Case Analysis: Argentina Suites
What are some of the major problems facing Argentina Suites? Argentina Suites faced many problems from the beginning idea to convert a 75,000-square foot building into a hotel. The owner, Abraham Sinclair decided to enter the hotel business with no market research, no hospitality experience, and rough financial projections. The decision to enter a market without knowing what ones getting into, led to major problems facing Argentina Suites. Some major problems include inefficiency, lack of technology, threat of new entrants, unethical behavior and transferring of information. Max, a person very familiar with Argentina Suites took responsibility to manage the hotel and to
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For example, Max wanted to get an estimated cost of total renovation, according to Geraldo they didn’t need to establish firm prices with manufacturers of the wall paper and carpet because, the owner was a former business contact of his, and he was always able to come to some agreement. These institutional factors can become challenges for Argentina Suites because of the uncertainty and risk that the hotel takes when calculating costs for the hotel. The current business environment at Argentina Suites is difficult to say the least. There are problems with employees not respecting people in charge or the rules. It can become a tough situation with the low employee turnover and employees being entitled to one month’s salary for every year employed. There are still some employees that are being paid under the table, which does not help the business environment when government is cracking down on this situation. Some employees feel mistreated and unappreciated by the family that runs the hotel. Employees have a lot of tendencies that make their job look unprofessional. With some unethical manners that still need to be handled, the business environment has lots of room to improve.
What recommendations would you make to Max to address the most critical problem? -To invest in computer systems to track and record information. -Restructure the organizational plan to where