Portfolio 3 Club Med Case Study Essay

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BA (Hons) Business Management Top Up
Strategic Management in Organisations
Module Number 4
Tutor: Bryan Fagan
Student Number: 14032470
Assignment: 1
Portfolio 3: Club Med Case Study
Date: 10th July 2015
Word Count: 542

Shein (1997) defines culture as ‘basic assumptions and beliefs that are shared by members of an organisation, that operate unconsciously and define in a basic taken-for-granted fashion an organisation’s view of itself and its environment’. Corporate culture is generally articulated to customers and shareholders as the organisations ‘personality’ and represents the professional values of the organisation. Corporate culture is the driving force in how the company does business. The internal culture of the organisation however tends to be implicit ‘just the way we do things around here’ (Bower, 2003)and is built on the shared values, beliefs and behaviours, (appendix one) something which is learned as groups solve ‘its problems of external adaptation and internal integration, that has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way you perceive, think, and feel in relation to those problems’(Shein, 1997).

Club Med was designed as an ‘antidote to civilisation’ to make people smile again after World War II with all-inclusive breaks offering sea, sex and sun. Club Med created symbols (appendix two), such as the village’s isolation from real life with enforced socialisation and ‘sea, sex and sun’ reputation. Organisational structure appeared decentralised and built on employing people with a similar approach as the founders increasing autonomy for Gracious Organisers (GOs) and Gracious Members (GMs). This approach fed into the control systems as it enabled a very close relationship between GOs and GMs and direct monitoring of standards and quality control. The organisations rituals for GOs were builds on the constant interaction with GMs, the reward being GOs being able to access administrative positions. GMs routines and rituals centre mainly on enforced socialisation with eight seater tables at restaurants, minimalist accommodation (tents and huts) with communal bathrooms and a no cash payment system. The mid 1990’s saw strong competition and changes to tourism tastes necessitating the appointment of Philippe Bourguignon in 1997. This change saw a shift in focus to budget getaways for young adults but brought multi million pound renovations, increasing marketing, aggressive growth strategy, reduced pricing and reduced costs by replacing employees (appendix three), changing the Club ‘from a holiday village company to a services company’ (Wikipedia, 2015). Such growth, although good for profit, does have a negative consequence. Gone is the uniqueness of the Club, autonomy of staff is lost due to the rejection of an authoritarian management style, reductions in pay and replacement of staff with machines leads to disgruntled employees and attracting a lower calibre of applicant. Employees feel less committed as they feel undervalued. Too much change too quickly leaves employees unable to keep up and effects quality of services and a lack of engagement between management and staff may leave employees unable to ‘buy into’ strategic change. In 2001, terrorism brought the tourism industry to its knees, decimated the Clubs revenues and saw the inability of Bourguignon to continue his strategy. By 2002, Bourguignon was replaced by Henri Giscard d’Estaing who sought to unite the old with the new, changing the Clubs market position to upscale all-inclusive, revisiting the historical cultural aspects of the Club by working with Serge Trigano, the son of the original founder, instigating a cultural training plan to get back to the original convivial way of life. By combining the upscale, modern, all-inclusive experience expected by many holidays’ makers with the escapism from real life of the Club historic culture is likely to see the success of Giscard…