Telek Benoe Hotel Case Study

Managing Operations

Assessment Item number 1: Case Study

MGB 210

Name: Jean Martinez

Student Number: N9511598

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Word Count: 2709

1. Background

Considerably every tourist has had to experience bad hotel service at least once during a holiday; whether it was the quality of the food, the state of their assigned room or the helpfulness (or lack thereof) from the hotel staff. This is no different from the given case where vacationing couple decided to spend their two-week holiday in Bali, at the Telek Benoe Hotel. One of many operating chains that are stated to each have its own personality and style, while providing modern clean rooms, friendly efficient staff with a good understanding of English, high quality European-style food, and high quality service at an affordable price. Some of these hotel aspects, even if at a lower quality, are expected at the most basic of tourist lodgings (Johnson M., 2008). The couple however found themselves lacking the service as advertised in the online website and in relation to their previous Telek Benoe experience. This issue comes down to the core of Telek Benoe as it is obvious that some of the hotel chains, including the one in Nusa Dua, is not up to par with modern standards and quality. To address this problem, several recommended course of actions will be given according to an analysis of why the hotel has this problem in the first place.

1. Issue Analysis

In terms of the overall case, there are lot of problems that have been brought up by Wendy and Peter. First of all, the couple’s decision in hotels was highly influenced by Telek Benoe’s Dubai branch. Without counting the online advertisement it can be argued that, they already have a pre-conceived idea of what to expect when staying in the hotel. This expectation turned to be a disappointment since there is a clear concern in the managerial operations in the Bali branch:  the quality of service was poor, there were constant time difficulties and the staff was not trained well enough to handle basic procedural complications. Basically, how the Telek Benoe was marketed was clearly not the way it operated and a majority of these issues comes back to the management style.

2.1        Quality Issue - Total Quality Management

Quality is one the largest factors that define customer value; less quality means less customer value. Customers want the benefits of what they paid for; otherwise they will have a negative perception on the quality of service (Hjelm S., 2015). The main management approach towards quality for every company should be to strive in providing products and services that accommodate the wants or needs of its customers. Not doing so would be breaking one of the fundamental aspects of Total Quality Management. The International Organisation for Standardisation define TQM as “a management approach of an organisation centered on quality, based on the participation of all its members and aiming at long term success through customer satisfaction and benefits (Pfeifer T., 2002).  Looking at that generalised statement alone, there noticeable violations of the TQM system in the hotels operations and management. Telek Benoe Bali cannot center itself on quality since the general manager is not fully dedicated to his branch. He is more concerned about the financial goals, so much so that he is discounts quality service to achieve it. Secondly, Telek Benoe undermines its quality by completely ignoring the complaints about the hotel’s standards, rejecting any customer satisfaction and benefits. Another issue in the TQM is employee responsibility, which is quite lacking. This is especially seen when the staff did not know any appropriate procedures when the couple was checking out. One of the greater qualities of The Total Quality Management approach is that it can continuously improve and focus on the capabilities so it can produce better results (Gilbert G. R., 1992). The approach rests on the principle that whilst errors in service can be made by people, it is primarily caused, or in this case permitted, by faulty systems and practices.

2.2        Quality Issue – The Gap model

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Figure 1: Identifying quality problems using the GAP model

When analysing for a more structured method of assessing quality and standards, the GAP model in figure 1, acknowledges the leading influences to service quality from the noticeable activities of a given branch. Rightfully named the Gap model, it identifies gaps or incongruities in the operations at the organisational level. These gaps then determine how low the quality of service is (Collier and Evans, 2007). Using the Gap model as the tool for identifying these issues, it is analysed that the Telek Benoe hotel in Bali violates the framework structurally through every gap.

• Gap 1: This gap is identified as the perception of a customer’s expectations and the management’s assumptions of what these expectations would be. It can be argued in this case, that there is no gap since the management is aware of these expectations due to all the complaints they receive, but they just don’t care; however there is still a gap because, whilst the general manager is aware of the divergence in expectations, he assumes that criticisms are normal and disregards all of it due to the quality certifications the hotel has received. As evaluated by the Total Quality Management approach, the focus should be on continuously improving. Management assumes that trained staff is enough to service in high quality but fails to realise that it requires adapting from experience.
• Gap 2: This gap is identified as the management’s perception in contrast to the service quality specification. Time related issues are commonly categorised in gap 2, and this case there are various time difficulties due to the faulty structure of their servicing procedure. These discrepancies include the long check-in and check-out times, the response time to their arrival and the time it took to clean their rooms.
• Gap 3: This gap is identified as the difference between specified quality of service and the actual quality of service from its delivery. A majority of the Telek Benoe’s issues appears to fall in this category, even the ones in gap 2 are arguably applicable; for example, a majority of the check-in process was expected to have been completed since Wendy and Peter’s submissions was made online but their actual check-in required them to fill in forms that they thought to have finished on the website. Secondly, the shuttle bus as marketed on the Telek Benoe website did not specify that the transport was going to hop from one hotel or another to pick up other passengers. Another problem in this gap occurred when the couple called with the after-hours phone only to be greeted by a non-English speaking receptionist. This brings to question if the hotel staff is actually trained well enough for their jobs. Lastly, the food issue where, on top of the meal quality not being up to par with what was specified, the payment for the meal was misinterpreted by the staff since it was expected for it to appear in the hotel bill during check out time. This last issue, which could have been easily avoided, inconvenienced the couple twice by not being able to use their cash and having to wait longer to check-out.
• Gap 4: This gap is identified as the difference between the delivery of service and the external communication of this service. This brings up the more noticeable advertising problems of Telek Benoe Bali. These issues include the free internet misconception, the disappointing room conditions and the expectation of a European meal. All of the mentioned complications were due to the difference in the marketed quality of service and the given service. The marketing does not necessarily have to change since other branches have proven that they adhere to their advertised standards.
• Gap 5: This gap is identified as the expected quality of the customers in relation to their perceived quality. The other four gaps have provided enough confirmation that the customer’s left Telek Benoe thoroughly unsatisfied. Their pre-conceived notion of an affordable high quality hotel comes from experiencing it firsthand in the Dubai branch. They anticipated the experience to be similar in Bali, so it is understandable that when the quality is not to their standards, especially at such a significant level, they will be disappointed at the least.

All of these gaps will need to be taken into account should an overhaul of system be considered. Telek Benoe should not accept any quality less than what is advertised.

2.3        Operational Issue – The Bowman Clock

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Figure 2: The Bowman’s Clock Strategy for operations

Certain complications can be identified by looking at the process of operations at any given organisation. The Bowman Clock strategy in figure 2, gives an idea of the current and possible implications of a company’s competitive direction. The model implements eight dimensions where the organisation’s strategy is positioned. Each dimension provides detail of the operational strategies’ effectiveness (Carlisle and Faulkner, 2005). Referring back to the Telek Benoe’s corporate goals, it is intended for the hotel chain to provide high quality of service, whilst maintaining a low and affordable price. But as observed by the gap model and the Total Quality Management, there is a significant misalignment between the corporate goals and how the operations are run.