APPLICATIONS OF FUNCTIONS AND PRINCIPLES OF

MANAGEMENT IN THE HOSPITALITY INDUSTRY:

MARRIOTT INTERNATIONAL
HOTELS AND RESORTS

A PROJECT

Submitted by:

GROUP 5

For the course

PRINCIPLES OF MANAGEMENT

B.COM
BATCH 2015 - 18

SCHOOL OF COMMERCE

XAVIER’S UNIVERSITY, BHUBANESWAR

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 Group 5

The Team
Nishita Baliarsingh
Kamakshi Saklani
Nikita Baliarsingh
Siddharth Saraogi
Devansh Dutt Sharma
Aditya Kaushal
Nitin Gupta

Course Instructor
Prof. Dr. Kalpana Sahu

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 ACKNOWLEDGEMENTS

The project on the given topic has been a product of the long and fruitful efforts of many behind the
making of this besides us. Our work will not be complete without thanking the people behind the
successful accomplishment of this project.

First of all, a big thanks to the school of Commerce for giving us such a project, which would help us
understand the importance of planning better in life. The very idea of such a project is unique as it
gives so much information about management in our day to day life.

It is our duty to thank our Professor for Principles of Management course, Kalpana Ma’am for
briefing us on this project, which gave us a lot of information and helped us gain knowledge about the
various ways of collecting data and then presenting the various aspects of professional companies.

It would be an immense pleasure to thank our “close associates” for helping us gather information
about the project by guiding us on the best business industries and their perceptions of business
ventures.

We would also like to thank our friends, for discussing and sharing their opinions on the various
advantages and disadvantages of Henri Fayol’s 14 principles of modern management, the functions of
management as stated by various professionals, its advantages to the common man and so on.

Last but not the least; we would love to thank our parents, for advising us on the various aspects of
business ventures in India and across the globe along with a basic thought on the environmental
interaction of business and also for helping us to compile the project and for putting it up in a
systematic order.

THANK YOU!!!

Team - Group 5
Principles of Management

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 DECLARATION

We hereby declare that the project entitled “Applications of functions and principles of

management in the hospitality industry: Marriott international hotels and resorts”

submitted for the Principles of Management course to Prof. Dr. Kalpana Sahu is an

original work of our efforts & hard work. The project has been designed and created by us

and is not copied from any other matter or presented work what so ever. The content

provided in this project is true and justified to the best of our knowledge.

Place: Bhubaneswar

Date: 21.09.2015 Team – Group 5

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 ABSTRACT

Human beings are by nature gregarious. Community or group life has been one of earliest and
most enduring features of human existence on this earth. This natural phenomenon of human
beings living in groups has generated a variety of groupings such as family, clan, community
friendship group, organizations, etc. An organization needs a system of relationship among
functions; it needs stability, continuity and predictability in its internal activities and external
contracts. It requires harmonious relationship among people and processes.

All organizations have certain aims and objectives before them for which they strive and do
their best to achieve them through their people who run and manage the affairs. In order to
define the roles of their members, their behaviour and activities, they develop certain rules
and regulations, policies, practices and procedures. Organizations’ are thus made of
objectives, people, systems and procedures.

To become competitive is one thing. But to remain competitive over a long period of time is a
big challenge. Our team chose this company because of the compassionate way in which it is
operated by the entire Marriott family. They continue to come up with new and improved
brands, ideas, and great ways to improve the company altogether.

The company’s presence for decades gives

us the much wanted reason of finding out
how they apply the management functions
and principles in their day to day
operations. Even further, how these
management principles have helped them
evolve and grow through the years to be
the best company to work for and the best
place to stay in with 20+ brands operated
all over the globe.

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 CONTENTS

GROUP 5 – TEAM .................................................................................................................................................. 2

ACKNOWLEDGEMENTS ..................................................................................................................................... 3

DECLARATION ........................................................................................................................................................ 4

ABSTRACT ................................................................................................................................................................. 5

INTRODUCTION .................................................................................................................................................... 7

HENRI FAYOL ...................................................................................................................................................... 8

FUNCTIONS OF MANAGEMENT ................................................................................................................. 9

PRINCIPLES OF MANAGEMENT ............................................................................................................... 11

MARRIOTT INTERNATIONAL ........................................................................................................................ 22

HISTORY & EVOLUTION ............................................................................................................................. 23

VISION & MISSION ........................................................................................................................................ 28

SWOT ANALYSIS ............................................................................................................................................. 29

ORGANISATIONAL STRUCTURE .............................................................................................................. 30

OPERATIONS .................................................................................................................................................... 32

ANNUAL REPORT ............................................................................................................................................ 33

RISK & UNCERTAINITIES ............................................................................................................................. 36

APPLICATIONS OF FUNCTIONS OF MANAGEMENT ...................................................................... 50

APPLICATIONS OF FAYOL’S PRINCIPLES .............................................................................................. 53

REASON FOR SUCCESS ................................................................................................................................. 55

EMPLOYEE RECOGNITION STRATEGY ................................................................................................. 57

MANAGERIAL PRINCIPLES ......................................................................................................................... 58

IMPROVEMENT STRATEGY ........................................................................................................................ 59

CONCLUSIONS .................................................................................................................................................... 62

BIBLIOGRAPHY .................................................................................................................................................... 63

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 INTRODUCTION

A business develops in course of time with complexities. With the increase of complexities,
managing the business concern becomes difficult. The need of existence of management has
increased tremendously. Management is not only essential to business concerns but also
essential to Banks, Schools, Colleges, Hospitals, Hotels, Religious bodies, Charitable Trusts
etc. Every business unit has objectives of its own. These objectives can be achieved with the
co – operative efforts of several personnel. The works of a number of persons are properly co
– ordinated to achieve the objectives through the process of management.

Management in businesses and organizations is the function that coordinates the efforts of
people to accomplish goals and objectives by using available resources efficiently and
effectively. Management includes planning, organizing, staffing, directing, and controlling an
organization to accomplish the goal or target. Resourcing encompasses the deployment and
manipulation of human resources, financial resources, technological resources, and natural
resources. Management is also an academic discipline, a social science whose objective is to
study social organization.

Management has developed since the time when the world came into existence. Whenever
group efforts are required to achieve anything, there is a need for management. Various
management thinkers developed their own strategies for proper management in their times.
Great philosophers like Henri Fayol, Frederick Winslow Taylor, Max Weber, Mary Parker
Follett, Peter Drucker etc gave the theories of scientific & modern management and
bureaucracy which are used in all business organizations, small or big even today.

The project emphasizes on the functions of

management and the principles developed by the
management thinkers in the modern management
period. These principles are discussed and checked with
the hospitality industry. We chose “Marriott Hotels and
Resorts” for the case study. The project will show the
uses of principles of management and the most
important functions in the organization and its working.

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 HENRI FAYOL

Henry Fayol was born in France in 1841. He got degree in

Mining Engineering in 1860 and started working as engineer in a
Coal Mining Company. In 1888 he was promoted as the
managing director of the company. At that time the company was
in the situation of insolvency. He accepted the challenge and
applied his managerial techniques to bring out the company from
this situation and he succeeded. Henry Fayol was a French
industrialist. The observation of Henry Fayol on the principles of
Management was brought out in French language in 1916. Later,
it was published in English language in 1949. The Principles of Management of Henry Fayol
were known to the world only after 1949 after the publication of his Management Thoughts
in English. When he retired after 30 years the company was a leading coal-steel company
with strong financial background. He is known as the ‘Father of Modern Management.’
Henry Fayol concentrated on top management and that is known from his book “General and
Industrial Management.”

Major contributions of Fayol in management:

Henry Fayol became famous as “Father of Management Studies and Thoughts,” because of
the following contributions:

 He made clear distinction between technical and managerial skills.

 He identified the main steps in the process of management which are considered the
major functions of management:
(a) Planning
(b) Organizing
(c) Staffing
(d) Directing
(e) Controlling.
 He developed fourteen (14) principles of management which act as guidelines for
managers to perform managerial activities.

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 FUNCTIONS OF MANAGEMENT

Management is necessary for all the organizations irrespective of its size, nature and
functions. The concept of management is not restricted to business organization but even non
– business organizations need to manage their functions. Management is a pervasive and
universally accepted function. No organization can work smoothly and efficiently without
management. Regardless of the size, nature and type of organization, all the managers have to
perform some basic functions. Following are the most important functions of management:

 Planning:
Planning is always the first function performed by every manager. Planning refers to
“deciding in advance what to do, how to do, when to do and who is going to do it.
Planning bridges the gap between where one stands today and where one wants to
reach.” Every manager starts with deciding in advance the objectives of an enterprise
and how to accomplish these objectives. Planning is the base of all other functions of
management.

 Organizing:
After setting up of plans, the next function of every manager is to organize the
activities and establishing an organization structure to execute the plan. Setting up
organizational structure means deciding the framework of working how many units
and sub – units or departments are needed, how many posts or designations are
needed in each department, how to distribute the authority and responsibility among
different people. Once these decisions are taken an organizational structure gets set
up.

 Staffing:
Staffing is the third step or function of a manager. It refers to recruiting, selecting,
appointing the employees, assigning them duties, maintaining cordial relations and
taking care of grievances of employees. It also includes training and developing the
employees, deciding their remuneration, promotion, increments, etc., evaluating the
performance, maintaining personal records of employees.

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  Directing:
Once the employees are appointed there is a need to instruct them and get the work
done. Directing refers to giving directions or instructions to employees by motivating
them, supervising the activities of employees, communicating with them. Managers
act as leaders and guide them to right direction, so directing function includes,
supervising, motivating, communicating and leadership.

 Controlling:
This is the last function of managers. In this function the managers try to match the
actual performance with the planned performance and if there is no match between
both then the managers try to find out the reasons of deviation and suggest corrective
measures to come on the path of plan. Controlling functions refer to all the
performance measurements and follow up actions that keep the actual performance on
the path of plan.

Focus of functions at different levels:

Top Level Middle Level Lower Level

Management Management Management

Planning Directing
Staffing
Organising Controlling

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 PRINCIPLES OF MANAGEMENT

Management principles are not developed overnight but a complete procedure to develop
these principles are undertaken. The principles of management have been developed on the
basis of live experiences of happening of past. Co-operation, group efforts, direction and
control are necessary to achieve the objectives or goals of an individual. In our modern
world, an individual cannot survive separately. He has to rely upon others. So, managerial
efficiency is an essential requisite to human being. Proper understanding of management
principles is very necessary and helpful for managers as these principles act as guidelines for
managerial activities. By practicing principles managers can avoid various mistakes while
dealing with people in the organization.

The 14 principles developed by Henri Fayol are as follows:

 Principle of Division of work:

According to this principle the whole work must be divided into small tasks or units and
instead of assigning the whole work to one person one task or unit of work should be
assigned to one person according to the capability, qualification and experience of the
person. When a person is performing a part of job again and again he will become perfect
and specialized in doing that and the efficiency level will improve. Fayol said not only the
factory work but technical, managerial and skill jobs should also be divide into small
segments for specialization.

 Example:
o In furniture manufacturing company one person can be asked to cut the wood
pieces, one to join them, one to polish, one to give finishing touch to furniture.
With this division each person will become specialized in his part of job and his
effectiveness and efficiency improves.

 Positive effects of the principle:

o Specialization: whenever work is divided according to qualifications then
automatically it leads to specialization.
o Improves efficiency: when employee is performing only one part of job then he
becomes expert in that and results in less wastage of resources.

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  Consequences of violation of this principle:
o Lack of efficiency
o There will be no specialization
o Chances of duplication of work

 Principle of Authority and Responsibility:

Authority means power to take decision. Responsibility means obligation to complete the
job assigned on time. According to this principle there must be balance or parity between
the authority and responsibility. Excess of authority without matching responsibility may
bring negative results and excess of responsibility without matching authority will not
allow the worker to complete his job on time. There is need to bring parity between both
for best results.

 Example:
o If a person is given responsibility to produce 100 units in one week time but he is
not given authority to purchase the raw materials. If there is no raw material
available in the store-room as a result he could not complete the target of
producing 100 units on time. The worker cannot be blamed for not completing on
time because he was given only the responsibility and not the matching authority to
carry on the work. Excess of responsibility with less authority results in non-
completion of the job.

 Positive effects of this principle:

o No misuse of authority
o Helps in meeting responsibilities on time without any delay

 Consequences of violation of this principle:

o Delay in work or in completion of work due to less authority
o Misuse of authority due to excess authority
o Overburden with work with excess responsibility

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 Principle of Discipline:
Discipline refers to general rules, regulations for systematic working in an organization.
Discipline does not mean only rules regulations but it also mean developing commitment
in the employees towards organization as well as towards each other. Fayol insists that
discipline is required at superior as well as subordinate level. The disciplinary rules shall
not be applicable only on subordinates but discipline requires good superiors at every
level, clear and fair agreement between superior and subordinates.

According to Fayol discipline requires good superior at all levels, clear and fair
agreements and judicious application of penalties.

 Example:
o The employees must honor their commitments towards the organization by
working effectively and efficiently. On the other hand, superiors must also meet
their commitments by meeting their promises of increments, promotions, wage
revisions etc.

 Positive effects of this principle:

o Systematic working in the organization.
o Improves efficiency.

 Consequences of violation of this principle:

o Disorder, confusion and chaos
o Wastage of resources in absence of discipline
o Delay in work due to absence of rules and regulations

 Principle of Unity of Command:

According to this principle an employee should receive orders from one boss only
because if he is receiving orders from more than one boss then he will get confused and
will not be able to understand that whose orders must be executed first and on the other
hand, if employee is receiving orders from more bosses he gets chance to give excuses by
saying that he was busy in executing the orders of other boss. To avoid confusion and to
give no chance of excuse to employee, the orders must come from one boss only. If there

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 are more bosses it can create problem of ego-clash among the superiors as every superior
want his order to be executed by the employee.

 Example:
o If employee of production department is asked to go slow in production to maintain
quality standard by the production in-charge and sales in-charge instructs the
employee to fasten the production to meet the pending orders. In this situation
employee will get confused as to whose instructions must be followed by him.

 Positive effects of this Principle:

o No confusion in the mind of subordinates
o No ego clashes
o Improves effectiveness in working

 Consequences of violation of this Principle:

o Confusion in the mind of employee
o Subordinate will get chance to escape from his responsibilities by giving excuses
o Ego clashes among the different superiors
o Difficulty in maintaining discipline in the organization

 Principle of unity of direction:

According to this principle “one unit means one plan “, that is the efforts of all the
members and employees of the organization must be directed towards one direction that
is the achievement of common goal. If this principle is applied it leads to coordination.
Each department and a group having common objective must have one head and one plan
only.

 Example:
o If the organization is producing different lines of product-cosmetics, medicines and
confectionary items each product has its own market and its own business
environment. Each division must plan its target and every employee of that
division must put his efforts towards achievement of plan of their division under
the direction of one head only.

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  Positive effects of this principle:
o Achievement of organizational goal
o Efforts of all employees get unified towards one direction only

 Consequences of violation of this principle:

o Lack of coordination
o Wastage of efforts and resources by working in different directions
o Difficulty in achieving organizational goal

 Principle of subordination of Individual Interest to General Interest:

According to this principle the interest of organization must supersede the interest of
individuals or employees. In the organization all the employees are working with some
objective and there is always an objective of organization. If the objectives of individual
are in the same direction of organization then there is no problem but if the objectives of
both the groups are in different directions then manager must try to reconcile individual
interest with organizational goal and if it is not possible then individual goal must be
sacrificed for achieving organization prospers.

 Example:
o If individual’s objective is to earn more remuneration and organization is going
through the situation of financial crisis and has the objective of cutting down the
expenses. In this situation the individual must sacrifice his interest as when
organization will come out from financial crisis then he can achieve his objective.

 Positive effects of this principle:

o Achievement of organizational goal
o Coordination between individual and organizational goal

 Consequences of violation of this principle:

o No achievement of organizational goal
o Even employees will also suffer in long run

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 Principle of Remuneration of persons:
According to this principle employees in the organization must be paid fairly or
adequately to give them maximum satisfaction. The remuneration must be just and fair
because if employees are underpaid they will not be satisfied and an unsatisfied person
can never contribute his maximum. Dissatisfaction will lead to increase in employee’s
turn-over. So to have stability in organization and to get maximum efforts from
employees, the employees must be paid fairly. The fair wage is determined according to:
Financial capacity of the concern
By keeping in mind the Minimum Wage Act of Govt.
The wages and salaries paid by the competitors

 Example:
o If in a particular year the organization has earned more profit than apart from
giving extra profit to shareholders and owners, some part of profit must be given to
employees also in the form of bonus. This will encourage and motivate to put more
efforts and increase the profit of the company.

 Positive effects of this principle:

o Employees get motivated
o Devotion and commitment of employees improves

 Consequences of violation of this principle:

o Increase in turnover of employees
o Dissatisfaction and demotivation employees

 Principle of Centralization and Decentralisation:

Centralization refers to concentration of power and authority in few hands at the top level.
Decentralisation means evenly distribution of power at every level of management.
According to Fayol a company should be completely centralized or decentralized but
there should be combination of both depending on the nature and size of the business. A
small organization can be well organized and managed with the centralized technique but
I the large organization there is a need for decentralization. Secondly, if employees are
efficient and competent then they can be trusted by having decentralization but if

16
 employee are not fully developed and are less in numbers then there must be
decentralization. Fayol advised not to have a complete centralization or decentralization
but a combination of both.

 Example:
o Major decisions and activities of setting up organizational goals, plans, policies,
and strategies can be centralized but there can be policy of decentralization for the
activities of routine work such as purchase of raw materials fixing up of targets etc.

 Positive effects of this principle:

o Benefits of centralization and decentralization
o Fast decision at operational level and strict control by top level

 Consequences of violation of this principle:

o Complete centralization will result in delay in decision
o Complete decentralization will result in misuse of authority

 Principle of scalar chain:

Scalar chain means line of authority or chain of superiors from highest to lowest rank.
Fayol insists that this chain must be followed strictly in the organization. All information
must pass through every key of this chain, no skipping of any one key should be allowed.
According to scalar chain principle if E wants to contact O he has to move through E-D-
C-B-A-L-M-N and then O. If this chain is broken then there are chances of
communication gap in the organization but sometimes following scalar chain becomes a
long process and if some important information has to be
passed, it gets delayed so in case of emergency and
urgent information, Fayol permitted a short cut in the
chain which is called “Gang-Plank”. Gang –Plank
permits direct communication between the employees
working at the same level of authority without following
the scalar chain.

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  Example:
o E wants to pass some urgent information to O then instead of following the long
route of scalar chain, he can directly communicate with O by constructing a gang-
plank, but no gang-plank can be constructed between the people working at
different levels, i.e., no gang plank between D and L.

 Positive effects of this principle:

o Systematic flow of information.
o No communication gap in the organization.

 Consequences of violation of this principle:

o There may be communication gap.
o No clarity in authority-responsibility relationship

 Principle of order:
In this principle order does not mean command but it refers to orderly arrangement of
men and material that is a fixed place for everything and everyone in the organization.
Fayol insists that there must be a fixed place to keep every material and thing used in the
organization and fixed place or seat or cabin for every employee of the organization so
that no time and energy is wasted in search of any material or any person.

 Example:
o If a worker is in need of a tool he must know in which box or tool-room it will be
found and if he needs guidance from supervisor he must know the fixed cabin of
supervisor. If no place is given then worker will waste his time and energy in
search of tools or supervisor.

 Positive effects of this principle:

o No wastage of time in search of men or material
o Smooth and systematic working of organization

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  Consequences of violation of this principle:
o Wastage of time and energy in search of men and material
o Not able to contact people at the right time

 Principle of equity:
Equity refers to kind, fair, and just treatment to employees. Employees will put their
maximum efforts only when they are with kindness and justice. If the manager is biased
in with dealing with the employees then the employees will get dissatisfied and will not
contribute to their maximum capacity. Equity does not mean giving equal salary to peon
and a supervisor but equity means application of same disciplinary rules, leave rules in
the same way irrespective of their grade position and gender.

 Example:
o The roles for granting medical leave to an employee should be same irrespective of
their position, grade or gender

 Positive effects of this principle:

o Employees get satisfied
o Motivate the employee and boast up the moral of the employees

 Consequence of violation this principle:

o Dissatisfaction among the employees.
o Increase in turnover.
o Unhealthy relation between subordinate and supervisor

 Principle of stability of tenure of personnel:

It refers to frequent termination and transfers. According to this principle management
must provide job security among the employees because with the feeling of insecurity for
the job, the employee cannot contribute their maximum. Frequent turnover for employee
is bad for the organization and such decisions must be taken when they are almost
unavoidable.
Not only turnover but frequent transfer or rotation should also be avoided because it takes
some time for a person to get learned and get settled on a job and by the time he gets

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 settled and he gets his transfer letter then it will be wastage for the organization and
employee will not be able to contribute his best to the organization.

 Positive effects of this principle:

o Improves efficiency level of the employees.
o No wastage of time and resources.

 Consequences of violation of this principle:

o Wastage of resource in learning the new job.
o Frustration and dissatisfaction among the employees

 Principle of Initiative:
Initiative refers to chalking out the plan and then implementing the same. Fayol suggested
that the employee in the organization must be given an opportunity to take some initiative
in making and executing the plan. It gives immense satisfaction to employees. So
managers must welcome the suggestions and ideas of employees before framing a plan.
The initiative does not mean disobedience, i.e., once decisions are taken by management
then every employee must follow it whether it is according to employee’s suggestion or
not.

 Example:
o Before setting up of plan the manager must welcome the suggestions and ideas of
employees to allow their maximum participation. But once the plan is made every
employee must follow it and implement it.

 Positive effects of this principle:

o Develops feeling of belongingness in employees.
o Employees achieve the target on time if they are set up with their consultation

 Consequence of violation this principle:

o Employees will not work to best of their ability
o Demotivation among employees

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 Principle of Esprit De Corps:
Esprit De Corps means union is strength. Fayol emphasized on the team work. He
suggested that every employee in the organization must consider him as a part or member
of the team and try to achieve the team goal because team contribution is always better
than individual contribution. Management must develop a feeling of belongingness
among the employees as they must feel themselves as a member of the organization’s
team and contribute maximum to achieve team’s goal.

 Example:
o If the production manager assigned a target of manufacturing 100 units to a group
of ten members, divided the target amongst them to produce 10 units each,
principle of team spirit says that each member of the group should not concentrate
only on achieving his individual target of 10 units but they must concentrate on
achieving group target of 100 units so if two workers of the group fall sick then
other eight members must divide their individual targets amongst themselves and
try to achieve the target of the group.

 Positive effects of this principle:

o Develops team spirit.
o Achievement of group goal

 Consequences of violation of this principle:

o Team goal may not be achieved
o No team spirit and more stress on individualism

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 MARRIOTT INTERNATIONAL

Marriott International, Inc. is a global leading lodging company with more than 4,200
properties in 79 countries and territories. Marriott International reported revenues of nearly
$14 billion in fiscal year 2014. Founded by J. Willard and Alice Marriott and guided by
Marriott family leadership for nearly 90 years, the company is headquartered in Bethesda,
Maryland, USA. Marriott develops, operates and franchises hotels and corporate housing
properties under separate brand names, and it develops, operates and markets timeshare,
fractional ownership and residential properties under four separate brand names.

Marriott International also provides services to home / condominium owner associations for
projects associated with one of its brands. Marriott International has carried out certain
strategies resulting into effective market share and good profitability. The company operates
under 20 different brands and it has nearly 4,00,000 employees at the company’s head
quarters and other offices across the globe. The company is dedicated to providing
exceptional service to customers, growth opportunities for associates and attractive returns to
share holders and owners. It is ranked as the lodging
industry’s most admired company and one of the best
places to work for by ‘Fortune’ magazine. Marriott
provides a supportive environment where one can
grow in his current job and build a long-term career.
Everything they do is built on their culture of “putting
people first.” Learning, teamwork, and a collegial
atmosphere are part of the job, every day.

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 HISTORY & EVOLUTION

It all began with the efforts of Willard Marriott and his wife, Alice, by starting up an A & W
Root beer stand in Washington D.C. They started their business by quenching people’s thirst
during hot and sunny Washington summers. There motive was to provide the best food and
good service at a reasonable price, it later became a major principle of Marriott International
as it grew.

 1927 – 1956
1927:

In this year Willard Marriott along with his wife Alice, and
business partner Hugh Colton started their first beer franchise
in Washington D.C. In the same year they also added hot food
items to their menu and the name “Hot Shoppes” was born.

1928:
In this year they expanded their business and opened
two more Hot Shoppes including the East Coast’s first
drive inn restaurant.

1937:
In this year they started on Air catering. They
approached few Airlines and started delivering of hot
boxed lunch and dinner to passenger at Hoover Airport,
which was situated at south of Washington D.C.

1953:
In this year the company decided to go public. Hot Shoppes
Inc. shares were sold out at $10.25/share. Shares had a great
response and all the shares of Hot Shoppes Inc. was sold out
within 2 hours.

23
This was the turning point of Marriott it made a historic shift in 1957. Marriott hotel opened
world’s first motor hotel in Virginia under the Management of Bill Marriott, son of Willard
Marriott. In the next 25 years Marriott transformed in to a global enterprise and Bill Marriott
became the CEO. His leadership and vision for the company changed the whole hospitality
industry.

 1957 – 1985
1969:
In this year Marriott opened its first international
hotel at Acapulco, Mexico.

1972:
Marriott entered the cruise business by coming in to a
partnership agreement with Shine Line cruising
Company and became the first lodging company to
enter cruising business.

1983:
In this year Marriott started their first hotel for
business travellers by opening up their first
Courtyard hotel.

1984:
First J.W Marriott in the honour of J. Willard
Marriott was opened in downtown in Washington
D.C.

1985:
In this year J. Willard Marriott passed away and
J.W Marriott Jr. was elected as the chairman of the
board.

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One company many brand that was the innovative model that Marriott created or began
building in the late 1980s. From extending their business, launching new brands geared
toward business travelers, to increasing its overseas presence Marriott international covered
every ground it could and set new record to become #1 Hospitality Company in the world.

 1986 – 2011
1987:
Marriott opened their Fairfield Inn and Marriott Suits
and Hotels, thus becoming first lodging company to
offer portfolio of brands. In the same year Residences
Inn extended their lodging business.

1988:
It was an historic event for Marriott as t created a
milestone by opening its 500th hotel in Warsaw
Poland and becoming the first western managed
hotel in Europe.

1995:
In this year Marriott bought a historic brand into its
portfolio by acquiring 49% interest in Ritz Carlton
Hotel Company.

1997:
In this year Marriott International Acquired Renaissance
Hotel group and also launched Towne Place Suites.

1998 - 2000:
Marriott launches Springhill suites. Marriott also
Acquired ExecuStay housing Company. Alice Sheets
Marriott, cofounder of Marriott International passes away
at the age of 92.

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 2004 - 2008:
In this year Marriott launched it another brand
named as Bulgari Hotels and Resorts in Millan,
Italy. Bill Marriott along with Ian Schrager
announced the Edition Brand.

2009 - 2011:
In this year Marriott international launched a new
brand of upscale luxury and independent Hotels
named as Autograph collection. Ac hotels another
brand of Marriott international was formally launched.

Today, Marriott is on a mission to create a new future of travel through technology and
innovation. Providing new technologies like mobile check-in and Great rooms in lobby to
molding the experience of meeting with the new Red Coat Direct app, they are transforming
the travel more brilliant for the guests.

 2012 & Beyond:

2012:
Marriott International appoints Arne Sorensen
as their new President and CEO. The same
year Gaylord Hotels was acquired by Marriott,
adding 5 hotels and approximately 2 million
square feet of event and meeting area.

2013:
The MOXY HOTELS were debuted. This was the
company’s first entry into the economic segment.
The hotels are three-star hospitality tier in Europe.
Pattern-centralized air conditioned hotels are
introduced into the Americas by Marriott.

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2014:
With the acquisition of Portea Hotels’ Brand,
Marriott almost doubled its dissemination in
Africa to more than 23,000 rooms.

2015:
The year when Marriott acquires Delta Hotels and
Resorts, it became the biggest Full-Service hotelier in
Canada.

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Vision:
To become the leading provider and facilitator of the luxury, leisure and business
experiences across the globe

Mission:
“To create an environment conducive and helpful to both our employees’ and customers,
and encouraging our employees to work at their maximum capacity in being of service to
our customers whilst providing our customers with Good Food & Good Service at a Fair
Price. Satisfied customer is our ultimate goal and we strive to achieve that through
motivated associates, customization of quality product and exemplary excellence in
service.”

Objectives:
o Stay Live
o Greatest customer satisfaction
o Profit maximization
o Owner equity

Major Competitors:
o Hilton Hotels
o Starwood Hotels
o Taj Hotels
o Sheraton Hotels
o Hyatt Hotels
o Holiday Inn

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 SWOT ANALYSIS

 External Factors:

 Opportunities:
 High potential in emerging markets
 Innovation in customer services
 Better interiors / well done renovation
 Indian as well as global hospitality sectors are looking at a boom

 Threats:
 Entry of several international brands along with the strong hold of long standing,
well established brands from India
 Competition on price points
 Stagnated growth

 Internal Factors:

 Strengths:
 International brand name
 High brand recognition and recall
 Technical innovations to improve customer experiences and constant upgrade of
business processes
 Good employee retention with a total workforce of 1,50,000
 Convenient locations
 24 hour manned security
 Worldwide reservation system (MARSHA)
 Swimming Pool for all weathers
 Health Clubs
 24 hour business centers with a complete business environment
 Various brand range from attainable to aspirational

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  Weakness:
 Insufficient parking spaces at most of the hotels
 No live cooking like barbeques etc. at most of the country hotels
 All indoor seating and dining areas
 Limited choice of restaurants.
 No traditional restaurants
 Weakening of proper management due to huge span of control
 Competition from long established hotel chains means limited market share.
 Global expansion and high number of hotels may lead to brand dilution

ORGANISATIONAL STRUCTURE

 Formalization:
The organization follows a bureaucratic approach to the system, which means that the
work of the organization closely follows rules and procedures. The job descriptions are
closely defined with little flexibility. Therefore this type of structure is unable to change
and meet new demands.

 Specialization:
The structure of the organization follows the policy of dividing different jobs and
activities into departments so that there is specialization with the job and the department.
This makes the control over the organization much easier and clearly marks distinction
within the hierarchy and lines of authority.

 Decentralization:
All the orders are taken from the head office. Apart from that the General Managers at
various hotels maintain and keep control of the business. They also take decisions in
terms of the whole organization. This leads to little opportunity for subordinates to make
their own decisions leading to lack of motivation. Despite all this the Marriott prevents
the strict control of power by having some amount of decentralization within the
structure.

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 Hierarchy of authority:
Marriott’s organizational structure is such that the subordinates in each department take
orders from the manager of that particular department and carry out the work assigned
accordingly; likewise the general manager will have the authority over the managers of
each department. The head of departments, also keeps written documents and weekly
meetings are held between the supervisors and sub ordinates and the departments’
managers and employees.

 Personal Ratio:
Marriott arranges trainee programmes frequently. These programmes also include mini
quizzes for the employees. According to the grades in the quiz, the company gives a
certificate which is signed by the vice – president. This makes it easier for the
organization to offer promotions to their employees.

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 OPERATIONS

The company operates in 80 countries with more than 4,000 properties spread over the globe
under over 20 brands owned by company – Marriott International. The company operates
under the following terms and properties are marketed basing on these types:

 Owned lodging
 Time share spaces
 Leased property
 Franchised properties
 International properties

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 ANNUAL REPORT

The company has been earning profits since it was established. The company earns
annual profits from all its properties across the globe in billion dollars.

 Income Statement:

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 Balance Sheet:

34
 Cash Flow Statement:

35
 RISKS & UNCERTAINITIES

Marriott hotels are subject to various risks that could have a negative effect on them or on
their financial condition. Because there is no way to determine in advance whether, or to
what extent, any present uncertainty will ultimately impact their business, equal weightage is
given to all the environments affecting the growth of the organization.

 Internal environment:
Their industry is highly competitive, which may impact their ability to compete
successfully with other hotel properties for customers:
They operate in markets that contain many competitors. Each of their hotel brands
competes with major hotel chains in national and international venues and with
independent companies in regional markets. Their ability to remain competitive and
to attract and retain business and leisure travelers depends on their success in
distinguishing the quality, value, and efficiency of their lodging products and
services, including their loyalty programs and consumer-facing technology platforms
and services, from those offered by others. If they cannot compete successfully in
these areas, their operating margins could contract, their market share could
decrease, and their earnings could decline. Further, new lodging supply in individual
markets could have a negative impact on the hotel industry and hamper their ability
to increase room rates or occupancy in those markets.

Economic uncertainty could continue to impact their financial results and growth:
Weak economic conditions in Europe and other parts of the world, the strength or
continuation of recovery in countries that have experienced improved economic
conditions, changes in oil prices and currency values, potential disruptions in the
U.S. economy as a result of governmental action or inaction on the federal deficit,
budget, and related issues. As a result of such current economic conditions and
uncertainty, they continue to experience weakened demand for their hotel rooms in
some markets. Recent improvements in demand trends in other markets may not
continue, and their future financial results and growth could be further harmed or
constrained if the recovery stalls or conditions worsen.

36
 Operational Risks
Premature termination of their management or franchise agreements could hurt
their financial performance:
Their hotel management and franchise agreements may be subject to premature
termination in certain circumstances, such as the bankruptcy of a hotel owner or
franchisee, or a failure under some agreements to meet specified financial or
performance criteria that are subject to the risks described in this section, which they
fail or elect not to cure. In addition, some courts have applied principles of agency
law and related fiduciary standards to managers of third-party hotel properties,
including them (or have interpreted hotel management agreements as “personal
services contracts”). This means, among other things, that property owners may
assert the right to terminate management agreements even where the agreements
provide otherwise and some courts have upheld such assertions about their
management agreements and may do so in the future. If such terminations occur,
they may need to enforce their right to damages for breach of contract and related
claims, which may cause us to incur significant legal fees and expenses. Any
damages they ultimately collect could be less than the projected future value of the
fees and other amounts they would have otherwise collected under the management
agreement. A significant loss of agreements due to premature terminations could hurt
their financial performance or their ability to grow their business.

Their lodging operations are subject to global, regional, and national conditions:
Because they conduct their business on a global platform, changes in global and
regional economies impact their activities. In recent years, decreases in travel
resulting from weak economic conditions and the heightened travel security
measures that have resulted from the threat of further terrorism have hurt their
business. Their future performance could be similarly affected by the economic
environment in each of their operating regions, the resulting unknown pace of
business travel, and any future incidents in those regions.

Their lodging operations are subject to global, regional, and national conditions.
Because they conduct their business on a global platform, changes in global and
regional economies impact their activities. In recent years, decreases in travel

37
resulting from weak economic conditions and the heightened travel security measures
that have resulted from the threat of further terrorism have hurt their business. Their
future performance could be similarly affected by the economic environment in each
of their operating regions, the resulting unknown pace of business travel, and any
future incidents in those regions.

The growing significance of their operations outside of the United States makes
them increasingly susceptible to the risks of doing business internationally, which
could lower their revenues, increase their costs, reduce their profits, disrupt their
business, or damage their reputation.
They currently operate or franchise hotels and resorts in 79 countries, and their
operations outside the United States represented approximately 18 percent of their
revenues in 2014. They expect that their international revenues will continue to grow.
As a result, they are increasingly exposed to the challenges and risks of doing
business outside the United States, many of which are outside of their control, and
which could reduce their revenues or profits, increase their costs, result in significant
liabilities or sanctions, otherwise disrupt their business, or damage their reputation.
These challenges include:
o compliance with complex and changing laws, regulations and government
policies that may impact their operations, such as foreign ownership
restrictions, import and export controls, and trade restrictions;
o compliance with U.S. and foreign laws that affect the activities of companies
abroad, such as competition laws, currency regulations, and other laws
affecting dealings with certain nations;
o limitations on their ability to repatriate non-U.S. earnings in a tax effective
manner;
o the difficulties involved in managing an organization doing business in many
different countries;
o uncertainties as to the enforceability of contract and intellectual property rights
under local laws;
o rapid changes in government policy, political or civil unrest in the Middle East
and elsewhere, acts of terrorism, or the threat of international boycotts or U.S.
anti-boycott legislation; and

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 o Currency exchange rate fluctuations, which may impact the results and cash
flows of their international operations.

Any failure by their international operations to comply with anti-corruption laws or

trade sanctions could increase their costs, reduce their profits, limit their growth,
harm their reputation, or subject us to broader liability.
They are subject to restrictions imposed by the U.S. Foreign Corrupt Practices Act
and anti-corruption laws and regulations of other countries applicable to their
operations, such as the UK Bribery Act. Anti-corruption laws and regulations
generally prohibit companies and their intermediaries from making improper
payments to government officials or other persons in order to receive or retain
business. The compliance programs, internal controls and policies they maintain and
enforce to promote compliance with applicable anti-bribery and anti-corruption laws
may not prevent their associates, contractors or agents from acting in ways prohibited
by these laws and regulations. They are also subject to trade sanctions administered
by the Office of Foreign Assets Control and the U.S. Department of Commerce. Their
compliance programs and internal controls also may not prevent conduct that is
prohibited under these rules. The United States may impose additional sanctions at
any time against any country in which or with whom they do business. Depending on
the nature of the sanctions imposed, their operations in the relevant country could be
restricted or otherwise adversely affected. Any violations of anti-corruption laws and
regulations or trade sanctions could result in significant civil and criminal penalties,
reduce their profits, disrupt their business or damage their reputation. In addition, an
imposition of further restrictions in these areas could increase their cost of operations,
reduce their profits or cause us to forgo development opportunities that would
otherwise support growth.

Exchange rate fluctuations and foreign exchange hedging arrangements could

result in significant foreign currency gains and losses and affect their business
results.
They earn revenues and incur expenses in foreign currencies as part of their
operations outside of the United States. Accordingly, fluctuations in currency
exchange rates may significantly increase the amount of U.S. dollars required for

39
foreign currency expenses or significantly decrease the U.S. dollars they receive from
foreign currency revenues. They are also exposed to currency translation risk because
the results of their business outside of the U.S. are generally reported in local
currency, which they then translate to U.S. dollars for inclusion in their consolidated
financial statements. As a result, changes between the foreign exchange rates and the
U.S. dollar affect the amounts they record for their foreign assets, liabilities, revenues
and expenses, and could have a negative effect on their financial results. They expect
that their exposure to foreign currency exchange rate fluctuations will grow as the
relative contribution of their non-U.S. operations increases. Their efforts to mitigate
some of their foreign currency exposure by entering into foreign exchange hedging
agreements with financial institutions to reduce exposures to some of the principal
currencies in which they receive management and franchise fees may not be
successful. In this regard, these hedging agreements do not cover all currencies in
which they do business, do not eliminate foreign currency risk entirely for the
currencies that they do cover, and involve costs and risks of their own in the form of
transaction costs, credit requirements and counterparty risk.

Disagreements with owners of hotels that they manage or franchise may result in
litigation or may delay implementation of product or service initiatives.
Consistent with their focus on management and franchising, they own very few of
their lodging properties. The nature of their responsibilities under their management
agreements to manage each hotel and enforce the standards required for their brands
under both management and franchise agreements may be subject to interpretation
and will from time to time give rise to disagreements, which may include
disagreements over the need for or payment for new product or service initiatives and
the timing and amount of capital investments. Such disagreements may be more likely
when hotel returns are weaker. They seek to resolve any disagreements in order to
develop and maintain positive relations with current and potential hotel owners and
joint venture partners, but they are not always able to do so. Failure to resolve such
disagreements has resulted in litigation, and could do so in the future. If any such
litigation results in a significant adverse judgment, settlement, or court order, they
could suffer significant losses, their profits could be reduced, or their future ability to
operate their business could be constrained.

40
Their business depends on the quality and reputation of their brands, and any
deterioration in the quality or reputation of these brands could have an adverse
impact on their market share, reputation, business, financial condition, or results of
operations.
Events that may be beyond their control could affect the reputation of one or more of
their properties or more generally impact the reputation of their brands. If the
reputation or perceived quality of their brands declines, their market share, reputation,
business, financial condition, or results of operations could be affected.

Actions by their franchisees and licensees could adversely affect their image and
reputation.
They franchise and license many of their brand names and trademarks to third parties
in connection with lodging, timeshare, residential services, and their credit card
programs. Under the terms of their agreements with us, their franchisees and licensees
interact directly with customers and other third parties under their brand and trade
names. If these franchisees or licensees fail to maintain or act in accordance with
applicable brand standards; experience operational problems, including any data
breach involving customer information; or project a brand image inconsistent with
theirs, their image and reputation could suffer. Although their franchise and license
agreements provide us with rectheirse and remedies in the event of a breach by the
franchisee or licensee, including termination of the agreements under certain
circumstances, pursuing any such rectheirse, remedy, or termination could be
expensive and time consuming. In addition, they cannot assure you that a court would
ultimately enforce their contractual termination rights in every instance.

Damage to, or losses involving, properties that they own, manage, or franchise may
not be covered by insurance.
They have comprehensive property and liability insurance policies for their managed,
leased, and owned properties with coverage features and insured limits that they
believe are customary, and require their franchisees to maintain similar levels of
insurance. Market forces beyond their control may nonetheless limit the scope of the
insurance coverage they or their franchisees can obtain, or their or their ability to

41
 obtain coverage at reasonable rates. Certain types of losses, generally of a catastrophic
nature, such as earthquakes, hurricanes and floods, or terrorist acts, or liabilities that
result from breaches in the security of their information systems, may be uninsurable
or too expensive to justify obtaining insurance. As a result, they and their franchisees
may not be successful in obtaining insurance without increases in cost or decreases in
coverage levels. In addition, in the event of a substantial loss, the insurance coverage
they or their franchisees carry may not be sufficient to pay the full market value or
replacement cost of any lost investment or in some cases could result in certain losses
being totally uninsured. As a result, they could lose some or all of any capital that
they have invested in a property, as well as the anticipated future revenue from the
property, and they could remain obligated for guarantees, debt, or other financial
obligations for the property.

 Development and Financing Risks:

While they are predominantly a manager and franchisor of hotel properties, their
hotel owners depend on capital to buy, develop, and improve hotels, and their hotel
owners may be unable to access capital when necessary.
In order to fund new hotel investments, as well as refurbish and improve existing
hotels, both they and current and potential hotel owners must periodically spend
money. The availability of funds for new investments and improvement of existing
hotels by their current and potential hotel owners depends in large measure on capital
markets and liquidity factors, over which they can exert little control. The difficulty of
obtaining financing on attractive terms may be constrained by the capital markets for
hotel and real estate investments. In addition, owners of existing hotels that they
franchise or manage may have difficulty meeting required debt service payments or
refinancing loans at maturity.

Their growth strategy depends upon third-party owners/operators, and future

arrangements with these third parties may be less favorable.
Their growth strategy for development of additional lodging facilities entails entering
into and maintaining various arrangements with property owners. The terms of their
management agreements, franchise agreements, and leases for each of their lodging
facilities are influenced by contract terms offered by their competitors, among other

42
things. They cannot assure that any of their current arrangements will continue or that
they will be able to enter into future collaborations, renew agreements, or enter into
new agreements in the future on terms that are as favorable to us as those that exist
today.

Their ability to grow their management and franchise systems is subject to the
range of risks associated with real estate investments:
Their ability to sustain continued growth through management or franchise
agreements for new hotels and the conversion of existing facilities to managed or
franchised Marriott brands is affected, and may potentially be limited, by a variety of
factors influencing real estate development generally. These include site availability,
financing, planning, zoning and other local approvals, and other limitations that may
be imposed by market and submarket factors, such as projected room occupancy,
changes in growth in demand compared to projected supply, territorial restrictions in
their management and franchise agreements, costs of construction, and anticipated
room rate structure.

Their development activities expose them to project cost, completion, and resale
risks:
They develop new hotel and residential properties, both directly and through
partnerships, joint ventures, and other business structures with third parties. As
demonstrated by the impairment charges that they recorded in the 2014 first half in
connection with their development and construction of three EDITION hotels, their
ongoing involvement in the development of properties presents a number of risks
including that:
o Continued weakness in the capital markets may limit their ability, or that of
third parties with who they do business, to raise capital for completion of
projects that have commenced or for development of future properties;
o Properties that they develop could become less attractive due to decreases in
demand for hotel and residential properties, market absorption or oversupply,
with the result that they may not be able to sell such properties for a profit or
at the prices or selling pace they anticipate, potentially requiring additional
changes in their pricing strategy that could result in further charges;

43
 o Construction delays, cost overruns, lender financial defaults, or so called
“Acts of God” such as earthquakes, hurricanes, floods, or fires may increase
overall project costs or result in project cancellations; and
o They may be unable to recover development costs they incur for any projects
that they do not pursue to completion.

Development activities that involve their co-investment with third parties may result
in disputes that could increase project costs, impair project operations, or increase
project completion risks.
Partnerships, joint ventures, and other business structures involving their co-
investment with third parties generally include some form of shared control over the
operations of the business and create added risks, including the possibility that other
investors in such ventures could become bankrupt or otherwise lack the financial
resources to meet their obligations, or could have or develop business interests,
policies, or objectives that are inconsistent with theirs. Although they actively seek to
minimize such risks before investing in partnerships, joint ventures, or similar
structures, actions by another investor may present additional risks of project delay,
increased project costs, or operational difficulties following project completion. Such
disputes may also be more likely in difficult business environments.

Risks associated with development and sale of residential properties associated with
their lodging properties or brands may reduce their profits.
In certain hotel and timeshare projects they participate, directly or through non
controlling interests and/or licensing agreements, in the development and sale of
residential properties associated with their brands, including residences and
condominiums under their The Ritz-Carlton, EDITION, JW Marriott, Autograph
Collection, and Marriott brand names and trademarks. Such projects pose further risks
beyond those generally associated with their lodging business, which may reduce their
profits or compromise their brand equity, including the following:
o Weakness in residential real estate and demand generally may reduce their
profits and could make it more difficult to convince future hotel development
partners of the value added by their brands;
o Increases in interest rates, reductions in mortgage availability, or increases in

44
 the costs of residential ownership could prevent potential customers from
buying residential products or reduce the prices they are willing to pay; and
o Residential construction may be subject to warranty and liability claims, and
the costs of resolving such claims may be significant.

Some hotel openings in their existing development pipeline and approved projects
may be delayed or not result in new hotels, which could adversely affect their
growth prospects.
They report a significant number of hotels in their development pipeline, including
hotels under construction and under signed contracts, as well as hotels approved for
development but not yet under signed contracts. The eventual opening of such
pipeline hotels and, in particular, the hotels approved for development that are not yet
under contract, is subject to numerous risks, including in some cases the owner’s or
developer’s ability to obtain adequate financing or governmental or regulatory
approvals. Accordingly, they cannot assure that their development pipeline, and in
particular hotels not yet under contract, will result in new hotels that enter their
system, or that those hotels will open when they anticipate.

If they incur losses on loans or loan guarantees that they have made to third
parties, their profits could decline.
At times, they make loans for hotel development or renovation expenditures in
connection with entering into or amending management or franchise agreements.
From time to time they also provide third-party lenders financial guarantees for the
timely repayment of all or a portion of debt related to hotels that they manage or
franchise, generally subject to an obligation that the owner reimburse us for any
fundings. They could suffer losses if hotel owners or franchisees default on loans that
they provide or fail to reimburse us for loan guarantees that they have funded.

If owners of hotels that they manage or franchise cannot repay or refinance

mortgage loans secured by their properties, their revenues and profits could
decrease and their business could be harmed.
The owners of many of their managed or franchised properties have pledged their
hotels as collateral for mortgage loans that they entered into when those properties

45
 were purchased or refinanced. If those owners cannot repay or refinance maturing
indebtedness on favorable terms or at all, the lenders could declare a default,
accelerate the related debt, and repossess the property. Such sales or repossessions
could, in some cases, result in the termination of their management or franchise
agreements and eliminate their anticipated income and cash flows, which could
negatively affect their results of operations.

Planned transactions that they announce may be delayed, not occur at all, or
involve unanticipated costs.
From time to time they announce transactions that they expect will close at a future
date, such as the disposition of The New York (Madison Square Park) EDITION hotel
upon completion of construction or the acquisition of Delta Hotels. If the conditions
to consummating these transactions are neither satisfied nor waived by the time they
expect, the closings could be delayed or not occur at all. In addition, the EDITION
contract is for a fixed purchase price based upon the estimated total development
costs for the hotel and they will not recover any development costs in excess of the
agreed purchase price, so they will bear those development costs to the extent that
they are higher than they anticipated when they agreed to the transaction.

 Technology, Information Protection, and Privacy Risks:

A failure to keep pace with developments in technology could impair their
operations or competitive position.
The lodging industry continues to demand the use of sophisticated technology and
systems, including those used for their reservation, revenue management, and
property management systems, their Marriott Rewards and The Ritz-Carlton Rewards
programs, and technologies they make available to their guests. These technologies
and systems must be refined, updated, and/or replaced with more advanced systems
on a regular basis, and if they cannot do so as quickly as their competitors or within
budgeted costs and time frames, their business could suffer. They also may not
achieve the benefits that they anticipate from any new technology or system, and a
failure to do so could result in higher than anticipated costs or could impair their
operating results.

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An increase in the use of third-party Internet services to book online hotel
reservations could adversely impact their business.
Some of their hotel rooms are booked through Internet travel intermediaries such as
Expedia.com Booking.com™, Travelocity.com, and Orbitz.com, as well as lesser-
known online travel service providers. These intermediaries initially focused on
leisure travel, but now also provide offerings for corporate travel and group meetings.
Although Marriott’s Look No Further Best Rate Guarantee has helped prevent
customer preference shift to the intermediaries and greatly reduced the ability of
intermediaries to undercut the published rates at their hotels, intermediaries continue
to use a variety of aggressive online marketing methods to attract customers,
including the purchase, by certain companies, of trademarked online keywords such
as “Marriott” from Internet search engines such as Google, Bing, Yahoo, and Baidu to
steer customers toward their websites (a practice that has been challenged by various
trademark owners in federal court).
Although Marriott has successfully limited these practices through contracts with key
online intermediaries, the number of intermediaries and related companies that drive
traffic to intermediaries’ websites is too large to permit them to eliminate this risk
entirely.

Failure to maintain the integrity of and protect internal or customer data could
result in faulty business decisions, operational inefficiencies, damage to their
reputation and/or subject us to costs, fines, or lawsuits.
Their businesses require collection and retention of large volumes of internal and
customer data, including credit card numbers and other personally identifiable
information of their customers in various information systems that they maintain and
in those maintained by third parties with whom they contract to provide services,
including in areas such as human resources outsourcing, website hosting, and various
forms of electronic communications. They and third parties who provide services to
us also maintain personally identifiable information about their employees. The
integrity and protection of that customer, employee, and company data is critical to
us. If that data is inaccurate or incomplete, they could make faulty decisions. Their
customers and employees also have a high expectation that they and their service
providers will adequately protect their personal information. The information,

47
security, and privacy requirements imposed by governmental regulation and the
requirements of the payment card industry are also increasingly demanding, in both
the United States and other jurisdictions where they operate. Their systems or their
franchisees' systems may not be able to satisfy these changing requirements and
employee and customer expectations, or may require significant additional
investments or time in order to do so. Efforts to hack or breach security measures,
failures of systems or software to operate as designed or intended, viruses, operator
error, or inadvertent releases of data may materially impact their and their service
providers' information systems and records. Their reliance on computer, Internet-
based and mobile systems and communications and the frequency and sophistication
of efforts by hackers to gain unauthorized access to such systems have increased
significantly in recent years. A significant theft, loss, or fraudulent use of customer,
employee, or company data could adversely impact their reputation and could result
in remedial and other expenses, fines, or litigation. Breaches in the security of their
information systems or those of their franchisees or service providers or other
disruptions in data services could lead to an interruption in the operation of their
systems, resulting in operational inefficiencies and a loss of profits.

Changes in privacy law could adversely affect their ability to market their products
effectively.
They rely on a variety of direct marketing techniques, including email marketing,
online advertising, and postal mailings. Any further restrictions in laws such as the
CANSPAM Act, and various U.S. state laws, or new federal laws on marketing and
solicitation or international data protection laws that govern these activities could
adversely affect the continuing effectiveness of email, online advertising, and postal
mailing techniques and could force further changes in their marketing strategy. If this
occurs, they may not be able to develop adequate alternative marketing strategies,
which could impact the amount and timing of their sales of certain products. They
also obtain access to potential customers from travel service providers or other
companies with whom they have substantial relationships and market to some
individuals on these lists directly or by including their marketing message in the other
company’s marketing materials. If access to these lists was prohibited or otherwise
restricted, their ability to develop new customers and introduce them to their products

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 could be impaired.

Any disruption in the functioning of their reservation system could adversely affect
their performance and results.
They manage a global reservation system that communicates reservations to their
branded hotels that individuals make directly with them online, through their mobile
app, or through their telephone call centers, or through intermediaries like travel
agents, Internet travel web sites and other distribution channels. The cost, speed,
accuracy and efficiency of their reservation system are critical aspects of their
business and are important considerations for hotel owners when choosing their
brands. Their business may suffer if they fail to maintain, upgrade, or prevent
disruption to their reservation system.

 Other Risks:
Changes in laws and regulations could reduce their profits or increase their costs.
They are subject to a wide variety of laws, regulations, and policies in jurisdictions
around the world, including those for financial reporting, taxes, healthcare, and the
environment. Changes to these laws, regulations, or policies, including those
associated with health care, tax or financial reforms, could reduce their profits. They
also anticipate that many of the jurisdictions where they do business will continue to
review taxes and other revenue raising measures, and any resulting changes could
impose new restrictions, costs, or prohibitions on their current practices or reduce
their profits. In particular, governments may revise tax laws, regulations, or official
interpretations in ways that could significantly impact us, including modifications that
could reduce the profits that they can effectively realize from their non-U.S.
operations, or that could require costly changes to those operations, or the way in
which they are structured.

If they cannot attract and retain talented associates, their business could suffer.
They compete with other companies both within and outside of their industry for
talented personnel. If they cannot recruit, train, develop, and retain sufficient numbers
of talented associates, they could experience increased associate turnover, decreased
guest satisfaction, low morale, inefficiency, or internal control failures. Insufficient

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 numbers of talented associates could also limit their ability to grow and expand their
businesses. Any shortage of skilled labor could also require higher wages that would
increase their labor costs, which could reduce their profits.

APPLICATIONS OF FUNCTIONS

Basically a hospitality related firm has its main focus in entertainment and reception of
guests, visitors, and others with liberality and good will. The functions of management as
stated by Henri Fayol according to their applications in Marriott are stated in the following
clauses:

 Planning:

Planning in hotel sector is the conscious determination of future course of action. This
involves why in action? How to take action? And when to take action?
Management has to decide what they are going to do in mere future for the well-being
and growth of the organization. What sort of goals will fetch their organization the best
results? Management has to envision the position of the organization in the future and
implement their plans and policies in the similar manner to get the best out of it. Planning
is an ongoing step and can be highly specialized based on the organizational, divisional,
departmental, team’s goals.

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 Organizing:

It is the basic implementation phase of management wherein they have to make optimum
usage of the resources required to enable the successful carrying out of plans. Organizing
involves integrating, and co - coordinating task, goals and missions along with the
resources to attain specific objectives. In hospitality industry organizing is the one of the
crucial function of the organization. Management has to take care whether everything is
under control and properly functioned or not.
Organizing requires determining how to distribute resources and organize the employees
according to the plan. Management has to identify different roles and ensure that they
assign the right amount of employees to carry out the plan. They also need to delegate
authority, assign work, and provide direction properly.

 Staffing:

Staffing is one of the most important aspects for the development of all types of
organization. Hospitality sector has a very major influence from the employees of the
organization. It is the respect and courtesy which leads and booms the hospitality sector,
which comes directly from the individual skills and approach towards their guests. More
and more hotels have noticed and realized that a good staffing plan could increase their

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 good will in the market which is the major thing required for uplifting the name and fame
of the organization. Good staffing could be able to minimize cost in order to maximize
profit and reduce chaos. Management must ensure that the one going to be recruited is
properly skilled for hotel sector and has a nice human behavioural approach.

 Directing:

Directing is said to be the heart of management functions. All other functions have got no
importance if direction doesn’t take place properly. Directing initiates action at this is the
actual phase from where actual work starts. Directing comprises of providing proper
guidance to employees and encourages them to work effectively and efficiently.
Hotel sector has to follow directing function very properly because that’s how they will
be able to show their kind of hospitality to the guests. Mistake of an employee may spoil
the image of the organization, so they must be trained well enough to compete with the
challenges they’ll be facing in mere future.

 Controlling:

Controlling consists of verifying whether everything occurs in conformities with the plan
adopted, instructions issued and principles established. This function ensures that there is

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 efficient and effective utilization of organizational resources so as to accomplish
organization’s plans.
Hotel sector needs this function majorly to establish standards. A good scale of thinking
process must be kept in order to compare what is going on and what was planned. There
must be measurement of performance wherein the deviations from the pre-determined
goals should be judged and a proper remedial action must be taken to fill that gap.

APPLICATIONS OF FAYOL’S PRINCIPLES

 Division of work:
According to this principle, the whole work must be divided in small tasks rather than
assigning the whole work to one. In hotel sector, there must be division of roles and
responsibilities one has to play in the organization. One must be given tasks according to
his/her qualifications, capability and experience.

 Authority and Responsibility:

Authority here means the power to take decisions whereas responsibility means
obligation to complete the task on time. So according to this principle there must be
proper balance between authority and responsibility. Excess of authority may result
negatively and excess of responsibility again will not allow the worker to accomplish
targets on time.

 Discipline:
Discipline refers to general rules and regulations on must follow for proper and
systematic function of organization. It develops commitment in the employees towards
the organization. Hotels also must have good supervision at all levels. They must have a
clear and fair agreement and application of penalties must be done judiciously to ensure
prosperous future of the organization.

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 Unity of Command:
There must not be conflicts in the organizations. There must be only one boss to an
employee to assign duties so that two superiors may not order at the same time and
employee get confused what to do what to not.

 Unity of Direction:
Everyone’s work and effort in the organization must be directed towards one goal i.e. the
organizational goal. This helps in bringing unity of action and coordination in the firm.

 Subordination of Individual interest to General interest:

Basic ideology of this principle is that the interest of the organization should take
priority over the interest of individual employees. If it is not so, the managers must try to
reconcile individual interest with organizational goal. And again if things do not work
good, individual interest must be sacrificed to attain organizational goals.

 Remuneration of Employees:
The overall pay and compensation should be fair to employees and workers to give them
at least a reasonable standard of living. They get proper incentives as bonus,
commission, etc. for their services to the customers and also as a way of motivation to
work efficiently with effectiveness and achieve the organizational goals better.

 Centralization & Decentralization:

Centralization refers to concentration of authority in few hands at the top level.
Decentralisation means evenly distribution of power at every level of management.
According to the principle, a company mustn’t be completely centralized or
decentralized rather, there must be both depending upon the nature and size of the
organization.

 Scalar Chain:
Scalar chain refers to a proper line of authority of superiors from highest to lowest rank.
Organization should have a chain of authority and responsibility that runs from top to
bottom and should be followed by manager.

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 Order:
People and material must be placed at appropriate time for maximum efficiency. There
must be orderliness in the organization. Materials should be kept in a fixed place i.e.
material order and People should be arranged in proper order i.e. social order.

 Equity:
Good sense and experience are needed to ensure fairness to all employees, who should
be treated as fairly as possible. Equity means just treatment to every employee. There
should not be discriminated on the basis of sex, religion, language, caste or nationality.
Employees seek to become loyal and devoted if equally treated.

 Stability of Tenure of Personnel:

Once they employees are appointed they should be serving the organization for a fixed
period. Management must let them feel secure enough so that they don’t feel themselves
in danger and work properly. Frequent turnover of employees is bad not only for the
employee but for the organization as well.

 Initiative:
Employees must take proper initiative in work. Fayol said, employees must be given an
opportunity to take some initiative in making and executing a plan. So the management
must encourage the employees to come up with some good suggestions and ideas.
Employees must be given chance to come up and use their ideology to achieve expected
goal.

 Espirit De Corps:
This principle basically means “union is strength”. Managers must promote team spirit
of unity and harmony among the employees. Fayol put a point that every employee in
the organization must consider himself as a part of a team and try to achieve team goals.
The feeling of “I” should be replaced with “WE”. It helps to develop a feeling of mutual
trust and understanding and achieve goal with efficiency and effectiveness.

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 REASONS FOR SUCCESS

The Marriott Company’s core values make them unique. As they change and grow, the
beliefs that are most important to them stay the same - putting people first, pursuing
excellence, embracing change, acting with integrity and serving our world. Being part of
Marriott International means, being part of a proud history and a thriving culture for the
employees. Here are the reasons for Marriott’s success:

 They Put People First:

"Take care of associates and they will take care of the
customers."
This is the founder’s philosophy and it has made
Marriott International a great place to work for more
than 85 years. ‘Our people first’ culture has
consistently earned this organization awards and recognition around the globe. Giving
associates opportunities to grow and succeed is part of the company’s DNA.

 They Pursue Excellence:

“Our dedication to the customer shows in everything
we do.”
Marriott’s reputation for superior customer service
dates back to J. Willard Marriott’s original goal for his
business: “good food and good service at a fair price.”
This prestigious brand takes pride in the details - every day, in every destination
worldwide.

 They Embrace Change:

“Innovation has always been part of the Marriott story.”
The Marriott family helped shape the modern hospitality
industry. They’re driven to continually challenge the
status quo and anticipate their customers’ changing needs
with new brands, new global locations and new guest
experiences.

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 They Act with Integrity:
“How we do business is as important as the business
we do.”
They hold themselves to uncompromising ethical and
legal standards. This extends to their day-to-day
business conduct, employee policies, supply chain
policies, environmental programs and practices, and their commitment to human rights
and social responsibility.

 They Serve their World:

“Our ‘spirit to serve’ makes our company stronger.”
The Marriott family supports the communities in areas
where they live and work. Marriott International
focuses on five global social issues: poverty
alleviation, the environment, community workforce
development, the wellbeing of children, and global diversity and inclusion.

EMPLOYEE RECOGNITION STRATEGY

The Marriott Awards of

Excellence were established to
recognize the "best of the best"
at Marriott International. Every
year, a group of associates are
honoured for outstanding customer service, corporate citizenship, or diversity and inclusion
efforts. Flown in from around the globe, the honourees and their families are treated to an
evening of celebration and praise featuring Marriott senior leadership and hundreds of fellow
associates. Their stories exemplify the core values of Marriott International.

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 MANAGERIAL PRINCIPLES

Today, Marriott International manages more than 20 brands and 3,900 properties in 72
countries. It also employs more than 325,000 people around the world. Bill Marriott joined
the Marriott Corporation in 1956, he became the president in November 1964, and the CEO
in 1972. Today he serves as the chairman of the board and writes about his management style
and events in his company on his blog Marriott on the Move. He strongly believes in ‘12
rules for success,’ which he crafted in 1964 but are still as relevant as ever today.

 Bill Marriot’s 12 principles for being a successful manager:

Challenge your team to do better and do it often.

Take good care of your associates, and they’ll take good care of your customers.
Celebrate your peoples’ success, and not just your own.
Know what you’re truly good at and keep improving on it.
Do it and do it now. Err on the side of taking action.
Communicate by listening to your customers, associates and competitors.
See and be seen. Get out of your office, walk the talk, make yourself visible and
accessible.
Success is always in the little details.
It’s more important to hire people with the right qualities than with a specific
experience.
Customer needs may vary, but their bias for quality never ever does.
Always hire people who are smarter than you are.
View every problem as an opportunity to grow.

The whole point of that is, those words “What do you think?” are really the key to good
leadership. They give you an opportunity to express your opinion; they show that your boss is
interested in you, interested in your opinion and that he/she is willing to pursue what you are
thinking about. Marriott learned the phrase from ‘President Dwight Eisenhower’ in 1954
when the President asked him whether he preferred to shoot birds or stand by the fire.

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 IMPROVEMENT STRATEGY

Continuous improvement efforts developed for manufacturing environments, such as Six

Sigma and Lean, can be effectively applied in a shared services environment if the
organization chooses an approach that fits within its unique culture. Marriott Business
Services (MBS), the global shared services center for Marriott International, took several
months to assess its needs and identify a methodology that would allow the resulting
continuous improvement effort to meet goals for internal client satisfaction, process speed,
accuracy, people development and sustainability.
To achieve these goals, MBS adapted a Lean Sigma methodology that relied on the DMAIC
(Define, Measure, Analyze, Improve, Control) road map. A project team, culled from MBS
and Marriott International employees, developed a staged strategy that included training
teams within the organization.
 The stages of continuous improvement:
The implementation of a continuous improvement program is considered a best practice.
Marriott Business Services’ (MBS) leadership recognized that, in light of company
culture, its continuous improvement efforts had to be evolutionary to be effective. The
organization managed its evolution by introducing continuous improvement in stages that
build upon each other.

Stage one: Focus on internal issues:

Like many organizations, MBS began its continuous improvement efforts by focusing
on internal issues.
Stage two: Expand outside the organization:
Once the program has taken hold inside, MBS plans to have the next wave of changes
and improvements come from outside the organization, particularly improvements to
upstream and downstream touch points and hand-offs related to those relationships
and processes.
Stage three: Contribute to the full value stream:
Eventually, MBS expects its efforts to mature to the point where they are taking place
throughout the company’s entire value stream and that individuals throughout the
enterprise become more proactive when it comes to continuous improvement.

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Throughout each of these stages, MBS is focusing on building its culture of continuous
improvement so that it underlies everyday work and problem solving. Since MBS began
using Lean Sigma, it has launched many projects that have reduced costs, increased internal
client satisfaction and improved controls. Projects focused on cost savings include improving
the payment cycle and bill collections. Client satisfaction is the main goal for projects that
involve accuracy and timeliness. From “deciding on a strategy” to “implementing a pilot
project”, MBS’s Lean Sigma team learned some important lessons.
Gain leadership support:
MBS is fortunate to have a leadership team that loves process improvement, but the
project team still had to keep them engaged and updated.
Select the right tools:
Not all available Lean Sigma tools fit MBS’s needs, including some of the statistical
tools.
Implement methodically:
Rather than training all employees in a big bang approach, MBS moved forward with the
first wave of green belts and made adjustments to the training and structure prior to
training the second wave.
Understand timing:
Adopting the Lean Sigma culture is critical and cannot be rushed.
Don’t overlook soft skills:
Strong project management skills are essential.
Involve middle management and process owners
Choose a methodology that meets the organization’s needs:
It is important to spend time thinking about this choice with input from others.
Implementing the wrong methodology can hinder one’s ability to improve the business.
Learn and adjust:
By learning as they go, organizations can change and improve things as they are doing
process improvement.
Build a strong image throughout the enterprise:
Organizations can look for ways to market successes and look for ways to brand the
program and build excitement among employees and company leaders.

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 Define and measure success:
MBS measures success in a number of ways through client satisfaction scores, in
terms of employee development as more people ask for and receive green belt
training, and whether associates are rotating and getting promoted as a result of their
experiences using the Lean Sigma methodology.

MBS developed a continuous improvement approach that best suited its business
requirements. Which is referred to it as Lean Sigma, the chosen methodology is a version
customized for MBS’ shared services environment. The effort combined the approaches and
reflected the intense focus on customer satisfaction required by Lean and Six Sigma
initiatives. Lean initiatives focus on speed and delivering what the customer values and Six
Sigma initiatives focus on eliminating defects and exceeding customer requirements.
Structure was a key issue.

 Marketing value and branding the effort:

MBS’s Lean Sigma program in itself was not enough to build a culture of continuous
improvement. The team had to market and brand the effort to ensure its success. They
built a culture and generated excitement for the program among associates and hotel
clients.

The team also developed a Lean Sigma brand to build excitement and help employees
identify with the program. This branding effort involved the use of a Lean Sigma logo
and tailored communication to tell the Lean Sigma story using email, newsletters,
websites and bulletin boards. The team also distributed a Lean Sigma Road Map, which
showed the tools available for problem solving.

At the same time, the company will continue its internal transformation to ensure that the
culture of continuous improvement becomes ingrained and people gain the skills
necessary to fully participate in continuous improvement activities.

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 CONCLUSIONS

The hospitality industry is one of the largest

employers in the world and strongly
contributes to the global economy. The
principles of management are globally
applicable regardless of changing conditions
in the hospitality industry especially in the
Hotels business. Implementing Principles of
management in the organization brings about
a change and improves the quality of business.

Proper planning, organizing, staffing, directing and controlling provides the management
with a clear picture of the quality of the services provided, but also helps the hotel owners to
discover the needs, tastes, preferences and expectations of the guests. It also helps to innovate
various facilities which can be provided by the hotels to their customers. It helps the
organization in setting the standards for the provision of services in the hospitality industry.

In this competitive and globalised world, staff induction and on the job training plays a
crucial role in the hospitality industry. During the induction process staff gains knowledge
about the management they are going to work in. In on the job training staff gets an
opportunity to perform and develop their interpersonal skills.

Through this process the employees also develop communication skills, which is a major
issue in the service industry. Management should make sure that the employees working for
the organization expect and look for awards for their work. That makes them more hospitable
towards the organization.

Since Marriott group implements and follows most of the

principles and all the functions of management, it has
grown as the undisputed leader in the hospitality industry.
Efficient and effective working makes them the most
preferred hotel to spend a vacation.

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 BIBLIOGRAPHY

The management principles and functions are followed in all organizations irrespective of its
genre. The success rate of Marriott proves it. The following are the references used for
completing this project:
www.wikipedia.org:
o Management Concepts
www.google.co.in – Images:
o Principles of management
o Marriott Hotel
www.marriott.com:
o Company Profile
o Employee Rewards
o Company Operations
Marriott International Annual Report:
o Financial Statements
o Income Statements
o Cash Flow Statements
Marriott International Sustainability Report:
o Environmental Risks
o Corporate Social responsibility
Book – Principles of Management by, T. Ramaswamy
Book – Business Studies by, Poonam Gandhi
Marriott on the move – Blog by, Mr. Bill Marriott
o Growth of Marriott
o Managerial Principles
Principles of Management (Pdf)
Official brochure – Marriott (2015)

FSS International Business Perspective Report:

o Improvement Strategy

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