International Journal of Hospitality Management 47 (2015) 65–

75

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International Journal of Hospitality Management

jo u r n al ho me p age: w w w .e l s e v i e r . c o m / l o c a t e / i j h o s m a n

Strategic human resource management: Insights from the

international hotel industry
∗
Judie M. Gannona, , Angela Roperb , Liz Dohertyc
a
Oxford Brookes University, Gipsy Lane, Oxford OX3 0BP, United Kingdom
b
London School of Hospitality & Tourism, University of West London, London W5 5RF, United Kingdom
c
Sheffield Hallam University, City Campus, Howard Street, Sheffield S1 1WB, United Kingdom

A R T I C L E I N F O A B S T R A C T

Keywords: In the strategic human resource management (SHRM) field three approaches have dominated, namely, the
International human resource
universal or best-practice, best-fit or contingency and resource-based view (RBV). This study investigates
management Strategic human resource
evidence for the simultaneous or mixed adoption of these approaches by eight case study firms in the
management Differentiation
Competitive advantage international hotel industry. Findings suggest there is considerable evidence of the combined use of
the first two approaches but that the SHRM RBV approach was difficult to achieve by all companies.
Overall, gaining differentiation through SHRM practices was found to be challenging due to specific
industry forces. The study identifies that where companies derive some competitive advantage from
their human resources and HRM practices they have closely aligned their managers’ expertise with
their corporate market entry mode expertise and developed some distinctive, complex and integrated
HRM interventions, which have a mutually reinforcing effect.
© 2015 Elsevier Ltd. All rights reserved.

1. Introduction
This study responds to this demand and analyses the adoption of
hybrid SHRM approaches by firms in one industry.
SHRM has emerged as the prominent designation of people
While the SHRM literature recognizes the importance of exoge-
management over the past three decades (Boxall and Purcell, 2008;
nous and endogenous factors in shaping firm’s people
Thite et al., 2012; Zheng, 2013). With their own discernible per-
management practices and approaches, the international human
spectives, the universal or best practice, best-fit or contingency
resource man- agement (IHRM) literature highlights that cultural
and the resource-based view (RBV) approaches (Boxall and Purcell,
and institutional environment factors which influence, facilitate
2008; Pinnington, 2011) have dominated the field. Whilst empir-
and constrain HRM across borders (Edwards et al., 2010; Zheng,
ical research has tended to explore SHRM from one of these
2013). However, limited research has focused on understanding
specific approaches, more recent theoretical arguments have sug-
how international companies within specific industries adopt
gested that companies are unlikely to adhere solely to a singular
SHRM approaches and HRM practices to deliver competitive
approach due to the complexity of factors and forces acting upon
success (Boselie et al., 2009; Marler, 2012; Zheng, 2013) by
firms, instead adopting these approaches simultaneously (Boxall
balancing these exogenous and endogenous factors. As the
and Purcell, 2008, 2011; Marler, 2012). Limited empirical explo-
spotlight of this study is the strate- gic and international human
ration has taken place to explore firms’ simultaneous adoption of
resource management (SIHRM) of international managers, the
these SHRM approaches to achieve competitive advantage through
expatriates and inpatriates who lead international subsidiaries, the
human resources (Boselie et al., 2009). Where research has been
strategic approaches are given centre stage in the exploration of
undertaken, findings have highlighted the importance of indus-
the literature.
try level analysis (Paauwe, 2009; Paauwe and Boselie, 2003) and
The aim of this research is to explore evidence of the hybrid
called for further empirical work to explore how international
version of SHRM approaches through case studies of companies in
firms within industries manage their human resources
the international hotel industry. This industry presents a particu-
competitively.
larly apposite sectoral context where there is a long and continued
history of internationalization and the rhetoric suggests ‘a hotel
is only as good as its manager’. Unit or subsidiary managers have
traditionally been seen as ‘strategic human resources’ responsible
∗ Corresponding author. Tel.: +44 01865 483837.
for creating profitable units through their leadership and exper-
E-mail address: j m g a n n o n @ b r o o k e s . a c . u k (J.M. Gannon).
tise in hospitality-specific and generic-business management skills

http://dx.doi.org/10.1016/j.ijhm.2015.03.003
0278-4319/© 2015 Elsevier Ltd. All rights reserved.
 J.M. Gannon et al. / International Journal of Hospitality Management 47 (2015) 65–75
6
(Miao et al., 2011). It is also an industry, dominated by compa-
challenges of achieving competitive advantage where other organi-
nies with vast portfolios of hotels across the world using low
zations within the same sector pursue similar strategies and
risk and control entry modes, typically management contracts and
market positions (Boxall and Purcell, 2011).
franchises (Xiao et al., 2012) which has increased the skills and
Finally, the RBV SHRM approach is suggested as an alterna-
expertise demanded of such managers (Magnini, 2008; Gannon
tive to the best practice and best-fit SHRM approaches. It differs
et al., 2010; Hodari & Sturman, 2014). As such, the importance of
from the previous approaches because it proposes that creating
mutually beneficial relationships between hotel companies, their
competitive advantage is achieved via the leveraging of valuable,
partners and property owners and (master) franchisees further
rare, inimitable, non-substitutable and rent achieving (human)
highlights the importance of effectively managing and developing
resources (Barney, 2001; Morris et al., 2006). Several studies
skilled and experienced hotel managers. By undertaking a qualita-
provide empirical evidence that employees can fulfil these criteria
tive approach, and securing unprecedented executive level access
to realize competitive advantage through human resources by cre-
into eight of the world’s largest international hotel companies
ating human capital advantage (Marchington et al., 2003). ‘Strategic
(IHCs), this study explores the deployment and development of
human resources’ or ‘rainmakers’ are the most valuable human
strategic human resources by evaluating a hybrid version of
resources who specifically fulfil the RBV criteria and contribute
SIHRM approaches. In so doing, it focuses upon the links between
significant added value to their employers’ companies. Commen-
dom- inant fields in the literature: strategy, SHRM, IHRM and
tators have determined that HRM practices can become strategic
market entry models, which have previously received little co-
assets/resources just like the human resources they set out to
ordinated attention (Pisani, 2009).
man- age (Boxall and Purcell, 2011) but only where companies
Initially, this article evaluates the SHRM approaches and the
develop idiosyncratic and interdependent HRM practices which
empirical and theoretical evidence on IHRM highlighting evi-
capitalize on their proprietary knowledge and transfer it
dence for a hybrid SIHRM approach. An overview of the research
effectively across the workforce. The focus of the RBV approach, on
design is then provided alongside the rationale for the methods
exploiting inter- nal resources to achieve competitive advantage, is
deployed. The findings from the companies’ SIHRM approaches are
then a departure from the best-fit SHRM approach as it attempts to
reported and evaluated in relation to the proposed hybrid SIHRM
overcome the external and prescriptive views of the best-fit
approaches. The opportunities and limitations to building and sus-
approach (Morris et al., 2006).
taining competitive advantage through international (hotel) unit
Amidst criticisms of these three SHRM approaches each has
managers, as strategic human resources, are assessed. Finally, a
some value and integrity; however, they represent ideal types
discussion of the main contributions and limitations of this study,
which are unlikely to provide companies with a level-headed reso-
as well as the managerial, theoretical and research implications,
lution to their pursuit of competitive advantage via their human
conclude this article.
resources or HRM practices (Boselie et al., 2009; Marler, 2012;
Zheng, 2013). Rather it seems that companies may instead use a
‘hybrid’, combined and simultaneous version of the three SHRM
2. Approaches to strategic human resource
approaches in the attempt to understand and balance the exter-
management (SHRM)
nal pressures of their industry and competitive set to conform and
internal pressures to differentiate. Such insights have been sup-
Exploring the three main SHRM approaches typically begins
ported further by the work of Teece (2007) and Foss (2011) where
with an exploration of the universalist or best practice SHRM
the arguments for the dynamic capabilities and micro-foundations
approach where companies are encouraged to achieve compet-
approaches have been explicated. This hybrid version of the three
itive advantage by adopting sophisticated or ‘high performance’
SHRM approaches is a departure from the autonomous way that
HRM practices for their human resources (Pfeffer, 1998).
these approaches are typically viewed and also highlights the
However, disagreements between researchers on what is meant by
importance of industry dynamics and isomorphism on the devel-
‘sophis- ticated’ HRM, the exact practices required and the
opment of bundles of HRM practices used to satisfy the ‘table
limitations of the empirical evidence has resulted in considerable
stakes’ best practice SHRM approach (Boselie et al., 2009; Boxall
criticism (Boxall and Purcell, 2011). Claims that the ‘superior’ HRM
and Purcell, 2008).
practices associated with the best practice SHRM approach can be
adopted across different industrial and national boundaries
regardless of diverse cultural conventions and values, and political
3. International SHRM approaches
and social and economic histories and institutions, have led to
further denuncia- tion (Boxall and Purcell, 2008; Kaufman, 2014).
In the international SHRM arena similar limitations of the three
However, outright criticisms of the ‘best practice’ SHRM approach
main SHRM approaches have been compounded by additional
have evolved to recognize that within industries there may be
pressures to customize and standardize practices dependent upon
certain HRM prac- tices, which are indispensable (Boxall and
local and parent company cultural and institutional factors. For
Purcell, 2008, 2011) and known as ‘table stakes’. Such shared
example, the wholesale adoption of ‘sophisticated’ HRM prac-
practices are adopted by all organizations to show their legitimate
tices, in line with the best practice SHRM approach, has been
membership of an industry and are recognized as an adaptation of
roundly critiqued (Brewster, 2006, 2007) due to the deep-rooted
the ‘best practice’ SHRM approach (Bjorkman, 2006; Leonard-
national institutional and cultural conventions to people manage-
Barton, 1995).
ment across nations. However, this does not mean that within a
The second SHRM approach ‘best-fit’ proposes that companies’
nation all industries have the same HRM practices (Boon et al.,
market positions and strategies determine their HRM policies and
2009). Indeed the IHRM literature can be accused of dispropor-
practices. A range of theories on the ‘best fit’ SHRM approach
tionately focusing upon the differences between parent and host
have developed including those which link specific strategy deci-
country cultures and institutions without appreciating the diver-
sions and choices to HRM practices and policies (Schuler and
sity across industry sectors within nations (Marler, 2012; Kaufman,
Jackson, 1987) to more complex models (Fombrun et al., 1984;
2014). Boselie et al.’s study (2003) shows different ‘table stake’
Beer et al., 1984) which incorporate wider corporate
HRM practices within the hospital, local government and hotels
characteristics (strategies, positions, portfolio characteristics) to
sector within the same country (The Netherlands) and highlights
determine HRM practices. The limitations of the ‘best fit’ SHRM
the value of a hybrid approach to understanding SIHRM where
approach revolve around its concentration on external market
positioning and the
 J.M. Gannon et al. / International Journal of Hospitality Management 47 (2015) 65–75
industry context and national cultural and institutional factors all
impact upon people management practices.
Within the IHRM area, much of the research conducted has
been based upon the best-fit or contingent SHRM approach,
though once again such research has focused upon the influence of
national dif- ferences as well as strategic models (Bartlett and
Ghoshal, 1989, 2000). The main thrust of the strategic dimension
to IHRM has revolved around the question of whether HRM
practices are cus- tomized (to local practices) or standardized
(across the company) when firms operate internationally. For
example: the models of international orientation (Heenan and
Perlmutter, 1979); prod- uct life-cycle phases (Adler and Ghadar,
1990); and international responsiveness versus integration
(Bartlett and Ghoshal, 1989, 2000) are based upon strategic choice
arguments derived from the strategic management field.
There have been attempts to develop more nuanced descrip-
tions of SIHRM by analyzing the contingency of specific factors.
International versions of the best-fit SHRM approach suggest HRM
practices are more likely to be standardized where: they are aimed
at managers (Easterby-Smith et al., 1995; Rosenzweig, 2006); there
is a high level of parent and subsidiary interdependence; mar-
ket entry modes involve full or partial ownership (Edwards et al.,
2010); companies originate from the USA or Japan (as opposed
to Europe) (Ferner and Quintanilla, 1998); the host country the
company enters is less ‘culturally distant’ from its own country
of origin; and their business is embedded in the national busi-
ness system (Boselie et al., 2003). More recently a four influences
framework identifying; country of origin, parent dominance, inter-
national integration and host country effects emerged from the
cultural, institutional and market based pressures companies face
(Edwards et al., 2010). However, once again critics identify simi-
lar limitations associated with the external focus of these best-fit
type of SIHRM so it is useful to consider the internally focused RBV
approach within the IHRM area (Boxall and Purcell, 2011; Zheng,
2013).
Several authors have adopted the RBV approach in their IHRM
investigations (Zhong et al., 2012; Bonache and Zagarty-Oberty,
2008; Harvey et al., 2000) highlighting its strength as the ability
to shed light on the relationship between competitive advantage
and expatriates due to the importance of international assignees in
the deployment of tacit knowledge across markets. This literature
highlights the ‘rainmaker’ status of expatriates and inpatriates, and
their management, in international organizations where knowl-
edge transfer is critical to their organizations’ success (Bonache
and Zagarty-Oberty, 2008).
In summary then the hybrid version of SIHRM approaches
offers a valuable way of understanding how companies deal with
the need to simultaneously conform (to national and industrial
conventions on managing human resources) and differentiate
(through distinc- tive, integrated and added value HRM
practices) in the pursuit of competitive advantage across
complex national and industrial contexts (Boxall and Purcell,
2011). This hybrid standpoint may also allow a more subtle
appreciation of SIHRM as it permits a more balanced view of the
patterns of internal and external factors shaping companies’
attempts to strategically manage their human resources (Boon et
al., 2009), overcoming the often domineering influence of specific
national cultural and institutional differences. Having highlighted
the gaps in the literature and made the case for exploring the
hybrid version of SIHRM approaches within the inter- national
hotel industry, the design of this study is now outlined.
4. Research design
A multi-case study strategy (Thomas, 2011; Patton, 2002) was
adopted to achieve cross case analysis of the SIHRM approaches
67
employed in the international hotel industry. Using an industry
def- inition of global operations based on companies with hotels on
at least four out of the six economically viable continents, as a pur-
posive sample technique (Bryman and Bell, 2007), nine companies
were invited to participate in the research. They were contacted
through the research teams’ existing professional networks. Sub-
sequent merger activity meant that eight companies accepted
the invitation, on the basis that their participation would be
anonymized. Company, analysts’ and consultancy reports were
used to identify the size and scale of portfolios. The final set of
eight companies highlights the range across the industry with
companies varying in size (from 2000 plus hotel units to under
50), interna- tionalization (between 20 and 70 plus countries),
nature of brands (solely luxury brands to brands at all market
levels) and methods of international growth (ownership,
management contracts and franchises).
Senior human resource executives of these eight IHCs were
pinpointed as the main respondents to the study in line with
Brewster’s (2007) argument that a key role for corporate HR is
the management of strategic human resources. The authors’ per-
sonal experiences and contacts in the industry also verified these
executives (typically Senior Vice President of Human Resources)
as responsible for the deployment and development of hotel man-
agers as strategic human resources. The company case studies
were constructed from four strands of data collection (Patton,
2002). Firstly, company and industry archives and documentation
were used to analyze the portfolios of the IHCs. Secondly after
discussions with a Human Resources director a short, multiple-
choice ques- tionnaire was developed to facilitate access through
gatekeepers, engage relevant executive participants in the study
and inform the subsequent interview conversations. The two-page
question- naire was designed to cover areas which the literature
suggested were appropriate in terms of managing international
manage- ment resources and the frequency and criteria for
deploying these practices (see Appendix 1). The responses from
these brief ques- tionnaires led to the subsequent development of
the interview questions. The questions were as follows;
1. How does an individual become an international
hotel general manager in your company?
Aimed to elicit data about how general managers were
viewed and valued within their companies, their
characteristics, quali- ties, and competences to be displayed
and their contributions to the achievement of international
goals.
2. How does your company manage the careers of its
hotel managers?
Aimed to establish the organizational and specifically peo-
ple management practices used to manage hotel managers
including recruitment, selection, succession planning, train-
ing and development, performance appraisals, contractual
aspects and talent management.
3. How does your company ensure you will have
the right calibre and number of hotel general
managers to realize your corporate strategy?
Aimed to ascertain the organizational arguments for the
prac- tices and policies adopted in managing international
hotel general managers in relation to the companies’
international strategies. It also hoped to elicit the
organizational com- petencies and knowledge developed and
used in realizing competitive advantage through key human
resources.
 J.M. Gannon et al. / International Journal of Hospitality Management 47 (2015) 65–75
6
While there were only three main questions the interviews
that familiarization and inculcation to the corporate and brand
with senior executives lasted on average four hours. The
ethos and operating standards were fundamental. The interven-
interviews with other Human Resource team members were
tions in the areas of corporate communications highlighted the
typically shorter and more focused on their specific areas of
challenges of geographic spread and ownership as particularly
expertise, for example, talent database use. These interactions also
important in the international hotel industry. The documentation
included requests for company documentation, opportunities to
provided emphasized the companies’ intense desire to communi-
observe meetings and day-to-day activities in these teams. The
cate to their human resources with the cases all using web pages,
access to archive strategy and HRM materials included HRM
brochures, newsletters and booklets as well as travelling execu-
policies, performance appraisal forms, organizational charts,
tives to further reinforce company service standards and goals as
training manuals, company newspa- pers, job descriptions and
identified by the Anglo-American Premium executives’ comments
succession planning charts, as well as demonstrations of talent
“At the Vice President and divisional director levels we’re always
bank databases. Alongside the interviews these other insights
trav- elling, listening to what are people are saying and telling them
provided additional context and depth to the research data
about what’s happening across the company.” The nature of the
(Thomas, 2011). Subsequent to the fieldwork visits follow-up
interna- tional hotel industry, with its specific market entry modes
telephone calls helped clarify some of the company doc-
and the diverse geographical spread of properties, results in a set
umentation and interview discussions with participants.
of com- mon HRM challenges being identified. All the respondents
The eight cases were developed into narratives and analyzed
reported the property owners involved in management contracts
manually. Pattern and theme analysis were used initially with
interfer- ing in human resource decisions and practices to some
descriptive coding highlighting specific activities and associations
degree. Owners from specific regions (namely the Middle East,
between HRM practices and approaches and company charac-
parts of Eastern Europe and China) were seen to cause particular
teristics, within and then across the cases, and their associated
problems of influencing selection and development decisions, as
documents (Patton, 2002). The theoretical relationships arising
well as day to day operational activities within the hotels. The
from the data and initial coding were derived from further inter-
executive from Britbuyer identified;
pretive coding and analytic coding with the extant literature used
to draw conclusions. Speaking bluntly the Arab owners in particular are just difficult
to deal with and once you put their ideal people in there you
can forget about them as it will be difficult to get them out. It is
5. The SHRM approaches in international hotel companies
a problem. The owners can be really very difficult.

The results showed strong evidence of consistent similarities in The executives’ comments also reported how local investors
the HRM practices deployed by the firms. The initial questionnaire exerted pressure to localize management appointments at their
results indicated that specific interventions were being deployed units and argued for particular nationalities to fulfil specific roles,
across the sample to manage the quantity and quality of subsidiary such as French head chefs. Such intrusions were seen to impair the
managerial resources. In the company cases, built upon the inter- development and succession planning the executives undertook to
views and documents, these similarities were borne out and were develop corporate managerial resources.
particularly evident in how managers were ‘seen’ by their
corporate employers. There were also some differentiating HRM 5.2. Shared HRM interventions between international
practices apparent, which only a few companies (or one company) hotel companies
adopted, and that were viewed to provide particular
organizational benefits by their executive advocates. In addition to the widespread core HRM practices undertaken
by the companies to manage their managerial resources, two sets
of differentiating practices were discerned. The best fit SHRM
5.1. Core HRM interventions in international hotel companies
approach has consistently argued that strategies and competitive
positions should determine people management practices to sat-
The second column of Table 1 summarizes the similar or core
isfy those corporate ambitions (Sanz-Valle et al., 1999; Boxall and
HRM interventions. All the HR executives saw their unit managers
Purcell, 2011). However, others have also argued that the indus-
as strategic human resources or rainmakers (Marchington et al.,
try level provides too broad a level of analysis when attempting to
2003; Boxall and Steeneveld, 1999) fundamental to business suc-
understand competitive positions (Gannon et al., 2012; Panagiotou,
cess. All unit managers were charged with being key players in
2006, 2008), and as such, where an industry is highly differen-
their local business community and as the companies’ representa-
tiated and competitive, rivalry between firms can result in the
tives, often at different market levels too. Industry transformations
formation of what are known as strategic groups of particularly
were bringing new knowledge and skills to bear where broader
close competitors. These groups are formed through collections
business and leadership skills were valued over traditional craft
of firms adopting similar competitive positions and attempting to
skills and knowledge. In addition company growth through the use
create barriers to other firms entering their area of the industry.
of management contracts, with the properties owned by external
When analyzing the eight company cases three specific clusters
investors, emphasized the importance of unit managers’ abilities
emerged based upon their analogous strategic positions (arising
to manage different stakeholders’ interests, as well as the expecta-
from their portfolio characteristics, extent of internationalization,
tions of their corporate employers.
geographical coverage, strategic business choices and market
Amongst the common HRM practices, interventions which
entry modes) as well as similarities in the sets of HRM practices
allowed the companies to reinforce their brand standards and
adopted. These clusters were subsequently labelled: The
promote their version of hotel products and services across inter-
Multibranders, The Mixed Portfolio Purchasers and The Prestige
national markets were of particular importance. While there are
Operators. The third column of Table 1 also identifies the three
arguments that some of these HRM practices formed the basis of
clusters before the distinctive HRM practices of the individual
generic best practice; namely training, contractual arrangements
companies are considered.
and performance appraisal, the others could be seen as ‘table
The Multibranders cluster was captured due to the size and
stake’ practices particular to the international hotel industry itself.
scale of their multi-branded, mainly franchised and managed port-
Table 1 summarizes the six areas so the strong internal labour
folios which allowed a critical mass of hotels in specific countries
market favoured by all the companies was symptomatic of the
or
firms’ views
Table 1
Summary of IHCs and their HRM practices across the sample, closest rival clusters and company specific approaches.

IHCs Common across Common within closest Distinctive Resource

sample ‘Table Stake’ competitor clusters Based View approach
best practice approach Best fit approach

No. of hotel
No. of Brands
units
countries
Euromultigrow Strategic group 1 –
• More localised recruitment – related to critical FranchiseKing – synergies sought between HRM
The
mass of units practices, driven heavily by competencies and
Multi-branders
2500 plus 70 plus Seventeen Strong internal labour • Distinct in-brand approaches and practices, few performance management framework. Transfers
brands split markets • Euromultigrow opportunities for x-brand moves facilitated between franchised, managed and owned
into: upscale • FranchiseKing • Competency framework and position guides used to units in line with competency framework and brand
and midscale, identify skills and managerial talent to operate standards
Economy and brands
J.
budget and • Strong communication policies to create corporate M.
Leisure hotels heart and develop networks across diverse Ga
portfolios nn
on
FranchiseKing et
al.
2300 plus 65 plus Five brands; at Training programmes /
prestige level, In
two at te
mid-market, rn
budget brands ati
on
and resorts al
Jo
Strategic group 2 – ur
Britbuyer
• Separation of international and domestic operations, na
The
l
900 50 Nine brands at Performance appraisal Mixed Portfolio management cohorts and HRM activities of
international Purchasers Ho
and management • PCN domination of management recruitment
and domestic spi
• Attempts to build stronger corporate cultures tal
levels; Upscale, • Britbuyer and communication routes following mergers ity
mid-market • US mixed economy • Management development focused at regional and M
and budget local levels an
US mixed economy • Career management interventions for ag
460 63 Prestige brand e
Specific contractual senior management only m
and arrangements • ‘Good practice’ HRM practices adopted en
mid-market from acquired/merged companies t
brand – North 47
America (2
01
Contractman International 5)
Corporate com- Strategic group 3 – • Global vision for managerial staff and development Contractman International – cultural adjustment
65
The
–
200 35 Four luxury or Prestige Operators programmes used programmes, major role for senior HR personnel at
upscale brands munication
• Key location recruitment initiatives, access for HCNs regional and corporate levels, integrated HRM IT
AngloAmerican Premium channels • Contractman systems for all employees management and transfer,
• International moves facilitated
150 plus 48 Prestige International • Strong corporate cultures but modified to fit labour surveys developed to provide host country
international • AngloAmerican with local cultures and customs knowledge.
brand and Premium • Cultural differences acknowledged and
national UK • Globalalliance valued; language proficiency, adaptability,
mid-market • Euroalliance international exposure
brand • Succession planning and career management Globalalliance – fast track management development
Globalalliance interventions integrated with other practices
Cultural and programme, powerful role for HR executives over unit
190 70 Prestige brand • Ability to manage international challenges
International
and and owners valued management appointments. More focused
challenges
mid-market international mobility and specific investments in
North managerial development
American
69
brand
Euroalliance
50 16 One upscale
brand
 J.M. Gannon et al. / International Journal of Hospitality Management 47 (2015) 65–75
7
regions of the world. These portfolios had particular implications
for their recruitment policies and the spread of their managers,
with strict frameworks for selection criteria for each brand devel-
oped by the corporate HR departments. They also used
competency frameworks to facilitate more managerial transfers
across the com- panies’ brands aiding the corporate recognition of
management talent and alleviating promotion bottlenecks in
particular brands. Although this group mentioned the problems of
property owner interference they were less concerned than the
other firms. Their highly standardized brands meant that the
majority of investors had already bought into their hotel services
formula and did not wish to jeopardize their investments. The
Multibranders’ critical mass of units in specific countries or
regions also meant that they were able to provide area HRM
support to their unit managers and reinforce their brands and
operating standards. This is captured in the mandatory training
courses for managers of owned, managed and franchised units
where attendance was obligatory. In the case of the FranchiseKing
the importance of the training in the com- petency framework was
emphasized for aspiring and existing unit managers:
“We have been training them in the use of Behavioural Event
Interviewing to help them, where the key skills are listening
and questioning, to spot the competencies. Some people seem
to be naturals at it, others struggle and evaluate and judge. But
it’s what we’re about now so we have to make sure they under-
stand.”
The two members of the Mixed Portfolio Purchasers group
had experienced considerable change and expansion following
their acquisition of smaller European hotel chains, which occurred
alongside substantial enhancements to their own domestic and
international portfolios. The companies were struggling to recon-
cile these recent changes and both had divided out, and separately
managed, their domestic businesses despite operating at the
same market levels. There was slightly less emphasis on the
strong internal labour market with figures of 75–80% quoted
against the 90–100% indicated by other companies. Pressures
to achieve profitable returns on their acquisitions had forced
restructuring activities and the previous ‘low risk’ heir appar-
ent role of deputy unit manager positions had been eliminated
as a cost saving measure. These companies recruited many more
Parent Company Nationals (PCNs) than the other two clusters
too.
To realize the value of their acquisitions the Mixed Portfo-
lio Purchasers had attempted to build strong, coherent corporate
cultures in their newly merged organizations through extensive
communication networks. Both firms had developed profiles of
their hotel units (rather than their managers’ or their abilities),
based upon the location and size of the unit, owner relations,
marketing needs, customer groups, staff relations and complex-
ity and maturity of the business, to help in unit manager selection.
However, these executives suggested their profiling of managers’
talents were less consistent and rigorous, and still too often reliant
on some subjective input. The Mixed Portfolio Purchasers were
keen to undertake further growth; however, their purchases had
resulted in periods of uncertainty where the effective develop-
ment of their unit managerial resources had been undermined.
As such this cluster is pitched somewhere between the other
two clusters of IHCs, in a volatile position; having to deal with
the multiple demands of realizing the asset and human resource
value of their acquisitions, and assimilating effective HRM prac-
tices, whilst maintaining their positions in a highly competitive
industry.
The four smaller companies of the Prestige Operators clus-
ter reveal the widest variety of HRM practices and approaches
used to develop and manage hotel managers. These companies
are the most international in terms of the diversity of their
portfolio of luxury hospitality facilities spread across countries.
The Prestige Operators had grown substantially, internationally
rather than on a national basis. They were keen to maintain
their ‘true international hospitality status’ whilst recognizing the
increased challenges involved in securing a quality supply of man-
agerial human resources. The Prestige Operators had developed
specific HRM practices to assuage these challenges and real-
ize their strategic objectives on growth and quality standards.
Their recruitment was focused primarily on securing candidates
from the international hotel schools in Europe to their manage-
ment development programmes. They also operated management
development programmes aimed at enhancing talented managers’
routes to unit manager positions, within eight to ten year periods.
These programmes all espoused a clear vision of what an inter-
national manager should look like. The importance of mobility
and international transfers was stressed, with international flex-
ibility, linguistic ability and cultural adaptability prioritized, even
for HCNs aspiring to unit management. The importance of interna-
tional experience was based upon the nature of the clientele and
the standards of hospitality balanced with their commitment to
cus- tomize these to local traditions and preferences. Across the
Prestige Operators more integration of HRM practices (succession
planning, performance appraisal, training and development
programmes, transfers and career management activities) was
evident than in the two other clusters resulting in a higher level of
consistency for identifying unit manager potential. The
Globalalliance executive commented:
“How do we manage our GMs? Well we include all managers
here – well it’s a very integrated approach to career develop-
ment, or management development and the annual appraisal,
and it all comes together with succession planning and the
work we co-ordinate here.”
Effective management of human resources was also achieved
through IT systems holding managers’ details and other HR infor-
mation including: mobility, succession planning, human resource
planning issues, and the level of managerial talent generally.
These systems allowed the Prestige Operators’ HR executives more
control over selection and development decisions compared to
the other two clusters. The similarities in HRM practices and
approaches across the Prestige Operators led to a common percep-
tion that each company was creating managerial talent which was
unique and superior to their rivals. Arguments such as ‘It’s not
what the rest of them are doing!’ and ‘We’re producing managers
who’ll out- play the competition’ highlight these perceptions of
distinctiveness in the practices used to manage and develop
international hotel managers. While these assertions do have
some support, because of the more sophisticated and coherent
HRM activities the Prestige Operators engaged in to ensure
sufficient quantity and quality of international unit managers,
much of the HRM practices evident were actually equivalent. The
context in which HRM practices took place was more demanding
for the Prestige Operator group mem- bers. The HR executives and
their administrators reported more widespread issues with
managing owner relations, coping with local and cultural
differences, and talked in more detail about the challenges of
standardizing and customizing HRM practices within and across
their hotel units. These issues and concerns arise from the greater
vulnerability they experienced to serving their demand- ing
international clientele and developing partnerships through
management contracts with investors. As such their industry pos-
itions as global and luxury hotel service providers indicated the
necessity for a more coherent, integrated and wider range of HRM
practices.
5.3. Distinctive hotel companies
HRM interventions
in international The final column of Table 1
 J.M. Gannon et al. / International Journal of Hospitality Management 47 (2015) 65–75
7
identifies how in addition to approach played a pivotal “We must therefore nurture
There was clear
the similarities in HRM role in committing managers excellence in every one of
consistency and integration
practices, at industry and to the brand standards. This our employees, especially
between these systems with a
closest rival cluster levels, is captured by the remarks of our local nationals – the
strong emphasis on
distinctive HRM practices the FranchiseKing executive: people who live in the
international awareness and
were also discernible. While “Really our fran- chisees can countries where we
cultural adaptability along
all IHCs may lay claim to do what they want, really, operate hotels.”
with the other more typical
some distinctive HRM what they want. As long as
selection and performance
practices or approaches this they don’t compromise the few
criteria of an ability to work
does not suggest all firms things we hold dear about our
with others, demon- strating
have adopted the RBV brands.” This philosophy
initiative, business acumen,
approach. In practice only a facilitated through human
and language proficiency.
few companies appeared to resource trans- fers, training
These practices were co-
have evolved highly courses, newsletters and
ordinated through advanced
integrated and sophisticated other literature, provides the
IT systems with the regional
HRM approaches and company with opportunities
HR offices playing a vital role
practices to develop and to achieve its desired
in supporting, advising and
sustain their strategic human authority over the mid-
updating unit HR managers in
resources. FranchiseK- ing, market, budget and heavily
the development and
Contractman International branded sectors of the
deployment of staff. The
and Globalalliance stand out industry.
growth of the company,
from their competitors in All the companies in the
Prestige Operators group predicated on new build
terms of their SIHRM could be properties managed through
approaches and prac- tices argued to have achieved some contracts, was seen to be
due not only to the level of integration of their achiev- able due to a pivotal
distinctive SIHRM HRM practices and activity undertaken by
approaches taken, and the approaches, however, regional HR functions. Each
sophistication of specific Contractman International new build project instigated a
HRM practices but their and Globalalliance stand out labour survey, another novel
attempts to bundle practices as the exclusive, niche market HRM exercise, to identify and
and achieve coherence and oper- ators doing the most plan its human resource
synergy between the here and possibly creating demands, and predict
strategies and activities of competitive advantage challenges and difficulties. In
managing their strategic through leveraging the short, Contractman Inter-
human resources. The expertise of their managerial national took a very
strength of FranchiseKing’s human resources and their comprehensive and
brands is based upon a management. Contractman determined approach to
relatively small number of Interna- tional enjoys a great managing its human resources
company owned properties deal of status on the global on an international scale
at the centre of a substantial stage and substantial through more advanced
network of franchises and autonomy from its parent. It initiatives, using HR
management con- tract units. also prides itself in ‘leading executives in strategy devel-
The HRM interventions used the pack’, in the design of its opment and integrating its
in the company’s own hotels facilities, use of technology, HRM practices in a way that
foster managers with cultural sensitivity and no other company had
intimate knowledge of development of human attempted to achieve. The
FranchiseKing’s prevailing resources. A distinguish- ing underlying belief in Con-
and highly standardized aspect of this was apparent in tractman International was to
brand standards. The man- the preparations made for the create an intangible human
aged and franchised transfer of staff at all levels resource advantage due to its
properties benefit from this across the company’s lack of asset value, as a
expertise where all managers portfolio. This was the only company that did not own
are encouraged to transfer company that had developed properties but merely
between properties and train or used in any form a managed properties for
together in these brand company-wide relocation or others, and traded only on the
standards regardless of their cultural adjustment knowledge and expertise of its
prop- erties’ ownership programme with the express people.
status. The company’s aim of tackling culture shock Globalalliance’s approach to
competency framework, issues. Opportunities for all managing its international
based upon the behavioural human resources, rather than unit
attributes of its most solely managers was a core managers takes a more elitist
successful unit managers and theme of Contractman stance to achieve human
franchise service managers, International’s approach with capital advantage. It had
reinforce its hierarchy of its transfer, training and developed a fast track
brands. FranchiseKing’s appraisal systems aimed at all development programme,
successful growth and employees. This commitment which incorporated an MBA
generation of profits through to developing human qualification and extensive
franchise agreements, as well resources is evident in the interna- tional transfers and
as hotel revenues, meant the executive’s statement that: exposure across the company,
competency framework far beyond the standard
 J.M. Gannon et al. / International Journal of Hospitality Management 47 (2015) 65–75
7
management development resources particularly promotes convergence in HRM practices were driven by
programmes outlined else- challenging. practices across the industry. companies’ strategies and market
where. Allied to this The belief that unit managers pos- itions, some novel findings
programme was the need to be business people emerged. The executives talked
protection afforded 6. Discussion rather than solely hoteliers was about the ways in which their
managers on this scheme a common theme across the HRM practices were based upon
and those in the deputy and The findings highlight the company case studies and their own company’s strategies,
unit man- ager ranks, to the degree of similarity in HRM reflected the changing nature of portfolio characteristics and
extent that HR executives approaches adopted by all the industry. However, the market pos- itions. However,
rather than senior companies, the limited companies still recruited amongst the eight cases, three
operational executives had extent of differ- entiation mainly from specialized clusters surfaced with common
control over their and the three clusters hospitality programmes and HRM practices and policies
appointments. Glob- identified, and the very were reluctant to take on aligned with their simi- lar
alalliance credited the restricted evidence of management recruits who did market positions, portfolio
expertise of, and unique differentiation in not ‘know’ the industry. The characteristics and strategies.
contribution made by its individual company HRM international hotel schools that Within the Prestige Operator,
corporate HR office, by practices. provided the main pools for Mixed Portfolio Purchaser and
distinguishing key roles in The best practice SHRM management recruitment did at Multibran- der clusters different
strategy devel- opment and form or table stakes least fulfil some of the branding approaches shaped
implementation. These approach is seen in HRM international requirements their investment and operating
views were ‘part and practices which companies though they also created a priorities and consequently their
parcel’ of the devolution of adopt in order to be socially relatively homogenous human ways of articulat- ing the
much of its real estate in legit- imate in an industry resource that may inhibit management skills required to
favour of more man- (Boxall and Purcell, 2008; change and innovation in the deliver their brands. The clusters
agement contracting and Bjorkman, 2006). The sector (Gannon et al., 2010). also differed on the basis of their
marketing alliances, and drivers for table stake SHRM The sim- ilarities in HRM organization and struc- ture, and
substantiated by attempts include the requirement to interventions reinforce the international management
to create added value and service the needs of arguments that specific people orientations affecting their choice
subsequently competitive international customers, the management practices occur, of recruitment pools, at local,
advantage through its decision to drive market not only in response to com- regional, national and inter-
managerial resources. share through replica units mon industry challenges, but national levels. The various
Overall it seems across key locations and the also in order to serve to modes of growth and market
surprising that only limited role of technological legitimize industry membership entry expertise of the three
three of the interna-
substitution in such a people (Boxall and Purcell, 2011; clusters consequently led to a
tional hotel companies had
intensive service industry Leonard-Barton, 1995). This different
managed to foster some
(Marco-Lajara and Ubeda- version of the best practice
kind of human resource
Garcia, 2013; Miao et al., SHRM approach verifies at least
(process) advantage
2011). As such, the strong some of claims of the best
through the RBV approach.
internal labour markets, practice protagonists that
As the discussion
training and perfor- mance certain HRM practices are
highlights, however, the
appraisal HRM interventions competitively important
nature of competition in
are all based on achieving (Pfeffer, 1998; Huselid, 1995).
the industry may make the
and reinforcing consistency However, it also shows that
RBV route to competitive
in hospitality services and these practices are not the sole
advantage through human
transferring determinants for organizational
success but fulfil one aspect of
proprietary knowledge. Other Placed alongside HRM’s
firms’ performance measures,
industry features of; US American ancestry (Boselie et
the need to be socially
domination of the industry al., 2009; Brewster, 2007) the
legitimate and to conform to
(Nickson, 1998), the use of evi- dence suggests that the
industry standards in order to
management contracts as one management of unit managers
succeed and sur- vive (Boxall
of the prime market entry in this sector is particularly
and Purcell, 2008; Paauwe,
mode (Beals, 2006; Gannon strongly influenced by industry
2009; Bjorkman, 2006). This
et al., 2010) and the cultural and institu- tional
means that some HRM
increasing multiple brand factors, in addition to the
practices are not created for
ownership and con- typical parent and host country
com- petitive advantage but
centration (Xiao et al., 2012) factors (Hodari and Sturman,
for competitive endurance and
have created another set of 2014). The HRM implications
they exist to ensure survival
drivers towards common HR can be seen most clearly in the
within an industry. This
practice. The whole sample shared challenges of working
evidence of human resource
had some aspect of American with prop- erty
‘table stake best practices’
heritage, either through owners/investors with
(Leonard-Barton, 1995) operat-
original ownership or subse- different cultural conventions
ing at the international level
quent acquisition and and the intensive corporate
within a particular industry
partnerships, and had communication attempts to
highlights the complexity of
adopted management maintain brand standards
forces acting upon
contracting or franchising as across hotel portfolios (Beals,
international companies.
the preferred low equity 2006).
In terms of detecting the
expansion strategy (Nickson, The nature of the managerial ‘best fit’ SHRM approach
1998; Xiao et al., 2012). human resources themselves where HRM
also
 J.M. Gannon et al. / International Journal of Hospitality Management 47 (2015) 65–75
7
emphasis in managerial Contractman International, (Boselie et al., 2003). One moderate interdependence
skills and knowledge. For FranchiseKing and Global- explanation for the degree between sub- sidiaries and
example the Prestige alliance had a very clear of standardization found parent companies (due to the
Operators highlighted sense of what they were across the HRM practices is market entry modes used),
their unit managers as good at, where those the focus on managers (as and the cultural distance
capable of managing strengths lay in their opposed to lower levels of between the headquarters of
(difficult) property resources and practices, employees (Easterby-Smith the parent company and the
owners whilst the and how they could be built et al., 1995; Rosenzweig, countries of operation to have
Multibranders upon and leveraged. It was 2006)), the US origins of the acted as competing forces for
encouraged management not just the case that these companies (Ferner and customization (Edwards et al.,
expertise in operating companies’ managerial Quintanilla, 1998; Nickson, 2010). In the international
highly standard- ized knowledge and skills and 1998) and low level of hotel industry these localizing
hospitality services and HRM prac- tices were entrenchment of the hotel influences seem to be
disseminating that aligned with their industry in national busi- outmanoeuvred by the
knowledge to others internationalization ness institutions (Boselie et origins, power and growth
(franchisees and strategies but that these al., 2003; Edwards et al., methods of the international
partners). These findings strategies and practices had 2010) also compound this brands in driving
show that the ‘best fit’ been based upon the exist- consistency. However, set standardization (Xiao et al.,
SIHRM approach can be ing managerial and against this we might have 2012).
applied to companies’ executive expertise to expected the low to
closest industry rivals create advantage (Morris et
Even so, there is one competitive and operationally
because they face similar al., 2006). These companies
localizing force that has complex, international industry.
HRM dilemmas due to were also investing in HRM
emerged as being of particular The findings provide evidence
their common business prac- tices and processes
importance in the management for this hybrid version of
and operational that were particular to
of unit managers. This is the SIHRM approaches and the
predicaments. Such their strategic needs in an
influence of local property importance of industry factors
findings indicate another attempt to sustain their
owners who often influ- ence in shaping opportunities and
level of institutional competitive advantage and
and inhibit human resource challenges for com- petitive
assimilation and render imitation by their
decisions and practices. Their advantage through human
conformity amongst the competitors more difficult.
impact means companies are resources (Boxall and Purcell,
strategies and HRM That only three com- panies
not always able to manage 2011; Boselie et al., 2009).
practices of the closest demonstrated any
their human resources in line In this industry, companies
rivals in industries semblance of the RBV
with their objectives of appear not to adhere to only
(Oliver, 1997; Boxall and SHRM approach suggests
building and trans- ferring one of the three main SHRM
Purcell, 2011). This that although firms use
proprietary knowledge and approaches (best practice, ‘best
evidence strongly rhetoric to suggest that they
expertise through managerial fit’ and RBV) when they seek to
reinforces the view that strive for competitive
resources (Hodari and achieve competitive advantage
more research needs to distinction and ‘do things
Sturman, 2014; Beals, 2006). through their human resources.
be under- taken on such differently’, through their
Finally, in terms of the In line with more recent
clusters of close rivals’ human resources and
arguments surrounding the theoretical argu- ments the
adoption of HRM associated practices, in
convergence–divergence eight IHCs tend to adopt very
practices and their reality the pressures for
debate, the findings show clear similar HRM practices in their
relationship to the conformance are strong
indi- cations of standardization management of the subsidiary
strategic group literature (Marco-Lajara and Ubeda-
in HRM practices in the managers, who constitute their
featured in the strategic Garcia, 2013; Bjorkman,
international hotel industry. As strategic human resources
management literature 2006). Specifically within
Brewster (2006 p. 83) argues (Boxall and Purcell, 2011), due
(Gannon et al., 2012; the international hotel
however, this does not to the complex and competitive
Short et al., 2007; indus- try, it is not only the
condemn all HRM practices in environments in which these
Panagiotou, 2006, 2008). table stake approach issues,
an industry to inevitable firms operate (Hodari and
The evidence of pressures identified above, but also
on companies to conform assimilation, as “there is a Sturman, 2014; Miao et al.,
another level of conformity,
due to continual tension between 2011; Xiao et al., 2012).
identified through these
industry institutional isomorphic pressures for However, this study also shows
clus- ters of closest
conventions is also part similarity and the local that few companies suc-
competitors, which limit
of the critique on the resistance to such pressures.” The cessfully adopted a hybrid of all
companies’ capacity to
RBV SHRM approach opportunity to identify and three SHRM approaches – in
create and leverage
(Boxall and Purcell, 2008; analyze different levels of particular, only three firms
distinctive human
Paauwe, 2009; Oliver, competition associated with displayed practices which were
resources and HRM
1997). Within this study survival, market positioning char- acteristic of the RBV
practices which
surprisingly little and competitive advantage in approach. There was
differentiate themselves
evidence of the RBV was an industry can help considerable evidence of the
(via the RBV approach).
found as just three out of understand this continual simultaneous adoption of both
Earlier in this article some
the eight companies discussion was offered tension (Paauwe, 2009). industry-wide ‘table stake’
deployed unique HRM about the practices, together with ‘best-
practices, integrated with forces for customization 7. Conclusions fit’ at the level of the closest
other aspects of their and standardization in indus- try rival clusters, akin to
HRM or broader international HRM. The This study set out to the strategic groups
corporate and business findings presented here explore the evidence for a acknowledged in the strategic
strategies, to create offer limited support for hybrid version of SIHRM management literature. Overall,
competitive advantage. existing research literature approaches within a highly more common practice than
 J.M. Gannon et al. / International Journal of Hospitality Management 47 (2015) 65–75
7
differentiated HRM practice
An important theoretical
was found and the extent of
implication arising from this
the commonality was
study is that competitive
derived from the similarity of
advantage through human
the institutional forces
resources is clearly more
exerted on the companies
challenging for some
both at the industry and
industries than others
closest rival levels. This
though a hybrid version of
rendered it difficult for the
the SHRM approaches
companies to differenti- ate
adopted in an industry
themselves in inimitable
offers valuable insights into
ways through their
why this is, along with
managerial human resources
relevant practical
and their HRM practices as
implications. Executives and
expected in the RBV SHRM
managers of companies
approach. Key to these
within indus- tries that face
specific industry forces was
substantial pressures for
the US domi- nation of the
institutional assimilation
corporate hotel industry, the
and restraints on market
predominant use of low risk
entry modes must recognize
market entry modes and the
how oppor- tunities for
homogeneity of the
differentiation are inhibited.
managerial labour pool
With the continued use of
(Gannon et al., 2010; Miao
low or non-equity market
et al., 2011).
entry modes in the hotel
industry execu- tives must
be clear about the asset and
wider strategic implications,
as well as the opportunity
costs concerned.
This study identifies that
where companies derive
competitive
advantage from their human
resources and HRM
practices, they have closely
aligned their managers’
expertise with their corpo-
rate market entry mode
expertise and developed
some distinctive, complex
and integrated HRM
interventions, which have a
mutually reinforcing effect.
The managerial implications
are then that cor- porate
executives may find
understanding what they
can leverage internally in
terms of their managerial
resources and HRM prac-
tices beneficial for achieving
competitive advantage,
however, in addition it
seems they need to focus
upon differentiating them-
selves from their closest
rivals. A further implication
also surfaces here and
indicates that there are
opportunities to explore
how closest rivals or
strategic groups, as
identified in the strategic
management literature,
impact upon HRM strategies
and prac- tices to achieve
competitive advantage
(Gannon et al., 2012; Short
et al., 2007; Panagiotou,
2006). This study indicates detailed level of insight into
that given the ongoing quest the industry, the companies
for sustained competitive and the management of
advantage, argu- ments that subsidiary managers was
human resources accrue achieved. The breadth of data
added value and increasing sources, access and level of
internationalization, further engage- ment with
research concerning HRM administrative and executive
practices and strategies at HRM respondents does
industry and sub-industry compensate for the limited
levels is clearly warranted. number of key respondents
Despite the important due to their significant
insights of this article it is
strategic roles. Future
apposite to
research would, however,
reflect upon its limitations.
benefit from respondent
The primary limitation is
participation across a wider
the focus on senior HR
range of func- tions at the
executives and their teams as
senior executive levels and
the main respon- dents as
should pursue the links
additional insights from non-
between SHRM and the nature
HR executives could have
of micro-foundations
elaborated further upon the
(Minbaeva, 2013).
strategic value, deployment
and devel- opment of unit
Acknowledgement
managers. However, issues of
wider access and resources
The authors would like to
(time and money) precluded
express their thanks to Dr.
such ambitions and the
Peter Lugosi for his helpful
participation of the most
comments on earlier versions
senior HRM executives of the
of this paper.
com- panies meant that a
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