CASE STUDY I:
CULTURAL DIVERSITY AT NIKKO HOTELS INTERNATIONAL
Nikko Hotels international is a subsidiary of the Japan Airlines (JAL) Development Company, Ltd. It was created as JAL’s diversification and globalization strategy to strengthen the company’s marketing and financial position. Known for its aggressive global marketing and application of new technology in hotel operations, the company is determined to establish a worldwide network of hotels comparable in number to Hilton, Sheraton, and inter-Continental. It has forty-four properties in its worldwide portfolio by 1997. Relating to the theme of this chapter, this case study focuses on the cultural diversity of Nikko’s management team and the cultural adjustment made by Nikko’s executives when they first entered the U.S lodging market.
The decision to enter the U.S hotel market was intended to establish Nikko’s identity and reputation in the large and competitive U.S travel market. But, Nikko’s entry into the market presented some cultural challenges to the company, particularly the transfer of a corporate culture based on Japanese cultural values to a multicultural workplace in the United States.
The first hotel Nikko hotels International acquired in the United States was the Essex House in New York City. The famous Essex House was to be a springboard for Nikko’s future growth. Nikko’s executives believed that if they could do well with the Essex house in the competitive New York market, they would do well in other markets in the United States. Nikko’s strategy and management operation would be tested in this major world commercial city and adjusted to the competitive and changing requirements of the U.S. lodging market.
The Essex House was originally managed by Marriott Corporation. When Nikko took over the ownership and management, all on-site Marriott managers and staff were invited to stay with the new company. In response to Nikko’s invitation, six managers decided to stay....
Please join StudyMode to read the full document