Taj Hotels Case Studies Example

Facts Surrounding the Case

Taj Hotels is an international hotel company that services the value, mid-market, premiums and luxury markets of the lodging industry. They own 112 hotels in India and 16 more internationally. The company has been in existence since 1903 and went public in the 1970’s. Taj hotels is committed to sustainable livelihoods and participates in several initiatives in this area in India. Philanthropy has always been a focus of the company and its aim and implementation have evolved over the years to its current sustainable ventures it engages in.

Strengths and Weaknesses

Taj is a very successful company and looks to make a difference in the community through sustainable livelihood initiatives. They are in a unique position by being in the hospitality industry. The product they offer is intangible. They are not manufacturing a product. This enables them to provide the community service related training initiatives. Training those with disabilities in their community for jobs in hospitality has been a successful venture, but the company does not promise these people employment with Taj. This philanthropic stand was taken by the owner of Taj and has been an important part of the company’s purpose.
The company has a dedicated Sustainability department headed by Foram Nagori. She and her staff are dedicated to their purpose and their job in seeking out and developing NGOs for the company to work with. Staff with the Taj Company reflect high levels of standards and quality in their work as well as commitment. The company’s many properties also afford them the opportunity and resources to help small community initiatives throughout the country.

Opportunities and Threats

Taj is in the unique position of being a solid corporation with locations globally. Due to its influence and power in the market, especially in India they are in a position to effectively effect social change and influence others in their industry to do the same. However, because of their high standing in the hospitality market, they must ensure the best quality in their product. Towels must be clean and fresh, rooms that are comfortable and clean and exceptional food in their restaurants. The experience of a hotel is what sells this type of product.
Threats to the operation and integrity of the Taj can occur from the outside businesses they deal with. Vendors who promise a product of a certain quality that is delivered in a timely manner is critical. If the hotel requires red roses for the vases in the lobby at 6 AM, their florists must deliver fresh, beautiful roses on time. The lodging industry is a time sensitive industry, customers make a subjective judgement based on a moment of experience in a hotel. Guests’ expectations of cleanliness, professionalism of staff and a quality of atmosphere that is not a concrete product, it is intangible.

Key Issues

The company partners with non-governmental organizations (NGO’s) to obtain goods and services that are required by the hotel’s operations. According to the United Nations an NGO is defined as “a not for profit group, principally independent of government, which is organized on a local, national or international level to address issues in support of the public good” (United Nations Rule of Law). In charge of the effort is Foram Nagori who is the Corporate Sustainability Manager. She is the liaison between the corporation and the NGOs that they deal with.
Taj, however, is a business and maintains very high standards for its services and the products used in their hotels. NGOs must be competitive in order to become a supplier to the corporation. One of their programs is selling the artwork of local artists or featuring this artwork in their properties. His type of exposure for the artists does not affect the services and high standards that Taj is known for. Entering into agreements with NGOs that offer services such as laundry or supplies for their rooms is another. The NGOs must understand the expectations of the Taj and deliver high quality products and services.
As Nagori and her staff discovered, NGOs do not always meet the expectations of a company. In the case of Arz Swift Wash Laundry, Nagori and her team encountered several problems. The company did not have adequate equipment to meet the needs of the Taj. Arz was hoping to get Taj’s entire laundry load from one property which would give them a strong foot in the market.
Arz Swift Wash was a social work organization to train and employ women who were involved in the sex trade. The group had some equipment and were training the women to operate the equipment and work the laundry services appropriately. Taj was approached by Arz and they entered into negotiations. Taj went so far as to tour their facilities and provide months of service to help the fledgling NGO to develop and grow the business. Taj finally agreed to contract Arz to launder 25% of their spa linens. There were several issues with quality and timeliness. The hotel’s staff continued to work closely with Arz to help to ensure its success. The Taj paid Arz the same rate that it paid competing private vendors. The relationship is finally established and it is assumed that Arz continues to do a limited amount of laundry for the property.
Arz is one example of the challenges and successes associated with a commitment between a corporation and an NGO. Sustainable livelihoods is not only commendable but it benefits the economy of a society. Engaging in these relationships can be very risky as opposed to other initiatives such as the training program that the Taj runs. There are expectations from both the hotel and the NGO. The NGO hopes for more business to employ more workers and continue operations and the hotel expects linen that is clean and delivered on time. The amount of time and support that the hotel’s staff invested in the venture is not included in the bottom line of this venture. When embarking on these relationships the hotel and the NGO need to be honest and forthcoming in their expectations from each other. NGOs are not “charities” they are organizations that need to operate like a business but with a social mission.

References

United Nations Rule of Law (2015). Non-governmental organizations. Retrieved from:
http://www.unrol.org/article.aspx?article_id=23