Operation management Essay
The company that our group chose to study is City of Dreams Macau (COD), which is located in Macau Cotai coherent highway. COD is a diversified entertainment resort, which contains a rich set of entertainment, grand hotel accommodation, international cuisine, internationally renowned brands as well as casino. Luckily, we found a manager in entertainment and progress department of this company to help us conduct an interview. The information of this manager are as follows:
Manager name: Huá dì
Telephone number: 66884314
Position: Theatre Director
Main responsibilities: All ticketing and frontline day-to-day operation of Atrium, Dancing Water, Hard Rock pool party, The Junyue MMA boxing matches, CUBIC ticketing and TABOO.
COD’s corporate goal, as stated by Lawrence Ho, is to become the tourist resort that makes Asian and even the global tourists to have multi-day stay, and to consolidate Macau as Asia’s leading leisure and tourism center. COD locate in one of the most competitive area in Taipa, Macau. There are several entertainment resort hotels, such as Venetian, Sands Cotai Central, Galaxy Macau these competitors. COD has to keep its competitiveness to fight with them. So COD provides with some entertainments (like the house of Dancing Water, Dragon treasure, etc.)
to attract the customers to come to COD to achieve corporate goal. In order to improve staff quality, entertainment and progress department also cooperate with HR department to offer training program to staff. Staffs can go for training as long as they are available. In corporate positioning, COD believes that it takes the advantage of providing something different than other competitors by implementing the differentiation strategy, for example, offering Dancing Water, Atrium to customers.
COD also has high requirement on the entertainment activities they offered. In the past, COD once thought of opening a cinema. However, COD thinks cinema is not very high-end and it will low the elegance of COD, so COD rejects the consideration at last.
b) Current Operations
The current operation is to provide above entertainments to customers and make sure that the entertainment activities go smoothly. The manager has to measure ticketing and frontline workings keep running. In the ticketing, the manager said COD provide 60~70%‘s ticket for internet sell, and the rest of the ticket will provide to the agent like travel agencies, these agencies will sell the tickets to the group customers.
The manager said COD won’t overbook the ticket to get the maximum profit, because their shows are unique, and they care more about the quality rather than the quantity. They have to take-care some special needs person, providing convenience to them. COD tries to get a balance between making profit and remaining service quality.
Show cancellation & Compensation
COD sometimes face problems of show cancellation of Dancing Water and receive complaints from customers. Also, there may have some mistakes on the daily operation, so the customers will not satisfy the services and have complaint with COD. For the compensation part, COD build a compensation standard to deal with customer complains. The general approach is to take the customer complaint at first place, for example, ticket refund.
However, if the compensation exceeds the company’s standard, then COD will take company’s benefit at the first place (e.g. some customers will ask for airplane tickets refund and it will be transferred to higher level manager to determine the compensation level). Also, COD’s management group will have meeting every week to discuss complaint affairs and try to analyze whether it is due to guests vexatious or they have some shortcomings. If they think that they are not doing well, then they will think of ways and make improvement. Decentralization
Instead of centralization, COD tends to have decentralization because they believe that this is more effective. COD depend on staffs to help monitor the operations of entertainment activities, so manager do not need to deliberately spend efforts on ensuring the operation of activity is smooth and they can focus on the overall operations. Staffs can directly go to their supervisor when they encounter problems. Also, manager will assign some employees who are in higher position to help monitor the lower level employees’ performance, as well as daily operation of activity.
Supervisors directly ask the higher level staffs about the problems on work(e.g. do small circle of people exist and is there any employee they find that is difficult to get along with others ) in order to get a respectively good understanding about what’s going on of daily operation.
There is no reward system implementing now for the staff performance. According to the interview, there was a reward system before, employee who performs well will get free coupons of restaurants in COD, concert tickets, shopping tickets, or dancing water tickets, etc. as a bonus. However, it was cancelled due to the inefficiency.
In the past, company let employees to vote for the best employee, and it causes problem that employees will vote to their friends, instead of having an evaluation about who is the best employee. COD think that it cannot reflect the truth and is meaningless. Therefore, COD now cancel the reward system and use the money to hold department activities, e.g. BBQ or order take-away for all employees in the department. Training
COD use decentralization to let employees help maintain the current operations. Employees have to handle problems met by them. Therefore, training is an important way to ensure staffs’ quality and performance. The manager said the COD do very well in staff training, COD provides many training courses to the staffs to improve their work quality and skills. In usual time, they will post a form that includes all the training courses available along with corresponding time schedule, staffs can decide which training course to participate in accordance with their working time.
COD will try to accommodate staffs’ working time to provide training courses. If it is not possible to arrange the suitable time for the staffs, regular work should be taken in the first place. Staffs can join the training course after finishing the work. In most of the time, COD won’t enforce the staffs to participate training courses, staffs participate these training course voluntary.
But there are some training courses that are compulsory to every staff according to COD’s requirement. For example, in the future, COD will open a new show in CUBIC, and COD will arrange each employee to watch the “CUBIC” show at least once. So the staffs will know about the show and what is the process of the show.
c) Opportunity of improvement
Although it is a good idea to let all employees help monitor the daily operations of activities, so manager can focus more on the overall operations, there also some drawbacks caused by decentralization. According to the current operations, employees report to manager directly if they find problems on daily operations. It raises possible problems like: (1) The quality of work may be poor because there is no clear responsibility assigned to specific employee.
The monitoring work conducted by employees may not be efficient. If there are problems that employees failed to recognize, manager may not know, because employees’ reporting is the only way for manager to get detail daily operating information from employees, it affects the operation activity in the short run if the problem is not negligible.
(2) No regular meeting is required for manager and employees to exchange information. Regular meeting is an important way for reporting, if there is no such a meeting, employees are not encouraged to raise problems they found. They may first try to solve the problem when they find it, instead of reporting to their manager. Therefore, some problems may be hided and it causes bigger problems if the problem is crucial to the organization. Moreover, employees may not have a very good understanding of the company’s strategy and may make inappropriate decisions without fully understanding the big picture.
No reward system is implemented in current operations due to the former unsuccessful reward system. Employees’ individual performance is not linked with reward. Employees may be less motivated. Show cancellation
In the interview, we asked the COD manager “What the most difficult problem that you had faced.” The COD manager answered us is the show cancellation, which is a big problem for an entertainment resort. We can find some news about COD canceled the show. According to the news, COD suddenly cancel three shows of the “house of Dancing Water”. There are a lot of audiences already booked the tickets in a few days ago, they received message from COD about the show cancel after they arrived Macau.
This thing disturbs their plan. COD claim they need to cancel the shows because of the technical problems, and they will return the ticket fees, but they won’t compensate the other loss, so audiences feel angry and disappointed with COD. This thing will hurt the image and reputation of COD, it can decrease customers that want to come to COD to watch the show, and decrease the profit. d) Solution
1) Manager should provide training to staffs in order to strengthen their awareness of responsibility. Manager may also provide some guideline to staffs about what they should do if they encounter problems. Moreover, instead of fully depending on staff reporting, manager may take time to supervise daily operation if needed.
2) Hold regular meetings for information exchange. With regular meetings, employees will have formal way to express their opinions or problems they found, so problems can be improved or solved in a more efficient way. Reward system
According to the interview, the former reward system is based on the vote of employees among each other, and this would easily cause about inequity. We recommend that COD may develop a reward system for a trial using different voting method. Instead of basing on the vote among employees, the department should create a criterion chart for all the employees to be monitored by the supervisor. Once the employee performs great in some area, she/he will get a point in that part.
The final score is the cumulative score of every part. At the end of one period, the entire criterion chart should present the degree of performance of the employees, which could be the grounds to decide which employee to get the rewards. See whether employees’ performance have improved under implementing the new reward system by making evaluation from period to period. If the result is good, then company should consider implementing a reward system in order to encourage employees for better performance in the long-run.
This kind of solution will eliminate some bias of the evaluation. Not basing on the evaluation among employees, monitored by supervisor will be more just to use the reward system.
We think out some suggestions for the COD to solve this problem. (1) Develop a contingency plans. The staffs of COD must make advance notice about the show cancellation message to the customers, and then arrange the customers to return the tickets, getting back the fees. This can mitigate the dissatisfaction of customers and reduce other unnecessary loss. However, sometimes we cannot expect accidents, which are some aspects we cannot control, and it is hard to tell the customers early.
(2) Second, open the other facilities of the hotel. Customers come to COD to enjoy the service and entertainment, and if I was one of them, I don’t want just go back home because of the cancellation of the shows I want to watch. So COD can open some facilities to these customers to ensure they still have an awesome experience in COD. For instance, Venetian has the In the other hand, COD can give these customers equivalent coupons, and they can spend some time in COD, and use these coupons to buy anything in the hotel.
Of course, this method needs the cooperation among many involved departments. (3) And the last is to prepare a backup show. If a show has to be cancelled, customers can choose to watch the backup show. But not every customer wants to watch another show because they come for shows that they want to watch, and the cost of backup show is not cheap. Therefore, customers can also ask for refund and buy the ticket next time with a discount. e) Implementation
After communicating the suggestions we made for the manager, he said that implementing our solution to the company right now was not practical. Their decisions need to be made based on some professional analysis. However, he listened to our solution and gave his own comments about the effect of those solutions: For the decentralization part, he thinks holding regular meetings is one of the possible way for staffs to raise problems they found, but managers always need to manage so many things and may not have enough time to do that. For the reward system part, we suggested that to build a new reward system using different voting method.
However, according to the manager, biases also exist if using this method. However, there will be two potential problems: 1 There is a grey area between just and unjust, and once the supervisor decides the reward, it’s complicated to say the manager will be definitely just to everyone. The bias might exist still; 2 The supervisor has many things to deal with; there might be some overlook in employees’ performance, which will be hard to monitor all the aspects.
For the show cancellation part, sometimes advance announcement is not possible because of the suddenly occurred error. In other way, COD should consider the cost problem if they want to satisfy customers by providing them equivalent coupons. The cost problem also exists in the back-up show suggestion.
After the interview, we can get some information about the operations of the entertainment fields in the COD. In the daily operations, it depends on the staffs to maintain the operations and solve the problems. COD also provides some training courses for staffs to participate, but these training courses are optional, which means not every staff has enough skills to handle the difficult level operation problems.
One of the COD’s selling points is its wonderful shows, these shows attract a lot of people to come. But sometimes, because of some reasons, COD have to cancel the show, which means they need some good back up plans to appease the angry of customers, and try to decrease the loss. COD is a big entertainment resort hotel in Macau. From the interview, we can find out that COD actually do a good job in its operation.