**4. Marriott's knowledge management process in China's hotel industry**

The second stage coding of the annual report data indicated that Marriott's knowledge management (as developed for the Chinese hotel industry) followed a five-stage process: (1) assessing the organisation's cross-cultural knowledge-base, (2) accessing domestic labour-market knowledge, (3) developing domestic labour-market/domestic employee knowledge, (4) developing domestic supply-chain knowledge, and (5) managing domestic employee satisfaction and commitment. Each of these five stages will be discussed in the following sections.

### **4.1. Stage 1: assessing the organisation's cross-cultural knowledge-base**

organisation operating in the Chinese hospitality industry) and to refine and elucidate previously unidentified issues. To achieve this, the authors conducted a series of semi-structured interviews with senior managers in the Marriott Group's Chinese operation. The choice of Marriott was driven by three factors; the first being that it presents a revelatory case, whereby senior management can deliberate those aspects of knowledge management critical to the strategic management of its business. Secondly, Marriott represents a renowned global organisation seeking to leverage its brand into the expanding Chinese market. Finally, the researchers were able to secure access to the organisation's senior management team through a key informant, who is recognised in the industry as one of the longest serving General Managers in China. In total, twelve Marriott senior managers were recruited to provide primary data relating to the organisation's knowledge management processes in the Chinese hospitality industry. Of the twelve senior managers: three were General Managers, three were Marketing Directors (that had been working with Marriott since its entry into China in the mid-1990s),

A longitudinal approach to primary data collection was adopted whereby each respondent was interviewed four times, over a period of 4 years (i.e. 2009–2012). Given the complexity of the phenomenon, this approach was adopted for two reasons: firstly, it gave respondents the time needed to reflect on knowledge management issues idiosyncratic to the Chinese hospitality industry. Secondly, it gave the authors' time to probe evidence gathered from other sources and focus interviews on factors identified as specific to knowledge management processes in the Chinese context. The semi-structured interview questions were formulated to cover the necessary knowledge management issues, yet framed in an open-ended manner. This design provided respondents with ample scope for introspection, and the freedom to pursue and openly report on matters they considered important. In total, 46 semi-structured interviews were conducted over the 4 years, each with a duration of 60–120 min. Secondary data were sourced from historical publications pertaining to China's economic and hospitality industry development, annual reports of the Marriott group, local and international newspaper archives, and Chinese government agency publications. This collection of data from various sources provided triangulation and subsequently assisted in the aggregation, analysis, and

A rigorous content analysis process using the five-stage protocol forwarded by Refs. [24–26] was applied to each interview transcript and all secondary data. The content analysis and the verification of the conclusions drawn were facilitated by the use of the NVIVO software package. During Stage One of the content analysis, the aims and objectives of the research were identified. During Stage Two, the interview transcripts and secondary data were converted into MS Word® format and entered into a codified NVIVO database. Stage Three comprised an interrogation of the coded data to detect any significant themes emerging with regard to knowledge management issues in Marriott's strategic management of operations in China. These emergent trends and themes provided the basis for the second round of data coding categories. Stage Four of the content analysis involved a refinement of the second-round coding results, while Stage Five involved finalisation of the research findings. These findings are discussed in the following sections, along with implications for future research in the cross-

three were Human Resource Directors and three were Sales Directors.

validation of information.

242 Knowledge Management Strategies and Applications

cultural knowledge management field.

During its entry stage into the Chinese hotel industry (i.e. the early 1990s), Marriott's senior management identified that a cross-cultural knowledge deficiency gap existed with regards to its Chinese operations. To address this deficiency and to simultaneously improve its image in the Chinese labour market, Marriott's senior management implemented strategies to (1) increase its capacity to understand the Chinese culture through its labour market and (2) establish its reputation as an 'employer of choice' in the Chinese hotel industry. Initially, Marriott implemented a two-tier brand reputation building and recruitment strategy; at the first-tier level, Marriott used their pool of existing domestic managers to work closely with (and gather data from) domestic hotel owners, recruitment agents and government officials regarding operational matters. At the second-tier level, Marriott used experienced expatriate managers to focus on working with the higher level national and local governments on its brand and reputation:

*We always have a pool of well-trained and experienced managers ready to be posted anywhere in the world. The combination of this pool of foreign managers supported by our selected domestic managers is one of Marriott's strengths (Human Resources Director 3, Personal interview, 2010).*

*… its two-tier brand [reputation] building strategy, Marriott able to depend on management capability to effectively negotiate between domestic hotel owners, governments and Marriott's head office in the United States (General Manager 1, Personal Interview, 2011).*

As part of this two-tier recruitment strategy, Marriott sourced skilled and qualified domestic workers to fill essential positions across its hotels and overcome its deficiency in terms of local cultural knowledge. The central part of this strategy was leveraging the personal networks of experienced domestic managers and using them to identify and recruit qualified and appropriately skilled workers. These personal networks comprised past work colleagues, family members and relatives, friends and government officials. Marriott's senior management also drew upon the negotiation expertise and comprehensive understanding of the domestic employment context possessed by their experienced domestic managers. These insights provided key inputs into public relations activities that were designed to promote Marriott's reputation and assist in the negotiation of employment contracts:

*We have a better understanding of domestic employment regulations and what governments are trying to achieve in the labour market…in a much better position to negotiate with relevant authorities regarding employment terms and conditions (Human Director 1, Personal Interview, 2010).*

Marriott realised that if it were to continually improve its reputation as an employer of choice in the Chinese labour market (and, therefore, be able to attract skilled and qualified domestic workers), it would need to continue to improve its understanding of the Chinese market and establish a competitive advantage distinct from its international competitors. To achieve this aim, the Marriott website was used as a channel to promote the company to the domestic Chinese labour market and increase its brand reputation in the domestic market:

*In the last three years [2002–2005], developed seventeen international sites…to learn about different cultures, and how to tailor sites for specific markets. We're interested in understanding Chinese consumer habits and upcoming market trends (Director of User Experience, in Ref. [27]).*

### **4.2. Stage 2: accessing domestic labour-market knowledge**

During the early 1990s, the Chinese hotel industry was considered an attractive industry to work in by the domestic workforce. However, with the influx of international hotels and consistent double-digit gross domestic product growth, China developed into a highly competitive labour market for hospitality workers. As the skilled and educated workers sought more secure and lucrative careers with government departments and multinational organisations in other industries, the hotel industry was faced with ongoing skill-shortages. Marriott recognised that in order to recruit enough skilled workers, they needed to improve their domestic management expertise and knowledge (to compete with other industries for domestic talent). In order to achieve this outcome, Marriott implemented a modified version of one of their successful recruitment strategies employed in the United States during the 1960s; Marriott actively recruited veteran Chinese hotel operators from surrounding countries, such as Hong Kong and Singapore, to improve their domestic management expertise and knowledge. According to Marriott's senior management, the modified recruitment strategy enabled Marriott to effectively source many of its skilled and qualified workers from across various provinces and cities:

*[Domestic] managers are all Marriott people and the first job they do is to find domestic talent, as they know the domestic market (General Manager 1, Personal Interview, 2012).*

*…skilled employees with good language skills are one of the most important success factors in the Chinese hotel industry today…our extensive domestic networks assist us in finding our potential associates to fill positions across different functions and in different cities (General Manager 3, Personal Interview, 2012).*

In order to build on its reputation as an employer of choice, Marriott's senior management also implemented a series of strategies to promote and retain its existing experienced domestic Chinese managers. One such strategy was to provide experienced domestic managers with a distinctive career succession plan and promoting them to the position of general manager in newly opened hotels in second and third-tier cities. This succession strategy was designed to leverage their experienced domestic managers' expertise, knowledge and networks to serve the emerging domestic segments in the second and third-tier cities and provide a retention incentive:

*We have a better understanding of domestic employment regulations and what governments are trying to achieve in the labour market…in a much better position to negotiate with relevant authorities regard-*

Marriott realised that if it were to continually improve its reputation as an employer of choice in the Chinese labour market (and, therefore, be able to attract skilled and qualified domestic workers), it would need to continue to improve its understanding of the Chinese market and establish a competitive advantage distinct from its international competitors. To achieve this aim, the Marriott website was used as a channel to promote the company to the domestic

*In the last three years [2002–2005], developed seventeen international sites…to learn about different cultures, and how to tailor sites for specific markets. We're interested in understanding Chinese con-*

During the early 1990s, the Chinese hotel industry was considered an attractive industry to work in by the domestic workforce. However, with the influx of international hotels and consistent double-digit gross domestic product growth, China developed into a highly competitive labour market for hospitality workers. As the skilled and educated workers sought more secure and lucrative careers with government departments and multinational organisations in other industries, the hotel industry was faced with ongoing skill-shortages. Marriott recognised that in order to recruit enough skilled workers, they needed to improve their domestic management expertise and knowledge (to compete with other industries for domestic talent). In order to achieve this outcome, Marriott implemented a modified version of one of their successful recruitment strategies employed in the United States during the 1960s; Marriott actively recruited veteran Chinese hotel operators from surrounding countries, such as Hong Kong and Singapore, to improve their domestic management expertise and knowledge. According to Marriott's senior management, the modified recruitment strategy enabled Marriott to effectively source many of its skilled and qualified workers from across various

*[Domestic] managers are all Marriott people and the first job they do is to find domestic talent, as* 

*…skilled employees with good language skills are one of the most important success factors in the Chinese hotel industry today…our extensive domestic networks assist us in finding our potential associates to fill positions across different functions and in different cities (General Manager 3,* 

In order to build on its reputation as an employer of choice, Marriott's senior management also implemented a series of strategies to promote and retain its existing experienced domestic Chinese managers. One such strategy was to provide experienced domestic managers with a distinctive career succession plan and promoting them to the position of general manager in newly opened hotels in second and third-tier cities. This succession strategy was designed to

*they know the domestic market (General Manager 1, Personal Interview, 2012).*

*ing employment terms and conditions (Human Director 1, Personal Interview, 2010).*

Chinese labour market and increase its brand reputation in the domestic market:

*sumer habits and upcoming market trends (Director of User Experience, in Ref. [27]).*

**4.2. Stage 2: accessing domestic labour-market knowledge**

244 Knowledge Management Strategies and Applications

provinces and cities:

*Personal Interview, 2012).*

*Our US managers not very effective in communicating with our Chinese key stakeholders [suppliers, hotel owners, and domestic government officials], needed domestic managers who speak Chinese and understand local culture to work closely with stakeholders to achieve desired outcomes for all parties (Human Resources Director 1, Personal Interview, 2009).*

*Marriott uses the second-tier cities as part of their domestic executive promotion strategy…it gives Marriott the domestic representation it needs in these cities, it also acts as an incentive to retain managers and to increase staff loyalty (Key Informant 1, Personal Interview, 2012).*

### **4.3. Stage 3: developing domestic labour-market/domestic employee knowledge**

During the early stages of its operation in China, Marriott's senior management found that the level of trust and productivity between the domestic employees and management was substantially lower in China than in the US. From their experience, Marriott recognised that if they were to successfully build trust and productive relationships with their domestic employees, they needed to gain their loyalty through organisational culture-based training and development initiatives. Marriott leveraged their experienced managers to work closely with employees (whom they term 'associates') to achieve required organisational standards and at the same time, to instil its organisational culture of the 'Marriott's Way':

*…in the early 1990s, hotel employees had no clue and no ideas of how to handle their own grooming and personal hygiene, not to mention providing quality service to guests… started with very basic training to get them up to our minimal standards, then slowly introduced standard operating procedures (General Manager 1, Personal Interview, 2009).*

*…our domestic associates needed to be shown how to perform tasks and to be reminded how to work within the boundaries of procedures and processes (Human Resources Director 2, Personal Interview, 2010).*

According to Marriott, the 'Marriott's Way' enabled the company to build strong relationships with its employees that encouraged them to share tacit knowledge across the company's structure:

*Our competitive advantage is that we care about our people, our associates…the "Marriott's Way" is the core capability to our success for over eighty years, based on the philosophy of if you treat your associates well, in turn they will treat your customers well (General Manager 2, Personal Interview, 2011).*

*Overall, good experienced managers are still looked upon as the person who set the brand standards in a country where human capital is still at a development stage and the "Marriott's Way" is still very effective in associates' training and development. Hopefully, we can keep them for as long as possible before our competitors poach them away (General Manager 1, Personal Interview, 2012).*

Marriott attempted to reinforce a strong bond with its domestic Chinese employees by conducting a series of ongoing targeted training and development programs throughout their careers. For example, an average 78 h of on-the-job training (plus another 34 h of professional development) is provided to each associate every year; for more senior employees, Marriott provided a specialised career and training paths to ensure they were prepared for future management positions:

*…in the 1990s and even in the early 2000s investing in your employees and treating them well were not common management practices in China…Marriott is perceived as a very good employer in the Chinese market (Human Resources Director 1, Personal Interview, 2012).*

*Marriott is very good with in-house training programs….we spending around US\$800.00 per manager per year in training expense back in the early 2000s…we value our skilled associates and in China where hospitality skills are very hard to find, we use our in-house training programs to increase our available pool of skilled human resources (General Manager 1, Personal Interview, 2011).*

### **4.4. Stage 4: developing domestic supply-chain knowledge**

To continually and systematically promote Marriott as an employer of choice within the labour market, its senior management actively sought to engage with supply-chain members of the hospitality industry. For example, Marriott entered into arrangements with domestic hospitality training schools across China (as well as selectively inviting suitable candidates to participate in their internship program). Marriott's senior management state that their talent building campaigns focused on both the internal and external labour markets have provided them with a skilled labour force providing consistent delivery of its brand promises:

*We [Marriott] work closely with domestic hospitality training schools in China…we get good students from some of these schools…our in-house training programs help students to get up to our standards pretty quickly once they have started with us (Human Resources Director 3, Personal Interview, 2011).*

Marriott also promoted the 'Marriott's Way' organisational culture (on their "Destination Marriott" career website) to local supply companies to reinforce the quality standards required by the company. The 'Destination Marriott' career website was designed to assist potential employees to apply for the various careers available at Marriott worldwide and to highlight the various benefits and rewards enjoyed by Marriott's associates. For the more senior positions within Marriott, senior management continued to leverage their domestic managers' networks to seek out and appoint experienced managers from other industry sectors, as well as from direct competitors.

*A fluent Mandarin speaking expatriate manager is still a rare resource in today's market, but we commonly transfer them across our hotels internally….one of our immediate issues is finding enough English speaking associates…English language skills are still considered to be low in China and that causes us concern with regard to our service quality level (Human Resources Director 1, Personal Interview, 2011).*

*The country [China] and its cities can build the world's most outstanding or tallest buildings…but the skills level is still very much behind most of the developed markets (General Manager 5, Personal Interview, 2011).*

As part of Marriott's strategy in China, its senior management continued to actively seek high growth opportunities in second and third-tier cities outside the major urban areas. These cities are located outside key gateway cities such as Shanghai and Beijing in different provinces across China. The local governments, supply chain members and customers were the three major market segments identified in these second and third-tier cities. Marriott's senior management recognised that if they were to compete effectively in these emerging market segments, they needed to communicate key messages to these segments which focussed on how the company could better serve and satisfy their needs. To achieve this, Marriott implemented a modified recruitment strategy that they had employed when first expanding into China (i.e. by appointing experienced senior domestic managers to work closely with these three major emerging market segments in second and third-tier cities):

*Our growth has been fast in emerging markets like China, but we have to do things differently to succeed. Manpower is an issue. Finding experienced associates is difficult….Awareness is an issue, so public relations and local marketing efforts are important to establish the brand (Senior Vice President of International Marketing, in Ref. [28]).*

*…we get relocated to second-tier cities to manage our major clients [domestic governments and key stakeholders] and to train our management team to ensure our domestic customers get the services they want (General Manager 4, Personal Interview, 2009).*

### **4.5. Stage 5: managing domestic employee satisfaction and commitment**

*…in the 1990s and even in the early 2000s investing in your employees and treating them well were not common management practices in China…Marriott is perceived as a very good employer in the Chinese* 

*Marriott is very good with in-house training programs….we spending around US\$800.00 per manager per year in training expense back in the early 2000s…we value our skilled associates and in China where hospitality skills are very hard to find, we use our in-house training programs to increase our* 

To continually and systematically promote Marriott as an employer of choice within the labour market, its senior management actively sought to engage with supply-chain members of the hospitality industry. For example, Marriott entered into arrangements with domestic hospitality training schools across China (as well as selectively inviting suitable candidates to participate in their internship program). Marriott's senior management state that their talent building campaigns focused on both the internal and external labour markets have provided

*We [Marriott] work closely with domestic hospitality training schools in China…we get good students from some of these schools…our in-house training programs help students to get up to our standards pretty quickly once they have started with us (Human Resources Director 3,* 

Marriott also promoted the 'Marriott's Way' organisational culture (on their "Destination Marriott" career website) to local supply companies to reinforce the quality standards required by the company. The 'Destination Marriott' career website was designed to assist potential employees to apply for the various careers available at Marriott worldwide and to highlight the various benefits and rewards enjoyed by Marriott's associates. For the more senior positions within Marriott, senior management continued to leverage their domestic managers' networks to seek out and appoint experienced managers from other industry sec-

*A fluent Mandarin speaking expatriate manager is still a rare resource in today's market, but we commonly transfer them across our hotels internally….one of our immediate issues is finding enough English speaking associates…English language skills are still considered to be low in China and that causes us concern with regard to our service quality level (Human Resources Director 1, Personal Interview, 2011).*

*The country [China] and its cities can build the world's most outstanding or tallest buildings…but the skills level is still very much behind most of the developed markets (General Manager 5, Personal* 

As part of Marriott's strategy in China, its senior management continued to actively seek high growth opportunities in second and third-tier cities outside the major urban areas. These cities are located outside key gateway cities such as Shanghai and Beijing in different provinces across China. The local governments, supply chain members and customers were the three major market segments identified in these second and third-tier cities. Marriott's senior management recognised that if they were to compete effectively in these emerging market segments,

*available pool of skilled human resources (General Manager 1, Personal Interview, 2011).*

them with a skilled labour force providing consistent delivery of its brand promises:

*market (Human Resources Director 1, Personal Interview, 2012).*

**4.4. Stage 4: developing domestic supply-chain knowledge**

*Personal Interview, 2011).*

246 Knowledge Management Strategies and Applications

tors, as well as from direct competitors.

*Interview, 2011).*

As skill shortages continued to be one of the major challenges faced by the hotel industry in China, Marriott implemented a number of strategies designed to build staff loyalty with both its internal and external labour markets. Marriott's senior management implemented internal employment strategies which were designed to promote and retain experienced domestic managers. Further, as part of their internal staff loyalty building campaigns in China, a variety of in-house multi-disciplinary training and development programs were implemented which were designed to up skill all associates. For example, Marriott continued to develop and promote their experienced domestic female managers to senior management positions as part of its Global Diversity and Inclusion policy and Women's Leadership Development Initiative:

*Human capital capabilities are becoming more important than having a western manager…western management strategy no longer requires a certain number of foreigners working as staff to operate in China….Foreign managers no longer have the monopoly of first pick of all the good positions (Human Resources Director 3, Personal Interview, 2012).*

*…with good support and training from Marriott's international office, we able to achieve good results from some of the newly implemented processes and systems in areas such as hotel operation standards, overall food and beverage offerings and management and general customer service…but up-skilling our associates took longer…a continuous process (General Manager 1, Personal Interview, 2010).*

As previously discussed, according to Marriott's senior management, the use of action and policies designed to communicate and instil the ethos of "Marriott's Way" enabled the company to build productive relationships with its associates as well as to motivate them to improve their performance:

*…if you see some strangers talking to your top managers, you can be certain that your top managers are being poached by your competitors (General Manager 4, Personal Interview, 2011).*

*It is becoming more difficult to employ and retain younger, quality staff because there are so many opportunities now open to young people in China (Director of User Experience, in Ref. [28]).*

To maintain its market leadership position in China, Marriott continued to strategically build and market their brand as the employer of choice in the domestic market. Being the employer of choice enabled Marriott to select and recruit a skilled workforce to maintain and deliver its quality service level and to combat protected domestic competitors:

*…the one child policy has contributed to the current skill-shortage situation in China. However, hotels are also competing with the domestic government departments for skilled employees, as the domestic governments are now providing benefits such as welfare, less hours and higher salaries to attract talents (Human Resources Director 3, Personal Interview, 2009).*

*Marriott was awarded the top employer in China by the Corporate Research Foundation Institute in 2012 (Human Resources Director 1, Personal Interview, 2012).*

*Marriott builds on its success by using initial strategy coupled with domestic experience and learning…Marriott's new processes and services in China are blended with domestic culture to create a unique quality standard (General Manager 1, Personal interview, 2012).*
