Globalization and Localization

3708 Words Apr 13th, 2011 15 Pages
Analyze issues of globalization and localization

Abstract:

How hotel companies keep being successful in international hotel industry (IHI). Nowadays, the stiff hospitality industry situation puts more stress on hotels, especially on international ones. Furthermore, clients who purchase hotels’ products are not only for a place to stay, but more eager to pursuit for an impressive accommodation experience. Globalization helps hotel corporations represent themselves to the world and succeed in operation more easily. While localization makes hotel firms better suit local market, local culture and so on. Globalization and localization are not two separate issues; instead they have internal and external links which would affect each other. No
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Labor diversity is one of the most effective advantages that hotels could take good use of. For instance, the labor in China is rich but costs much lower than many developed countries. So hotel firms could be more active and creative by contributions of Chinese employees, furthermore, they could reduce labor cost. Galicic & Ivanovic (2007) say that hotel industry is exposed to great changes in business environment, but globalization can help hotels react much quickly to march changing market and meet guests’ needs. Although hotel companies have to take budget into prior consideration when implement global strategy, the global development costs are much lower as companies provide similar hotel name, style and size.

However, globalization can be a double edged sword since there are many difficulties, such as cultural difference, complex human resource management (HRM), huge expenditure and trade barriers. There is an increasing number of new hotels spring up each and every day, so ‘survival of the fittest’ becomes a definite truth as competition is unable to avoid. Frink (2009) states that hotel companies have to consider different cultures under different locations when they go globally. It is usually hard for hotel firms to integrate other cultures into their own previously corporate culture, particular to successful ones with a long history as they already have had a stable operation system. For instance, a Hilton hotel built in China has an
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