Strategic management practices in the hotel industry of Thailand

The subject of strategic management has been studied for many decades but theoretical and empirical investigations of the strategic management area in the developing countries has remain limited. This research was designed to explore strategic management practices in the hotel industry of a developing country, namely Thailand and identify whether there are differences in the strategic management practices on the basis of size, ownership, and planning system. This research in essence is exploratory in its nature; hence the focus of the research is through stated research objectives rather than specific hypotheses. The theoretical framework was based upon frameworks developed in previous studies. The data was collected by three to four hour highly structured personal interviews with senior executives over a period of five months in 2003. In total 50 companies participated in this survey which represents a 52.08 percent response rate. Of the participating companies, 84% undertook formal strategic planning. The companies who undertook formal strategic planning were further classified into 2 categories; 36% were classified as having a planning sophistication2 system (financially oriented formal planners) and 64% were classified as having a planning sophistication3 system (strategically oriented formal planners). Analyses in this research provided some evidence to support that size and ownership had an association with planning system sophistication. Planning sophistication3 companies were amongst the largest companies, they averaged a higher revenue, employed more people, and had more complexity in ownership than the planning sophistication1 or planning sophistication2 companies. It appears that the formal planning process contributed to a great extent to the strategic management of all the formal planning companies, particularly in large companies, group companies, and planning sophistication3 companies even though informal planning was found important for strategic management in the medium sized companies, independent companies, and planning sophistication2 companies. In addition, large companies, group companies, and planning sophistication3 companies believed they were strategically managed to a greater extent than the other groups. Amongst the unique features identified with planning sophistication3 companies were that these companies had a longer planning time horizon and they normally develop their long-term plan before the short-term plan. These companies expended a great degree of effort on every aspect of planning activities, on every external forecast area, and they extensively employed computer models/systems to support their corporate planning. They had a high degree of forecast transmission from corporate planning to the second level management in every forecast area and they tended to incorporate market analysis, customer analysis, competitor analysis, company analysis, key issue/problems, corporate strategy, and second level strategy into their corporate plan. Quality management was focused upon as a key strategic issue with a high degree of people involvement. This research identified size, and a non-standard process of formulating strategies as the main reasons for the companies who had no formal planning system. These companies were relatively small in all aspects of size and their CEO/MD/President had most influence on all strategic decisions and strategy formulation. Compared with the formal planning companies, non-formal planning companies assigned less effort to most areas of external forecasts and used computer models/systems to a minimal extent. Overall, it would appear that larger companies, with more complex ownership and probably more complex environments are the companies who are most likely to develop more formalised strategically oriented planning systems. The comparative analysis results with previous studies have confirmed the existence and importance of strategic planning in strategic management practices across very different time frames, industries, and countries. Overall these studies broadly indicated the same pattern of planning system, with more than 70% of the companies responding having a formal planning system. A reasonable amount of corporate planning effort was spent on all forecasting areas and there was a fair degree of transmission of the forecasts from the corporate level to second level of management. The main computer models/systems regularly used to support corporate planning were financial models, and forecasting models. Fair quality information was received from all functional departments. The results from these research studies suggest that the underlying processes described especially the strategic planning processes may indeed be important for strategic management in large companies in a wide variety of situations. This research has contributed to strategic management theory, practices, and research methodology and this research facilitates further research, which builds upon either the theoretical framework, the methodology, or the database.