1.

REVIEW OF THE CASE The Avari group started its journey in Pakistan in 1947 and now it manages hotels in Pakistan, Dubai and Toronto. It was founded by Mr. Dinshaw Avari who was born in 1902 and was brought up and schooled in an orphanage. He had to face a lot of ups and downs during his earlier life due to lack of resources. In spite of all those hardships he had to face he got a degree in commerce and started his career. His talents showed from the very beginning and he excelled wherever he went. He was very passionate about his career and wanted to achieve more and more in life. In 1948 he brought the Bristol hotel from an English couple and made it binding on the seller to train him in this business. He would do all the chores, room maintenance, and purchasing food and worked very hard to make his business work and eventually the business became a success. He then realized the potential in hospitality business and was then able to build the Beach Luxury Hotel and added some innovations in it like the first Chinese restaurant. The story of progression then continues with the Park Luxury Hotel, Avari Plaza and Avari Travel Agencies. He also made collaborations with international hotel management companies. Dinshaw was a visionary man, he was able to see the opportunity and money in this industry. He had his own set of values which he instilled in the organization in documented form. After the death of Dinshaw at the age of 86, his son Byram Avari took incharge. Byram did his MBA from IBA Karachi and his father made him work from the lowest level in the hotel i.e. in the kitchen. He valued his fathers beliefs and considered family ties to be of utmost importance. He was deeply impressed by his father but was not a risk taker like him. He always saw his father as his best friend and mentor and wanted to be the same for his children. He built a strong bond with his children and taught them the values that his father had taught him. The third generation i.e. Dinshaws sons Xerxes Avari and Dinshaw Avari (Jr) were brought up with the same values that their grandfather and father believed. Following their fathers footsteps they too did their MBA from IBA Karachi and did their summer internships in the Hotel. Dinshaw often discussed hotel matters with his children over the dinner so that they can have an insight on how things work and how decisions should be taken. When they joined the organization they too maintained the environment of mutual respect and considered it to be a core ingredient in employee retention. Avari had always been an employee friendly organization. The rules could be made flexible as per the situation of employee. This made the employee loyal to the organization. Due to employee welfare programs, employee compensation plans and the no retirement concept the

employees stayed with the organization for very long periods, some had been working in Avari for about 30-35 years. Each and every employee had the chance to get promoted in Avari if he had the potential. A person entering as a peon could be raised to managerial or even directorial rank if he had the potential. What inspires me in this case are the core values and philosophy of the Avari family that ran through generations. They had a very flexible approach towards the employees of the organization especially Byram as his father once said to him we look after the poor because we were once poor too. His sons as well created an environment of mutual respect with the employees and realized that there are people working in the organization from the time when they were not even born. So they never hesitated to apologize from them when needed. Avari family as a family business based on the core values of honesty, caring and respect for each other. They never hesitated to share their wealth with the employees. In such flexible environment Dinshaw also believed that they should never allow anyone to take advantage of their soft image. The core values were brought down from generations to generations and every member of the family and organization valued them.

3. THE WAY FORWARD The options that are available to the founders in order to cope with the challenges are as follows Options in case i. ii. Reduce headcount Change the lifelong employment policy

Other options iii. iv. Reduce employee salaries (as done before) Increase room tariff

Change the lifelong employment policy My course of action would be to change the lifelong employment program. Although it had been a key factor in employee retention but now the hotels survival is at stake. Employees would want to first think about their present survival rather than think about the future employment programs. Reducing head counts will upset the employees in organization. They would always be worried about the fact that the company can fire them any moment. They should be taken into confidence and then if needed the company can also cut down their salaries in addition to changing the lifetime employment policy. Increasing the room tariff can also lead to a loss in the number of customers as the customers will then seek for lower tariff options which are easily available. So the best option is to eliminate the lifetime employment policy program. In order to compensate for the elimination of this program the organization can come up with some sort of cheaper program that could benefit the employee in some other way. The new program should be something that would cost much less than the lifetime employee program and as a result employees will be happy that they have been compensated after the elimination for the lifetime employment program.