Success and Decision-Making - of Genting Group - Case Study Example

Success and Decision-Making (Name) (Date) Introduction According to Neil Russell-Jones (2000), the process of decision-making involves identifying a need and the solution that is likely to best address the need while minimizing the risks and consequences involved. In any business, the process of decision-making is of high importance. Every business needs to make sound decisions that can chart the way forward for the organization while at the same time guarantee profitability. In this way, the process of making effective decisions for the business should be both critical and habitual. Decision-making involves choosing the best available alternative that can aid the enterprise in achieving its mission and objectives. The process of decision-making usually incorporates several techniques and tools to ensure the organization makes a sound decision. In order for businesses to make effective decisions, they need to have reliable information and the experience and expertise to interpret this information. This paper explores the importance of the decision-making process in business, with special focus on the Genting Group. Furthermore, In order to understand the correlation between effective decision-making and success achieved by the Genting Group, an analysis of the decisions made by its member companies is necessary. Genting Group is a conglomerate founded in 1965 and based in Malaysia. It comprises of Genting Berhad, the parent company, and four other member companies, which are Genting Singapore Plc, Malaysia Berhad, Plantations Berhad, and Genting Hong Kong (Genting Group, 2012). The group operates within the hospitality and tourism industry in Malaysia and beyond, with several integrated resorts and casinos under its name. The award winning multinational began operations as a company specializing in hospitality and leisure activities but has since diversified into other activities and industries such as energy, property, and information and biotechnology. The overall market capitalization of the group is estimated at over US$ 50 billion, with the parent company and all member companies of the group listed on their respective stock exchanges. Over the years, Genting Group has expanded and diversified its operation within Malaysia and other international countries. The company prides itself in having created integrated resorts that have revolutionized the hotel industry. In addition to this, the group has ventured into the gaming business through which it has reaped several benefits. The company saw the need to invest in the business of leisure following the demand for tourism products and the boom in both the Asian and global tourism market (Fong, 2009). The group has achieved success in its business operations with several assets valued at billions and international recognition. The decision-making process takes place at all levels of a business’s operations. In most companies, the Board of Directors have the ultimate power to make strategic decisions regarding available investment opportunities and the intended direction the company needs to take when it comes to future growth. Likewise, the management team make decisions, which are more tactical than strategic, that contributes to the overall mission and objectives of the company at the departmental level. Furthermore, low-level employees also make such minor decisions improving existing business practices and responding to client queries. These decisions are all necessary and of significance to the business operations and, therefore, require careful consideration when recruiting new employees. All the members of the Genting Group have a Board of Directors who have several responsibilities, key among them is to ensure the proper conduct of business by their respective companies. The board meets four times each year and reserves time specifically for such decisions as the companies’ strategic direction, financial strength, capital projects and operating plan and activities. They also ensure that the companies’ safeguard the interests of the stakeholders, as well as, assets of the business (Genting Group, 2012). The leadership style exercised by the Genting Group allows for a continuous flow of ideas and knowledge from the top to the bottom level of management, which facilitate proper decision-making. It is quite evident that without making the right decisions, a company like Genting Group cannot achieve the level of success that it has. Effective decisions ensure that companies can choose the right investment opportunities to venture in, as well as the level of commitment they desire, in terms of resources. The company has achieved success by identifying the gaps available within the hospitality and tourism industry and filling these gaps with innovative products or enhanced customer facilities already available in the market through which it has a competitive advantage. The company has also ventured into the rapidly expanding gaming industry with several casinos as far as England. In Asia and several parts of the world, the Genting Group enjoys recognition as one of the best-managed and financially sound multinationals. Genting Plantations Berhad began operations in 1980 with only 13,700 hectares of land in Malaysia. However, over the years, the company has expanded and acquired six oil mills and large tracts of land, estimated at over 186,000 hectares, with high potential for development. Through shrewd decisions, the company acquired land with potential that continue to appreciate over the years. The company has received several awards and quality management certification, including the coveted ISO 9001:2000 certification According to Alan J. Baker (1981), effective decision-making is a vital part of the operations of a business. It is an ongoing process that lasts as long as the company remains in business and provides a path through which the company can achieve long-term success. The decision-making process begins by identification of the problem or opportunity by the company. As in the case of Genting Plantation, the decision may be to purchase more land or acquire more oil mills. The company analyzes the situation for possible alternatives and solutions, which are then evaluated based on how they help achieve the goals of the business. The decision made often takes into account the resources available to the company at that moment, and the potential gains to be derived from such an acquisition. Genting Berhad was incorporated as a company in 1968 to engage in such business as hotels and casinos (Genting Group, 2012). The company began operations as a private company but later made the decision to become a public company two years later. Since then the conglomerate has undergone several changes in its operations to become the successful company that it is now. In addition to the hospitality and tourism industry, the company has diversified its operations and ventured into other business such as the production of palm oil, listed under Genting Plantations Berhad, energy production, cruises, and the packaging and paper business. The company has also undergone a few restructuring exercises to streamline its operations and trades its shares on the Malaysian Stock Exchange. The Genting Group started out from humble beginnings but has defied several challenges to become the number one multinational in Asia. Genting Singapore braved the uncertain financial times and bumpy economic environment experienced, in previous years, to build and launch a grand resort and also record a profit of over US$ 2.90 billion in 2012. The company also engages in CSR activities such as educating the community on responsible gambling, conserving the environment and improving the lives of disadvantaged youths. Most often than not, successful companies are those that have experienced the negative implications of making poor decisions. Despite engaging in a rational and strict process decision-making process, it is likely that there are other risks involved that may be beyond the control of the company. A successful company, therefore, is one who has experienced such failure and knows when the need to back down from certain investments. Efficient managers understand that not all information is available for the process of decision-making and, thus, make decisions that mitigate or minimize the impacts of these risks. For instance, in 2012 Genting Group applied for a casino license and bought several buildings in Florida (PRNewswire, 2013), which were to be demolished and luxury resorts and casino built in its place. However, the company became entangled in a legal battle with the Dade Heritage Trust, which sought to have the Miami Herald building scheduled for demolition saved and registered for historic preservation. Although the company won the suit, it made a business decision not to continue with its efforts of obtaining a license to operate casinos within the state. This decision is likely to have been made based on the negative publicity following the suit. In order to make the right situation for a given situation, it is necessary for the business to consider the ethical implication of such a decision (Odies C. Ferrell, 2012). More often than not, ethical decision-making is more difficult than making individual decisions since there are several organizational pressures that determine the decision made. Companies have different reasons for engaging in ethical practices or undertaking ethical decisions. Some may do so genuinely while others because of external pressures from several stakeholders. Regardless, Genting Group has managed to excel in making ethical decisions through several sustainability projects. Such activities endear the company to its publics and help the group gain competitive advantage over its competitors and often translate to higher profits in the long run. The Genting Group is a conglomerate with several operations worldwide, which need efficient management and business practices. The Board of Directors and all the personnel hired by the group are necessary to ensure the smooth and continuous running of the business. The company encourages cooperation and commitment among all levels of management to ensure success. The leadership and management style at the Genting Group is quite distinct and an inspiration to several companies. Over the years, the company has recruited among the best personnel available in the market, training and molding them into excellent managers then incorporating them into the company’s corporate culture. Genting Group knows that the decisions made by each of its staff affect the operations of the business in one way or another. In fact, for a company that operates within the hospitality and tourism industry, the low-level employees interact one-on-one with the clients than top management and if these employees do not make the right decisions, the business might lose out on its client base. The decisions made by managers are intended to find solutions to issues that arise within the business concerning workflow, business strategies, employee performance, and quality improvement among several others (Williams, 2005). This is not an exception for managers at the Genting Group. Such managerial decisions have an immense impact on the company’s performance and profitability and may have costly consequences if not given the consideration they deserve. In order to do this, Genting Group offers on-the-job training for successful recruits where they are taught the classical steps involved in decision-making. A company like Genting Group knows that a company may be successful today and end up being bankrupt tomorrow. No business in the world is safe from the changing business environment and the complexities and challenges that arise due to these changes. As a result, the decisions made by the company reflect the changing times and take into account that these decisions may become obsolete with time. Most companies that fail do so not because the challenges they face have become more complicated than before or lack of resources to counter these problems, but because they address these challenges based on inadequate information. An effective decision-making process ensures that the company gathers enough research and information, which will enable it to overcome the challenge it is facing with minimum consequences and risk. When a company achieves success, it learns to brave challenging situations by making wise decisions and calculated risks. During the recent economic downturn, several companies were forced into liquidation because they were not prepared for the collapse of the economy. Most of them operated without taking into consideration the fact that, at some point, the business may face such a huge level of adversity. As a result, their operations are characterized by repeat decisions and the belief that what worked for them before will likely work for all situations. This was not so. Genting group rose above the crisis and continues to be profitable with each passing year. The company recognizes the need to make strategic adjustments to its decision-making process in order to counter the continuously evolving nature of the business environment, changing demographics, competitor tactics and client needs. A majority of the operations carried out by the member companies of the Genting Group revolve around adequate and sound decisions made by the internal management, as well as other stakeholders of the companies. In order to make these decisions effectively, it is essential for the firm to put in place an efficient information system that will ensure that free flow of knowledge to and from all levels of management (Rudolf Grunig, 2005). Information plays an exceedingly significant role in the process of decision-making, and it can be equated directly to the quality of decisions that a company makes. The business environment continues to change with each passing day. New ideas and businesses are coming up while others are becoming obsolete. However, as businesses get access to more information; it becomes increasingly difficult to make effective decisions. While information is vital in the decision-making process, the huge amounts of information available today make it difficult for companies such as the Genting Group to make sound decisions without the aid of reliable information system. The group undertakes several businesses and it needs to make several essential decisions in each business day. As a result, the company depends on information systems, to ensure it makes the best decision using the information available. Traditionally, management relied on past financial statements, budgets and reports to make decisions concerning the future of the company. However, with the rapidly of the business environment, this will no longer be sufficient since those decisions will not effectively address the challenges that the company faces. In the world today, stakeholders are more aware and businesses more complex than before and, therefore, require information that is of variety, extensive and analytical. This way it is easier to make a clear and informed decision on the financial position and performance of the company. The decisions made by a business often reflect the leadership that it has. The best and successful companies are those that have capable leaders who make smart decisions. Tan Sri Lim Goh Tom, the founder of the Genting Group, believed that in order to achieve set goals, hard work and determination were necessary. It took four years to create an accessible road to what would be the first Genting hotel, and he did not give up despite the herculean task and the resources needed. He recognized the need for effective leadership within the helm of the Genting Group and proceeded to groom his second son to take over from him when the time came. A quality decision is one which offers a guarantee to the business that the choice made is the best alternative available or possible. It offers a certain level of confidence with which the company can allocate some of its resources to an investment project. The Genting Group owns 46 casinos in the United Kingdom and many others in the Singapore, United States, Philippines, and Hong Kong. The decision to invest in these foreign countries may not have been an easy one seeing as the company is based in Malaysia. The company could not predict the reception its business would receive in a foreign country given as some countries do not allow gambling. Regardless, the company went ahead and invested in these countries and continues to benefit from all these investments. The process of decision-making is continuous and encompasses all other functions that the management handles (DQI, 2008). As Genting Group continues to grow its operations both locally and internationally, the company understands the significance of effective decision-making as an indispensable element of management. The decision-making process seeks to find a solution to challenges faced by the company and may take time. The Genting Group has achieved success since its inauguration and continues to do so meaning that the company engages an effective decision-making process. In conclusion, the process of decision-making is fundamental in all businesses. When making business decisions, it is essential that managers consider both positive and negative implications of such decisions on the operations of the business. In order to avoid the risk of poor decision-making, Genting Group encourages its management to make decisions based on available facts and adequate research and not just instinct and gut feeling. Effective decision-making has ensured that the conglomerate has avoided possible losses and guaranteed sustainable growth and continued profitability. The Genting Group prides itself in being a leading corporation within the hospitality and tourism industry and a symbol of excellent management and leadership. This success it achieved through making the right decisions for each business situation. References Baker, A. J., 1981. Business decision making. New York: Taylor & Francis. DQI, 2008. Decision Making Process. [Online] Available at: http://decision-quality.com/intro.php [Accessed 17 May 2013]. Fong, K., 2009. Special Focus: Genting Group Bets Big on Singapore. [Online] Available at: http://www.theedgemalaysia.com/first/158007--special-focus-genting-group-bets-big-on-singapore.html [Accessed 17 May 2013]. Genting Group, 2012. Genting Group, Our Mission. [Online] Available at: http://www.genting.com/mission.htm [Accessed 17 May 2013]. Genting Group, 2012. History. [Online] Available at: http://www.genting.com/history/index.htm [Accessed 17 May 2013]. Odies C. Ferrell, J. F. L. F., 2012. Business Ethics: Ethical Decision Making & Cases. 9 ed. Connecticut: Cengage Learning. PRNewswire, 2013. Genting Group Announces Plans For Transformational New Development Project Along Las Vegas Strip. [Online] Available at: http://www.prnewswire.co.uk/news-releases/genting-group-announces-plans-for-transformational-new-development-project-along-las-vegas-strip-195026861.html [Accessed 17 May 2013]. Rudolf Grunig, R. K., 2005. Successful Decision-making: A Systematic Approach to Complex Problems. Munich: Springer. Russell-Jones, N., 2000. The Decision-Making Pocketbook. New York: Pocket Books. Williams, R. G., 2005. Decision Making in Business. New Jersey: Pearson Education. Read More