The decision to outsource or keep activity ‘in-house’ depends on:-

Whether the activity/process is core

If the activity or process is core process to the business, it should not be outsourced. For example, in car assembly, the assembly-line is core and cannot be outsourced, while computer training is not core and can be outsourced.

Whether specialized skills are needed

If the activity requires highly specialized skills which the organization may not have, the activity or process can be outsourced. For example if an organization wants to write an employee handbook ensuring all policies are represented clearly and in legally correct terms, it’s better to outsource to an experienced HR consulting firm. On the other-hand, if affirm has just installed a new database technology requiring specialized technicians, it’s better to hire the skilled individuals since they will be needed for an extended period to work on projects.

The duration

If the activity will last several years, it should not be outsourced. The primary reason is price. Outsourcing typically costs more for long periods because, the client pays some ‘fixed costs and profit’ as part of the cost to do the work.

Confidentiality of information

If highly sensitive and confidential information will be revealed during the execution of the project, do not outsource. For example, if the project requires access to customer lists and future orders, it cannot be outsourced.

Staffing

If the staff will be needed after project completion for future projects, then the activity should not be outsourced. However, projects that end with no ongoing need of the staff would best be outsourced

Management involvement

If the management needs to strictly control the process, they should not outsource. An example of an outsourcing activity which may not have been a good idea was customer support for computer equipment sales by Dell a while ago. Dell could not control the interaction with their customers and there were numerous complaints about communication skills, product knowledge and general attitude of the outsourced technician.

In the current dynamic and competitive global economy, outsourcing has become a raging debate and both advocates and opponents argue the issue passionately. It’s common practice for companies to outsource their business functions. Outsourcing has many advantages but at the same time it has some disadvantages that cannot be ignored.

Cheap labor

The organization is able to access cheap and efficient labor through outsourcing. This is brought about by reduced training costs. Outsourcing helps the organization save money, but this depends on the specific tasks are outsourced.

Reduced costs

Outsourcing helps companies cut operating costs by almost half. It also helps the organization provide high quality products at a cheaper rate. The savings can be enormous depending on the nature of business operations.

Access to better technology

The outsourced firm can afford the latest technology since it could be part of their core business. With outsourcing you don’t need to become an expert in a particular area because you can depend on the outsourced company.

Increased production

The outsourced company can provide service 24 hours a day, with workers around the globe operating in the best shifts available. This way the company will focus on its core business and outsource “non-competitive” factors to business partners.

Even though there are many reasons to consider outsourcing, there are also some negative aspects that need to be considered.

Employees feel threatened

No one likes to think his or her job may be in jeopardy. Once your employees see that jobs are being outsourced, they may think their jobs are next. This can cause some employees to leave the company in search of one that isn’t outsourcing tasks. It can also cause general uneasiness, which can lead to lower morale and less productivity.

Loss of control

Once you let someone else handle part of your business, you begin to lose control. Customers may not be handled the way you prefer and management may make decisions you don’t approve of. If total control is important to you or your business, reconsider outsourcing. The company can get into serious trouble if the service provider refuses to deliver as per the agreement.

Lose customers

You may lose some of your customers once you start outsourcing. Some customers may feel disconnected knowing you no longer perform this function yourself. Issues of trust arise and the outsourced company may not adapt to the firms changing needs.

Security Issues

It is more important than ever to protect customer information. Every company must deal with this issue. It is more challenging, however, to secure data when that data is in someone else’s hands.

Companies today should make use of outsourcing in order to progress and stay abreast of the competition. They should carefully think through each function in their business and figure out which tasks make sense to outsource taking into account the interests of employees and customers alike.

By Kimanzi Mwalya

“People of different religions and cultures live side by side in almost every part of the world, and most of us have overlapping identities which unite us with very different groups. We can love what we are, without hating what – and who – we are not. We can thrive in our own tradition, even as we learn from others, and come to respect their teachings.”

Kofi Annan, Former Secretary-General of the United Nations.

Managing in a multicultural environment involves studying the behaviour of people from different cultures and regions and stipulating the expected behaviour and culture in the organization. It seeks to understand and improve the interaction of employees, clients, suppliers, and other stakeholders from different countries and cultures.

Globalization is reshaping people’s ways of thinking and behavior. This has led to cultural changes where organizations have merged different cultures and created a new one. Many companies all over the world are crossing national borders to do business. They find themselves dealing with people from various national, religious and ethnic backgrounds.

Organizations should ensure that there is successful communication between people from all cultures. People from various cultural backgrounds should play themselves out well at the workplace.

When managing people from different cultural backgrounds, the management should:-

Make a concentrated effort to learn about the culture of their employees and understand them.

Develop an organizational culture that accepts and appreciates the differences that individual employees bring to the workplace. Employers should recognize and appreciate the differences between cultures. One of the realities of integrating people of different races and cultures is that occasionally racism or prejudice emerges, creating tensions and disrespect within the workgroup. Effective managers address problems of prejudice in the workplace by insisting that all employees be treated with respect and dignity regardless of race or cultural background.

Take a proactive role in helping employees to adjust to the work environment and create a new organizational culture by establishing employment policies which stipulate the expected code of conduct. Once established, the policies should be uniformly enforced with all employees. This should be done the beginning of the employment relationship.

Inform all employees on local laws and their performance requirements. The organization should also develop staffing systems that are flexible enough where non-resident employees can have extended periods of time off and still fulfill their work schedules.

Support social and recreational activities for all employees that will create a quality of life outside of their jobs. It is not traditionally the employer’s responsibility to find social and recreational activities for their employees. However, some employers encourage employees to join local soccer leagues, attend local churches, and provide opportunities to get away from the office and pursue personal interests.

Become involved in community relations to help community residents accept and support employees from other cultures and to help employees become oriented to the community. This helps employees to become part of the community and help community residents to appreciate them.

Beware of personal space and cultural contexts because people from different cultures have different “comfort zones” and ways of communication.

Beware of body language and learn the basic differences in the way people supplement their words with body movement. The organization should also be aware about different etiquette rules or manners because what is polite in one culture may be rude to another, this can be achieved by observing ethical and legal behaviors in different cultures.

Learn as much as possible about other cultures to enhance the organizations ability to communicate with other cultures. Learn the cultures history, religion, politics, values and customs. Still the organization should, show respect, be patient, flexible and recognize its own cultural biases and emphasize on common ground and increase its cultural sensitivity.

Be aware of different social values and status symbols and aggressively overcome the culture barriers. It should also have a basic knowledge of the employees’ culture and traditions because this has a bearing on their behavior.

Make people with different cultural identities feel like part of the society around them and feel like one team. It should also consider each employees family, religion, education, nationality, ethics and etiquette because these play an important part in their life.

Develop an open culture at the work place that accepts and appreciates the differences individual employees bring to the organization. It should also establish a culture policy and communicate them to all employees.

Organizations fail to achieve a focused and effective culture identity because:-

They focus on financial and administrative tasks and leave no time for culture management; they do not realize the impact culture has on morale, security, relationships and productivity.

They try to legislate a new culture rather than let it develop over time. The management at times doesn’t know how the new culture should look like and plays wait and see with it.

Culture is a source of competitive advantage because it releases cultural synergies, knowledge, values and reshapes the identity of the organization.

Culture and tradition are powerful principles we always carry with us even though we are unaware of it. Multiculturalism is not about a single element of a persona, it’s about various cultures in each one of us and they represent the way employees think, act and react.

By: Kimanzi Mwalya

Mark Twain once said “The secret of success is honesty and fair dealing, if you can fake these, you’ve got it made.”

I was recently involved in a discussion on what constitutes ethical business practices. The discussion was fierce because it touched on integrity, rules, good intentions, accountability, profitability and honesty.

The true meaning of corporate ethics isn’t far from these words. Corporate ethics is about an outward-focused social vision, putting out quality products at reasonable prices; treating all stakeholders fairly; acting responsibly toward the local environment and community; and, most of all, embracing transparency and accountability in business operations.

Unlike popular perception, corporate governance is not merely ensuring adherence to a set of rules. It is also not about smart brand-building exercises to manage “perceptions.” It is less about policing and posturing and more about nurturing trust as an intrinsic part of an organizational culture.

Corporate ethics programs have spread widely in the past because of a stronger focus by the media on corporate conduct, increased pressure by statutory bodies and the growing maturity of business organizations. Organizations are facing the moral expectations of market participants. There exists a social contract between the organization and society where companies are expected to use their resources in a responsible way.

There are three types of business ethics programs:-

Code and compliance programs:-These focus on regulating the behavior of employees. They govern issues like conflict of interest, anti-competitive behavior and customer relationships. Employees should read and understand the expected code of conduct.

Compliance programs will be more successful when connected to positive values with which all stakeholders can empathize. For any ethics programs, having a formal code is not enough. Any such statement must be synchronized with the company’s organizational structures, its culture and its leadership.

Identity and value programs are based on company’s values that emphasizes on positive concepts and values like integrity, respect, service to stakeholders and team work. They express what the corporation stands for.

Social outreach programs emphasize the role of the company as a social entity. “Social accounting” programs rests on the premise that companies should account for social activities in much the same way as they account for their financial activities.

Presence of ethics programs doesn’t necessarily mean that there will be improved employees and company behavior, because corporations and individuals can be idealistic in intent while the consequences of their actions are not particularly ethical.

Business ethics must touch on organizational structures, internal auditing, and corporate governance. Ethics programs are more successful when they bring compliance and values. They fare better when they are integrated with other corporate structures, policies and management accountability. Companies that attempt to manage ethics without cooperation of management, structural adjustments and proper policy formulation are less likely to succeed.

Not all ethics programs are created equal. The programs can either fit with or conflict with the interests and objectives of the corporations that create them. For companies to effectively define their identity and communicate their values to all stakeholders, they should adopt different ethics programs for different situations.

Corporate ethics reforms can reduce litigation expenses, lighten regulatory pressures, and improve company morale. Frequently they can result in considerable savings in their own right. Selling necessary products with an eye to a broader definition of stakeholder responsibilities can promote positive social change. This helps the organization achieve its return on investments and customer satisfaction.

Globalization has brought about international ethics codes, norms, principles and guidelines on ethical business conduct. These are designed to win adherence to internationally acceptable norms on the part of corporations in the global marketplace. Organizations should therefore identify and assemble the most significant and influential codes relevant to the nature of their business.

As organizations chase their goals, deadlines and targets, some tend to forget the real issues in the world outside their windows. The leadership of these firms should shake off the ‘bigger-larger-higher’ stupor that has consumed their organizations.

It matters little what organizations do as long as they do their business with pride. It is fine to earn more as long as it is done honestly and not at the cost of others. There is a search for the ‘ethical quotient’ among organizations seeking to answer questions such as: honesty, transparency and accountability. The approach of the organization to these questions determines its destiny.

Trust is the only currency that can sustain a corporation through the turbulences over its lifecycle. One of the most uncomplicated ways of seeding trust is through transparency. This fabric of trust can be woven with simple but very effective corporate ethics tools

Organizations need to simply invert the traditional prism of how businesses should be run and win back their trust of all stakeholders. A cat may have nine lives to live, yet organizations have only one. If they destroy their reputation in search of profits, they destroy their pride. They should stop, think and act by redefining the purpose of their existence beyond revenues and profits

Ethics, like democracy, is a lot easier in theory than in practice. There has been a proliferation of well meaning and publicized corporate codes of conduct and mission statements which do not benefit the company they were designed to help. This is not to suggest that codes are entirely meaningless. They help organizations focus on their accountability and corporate strategy.

The corporate world cannot be divided easily into “good and evil companies”. Mistakes are built into life, including the life of corporations. There is emerging emphasis on self-regulation and scrutiny as the primary method for raising standards of corporate conduct. The measure of a company’s integrity is not how loudly it beats its own breast, or whether it blunders, but its respect for its stakeholders.

Even if a company is regarded as unethical and lacking in critical areas of accountability and honesty, it can still launch impressive affirmative action practices and quietly move to the forefront of corporate responsibility, honesty and accountability.

It’s a dangerous trend for companies promote mission statements without organizational commitments to implement those ideals. Character demonstrated by actions, not by intentions, is the only reliable measure of corporate ethics. . It is disappointing when a trailblazing ethical company that has loudly trumpeted their corporate values stops following them.

The term corporate communication can be defined as the set of activities involved in managing and orchestrating all internal and external communications to all stakeholders. The communication provides information about a corporate entity to its customers, shareholders and the public so that they can know what the company is trying to achieve. It governs the flow of information within the organization and also to the external environment.

Corporate communication follows the same model as human communication, beginning with the meaning that needs to be conveyed from one communicator to another. Effective communication does not occur until the meaning that the sender wanted to transmit is accurately communicated and understood by the message receiver.

Successful or effective corporate communication strategies are those designed after a proper evaluation of an organization’s past and present. A good communication plan identifies how an organization can move from where it finds itself to where it desires to be in future. For example, in order to design a good customer relations plan, it is important to evaluate how an organization has been dealing with its customers in the past and whether such communication approaches  had good impacts on the organization or not. This ensures that the plan’s strengths are identified and incorporated in a new plan while avoiding a repeat of its weaknesses in its new strategies.

The way corporate information is presented bears equal importance as the content being communicated there in. The success of corporate communication depends on the speed at which the information is disseminated because this plays a critical role response generation. Communication styles differ from one organization to the other. Some organizations prefer formal while others are strictly informal.

Essential elements of corporate communication

Good communication is needed by teams and leaders to succeed in a complex working environment. Recent research has identified good communication along with strong organizational support, high levels of leadership competence, team coaching and clear objectives are crucial to the success of teams working in across a geographical or organizational spread. The essential elements of an effective communication can be discussed as below:-

Research: Research is the starting point because it involves planning and ensures programmes, strategies and campaigns are built on a solid foundation. This phase of work is about understanding and identifying the context of the communication and its current levels of awareness and understanding. It’s also about establishing some benchmarks to enable tracking of future communication progress.

Strategy: Strategy is at the heart of everything. Whether it’s in developing an organization-wide communication programme or supporting a specific campaign or initiative, this phase is about creating a corporate master plan. It’s about making sure that whatever is done proactively supports the organization’s strategy. Strategic communication adds value and helps move the organization forward.

Delivery: communication must be strategic, but it must also be delivered creatively. Stakeholders won’t engage if communication is dull and uninspiring, if it is delivered in the wrong way by the wrong people, or if important messages get lost due to the ‘white noise’ that appears when too much is communicated too quickly.

Evaluation: Organizations need to be great believers in regular evaluation and measurement of communication programmes. Put simply, there’s no point investing time and energy in communication if the organization doesn’t know whether it’s working. Organizations should develop strategies based on genuine insight and work to put in place measures to track the medium to long-term progress of those strategies.

Resourcing: It’s finding and growing the right people, creating the right internal structures, clearly defining roles and building great performing communication teams. This can involve one-to-one coaching, traditional classroom-based training, role profiling, selection interviewing, developing toolkits to drive consistency and providing ‘hands-on’ interim support. It also involves imparting knowledge to team and building skills through support.
Organizations can use corporate communication beneficially by:-

Linking their philanthropic efforts to their brands and corporate social responsibility platforms. This can be achieved by participating in charitable activities. These efforts can also be reinforced internally within the organization. The companies that can use their communication in a simple and concise manner are ahead of the game.  Companies can also utilize their communication as starting point to sharpen their competitive edge and be a leader in showcasing and communicating effective CSR.

Being sensitive to their key communications and ensuring that they complement product advertising and marketing. This can be achieved by carefully assessing consumers’ responsiveness to its products, advertising and marketing.

Identifying how the corporate brand can uniquely leverage consumers’ desire to actively participate in company’s activities. This can be achieved by making sure that consumers get involved in its activities.

Exploring new opportunities and telling their corporate story. This can be achieved by use of annual promotion drives which can be very effective in communication. The organization should continuously look for new and bigger opportunities to share the company’s message to all the stakeholders.

It is a digital world we live in and a lot depends on the presence of a company communication strategy or policy. Corporate communication makes it easier for organizations to reach out to the target audience. Active communication with stakeholders through emails, newsletters, and updates on social networking websites helps the business flourish to a great extent. It is also through corporate communication that a company is able to build, maintain and improve its position on the market. The company’s image in the corporate world is maintained successfully by building strong and healthy relations with its stakeholders.

A communication system in an organization is like the nervous system in an organism. It’s what detects and responds to the environment, and what coordinates the functions of the various specialized elements. Many enterprises want to grow and change, but they don’t realize the dramatic efforts required, especially in communication policies and procedures. Just making the existing communication system bigger or giving it some fashionable new name won’t do the job. Instead, the organization must develop completely new, more sensitive, responsive and complex communication infrastructures.

Always remember: – poor communication can damage the reputation of a firm as well as its bottom line

There is no single official definition of what constitutes a small business; most definitions look at their characteristics. Most small businesses are privately owned and operated, have small number of employees, have low value of assets and low sales volumes. What constitutes a small business varies in different countries and regions.

Every small business owner is always looking for ways to grow their business in a healthy and manageable way. 80% of businesses in Kenya are small businesses and they constitute a greater portion of the gross domestic product (GDP).

Having survived the startup process. Now it’s time to begin focusing on growing the small business and making it profitable. This can be achieved by:-

Growing the profitability of the business.

Every organization is in business for profits. So it’s important to understand how to generate and grow it by reducing costs and increasing sales. Sales can be increased by increasing the sales volumes or increasing the selling price of products and services.

Creating a business plan.

A business plan enables the business to focus on growth, marketing, sales and product development. If properly followed, it ensures that the plans for each of the above areas work together in one cohesive plan for the business.

If a business plan was done initially before starting the business, it should be clearly followed and read. This will enable the business owner to update and revise his or her goals or schedules. It also re-acquaints the business owner with the goals which were set in the beginning and may have been lost along the way. Processes and procedures developed during the first few years of business operation helps the business owner think through the key elements of its critical path.

Assessing capital requirements.

As the small business grows, its needs for capital outstrip its initial funding sources. With the established track record of the small business, it’s possible to get funding from banks, angel investors and other financial institutions. Most financial institutions require documentation in the form of income statements, cash flow projections and balance sheets which the small business must provide.

Utilizing and building your network

One of the most valuable assets a company or an individual can possess is their network, and it should be utilized to its fullest potential. The business owner should set up meetings with clients to gain their insight and feedback. They may need the newest products and services from the business. The business owner should also look for strategic partnerships and alliances that can be fostered. A network is so valuable that one should spend significant time to improve and increase it. Look at the connections of your contacts and ask for more introductions.

Listening to your employees

Look internally at your employees. Business owners get into a habit of managing employees but not taking time to get feedback from them. Open dialog for your employees to get their thoughts on products, customers, and prospects by making sure you are in touch with their goals.

Entering into strategic alliances

By aligning your business with similar or complimentary businesses, you can quickly expand in a very powerful way. Even if the idea of offering commissions from your sales sounds a bit unpleasant, when you consider the dramatic increase in sales you’ll be receiving, the commissions will barely be noticeable. Examine the consumer and economic trends with regards to your business industry and the ability for the company to succeed.

Product and services development.

After several years of business operation, sales volumes slow, demand slackens and growth almost stalls. It’s time to abandon the tired horses and innovate by coming up with new products, services and markets or simply improve the existing products or services. This incremental expansion can be achieved by developing different sizes, colors or packaging for all the product lines.

Cost management.

The business should spend time and energy reducing costs by finding out where the bottlenecks are, trimming expenses, cutting waste and finding out which processes to eliminate or amend. This will improve their productivity. Cost reduction goes directly into the company’s bottom line

Embrace the internet: Create a web site
in today’s digital age, having a Web site and e-mail address is expected of a business, and can make a critical difference in building name recognition and attracting new customers. A Web site provides customers with information about the company and advertises your products and services.

Diversify your business

Diversifying products lines or services includes mostly selling new products or services that compliment the ones already being offered, looking into new markets and tapping into the existing ones too. The business owner should also look at different demographics, and see which ones are most likely to be attracted by the products and services being offered.

Diversification is driven by the desire to increase profitability, business growth and economies of scale, for example, while one product’s seasonality results in slow sales; the other product’s seasonality results in high sales. It also enhances production capacity utilization: for example, if the production facility is under-utilized, then adding new products through a diversified strategy can help fill production capacity.

Managing business maturity.

While the small business stabilizes, markets continue to change, competitors arise, technologies disrupt and the world otherwise evolves. So the primary growth challenge of the business in this stage is to keep innovating and coming up with new ways of doing business because markets that once seemed like they would expand forever suddenly mature themselves and become slow- or no-growth ventures. At this stage also, the owners of the business should begin grooming a potential successor and initiate the process of stepping back from day-to-day operations. With new leadership coming on board and the founding entrepreneur taking a smaller role, it will be easier and more natural for the organization to embrace new ways of being.

After a student from Nottingham University on a medical field trip to Kenya tested positive for swine flu, the players in the hospitality industry have reason to worry because with this confirmation, Kenya joins South Africa, Ethiopia, Ivory Coast and Cape Verde as countries hit by the dreaded flu in the Sub-Saharan Africa. The latest global figures issued by the World Health Organization (WHO) gave the number of recorded swine flu cases as 70,893 worldwide, with 311 deaths.

The Swine Flu outbreak is already starting to have an impact on international travel and trade as a result of the World Health Organisation’s decision to upgrade the threat alert to level four.The tourism industry could be one of the first to suffer from the swine flu outbreak even at this early stage because:-

• The threat is very real, and everyone, especially those in the hospitality industry, should not wait to assess just how real it really is. If more cases are reported in the near future we will start experiencing a reduction in hotel bookings.
  • Swine Flu could have a significant impact on air traffic. It’s still too early to judge what impact Swine Flu will have on the bottom line, but it’s sure that anything that shakes the confidence of passengers has a negative impact on the business. And the timing could not be worse, given all of the other economic problems airlines are facing.
  • Tourists are more scared of this silent killer that comes with a warning all over the world. This will lead to reduced travelling to Kenya as thousands of travellers would stay away in droves.
  • Swine Flu has created a “perfect storm” for the Kenyan tourism industry already reeling from the effects of the global recession. Swine flu will be more devastating to tourism, because many international visitors will shun Kenya. Tens of thousands of jobs could be at risk in the tourism sector
  • Flying will also become more difficult due to the policing of incoming passengers from any part of the globe.
  • Most of our hotels rely on foreign clientele and very little domestic clientele. This outbreak can seriously affect our tourism industry which is not yet out of the woods following the post election violence.
  • Continued infection reports can lead to a travel advisory. This could lead to cancellations and requests for refunds on any business on the books.

Some measures which could be taken to avoid these negative effects of the swine flu pandemic on tourism industry are:-

• Closely monitoring the Swine Flu developments, including a plan to keep tourism operators informed about any developments associated with health scares.
• Tourism industry needs to be better prepared to respond to any future epidemic, because the global tourism industry was caught completely unprepared by swine flu and they need to heed the lessons taught by the pandemic.
• In this day and age health and safety issues are highly prominent in peoples’ minds when they think about travelling. It is important that we provide appropriate information about taking sensible, precautionary measures while travelling, without resorting to scaremongering.
• The nations involved should be compelled to work together, their tourism and health agencies should work more closely and have open communication channels because swine flu has exposed our vulnerabilities and we need to educate ourselves on what types of risks are out there that may affect our business in the future. Kenya is not an isolated island and it is only a matter of time until the next swine flu infection is reported in the East African region -they need to be ready.
• The mass global hysteria being caused by swine flu has a devastating effect and serves to teach us a valuable and expensive lesson on how our tourism and health ministries should cooperate better during times of crisis.

• Meeting with local and national agencies to discuss pandemic issues. They can also have a “Pandemic Preparedness Task Force” with plans and puts procedures in place. They should meet regularly, especially as outbreaks occur.
• Domestic boost-Of course, the impact on foreign travel could turn out to be a boost for domestic tourism. And while the implications of swine flu are “frightening”, individual operators can’t do much to control global events.

Kenya like many African nations is particularly vulnerable due to our poor health care systems, poverty and the presence of other respiratory illnesses, such as tuberculosis and Asthma. The government can also put in place the following measures:-

• Ease access to Tamiflu, the main drug used to treat the disease manufactured by Swiss drug maker Roche. We should also build emergency stockpiles
• Kenya’s  heath systems should be  high alert
• Make the drug affordable from the current Kshs 654 for a pack of 10 Tamiflu capsules excluding  local taxes
• Issue  personal safety and hygiene guidelines all over the country and closely monitor all flu entry points or hot spots mostly ports of entry

It’s not all doom and gloom despite all this .We have not yet  heard any cancellation due to swine flu. We should become very adept at responding to these crises in recent years, we should be battle-hardened and better prepared for something like this than we have ever been. The hotel industry in particular is highly susceptible to the events that make significant changes to people’s behaviour.

We’re in a recession and we’re trying to make the best of things as a bigger priority for the industry than worrying about the potential impact of swine flu. At this point it is too early for us to tell the effect swine flu will have on our business.

Every economy has to contend with an “X Factor”, and  it is fair to say that this year we are  not only dealing with two “X Factors” – The global economic crisis and the second “X+1 Factor” -The increase  in the cost of fuel.

We are now dealing with another potentially cataclysmic factor, let’s call it the “X+2 Factor” – the outbreak of Swine Flu in Kenya which if not properly checked could lead to devastating effects on tourism industry.

With all these happening almost simultaneously, one begins to wonder if we are experiencing the 21st Century equivalent of the Plagues of Egypt, which as they appeared in the Bible, were rivers and other water sources turning to blood killing all fish and other water life; frogs; lice or gnats, wild animals, livestock disease, unhealable boils, hail mixed with fire; locusts; darkness; and death of the first-born of all Egyptian families….hey, anything could happen!

We need to sit tight as industry players and watch this global pandemic, you never know what tomorrow might bring.

Work-life balance is a broad concept including proper prioritizing between career and ambition on one hand, compared with pleasure, leisure, family and spiritual development on the other. As the separation between work and home life has diminished, this concept has become more relevant than ever before.

The terms work/life balance and balanced-life are commonly used to describe various aspects of life satisfaction. Symptomatically, among the life maladies attributed to lack of balance are feeling overwhelmed by responsibilities, feeling guilt at shirking family in favour of work or vice-versa, lacking control over one’s life, and feeling unfulfilled by life’s responsibilities and roles.

Work life balance is called the ”holy grail of the 21st century.” In bookstores, the bookshelves groan with books devoted to the topic, yet ironically enough, quite a few people just can’t find the time to read them. May this article help you cast a fresh eye on what work life balance means to you and your organization and take a further step towards balanced life.

Rich as it is, the relationship between personal and professional life can be rocky and maintaining the work life balance is often a tricky issue. Life, work, and business exist in a nexus from which we cannot easily extract one from the others. In a world where “too much to do and too little time” is a common mantra, there’s a sense that everyone and everything has more control over our day than we do.

The core issue for many people dissatisfied with life is poor alignment of their roles and responsibilities with their fundamental building blocks of well-being. Each person arrives pre-loaded with the components required for a happy, successful life. This can be seen by observing children at play. Given the appropriate supportive environment, young children naturally gravitate to activities they enjoy. They’re pre-programmed to enjoy life, and have little trouble aligning themselves with fulfilling activities until adults superimpose restrictions and “must-do” structure on their lives.

If you feel that your work life balance is teetering on the edge, it is time to make changes before the problems overwhelm you. Here are strategies that, taken together, can help to change course without abandoning the destination and help you restore your work life balance.

Identify energy leaks

Use energy inventory to assess the quality of your work life balance. Call your energy home by noticing where you are gaining or losing energy. Simply notice without judgment, holding yourself whole, competent, and resourceful to redirect your energy when you choose to do so. Once you have identified your energy leaks, you will begin to recognize ways to close them and regain work life balance. Each time you close an energy leak you become more focused, clear, and balanced. Be patient, be honest, and you will soon develop the momentum to live your life in a more satisfying manner.

Without work life balance, we may leak our energy and resources and lose focus. We leak energy to unimportant activities or unconscious commitments as a result of not having focused intentions. Sometimes energy flags when we’ve gotten into a pattern of pleasing others or living according to standards that are not our own. Notice if there is any imbalance. Notice where you’re being less than forthright and get clear about your motives, then clean it up.

• Negotiate a Change with Your Current Employer.

Progressive employers recognize the value of good employees, and many are willing to find ways to help current employees deal with short-term or permanent changes caused by family situations. The changes can include flex time, job-sharing, telecommuting, or part-time employment. Your first step is to research your employer’s policies and methods of handling previous requests. Then go to your boss armed with information and a plan that shows how you will be an even more valuable and productive employee if you can modify your current work situation.

·         Attitude is everything.

No matter how much you love your job, no matter how big a part of your life it is, ultimately you need to be able to “turn it off” and spend some time not working. This is hard for a lot of people, because their work is an important part of who they are as people. This can be admirable, especially when you accomplish great things in your work, but an always-on-the-job attitude can be harmful in the long run. What’s more, it might even reduce your effectiveness in your work — both the mind and body need a break from thinking about and doing the same things all the time to recharge and keep coming up with fresh ideas.

·         Keep a rational schedule.

The more you’re trying to juggle, the more important it is to make a good schedule and keep to it. Block out all your work and non-work commitments and make sure to allow plenty of downtime and non-work time. Treat non-work commitments as seriously as you treat working commitments — the time you’ve assigned to family, housework, and your own activities needs to be just as inviolable as the time you spend in the office, going to meetings, or meeting deadlines. This is especially true if you’re so busy that you can’t reschedule that off-work time.

·         Learn to say “No.”

If you’re having trouble keeping on top of everything going on in your life, it may be that you’ve committed more time than you have. If you’re like me (and just about everyone else), you don’t like to refuse favors, new responsibilities, or even casual requests, for fear of a) looking undependable, b) upsetting someone, or c) missing out on something. Make a point of seriously considering any request that comes your way, and double-check your schedule before taking anything else on. When it’s too much, don’t be afraid to refuse — you won’t be doing anyone any good by taking on tasks that you won’t be able to do well because you’re too overwhelmed to handle them, or by accepting social invitations that you’re too stressed out to enjoy.

• Clean out your mental closet.

There’s substantial evidence that managing the way we think can have a profound and lasting effect on mood and motivation. To nurture our nature, we also have to discard all the old notions and the negative beliefs that keep us from springing forth. Write positive affirmations that counter such beliefs and post such statements at places where you’ll see them often. Don’t worry if you don’t yet truly believe such statements. Action often precedes belief. Identify what activity you will discard because it feels too tight and constraining.

Whatever your spiritual orientation or tradition, connect with what for you is the Source of life or spirit. Know that there is something larger than you that encompasses you. Spend at least 15 minutes each day connecting with that Source.

·         Batch it.

Batching tasks can be a great way to get more done in less time, whether it’s handling your work email or your mail at home. You’ll work faster and better because your mind is only on one thing, and when it’s done, you can forget it — so worrying about that bill you have to pay or that email you should respond to doesn’t “spill over” into the rest of your day. You know that your bill will get paid during your normal bill-paying time

·         Get it ‘wrong’ the first time.

Sounds funny!-The idea is to give yourself a set amount of time — say, an hour — to do the job, no matter how poorly. Let go of your perfectionism and just do as well as you can in the set time. You may have to go back and fix it up — but you’ll be charged up by knowing the “heavy lifting” is already done. Plus, by forcing yourself to cram the whole job into a short time period, you’ll give yourself a more “global” view that might help you see things you wouldn’t have otherwise.

Obviously, this isn’t going to apply to every situation — if your boss comes to you with a last-minute report that has to be generated, this will work great; but if your boss asks you to fill in for the other neurosurgeon, who got caught in traffic, a little perfectionism is probably in order.

·         Keep the lines of communication open.

I learned this the hard way when a rough patch of work started to alienate me from my family. Let the people closest to you know what’s going on in your work life when things get hectic, so they don’t feel like your lowest priority or worse, suddenly abandoned. And keep your ears open to hear what they tell you, too — if your spouse or partner, your friends, or your kids start complaining — or tell you straight out that you’re working too much — listen to them. They’re generally going to be a better judge of your behavior than you are.

• Slow Down and let things go. (Don’t sweat the small stuff.)

It’s simpler said than done, but learn to let things go once in a while. So what if the dishes don’t get washed everyday or that the house doesn’t get vacuumed every week. Learn to recognize the things that don’t really have much impact in your life and allow yourself to let them go — and then not beat yourself up for doing so. Life is simply too short, so don’t let things pass you in a blur. Take steps to stop and enjoy the things and people around you. Schedule more time between meetings; don’t make plans for every evening or weekend, and find some ways to distance yourself from the things that are causing you the most stress.

• Share the load and get help.

Even though we may sometimes feel we’re the only ones capable of doing something, it’s usually not the case. Get your partner or other family members to help you with all your personal/family responsibilities. Taking care of the household, children, or parents should not be the responsibility of just one person. If you are feeling overwhelmed with your family responsibilities, please get help if you can afford it. Find a sitter for your children, explore options for aging parents, and seek counselling for yourself. In many cases, you have options, but you need to take the time to find them.

• Take charge, simplify and set priorities.

Sometimes it’s easier for us to allow ourselves to feel overwhelmed rather than taking charge and developing a prioritized list of things that need to get done. You need to buck the trend. Develop a list. Set priorities. And then enjoy the satisfaction of crossing things off your list. It seems human nature for just about everyone to take on too many tasks and responsibilities, to try to do too much, and to own too much. Find a way to simplify your life. Change your lifestyle. Get rid of the clutter and baggage in your house — and your life.

• Be real and  revise your commitments

However linear or spontaneous, ground your choices in your real life and work experience. It doesn’t make sense to simply ignore a deadline or to pretend that a complex piece of work can be done in 10 minutes. Promises are not made to be broken, but some are made to be revised. Act promptly to revise commitments that you cannot or will not keep.

·         Be honest with yourself.

Ask yourself “Am I happy with all this?” And to follow up by looking at how well you’re doing of balancing everything. Be honest — this is your life we’re talking about. If you can’t face the hard questions, all the life hacks and organizing won’t mean a thing — you’ll just slide away.

• Set Healthy, Flexible Boundaries.

Yes, real life and real business are intimately connected, but that doesn’t mean that you need to give up your privacy. To find your work life balance, set boundaries so that you can feel generous without feeling depleted and available without feeling invaded. Keep them flexible, because things change. Take time for exercise, prayer, meditation, and simply “defragging” no matter how busy you are. Doing these things first each day enlivens you and gives you the resilience and resourcefulness to do your best.

• Keep the Goal, Drop the Plan.

Sometimes the best way to achieve a goal is to let go of our plans. Promptly and clearly revise commitments and offers as necessary to bring current activity in line with current resources. Why abandon ship when you can drop anchor while you make some repairs (or while you enjoy a few weeks in the sun!)?

Conclusion.

I fully believe that if we can integrate our working and non-working lives better we can be more efficient and effective, and we can achieve more in all aspects of our lives.

I would like to leave you with a final thought. In one of the management trainings i attended, one of the activities we did was an ‘in-tray’ exercise. This comprised ten pieces of paper all of which required some urgent action to be taken before noon that day. The aim of the exercise was to put the pieces of paper in priority order and say why. Amongst the pieces of paper was a letter from a long-time best friend who lived elsewhere in the country and was passing through that day on the way to a new life in New Zealand and you will never see him again. But the only time they were available to meet with you was at noon that day. All the participants put that letter last. When they were challenged they said ‘but it isn’t work-related and we shouldn’t mix work with our private lives’. They failed to recognize that both working and non working lives needs to be integrated.

Whether or not you own your own business, life is often overwhelmingly rich. I wish you joy in the dance as you move with order and disorder, discipline and insight, gracefully maintaining work life balance.

In the end, the key word is balance. You need to find the right balance that works for you. Celebrate your successes and don’t dwell on your failures. Life is a process, and so is striving for balance in your life.

Corporate Social Responsibility (CSR) is a concept that compels organisations both public and private to consider the interests of stakeholders e.g. customers, employees, shareholders and the surrounding environment in all aspects of their operations.

This concept has been around in Kenya for many years. Every company in Kenya that cares for its corporate image has a CSR policy. What most organizations have failed to understand is the facts that, each company has different CSR objectives and that stakeholders have different CSR requirements for different types of companies.

Most Companies have resulted into copying others in CSR programmes. Some of the programmes undertaken by some companies cannot pass the sustainable development test. Some are very short term and lack the long term objective. For example if an area is affected by floods and a corporate entity donates food and clothing, that’s all very well but it addresses a short term need.

Companies should not come up with CSR programmes just to keep up with external demands. CSR programmes should have both action and guiding light on real values and substance. Here in Kenya, we should look at CSR Differently by asking ourselves “Why do corporations “give back” to the community?” Is it blatant public relations exercise, designed to build an image of caring that bolsters the bottom line? Or is it out of a sense of responsibility for the community, a sense that each corporation must play a role in bettering world of its employees and customers? Kenyans are clearly expecting stronger community involvement from corporations. It is more important than ever before for companies to be socially responsible. Clearly Kenyans are renewed in their social vigilance.

If companies in Kenya want long-term success in CSR they must redefine their approach CSR. Some of the measures that they can apply and redefine their CSR policies and programmes are:-

• The same way we have market indexes like the consumer price index, share index and market capitalization we should also have corporate responsibility index which can be used to score companies on how well they measure and integrate business practices affecting the environment, the marketplace, the workplace and the community.
• Corporate reports should have elaborate CSR section where they should report their CSR activities and show how they have complied with the widening range of social expectations. These are called statements of CSR compliance or social reports.
• CSR compliance should be enhanced and each company should communicate a clear sense of purpose and values that differentiate it from its competitors.CSR must come from the heart of the organization for it to remain meaningful, otherwise it will be an exercise in futility.
• CSR activities and programmes should not be designed for PR purposes or winning the silence of the company critics or promoting corporate brands and create an appearance of good corporate citizens. They should be focussed on a target group that is facing a specific challenge in the society.
• CSR should generate real social change. If approached strategically it should solve social ills at the same time giving a company competitive advantage. Companies should tackle social issues that they have competitive advantage on, for example players in the motor industry should eradicate auto emissions by developing electric cars or make car brands that have reduced emissions of pollutants.
• Companies should come up with a more integrated approach where CSR is critical to company strategy rather than seeing it as a separate activity.CSR cannot make a company lose focus of its core business or compromise its performance. Responsible companies are very successful because they have the goodwill of the customers.
• The need for top quality leadership-An organization that is well led will strive to create optimal values in all its relationships with its stakeholders. The leaders should understand that for a business to be successful, they should look beyond their products, services and profits and look at the impact of their actions on the world around them
• Come up with market based incentives that will make it attractive for organizations to undertake CSR programmes.eg tax incentives or allowing the cost of CSR programmes in the companies income statement.

Almost 70% of Kenyan companies have CSR programmes. For example Kenya Wildlife Service has worked closely with communities who host wildlife on their land and sharing the benefits of wildlife conservation. KWS has Goloni Mwaluganje Community Elephant Sanctuary, situated in Kwale in the coastal region and Wasini Women’s Group Coral Garden Boardwalk also within coast region; this has assisted locals in developing their own income generating ventures. There are many other examples with a long-term objective.

The challenge now is for organizations to make the changes to maintain their success in the long-term. The incentive arises from the recognition that global businesses should be proactive in addressing wider concerns which will otherwise be more costly and complex to resolve; the means is provided by the combination of redefining success, embedding values and creating frameworks which hard-wires ‘CSR’ into business strategy and performance.

If corporate social responsibility is to be robust and enduring in Kenya, We should have an elaborate CSR legislation .This will eradicate confusion and all corporations can pull in the same CR direction. Companies should not do CSR activities just for the cameras only or to publish the one day event in their brochures all the time, they should do it for posterity and sustain their activities in the long term.

Companies should not do CSR simply to meet the regulatory requirements or look good because this will not be sufficient to the society and will be very superficial.

‘‘How hard do you play your CSR roles when no one this watching’’

The internet has developed a revolution in the field of hotel booking services. It is now very easy to find a hotel anywhere in the world within seconds. You can book your favourite room any time of the day from anywhere in the world.

The hotel industry has seen tremendous growth in the past few years as millions of hotel properties are now offering their guests online bookings. Online hotel reservations have become a very popular method for booking hotel rooms as travellers from around the world can make room reservations from the comfort of their home or office. There are primarily two ways in which one can make an online booking, namely – Online Travel Agencies (OTA’s) and Booking Directly with Hotels.

OTA’s provide travellers with a wide of range of accommodation options, allowing them to make an informed decision by comparing prices and facilities of different hotels. Some of the popular OTA’s include Expedia, Travelocity, MakeMyTrip, etc. OTA’s provide pictures of hotels and rooms, information on prices and deals, reviews of travellers, etc making it a lot easier for people to make bookings.

However, even though having a presence on OTA’s can be quite beneficial; you cannot ignore the importance of booking directly on hotel websites. Direct Hotel Bookings attract frequent, loyal leisure and unmanaged business travellers, who focus on schedules, and convenience. Hotel websites cater to this audience with more personalization and loyalty, whereas OTA’s appeal to different types of travellers like infrequent, leisure travellers who take very few trips a year and are more price-sensitive.

A recent survey taken in 2008 says that only 39% of online travel sales are made through online travel agencies (OTA’s), whereas the remaining 61% are made directly at hotel websites. Clearly, the percentage of travellers making online bookings via OTA’s is less than half compared to bookings made directly at hotel websites.

An increasing number of hotels now have their own websites with a booking engine attached to their website to permit people to book rooms in real time. This way, hoteliers can market their hotels directly to their guests through their websites.

Listed below are some of the benefits of online hotel reservation services.

Simplifies Your Overall Booking System

With a hotel booking engine, reserving a room will be a lot easier for your guests. Unlike the use of traditional registration cards, filling up forms has never been more convenient with guests typing in personal details and spending a fraction of their time online. The best part is, customer information will be kept permanently online, so guests need not fill the same information every time they check in to your hotel.

Provides Hotel Information in Real Time

While face-to-face contact is very important between hoteliers and guests, some aspects like inquiries about availability, room rates, and billings are best handled automatically via online hotel booking solutions. Even special offers for specific dates can be tracked in actual time, so no guest will come to you with coupons that have expired already. That’s one less hassle for busy hoteliers.

Increases Your Direct Sales

If only hoteliers can have their way, they would never allow agencies to eat a portion of the revenues. But alas, accommodation providers need agencies to help boost sales. By using online hotel booking solutions, hotel owners can lessen, if not eliminate their reliance on reservation and ticketing agents. You can take control of reservations directly via your website while third parties gain less and less involvement in your business.

Renders Instant Confirmation to Guests

A hotel booking engine is designed to furnish instant confirmation for reservations. So while you are spared from checking your records every time a guest reserves a room, your guests do not have to worry whether their bookings are firmly assured or not. Since everything is done online, instant confirmations are offered to guests from anywhere in the globe, 24/7.

Hotel Enjoys Prompt Sales Transactions

Hotel online booking allows you to make prompt sales by cutting through communication exchanges via faxes, emails or, worse, telephone calls between you and your guests. As all important information about your hotel is posted on your website and reservation interface, you provide your potential guests with a one-stop inquiry shop that will do all the talking for you. So what’s left for your guest to do is simply click the reserve button.

Creates Better Opportunities for Your Hotel

Apart from attaining total control of your business, hotel booking solutions allow you to create more opportunities for your property. Here, you can easily change your rates to become more competitive in your market. You can even offer best value packages and hot deals without the need to please travel or ticketing agencies.

Effectively Manages Seasonality

Dealing with seasonality is part of managing a hotel. But the changing of particular periods in a year should not translate to zero bookings. Data that can be automatically gathered from your booking engine can allow you to come up with competitive rates based on your locality’s seasonal changes. With a few mouse clicks, you can set your sights to the right guests for the current season. You can even come up with special rates exclusively for online bookings and widen your market categories with multi-tiered pricing.

Reduces Marketing Costs

Online booking solution providers often bundle their services with hotel Internet marketing. With online-based marketing campaigns, you can significantly reduce your costs. Imagine your hotel website being viewed by millions of Internet users or potential guests without you spending on expensive brochures and mailing. Because of this you can even aim to compete with bigger hotels in your area without necessarily matching their marketing budget.

Hotel Becomes More Visible To the World

Some hotel booking engines come with Internet marketing modules that help promote your hotel using up-to-date online marketing techniques. These allow your website to become more visible to potential guests who are searching for the right hotel. With online marketing techniques, you can say that customers will come to you instead of the other way around.

Sets Your Business Free

With hotel online reservations, you can set your business free from the burdens of having to allot rooms and fix rates for travel agencies. In fact, you do not need to be bound by long-term contracts with agencies anymore, unless of course you really need their services.

Caution should also be exercised by hotel customers when making online hotel bookings.

First of all, the customer should check whether the hotel company they have chosen is legitimate, since identity theft is becoming common nowadays via hotel transactions. It is therefore advisable not to give your vital information such as credit card number unless sure of legitimacy of the hotel providers.

Further, there are certain unscrupulous hotel firms promising great deals at first, and on receipt of bank account details or credit card information, they may charge incredible later. Hence, it must be checked for.

Likewise, beware of such hotel companies requiring immediate action. Al though, it may be true there may be shortage of rooms especially in peak seasons, try to check for the reputation of the company, particularly if it is a less-known hotel booking agent or company.

The next thing you have to check is whether the website has privacy policy. If the website doesn’t have one, then think twice prior to giving your details. Likewise, prior to booking a hotel, it should be confirmed that you have all of the transaction’s details in writing. Additionally, it must be made sure that the hotel is going to provide you the room of your specifications and preferences.

Websites go down occasionally and lose information. Customers purchase or reservation could disappear. Websites have warnings urging customers to print transaction confirmations but many customers do not. There is also fraud on the Internet. Criminals try to steal customer credit card numbers with fake websites and other scams. Online booking providers have made significant improvements in security, but fraud still occurs. Those who book online should take great care to only deal with legitimate websites and to use a secure Internet connection when transmitting credit card data.

Some lazy agents try to sell you what’s easiest to sell rather than what’s really best for you—a package tour rather than independent travel, for instance, or a rail pass instead of individual rail tickets. Still, some agents try to steer you to their preferred suppliers—airlines, hotel chains, and cruise lines that give them extra bonuses or override commissions—rather than the supplier that’s best for you.

Bottom of FormIn conclusion, in the past few years hotels have significantly improved their websites providing better navigation, design and content. This will enable customers to use their sites and make online reservations. With a comprehensive online booking engine integrated to the hotel website that provides real time, multi-lingual and multi-currency solution, wide range of payment options, and high security standards, the hotel can provide utmost ease of booking, influencing customers’ decision making, ultimately reinforcing loyalty
Please enter a brief description.The travel industry continues to adjust to the advantages of the Internet. Billions of shillings have been invested in online travel booking systems, and new players continue to enter the market every day. Armed with these tips hotels will be better prepared to navigate through the maze to the very best deals.

As the web continues to develop and advance, one can only predict that it will become more prevalent in the daily lives of citizens worldwide. Those quickest to predict and adjust to the changes will be the winners.

A hotel management contract is an agreement between the owner of a hotel and a hotel management company to do the day to day running of the hotel. The owner has limited control over the operation of the hotel although there are agreed key performance standards that the management company must meet. The managing company provides supervision and expertise at a fee as per the terms agreed with the owner. The agreement also sets the relationship between the owner and the management company.

Kenya has witnessed an increase in hotel investments over the years and this has attracted local, regional and international hotel management firms. Hotel owners have been very careful when selecting management firms and negotiating contracts. Such agreements generally aim to maximise the return on investment (ROI) for both the operator and the owner. Some respected hotel management companies are Southern Sun, Protea Hotels, Four Seasons Hotels & Resorts and Ritz-Carlton.

A hotel management agreement is a long and complex document, and all the issues cannot be covered in detail in this article. However, below are some key provisions in a hotel management contract which are worth mentioning. Most of these provisions have both legal and commercial terms and more often than not they involve lawyers and advisory firms.

• The term and renewal clause

It’s the length of time that the contract will remain in place. The contract could be renewable or non renewable. Most hotel management companies have fixed contract periods for different types of hotels and regions.

• Management Fee

This is the fee paid to the management firm by the owner as compensation for the professional services offered within a month, also called operating fees or base fees. It’s calculated as a percentage of hotels revenues. Incentive fee is a fee paid to reward management for efficient and profitable management of the hotel and its charged based on the profitability of the hotel. Incetive fee percentage is mostly applied on the difference between gross operating profits less management fees. Management and incentive fees should be clearly stipulated in the management agreement.

• Owner’s approval

The owner of the hotel must approve all the clauses in the agreement. Most owners  remain involved in key decisions of the hotel e.g. capital expenditure, hotel systems and procedures, leases of hotel space to third parties such as spas, restaurants, salons, gift shops etc..Owners will also get involved in hiring senior management staff mostly the general manager and the financial controller. The contract should limit the managing company’s powers to commit huge hotel funds either in capital projects or expenses without the approval of the owners.

• Non-compete clause

Under most circumstances, a hotel owner will want to limit the ability of the manager to operate certain types of hotels within a certain distance from the hotel or within specific defined borders, so that the manager does not have a conflict of interest.

Without non-compete provisions, the owner of a hotel may find himself in uncomfortable position of fiercely competing for customers against a similar hotel located within a close proximity and operated by the same management company.

This insulates the owner of the property from direct competition from other properties within the same brand within a certain radius of the subject hotel for the duration of the agreement or for a period of time. This minimises any form of cannibalisation either from the same brand or another brand of the same company.

• Dispute resolution

Disputes between hotel owner and the management company can arise on various issues like on management style, capital expenditure; management performance etc.The dispute(s) can be solved through discussions between the owners and the management company, arbitration or through a court process.

• Power balance

Hotel owners are very careful nowadays when negotiating management contracts. They strive to achieve a balance of power between them and the managing company. Owners mostly want contracts that increase their control, flexibility and leverage in the business. The most desirable situation should be a win -win between owner and management company.

• Termination clause

Either party can terminate the agreement. Termination can arise from bankruptcy, fraud, performances standards or the management contract coming to an end. It is important that the management agreement clearly sets forth the right of the owner to terminate the management agreement under a variety of situations as discussed above, termination fee could be paid or not depending on the circumstances of the termination.

• Budget and Financial Reporting

The owner of the hotel should have the right to review, approve and make changes into the budget prepared by the management company. The management contract should also include an obligation on the part of the manager to provide complete, detailed, accurate and timely reporting of the hotel’s financial results. The management should also be obliged to prepare and deliver operating and capital expenditure budgets for owners to review and approve. This will enable owners to manage and control costs.

• Other charges

These are basically charges made by the managing company to the owners. They are mostly charges arising from central reservations, sales and marketing services, accounting charges and purchasing costs.

To conclude, it is important to note that the increased knowledge of owners and their understanding of market dynamics have enabled them to be in a much stronger bargaining position when negotiating management agreements. This has forced management firms to amend agreement terms that were historically in their favour to terms that now favour the owner.

There are many changes made to a typical management agreement to make it an equitable agreement between owner and manager. Nonetheless, it is important for owners to be diligent and patient during the negotiation process because an equitable management agreement can materially improve the financial returns realized by the owner as well as reduce the stresses of hotel ownership.