Page 48 - Stakis Consolidated Teaching Note

Communication System

Information systems were developed as the company
expanded but there is little evidence that they were

effective before Sir Lewis arrived. Indeed there is evidence

of poor financial control (e.g. poor margins in hotels), poor

estimating (e.g. increased cost of refurbishment), poor
monitoring of developments (e.g. escalating costs of

building Country Court Hotels) and poor market research

(e.g. failure to find a buyer for £100 million worth of

hotels).

External and internal communications must be effective.
Before 1991 both were poor. Internally, information,

particularly at strategic level, was retained in a small,

exclusive group: the result was that management in

different areas and at different levels were pulling in
different directions. For most of the people in the

business there was no clear focus.

Communications with the external environment left much
to be desired. Too many ‘black holes’ developed with the

result that stakeholders were confronted with unpleasant

surprises. The outcome was a loss of confidence and trust
in the company’s management.