Starwood Hotels & Resorts Worldwide, Inc: Transformation into a Truly Global Organization

In 2009, Starwood Hotels & Resorts Worldwide, Inc (Starwood) faced numerous challenges in its business. Most importantly, the company struggled to achieve its growth targets. While Starwood was a market leader in stagnating markets (especially in the home market in the United States (US) as well as in Europe), the company had yet to tap into promising market opportunities in fast-growing emerging markets, such as in Asia and in the Middle East. The underperformance in these regions could primarily be attributed to a lack of relevant knowledge of emerging markets, limited diversity within the top management team, and a rather ethnocentric corporate mindset, especially in the headquarters (HQ) in the US. The new CEO Frits van Paasschen sought to change this situation and tap into the growth opportunities of emerging markets. However, he faced a dilemma and was unsure how to proceed. Further decentralizing the organization could potentially energize businesses in emerging markets but, in the hotel industry, globally standardized quality and branding standards were of utmost importance. He also had ideas for upgrading the knowledge and mindset of the HQ, such as changing the recruitment focus, but he was afraid that these measures would take too much time. The students are introduced to the hotel industry and to various perspectives on the dilemma at hand. The students are asked to evaluate the situation and come up with a proposal for structural, processual, and cultural changes within Starwood. One aspect of the case that stands out and from which intensive debate can stem is van Paasschen's unusual and creative approach of organizing temporary HQ relocations. This novel phenomenon was complemented by other, more standard measures, and it opens room for extensive discussion of its advantages, disadvantages, and contingencies.