star city casino management analysis - case study

MGT 203 Site Visit

(draft copy)

Star City Casino:

Functions

Group Members & Allocated Sections - Michael: Internal & External Environments (+ Overview and Introduction)

Michael, Eva, Oscar & Mark - 1 - MGT 203 Site Visit Outline:Star City - Functions

Eva: Planning and Strategy FormulationOscar: Organisational ChangeMark: Implementation of Corporate Social Responsibility and Ethical

Behaviour (+ Conclusion and Reference List)

Overview

Star City Casino and Hotel, the proponent of the Major Project application for

alterations and additions to Start City hotel make the following commitments

in association with that application. With the development of Sydney, Star City

has played an important role in this modern city. This report will provide four

sections: internal and external environment, planning and strategy

formulation, organizational change and the implementation of corporate social

responsibility and ethical behaviour.

Introduction

Located on Sydney Harbour, Star City is the only casino in New South Wales.

It is owned and operated by Tabcorp Holdings Limited, one of Australia's

largest entertainment and leisure companies. Star City operates 200 gaming

tables and includes a 480-room hotel, a 2000-seat theatre, six restaurants

and eight bars. Its 3.34-hectare complex (about the size of seven football

fields) is a key part of the city’s vibrant Darling Harbour precinct.


Internal and external environment

SWOT Analysis, is a strategic planning tool used to evaluate the Strengths,

Weaknesses, Opportunities, and Threats involved in a project or in a business

venture. It involves specifying the objective of the business venture or project

and identifying the internal and external factors that are favourable and

unfavorable to achieving that objective. In addition, SWOT analysis is just one

method of categorization and has its own weaknesses. For example, it may

tend to persuade companies to compile lists rather than think about what is

really important in achieving objectives. It also presents the resulting lists

uncritically and without clear prioritization so that, for example, weak

opportunities may appear to balance strong threats.

Internal factors are the strengths and weaknesses internal to the organization.

The internal factors may be viewed as strengths or weaknesses depending

upon their impact on the organizations objectives. What may represent

strengths with respect to one objective may be weaknesses for another

objective. The factors may include all of the 4Ps; as well as personnel,

finance, manufacturing capabilities, and so on.

City & Country Environment Restoration Program presented by Kellie


Walters,

Senior Project Officer – Urban Sustainability Program

Environmental restoration is most successful when communities, industry and

government work together. Kellie Walters will provide an overview of the new

Urban Sustainability Program developed by the Department of Environment &

Climate Change and discuss the challenges facing communities with regards

to implementing sustainability projects.

This session will also feature a case study example of a Council partnership

recently granted project funding and will discuss the project aims, predicted

outcomes and environmental gains to their local communities.

External factors are the opportunities and threats presented by the external

environment. The external factors may include macroeconomic matters,

technological change, legislation, and socio-cultural changes, as well as

changes in the marketplace or competitive position. The results are often

presented in the form of a matrix.

Indoor Environmental Quality

- Increased fresh air supply

- Carbon dioxide sensors

- Avoidance of Volatile Organic Compound emissions

- High levels of daylight atrium lobby

- High frequency electronic ballasts

- Efficient Air conditioning

- Maximize External Views

However, there are still some challenges for the employees who work in Star


City.

• Maintaining diversity issues on the agenda:

• Star City has a positive work environment and a history of employee focused

initiatives -making the argument that further improvements can be made.

• A government review is held every three years as part of our casino license

on all aspects of our business – examining the culture and environment at

other times rather than directly in relation to the review.

• Managers have competing priorities - finding time and resources when there

are pressing business pressures.

• Backlash from other employees about accommodations that are made, in

particular to those employees with carer’s responsibilities.


Planning and strategy formulation

The meaning of planning

All of organizations engage in planning activities. Planning is an important

function, and it is the first function of management process. Planning involves

setting an organization’s goals and deciding how best to achieve them. If

planning is well considered, the organization will have a good foundation to

operate other process of management.

Setting goals

Goals are vital to organization effectiveness. They represent the end result of

planned activities. There are four important purposes. Firstly, goals provide

guidance and a unified direction for people in the organization. Secondly,

goal-setting practices strongly affect other aspects of planning. Thirdly, goals

can serve as a source of motivation to employees of the organization. Finally,

goals provide an effective mechanism for evaluation and control. About the

responsibilities of setting goals, all managers should be involved in the goal

setting process.

Establish plans

Organizations establish many different kinds of plans. These include strategic,

tactical and operational plans. Strategic plans tend to have a long-time focus,

tactical plans an intermediate term focus, operational plans a short term

focus, and reaction plan, a plan designed to allow the company to react to an

unforeseen circumstance. In organizations, some develop a professional


planning staff. Sometimes, they use they use a planning task force to help

them develop plans as well. Moreover, board of directors, chief executive

officer, executive committee and line management are also the components of

organizations’ planning activities.

Furthermore, development and implementation of operational plans is another

important part of effective organizational planning. The two most basic forms

of operational plan are single-use plan and standing plan. A single-use plan is

developed to carry out a course of action that is not likely to be repeated in

the future. There are two types of single-use plan, a program, which is a

single-use plan for a large set of activities, and a project, which is similar to a

program but is generally of less scope and complexity. There are three types

of standing plans, policies, standard operating procedures, and rules and

regulations. A policy is the most general form of standing plan. A standard

operating procedure is more specific than a policy in that it outlines the steps

to be followed in particular situation. Rules and regulations describe the

exactly how specific activities are to be carried out. These are all examples of

standing plans.

Strategy formulation

A strategy is a comprehensive plan for accomplishing an organization’s goals.

Strategy formulation is the set of processes involved in creating or

determining the strategies of an organization. The start point in formulating

strategy is usually SWOT analysis. SWOT is an acronym that stands for

strengths, weaknesses, opportunities and threats. It is a careful evaluation of

an organization’s internal strengths and weaknesses, as well as its

environmental opportunities and threats. Many frameworks have been

developed for identifying the major strategic alternatives that organizations

should consider when choosing their business-level strategies. Porter’s


generic strategies are one of the business-level strategies. They include

differentiation, overall cost leadership and focus. Each of these is widely used

to many different competitive situations. A second one of the strategies is the

mile and snow typology. There are four types of organizations. Three of these,

the prospector, the defender, the analyser, can each be effective in certain

situations. Another one, the reactor, represents an ineffective way to strategy.

The third one of business-level strategies is based on the product life cycle. It

is a model that shows how the sales volume changes over the life of a

product.

The research of Sydney Harbors Casino Properties Pty Ltd

Casino customer service is the key to improvement and success. As casino

wants to grow and prosper in the midst of increased competition, they must

provide a better guest experience. It is not enough to have the newest games

for their planning. All the other casinos have them, too. The way that casino

is going to stand out is through better service and that will require employee

training. Casino has assisted over 40 different clients with marketing

strategies and detailed plans that address such marketing tools as

advertising, direct marketing, internet marketing, on-site marketing,

promotions, player card/loyalty card, special events and entertainment.

Casino Consulting has also worked with clients to develop strategies at both

the corporate and property levels that will help create and grow brand identity.

Casino business is not going away any time soon. And as long as it is not

going away and casinos are making money, competition is going to increase.

This makes the planning and strategies more important.


Organizational change

The nature of organizational change

Definition

Organizational change is any substantive modification to some part of

organization. Any organizational change is likely to have a considerable

influence on extending beyond the area in which the change is implemented.

It contributes in the structured way to make an effectively transition in group or

organizations. The organizational change includes

Forces for change

Forces for change are comprised of two aspects involving external forces

and internal forces.

External forces for change derive from the organization’s general and

task environment.

Internal forces for change come from inside organization.

For example, because there are the existing powerful casinos, Star City will

plan to improved gaming and function, such as conferences, gala dinners,

weddings, facilities and accommodation in order to be transformed into a

world-class casino to get advantages among the competitors. In this case,

competitions are external forces for change, for instance, Crown Ltd continues

to invest in improving domestic properties and new openings in Macau and

Singapore in 2009-2010. Organization’s strategies about improved function

are internal forces for change. They will improve their function by science

systems and technologies.


Managing change in organizations

Managing change in organizations will focus on two steps in

organizational change and how to manage resistance to change.

A comprehensive approach to change leads to successful change with

systemic views.

In the useful approach, they need to recognize the need for change which

can provide an opportunity to get more market potential and advantages. After

that, they establish of goals for the change and analyze relevant factors.

Afterwards, they need to choose appropriate techniques and have a science

plan for organizational change and implement it. Finally, evaluation of the

effectiveness of the chosen change is necessary to decide whether it attains

the desired outcomes.

For example, transformation has three components in Star City casino,

including creating a destination for their customers; deliver outstanding

service, securing license and product offering. We have to detect the

undesirable and unacceptable practices in the casino. In function, they offer

Sydney’s best food and beverage choice in clubs and restaurants. “STAR”

entertainment offer and luxurious accommodation are given to customers to

make them feel comfortable. Customer service revolution is implemented and

they need to keep the private secret about their customers.

Area of organizational change

Area of organizational change describes main areas of organizational

change. Generally, most of changes are associated with organizational

structure and design, technology and operation, or people.

Organizational change is likely to focus on the basic part of organizational

structure or design. Star City casino creates a new grand entry to the casino at

the harbor side of the existing building, replacing the current staircase. They will

build a new, 309 room hotel on a vacant block of land next to the casino. The


hotel will be the first major 5 star hotel built in the Sydney CBD since the

Olympic Games. The hotel will add 500 car parks to the property.

Technology plays an important role in organizational change. Technological

changes are getting more and more significant to many organizations due to

the rapid rate of all technological innovation. With development of technology,

Star City adopts new technology to supervise the order of casino and keep the

guests’ private secrets.

Human resources are a key factor of organization, so organizational

change has to relate with human resources. This is necessary to need a careful

management about how to change people. For instance, Star City casino thinks

that employees are the people deliver service to customers so that they can

have guarantee to keep customers coming back. Star City spends money on

training employees which is treated as an investment in casino’s property.

Improving employees is one of the best investments of casino. It can pay a

huge dividend and casino now has an appreciating asset.

Types of change

There are several types of effectiveness of organization change programs.

Collaborative change has a relationship of cooperation between

employees and management, which results in supports to the change from

employees. For example, Star City will get supports by increasing wage 10

per cent per year or making a measure to make employee share scheme-

shares worth at least $500 per year.

Transformational change programs include organizational design,

technology and people. An example of this is training people to improve their

skills of service and ability to offer best services to guest. Another example is

adopting technology to manage technology.


IMPLEMENTATION OF CORPORATE SOCIAL RESPONSIBILITY AND

ETHICAL BEHAVIOUR

1) Corporate Ethics and Social Responsibility

Areas of Social Responsibility

- Define social responsibility and the importance of it’s manifestation

from the triple bottom line for organisations

- “When looking at the Function rooms on offer within Star City, the

necessity to act with a high level of social responsibility and integrity

often comes into question. This section will identify some of the

elements of social responsibility that Star City encounters when

running their Function sections, as well as discussing these actions

taken by Star City in detail.”

Organisational constituents

- Define organizational constituents – ie the stakeholders that are

impacted by Star City’s performance regarding the use of their

functions.

- Identify and discuss evidence of corporate social responsibility (positive

and negative) within these areas

The main stakeholders directly affected by Star City’s functions include:

- Clients utilizing the rooms (whether or not they are catered for

regarding requests from Islamic groups, disabled access, service of

alcohol to minors and excessive use within functions, etc)

- Star City staff (whether they are fairly compensated, protected by

security, RSA)


- Shareholders (their preferences regarding acting socially responsible

against expanding function areas in the long term due to directly

affecting profits etc

The Natural Environment

- Identify whether Star City uses recyclable materials when developing

new function areas, as well as the amount of waste, etc used within

each function

- Whether or not Star City reuses it’s materials from functions, in the

interest of conserving the environment (eg – conferences using large

numbers of flipcharts, other sources of paper) and

brochures/packages that it creates

General Social Welfare

- Discuss evidence regarding the utilisation of function rooms for

charitable events (eg the Astral room with with Aussie superstars to

raise cash for Victorian Bushfire Appeal, and the partnership with

Camp Quality and subsequent events held within the function rooms)

- Waiting on response from Dolores Element (looks after Tabcorp

community/public statements) otherwise further research into function

areas utilised for CSR will need to be undertaken.

Arguments for Social Responsibility

- By acting socially responsible, Star City also has the advantage of

increasing it’s potential market (eg Halaal/Kosher meat provided

allows other cultures to use the banquet services and hence the

function areas)

- Promotes Star City’s operations in a positive light; and in turn has the

potential to boost their market share


- Star City should be obligated to provide the highest level of social

responsibility given that it is the only casino in New South Wales (link

back to the effects of gaming – possibly under the first point of fixing a

problem created?)

Arguments against Social Responsibility

- Carrying out socially responsible gestures reduces the amount of

capital earned for Star City/Tabcorp overall (eg Camp Quality’s

partnership) whereby Tabcorp has a duty of care to it’s shareholders

- People utilizing functions maybe tempted to go into other gaming

areas (primary function of Star City); Allowing minors to attend

weddings and other functions where they are permitted to attend with

adult supervision may cause a positive emotional attachment to

develop at a later stage (even philanthropic acts with Camp Quality

could potentially create this link, perceived as a self-defeating act of

CSR)

- The link between Star City and it’s efforts towards becoming more

socially responsible may distract the public from the serious gambling

concerns from it’s gaming function.

Organisational Approaches to Social Responsibility

- Describe the 4 types of approaches and outline which one best

represents Star City’s approach in regards to Function (dependent on

an evaluation of all the activities it deals with

- Elements of different organizational approaches in all functions (eg

social obligation for liquor licenses, social response/contribution for

Camp Quality)


2) The Government and Social Responsibility

Government influencing Organisations

- Direct regulation: examples such as RSA and RSG for patrons using

the function rooms (ie no excessive drinking, no service to under 18’s)

- Indirect regulation: defining some of the laws regarding the tax

brackets on alcohol, as well as the “10min break”, and stoppage of

serving alcohol after a certain time

Organisations influencing Government

- Proposals put forward to the government to build a bigger function

area

- Research into other ways that Star City has influenced the

government, specifically regarding the Function area

3) Managing Social Responsibility

Formal Organisational Dimensions

- Legal Compliance: Strong legal compliance regarding Liquor Licenses

and the provision of criminal acts being taken within these halls

- Ethical Compliance: Star City employees requirements to be ethically

and legally prepared (eg RSA/RSG’s, following code of conduct)

- Philanthropic Giving: Camp Quality, Victorian Bushfire Appeal, other

information pending response/interview from Dolores Element.

Informal Organisational Dimensions

- Research required into the culture of staff taking a strong stance on

illegal acts within the function rooms (eg irresponsible service of

alcohol, drugs, prostitution, other acts)

- Pending interview with Function representatives to find out more

information


Conclusion

After discussing in depth the management systems around functions within

Star City, this report will now present several findings around the internal and

external environment, planning and strategy formulation, organizational

change, and the methods whereby Star City implements corporate social

responsibility and ethical behaviour.

- Summarise findings surrounding internal/external environment; outline

the main points of the SWOT analysis, and the course of action that

needs to be taken (include references to how much Star City can

influence these factors)

- Summarise the importance of planning for Casinos with reference to

the influences of Porter’s Analysis, as well as detailing the possible

strategies that are put into place for functions in the future (especially

regarding the large function area that will be built over the coming

years)

- Summarise the main internal and external forces of change affecting

the functions area and what Star City has done and will do to adapt to

this change; go into detail regarding how to remain contingent in the

face of change (eg GFC results in a loss of potential clients for

functions) so Star City is beginning to tie in other areas to functions as

well (eg accommodation, dining, gaming, etc) to promote the use of

the function areas

- Determine whether Star City is really acting socially/ethically with

regards to it’s functions arm, given the hypocrisy of dealings with


Camp Quality etc (ie promoting charity and gambling at the same

time). Also, provide advice regarding other methods of promoting their

corporate social responsibility within function, such as extensive

training around corporate guidelines for staff, promoting the necessity

of CSR towards shareholders, and continually catering to the needs of

a multicultural society, in order to achieve an efficient service area that

still focuses on profit maximisation.

Reference List


(NB dates of internet sites accessed by group members to be determined

before full references are given)

http://www.tabcorp.com.au/investor_holder_start.aspx

http://www.tabcorp.com.au/news_mediarel_detail.aspx?view=376

http://www.casinocustomerservice.com/improvement/ccskeytosuccess.htm

http://www.casinocustomerservice.com/improvement/investintraining.htm

http://www.starcity.com.au/Functions-Christmas_Functions.cms?

ident=KH56Q8F790Y9HK2GA1CF0B9CTKXKIQ&analyticsLink=Left

http://www.tabcorp.com.au/community_commi.aspx

http://www.casinocontrol.nsw.gov.au/

Davidson, P & Griffin, R.W. 2006, Management, 3rd edn, John Wiley & Sons,

Australia

APPENDIX 1


http://www.casinocontrol.nsw.gov.au/

http://www.tabcorp.com.au/community_commi.aspx

http://www.starcity.com.au/Functions-Christmas_Functions.cms?ident=KH56Q8F790Y9HK2GA1CF0B9CTKXKIQ&analyticsLink=Left


http://www.casinocustomerservice.com/improvement/investintraining.htm

http://www.casinocustomerservice.com/improvement/ccskeytosuccess.htm

http://www.tabcorp.com.au/news_mediarel_detail.aspx?view=376

List of all function rooms as shown on the Star City website -

http://www.starcity.com.au/Functions-Christmas_Functions.cms?

ident=KH56Q8F790Y9HK2GA1CF0B9CTKXKIQ&analyticsLink=Left

Function Room Cocktail Banquet

Astral Restaurant 400 150

Astral Private Dining Room - 20

Sean's Kitchen 500 150*

Sean's Table - Private Dining Room 80 60

Sean's Tapas 150 100

Lotus Pond - 400

Astral Bar (including terrace) 250 -

36 Degrees Bar 300 -

Grand Harbour Ballroom 1500 1000

Ballroom 1 370 220

Ballroom 2 350 220

Ballroom 3 320 200

Mill Room 60 50

Quarry Room 100 70




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