In the report, an organizational crisis of company namely Merivale hospitality organization based in Australia revealed. Additionally, the current key issues faced by the respective hospitality industry specified. On the other hand, possible recommendations and suggestions were made concerning the subject matter. Lastly, the conclusion was drawn for the completion of the report.
Overview of the organization
Merivale is an Australian hospitality industry run by the CEO namely Justin and his robust innovative and communication skills set the bar and beat other hospitality industries based in Australia. On the other hand, Merivale gained the media’s attention because of the ethical issues associated with the organization (Merivale, 2019).
ORGANIZATIONAL CRISIS CASE OF MERIVALE-
UNDERPAYMENT TO THE STAFF
In the year 2019 dated 27, Merivale CEO Justin fall into ethical issue that involved the underpayment of its employees hence, the legal action was undertaken by the Law agency based in Australia namely Adero against the Merivale company for failing to pay the wages to its employees consisting of around $123mn. Moreover, on behalf of the workforce, the law agency Adero filed an open case against Merivale and ensured that due payments are done. Additionally, it was observed that for the past five years this hospitality company underpaid the staff and was obliged to work overtime at the workplace and didn't received the desirable wages for working overtime (Spurgeon, Clark, & Ham, 2017). On the other hand, the organization stated that the legal actions were groundless but if any legal claim is undertaken further then it would strenuously protect such claims. Moreover, in the recent year, one of the staff members of Marivale came closely in contact with Adero and stated that they were paid for around 39 hours weekly but obliged to work for around 53 hours without any kind of incentives, bonus, overtime wages or remuneration that negatively impacted their health and wellbeing (Spurgeon, & Clark, 2017). On the other hand, Merivale was claimed to pay for the fiscal vandalization estimated at around $700000 under the provision of the fair pay law.
ANALYSIS OF THEORY OF AUTHENTICATED LEADERSHIP-
In the context with the Merivale hospitality organization, complying with the authentic leadership style is need of the hour. The theory focuses on the fact that the leaders must be honest and true to their followers such that they are open-minded and fair to them. Similarly, considering the ethical issue of the Merivale Australian organization regarding the underpayment case, the organization CEO must adopt authentic leadership so that the employees don't suffer and the trust and transparency could be maintained in the future. Although, it will assist in maintaining good image and satisfaction of its employees which will lead to improved productivity, smooth operations, and lucrative opportunities (Spurgeon, & Clark, 2017). Hence, it can be said that skills such as communication skills, leadership skills, and interpersonal skills are what makes a leader successful in his job. In relation with the Merivale If the CEO namely Justin would be fair and just enough to its employees and paid them as per their performances and desirable amount then, the consequences would have been different such that the organization would not have bear huge loss and repayments of $123mn to the workforce (Rich, Rich, & Dizyee, 2018)
As said by the researcher namely Gardner, in the year 2014, stated that authentic leadership is vital for promoting employee's creative and innovative skills. Another side, Walumbwa stated that authentic leadership is when the leaders are well known for his skills as well as weaknesses hence, it can be said that self-consciousness is the primary element of authentic leadership.
PHASES OF THE CRISIS MANAGEMENT-
Under crisis management, there exist three types of crisis namely- the lead-up, the crisis stage and lastly the post-stage that depicts the possibilities and identification of the crisis for mitigation in the future. It assists in recovering and managing the crisis so that the loss can be prevented in the future and for gaining recovery from such losses such as- change in the rules and regulations, political disturbances and governmental interventions (Schein, & Schein, 2018). Similarly, in context with Merivale hospitality industry it faced a major crisis in which the CEO named as Justin didn’t comply with the employee’s rights and underpaid his employees consisting of around 3000 staff members hence, it was reported that the employees were obliged to work beyond the working hours and still were unpaid. Hence, the legal action was undertaken by the Australian law agency namely, Adero and it supervised the actions and filed an open case against Merivale organization stating that a sum of $123mn is penalized against the company for not paying the right wages to its employees and was obliged with payments concerning commercial vandalization estimated around $700000 under the provision of fair work law (Taylor, 2018).
Hence, the following three stages summarized the crisis in context with Merivale hospitality industry-
The lead-up phase-
Under this stage, the organization prevents and prepares for the crisis hence, it requires steps undertaken such as planning, training, and sampling for judging the viability of the plan concerning the management of a crisis. The author namely Coombs stated that if an organization conducts measures to check the viability of a plan for crisis management on an annual basis then, it can tackle the crisis effectively. Hence, in context with Merivale, it lacked in crisis and generated huge losses. Additionally, Barton stated that plan of crisis management assists in responding well to such threats (Lacerenza, et al. 2017).
The crisis stage-
The secondary stage that aims at responding to the crisis hence, the implementation of strategical plans concerning crisis management with the team, stakeholders- internal and external occurs for handling the adverse scenarios. Hence, under the case of Merivale, the agency Adero ensured that the underpaid employees receive their due payments by the CEO of the company who didn't pay desirable wages to its employees for the past five years. Scapegoat strategy was used by Justin for shifting blame to the agency saying that legal action was baseless. Additionally, agency Adero ensured that due payment is received to its employees as a contrition remittance.
The last stage of the crisis management that focuses on the fact that the crisis management is no longer point of consideration hence, the normal business operations can be performed again but, it strongly suggested that the planning of crisis management is checked on an annual basis as it assists in tackling the crisis effectively.
Moreover, Coombs stated that team and managers for crisis management department can implement robust planning and check viability yearly for the prevention and mitigation of such threats (Huber, 2017).
ROLE AND RESPONSE BY MERIVALE ORGANIZATIONAL LEADERSHIP-
Merivale is an Australian hospitality industry owned by Justin and his robust innovative and communication skills set the bar and beat other hospitality industries based in Australia. On the other hand, Merivale gained the media's attention because of the ethical issues associated with the organization (Smith, Lewis, & Tushman, 2016). Although, it’s one of the reputed companies in Australia because of opportunities and improved quality of services in food at restaurants in around 50 venues based in Sydney. Moreover, Justin failed to comply with employees' rights and failed to pay the right wages to its employees. However, the vision and objectives of the organization were clearly understood to the staff and they performed effectively even beyond working hours but the leader or let's say CEO Justin failed to perform as a successful leader by offering values and satisfaction to the employees of the organization (Carr, et al. 2018).
In my opinion, the crisis could not be avoided as the employees are the backbone of an organization and the satisfaction and protection of employees should be the priority of a manager/leader. Although, since the past five years the employees were not paid comprehensively hence, avoided by Justin the legal action was undertaken further against him for the underpayment and overtime work obligation by him. Moreover, leadership theory and crisis management planning are strongly suggested to prevents such threats.
It aims at the leader's roles and skills while attaining the set targets of an organization. similarly, in context with Merivale Justin didn't comply with leadership theory as he didn't perform his job fairly and break the rule of complying with employees' rights and fair evaluation system (Gifford, et al. 2017).
It can be concluded that crisis management planning is vital for handling the adverse situations and the employees' are the backbone of a firm hence, the leaders/managers must aim at the satisfaction of employees through employees' rights and fair evaluation systems. Additionally, leadership theories must be implemented such as- authenticated leadership for ensuring smooth operations and decision making in an organization. Moreover, planning of crisis management and ascertainment is vital for recovering and mitigation of adverse situations. Hence, it can be said that crisis management assists in overcoming and mitigation from the uncertainty of events.
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