Chapter 5 case studies
Case 5.1: Club Med
This case was prepared by Professor Christopher Hart with the
research assistance of Dan Maher from Harvard Business School.
Abstract
Club Med is the second case in a two-part case series. The first case
addresses issues of competitive advantage in the rapidly growing
American subsidiary of Club Mediterranee, an international all-
inclusive vacation resort company. This case describes employee
turnover problems in the company and focuses on building a
service organization and improving service quality for Club Med.
A large part of Club Med’s successful competitive positioning can
be attributed to a large extent to the value added through interac-
tions between employees, particularly front-line staff and cus-
tomers. Employee morale and interpersonal skills are, therefore,
essential ingredients in determining customer satisfaction for the
company. The Club Med case charts employee turnover in the
American zone and implies that the high turnover may be a cause
and an effect of poor morale among American employees. The case
documents how high turnover can affect team performance by
dampening morale of the employees who stay with the company
and lead to the hiring of less experienced and less qualified staff.
The case concludes with Jacky Amzallag, director of Human
Resources for Club Med’s American zone, considering a series of
options available to the company on how to reduce employee
turnover and improve the recruitment process for Club Med.
Learning points
This case provides an excellent example of how a rapidly growing
company finds it increasingly difficult to manage its relationships
with its internal and recruitment markets. Specifically, maintaining
an appropriate organizational climate and culture whilst rotating
employees between the villages, and managing cross-cultural
issues, are major causes for concern for the internal market. The
company also failed to manage its recruitment activities in terms of
328 Relationship Marketing