Managerial Accounting and Control

CASE STUDY/ANALYSIS

MBA Candidate
 Case # 1. Garden Royal Hotel

A. Overview of the Case

Garden Royal is one of the finest and grandest hotels in the city. It offers state-of-
the-art room accommodation, excellent room service, catering, function rooms and
more. Since its existence, Garden Royal hotel was performing very well in terms of
profitability, quality service and customer satisfaction. Before the pandemic, the hotel
spent huge amount of money for maintenance, repairs and renovation. The purpose
of such repairs and maintenance was to prepare for something innovative service
and at the same time timely for the preparation for the coming summer season (the
season where there is a great demand or high level of sales). To make the story
short, as of the moment, Garden Royal is experiencing financial challenges because
it was greatly affected by the pandemic. No cash inflow as a result of sales and huge
amount of money was spent for its people and maintenance cost. The company as
of this time is considering temporary shutdown of the Garden Royal and even
planned to sell the hotel.

Covid-19 pandemic has affected every sector across the world and the hotel industry
is among the hardest hit. When corona virus has spread in a short period and has
been labelled a pandemic by the WHO, almost all countries have introduced travel
bans, declare state of emergency and implement curfew as this new virus is quite
contagious and can spread asymptomatically. In such a negative scenario, tourism
and hospitality industry has been the worst affected of all major economic industries
by the outbreak of the COVID-19 pandemic. The reason is that people are not
allowed to travel domestically/overseas; go to the restaurants/cafes; and are working
from home while cutting their spending except basic needs. Among all the hospitality
industries, hotels like Garden Royal Hotel, are the first to be affected since the
restrictions for domestic/overseas travelling directly affect their core business. For
example, restaurants activity can be partially maintained with delivery or take away
services but since people are not allowed to travel even inside the country, hotels
cannot even afford to breakeven because of this crisis.

To make the situation even worse for Royal Garden Hotel, they spent a huge
amount of money for maintenance, repairs and renovation prior to the pandemic
leaving them in a tight working capital situation and less liquid when pandemic hit
the world. The hotel management were not financially prepared for this world crisis
that affected everyone all over the world.
B. Impression and Implication of the Study

The hotel industry has entered into situations unknown and never seen before in our
lifetime, this present perfect storm has both a health and financial crisis occurring at
the same time. Despite many strategies for preventing the spread of the pandemic
and its impacts on the economic growth, the tourism and hospitality industry was the
most severely affected. Since the first case of COVID-19 was recorded, tourism
faced challenges of both a significant reduction in numbers of visitors, resulting to
even not making it breakeven in the operations. Many hotels have had to switch to a
hibernation mode due to canceled travel plans. Small and large hotels have also
shut down which has caused food and beverage sectors to be impacted negatively
as a result. A large number of employees in these sectors have lost their jobs and
considered starting their careers in other paths to resolve their financial difficulties,
which may cause human resource shortage for the tourism and hospitality industry
after the pandemic.

Given the situation, Garden Royal Hotel should also consider the option of
volunteering to be quarantine service centers that could potentially help Garden
Royal Hotel continue its operation aside from just giving up and shut down or sell the
hotel. Many mid-range and high-end hotels and resorts volunteered to be quarantine
service centers in order to respond to the shortage of facilities, service staff, and
accommodation for quarantine. This proposal can be considered beneficial for all
parties. Pressure could be lessened for the healthcare system; demand for more
comfortable accommodation with better service quality could be satisfied for the
quarantined people who were willing to pay for the services, and service operation
could be maintained for the hotels to help them survive over the pandemic. The food
supply chain for the hotels and resorts could also be maintained during the
operation. Local governments will consider authorizing the hotels and resorts that
have met the necessary health and sanitation standards required to be quarantine
centers. In order to come up with such big decision we need to gather data to
support such decision and use the managerial accounting concepts, tools and
techniques we have learned from this course.

Applying the relevant costing concept for managerial decisions, we can weigh the
best decision to make by first following the steps in decision making:

1. Define the decision task.

In this case about Garden Royal Hotel, the task is to decide the future of the
business operations of the establishment given various factors brought about
by the pandemic.
2. Identify alternative courses of action.

The management of Garden Royal Hotel is faced with the following

alternatives:
a. To shut down operations temporarily.

Among the three alternatives, this is quiet the safest option for the
management to take. This would help the management avoid more
losses and would keep the hotel to themselves until it is safe enough to
go back in business but risks of difficulty in rehiring their staff in the
future can be a problem.

b. To sell the hotel.

In this alternative, the management will be able to recover what is left

to them of the fair value of their primary asset –the hotel but sacrificing
future possible opportunities of business growth associated by
continuing into business.

c. To volunteer as quarantine service center.

When people arrived at the airport, they were asked for a declaration
of health and a medical check; afterwards, before transferring them to
quarantine centers, they would be asked if they wished for quarantine
with service fees. People who wished to pay for the services would be
looked after well by both the service staff of the hotel and also with the
cooperation of the local government. For instance, regular security
checks were made throughout the day and night by the local police,
and guidance was given in operating qualified quarantine by local
medical centers. The hotels and resorts which offered to be quarantine
centers had to be transparent about their service fees, ensuring that
they had the healthcare service quality, hygiene, and the related
services that were required by the government. Service staff had to be
well trained to ensure the effectiveness of both the healthcare and
hospitality services. The hotels had to keep monitoring via CCTV,
recording, and then keep reporting to ensure that daily updates were
sent to local healthcare government.

3. Collect relevant information on alternatives.

In this step we have to identify the costs that are applicable to a particular
decision, the costs that should have a bearing on which alternative a
management selects, costs that are avoidable and future costs that differ
between alternatives. To summarize, we need to identify the sunk costs,
relevant costs and the opportunity cost.
 4. Select the preferred course of action.

Given the three alternatives stated above, the management should carefully
consider the relevant costs, opportunity cost and sunk cost associated in that
particular alternative in order to come up with the best course of action.

5. Analyze and assess decisions made.

Whether to decide on shutting down, selling or continue with the operations

by volunteering as service centers, the management need to carefully
analyze the decision made in order to survive this crisis brought about by the
pandemic.

The concept of the relevant costing is very helpful to eliminate irrelevant information
from a particular decision-making process. Also, by eliminating irrelevant costs from
a decision, management is prevented from focusing on information that might
inaccurately affect its decision. This will be very helpful for the case of Garden Royal
Hotel in choosing the best alternative to take given the situation brought about by the
pandemic to the hotel industry.
C. Conclusion

This case study has shed light on the development and operation of paid quarantine
service in a case study of Garden Royal Hotel that might managed to survive during
the COVID-19 pandemic. While the coronavirus disease and mandatory quarantine
have resulted in many great negative implications for health, society, and the
economy, as well as negatively affecting every single industry of almost every
country in the world, especially the tourism industries, our case hotel can do
anything it can to maintain their business as well as secure the jobs for their staff
members such as adopting cost and investment reduction approaches. This is as
well as promoting multi-tasking roles for employees. On the other side, employees
are also willing to work and try to follow cost-saving strategies and engage in paid
quarantine services.

This case analysis suggests that the development of hospitality services for paid
quarantine guests in Garden Royal Hotel can be a way of minimizing the negative
implications of the COVID-19 pandemic to several sectors and stakeholders. First,
the introduction of paid quarantine service can help the hotel and its staff to reduce
the current negative economic effects of the COVID-19 pandemic as well as
improving the already-high morale of its employees. It also reduces pressure on the
government and the hospital as they need to cover costs and places for
institutionally quarantined people. Finally, the paid quarantine service option can
satisfy visitors who want to pay for receiving higher-quality hospitality services during
their time in quarantine.
D. Recommendation

There is no doubt that COVID-19 has created a crisis in multiple areas for the hotel
industry in general, and for our case in particular. However, the paid quarantine
approach alongside other response strategies can be perceived as the salvage in
this crisis period which can even open up future business opportunities. Given the
experience and knowledge to be gained from training for paid quarantine services,
when the tourism attractions in the country were allowed to reopen, and the
employees’ morale will be extremely high, as they can both serve paid quarantine
guests and also run normal hospitality services. Besides this enhancement in the
morale of the employees, several managers and staff members still faced
challenges during the adaption to their new roles, carrying extra duties or making
themselves familiar with new procedures.

Reducing costs and investments could not completely resolve the difficulties caused
by the significant drop in business following the coronavirus pandemic. Paid
quarantine can be seen as a way of eliminating problems during a crisis and a
recovery strategy as well as promoting the brand name of the hotel. When domestic
tourism resumes, hotels will re-open throughout the country and tourists are allowed
to enter after 14 days of institutional or paid quarantine. Hence, Garden Royal Hotel
could run dual services, in two separated areas, whereby guests can choose paid
quarantine in a quarantine zone and after that, use normal hotel services in other
buildings. The hotel can also keep their loyal customers informed of government’s
efforts to prevent the coronavirus disease, its intention to run dual hotel services,
including a normal hospitality service and paid quarantine services, as well as
advertising the hotel’s health and sanitation capabilities as being an advantage when
compared to other hotels.

I believe that paid quarantine service can even help to reduce pressure on the
institutional quarantine services for our government as well as save space and
resources for those who do not want to pay for quarantine service in a hotel.
E. References

https://dfa.gov.ph/dfa-news/dfa-releasesupdate/28480-dfa-repatriates-327-511-
overseas-filipinos-in-2020

https://www.bu.edu/bhr/2020/03/25/navigating-hotel-operations-in-times-of-covid-19/

https://www.hospitalitynet.org/news/4104448.html

https://www.sciencedirect.com/science/article/pii/S2405844021019393
 Case # 2. CDR King

A. Overview of the Case

CDR King is known for selling IT and computer accessories, cellphone accessories,
electronic devices, and the like. CDR King started its venture at Quiap0, Manila.
Because of its huge success, the management decided to expand its business
venture by establishing more CDR King store in every mall to capture the wide
coverage of the target market. Subsequently, more and more CDR King stores were
established successfully and it turned out be marketable despite of having a small
margin/income to its items being sold.

Despite of the success of CDR King and being able to rock the market in the
industry, at present, noticeably, CDR King is nowhere to be found. The noise of CDR
King before in the market was replaced by the deafening silence of its existence
now.

Simultaneous with the company’s success and popularity came complaints from its
customers. Many questioned the quality of the products, with some accusing the
store of selling substandard merchandise that broke or fell apart way too
soon. Another complaint was the payment system that CD-R King had in its stores.
For years, sales personnel wrote out receipts by hand for all purchases, which
doubled or tripled the waiting time for its customers. Even well into its 10th year of
existence, the store still kept the same system, which has led many people to
question why it hasn’t adopted a more efficient way of completing this part of the
transaction. By the latter part of the 2010s, CD-R King, and indeed, most other brick-
and-mortar retail stores, began to contend with the rise of ecommerce, specifically,
online retail stores. Especially for electronics, computer peripherals and mobile
phone accessories, many people began turning to online marketplaces for these
items.

There was a spate of CD-R King store closures over the last few years. From a high
of 500 stores, CD-R King currently has less than 10 branches, according to a source
from an official of the leasing department of one of the country’s major shopping
malls. The source says that the CD-R King there is still operational, but has closed
down several other branches in the same mall network even before the onset of the
coronavirus pandemic. And as far as the source knows, the company has also
undergone a change of ownership.
B. Impression and Implication of the Study

We can’t say for sure that ecommerce has contributed to the decline of CD-R King,
but it certainly hasn’t helped the company’s bottom line. In addition, competitors such
as Miniso, Mumuso, and similarly themed mini-department stores that sell similar
items that CD-R King sells, such as speakers, headphones and earphones,
powerbanks and the like, have likely eaten into CD-R King’s market share. One other
theory about the decline of CD-R King is the sheer volume of products available in
store. At one point, the company also started selling electric bikes, solar panels,
lightbulbs, CCTV cameras and surveillance systems, 3D printers and even rice
cookers, mini refrigerators, and windmills. While this has led to endless jokes and
memes about the variety of products one can buy at a CD-R King store, there’s always
that limitation of spreading oneself too thin. Its quest to cover all bases and be
everything to everybody might have ultimately worked against it.

Online and offline were once two very separate worlds. But with the rise of e-
commerce and in particular mobile e-commerce, the distinction between online and
offline is blurring rapidly. One of the internet’s early effects was to foster a much
greater proliferation of specialty retailers than ever before — retailers with a unique
point of view but not necessarily a need for a tremendous amount of floor space.
The internet has allowed retailers to connect with potential customers and express
their brand in entirely new ways, and physical stores have become a part of their
communication and sales strategy instead of being their only or primary way to
reach consumers. While logic would suggest that this downgrade in the importance
of physical stores would lead to less interesting designs, on the contrary the ability of
retailers to communicate and build brands online has actually led to more focused
and impactful physical store identities as well. If you look at a successful mall today
versus twenty years ago, you will see a much stronger and more varied collection of
tenants now than ever before, and shoppers have the internet and e-commerce to
primarily thank for this more tailored collection.

The internet has also impacted retailers in ways that go far beyond their physical
space or their online presence. Fast-fashion retailers like Zara, Uniqlo, TopShop,
H&M and Forever 21, who are harnessing the power of internet-based technology in
all aspects of their business — design, manufacturing, and logistics — are growing
very rapidly and in many cases taking over larger spaces once inhabited by big box
retailers like department stores and large home electronics showrooms. Along with
convenience, these stores offer the latest styles, reasonably priced, updated quickly
and continuously, in ways that simply weren’t possible before. With these internet-
fueled changes gaining traction among retailers, developers of shopping centers are
weighing the new choices that these technologies are bringing consumers,
comparing them against brick & mortar’s limitations, and beginning to respond with
changes of their own.
Just as many brands are now looking to trend-setting individuals that curate
collections from a variety of sources, and then through social media connect with
other consumers worldwide, shopping centers of all kinds are now also being
curated in order to bring a special vibe or character to physical collections of stores.
One of the biggest curation trends is to integrate strong national or international
brands with stores or restaurants with a strong local vibe or presence, so that
consumers feel that they have the best of everything available to them in one place.
And it is no longer enough to cluster all the luxury brands on one end of the center
and the value brands on the other — along with the tried and true, consumers are
looking for interesting, surprising shopping opportunities on both ends of the
spectrum, often at the same time. And perhaps in response to the private nature of
online shopping, the public experience of shopping has become more heavily
intertwined with other communal experiences. Pop-up stores, rock star chefs, strong
art programs, enhanced programming, better restaurants and food courts, even the
increase in mixed-use destinations that include retail, office, hotel and residential
uses… all are enhancements to the ceremony of shopping, of people gathering
together to share experiences and activities.

The problem with CD-R King is that they failed to innovate and go with the trend of
online shopping. The world is changing with the rise of technologies and if you want
to stay in business you should take advantage of that. Using the concept of flexible
budget and performance analysis the management can directly compare actual
revenues and costs to static planning budget revenues and costs can easily lead to
erroneous conclusions. Actual revenues and costs differ from budgeted revenues
and costs for a variety of reasons, but one of the biggest is a change in the level of
activity. One would expect actual revenues and costs to increase or decrease as the
activity level increases or decreases. Flexible budgets enable managers to isolate
the various causes of the differences between budgeted and actual costs so it would
be easier for them to notice the variances associated with the change of sales.

flexible budget is a budget that is adjusted to the actual level of activity. It is the best
estimate of what revenues and costs should have been, given the actual level of
activity during the period. The flexible budget can be compared to the budget from
the beginning of the period or to the actual results.

When the flexible budget is compared to the budget from the beginning of the
period, activity variances are the result. An activity variance shows how a revenue or
cost should have changed in response to the difference between actual and
budgeted activity.

When actual results are compared to the flexible budget, revenue and spending
variances are the result. A favorable revenue variance indicates that revenue was
larger than should have been expected, given the actual level of activity. An
unfavorable revenue variance indicates that revenue was less than it should have
been, given the actual level of activity. A favorable spending variance indicates that
the cost was less than expected, given the actual level of activity. An unfavorable
spending variance indicates that the cost was greater than it should have been,
given the actual level of activity. A flexible budget performance report combines
activity variances and revenue and spending variances on one report.

Common errors in comparing actual costs to budgeted costs are to assume all costs
are fixed or to assume all costs are variable. If all costs are assumed to be fixed, the
variances for variable and mixed costs will be incorrect. If all costs are assumed to
be variable, the variances for fixed and mixed costs will be incorrect. The variance
for a cost will only be correct if the actual behavior of the cost is used to develop the
flexible budget benchmark.
C. Conclusion

CDR King may have failed to ride just in time for the opening and development of e-
commerce it is never too late to enter the online market today. The problem with the
company might be they underestimated the capacity of ecommerce and they failed
to innovate just in time for the development in technologies. They were so focused
on expanding their physical stores that they neglected the online market.
Understanding that e-commerce has made shopping more convenient, bricks and
mortar developers are focusing on enhancing the convenience of shopping centers
as well. Features like concierge desks, car washes, and children play facilities, along
with better food and entertainment choices, allow consumers to continue to fit the
pleasure of real-world shopping into their increasingly busy lives. While retailers
have taken the lead in addressing the challenges and opportunities provided by the
internet, integrating the online and physical worlds to provide a number of integrated
platforms to reach their customers, shopping center operators and developers are
not far behind, focusing on enhancing the experiential qualities of retail
environments and in bringing a variety of new venues and experiences into their
centers. And for shoppers, it’s been a win-win.

In order to stay in business, management should always look at the trends and be
open to all ideas especially those
D. Recommendation

Omni-channel retailing has converged the online and offline shopping experiences.
For retailers who practice this approach, prices are consistent in all formats, and
consumers can choose between numerous options: shopping online with home
delivery, shopping online and picking up at a store, shopping at a store and taking
merchandise away, or shopping at a store and having it delivered to their home. The
internet has also impacted retailers in ways that go far beyond their physical space
or their online presence. Fast-fashion retailers like Zara, Uniqlo, TopShop, H&M and
Forever 21, who are harnessing the power of internet-based technology in all
aspects of their business — design, manufacturing, and logistics — are growing very
rapidly and in many cases taking over larger spaces once inhabited by big box
retailers like department stores and large home electronics showrooms. Along with
convenience, these stores offer the latest styles, reasonably priced, updated quickly
and continuously, in ways that simply weren’t possible before.

CDR King could do the same in order to get back on track. In this era where anyone
has access to the internet and too lazy to go to the physical store, sellers need to
adjust in adapting the ecommerce trends. CDR King could make use online
platforms like Shoppe and Lazada to make its product accessible from anyone with
access to the internet. This would minimize costs of rent, store employees and other
in-store related operational cost while expanding its market all over the country as
long as it has internet connections and serviceable to local couriers.
E. References

https://www.esquiremag.ph/money/industry/what-happened-to-cd-r-king-a00289-
20201111-lfrm

https://farhatlectures.com/flexible-budget-and-performance-analysis-managerial-
accounting-cma-exam-cpa-exam-bec/
 Case # 3. La Playa Azul Resort

A. Overview of the Case

La Playa Azul Resort is a resort commonly visited by the local tourists and has a
great ambiance for family gathering, group outings, teambuilding activities and many
more. As a resort, summer time is the peak season, thus, it necessitates further
renovation and maintenance in order to keep its beauty and to be able to attract
more tourists. Renovation was done and repairs and maintenance were already
performed, however, unexpectedly, the operation of the resort was affected by the
pandemic. The negative implications brought about by the pandemic affected their
profitability and liquidity. For more than 5 months, the resort was not able to operate
as mandated by the regulatory agencies.

Covid-19 pandemic has affected every sector across the world and the hotel industry
is among the hardest hit. When corona virus has spread in a short period and has
been labelled a pandemic by the WHO, almost all countries have introduced travel
bans, declare state of emergency and implement curfew as this new virus is quite
contagious and can spread asymptomatically. In such a negative scenario, tourism
and hospitality industry has been the worst affected of all major economic industries
by the outbreak of the COVID-19 pandemic. The reason is that people are not
allowed to travel domestically/overseas; go to the restaurants/cafes; and are working
from home while cutting their spending except basic needs. Among all the hospitality
industries, hotels like Garden Royal Hotel, are the first to be affected since the
restrictions for domestic/overseas travelling directly affect their core business. For
example, restaurants activity can be partially maintained with delivery or take away
services but since people are not allowed to travel even inside the country, hotels
cannot even afford to breakeven because of this crisis.

To make the situation even worse for Royal Garden Hotel, they spent a huge
amount of money for maintenance, repairs and renovation prior to the pandemic
leaving them in a tight working capital situation and less liquid when pandemic hit
the world. The hotel management were not financially prepared for this world crisis
that affected everyone all over the world.
B. Impression and Implication of the Study

The hotel industry has entered into situations unknown and never seen before in our
lifetime, this present perfect storm has both a health and financial crisis occurring at
the same time. Despite many strategies for preventing the spread of the pandemic
and its impacts on the economic growth, the tourism and hospitality industry was the
most severely affected. Since the first case of COVID-19 was recorded, tourism
faced challenges of both a significant reduction in numbers of visitors, resulting to
even not making it breakeven in the operations. Many hotels have had to switch to a
hibernation mode due to canceled travel plans. Small and large hotels have also
shut down which has caused food and beverage sectors to be impacted negatively
as a result. A large number of employees in these sectors have lost their jobs and
considered starting their careers in other paths to resolve their financial difficulties,
which may cause human resource shortage for the tourism and hospitality industry
after the pandemic.

Given the situation, Garden Royal Hotel should also consider the option of
volunteering to be quarantine service centers that could potentially help Garden
Royal Hotel continue its operation aside from just giving up and shut down or sell the
hotel. Many mid-range and high-end hotels and resorts volunteered to be quarantine
service centers in order to respond to the shortage of facilities, service staff, and
accommodation for quarantine. This proposal can be considered beneficial for all
parties. Pressure could be lessened for the healthcare system; demand for more
comfortable accommodation with better service quality could be satisfied for the
quarantined people who were willing to pay for the services, and service operation
could be maintained for the hotels to help them survive over the pandemic. The food
supply chain for the hotels and resorts could also be maintained during the
operation. Local governments will consider authorizing the hotels and resorts that
have met the necessary health and sanitation standards required to be quarantine
centers. In order to come up with such big decision we need to gather data to
support such decision and use the managerial accounting concepts, tools and
techniques we have learned from this course.

Applying the relevant costing concept for managerial decisions, we can weigh the
best decision to make by first following the steps in decision making:

6. Define the decision task.

In this case about Garden Royal Hotel, the task is to decide the future of the
business operations of the establishment given various factors brought about
by the pandemic.
7. Identify alternative courses of action.

The management of Garden Royal Hotel is faced with the following

alternatives:
d. To shut down operations temporarily.

Among the three alternatives, this is quiet the safest option for the
management to take. This would help the management avoid more
losses and would keep the hotel to themselves until it is safe enough to
go back in business but risks of difficulty in rehiring their staff in the
future can be a problem.

e. To sell the hotel.

In this alternative, the management will be able to recover what is left

to them of the fair value of their primary asset –the hotel but sacrificing
future possible opportunities of business growth associated by
continuing into business.

f. To volunteer as quarantine service center.

When people arrived at the airport, they were asked for a declaration
of health and a medical check; afterwards, before transferring them to
quarantine centers, they would be asked if they wished for quarantine
with service fees. People who wished to pay for the services would be
looked after well by both the service staff of the hotel and also with the
cooperation of the local government. For instance, regular security
checks were made throughout the day and night by the local police,
and guidance was given in operating qualified quarantine by local
medical centers. The hotels and resorts which offered to be quarantine
centers had to be transparent about their service fees, ensuring that
they had the healthcare service quality, hygiene, and the related
services that were required by the government. Service staff had to be
well trained to ensure the effectiveness of both the healthcare and
hospitality services. The hotels had to keep monitoring via CCTV,
recording, and then keep reporting to ensure that daily updates were
sent to local healthcare government.

8. Collect relevant information on alternatives.

In this step we have to identify the costs that are applicable to a particular
decision, the costs that should have a bearing on which alternative a
management selects, costs that are avoidable and future costs that differ
between alternatives. To summarize, we need to identify the sunk costs,
relevant costs and the opportunity cost.
 9. Select the preferred course of action.

Given the three alternatives stated above, the management should carefully
consider the relevant costs, opportunity cost and sunk cost associated in that
particular alternative in order to come up with the best course of action.

10. Analyze and assess decisions made.

Whether to decide on shutting down, selling or continue with the operations

by volunteering as service centers, the management need to carefully
analyze the decision made in order to survive this crisis brought about by the
pandemic.

The concept of the relevant costing is very helpful to eliminate irrelevant information
from a particular decision-making process. Also, by eliminating irrelevant costs from
a decision, management is prevented from focusing on information that might
inaccurately affect its decision. This will be very helpful for the case of Garden Royal
Hotel in choosing the best alternative to take given the situation brought about by the
pandemic to the hotel industry.
C. Conclusion

This case study has shed light on the development and operation of paid quarantine
service in a case study of Garden Royal Hotel that might managed to survive during
the COVID-19 pandemic. While the coronavirus disease and mandatory quarantine
have resulted in many great negative implications for health, society, and the
economy, as well as negatively affecting every single industry of almost every
country in the world, especially the tourism industries, our case hotel can do
anything it can to maintain their business as well as secure the jobs for their staff
members such as adopting cost and investment reduction approaches. This is as
well as promoting multi-tasking roles for employees. On the other side, employees
are also willing to work and try to follow cost-saving strategies and engage in paid
quarantine services.

This case analysis suggests that the development of hospitality services for paid
quarantine guests in Garden Royal Hotel can be a way of minimizing the negative
implications of the COVID-19 pandemic to several sectors and stakeholders. First,
the introduction of paid quarantine service can help the hotel and its staff to reduce
the current negative economic effects of the COVID-19 pandemic as well as
improving the already-high morale of its employees. It also reduces pressure on the
government and the hospital as they need to cover costs and places for
institutionally quarantined people. Finally, the paid quarantine service option can
satisfy visitors who want to pay for receiving higher-quality hospitality services during
their time in quarantine.
D. Recommendation

There is no doubt that COVID-19 has created a crisis in multiple areas for the hotel
industry in general, and for our case in particular. However, the paid quarantine
approach alongside other response strategies can be perceived as the salvage in
this crisis period which can even open up future business opportunities. Given the
experience and knowledge to be gained from training for paid quarantine services,
when the tourism attractions in the country were allowed to reopen, and the
employees’ morale will be extremely high, as they can both serve paid quarantine
guests and also run normal hospitality services. Besides this enhancement in the
morale of the employees, several managers and staff members still faced
challenges during the adaption to their new roles, carrying extra duties or making
themselves familiar with new procedures.

Reducing costs and investments could not completely resolve the difficulties caused
by the significant drop in business following the coronavirus pandemic. Paid
quarantine can be seen as a way of eliminating problems during a crisis and a
recovery strategy as well as promoting the brand name of the hotel. When domestic
tourism resumes, hotels will re-open throughout the country and tourists are allowed
to enter after 14 days of institutional or paid quarantine. Hence, Garden Royal Hotel
could run dual services, in two separated areas, whereby guests can choose paid
quarantine in a quarantine zone and after that, use normal hotel services in other
buildings. The hotel can also keep their loyal customers informed of government’s
efforts to prevent the coronavirus disease, its intention to run dual hotel services,
including a normal hospitality service and paid quarantine services, as well as
advertising the hotel’s health and sanitation capabilities as being an advantage when
compared to other hotels.

I believe that paid quarantine service can even help to reduce pressure on the
institutional quarantine services for our government as well as save space and
resources for those who do not want to pay for quarantine service in a hotel.
E. References

https://dfa.gov.ph/dfa-news/dfa-releasesupdate/28480-dfa-repatriates-327-511-
overseas-filipinos-in-2020

https://www.bu.edu/bhr/2020/03/25/navigating-hotel-operations-in-times-of-covid-19/

https://www.hospitalitynet.org/news/4104448.html

https://www.sciencedirect.com/science/article/pii/S2405844021019393
 Case # 4. Divisoria Manufacturing Plant

A. Overview of the Case

Divisoria Manufacturing Plant is engaged in manufacturing of steel. Because of the

pandemic, it decided to temporarily close the plant until the situation gets back to
normal. After 5 months, as per advice by IATF, non-essential establishments may
operate with 50% capacity limit to its employees. With this consideration, Divisoria is
considered as a non-essential and allowed to operate with 50% capacity workforce.
Limited capacity also means that limited and decreased productivity. While
temporarily closed, the plant still incurring unavoidable fixed costs to maintain the
manufacturing plant.

Steel Manufacturing Plant or any other manufacturing plants all over the world faced
significant challenges. There are many companies that shut down due to restrictions
by local governments but there are also others that are holding on. Due to the
devastation cause by the pandemic, many plants which employs many workers are
greatly affected. Due to this many plant managers or CEO’s all over the world are
looking for ways on how to address this challenge. As time passes by, we can
eventually say that this is really becoming a new normal for us. COVID is here to
stay, as what most people say. So as the CEO it is important to study the
implications cause by COVID in the manufacturing industry. You must also see to it
that the law of demand and supply is strictly monitored because due to pandemic
there is an assurance that demand would be higher due to shortage of productivity
brought upon by shortage on personnel as an impact cause by COVID. But even if
there is an increase in demand you still cannot surely say that it is good thing for you
as a manufacturing plant because your source of raw materials might be affected
also which will also result in another problem for you. So there are many factors that
is needed to be considered before considering whether to open the manufacturing
plant or not. It is not always profit, you must also think of the safety of the workers,
losses incurred during pandemic while thinking of a more balance way to address
both issues. In my own observation if I were the CEO, considering we are in the
Philippines I will be studying whether or not the market demand can make me at
least break even or profit even a small margin before considering whether to open or
not. We know that only 50% of the workforce is allowed which results around 50% of
the productivity also, so I will see to it that the total fixed cost incurred during
operations will be covered up by the demand and price, because we know, as
demand goes up and the supply goes down, there would be an increase in prices so
this must be considered also. And if by the end of the day, it can give you a profit no
matter how small it is, then by all means open. Not only you can help your workers
earn during crises you can also address the fixed cost incurred to your plant whether
you open or not.
B. Impression and Implication of the Study

This study implies the need to address the common problems of all manufacturing
company in the world. Difference industries requires different approaches. Steel
manufacturing plants affects mostly those industries that are less essential that is
why it is considered as non-essential. But despite being non-essential we know that
as pandemic goes by, the world now realizes that we cannot be stuck, we must
move, we must address the problem while moving on also, we cannot let pandemic
affect more of the economies. No country in the world can feed the people and not
doing anything at all to bounce back. That is why many companies are now looking
for solutions to address this crisis that affected our very own lives and lifestyle.
Solutions that are not only helpful to the company but helpful to the workers as well.
This study also implies that there really is a strong need to counterbalance
everything we are experiencing right now. We cannot be reliant to the government, if
we want to stay afloat as a business we need to stand up and do what needs to be
done.
The most critical focus for every organization is to keep employees safe in an
environment where repeated outbreaks are a persistent threat. To achieve this,
companies can deploy a comprehensive set of policies and guidelines, including
enhanced hygiene measures, provision of additional personal protective equipment
(PPE) where necessary, physical distancing, and modifications to existing
governance and behaviors. Protecting employees’ mental health has also emerged
as a high priority, with companies in China (and elsewhere) providing counseling
services to employees returning after prolonged quarantines. These measures,
developed in the initial response to the crisis, can be integrated into an
organization’s standard procedures as it makes the transition to next-normal
operations.

Ramping up internal communications is vitally important, including regular sharing of

information about the company’s evolving knowledge of the crisis and how it is using
that knowledge to protect employees and the organization. Clarity, simplicity, and
framing all matter—research from earlier epidemics shows that positive messages
focused on best practices were more effective than negative messages designed to
address misinformation. Frequency counts as well, as audiences need to hear a
message repeatedly before fully absorbing it. And that implies consistent content,
reflecting a single source of truth at the corporate center.

Finally, the best communication is two-way, with managers answering questions and
engaging in an open dialogue with employees at all levels. One equipment maker,
for example, asks supervisors to collect queries and concerns from frontline team
members every morning. The company’s HR department then publishes an updated
daily list of questions and answers, which are displayed on monitors around the
factory. After the introduction of the new policy, absenteeism among shop-floor staff
dropped significantly and productivity returned to pre-crisis levels. As an additional,
unintended benefit, the approach uncovered a number of frontline concerns
unrelated to the pandemic, allowing managers to take additional steps to boost
productivity and improve workforce satisfaction.

Plant leaders are already telling us that their frontline personnel appreciate the
increased frequency and clarity of two-way communication necessitated by the
outbreak. Organizations can capitalize on these improvements by standardizing their
enhanced communication approach, rather than letting things regress to pre-crisis
norms as the situation stabilizes.

To keep staff safe over the longer term, companies can retain and formalize
appropriate parts of their emergency-response guidelines, so they become part of
plants’ standard operating procedures. Such guidelines might include enhanced
health surveillance, restrictions on the use of communal tools and areas, regular
sanitization of equipment along with periodic deep cleans of whole workplaces, and
HR policies that ensure workers can stay at home if they feel unwell. Regulatory
changes also merit extra attention, as governments introduce new rules on
mandatory sick pay, or requirements for employees to limit contact with products or
one another.

At the onset of the crisis, some companies began to ask employees to take a digital
survey before starting on-site work, confirming that they do not have any COVID-19
symptoms, sharing their travel history since their last shift, and verifying they
understand new health and safety guidelines. This approach provided valuable data
that could aid contact tracing (where consistent with local practices) in the event of a
positive test at the plant. It also helps to reinforce the importance of following health
policies and reminds employees to avoid the risk of getting others sick.

The coronavirus crisis has dramatically increased risk for every business, with many
experiencing shocks in both supply and demand. Manufacturing plants are at the
center of that uncertainty, and their continued operation through the crisis and
beyond will depend in large part on the organization’s ability to navigate these wider
risks. We have written elsewhere about the necessary steps to build resilience into
the wider supply chain, and plant leaders will play a central role in their
organization’s response.

Plant leaders can also plan their own response to risks that could directly affect
operations in their facility—starting with what to do if an employee anywhere in the
plant tests positive for a COVID-19 infection. Responses can include—but would not
be limited to—consulting with health authorities, quarantining the affected person
(together with any other staff who were working in close proximity), and isolating and
sanitizing exposed products, tools, and workspaces.

Facing higher levels of uncertainty over the medium term, plants will likely find it
useful to ramp up their scenario planning, with a higher planning cadence and a
wider range of potential scenarios included in their analysis. When closely tied to the
organization’s wider response and recovery strategy, this accelerated planning helps
the plant develop strategies to accommodate substitute materials, or produce hard-
to-source parts in-house.

Some companies are using digital twins of their facilities to simulate operation under
different staffing levels and production scenarios. This approach can support many
aspects of operational planning, from evaluating the impact of changes to plant
layout to determining the mix of skills that on-site teams will require.

The transition to the next normal in manufacturing plants will require both leaders
and frontline teams to develop new capabilities. The introduction of pods on the
production line, for example, may call for operators with a wider range of skills, so
they can complete all the tasks required in their pod or cover for absent colleagues.

New digital approaches can accelerate the capability-building process and allow
employees to develop new skills remotely. Such techniques include the remote
delivery of training using e-learning systems or the use of virtual-reality technologies
to familiarize operators with new tasks or plant layouts. Augmented-reality systems
help shop-floor staff to receive training, advice, and support from remote colleagues.
Specialist contractors can use such systems to guide shop-floor staff through
machine maintenance or troubleshooting.

For as long as virus transmission among employees remains a risk, companies will
naturally want to minimize unnecessary contact between personnel. Anybody not
absolutely required on-site, including managers and many support functions, can be
encouraged to work remotely as much as possible to protect the health of their shop-
floor colleagues. To minimize the risk that an entire leadership cohort would need to
enter quarantine at the same time, leadership staff who do need to stay on-site can
be separated into at least two teams, with no physical contact between them.

As they reconfigure their operations to keep employees safe and respond to

changes in the wider value chain, companies still need to maintain manufacturing
performance. In many plants, leaders have long managed performance face to face,
using daily shift briefings, visual management, and regular “gemba walks”—
observant walk-throughs of the shop floor and wherever else the “real work” is being
done. Physical-distancing and remote-working policies will make these established
approaches more difficult, compelling companies to find new ways to manage shop-
floor performance.
C. Conclusion:

As what we can see on our daily surroundings today, there is only common solution
to this, and it is to work hand in hand with all the parties involve, whether it is the
individual within the company, the government, the workers, as well as the
customers to ensure that business will flow as usual but there are now milestones
that needs to be addressed. And without addressing it the business might be
interrupted or worst close. Next is that while ensuring that profit is acquired during
operation you must not also forget your workers who is there with you, you must
ensure their safety and their health this is the least you can do. Another thing is that
if you can do an online way of transaction might as well do it that way, this is the new
normal during this pandemic times, what we call “contactless” transactions. Not only
this lessens the chances of acquiring virus, it also lessens the hassle. Because all
you need is to maximize the internet to address your business problems. As to
address the governments mandates, of course this must be prioritized also because
the government only wants to ensure the safety of its citizens, it also wants to control
the spread of the virus.
D. Recommendations:

My recommendation to address this challenge is the same as what I stated on the

conclusion part. Look for a way to control the virus and maintain the safety of the
workers. Like doing online transactions instead of doing it face to face. Internet must
be maximized and workers must be provided with individual personal protective
equipment (ppe) while maintaining social distancing to ensure that they are safe.
Look for government assistance especially those that can help your business stay
afloat like tax holidays and other things that the government can do to help your
business.
 Case # 5. Small Private Hospital

A. Overview of the Case

A small private hospital is successful in its hospital operations to address the health
care needs of the community. The hospital went well until such time COVID 19
strikes and affected most of the business establishments including hospitals. This
private hospital is considering to shut down temporarily because of the expensive
and costly paraphernalia needed in order to adhere to the minimum health standards
as required by the DOH during this pandemic. Being a small private hospital, it
seems that the situation affected the operations and financial aspect of the hospital
with its long-term goals. Particularly, it affected their profitability and liquidity of the
hospital. During the pandemic, there were sudden decline of patients going to
hospital because they are afraid to get infected with the virus. Additionally, for the
hospital to continue to operate, it needs more supplies and equipment to
continuously serve the general public without sacrificing the health standards and
the health protocols in order to fight against COVID 19.

Having a private small hospital during pandemic season is like a double edge knife,
there is a chance you can profit there is also equal possibility that you will be losing
depending on your situation and location. As we can observe especially during the
earlier times of the pandemic, hospital beds in Philippines is so limited that even the
hallways are crowded with covid-infected patients. As a small private hospital,
maybe you can strike a deal with the government to help you with the things you
need to keep your small hospital running just to help patients that needs to be taken
care of, considering that all hospitals both rural and urban areas are already full. Of
all essential type-business, aside from food, I think private hospitals are the most
needed during these times. They are our modern day heroes, the doctors and
nurses. The government is the only agency that can help you stay afloat during
these times of crisis. You can look for your own local executive and look for a way
where you can help by providing care for the patients. There are many types of
disease that needs to be treated but cannot be treated because of the fear of getting
infected, topping it with full hospitals what can people do? So here you can enter,
you can extend your help, just that the government will help you also in return. In
that way both of you wins.
B. Impression and implication

This study implies the need to exert an effort not just to make your business thrive
but to help other people as well. We all knew that pandemic is the worst modern
time crisis that had ever hit during our lifetime and it affects not only our country but
all over the world. Hospitals all over the world are full and many others have no
access to any medical establishments. So why would a hospital like yours be close
instead of helping those who are in need of a treatment? Problems such as money
and equipment can always be given a solution, if you cannot look for it privately you
need to approach the government and see what they can do to help you and help
themselves. There are many deaths that are indirectly cause by covid, for example,
an asthma patient afraid of going to the hospital because of the fear of getting
infected with covid or afraid of being diagnosed with covid. Due to this, no medicines
is being given resulting to worst – death. Who were to blame? We are all to blame,
but this can be address by helping those agencies that provide treatments. Give
them what they need and they can surely pay it back considering patient influx is so
high during pandemic season.

If I were to suggest, I would share the concept of Capital budgeting that I learned in
this course. In order to remain in business, the hospital management might consider
to invest in equipment and facilities to serve the people during the pandemic. The
management have to always see the opportunity in every given situation be it good
or bad. In this trying times of pandemic, this small hospital should consider taking a
loan to finance acquisition of equipment in order to stay in business during this
pandemic.

Capital budgeting involves choosing projects that add value to a company. The
capital budgeting process can involve almost anything including acquiring land or
purchasing fixed assets like a new truck or machinery. In the case of this small
hospital, acquiring new equipment to teat covid-19. Capital budgeting is important
because it creates accountability and measurability. Any business that seeks to
invest its resources in a project without understanding the risks and returns
involved would be held as irresponsible by its owners or shareholders. Furthermore,
if a business has no way of measuring the effectiveness of its investment decisions,
chances are the business would have little chance of surviving in the competitive
marketplace. Businesses (aside from non-profits) exist to earn profits. The capital
budgeting process is a measurable way for businesses to determine the long-term
economic and financial profitability of any investment project. Different businesses
use different valuation methods to either accept or reject capital budgeting projects.
Although the net present value (NPV) method is the most favorable one among
analysts, the internal rate of return (IRR) and payback period (PB) methods are often
used as well under certain circumstances. Managers can have the most confidence
in their analysis when all three approaches indicate the same course of action.
When a firm is presented with a capital budgeting decision, one of its first tasks is to
determine whether or not the project will prove to be profitable. The payback period
(PB), internal rate of return (IRR) and net present value (NPV) methods are the most
common approaches to project selection.

Although an ideal capital budgeting solution is such that all three metrics will indicate
the same decision, these approaches will often produce contradictory results.
Depending on management's preferences and selection criteria, more emphasis will
be put on one approach over another. Nonetheless, there are common advantages
and disadvantages associated with these widely used valuation methods.

Using these capital budgeting concept, the hospital may have other options other
than shutting down. This concept may help save people’s lives and help them stay in
business providing jobs for their employees.
C. Conclusion

Nearly a fifth of hospitals in the Philippines are close to full capacity as a surge in
COVID-19 infections, driven by the highly contagious variant of the virus, spreads
across the Southeast Asian country. Coronavirus cases in the Philippines, a country
of 110 million, have been growing at a rate of around 8,000 to 10,000 infections a
day over recent weeks, above the daily average of 5,700 cases reported, according
to official data. Looking at this data, I can say that the world needs every help it can
get just to accommodate and treat sick people.

Essential-type businesses like private hospitals can be considered a jewel during

pandemic period. Not only they can help provide care for the people but ease the
problems face by large hospitals as well. In a way that it can be called win-win
situation. The only thing is that there must be help given to them to make them
running even during pandemic times. Maybe it’s the government or those big private
businesses as long as they can help address the situation at the right negotiation I
am sure that all of this can be addressed correctly.
D. Recommendation

I highly recommend partnering up with the government sector because there are
various way the government can help you not just in financial matters but on
business aspect of the matter as well. You just need to present it correctly I am sure
no government official would turn down a hospital during these pandemic season.
E. References

https://www.investopedia.com/articles/financial-theory/11/corporate-project-
valuation-methods.asp

https://www.reuters.com/world/asia-pacific/hundreds-philippine-hospitals-near-full-
capacity-virus-cases-surge-2021-08-09/
 Case #6 Small Business

In this case, I want you to look around and select a small business establishment
that operates during the pandemic. Ask the following questions on your selected
establishment:

a. Why is it that you continue to operate despite of the pandemic?

b. What is/are your reason/s why you continue to operate despite pandemic?
c. Are there instances where you consider shutting down your business? Why or
why not
d. What are your strategies in order to cope up with your business and survive
the business operation during pandemic?
e. If given the opportunity to be the manager of your chosen establishment, what
will be your practical advice to the business establishment to survive during
the pandemic?

A. Overview of the Case

Small business establishment that operated during pandemic can be seen as the
most active business we can see as we drive around the place we use to stay. They
are the delivery service businesses. Due to the impact cause by the pandemic,
during the earliest part when the pandemic affected our lives even going out and
buying necessities is a big problem. To address that home delivery business sprout
like mushrooms all over the country. And in all fairness they truly help us in a very
significant way. Instead of going to the market or store to acquire your needs and
pay transportation fees you can just pay the delivey service provider and buy all your
needs and delivered it straight to your door. Not only these eases your way of buying
your stuff, this also lessens your probavility of acquiring virus thus lessening the risk.
Some of these delivery business are already operating even before the pandemic
but they truly profited when pandemic strikes us. Because they make us realize how
convenient it is knowing that there is a high risk of acquiring the virus once you go
out of your house. This is one of the businesses that not only continue to operate
during cirisis but profited from it as well. The very reason for that is, of course, the
fear of acquiring the virus and cost-wise, if you are a commuting when buying the
things you need, might as well pay for a delivery service than commuting your way
into the mall and standing up in long lines in the counter, all in all, this will cost you
even more that what you will be paying the delivery service provider.
B. Impression and Implication of the Study

I have a great impression on this study because I was once offered a business
partnership regarding food deliery service particularly the “toktok delivery service”. I
had this chance of attending an online seminar, wherein they discussed the
advantages, how the business model is, how it works and how many ways you can
earn. There are many ways to earn actually, though it requires for you to have that
wide range of online circle for it to work but still, considering that we are tachnically
living in an online world since the pandemic started there will surely be one way or
another that a good break will be given upon you. They are offering a good package
for you to select from, low investment with high returns as long as you are not lazy
you will eventually earn.

This study implies that business really is humurous in some ways, because small-
time delivery business strive hard during normal times. Things like “closure” is often
being considered if it is normal times but during pandemic, this is the business that
you can truly say “blockbuster” type. There is shortage in drivers compared to
customers. Most of the times customers need to wait for long times before ensuring
a transaction due to high demand. Things such as “shutting down or closure” is just
a thing or two during these times. There is not much strategy use in this type of
business, just make sure you deliver the needs of the customer at the desired time
without delay at the resonable cost. As I’ve said before, business like there sprouted
like mushrooms during pandemic times, usually their cost are almost the same.
Maybe the strategy lies on how well you compensate your riders, for them to be loyal
to your company and do a good job delivering your needs. As well as how big is the
scope of your market, because there are deliveries that only delivers food from food
stalls and restaurants, there are types that buys you groceries and foods, there are
the types that can even deliver you trucks of materials. They differ in many ways,
you just make sure that they are trusted one because scammers also thrive during
these period of times.

Foods is essential to people. That is why, there will always be people who will be
requesting delivery services because it is easier and safer to do it like this that
acquiring it yourself at the risk of getting infected with covid. Not just foods but
essential grocery items as well as medicines can be acquired through delivery
services and other “pabili or pasabuy” type of delivery businesses.

This also implies that there is always a solution in every problem that occurs, as long
as you are determined to persevere, you can be successful.

Partnering up with restaurants, grocery stores and other market establishments is

good way or good strategy when doing a delivery business. This way, you can have
a partner, in a way that you talk of a way to ensure that both your business survives
during the pandemic. You cannot deliver without the things the people needs and
the stores and restaurants cannot do business because most of the times during
pandemic there government restrictions on the capacity of doing business so the
good thing to do is to meet halfway and talk to each other what you can do to
address both your needs . This mostly involves financial matters of course. This is
also an implication that business truly needs to collaborate if they want to survive the
pandemic.

Government also offers helps during the pandemic season, such as loans to small
business and enterpreneurs, tax holidays etc. There might be some restrictions and
stricter policies that comes along the way but by proper communication with the
government side, you can ensure the the services you provide to the public is not
affected by it and the business will continue to work as usual.
C. Conclusion

Business is like fruit, there are seasons where it will bear fruit and be harvested, the
season for the small business like delivery business has come during pandemic
season, we cannot say that we are happy with it, but , come as it may, we need to
learn to understant that this will be the new normal, this will be our life as we go on.
If there’s truly a cure in the future then good, if there’s not then also good. We
cannot be stuck in this kind of reality and just stop moving also, we need to adapt
and learn to survive. We need to fight back and need to earn. There is a family to
feed and taken care. If we are students there lessons to learn and of we are
businessman there is business to run and by running a business during pandemic is
a great challenge but as I said we need to adapt and be respondent on the situations
we faced. We need to be able to address problems by looking for ways and
answers by studying, looking for ways and means, researching, listening to experts
and partnering with other businesses.
D. Recommendation

My recommendation is that, never sacrifice the health of your workers/riders in favor

of a profit because a profit can always be earned but a good worker is hard to earn.
We need to take care off our own people, need to respect them and give them
support, they are also striving hard during this pandemic times so as the boss you
need to treat them with dignity as a person and give what is due to them. Do not use
the situation to use the vulnerability of other workers to profit your own self. So as a
boss of these kinds of business that had a good business during pandemic it is
them, the workers that get you to where you are right now so treat them correctly,
give them the benefits due to them and show them support that they may double
their efforts for you in the future.