Final EXAM TOTAL QUALITY MANAGEMENT

Case analysis

I.

POINT OF VIEW
Its unclear what turn the corporate espionage case between Starwood Hotels &
Resorts Worldwide and Hilton Worldwide might take now that federal prosecutors are
asking for that case to be halted so as not to taint a criminal investigation into the
matter, outside observers say.

II.

BRIEF SUMMARY
REPORT FROM THE U.S.Its unclear what turn the corporate espionage case
between Starwood Hotels & Resorts Worldwide and Hilton Worldwide might take
now that federal prosecutors are asking for that case to be halted so as not to taint a
criminal investigation into the matter, outside observers say.
The government is seeking a six-month stay of discovery in the civil suit, according
to a 14-page filing made 19 February by the office of Preet Bhara, U.S. Attorney for
the Southern District of New York, where the civil case was filed. The government,
which has already begun interviewing certain individuals, intends to conduct more
interviews with witnesses during the next several months.
Federal intervention
Its a pretty unusual step, said Steven Gutierrez, partner and chairman of the labor
and employment group in the Denver office of law firm Holland & Hart. Its not
often that we see prosecutors intervening (in such cases). Of course, its high-profile
and the scope and depth of the theft is probably what put it over the top. Still, other
attorneys contacted insist the federal government does often get involved in Securities
and Exchange Commission-related matters.
Starwood last April sued Hilton and accused the hotelier along with former Starwood
executives Ross Klein and Amar Lalvani, who were responsible for overseeing
Hiltons luxury and lifestyle brands and segments, of pilfering massive amounts of
electronic files after being recruited to Hilton in May and June 2008.
Unclear next move
Outside observers and attorneys contacted by HotelNewsNow.com were mixed in
their opinions about whether the governments motion to intervene would be granted.

STATEMENT OF THE PROBLEM/OPPORTUNITY

Federal officials are concerned about the potential ramifications of the similarity
between the civil and criminal proceedings.
A stay is appropriate, because, among other things, the plaintiff in this action has
actively pursued discovery with a view towards finding out what has occurred
between various witnesses and the United States Attorneys Office, the filing states.
Moreover, potential defendants in the criminal case would otherwise be able to use
the broad civil discovery rules to obtain information that they could not obtain in the
criminal case and then tailor their testimony and defenses to conform with the
governments proof.
Among the evidence the government said Starwood has subpoenaed include: all
documents between defendants concerning the criminal investigation; all documents
concerning communication with the U.S. Attorneys Office; and copies of subpoenas
connected with the investigation.
In sum, the government will suffer irreparable prejudice if the parties are permitted
to obtain civil discovery prior to the conclusion of the governments criminal
investigation, the filing reads.
Rebekah Carmichael, a spokeswoman for the U.S. Attorneys Office for the Southern
District of New York, declined to comment beyond what was disclosed in the filing.

III.

OBJECTIVES

To know the reasons behind the Starwood Hilton case.

Seeking for proofs and suspects

The case exist in the environment wherein there is a threat and opportunity.

Strength
Brand Recognition
Hilton has a good
reputation and their
name ius well
Diversification of
products Hilton is
more than hotels.
They also generate
revenue from
gaming and
entertainment

Weakneses

Diversity foes not

automatically insure
succes, it does help
the company to
balance out its
proffit across the
business.

Opportunitie
s

Threats
Hilton Hotels has become
a worldwide name, which
has ventured out into
franchise hotels, casinohotels and inns, operates a
computerized reservation
system, selling furnisher,
equipment and supplies.
Within any line of
business the fear of
competition turns out to be
an issue. The hilton hotel
started with one hotel and
progressed into hotel
chains all over the world.
Demands within the hotel
business forced hilton to
develop an aggressive
business operation. Hilton
decided to undertake
gambling which forced
Hilton into the casinos
world.

CONTRIBUTIONS OF THE INDUSTRY

A. Technological aspects
Starwood Hotels & Resorts worldwide and Hilton Worldwide uses high
technology equipments for their business firms and contribute a lot in
terms of technology for every kind of process.
B. Socio-Cultural
Starwood Hotels & Resorts Worldwide and Hilton Worldwide contributed
a lot in the industry in the sense of their individual business firms that
provides good services to the society.

C. Economic
They contribute increase of income in the economy being a worldwide
hotels and casinos by generating funds through their business firm.
Starwood Hotels & Resorts Worldwide and Hilton Worldwide provide the
individuals the needs and wants and giving them the oppurtunity to the
needy.
D. Political/Legal
Federal officials are concerned about the potential ramifications of the
similarity between the civil and criminal proceedings. Federal officials are
seeking a six-month stay of discovery in the civil suit, according to a 14page filing made 19 February by the office of Preet Bhara, U.S. Attorney
for the Southern District of New York. The government, which has already
begun interviewing certain individuals, intends to conduct more
interviews with witnesses during the next several months, the filing said.
IV.

ALTERNATIVE COURSES OF ACTION

Alternative Course of Action 1 Federal intervention
Pros
Starwood last April sued Hilton and

accused the hotelier along with former

Starwood executives Ross Klein and
Amar Lalvani, who were responsible
for overseeing Hiltons luxury and
lifestyle brands and segments, of
pilfering massive amounts of electronic
files after being recruited to Hilton in
May and June 2008.

Cons
Still, other attorneys contacted insist
the federal government does often get
involved in Securities and Exchange
Commission-related matters.

Alternative Course of Action 2 Unclear next move

Pros
Cons
Outside observers and attorneys
Determining the likelihood of
contacted by HotelNewsNow.com
going right or left? he asked.
were mixed in their opinions
Thats pretty difficult.
about whether the governments
motion to intervene would be
granted.

Alternative Course of Action 3 Starwood responds

Pros
Cons
In the filing, Starwood said it
A spokesman for Starwood had
respects the governments right to
previously declined comment on
intervene, but the hotelier has
the governments motion.
asked the court to deny a full stay
of discovery in the case. Instead,
Starwood has requested a more
limited stay of particularized
discovery so that the interests of
the government and the victim
Starwoodcan both be
protected.

V.

CONCLUSION/RECOMMENDATION

According to papers filed Dec. 22 with the U.S. District Court for the Southern
District of New York, a court-appointed monitor will ensure that Hilton complies
with the conditions. Among them: Hilton cannot use or distribute any Starwood
information; until 2013, Hilton cannot acquire, manage or own any Starwood
Lifestyle Brand hotel currently owned, operated or licensed by Starwood; Hilton
cannot hire any Starwood employee to work within or above the Hilton Luxury &
Lifestyle group before 2013. At this point it's unlikely Klein and Lalvani will be
pursued for criminal charges, said M&C legal expert Jonathan Howe, Esq.,
president of Howe & Hutton. "In a sense, the timing was a little fortunate for
Hilton," noted Howe. "It prevented them from opening a new brand just as the
market went so far south."
I therefore conclude that Starwood Hotels & Resorts worldwide and Hilton
Worldwide is the most valuable firms that is published throughout the world not
in their bad reputation but in their good ones.