Managing Paradox for Profitability - A case study on paradox management between Revenue- and Key Account Management within the hospitality industry

Abstract: This paper describes a case study within the hospitality industry that is known for applying the accounting techniques Revenue Management and Key Account Management for revenue maximization and increasing profitability. The study aims to describe conflicts of interests between the two techniques and how these are managed within the organization. Using Lewis' (2000) paradox framework, we describe the identified conflicts of interests as interrelated and interlinked underlying tensions, being enforced by reinforcing cycles (differentiation) and mitigated by management tactics (integration). The study shows the active application of KPIs and the Budget by various members within the organization as the main differentiating and integrating tactics for managing cross-functional tensions. Last, the results indicate the beneficial effect on performance by following an active strategy that embraces existing tensions.