Organisational Audit of Cibo Espresso - Case Study Example

Cibo Espresso: A Report on Organisational Audit and Recommendations Table of Contents Introduction 1 This is an organisational audit and recommendations report on Cibo Espresso. The report is based on an assessment of how prepared and capable the organisation is to deal with the following issues: globalisation, outsourcing, ethics, deregulation, internet technology and sustainable environmental management. The impact of other factors such as the global financial crisis, skills shortages and changes in the Australian demographics are also evaluated. Since these issues have been recognised as some of the key factors that are shaping the operations and strategies of players in the tourism and hospitality industry in general, it is important for Cibo Espresso to be not only ready tackle them but also capable of responding effectively to the changes initiated by these factors. This is important for the success of the organisation both in the short- and long-term basis. The report is divided into three major sections. In the first section, background information about the organisation and the tourism and hospitality industry in general is given. This is followed by a detailed assessment of how prepared the organisation is to respond to the key issues of concern in the second section. Lastly, the third section of the report is based on general recommendations for improvement. Several recommendations on how the organisation can improve its capacity in order to effectively respond to the issues of concern are presented in this section. 1 Background 1 Cibo Espresso is a coffee shop and cafe franchise operating in Australia. Started back in the year 2000, the organisation has grown into 16 outlets operating in different locations within Adelaide in Australia (Cibo 2014, n.pag). The outlet differentiates itself by seeking to provide a completely Italian menu to its clients. With its different outlets located in different locations, the organisation targets a wide range of clients. However, its primary market segment is composed of the business population and university students operating in areas in which its outlets are located. 2 The effects of changes in the tourism and hospitality industry are reflected in new strategies being adopted by players and regulatory bodies in the industry. According to Tourism Australia (2013, p. 4), the strategic objectives for the tourism industry in Australia by the year 2020 are based on six strategic areas as follows: the Asia markets, digital capability, regulatory reforms, environmental management, labour management and overall productivity. Further, it is observed that the changes in the local tourism industry are in response to wider changes taking place in the global economy (Tourism Research Australia 2013, p. 14). It is in response to these strategic objectives and changes to both the local and global economic trends that different players in the industry are required to put in place necessary measures. 2 This report is based on an assessment of how the organisation is prepared to handle the issues that are regarded as being of primary concern to players in the hospitality industry. The audit was carried out in the form of an interview with one of the members of the management team of the organisation. The interview was based on examining a broad range of issues that are important for the tourism and hospitality industry in general and Cibo Espresso in particular. 3 Assessment 3 The assessment is based on the different ways in which Cibo Espresso is prepared to handle several changes taking place within the industry. This information is presented in the sections that follow. 3 Globalisation 3 Theoretically, globalisation, which acts as a powerful force that shapes social, cultural and economic integration in the world, has a direct impact on the tourism and hospitality industry. This is because of the relationship between economic development and increased demand for tourism services across the world. As a result of overall improvements in economic performance, followed by increased integration among different regions of the world, the level of activity and diversity of tourist destinations in the sector improves in different regions of the world (Holowiecka, Grzelak-Kostulska & Kwiatkowski 2011, p. 56). 4 In general, the impact of globalisation for Cibo restaurant is felt in several ways. One way in which this trend is important to Cibo is that globalisation, which increases the level of cultural and social integration among different nations, will lead to an increased number of new visitors into Australia. From the assessment, it is seen that the primary market segment of the outlets comprises the business community and students. As such, growing numbers of students from different countries will translate into increased demand for the products of the organisation. On the other hand, since most of the students will be from China and other Asian countries, there is need for the company to respond to their different needs and meet their expectations. 4 It can also be seen that the members of staff of the organisation are from different cultural and national backgrounds. With changes in immigration laws arising from the need to increase the mobility of labour into the country, the number of skilled and unskilled workers in Australia is set to increase. Because of this, the organisation has put in place several measures to leverage on such changes arising from globalisation. For example, the organisation endeavours to factor in different cultural values brought in by its employees from different regions of the world. Also, from the assessment done at the restaurant, it can be seen that as a way of fostering the right Australian values among its employees, the organisation trains its multicultural staff on several aspects of the Australian culture. This is important in helping them offer efficient services to clients. Lastly, with an increase in the number of customers from different cultural backgrounds, the organisation seeks to cater for their different needs by offering personal customer service experience. 5 Outsourcing 5 In general, outsourcing is beneficial to organisations in that it enables them to cut down on operational costs, develop important partnerships and improve their overall performance (McIvor 2005, p. 21). There are several ways in which Cibo Espresso has developed its capacity to deal with trends in the hospitality industry with regard to the practice of players outsourcing their different services to other players in different regions of the world. To begin with, the organisation receives all its food products from Cibo Espresso Patisserie. This practice of outsourcing some non-core operations to other operators is beneficial to the organisation in several ways. For example, since nothing is prepared at the cafes, the management of the cafes is able to focus on key operations such as customer service, hence enhancing its overall performance in the market. 6 Secondly, with changes in the industry resulting from competition between traditional standalone restaurants and hotel-owned ones, Cibo Espresso has put in place measures to ensure that it remains competitive in the market. One way is by offering unique and highly innovative products and services to clients. To this end, Cibo has sought to establish and maintain close relationships with its client base. This has been done through increased engagement with them on different platforms. It can be seen that the ability to develop efficient service offering to its customers is a result of outsourcing its non-core operations to other partners. This has allowed the business to concentrate on its core processes. 6 Thirdly, Cibo Espresso has developed important partnerships with different other organisations offering different services. These include South Australian Police, Zamberos and Miller Apartments. By developing strategic partnerships with such organisations, the company is able to outsource its various processes to the partners, thus having sufficient time to concentrate on its core operations and gain a competitive advantage as a result. 7 Ethics 7 Theoretically, there several ways in which issues of ethical consideration are important for organisations operating in the tourism and hospitality industry. According to Keating (2008, p. 3), ethical issues touch on different stakeholders and processes in the entire tourism industry including the demand and supply side of the industry. Whereas the supply-side ethical issues include different activities and roles of stakeholders in the country from which the tourists come, demand-side ethical issues touch on how players in the destination areas carry out their business activities. Key service providers on the demand side are hotels, restaurants and entertainment service providers. 8 There are several ways in which Cibo Espresso seeks to enhance ethical considerations in its operations. These initiatives tie in with the overall trend in the industry in which customers, operators and other stakeholders play different roles in enhancing ethical practices within the industry (Chafe 2005, p. 4). One way is through a sustained engagement in different corporate social responsibility activities within the society in which the organisation operates. The initiatives in which the organisation is involved include participation in university events, sponsorship activities for cycling teams, street party activities during the festive season and sponsorship of various arts events in the area. By participating in a wide range of social and sporting activities, it can be seen that the organisation has established its reputation as a responsible corporate citizen in the region. 8 The second way in which Cibo has put in place measures to ensure that it enforces ethical standards in its operations and that of the entire industry is through ensuring that there is compliance with various regulations and standards applicable to players within the industry. In general, research has indicated that tourists and other customers take into account the ethical standing and reputation of the different organisations they are visiting as well as the costs and quality of the services provided when making choices (Chafe 2005, p. 5). Since the ethical standing of different organisations is measured by how responsible they are in managing their operations, among other issues, Cibo has endeavoured to develop an image of being an ethically responsible organisation. 9 Deregulation 9 In general, deregulation for Cibo Espresso is seen in the form of different legislations and regulations developed to guide labour relations within the tourism and hospitality industry in Australia. According to the International Labour Organisation (ILO) (2014, n.pag), labour relations within the tourism and hospitality industry remain poor despite the fact that the sector is one of the fastest growing ones in the global economy. The level of fragmentation within the industry has led to poor working conditions for workers in organisations operating in the industry. It is because of this that the authorities in Australia have initiated different forms of labour reforms within the sector. Starting from the early 1990s, the authorities have sought to introduce decentralisation, labour flexibility and general reference to the labour relations within the tourism and hospitality industry of the country (Buultjens & Orme 2002, p. 108). 10 From the audit, it can be seen that Cibo Espresso is facing challenges in complying with the penalty rates under the current industrial relations regulations in the country. Since the organisation does not operate its outlets on Sundays and closes early on Saturdays, it finds it difficult to pay employees under the current penalty rates. What this means is that the company does not have the right measures in place to tackle different other challenges that may arise from official initiatives to enhance flexibility, decentralisation and other forms of reforms to industrial relations within the industry. 10 Internet and customer-driven technology 10 According to a report by Dwyer et al. (2008, p. 35), the tourism and hospitality industry is currently being affected by several trends and developments in the information and communication technologies. One key trend is the use of information and communication technologies as an important tool of management in achieving competitive advantage in the industry. The second one is the use of social networking sites as a means of enhancing engagement with different stakeholders as well as all marketing tools for the products of organisations operating in the industry (Dwyer et al. 2008, p. 36). 11 It can be seen that Cibo Espresso has put in place the right measures to take advantage of these trends in the use of information and communication technology. For instance, the organisation uses various forms of information and communication technology (ICT) in its communication practices both within the organisation and with the clients and other stakeholders. The second way in which the organisation is using ICT is in the process of ordering for the store. Through these processes, the organisation has managed to effectively use information and communication technology as a way of easing the communication process during its operations. 11 Apart from using ICT as a communication tool with different stakeholders and as a result enhancing its management practices, the organisation has managed to engage with its customers through popular social networking sites. The popularity of use of social networking sites by organisations has growth in the recent past with the knowledge that such pages can be used not only as new marketing platforms by organisations but also as a means of engaging with the existing and potential clients of organisations (Bradley & McDonald 2013, n.pag). 12 Environmental management and sustainability 12 Since Cibo Espresso operates within the broad tourism and hospitality industry in Australia, its activities are affected by the general framework on environmental conservation that operates in the industry. There are several ways in which the organisation has put in place measures to ensure that its operations do not compromise the environment of the area in which it operates. For example, the company has developed and adopted what can be described as environmental best practices to ensure that its negative impact on the environment is at a minimum. This approach is in tandem with what is happening at the global stage with many players in the tourism industry seeking accreditation schemes to attest their commitment to environmental conservation (OECD 2003, p. 42). 13 One important area of concern for Cibo is waste and sewerage disposal. According to Sunlu (2003, p. 264), improper disposal of solid waste, poor management of sewerage systems and littering activities by both clients and operators in the tourism industry are responsible for environmental damage in different areas. This is because such practices degrade the environment and endanger the lives of several species in the ecosystem. It is in recognition of this phenomenon that the organisation has put in place a regular cleaning roster to ensure that both the premises and its surroundings are clean at all times. Secondly, Cibo regularly collects general waste and organic waste which is generated from its operations. The generated waste products are collected by the local city authority for either disposal or recycling. This way, Cibo ensures that its premises and the surrounding areas are free from garbage and other forms of wastes. This minimises the impact that littering and uncollected damage would have on the environment if not collected in time and properly disposed. 13 Skills shortage, the global financial crisis and changes in Australian demographics 14 There are several ways in which Espresso is prepared to handle the issues of skills shortages within the tourism and hospitality industry in Australia. According to a report by Service Skills Australia (2009, p. 6), the shortage in the number of skilled employees within the industry in Australia can be attributed to a number of factors arising from inadequacies within the industry itself and the general external socio-economic environment. It has already been seen that Cibo Espresso seeks to instil the right skills in its workforce as a way of enhancing overall service delivery. This is an important step that will enable the organisation to attract, train and retain the right employees. 14 There is a direct link between economic crises in general and the tourism sector. This is because a downturn in economic performance translates into a decline in the tourism activities. The tourism and hospitality industry in Australia was greatly affected by the global financial crisis of 2007/2008. A decline in overall tourist activity following the effects of the crisis and the subsequent recession has been experienced across the industry in different regions of the country (Commonwealth of Australia 2009, p. 16). Although these effects may not have a direct impact on the operations of Cibo Espresso, it can be seen that the organisation is likely to be heavily affected by a decline in economic activity. This is because it has not developed appropriate diversification strategies to minimise the impact of a possible economic downturn. 14 Changes in Australian demographics will have an impact on the tourism and hospitality sector in several ways. One common effect will be in the form of increased tourism flows within the country as a result of an increase in the proportion of resource-rich but time-poor individuals (Dwyer et al. 2008, p. 16). Although this segment of the population does not form the primary target market for Cibo Espresso, there is need for the organisation to develop innovative concepts to capture this potential market. 15 Conclusion 16 This report has presented an evaluation of how best Cibo Espresso is prepared to handle several changes that are taking place within the tourism and hospitality industry in Australia. From the assessment, it can be seen that the extent to which the organisation is prepared to tackle the changes in the industry varies with specific forces of change. For example, the organisation is well prepared to tackle issues of outsourcing and globalisation. This is seen in the extent to it has outsourced its non-core operations to other partners in the industry. Similarly, its engagement in corporate social responsibility initiatives within the society in which it operates has helped it develop an image of an ethically responsible organisation. Further, Cibo is well equipped to handle changes in the form of the growing need for sustainable environmental management practices. Through its various policies, Cibo has ensured that its operations have the minimum negative impact on the surrounding environment. On the other hand, the organisation is not sufficiently equipped to handle changes in labour relations within the industry. Lastly, there is need for the organisation to enhance its use of internet technology and customer-driven technologies as well as training programmes for its employees. Whereas increased use of technology will enhance the level of engagement, improvements in skills training will enable the organisation to have well trained, adequately skilled and sufficiently remunerated employees. This is necessary as a way of developing an advantage over its competitors within the industry. 16 References 17 Bradley, A & McDonald, M 2013, The social organisation: how to use social media to tap into the collective genius of your customers and employees, Harvard Business Press, New York. 17 Buultjens, J & Orme, F 2002, ‘Industrial relations reform and the small business sector,’ The Drawing Board: An Australian Review of Public Affairs, vol. 3, no. 2, pp. 105–120, viewed 26 May 2014, 17 Chafe, Z 2005, ‘Consumer demand and operator support for socially and environmentally responsible tourism’, CESD/TIES Working Paper No. 104, viewed 26 May 2014, http://www.rainforest-alliance.org/branding/documents/consumer_demand.pdf> 17 Cibo 2014, ‘The Cibo story’, viewed 26 May 2014, 17 Dwyer L, Edwards D, Mistilis N, Roman C, Scott N & Cooper C 2008, ‘Megatrends underpinning to 2020: analysis of key drivers for change’, CRC Technical Reports, viewed 27 May 2014, 19 Holowiecka, B Grzelak-Kostulska, E & Kwiatkowski, G 2011, ‘Impacts of globalisation on tourist preferences and activity’, viewed 27 May 2014, 19 ILO 2014, ‘Hotels, catering and tourism sector’, viewed 27 May 2014, 19 Keating, B W 2008, ‘Managing ethics in the tourism supply chain: the case of Chinese travel to Australia’, viewed 26 May 2014, 19 McIvor, R 2005, The Outsourcing Process, Cambridge University Press, Cambridge. 19 OECD 2003, ‘National policy tourism review of Australia’, viewed 26 May 2014, 19 Sunlu, U 2003, ‘Environmental impacts of tourism’, viewed 26 May 2014, 20 Tourism Australia 2013, ‘Working with tourism Australia: global marketing prospectus 2014/15’, viewed 26 May 2014, 20 Tourism Research Australia 2013, Tourism Forecasts, viewed 26 May 2014, 20 Introduction This is an organisational audit and recommendations report on Cibo Espresso. The report is based on an assessment of how prepared and capable the organisation is to deal with the following issues: globalisation, outsourcing, ethics, deregulation, internet technology and sustainable environmental management. The impact of other factors such as the global financial crisis, skills shortages and changes in the Australian demographics are also evaluated. Since these issues have been recognised as some of the key factors that are shaping the operations and strategies of players in the tourism and hospitality industry in general, it is important for Cibo Espresso to be not only ready tackle them but also capable of responding effectively to the changes initiated by these factors. This is important for the success of the organisation both in the short- and long-term basis. The report is divided into three major sections. In the first section, background information about the organisation and the tourism and hospitality industry in general is given. This is followed by a detailed assessment of how prepared the organisation is to respond to the key issues of concern in the second section. Lastly, the third section of the report is based on general recommendations for improvement. Several recommendations on how the organisation can improve its capacity in order to effectively respond to the issues of concern are presented in this section. Background Cibo Espresso is a coffee shop and cafe franchise operating in Australia. Started back in the year 2000, the organisation has grown into 16 outlets operating in different locations within Adelaide in Australia (Cibo 2014, n.pag). The outlet differentiates itself by seeking to provide a completely Italian menu to its clients. With its different outlets located in different locations, the organisation targets a wide range of clients. However, its primary market segment is composed of the business population and university students operating in areas in which its outlets are located. The effects of changes in the tourism and hospitality industry are reflected in new strategies being adopted by players and regulatory bodies in the industry. According to Tourism Australia (2013, p. 4), the strategic objectives for the tourism industry in Australia by the year 2020 are based on six strategic areas as follows: the Asia markets, digital capability, regulatory reforms, environmental management, labour management and overall productivity. Further, it is observed that the changes in the local tourism industry are in response to wider changes taking place in the global economy (Tourism Research Australia 2013, p. 14). It is in response to these strategic objectives and changes to both the local and global economic trends that different players in the industry are required to put in place necessary measures. This report is based on an assessment of how the organisation is prepared to handle the issues that are regarded as being of primary concern to players in the hospitality industry. The audit was carried out in the form of an interview with one of the members of the management team of the organisation. The interview was based on examining a broad range of issues that are important for the tourism and hospitality industry in general and Cibo Espresso in particular. Assessment The assessment is based on the different ways in which Cibo Espresso is prepared to handle several changes taking place within the industry. This information is presented in the sections that follow. Globalisation Theoretically, globalisation, which acts as a powerful force that shapes social, cultural and economic integration in the world, has a direct impact on the tourism and hospitality industry. This is because of the relationship between economic development and increased demand for tourism services across the world. As a result of overall improvements in economic performance, followed by increased integration among different regions of the world, the level of activity and diversity of tourist destinations in the sector improves in different regions of the world (Holowiecka, Grzelak-Kostulska & Kwiatkowski 2011, p. 56). In general, the impact of globalisation for Cibo restaurant is felt in several ways. One way in which this trend is important to Cibo is that globalisation, which increases the level of cultural and social integration among different nations, will lead to an increased number of new visitors into Australia. From the assessment, it is seen that the primary market segment of the outlets comprises the business community and students. As such, growing numbers of students from different countries will translate into increased demand for the products of the organisation. On the other hand, since most of the students will be from China and other Asian countries, there is need for the company to respond to their different needs and meet their expectations. It can also be seen that the members of staff of the organisation are from different cultural and national backgrounds. With changes in immigration laws arising from the need to increase the mobility of labour into the country, the number of skilled and unskilled workers in Australia is set to increase. Because of this, the organisation has put in place several measures to leverage on such changes arising from globalisation. For example, the organisation endeavours to factor in different cultural values brought in by its employees from different regions of the world. Also, from the assessment done at the restaurant, it can be seen that as a way of fostering the right Australian values among its employees, the organisation trains its multicultural staff on several aspects of the Australian culture. This is important in helping them offer efficient services to clients. Lastly, with an increase in the number of customers from different cultural backgrounds, the organisation seeks to cater for their different needs by offering personal customer service experience. Outsourcing In general, outsourcing is beneficial to organisations in that it enables them to cut down on operational costs, develop important partnerships and improve their overall performance (McIvor 2005, p. 21). There are several ways in which Cibo Espresso has developed its capacity to deal with trends in the hospitality industry with regard to the practice of players outsourcing their different services to other players in different regions of the world. To begin with, the organisation receives all its food products from Cibo Espresso Patisserie. This practice of outsourcing some non-core operations to other operators is beneficial to the organisation in several ways. For example, since nothing is prepared at the cafes, the management of the cafes is able to focus on key operations such as customer service, hence enhancing its overall performance in the market. Secondly, with changes in the industry resulting from competition between traditional standalone restaurants and hotel-owned ones, Cibo Espresso has put in place measures to ensure that it remains competitive in the market. One way is by offering unique and highly innovative products and services to clients. To this end, Cibo has sought to establish and maintain close relationships with its client base. This has been done through increased engagement with them on different platforms. It can be seen that the ability to develop efficient service offering to its customers is a result of outsourcing its non-core operations to other partners. This has allowed the business to concentrate on its core processes. Thirdly, Cibo Espresso has developed important partnerships with different other organisations offering different services. These include South Australian Police, Zamberos and Miller Apartments. By developing strategic partnerships with such organisations, the company is able to outsource its various processes to the partners, thus having sufficient time to concentrate on its core operations and gain a competitive advantage as a result. Ethics Theoretically, there several ways in which issues of ethical consideration are important for organisations operating in the tourism and hospitality industry. According to Keating (2008, p. 3), ethical issues touch on different stakeholders and processes in the entire tourism industry including the demand and supply side of the industry. Whereas the supply-side ethical issues include different activities and roles of stakeholders in the country from which the tourists come, demand-side ethical issues touch on how players in the destination areas carry out their business activities. Key service providers on the demand side are hotels, restaurants and entertainment service providers. There are several ways in which Cibo Espresso seeks to enhance ethical considerations in its operations. These initiatives tie in with the overall trend in the industry in which customers, operators and other stakeholders play different roles in enhancing ethical practices within the industry (Chafe 2005, p. 4). One way is through a sustained engagement in different corporate social responsibility activities within the society in which the organisation operates. The initiatives in which the organisation is involved include participation in university events, sponsorship activities for cycling teams, street party activities during the festive season and sponsorship of various arts events in the area. By participating in a wide range of social and sporting activities, it can be seen that the organisation has established its reputation as a responsible corporate citizen in the region. The second way in which Cibo has put in place measures to ensure that it enforces ethical standards in its operations and that of the entire industry is through ensuring that there is compliance with various regulations and standards applicable to players within the industry. In general, research has indicated that tourists and other customers take into account the ethical standing and reputation of the different organisations they are visiting as well as the costs and quality of the services provided when making choices (Chafe 2005, p. 5). Since the ethical standing of different organisations is measured by how responsible they are in managing their operations, among other issues, Cibo has endeavoured to develop an image of being an ethically responsible organisation. Deregulation In general, deregulation for Cibo Espresso is seen in the form of different legislations and regulations developed to guide labour relations within the tourism and hospitality industry in Australia. According to the International Labour Organisation (ILO) (2014, n.pag), labour relations within the tourism and hospitality industry remain poor despite the fact that the sector is one of the fastest growing ones in the global economy. The level of fragmentation within the industry has led to poor working conditions for workers in organisations operating in the industry. It is because of this that the authorities in Australia have initiated different forms of labour reforms within the sector. Starting from the early 1990s, the authorities have sought to introduce decentralisation, labour flexibility and general reference to the labour relations within the tourism and hospitality industry of the country (Buultjens & Orme 2002, p. 108). From the audit, it can be seen that Cibo Espresso is facing challenges in complying with the penalty rates under the current industrial relations regulations in the country. Since the organisation does not operate its outlets on Sundays and closes early on Saturdays, it finds it difficult to pay employees under the current penalty rates. What this means is that the company does not have the right measures in place to tackle different other challenges that may arise from official initiatives to enhance flexibility, decentralisation and other forms of reforms to industrial relations within the industry. Internet and customer-driven technology According to a report by Dwyer et al. (2008, p. 35), the tourism and hospitality industry is currently being affected by several trends and developments in the information and communication technologies. One key trend is the use of information and communication technologies as an important tool of management in achieving competitive advantage in the industry. The second one is the use of social networking sites as a means of enhancing engagement with different stakeholders as well as all marketing tools for the products of organisations operating in the industry (Dwyer et al. 2008, p. 36). It can be seen that Cibo Espresso has put in place the right measures to take advantage of these trends in the use of information and communication technology. For instance, the organisation uses various forms of information and communication technology (ICT) in its communication practices both within the organisation and with the clients and other stakeholders. The second way in which the organisation is using ICT is in the process of ordering for the store. Through these processes, the organisation has managed to effectively use information and communication technology as a way of easing the communication process during its operations. Apart from using ICT as a communication tool with different stakeholders and as a result enhancing its management practices, the organisation has managed to engage with its customers through popular social networking sites. The popularity of use of social networking sites by organisations has growth in the recent past with the knowledge that such pages can be used not only as new marketing platforms by organisations but also as a means of engaging with the existing and potential clients of organisations (Bradley & McDonald 2013, n.pag). Environmental management and sustainability Since Cibo Espresso operates within the broad tourism and hospitality industry in Australia, its activities are affected by the general framework on environmental conservation that operates in the industry. There are several ways in which the organisation has put in place measures to ensure that its operations do not compromise the environment of the area in which it operates. For example, the company has developed and adopted what can be described as environmental best practices to ensure that its negative impact on the environment is at a minimum. This approach is in tandem with what is happening at the global stage with many players in the tourism industry seeking accreditation schemes to attest their commitment to environmental conservation (OECD 2003, p. 42). One important area of concern for Cibo is waste and sewerage disposal. According to Sunlu (2003, p. 264), improper disposal of solid waste, poor management of sewerage systems and littering activities by both clients and operators in the tourism industry are responsible for environmental damage in different areas. This is because such practices degrade the environment and endanger the lives of several species in the ecosystem. It is in recognition of this phenomenon that the organisation has put in place a regular cleaning roster to ensure that both the premises and its surroundings are clean at all times. Secondly, Cibo regularly collects general waste and organic waste which is generated from its operations. The generated waste products are collected by the local city authority for either disposal or recycling. This way, Cibo ensures that its premises and the surrounding areas are free from garbage and other forms of wastes. This minimises the impact that littering and uncollected damage would have on the environment if not collected in time and properly disposed. Skills shortage, the global financial crisis and changes in Australian demographics There are several ways in which Espresso is prepared to handle the issues of skills shortages within the tourism and hospitality industry in Australia. According to a report by Service Skills Australia (2009, p. 6), the shortage in the number of skilled employees within the industry in Australia can be attributed to a number of factors arising from inadequacies within the industry itself and the general external socio-economic environment. It has already been seen that Cibo Espresso seeks to instil the right skills in its workforce as a way of enhancing overall service delivery. This is an important step that will enable the organisation to attract, train and retain the right employees. There is a direct link between economic crises in general and the tourism sector. This is because a downturn in economic performance translates into a decline in the tourism activities. The tourism and hospitality industry in Australia was greatly affected by the global financial crisis of 2007/2008. A decline in overall tourist activity following the effects of the crisis and the subsequent recession has been experienced across the industry in different regions of the country (Commonwealth of Australia 2009, p. 16). Although these effects may not have a direct impact on the operations of Cibo Espresso, it can be seen that the organisation is likely to be heavily affected by a decline in economic activity. This is because it has not developed appropriate diversification strategies to minimise the impact of a possible economic downturn. Changes in Australian demographics will have an impact on the tourism and hospitality sector in several ways. One common effect will be in the form of increased tourism flows within the country as a result of an increase in the proportion of resource-rich but time-poor individuals (Dwyer et al. 2008, p. 16). Although this segment of the population does not form the primary target market for Cibo Espresso, there is need for the organisation to develop innovative concepts to capture this potential market. Recommendations for improvement To begin with, the management of Cibo should consider increasing its use of social networking sites as a means of engaging with its clients. Although the organisation is currently operating pages in several popular social networking sites, there is need for an increased level of engagement with the other users of social networking sites for the benefit of the company. The second recommendation regards how to deal with several reforms in labour relations within the industry. Since the organisation is operating as a franchise and does not have control over diversifying its services, there is need for the management to develop innovative ways of minimising the impact of high penalty rates for employees as a result of not operating during the weekends. The last recommendation is about how best the organisation can capitalise on the changes brought about by globalisation to develop a competitive advantage in the market. Since changes occasioned by globalisation are reflected in an increased number of foreign students getting into Australia, there is need for the organisation to develop the right strategies to take advantage of the increase in demand for its products and services that arises from such global changes. Conclusion This report has presented an evaluation of how best Cibo Espresso is prepared to handle several changes that are taking place within the tourism and hospitality industry in Australia. From the assessment, it can be seen that the extent to which the organisation is prepared to tackle the changes in the industry varies with specific forces of change. For example, the organisation is well prepared to tackle issues of outsourcing and globalisation. This is seen in the extent to it has outsourced its non-core operations to other partners in the industry. Similarly, its engagement in corporate social responsibility initiatives within the society in which it operates has helped it develop an image of an ethically responsible organisation. Further, Cibo is well equipped to handle changes in the form of the growing need for sustainable environmental management practices. Through its various policies, Cibo has ensured that its operations have the minimum negative impact on the surrounding environment. On the other hand, the organisation is not sufficiently equipped to handle changes in labour relations within the industry. Lastly, there is need for the organisation to enhance its use of internet technology and customer-driven technologies as well as training programmes for its employees. Whereas increased use of technology will enhance the level of engagement, improvements in skills training will enable the organisation to have well trained, adequately skilled and sufficiently remunerated employees. This is necessary as a way of developing an advantage over its competitors within the industry. References Bradley, A & McDonald, M 2013, The social organisation: how to use social media to tap into the collective genius of your customers and employees, Harvard Business Press, New York. Buultjens, J & Orme, F 2002, ‘Industrial relations reform and the small business sector,’ The Drawing Board: An Australian Review of Public Affairs, vol. 3, no. 2, pp. 105–120, viewed 26 May 2014, Chafe, Z 2005, ‘Consumer demand and operator support for socially and environmentally responsible tourism’, CESD/TIES Working Paper No. 104, viewed 26 May 2014, http://www.rainforest-alliance.org/branding/documents/consumer_demand.pdf> Cibo 2014, ‘The Cibo story’, viewed 26 May 2014, Commonwealth of Australia 2009, ‘The global financial crisis and regional Australia,’ A Report of the House of Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government, viewed 27 May 2014, Dwyer L, Edwards D, Mistilis N, Roman C, Scott N & Cooper C 2008, ‘Megatrends underpinning to 2020: analysis of key drivers for change’, CRC Technical Reports, viewed 27 May 2014, Holowiecka, B Grzelak-Kostulska, E & Kwiatkowski, G 2011, ‘Impacts of globalisation on tourist preferences and activity’, viewed 27 May 2014, ILO 2014, ‘Hotels, catering and tourism sector’, viewed 27 May 2014, Keating, B W 2008, ‘Managing ethics in the tourism supply chain: the case of Chinese travel to Australia’, viewed 26 May 2014, McIvor, R 2005, The Outsourcing Process, Cambridge University Press, Cambridge. 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