The relationship between organizational design and service behaviors in the hospitality industry - Essay Example

?The Relationship between Organizational Design and Service Behaviors in the Hospitality Industry Introduction It is an indisputable reality that organizational design or structure forms a principal determinant of competitive success for many organizations. It is not only an important source of innovation and growth but it also inflicts a phenomenal influence on customer satisfaction which is the essence of the hospitality industry. Literature suggests that customers are the most important stakeholders in the hospitality industry as all operations carried out primarily focus on gratifying the customers’ needs. As the name indicates, providing service profitably to people with consistence in quality and creating an atmosphere to make every individual feel exceptional forms the hallmark of the hospitality industry (Hogan 2008). It is said that this industry is itself a part of a larger group of industries called travel and tourism industry and together hospitality and tourism make up the largest industries in the world (Walker 2009, p. 4). As one of the biggest and fastest growing industries in the world, a vast amount of research is done as yet to evaluate the implications of organizational structure and service behaviors on the growth and success of this industry. “The hospitality industry includes the tourism lodgings, the catering companies, as well as the food and beverage departments operating within the lodgings” (Kapiki 2012, p. 2247). In addition to this, other sources suggest that the transportation services which include airlines, cruises, and trains, retail stores, and recreational event planning also makes up giant blocks of the hospitality industry (Kasavana & Brook, 2007). This reflects that every principal area of business in the hospitality industry particularly focuses on the customers and all efforts are accordingly directed at enhancing customer satisfaction because this means customer loyalty which is tried to be sustained by employing different organizational designs. There is a huge variation in such designs or structures which will be contemplated at length in this essay. General consensus is that organizational design has huge ramifications for the hospitality industry. Proper organizational design significantly helps in managing a smooth experience from check-in to billing (Reinhart 2012) and enables the employers to create a right impression on the community. It not only aids different organizations to maintain long-term success but also guides them to competitively struggle in the fierce marketplace as a way of meeting the customers’ dynamic preferences. Not only is the organizational design or structure the main factor influencing the organizational innovation (Lavado cited in Heydarinejad, Boushehri & Delfani 2011, p. 145) but also there is a growing need to incorporate flexible and organic structures where the personnel is especially trained to treat a diverse customer line and is given empowerment to participate in decision-making processes (Daft cited in Heydarinejad, Boushehri & Delfani 2011, p. 145). In the highly competitive present times, scrutinizing a range of organizational designs and approaches is critically important to retain success by any organization operating in the hospitality industry as a way of facing the competition and addressing the ever-growing demands of the customers (Caruana et al. cited in Heydarinejad, Boushehri & Delfani 2011, p. 145). Regarding the importance of service behaviors in the hospitality industry, it is claimed that “hospitality employees have the ability to affect the human experience by creating powerful impressions that may last a lifetime” (Walker 2009, p. 4). This is because since hospitality staff is under direct responsibility to serve people from diverse backgrounds, the customers’ future behavioral intentions are affected by the treatment they receive as they continue to get a taste of what the business is all about and how it is handled every time the staff interacts with them (Reinhart 2012). This essay basically aims at reviewing literature in an attempt to analyze what it has to say about the relationship between organizational design or structure and service behaviors in the hospitality industry and to what extent these factors individually and in combination influence the hospitality management operations. How Service Organizations can be classified? It is claimed that no service system in the world could be called foolproof as sometimes even the best service providers face difficulties in context of service delivery and customer satisfaction. Service failures occur when service delivery performance falls below the mark of customer satisfaction (Smith & Bolton cited in Huang & Lin 2011, p. 202). Therefore it is important to contemplate how service systems can be classified in terms of the kind of service the management intends to provide. Research suggests that service organizations can be classified into two broad categories namely utilitarian and hedonic. Utilitarian organizations are typically large organizations that are joined by people for monetary benefits. Providing a better service to the customers is at the core of utilitarian concept and all business organizations which generate profits and distribute salaries and wages among the employees are referred to as utilitarian organizations (Andersen & Taylor 2007, p. 152). Though companies operating on a national or international level tend to be persistent in their function still they have to be responsive also to sustain growth and reputation. This is because business organizations are under a constant pressure always to be more vigorously responsive to dynamic social environment and for this purpose, they have to integrate new and innovative beliefs and practices into their organizational design or structure as the world changes (Andersen & Taylor 2007, p. 150). Though utilitarian service organizations tend to address customer desires as the environment changes, but they do not particularly enjoy the things or functions they carry out and accordingly prefer to invest less time and efforts in getting such things done. While utilitarian services stress on things which absolutely have to be done because they are needed, hedonic services relate more to pleasure, luxury, and customer satisfaction. Now service quality and customer satisfaction form important elements and indicators of competitiveness in the present business age. The importance of service quality in terms of service management is often debated. Since service industry employs different service designs so the related benefits of what the customers prefer also fluctuate in accordance with different types of services provided. It is claimed that “while some services provide benefits of utilitarian values, other may provide hedonic values” (Lien & Kao 2008, p. 523). As mentioned earlier, utilitarian services focus primarily on fulfilling necessity and attempt to accomplish functional objectives like banking, car washing, car repair etc. On the other hand, hedonic services relate more with pleasure-seeking functions and attempt to provide emotional, unforgettable, and in a way multi-sensory experiences to the customers because customer satisfaction is linked with customer loyalty and monetary benefits in this context. Examples of hedonic services include holidaying at the beach, dining at lodges, going to spa resorts etc. (Hirshman & Holbrook 1982, p. 92). It is easy to analyze from the difference between utilitarian and hedonic services that the hospitality industry management should be based on providing quality hedonic services to the customers to ensure their loyalty and individual profitability. If service organizations intend to provide emotional aspects of the consumption experience to the customers, they should be classified as hedonic systems. But where customers are more practical and more concerned with outcomes of the services because they do not have the time or money to indulge in pleasure, the service organizations tend to get utilitarian in their functional processes. The utilitarian services stand world apart from the hedonic services and the hospitality industry should essentially focus on providing hedonic services because the essence of this industry is to provide the customers a place “where they can still be exceptional individuals and they can extend their own personality and style” (Hogan 2008). In the same way when demanding hedonic services, “customers are more concerned with the service-delivery and the evoked multi-sensual pleasure and enjoyment, captured with their experiential and affective benefits” (Lien & Kao 2008, p. 523). How a range of Hospitality Organizations can be classified? The effectiveness of different types of services provided by a range of hospitality organizations has often been contemplated and these organizations are also classified on the basis of services they provide. By far, all hospitality organizations are classified into either utilitarian or hedonic systems because all services provided are predominantly considered to be utilitarian or hedonic (Huang & Lin 2011, p. 203). But it is claimed that these two service categories are inseparable and efforts made at employing only one service model can result in disastrous consequences for an organization because many times customers want both utilitarian and hedonic benefits when buying goods or services. Customer loyalty is not ensured by providing utilitarian services alone, rather a combination of utilitarian and hedonic services makes consumers keep purchasing goods from a certain company (Hirshman & Holbrook cited in Huang & Lin 2011, p. 203). A consumer is less likely to go back to a company which provides only utilitarian services and same goes for organizations which provide services on a strictly hedonic basis. It is argued that hedonic services alone do not ensure customer loyalty and profitability in the hospitality industry. Rather, customers in the hospitality industry also require the “functional, instrumental, and practical benefits of consumption offerings” (Batra & Ahtola 1990, p. 160). Both utilitarian and hedonic services differ from each other a lot which is why different hospitality organizations appear to function in a very different way from each other also. While some focus at rational or practical task performance and address more practical needs of the customer while ignoring the sensual aspects of the consumption experience from the customer point of view, other hospitality firms tend to provide services related more to “pleasure, enjoyment, and luxury experiences such as vacation resorts, restaurants, sea resorts, and theme parks” (Batra & Ahtola 1990, p. 161; Hirshman & Holbrook 1982). Research suggests that customers are found to be more involved in analyzing hedonic services than they are in utilitarian services and this is because they like to consider not only the service outcomes but also the service process as in case of hedonic services. Most customers nowadays do not only like to but services from different companies only to accomplish specific tasks but also because they want to indulge in a good experience by way of purchasing commodities which is why customers are often found to be “more involved in hedonic services compared with utilitarian services” (Shavitt 1992 cited in Lien & Kao 2008, p. 525). Important thing to mention here is that the hospitality organizations should remember that consumption of both utilitarian and hedonic benefits associated with both types of services leads to ensuring customer loyalty. If the customers are only provided utilitarian services which have only rational benefits, they will not be satisfied. On the other hand, if the management and employees make extra efforts to give the customers a pleasurable experience, the chances of them returning again increase significantly. It is justifiably claimed that “consumer value arises from the experience that results from the consumption” (Holbrook 1994, p. 21) of both such benefits. Management operations in the hospitality industry also vary in terms of the type of service provided by the organizations. If the organization design is utilitarian, the managers focus more on improving core benefits of the service provided to increase customer satisfaction as this is an indicator of competitive advantage and also because customers are more interested in service outcomes than service process. But the hospitality managers of hedonic services should significantly stress on the delivery phase in which the customers should be treated as exceptional individuals as already mentioned plus they should be assisted by the employees as much as possible. This is because in hedonic hospitality organizations, “customers tend to use both technical quality and function quality to evaluate their service experience” (Lien & Kao 2008, p. 525). Difference in the way front-line service staff behaves in utilitarian and hedonic hospitality organizations to satisfy and exceed customers’ needs Front-line employees or service staffs in the hospitality organizations which provide utilitarian services behave in a significantly different way from the organizations which provide hedonic services as a way of increasing customer satisfaction, loyalty, and profitability. Research suggests that hedonic organizations specially require the front-line employees to establish relationships with the customers. The relationship quality of hedonic services has a remarkable effect on future behaviors of the hotel or resort’s guests because not only does it help in creating positive word of mouth but also it makes the same guests come back again and again (Chitturi, Raghunathan, & Mahajan 2008, p. 58). Such customer satisfaction ensures huge payoffs for the hospitality organizations because a report compiled by The Cornell Hospitality Industry Perspectives also claims that customer satisfaction is directly linked to great financial outcomes (Pingitore et al. 2010 cited in Kapiki 2012, p. 2249). This is why more and more hotels are now seen making huge investments to “improve service quality and the perceived value for guests and this results in better relationships with each customer” (Jones et al. 2009 cited in Kapiki 2012, p. 2249). In every hospitality environment, service quality and the extent to which customers are tried to be satisfied make up two most critically important differentiating factors now (O’Neill & Palmer 2004, p. 22). Though all hotel managers know that they need to attract customers and make them loyal to the hotel, the way by which the guests are tried to be satisfied varies from hotel to hotel. It is claimed that at the forefront of the business world is utilitarianism which though serves to provide great advantages to an organization and its shareholders, still fails to address ethical aspects of many decisions (Audi 2007 cited in Masten 2012). Therefore, utilitarianism could not be looked upon as a solid model for the business world (Masten 2012). In hedonic hospitality organizations or profit-making corporations, the managers require the staff members to actively participate in interacting with the guests (Kandampully, Mok & Sparks 2001, p. 224). In the hospitality industry which is not concerned with manufacturing products but is based on sale and delivery of services for immediate consumption (Kandampully, Mok & Sparks 2001, p. 224), the employees are the representatives of the organization they work for. In an industry such as hospitality industry where service quality is extremely important and employees all the time remain in direct contact with the customers, it is important that the managers make ample use of empowerment and motivation to make the employees perform their duties in a customer-satisfying manner. It is stressed that “in a business or industry were employees create as well as deliver a service, employers must place great faith and trust in the frontline customer service employee” (Kandampully, Mok & Sparks 2001, p. 225). The front-line staff members in hedonic hospitality organizations are advised by the managers to not merely adhere to accomplishing the rational or specific tasks but be responsive to the issues and problems experienced by the customers also. It is correctly claimed that creating a delightful and memorable experience for the customers demands “knowing and eliminating their points of pain, and then listening to their desires” (Keiningham & Vavra 2001, p. 176). Research suggests that for higher customer satisfaction in the hospitality industry, there should be effective correspondence between utilitarian value and hedonic value (Chaudhuri 2006). There should be efforts made at bridging the distance between managerial assertions in both utilitarian and hedonic organizations context and employee behavior. How employees’ attitudes, personality, perceptions and motivations positively and negatively affect how they deliver the service the organization requires Poor management and employees’ attitudes and behaviors reflective of irresponsibility and unprofessionalism can seriously interfere with the services delivered by them which are required by the hospitality organizations. There are myriad issues which have the potential to create pandemonium in an organization and deteriorate customer relationships. Employees must have sufficient reason to perform at par with the standards for the “service to be delivered in the appropriate manner and with the expected level of quality” (Kandampully, Mok & Sparks 2001, p. 223). How can the front-line employees be expected by the managers to perform in the best way under stressful conditions and especially when they are not even paid in accordance with the kind of laborious services they perform daily? Research suggests that there is very poor remuneration of employees in the hospitality industry (Woods 1999 cited in Kusluvan 2003, p. 15) and because of tight budgets, the employees feel increasingly hesitant to invest in training and development. It is reported that “nearly three-fourths of the minimum wage employees in the US work in the hospitality industry” (Woods 1999, p. 545 cited in Kusluvan 2003, p. 15). It is also observed that employees are paid the lowest in the hospitality industry in the UK (Boella 2000 cited in Kusluvan 2003, p. 15). To compensate for the low pay then, employees have to turn towards receiving tips from the customers (Wood 1994 cited in Kusluvan 2003, p. 16) which negatively affects the spirit of both utilitarianism and hedonism. Such things fuel negative attitudes, behaviors, and demotivation in the employees. Research also shows that save some large well-established organizations like Hilton and Marriott, there is quite poor “orientation and training for new or existing employees, especially at the managerial level in tourism and hospitality organizations” (Anastassova & Purcell cited in Kusluvan p. 15). As service quality and customer satisfaction have become important indicators of competitive advantage, there should be huge investments made in remunerating the employees also because otherwise, they will find no reason to deliver quality services. “Temporary employment is a pervasive feature of the hospitality industry” (Anastassova & Purcell cited in Kusluvan p. 15) which is another reason why employees here are more prone to insecurities and stress at work which affects the services delivered by them. The managers can play a significant role in either fueling or controlling the wayward perceptions and ideas of employees to improve the quality of services delivered by them. Research shows that when the managers tend to behave very strictly with some employees but develop close affiliation with the rest, the resulting imbalance cultivates rancorous attitudes in the suffering group and this affects the level of work done and quality of services provided. Overworking employees and meager wages is another issue. Such negative workplace attitudes reflect issues of inequity and injustice and research stresses that “organizational peace, communication and justice perception are very important factors in order to be successful” (Ince & Gul 2011, p. 106). When temporary employment is always an issue plus the employees' concerns are not heard, they start losing their confidence and develop low self-esteems (Katcher & Snyder 2007). “Organizations can avoid having unhappy employees by successfully addressing their concerns” (Katcher 2006). Employees form very important stakeholders in the tourism and hospitality industry (Greenwood 2008) because “they are closely integrated with the firm” (Crane & Matten 2004, p. 224) which is why one of the main concerns of the managers at hospitality organizations should be to acknowledge how their management affects the employees. This is because it is the employees who play a critical role in helping an organization meet its obligations to the customers (Chevron Texaco, 2003). Unfairness and poor wages reduce employees’ chances of gaining fair outcomes from the organization due to which they can develop feelings of stress and hopelessness (Brockner & Siegel 1996, p. 391). Injustice perceptions also foster a sense of uncertainty in employees so they tend to react negatively to it (Shao et al. 2011) and start thinking of options to reverse the situation which can exacerbate stress. How organizations can influence employees to deliver the right kind of service by designing an appropriate organization structure In response to negative workplace issues which negatively affect the services delivered by the employees, both positive organizational psychology (POP) and positive organizational behavior (POB) should be made essential elements of organizational structure in the hospitality industry. This is because massive POP research stresses that the managers should try to create a positive atmosphere at work because all positive emotions share the ability to broaden an individual’s array of thought and enduring resources (Fredrickson 2001, p. 220). POB also contributes to positive organizational outcomes like optimism and resilience which directly relate to “higher job satisfaction, work happiness, and organizational commitment” (Youssef & Luthans cited in Donaldson & Ko 2010, p. 179). Effective and fair management makes a very important part of an appropriate organization structure and the purpose of which is to make the workforce feel valued and included at the workplace. This does not often happen in the hospitality industry because focus is laid more on satisfying customers. Thinking along the lines of fair treatment is important because otherwise the employees can stop perceiving themselves as an asset for the company and service delivery process can take a wrong turn. The negative shift in management in addition to giving rise to issues like unfairness, inequity, job insecurity etc. also affects the nature of the psychological contract. Fulfilling this contract should be taken into consideration while designing organizational structure as this contract refers to the mutual perceptions and obligations between the employers and employees and tells the employees about what they are expected to do and what they should expect from their jobs. The employees should then be awarded what they are promised during selection. The employers and managers often violate this contract by taking extra advantage of the employees. Resistance to good organizational structure and management strategies develops when the employees refuse to accept or respect new ideas which can be reduced by effective cognitive dissonance instruction which is a very good option and should be integrated into organizational structure. This is because it can make both the leaders and workers to maturely contemplate the challenging or conflicting work-related ideas, strategies, and perspectives and sort out any distressing conflict that may be based on negative workplace attitudes like discrimination, nepotism, low wages, unfair treatment, inequity, and violation of contract. As a result of unbalanced treatment towards employees like favoring one group over another giving the suffering employees a good grief time and again, mental distortion speeds up and dissonance increases at a hospitality organization no matter how much stress is laid on increasing customer satisfaction. Cognitive dissonance has multiple practical applications and is basically a motivator which can significantly inspire the people working for an organization to expand their thinking visions by mutually agreeing to add new cognitions. It basically stresses that “if you change a person’s behavior, his thoughts and feelings will change to minimize the dissonance” (Groenveld cited in Jean 1999). How organizations can influence employees’ behaviors to deliver the right kind of service by developing an appropriate organization culture The antagonistic relationship between employers and employees in the hospitality industry is indicative of a poor organizational culture due to which an appropriate organizational culture should be developed to positively influence employees' behaviors. The bad relationship between managers and employees negatively interferes with the organizational culture but it can also shift to one which reflects harmony and understanding if efforts are directed by managers at developing a safe organizational culture. Disputes mostly develop because the managers feel reluctant to side with the employees and a mixture of negative attitudes like less appreciation and minimal reward for the employees curbs the positive workplace environment. Organizational commitment and performance should be made important elements of organizational culture because when they are increased, the workforce is managed in such a way that individual goals are turned into organizational goals and efforts are directed at achieving those goals. The effectiveness of solid options like business ethics, employee empowerment, employee commitment, and work commitment etc. is such that it positively affects both managers and employees and brings them closer to alleviate unnecessary distances. These not only propel the employees to deliver the right kind of service but also inspire the managers to seek and discover truth and see the issues of inequity, resistance, discrimination, poor communication, weak management, and politics at workplace with as much objectivity as possible which is increasingly important in the hospitality industry presently (Jean 1999). Factors which should be considered by the hospitality managers and should also be integarated in the organizational culture as a way of handling the out of control issues like resentment, poor renumeration, intolerance, and poor communication are “fairness, care and concern for employees, and trust” (Frank, Finnegan & Taylor 2004, p. 13). These factors can also play a significant role in increasing the level of employee commitment which is very important in the hospitality industry. If employee empowerment is made a definite and functional feature of organizational culture, it can definitely work to solve a broad range of issues faced by the hospitality organizations presently. This is because it is a multi-level strategy which can be considered “both an effective and efficient approach to employee motivation and performance” (Siebert, Silver & Randolph 2004, p. 346). In addition to that an organization's culture should also be reflective of business ethics. Unhealthy use of power in a business settlement not based on ethics leads to corrupting the workforce most definitely. It is a deplorable fact that even presently many employers and managers forget to professionally address the sensitive line between exercise of power and work ethics (Clegg, Kornberger & Pitsis 2005, p. 153). Business ethics, like employee empowerment, tend to preserve the workers’ individual identities which can be helpful in case of hospitality industry where service delivery process holds extreme importance for the customers. Gaining information from the troublesome employees at the right time by communicating with them should be considered important and this can only happen if communication is thought to be an important part of organization's culture. Research implies that correct and timely information can prove to be the most important resource for the managers to “make sound decisions regarding the problems and issues facing their organizations” (Daft & MacIntosh 1978, p. 82). The relationship between organisation design and service behaviours in the hospitality industry The above discussion proves this much that organizational design in terms of structure and culture and service behaviors are utterly inseparable in context of the hospitality industry. Both have the potential to influence one another. In absence of a good organizational design, service behaviors are negatively influenced which further produces a direct bad influence on the quality of services delivered which hold huge importance in the hospitality and tourism industry because customer are made or lost depending on the services provided. In this industry, the customers are not primarily concerned with the utilitarian benefits but instead of rational problem-solving, they also like to get the emotional consumption experience and pay a great deal of attention not only on the service outcomes but also on the service process. Similarly, the above discussion proves that in the absence of good service behaviors due to multiple negative workplace issues like poor communication, poor remuneration of employees, favoritism, discrimination, overloading of work etc., organizational design starts getting seriously affected. Research centered on the hospitality industry proves that there is an established relationship between organization design and service behaviors. Instead of a negative organizational culture and structure which benefits some selected people like the managers and ignores the concerns of the majority of employees who are poorly paid but are overworked quite often, a negative kind of workplace environment is fostered which heavily interferes with the service behaviors of the employees. To cap the matters, temporary employment also forms a prominent feature of the hospitality industry which further serves to make the employees feel paranoid, stressful, and reluctant to carry out daily functions. This also affects their level of commitment they have towards the organization they work for and the services they provide to the customers. Organizational and work commitments together are even more important in the hospitality industry because here more than anywhere else, the employees directly deal with thousands of customers on daily basis. In contrast to that, if the managers feel conscious enough to address the employee's concerns, this can have direct influence on the quality of services they provide in positive terms. Their service behaviors can be positively influenced by a broad range of effective strategies like employee empowerment, business ethics, motivation tools, communication policies, etc. Together such strategies can foster a kind of organizational design and environment in which everybody develops increased organizational commitment and leaves politics behind. Job satisfaction is also increased in this way which produces a positive impact on the service behaviors of the employees leading to increased customer loyalty and profitability. Research also stresses that such high level of commitment on part of the employees is related negatively to absenteeism and turnover (Mathieu & Zajac cited in Sahoo, Behera & Tripathy 2010, p. 45) and positively related to job satisfaction. When employees are satisfied, they feel secure and this makes their service behaviors better and effective. “Those committed to their jobs and careers are absent less and have lower intentions to quit, increased job satisfaction, and increased intrinsic motivation” (Sahoo, Behera & Tripathy 2010, p. 47). The famous Mobley model also suggests that job dissatisfaction induces an employee to quit job, think about the benefits of joining another organization, and eventually employee turnover rises (Lee 1988, p. 263). A growing body of research suggests that employee empowerment initiatives among other motivation tools and behavioral strategies directly relate with “employee participation and job satisfaction, motivation and performance, individual commitment and organizational achievement” (Sahoo, Behera, & Tripathy, 2010, p. 40). This proves that organizational designs which integrate such effective tools improve service behaviors of the employees and make them invest extra time, hard work, and brainwork in the functions they perform. Such motivated style service delivery inflicts a very different and fresh influence on the customers who already happen to be after sensual type experiences when purchasing services. There should be such organizational design in the hospitality organizations which take care to give the employees a chance to not just share their problems in a direct manner but also propose solutions. This in turn polishes their service behaviors as they are ensured a sense of belonging by the concerned managers. This also keeps them from falling behind in the functions they perform which is associated with low commitment. 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