Multi Unit Company and MA Hospitality - Essay Example

Multi Unit Company and MA Hospitality Traditionally the hospitality industry was marked by small owner-managed restaurants or outlets or self-employed entrepreneurs managing small restaurants. The profiles of the UK units started changing in the 1970s when flatter structures became visible against the top-down control. This is the time when changes in the industry could be perceived as large groups or chains emerged with more sophisticated and strongly marketed products (Gross-Turner, 1999). Through consistency in standards and quality they could secure an increased market share. The food service sector is expanding due to the growth in travel and increase in disposable income in the hands of the people. The food service sector is a multicultural sector which continues to increase in size and diversity. The needs of multiple stakeholders have to be met and this enhances the need to manage restaurants efficiently. Gradually, due to technological advances, and competitiveness in supplies and distribution, restructuring in the industry took place. The larger organizations could react more positively to the environmental influences and could manage quality through out the supply chain – from market research to service delivery (Gross-Turner). The branded chains gradually turned to multi-site companies. This necessitated changes in the management and operations. Jones (1999) contends that the role of management changes as the firms grow in size. Long-term strategic planning and formalization of management processes and procedures become essential. Since they become geographically dispersed into multi-unit businesses, the operations management functions become challenging. The rise of large hospitality firms led to the evolution of multi-unit operations management. The firms started applying the principles of mass production and modern retailing to service units (Gross-Turner). The service sector was then closely related with the production line. A service unit organization is one where service is performed by individuals for other individuals on a one-to-one basis (Levitt, 1972). Service is intangible, heterogeneous, perishable and inseparable (Lashley & McGoldrick, 1998). A multi-unit organization has been defined as “an organization that competes in the industry with more than one unit of like concept or theme” (Olsen, Cling, Yick, TSE & West 1992). A multi-unit manager is one who is directly above the unit-manager in multi-site organizations, who is responsible for a number of like units and to whom the unit managers reported. Gross-Turner emphasizes that as firms grew in size, more layers of senior management had to be created and the services required a new approach to operational systems and organizational structures. Initially the hierarchical structures of the manufacturing companies could be seen in the hospitality sector but soon emerging management philosophies were applied to flatten these structures. Empowerment was used as a means of greater efficiency, improved employee commitment and ultimately increased customer satisfaction. This had great implications of how multi-site units were managed. The unit managers and the staff had added supervisory duties while the layers of management were reduced. This also translated into each multi-unit manager being responsible for larger number of units. Their role and responsibilities underwent drastic change and became more strategic in nature. The entire process of recruitment, training, development and level of empowerment of the multi-unit manager saw dynamic changes. The roles and responsibilities of the multi-unit manager had to be related to the corporate human resource strategy. The HR strategy has been defined as “the intensions of the corporation, both explicit and covert, towards the management of its employees, expressed through philosophies, policies and practices (Tyson, 1995). The HR has to be integrated with the business and its environment. Human resource strategy may not be effective by itself but it has to be integrated with the processes required for the business. According to Devanna et al., (1984) there has to be a fit with the business strategy. Based on the economic, political and cultural forces the business strategy is decided upon. For the large chains in the hospitality industry, due to geographical dispersions across boundaries, the supervision of skills and attitudes of service delivery employees becomes important (Gross-Turner). It thus became important to link HRM strategy with the business requirement and with the business environment. The large multi-unit organizations in the hospitality industry operate in competitive global markets and constantly search for prime locations, supplier economies and market segments (Ritchie & Riley, 2004). Their strategies are built on cost reduction, standardization and high returns to brand name capital. Since their multiple units are geographically dispersed, to maintain continuity and standards at the point of sale, operational efficiency is essential. The multi-unit manager is responsible to control multiple units within a region. The multi-unit manager works as the interface between the head office and the units. He is the motivator and the implementor of strategies. He is the ambassador and the controller (Olsen, Cling, Yick, TSE & West 1992). Ritchie and Riley however contend that the multi-unit manager does not merely play the role of an information conduit transmitting the strategic decision downwards to the customer interface operating units and report the marketing and financial statistics to the management upwards. All organizations are faced with contingency situations irrespective of strategy and structure. If the contingency that arises is within the strategy, it will be handled appropriately through the right communication process but if the contingency is unrelated to the strategies formulated, then two possibilities could arise according to Ritchie and Riley. It could still be handled perfectly well or it could require improvisation. The role of the multi-unit manager becomes important because he is more than an information conduit. He has the ability and the characteristics necessary to handle contingencies. Most contingencies in service units occur at the front line from where the human resources staff is located at a distance. The closest to handle is the multi-unit manager in the organizational structure. It first requires the multi-unit manager to interpret the contingency and then interpret the strategy and structure. This means the multi-unit manager must have knowledge of the strategy and the structure for efficient functioning. Thus it can be said that the multi-unit manager must have the ability to sense the contingency, be able to interpret and handle it which again requires him to have knowledge of the strategy and the structure. A multi-unit manager has the ability to reduce the level of uncertainties by coping with the contingencies. Changes occur even in the roles and responsibilities of the multi-unit manager which too is a contingency and the multi-unit manager is expected to respond to it in a positive way. Role Theory focuses on role behavior, expected behavior and role relationships (Willocks, 1994). Role performances can be measured in terms of meeting expectations. Role conflict arises when there is inadequate or inappropriate role definition. The emphasis has now moved from role description and the person-role fit arguments towards behavior in a role (Ritchie & Riley). It is thus concerned with open-ended component of a role. Role theory accepts that there is always a degree of uncertainty and uncertainty is seen as solely lack of clarity, ambiguity and incompleteness of these components. The role boundaries remain unclear, the tasks are vaguely defined and the workloads are indeterminate. The multi-unit managers are expected to handle whatever turns up. They are thus expected to have an open-ended quality to the role. Under such circumstances their responsibility remains unclear and hence can be held accountable for unforeseen events. When there is role ambiguity and role incompatibility, there is no clarity of role and there are more than one set of expectations, which are usually contradictory. To avoid role ambiguity and role incompatibility, and to equip the multi-unit manager to handle contingencies, empowerment becomes essential. A case study of the Harvester Restaurants chain shows how empowerment can lead to success in the multi-unit management within the hospitality sector. The Harvester Restaurants is a subsidiary and brand name owned and operated by Mitchells and Butlers. They have over 150 restaurants serving freshly prepared food round the country (Harvester website). The core concept is of family restaurant and pub. They have the restaurant service style through waiters/waitresses. The service style has an informal formality that reflects the ethos of “guests in your own home” (Ashness & Lashley, 1995). As far as the product that is served, the customers know what price to expect but service is intangible. The intangible benefits cannot be standardized and hence is dependent on the efforts of the front line staff. Empowerment has been known to encourage employees to assume responsibility for the service encounter, respond to the customer needs and make all attempts to ‘delight the customer’. Initially, they had five layers of management between the guest and the Managing Director. Each restaurant had a unit manager who was assisted by two or three assistant managers. This management team was responsible for managing everything including managing people to stock taking, ordering, deliveries and the service. Eight such restaurants had a regional manager for overall supervision. Four regional managers then were accountable to two operations managers who finally reported to the MD. So many layers were felt to be impediment to service quality and business performance. The Harvester Restaurant chain was restructured through setting up of unit-level autonomous workgroups. The firm was able to rethink its service strategy around the four tenets of culture, organization people and systems (Gross-Turner). The company could assess the strategic fit between the organizational structure, the systems employed and the service offering demanded by the brand. The managerial hierarchy was delayered of two managerial levels. The regional manager or the multi-unit manager responsible for 8-10 units under him was directly accountable to the MD. This restructuring resulted in tangible benefits like cost reduction, reduced labour turnover, continued development and expansion of the brand. Delayering of the organizational structures and empowerment has impacted the role of the multi-unit manager. In the field of empowerment Lashley (1995) contends that quality circles, autonomous work groups, suggestion schemes, “whatever-it-takes training”, etc., all represent different forms of empowerment. The empowered are likely to receive perceived benefits which could be both intrinsic and extrinsic. Delayering can thus bring about changes depending upon what the empowered can do or not do. Empowerment according to some is “vesting substantial responsibility in the people nearest the problem” while others define empowerment as “management strategies for sharing decision-making power” (Lashley, 1995). What it implies is that the individual must feel in control, have the freedom to use the power with discretion. The empowered should have a sense of personal efficacy and self-determination. Traditionally the human resource strategy involves low discretion for most employees. They have limited responsible autonomy and even the managers have their efforts closely supervised (Lashley, 1998). No importance is given to the recruitment and selection process which is often designed by the corporate office and the unit head is just asked to fill in the proforma and select. Even service delivery is scripted and has to be strictly adhered to by the service delivery staff. Employee appraisal is based on tasks performed by staff against rigid standards and then rewards are granted. The managers too are concerned with the achievements of the staff and employee commitment is limited under these circumstances. HR policies have a direct link with business performance. The HR professionals need to have certain characteristics to be successful in their role. They need to be strategists, facilitator, mentor, flexible and aware of the business environment, concern for the people, soft skills like empathy; they must have the ability to take appropriate risks (Holbeck, 2002). According to Fulford and Enz (1995) while human resource issues are important to the restaurant chain business, the human resources managers are not yet equipped to handle such issues in alignment with the firm’s strategic decision making. What is required is a strategic approach to the human resource planning. A survey of 158 managers of Midwest-based chain of quick service restaurants revealed that the unit managers were strategic partners while the human resource managers were not. It was found that the human resources managers are not able to make substantial contribution towards sharing the strategic issues that will make the company competitive. Issues like recruitment, selection and training have to be done at the unit level and this enhances the role of the unit manager against the human resources staff that is based at the corporate office. An in-depth interview (Appendix I) with the ABM, John Noakes, revealed that empowerment is the key to success in their organization. Empowerment leads to participation, involvement and commitment (Lashley & McGoldrick, 1994). Thus, even though the menu, prices, décor and service style is standardized, empowerment at the service staff level has motivated them to be sensitive to the service needs of the individual customers. Noakes mentioned that their customers include families, corporate executives and retired people. They also have repeat customers and hence sensitivity is essential. This also demands that staff turnover is low which helps to maintain continuity. Lashley (1999) suggests that the empowered is engaged at an emotional level. Empowerment should make the employee motivated; he must feel a sense of personal worth. Employees at Harvester, says Noakes have become motivated to be accountable for the service delivery. Since the motivation could be perceived in the service delivery, the staff was given further autonomy in service delivery. For instance, as Noakes, said, suppose a situation needed an immediate solution, the service staff has the power to use discretion and perhaps serve a free drink, without having to refer to his unit manager or team manager. The multi-unit manager in this case directly interacts with the unit manager and ascertains to what extent empowerment is helping in achieving the organizational objectives. At Harvester, the employees are empowered through participation because they are involved in every decision pertaining to service delivery. Noakes contends that since they are the people that interact directly with the staff, they best understand the nuances which not even the unit manager would be able to understand, let alone the human resources staff at the corporate office. The human resources staff is more concerned with the policies and procedures and is not in touch with the market-driven or location specific activities (Fulford & Enz, 1995). For instance at the time of labor shortage or during high season, as is quite common in the hospitality industry, the unit manager would use a strategic approach to attract labor but the human resources staff would have a personnel approach and just offer higher wages. This is not a solution in this industry and the unit manager would perhaps use non-traditional sources to recruit labor like retired people or teenagers during the vacations. Thus the unit manager is more equipped to apply specific strategies where necessary. At Harvester, according to Noakes, when operations are low, the front line staff has been given the autonomy to decide among them the minimum number of employees that could service efficiently. They then decide which of them would take the day off, which helps keep the employment costs low. Had this been the responsibility of the human resources department, no staff would have agreed to take off. Autonomy leads to accountability and commitment and such location specific activities have to be decided upon by the people who are present on the scene. The role of the multi-unit manager has become strategic because empowerment can also lead to control failures (Gross-Turner). Hence the multi-unit manager must have diagnostic control systems, which help to ensure that goals have been achieved efficiently and effectively; beliefs systems, which is based on empowering the employees to be innovative in service delivery; boundary systems that define the roles and clearly specify what actions must not be done by the empowered employee; the interactive control system, which requires the multi-unit manager to have regular face-to-face meetings to discuss issues and decide on actions. Noakes specified that the service industry and particularly the hospitality sector were full of tensions. Firms always aim to integrate the employee, the customer and the corporate goals. He has been with the firm for a considerable period of time and he clarified that over time certain changes have taken place as far as the policies and procedures of human resources is concerned. This is in line with Gross-Turner’s findings which suggest that growth is associated with more systematic HR approaches in the field of manpower planning, succession planning and work-team considerations. In fact, the theory suggests that HR approach is directly linked to the organizational life cycle. Naokes emphasized the importance given to clear vision and team culture at the time of staff training. Even though the efficiency and commitment in service delivery is based on individual effort, at the group or the team level certain decisions have to be taken. Empowerment does not give them the power to do just anything; it is the freedom to discharge their responsibilities in alignment with the objectives that have been set. Noakes narrated how, on one occasion, when one of the team managers could not handle a problem of the one of the service staff, another front office personnel stepped in and wanted to play the role of the team leader. This is beyond the powers that have been granted to the front office personnel and he was reminded of it. This is where the control system becomes essential to avoid chaos and disturbance within the unit. In the case of staff transfer within the chain, the multi-unit manager knows the problems at each unit under his jurisdiction, and hence is in a better position to allocate or transfer employees. At Harvester, the organization is at the growth stage and hence they have a ‘soft’ approach to HRM, which implies that the strategy, vision, goals are all communicated to the staff at all levels. This helps to foster team spirit, inculcate values which are then handed down. Each employee is recognized for his contribution, he is encouraged towards his career advancement. This is possible only when a multi-unit manager is closely in touch with the front office staff. Delayering has thus helped the Harvester chain to bring about positive changes. Gross-Turner further clarifies that a multi-unit manager is responsible for a number of unit managers who are physically distant from each other as well as from the area manager. The multi-unit manager thus has little control over the actions and behaviors of the unit managers. The interactions are limited, irregular and for short periods of time. Findings further suggest that in the restaurant sector the responsibility of the unit manager revolved around monitoring the daily performance, and taking actions if the results were not to budget and forecast. The multi-unit manager is responsible for implementing strategic imperatives with a need to manage the managers in the units. They are also responsible to ensure that the unit managers are ambitious to achieve the growth targets set by the organization. In addition they have to ensure that the profit margins are maintained. The multi-unit manager also has to motivate the unit managers to explore newer growth opportunities. Along with business development, people development and maintenance of standards are equally important. Again, business development entails capital expenditure project plans, analysis of financial performance and ensuring that the unit’s products and service systems are consistent with the brand concept. People management includes the different HR responsibilities that range from recruitment, selection to training and development, performance appraisals, rewards and motivation. The control and maintenance include customer service, hygiene, safety aspects, monitoring stock control. The multi-unit manager can only monitor these tasks or review the plans but physically he can perform some of these tasks only on the occasional visits to the units. At Harvester, the interview revealed that the responsibility of the unit manager was vital. That too did not involve much of ‘managing’ but it was the more the role of motivating and encouraging the field staff. The unit manager is the one who directly interacts with the multi-unit manager and then administers the policy decision that has been instructed to him. The unit manager finds at Harvester, that the multi-unit manager is not able to give him any on-the-spot decisions because he has to refer back to the corporate office. This indicates role ambiguity at Harvester as far as the multi-unit manager is concerned. While the field staff are empowered and so are the team managers, the unit manager and the multi-unit manager have no powers at all. In fact, both the unit manager and the multi-unit manager work as coordinators and controllers, with each having his or her own area of control. The multi-unit manager at Harvester was provided training before taking up the responsibility but despite that there is nothing to beat on-the-job experience. This is the best training that one can have because it is not feasible to foresee all the problems. According to Noakes, a multi-unit manager needs to be tactful, patient, observant, but also be firm where strategies have to be followed and where targets have to be achieved. He feels confident in his role although he finds it very challenging. Time management is another essential requirement of the role as he has to travel from one unit to another. Excellent interpersonal communication skills and the ability to maintain relations at all levels are essential. While he is usually in direct contact regularly with the unit manager, the role also requires him to acknowledge the work of the staff at the units under him. This has been found to be a great motivator in addition to the rewards and appreciation that comes from the team manager of the unit manager. As the multi-unit manager, he does stand a fair chance of being promoted as the General Manager – overall in charge of all the regional heads or the multi-unit managers. The role is stressful and hence the ability to cope with stress is necessary. Thus the multi-unit manager is the key operational interface between strategic planning and operational unit management and front-line employees. This implies he is the ambassador and implementor of the strategic decision taken at the company level. He has no role in creating strategies or even influencing the strategies. While autonomy is being granted at the level of the front line service delivery staff, there is little autonomy granted to the multi-unit manager. Their responsibility is restricted to checking, inspecting and maintaining the standards and ensuring that there is consistency across the region. Their role is more of a controller except that they are greatly responsible for motivating the unit managers. They need to have the ability to motivate the unit managers and the staff and encourage the staff to behave appropriately within the service oriented organizational culture. Hence, basically they perform some of the functions according to the hard HRM like control and monitoring performance and some of the soft HRM like motivation and sharing of goals. The multi-unit manager also needs to be tough and demanding of subordinates and must be able to deal with stress. One who can get the best out of the unit manager is a successful multi-unit manager. They must have a broader range of management skills like marketing and HRM. References: Ashness, D. & Lashley, C. (1995). Empowering service workers at Harvester Restaurants. Personnel Review, Vol. 24 No. 8, 1995, pp.17-32. Fulford, M. D. & Enz, C. A. (1995). Human Resources as a strategic partner in Multi-Unit Restaurants. Hotel & Restaurant Administration Quarterly. Vol. 36. No. 3 pp. 24-29 Gross-Turner, S. (1999). The role of the multi-unit manager in branded hospitality chains. Human Resource Management Journal; 1999; 9, 4; ABI/INFORM Global pg. 39 Jones, P. (1999). Multi-unit management in the hospitality industry: a late twentieth century phenomenon. International Journal of Contemporary Hospitality Management 11/4 [1999] 155-164 Lashley, C. (1995). Empowerment through delayering: a pilot study at McDonald’s restaurants. International Journal of Contemporary Hospitality Management, Vol. 7 No. 2/3, 1995, pp. 29-35 Lashley, C. (1998). Matching the management of human resources to service operations. International Journal of Contemporary Hospitality Management 10/1 [1998] 24-33 Lashley, C. (1999). Employee empowerment in services: a framework for analysis. Personnel Review, Vol. 28 No. 3, 1999, pp. 169-191. Lashley, C. & McGoldrick, J. (1998). The Limits of Empowerment. Empowerment in Organizations, Vol. 2 No. 3,1994, pp. 25-38 Levitt, T. (1972). Production-line approach to service. Harvard Business Review. September-October 1972 Ritchie, B. & Riley, M. (2004). The role of a multi-unit manager within the strategy and structure relationship; evidence from the unexpected. Hospitality Management. Vol. 23 pp. 145-161 Willocks, S., (1994), The Clinical Director in the NHS: Utilizing a Role-theory Perspective, Journal of Management in Medicine, Vol. 8 No. 5, 1994, pp. 68-76. Harvester website www.harvester.co.uk Appendix I Interview questions 1. Designation 2. Experience in the industry 3. Years of work at Harvester 4. Positions held at Harvester 5. Whether promoted from within the company 6. How many units under this multi-unit manager? 7. On what criteria are the units divided into groups? 8. What are the roles and responsibilities of the multi-unit manager at Harvester? 9. What are the challenges among these roles and responsibilities? 10. What are the limitations of the responsibilities as the multi-unit manager? 11. What competencies are required of the multi-unit manager? 12. Does he possess the necessary attributes for this role? 13. What is required for the success in the role of multi-unit manager? 14. Were you provided adequate training before taking over as the abm? 15. Was the training adequate to meet the challenges of the role? 16. Within the organization how many multi-unit managers are recruited from within and how many from external sources? 17. What are the future career prospects for the multi-unit managers? 18. Does he face any role ambiguity? 19. How does he perceive himself in the role of a multi-unit manager? 20. Has he been able to achieve the organizational goals in terms of growth? Read More