How National Cultures Impact the Operations of Hospitality Enterprises - Literature review Example

 How National Cultures Impact the Operations of Hospitality Enterprises Marketing of services is becoming competitive, organizations are becoming global in their outlook and barriers are becoming insignificant as information technology reduces the physical distance. Under these circumstances, national culture has a significant role to play in determining the practices and operations that should be applied. Culture according to Hofstede (1997, p4) is “the collective programming of the mind which distinguishes the members of one group or category of people from another” (cited by Hope & Mühlemann, 2001). Societies have developed common set of beliefs and developed a set pattern of behavior which allows them to live harmoniously. These are handed from one generation to another. Hofstede further believes that the culture in which an individual is immersed since birth is likely to have a much stronger effect on him than the organizational culture. Thus, national cultures would have no impact upon the way organization operate across boundaries. This essay will assess to what extent national cultures impact the operations of hospitality enterprises across national boundaries. Because of the diverse nature of the industry, the hospitality industry poses range of contradictions that are faced on a daily basis. Baum and Nickson (1998) recognize that in the hospitality industry each customer is an individual in her needs and the same customer may have differing demands in different circumstances while Gilbert and Tsao (2000) emphasize that cultural differences have an important impact on the results of all aspects in business such as marketing, management, leadership and decision making. According to Hofstede (1984), different cultures imply different mental programming, which governs activities, motivation and values (cited by Gilbert & Tsao). As such, the Ritz Carlton Hotel in the USA received the Malcolm Baldridge award for quality in 1992 but encountered problems in Hong Kong. Huyton and Ingold (1995) identified culture as the main cause. The ‘best practice’ approach of USA was not feasible in this setting. The Hong King culture did not permit them to work too closely with each or to share information as ‘knowledge is power’ (cited by Hope & Mühlemann). This conforms to Hofstede’s strong versus weak uncertainty avoidance culture. The Hyatt International Hotel Group uses the familiar cultural framework as its basis for planning and providing a high-quality product. As such in Japan, the layout of the bathrooms reflected the Japanese style (Teare, 1993 cited by Hope & Mühlemann). The group’s senior management team represents eight different cultures which helped them to evaluate and incorporate the national culture right from the planning stage. Teare (1995) emphasizes that the incentive packages too have to be flexible and vary across nations. The German managers in the hospitality industry prefer incentive based on thirteen-month salary bonus rather than a non-contributory pension scheme used in USA. Global culture arouses feelings of disgust says Duncum (2001). Describing Euro Disney as ‘cultural Chernobyl’ expresses this disgust. Controlling the customer contact experience in a foreign culture is a challenge. When Euro Disney opened outside Paris, some concessions to French culture were made like adopting both English and French at the park. This had to be done to cater to varied visitors. When the service is defined by the customer contact experience, translating the required human behavior of service personnel across national boundaries becomes a challenge (McLaughlin & Fitzsimmons, 1996). Crossvergence results in convergence of two parent cultures in terms of macro-level variables. The ‘Euro Disney’ theme park development demonstrates how national cultural differences can impact the transferability of a successful service delivery system between situations (Hope & Mühlemann). While it was successful in Japan, the French national culture resisted foreign influence as it was seen as diluting the French way of life despite the organization incorporating some European characteristics and facilities. While the French management and workforce support quality and excellence in services, this was seen as American arrogance. The French applicants also lacked the team spirit to fit into Disney’s team culture. Labor schedules were rigid at the French Park while the same system had not caused any problems in USA. Another reason which affected the success of the Euro Disney in France was that the Mediterranean visitors tend to be impatient and attempted to jump the queues which upset the queuing sensitivities of the British visitors (Trigg & Trigg, 1995 cited by Hope & Mühlemann). This reveals that it is not merely the national culture but the divergence of culture due to diverse nationalities present in a particular situation. It also demonstrates that venturing into strange cultures can be a chastening experience. The front office operations depend heavily upon the cultural adaptation of the service. It is possible to globalize the back room operations as this has no direct communication with the end customers. A study of the hotel managers in Korea, Japan and Hong Kong revealed that there were significant differences between nations in the usage of the managerial practices related to the four dimensions of culture as specified by Hofstede. While there were similarities, national culture had a stronger effect than industry culture (Hope & Mühlemann). At the same time, developed nations like Australia, Europe and North America, employ a high level of immigrant labor in the hospitality industry in the front line positions. They come from diverse cultures where working autonomously from authority is a new experience. In this case, the national culture does not remain significant and it becomes even more difficult to handle the incentives and motivations to get the best out of them (Baum & Nickson, 1998). The Great Wall Sheraton Hotel Beijing is a joint venture enterprise between the American ITT Sheraton Corporation and various Chinese business partners, and operated through a management contract under the brand name of ITT Sheraton Hotels and Resorts. ITT Sheraton’s global reputation for service excellence and quality requires the Beijing hotel’s commitment to quality and customer satisfaction (Mwaura, Sutton & Roberts, 1998). The Great Wall Sheraton Hotel has its own distinct US-influenced corporate culture. US companies strongly adhere to the US cultural values of social mobility, economic achievement, closeness to the customer and productivity through people but the influence of the Chinese is present in the environment, the language, the folklore and the practices of government, business and interpersonal relations. Theorists therefore argue that the Chinese culture is a strong determinant of the ways in which organizations in China are managed. Research demonstrated areas of divergence of between national and corporate cultures, which led to management difficulties. Culture has a significant impact on perception, problem-solving and cognition and often leads to differences in satisfaction levels on the same product between global customers. Expectations differ. Levels of literacy differ and so do performance evaluation standards (Pizam & Eliss, 1999). Chinese customers are more price sensitive than the westerners. The Chinese are price conscious, while the western clients evaluate the quality against the price. Hence to market a service to the Chinese customer, the price, the brand name and the prestigious status are more important while to the western customer, the room size, security, proximity, and location will hold priority. As such the Chinese managers have to adapt to different customer expectations (Gilbert & Tsao). A study of the Chinese hotel managers revealed that most Chinese hotels are collectivist organizations (one of the dimensions of culture as studied by Hofstede) as the management needs to motivate the whole group of employees and not specific individuals. This may result in disharmony among the personnel (Gilbert & Tsao). The managers of hotels in China understand certain aspects of culture and have overcome the problems. In the fast-food outlet sector, the management is faced with the dual challenge of providing high standards of service to the satisfaction of customers both at home and across borders with their own cultural differences. According to Ritzer (1993) the fast food segment is the organizational force representing and extending the process of rationalization and encroaches on individual identity (cited by Keel, 2006). McDonald’s serves as the role model and McDonaldization is the process by which the principles of the fast-food restaurant are coming to dominate more and more sectors of American society as well as of the rest of the world. McDonald has been charged with undermining cultural diversity and destroying the viability of local communities (Rifkin, 2001) for example, in India, consumers recently trashed McDonald's restaurants for violating Hindu dietary laws. McDonald did make some adaptation to the German societal framework over time but it was essentially to protect the grand image (Royle, 1999). This does not really alter the fundamental character of the firm’s mode of operation. Locke’s analysis of cross-national changes in employment relations suggest that these variations are driven by the competitive strategies of the firms. Whether service package design be centralized or should be managed country by country has always remained an issue. Kentucky Fried Chicken (KFC) addressed this issue by sending managers to distant provinces, with hardly any expertise and practically no staff support (McLaughlin & Fitzsimmons, 1996). Each country manager was left to make a success of his own venture. The corporate staff had little choice but to conform to the US template. Franchising collapses in the face of cultural adaptation. The chain restaurants use sophisticated selection techniques as the managers are outsiders in the local community. These decision makers who hold short tenure at the hotel do not possess the same degree of knowledge, experience, contacts and influence within the hotel or within the local community. They do not understand the local labor market. They have not been able to adopt and understand the local culture which results in high turnover of staff. This also demonstrates that best practice approach is not suitable in every situation (Lockyer & Scholarios, 2004). Organization communication is very important and this prompted a cruise company to use a research instrument known as the communication climate inventory to gather data and interpret the implications for organizational climate, culture and traditions (Teare). American companies are faced with the dilemma whether or not to adapt their services to the user’s culture (McLaughlin & Fitzsimmons, 1996). For instance, Benihana restaurants have adapted the local menu but retain the original Japanese elements in terms of décor and the personnel system. A service that decides to retain its location and attract customers from around the world will have to develop the foreign language skill and cultural sensitivity of its customer contact employees. The unique feature of the location dictates the selection of the strategy. Many foreign firms enter China not to serve the local customers but to serve their corporate clients. In line with this, one of the largest business travel agencies has partnered in almost every part of the world to serve its corporate customers. They want their executives to be served adequately wherever they go but this travel agency discovered that to attract local clients it would necessarily have to amend the service package and employ local people who are familiar with local business practices. Research demonstrates that no organization can escape adapting the local culture for sustained success. There has been limitations to the research as most of the literature available is more than 5-6 years old and hence the current scenario could not be ascertained. Nevertheless, it is apparent that varied management practices cannot be universally acceptable. They are not likely to be successful in environments other than that in which they are developed. It should be noted that culture is a mechanism for governing rational behavior but it is changeable and amenable to managerial intervention. Hofstede’s study of 53 national subsidiaries of an international company revealed four characteristics – individualism versus collectivism, large versus small power distance, strong versus weak uncertainty avoidance, and masculinity versus femininity. This is clearly evident from the above analysis of the various units in the hospitality sector. The cultural aspect has to be considered in every aspect of the management – leadership, marketing, customer relationship management, recruitment and retention. The same principles apply in every segment of the hospitality sector, be it a travel agency, fast food outlets, hotels, or entertainment parks. National cultures do have a very strong impact on how hospitality enterprises operate when crossing boundaries. References: Baum, T. & Nickson, D. 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