Research Problem, research purpose, aims and objectives
Discuss about the Impact Of Outsourcing Of Non-Core Functions In The Hotel Industry.
Outsourcing is basically a business strategy which is responsible for moving certain functions, procedures and decisions from within an organisation to people or organisations which are outside providers. This is completed by means of negotiating contract agreements with a vender who takes up the duty for the procedure of production, management of people, quality, the levels of customer service and key asset managing activities. It is possible for the process to reduce the fixed overhead costs in case of an organisation.
The aim of the research is to understand the impact of outsourcing the hotel staff on the level of service or the service quality in the hotel industry as a whole. This is due to the reason that there are several instances where organisations take it upon themselves to perform certain functions and tasks and sometimes they outsource either functions or people to help in their operations. This can have either positive or negative repercussions on the organisation. This report aims to explore the given issue.
In case of the hotel industry it has been seen that be it the “laundry department, the banquet staff, the entire housekeeping operation or even in case of the revenue management team of a hotel, the outsourcing of hotel operations is a trend” which can be innovative but has a certain amount of longevity. It is usually stated that the concept of outsourcing of business operations is a trend which is expensive but there are certain added benefits of allowing the professionals to come and also perform whatever they wish to do in order to improve the quality of specific hotel operations, thereby increasing the overall guest experience. Therefore this particular report aims to discuss the impact of outsourcing staff in the hotel industry (Uçar & Bilgen, 2013).
The concept of outsourcing has become a hugely important topic which is essential in the present day scenario. This is because of the reason that hotels all over the world in order to facilitate their operations are outsourcing different aspects of their business and function just like other industries. Therefore this research is crucial and its scope is very genuine are suitable in this respect.
Outsourcing truly complicated that comprises of numerous activities as well as functions which give rise to a series of activities and functions giving rise to the series of administrative and managerial dilemmas. There are several existent theories which are there to assist the scientists in ascertaining the nature of such organisations and also to help the managers of the companies to handle the procedures in an efficient manner. Any specific phenomenon can be described by means of theoretical frameworks which are based on the analogous approaches. Therefore the concept of outsourcing is crucial (Brewer, Wallin & Ashenbaum, 2014).
Significance of the Research
The “transaction cost economics” theory has traditionally been the most widely utilized theory of outsourcing which is considered to supply the best decision making tool in order to help companies in deciding which segment of their organisation need to be outsourced. In addition to this the organisations can organize themselves for the implementation the crucial organisational changes which arise from the concept of outsourcing. The most important aspect of this model is the fact that this can be utilized for the analysis as well as the selected of outsourcing contracts.
The core competencies theory focuses on the theory of resources and is an evolutionary method. It is stated that the core competencies are the combined knowledge of a company specifically with regard to various ways of combining different productive skills as well as the integration of types of technologies. “Core competencies theory” is aimed at improving the competitiveness of an organisation.
The relational theory helps in giving ideas regarding how the enterprises might gain and keep a competitive advantage for connections with other organisations. This specific model is usually utilized to study the phases of transition, relationship management as well as reconsideration. The relational theory is extremely crucial in the sense that only this can be applied to help in the enquiry of all the phases of the outsourcing process (Neves, Hamacher & Scavarda, 2014).
The major aim of the “resource based theory” is the fact that the resources and the capabilities can differ drastically among companies and these differences can also stay stable. In case the possessions and the capacities of a company are mixed and utilized in an appropriate manner they might cause the creation of a competitive advantage for the organisation. The resource based theory is used to understand the functioning of the outsourcing procedures with respect to the IT operations which is the most valuable approach for the organisation (Neves, Hamacher & Scavarda, 2014).
There has been a huge interest in the Evolutionary economics theory and this is due to the fact that this theory has a major assumption. This assumption is that both organisations as well as individuals cannot ever be fully knowledgeable and they need to adjust and optimise their performance in the local instead of in the global level. Another important assumption is that the decision making process of the individuals and organisations is subject to certain rules and regulations. In addition to this the individuals and organisations can emulate to a certain extent the behaviour as well as the rules which are followed by their peers for gaining a certain level of self confidence and bring about innovation (Young & Macinati, 2012).
Scope of the Research
This theory explains the way in which individuals cooperate in order to produce goods and for providing services. The “knowledge based view” puts forward two major methods of knowledge sharing among the partners which include that of knowledge generation and knowledge application. This theory puts forward the idea that the idea of knowledge sharing is one of the most important success factors of an outsourcing procedure.
This theory focuses on the interpretation of the transactional relationships by utilization of the “economic cost benefit analysis”. The concept of social exchange is basically an “ongoing reciprocal process in which the actions of individuals or organisations depend on the rewarding reactions which they receive from others”.
There are several significant impacts of outsourcing. Firstly it provides the privilege to the companies to focus on their core activities. It is natural that outsourcing helps in giving proper attention to the business activities which are crucial and important in due course. In several cases outsourcing specific activities or components or people helps in the reduction of cost and efficient savings as it is seen that often foreign labour is cheaper in comparison to domestic talent. Therefore the concept of outsourcing helps the companies to decide whether they aim to hire the company temporarily or hire full time employees for their needs. It also helps the companies have control in specific operations and these companies do well in the management skills in the business as well as the companies and they also perform in an organised and systematic manner. Outsourcing can be really proper for the company and also for the business.
There are several arguments for outsourcing. This is supposed to mean that in case specialists are hired there is sufficient time to focus on the core tasks which are important for the organisation’s business. Otherwise employees usually wish to spend time which is focussed on less valuable work which does not suit a specific area of expertise.
Specialists also provide a company with proper access to a new job which might not have been possible otherwise. Therefore existing employee skills are not always the best bet for a company. In case work is sent to a specialist there is an opportunity of creation of limited engagement with a certain amount of information.
It has been sufficiently researched that the growth in the human resource outsourcing, in this connection the outsourcing of staff has caused the organisations to forget the impact which it has on the quality of service in organisations. This is because of the reason that the service quality is often neglected and in many cases a proper bond is not able to be established between the business partners. In case there is not a proper amount of stability and trustworthiness in the relationship, it causes problems to the organisational members.
Literature Review
Outsourcing is a common practice in the hotel industry which includes several segments like payroll and landscaping. Those function which involve direct guest contact such as those of housekeeping, concierge and also front desk activities are not usually outsourced due to the impact which these activities have on the reputation of the hotel and the amount of revenue. Training of the hotel staff in such areas is also critical. It has been seen that that majority of the people having a negative experience at a hotel stated that unfriendly employees were the catalyst. The concept of outsourcing can either be a permanent or it can be a temporary arrangement in order to bridge the gap in case of staffing. This is done in order to learn better quality techniques or for the improvement of product designs which are faulty. Outsourcing finds importance in a variety of fields (Qi & Chau, 2012).
In the field of research, the methods of research involve different intervention strategies and plans which are to be put to use in order to help the researcher do his or her job. The action basically comprises of short term and long term goals and it is a type of an action plan. Research methodologies deal with a range of ways in which the key research problems are solved. It comprises of philosophies, ideals as well as foundations which drive the actions as well as the methods which can be used. The research methods can also refer to the different ways in which data can be collected for the purpose of the research project. In case a person requires quantitative data, there might be surveys can be used and in case of qualitative data then interview methods are utilized.
In case of qualitative research method the different responses are collected from the respondents and their responses help in the understanding regarding the situation in which they are put. Qualitative data helps in understanding the responses of the people.
There needs to be a critical understanding of the way the population is to be utilized in order to select a sample for the collection of data. In this particular study an interview is conducted and this is to be studied for proper understanding on the topic of outsourcing in the hotel industry and its impact on the service quality in the industry.
Usually in case of research techniques data are to be collected from different sources and these data need to be analysed from such sources. In this connection it can be said that there is the interview method of data collection and the nature of the data is qualitative in nature which is evident from the interview transcript. This method of interview differs from the normal conversations in the sense that these are conducted in a much more rigorous way than general normal conversation. The techniques which need to be employed in case of the interview is that, they need to be reproducible, systematic, credible and also transparent.
The interviews have certain credibility in the sense that the genuineness of the interviewee is determined before the interview is conducted. Credibility is one of the most important criteria which needs to be established. This is because of the reason that credibility asks the researcher to connect the research study and its finding in order to demonstrate the truth of the research and the findings which are to be evaluated. Credibility has majority of techniques for its establishment compared to the other aspects of trustworthiness. In order to establish credibility the qualitative researchers use member checking in order to clarify the intentions, correction of errors if any. Triangulation is a method which every qualitative researcher needs to be aware of and it involves the utilization of multiple methods, sources of data and also that of the theories.
Being a researcher, the individual conducting the methodology of research needs to maintain certain principles or ethics of research. In these cases there needs to be respect towards the rights of the individuals who are participating in the research project. There needs to be the principles of beneficence or doing good, non-maleficence or not doing any harm and also maintaining justice or equality. Apart from this, any individual who participates in the study needs to have given consent freely to participate in the survey. In certain cases where there is difficulty in getting written consent, at least verbal consent needs to be collected. In addition to this the confidentiality of the interviewees need to be maintained at all costs.
There is often the utilization of the procedure of coding as a method of analysis. This is because of the reason that coding actually means the attachment of a label to a selected data segment. This is very crucial because it often happens that a code is a expressive label, a category or a sub code or a dimension. There is not always available software capable of making correct decisions for people. In such cases the people need to learn to appreciate the different software features which help in the retrieval as well as the review of data. This also helps in the modification of boundaries for the coded segments in order to rename or merge or split codes or help in the rearrangement of the data in different ways. The procedure of development of a proper code system is more than the concept of coding in the technical sense. Only completion of data coding is not the end of the procedure of analysis. After the procedure of coding is complete the data is prepared for the purpose of supplementary analysis and exploration. The used tools are the code-coocuurence explorer and the codes-PD table.
The interview process is conducted in order to find out about the outsourcing perception in hotel by the examination of the perspectives of the manager of the restaurant which is the reason for the purpose of outsourcing. The interview helps in understanding the ideas which play in the heads of the management and those who take care of the operations. The interview transcript comprises of 16 questions in all and the answers to the questions as provided by the manager of the restaurant. The questions are open ended, as are answered by the manager of the hotel. Therefore the questions which are asked are related to the topic of outsourcing. The question which relates to the number of the employers who work in the hotel from outside sources was asked to which no particular number could be obtained. However certain amount of information needs to be understood with respect to the functions concerned. In this connection, the manager mentioned that the people from the housekeeping department were organised. Often extra staff needs to be present in order to take care of guests in a better manner. This sort of discussion is in a way related to the social exchange theory related to the theory of outsourcing staff (Agyemang-Duah et al., 2014).
Another important factor which is to be highlighted from the interview is the importance of keeping outsourced staff in the hotels. According to the manager of the restaurant, it is clear that there is huge amount of importance of keeping outsourced staff in the hotels. This is because of the fact that on the basis of the hotel operations, outsourcing is crucial. This is because of the fact that companies always do not want to recruit and train people who are not well versed with the responsibilities of managing staff and the customers. The hotel does not wish to waste resources on those members of staff who are not well equipped to deal with others. Therefore they have tried to balance staff and outside members in order to fulfil all the requirements in peak seasons.
The main reason behind outsourcing which has been stated by the manager in the transcript is the lack of hotel staff availability. There is often the need for quick service which is not really possible with limited existing hotel staff or staff members who are not well trained. Therefore the manager of the hotel has stated that the people who come to their hotel from other places need to understand the operations of their hotel in order to adjust to the specific scenario. Therefore it needs to be understood from the answer of the manager that the concept of outsourcing is important in the backdrop of the restaurant. It is also seen with respect to the answers of the manager that in the hotel mentioned the staff members are selected for a specified time frame and for usually short time periods to fulfil the basic needs of the hotel members. In this connection it can be said that outsourcing is basically the strategic use of the outside resources in order to perform activities which are traditionally handled by internal staff as well as resources. By the strategy of outsourcing, it is possible for an organisation to contract major functions to the specialized as well as efficient service providers. There are also cases of efficient providers of service. The concept of outsourcing in such cases is dealing with the transfer of employees from a fixed company to an outsourcing company (Zoghbi-Manrique-de-Lara & Ting-Ding, 2016).
It has been mentioned by the manager of the restaurant that they do not depend on the topic of outsourcing. There are cases in which shifts can be given to the staff at the hotels based on their competence and experience. The manager has also mentioned that there is a long difference between the employees who are permanent and existing in the hotel already rather than those who are asked to work for the company in specified shifts. At the time when the actual reason for hiring extra staff or outsourcing was asked to the employees it was clearly explained by the manager of the restaurant that this was the need of peak times or in case of seasonal upsurges. Usually the hotel favoured that the existent hotel staff perform all the necessary functions in the hotel. However it was found that in the hotels in the seasonal times there was the need for extra staff to manage the work load properly in those situations. All in all it can be clearly inferred that unless absolutely necessary the hotel does not hire staff from outside of their hotel. There are several positive as well as negative aspects of outsourcing which have come up as discussed by the manager of the hotel. The strengths lie in the fact that it is strong, reliable and dependable. In terms of negatives it can be the difficulties of training the problems or misunderstandings which can crop up and this is applicable when staff needs to be trained (Marshall et al., 2015).
There is a vast degree of outsourcing which is applicable in case of food and beverage management in the company. Thus the procedure of outsourcing is important and effective when it is applied in the best possible scenario based on the suitable requirements. The outsourcing of services which are related to housekeeping have become increasingly popular among the hoteliers. It is necessary for the hoteliers to effectively manage the potential risks. The popularity of outsourcing is not very much surprising in the sense that the hotels are places of immense activity and they often experience a high volume as well staff turnover. It is also seen that there is a high demand for products and services in the hotel. It is also seen that operating environment presents challenges to the recruitment, training as well as retention of staff. Outsourcing offers the best possible solution majorly due to the convenience, flexibility as well quality control specifically for non-core functions which include those of housekeeping. The dependence of the company in case of outsourcing is not much and it is possible for the company to make sure that they hire the best of products and services in case the need arises for the same. However it needs to be understood that the decision of outsourcing depends on the type and the nature of the hotel which is inclusive of the attitude of each of the hoteliers. There are different types of services which can be outsourced but the most crucial ones include those of clients, hotel and restaurant requirements and so on (Hiamey & Amenumey, 2013).
It is commonly known that the procedure of outsourcing, allows organisations to focus on the core businesses and helps in the creation of competitive advantage by the reduction of operational costs. One positive thing about outsourcing is that either an entire process can be outsourced or only a part can be. It is basically seen that organisations utilize outsourcing as a strategic initiative in order to improve the customer service, quality and the reduction of costs.
The interviewee has stated that the hotel does not depend on outsourcing and preference is given to the hotel staff due to their interests on the basis of suitable skills, capability, expertise, competence and experience. In cases when they require professional help they call for professionals in the specified fields. The interviewee also mentioned that they need staff who are available at odd hours in order to perform suitable responsibilities at work. This is because of the fact that they need to fulfil the needs which can crop up at any time in their work schedule. There is always bound to be a difference in the way the tasks are performed by the existing as well as the experienced employees.
At the time the hotel manager was asked the reason for hiring external staff despite internal staff working properly it was stated by him that they prefer to give shifts to their staff rather than hiring from outside places and complicating matters further. It is the aim of the hotel to concentrate on the motivation and development of hotel staff in order to ensure that they are happy at their place of work and this helps them in staying engaged and loyal. In the hotel industry the main aim is to retain a certain number of hotel staff in order to make sure that they have enough shifts during the low seasons. In the peak seasons however, they obviously need extra staff in order to endure that all the services are delivered on time.
Regarding the discussion on the main jobs which are allocated for the outsourced employees it was stated that the main job is to do setup or serve dinners due to the lack of availability of hotel staff, in order to perform quick services and improve the quality of service in order to take a better amount of care of guests. However there are no fixed areas for the employees to work in. The requirements keep changing with times and the outsourced staff also needs to modify themselves with the changing times.
Another important question which is of significance and is asked to the interviewee is that, whether it is better to improve the quality of service or to focus on the savings of cost. In this regard, it is the opinion of the restaurant manager that the labour cost savings is a huge challenge. Thus it is found to be a huge issue as which is mentioned in other cases as well. It is the opinion of the manager that it depends on the hotel concerned how they can enhance the quality of service and also save cost in the process. Therefore it needs to be ensured as per the manager’s perspective that both aspects are balanced. In case both are unmanageable, the service quality is always given priority because of the fact that the guests are most crucial to the hotel industry. In case the guests become dissatisfied it becomes difficult for them to retain the guests at a later date. There are opportunities for cutting of cost at the time of off seasons. Therefore it is reliant with the fact that quality of service to the guests is of utmost importance.
The issue of misunderstandings affecting the relationship between outsourced and hotel staff was also discussed. In this regard the manager of the hotel mentioned that the most important aspect is to ensure nothing hampers the service and ultimately the reputation of the company. Therefore despite several misunderstandings, there might be staff conflicts which might arise due to the lack of communication. Usually there are not much instances of the report of staff conflict as per the manager, but this varies from department to department. Therefore the people ensure that their work is done in a proper manner to maintain the level of service of the organisation and the hotel industry as a whole. In this connection it was also stated by the manager that the outsourced staff are not given much of training but are shown the basics so that they have no problem in manoeuvring their way around the place during the time of their service. The manager also mentioned that since the history of outsourcing is existent in case of their hotel they are aware of the strengths and weaknesses of each person. Therefore the outsourced staff are allocated work based on their areas of qualification and expertise in work.
It can be said that the performance data can be analysed and different types of personnel can also be considered. The best providers of outsourcing have a long list of satisfied people. They can tell a company the way in which they have received helped. It is necessary for the companies to ensure that the outsourcing provider can provide the services which it is seeking. Therefore the interview was extremely enlightening and a learning experience in the hotel industry.
Outsourcing the correct business operations and business strategies is a tough choice for companies. It is crucial to ensure that the decision to outsource is made in the context of the entire business strategy, the suitable controls and the intent can be bound into the contract. In case a company desires to grow by means of an aggressive strategy it needs to be seen that the price and planned growth needs to be taken into consideration. In case the outsourcing strategy is aligned to the strategic plan the management team becomes committed to the project and supports it. Management commitment is crucial to the success of the outsourcing of transactions. The procedure of outsourcing is not as easy as it seems. It is crucial to provide time for the project rather than choosing a date and define a deadline which needs to be set. there have been instances where less than optimal agreements have been signed quickly but this can cause severe amount of disadvantages to the customer.
Another important feature which needs to be kept in mind is that of communication. This is because for the sustainability of productivity, it is crucial that there is a certain amount of communication with the entire organisation. It is seen that only the employees involved in the outsourcing project receive a certain amount of information. But it needs to be understood that without open communication, there can be certain amount of suspicion from other parts of the organisation to feel that their segments can also be outsourced in the future. It is usually seen that outsourcing transactions run for several years and therefore it is important for the parties to work together effectively over the entire life of a contract. By the selection of a single service provider it needs to be seen that the culture of success is maintained at all costs. Without a certain degree of cultural compatibility, the best outcome which can be hoped for is a strictly transactional relationship which rarely allows the customers to tap into the services and the depth of skill which is being considered (Sonfield, 2014).
With the change in time and change in the way things operate it is being seen that the companies have become the most conscious and less willing to operate with large number of staffs. It is being seen that more and more workforces consisting of increased number of combinations of part time and full time workers and innovative solutions have become the norm at present. At present it is seen that the spectrum of outsourcing options is wide and deep which comprises of several models of work as well as categories of workers. Therefore with the correct outsourcing partners it is seen that the companies can mix and match solutions and also customize outsourcing in order to fit their full time and contingent workforce needs. At a point of time when being cost effective and agile are very crucial the companies all around are seeking outsourcing providers which either take the bulk of one or both at the time when they provide the improved and relate procedures. There has been several varied sophisticated and a bigger part of strategies of the companies. It is being seen that vast areas and range of areas are being targeted and there is unprecedented flexibility which is being experienced. The outsourcing providers are also very likely to see that they are being given special treatment (Willcocks & Lacity, 2016).
Therefore it can be said that the companies can focus on the improvement of the hiring of full time employees by means of recruitment process outsourcing or so on. There is a unique ability to find the best workers rapidly. However it is up to the companies to choose what they actually need and want. There are certain organisations which choose to phase in one or several services before finding more contracts (Karhunen & Kosonen, 2013). The company needs to check the references and look for a record of the company in the industry concerned for its own help (Gurung & Prater, 2017).
Conclusion:
All in all it can be said that the concept of outsourcing is a crucial part of the function as well as the decision of a business. There are numerous factors which play a crucial part in such decisions such as quality, cost and other factors under consideration. It can be said that “outsourcing is basically the act of obtaining semi finished products, finished products or services from the outside of a company if these activities where traditionally preferred internally.” There are several companies which depend on the concept of outsourcing in order to help their business become much more productive and succeed in the long run. There are several outsourcing companies which can be found in several parts of the world. Outsourcing has been present in different industries for a considerable time period and in this regard it can be said that they have helped a lot in the saving of costs.
It needs to be however understood in this connection that there are several risks associated with the concept of outsourcing as well including posing risks for several client companies. There can also be certain issues which can include the reduction of the costs which can impact the image of the organisation. It has also been seen that there are outsourcing factor links with the core competence theory. There can be outsourcing in different aspects of the business. Outsourcing functions also cannot always ensure that the work is done accurately and therefore cost reduction or effective function implementation cannot always be possible as well.
References and Bibliography:
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