Functional Benchmarking Learning from best practices to improve service quality in medium and small hotels
A large amount of publications by a variety of authors reveal the significance of this practice. Reviews of literature on benchmarking have been prepared in the past by a small number of authors. However, bearing in mind the contributions in the recent times, a more complete examination is attempted here. In this essay, the authors have reviewed benchmarking literature in a manner that would help researchers, academicians and practitioners to take a deeper look at the expansion, development and applicability of this method.
The authors have examined a range of papers and have anticipated a diverse plan of categorization. In addition, certain gaps that would present clues for extra study in benchmarking have been recognized.
Study Questions
A study of small hospitality businesses was undertaken in order to address the following research questions
1) How extensive is the formal and informal practice of benchmarking in small hospitality businesses
2) What kinds of practices and approaches are more or less likely to be benchmarked in small hospitality businesses
3) How is the corporate culture of firms in the small hospitality industry associated with their interest in benchmarking best practices
Principal Findings
Comparing performance figures is the procedure in the benchmarking processes that seem to be accepted and applied by tourism managers rather than more complex procedures like analyzing or optimizing.
However, there is a growing body of researchers assuming that benchmarking is not exclusively a comparison practice. Studying the business feat of a number of hospitality sectors (attractions, restaurants and caterings, motels) Bergin et al. (2000) found that benchmarking is frequently confused with the practice of viable assessment studies. Terms such as benchmarking, interfirm comparisons and competitive comparison analysis are inaccurately interchanged. Benchmarking is thought to be a more potent tool than competitive comparison.
Key Words
Benchmarking, competitive comparison, comparison analysis, interfirm comparisons, hospitality sectors.
Introduction
Benchmarking is concerned with obtaining information through relative study and applying it to develop internal procedures or practices (Smith, 1997). Whilst Business Week has described benchmarking as a euphemism for legally ripping off someone elses idea (McGonagle and Fleming, 1998), meaningful analysis and successful implementation is shown to be a complex task. As McNary (1994) observes what often gets copied in benchmarking are only the symptoms of success instead of the causes of success. This review checks existing literature on benchmarking, particularly with respect to context, procedure, needs and benefits. The applicability to higher education is examined and results drawn.
Decision makers are continuously on the look out for methods to make possible quality upgrading. Benchmarking is one such technique that has developed into a popular process in the recently. Benchmarking is one of many total quality management tools, which comprise problem solving, procedure reengineering and process improvement. According to DeToro (1995), benchmarking needs to be positioned within this larger context. From the strategic perspective, benchmarking could only be a piece of the jigsaw of initiatives needed to achieve substantial improvements (Smith, 1997). The challenge is to match the process with the optimal tool or technique (Keehley, 1997). Though benchmarking is not up-to-the-minute, it has now found more users, and takes up a major place, helping quality development.
Quite regularly, the benchmarking notion is understood to be an act of imitating or replicating. But in actuality this proves to be an idea that aids in originality rather than imitation, as stated by Thompson and Cox (1997). Many authors have contributed to the literature on benchmarking ensuing in more than 350 publications as of June 2002. Taking in the growth of publications, some efforts have been made in the past to review the literature. Despite the widespread discussion of both organizational learning and the learning organization (Yeo, 2005), there are few practical tools to promote learning within a supply chain context that also give implementation advice for practitioners (Garvin, 1993 Shipton, 2004). This paper, aside from providing a review of literature on benchmarking, envelops the following objectives
(1) Assembling the publications in a methodical way to allow easy and quick search
(2) Classification of literature
(3) Analysis of result of publications and
(4) Discover gaps plus presenting hints for further research.
As benchmarking relevance is rising considerably in large organizations, they have, as yet, had restricted application among small hospitality businesses. Much interest has been paid to small businesses in current tourism and hospitality literature, but this has centered on savings, finance and the use of technology (e.g. Buhalis, 1993 Kwansa, 1994 Ozer, 1996). There has been little research to quantify performance points of small hospitality businesses either as singular organizations or as workings of tourist destinations. This paper argues that benchmarking offers benefits for small hospitality businesses and for the destinations where they are situated. This is mainly true of grading schemes, where most of the fee is sustained by grading organizations, not by the small business themselves. Awards or grades give customers self-assurance and at the same time present a yardstick of competitiveness within the location area.
Literature review
The literature review focuses on exploring the potential of benchmarking to facilitate learning. It signifies the critical performance areas in classification and grading schemes in small to medium hotels. In the following part it specifies how people benefit from the stated grading schemes and how benchmarking is a useful grading scheme for hotel managers.
Tourist destinations components of attractiveness
Mill and Morrison (1992) make a note that tourist destinations are made of attractions, facilities, infrastructure, transportation and hospitality. Laws (1995) spots chief essentials contributing to the attractiveness of a tourist destination as being climate, ecology, culture and traditional architecture and less important rudiments specifically for tourist groups, e.g. hotels, catering, transport and entertainment. Goodall and Bergsma (1990) consider total cost a fifth constituent, in addition to attractions, facilitiesservices, accessibility and image. Destination choice, image and pleasure have all been the center of extensive tourism research(McLellan and Fousher, 1983 Pyo et al., 1989Selby and Morgan, 1996 Sirakaya et al., 1996).The subsequent inventory demonstrates components of tourist destination attractiveness, amassed from these sources, which were literature reviews concerning tourist destination choice, image and tourist satisfaction.
Attractions
Scenerynatural resources
Climate
Culture
Food
History
Ethnicity and
Accessibility.
Facilities and services
Accommodation
Airports
bustrain stations
Sport facilities
Entertainment
Shopping centers and
Food and beverage facilities.
Infrastructure
Water systems
Communication networks
Health care
Power sources
Sewagedrainage areas
Streetshighways and Security systems.
Hospitality
Friendliness
Helpfulness and
Responsiveness to complaints.
Cost
Value for money
Accommodation prices
Food and beverage prices
Transportation prices and
Shopping prices
Directly or indirectly, small businesses participate in an dynamic role in granting roughly all the physical and intangible components of attractiveness acknowledged in the lists shown above. Thus, they contribute significantly to visitor satisfactiondissatisfaction and to tourist opinion and images of destinations.
Small hospitality businesses
Hotel firms provide products which include tangible and intangible elements that combine into an exclusive combination of production and service. While room provision is a pure service activity, food and beverage functions involve processing and retailing processes. This might signify that the actual delivery of hospitality services may diverge widely and that the benefits derived are associated with feelings or emotions. The repercussions are that consumers use biased and contradictory frames of reference to judge the quality of services, presenting difficulties for the hotel operative in satisfying the customer. Customer prejudice is emphasized in Day and Peters comments that Quality is rather like pornography in this respect. We may not be able to describe it easily, but we know it when we see it. Its ambiguity is amplified because high quality service is often delivered by impulsive and since reacts by hotel staff which cannot simply be practiced or scripted, but are even so an important means of client satisfaction. In order to endure and be successful, a business has to make sure that it is producing the goods or services that the customer wants, that it gets its quality right, and that it brings on time. There is a growing body of evidence which suggests that are straight links with the satisfaction of the server and customer, repeat sales and profits. Heskettet al. implies that quality, repeat usage, profits and investment form a self-reinforcing rotation. As a result, despite the apparently indefinable nature of the hotel product, service improvement can represent an important source of competitive advantage because quality in service delivery can lead to more repeat custom and greater sales revenue. Augmented presentation may also benefit managers and staff whose tangible and intangible benefits include job satisfaction, profit sharing and esteem.
Small businesses are imperative to the financial health of both developed and developing countries. Gavron et al. (1998) makes a note of the vitality of the hospitality and tourism sector in this regard, in which low barrier to access generally ensure a steady supply of new businesses at the same time as unproductive or inefficient ones are going through difficulty. Quinn et al. (1992) remarks on the somewhat low capital investment required to start new small tourist businesses. Entry costs can be abridged even for relatively asset-intensive businesses such as hotels, through leasing or through mortgageloan agreements. Welshand White (1981) describe as resource poverty the inclination of small hospitality businesses to be short of financial backing and management skill and Gavron et al. (1998) refer to this as the reason why 64 per cent of UK small businesses fall short within four years. In Germany, where an inspection is required before an industrialist can start up in business, the rate is 32 per cent. Specific tourism-related statistics are limited, but, for example, Chelland Pittaway (1997) report that almost 50 percent of restaurants did not endure the first two years in their study.
The British Venture Capital Association (1996) makes a note that many small business managers are provoked by life style rather than economic and success issues. While this does not automatically mean that they function to insufficient professional standards, it does simply that they may not be motivated to endeavor further improvement in a business which already produces adequate profits. Eggers et al. (1994) note that businesses either look for stabilization or have an expansion orientation. They categorize a series of central business stages and comment that a business which is thriving at one stage may not have the knowledge crucial to uphold success in others. Thus, although small businesses have a vital part in creating tourist satisfaction, they are neither a homogeneous group, nor able to give constantly high service delivery.
Benchmarking
Camp (1989) and Zairi (1996) observe benchmarking as a way to contrast organizational practice and produce improvement. Smithet al. (1993) classifies the benefits of benchmarking as
presenting an organization how to better meet client requirements
recognizing an organizations strengths and weaknesses
Inspiring incessant operational enhancement and
A cost-effective means of gathering inventive ideas.
The key classifications of benchmarking are among internalexternal and genericfunctional (Zairi, 1992). Internal benchmarking contains the sharing of performance pointers between sections of an organization or between divisions in a group (Cross and Leonard, 1994). External benchmarking involves assessment with challengers or peers working in the same industry (Karlof and Ostblom, 1994). Genericfunctional benchmarking looks for comparison against organizations or sectors performing parallel activities or facing comparable problems, not essentially in the same industry (Breiter and Kline, 1995 Cook, 1995). Thus the benchmarking of small hospitalitytourism businesses may possibly involve comparison with other such businesses, or with a certain service characteristic such as customer care, in another business segment, such as airlines.
Benchmarking in the hospitality industry
Organizations have to attain an overall level of performance in order to be competitive. Categorization and grading schemes and awards such as IiP and Excellence through People can act as external enablers that circuitously sway the performance level of an organization as a yield. All these grading and award systems can be acknowledged as benchmarks signifying how businesses
execute against a variety of standards. In theory they make it achievable to perk up both systems and service outputs on a continuing basis.
To profit from external benchmarking, small tourism businesses must be inspired to reflect and scan. It is essential that external bodies such as TECS, tourist boards and associations, professional bodies and organizations such as British Hospitality Association participate in presenting the benchmarking procedure as a positive and important support to business efficiency. Local bodies involved in destination identification plans which are harmonious with the future plans for the destination. Management needs to build up award and given the instability in the small hospitality sector, it may be that those small businesses which can most profit from benchmarking are the very ones that are deficient of the assets and partiality to carry it out (Micklewright, 1993).
Either way, the benchmarking of small organizations against one another is improbable to make a genuine impact on destination preference and tourist satisfaction. It is also noteworthy that the inadequate examples of benchmarking carried out among small tourism businesses have almost all been carried out by external third parties (Coker, 1996 Department of National Heritage, 1996 Johns et al., 1996Johns et al., 1997). Such studies involve small businesses only to give data to external researchers and then gain from the data there is no need for them to carry out any lively research themselves. Externally instigated approaches to benchmarking comprise classificationgrading schemes and awards, which can likewise be used to gauge the performance of small hospitality businesses and to lift standards. In theory, grading schemes create universal benchmark standards against which the individual small businesses are evaluated. They also supply consumers with important information about hotels and other businesses.
Existing frameworks for rating accommodation
Since 1962 the World Tourism Organization (WTO) has sought after developing a unanimously acknowledged hotel rating scheme, but in 1995 there were more than 100 categorization systems in function. An alternate structure using symbols to signify facilities with no categorization has been worked out by the Confederation of National Hotel and Restaurant Associations (HOTREC) of the European Union, but the WTO form is generally acknowledged inmost nations. The common characteristics of hotel rating systems are as follows
Hotels with good quality essential facilities and furnishings guaranteeing relaxing lodging. Meals services may be narrow. Includes small private hotels.
Hotels having advanced values of accommodation and more services providing good levels of comfort and amenity. Includes private hotels and budget adjustment.
Well appointed hotels with open, very comfortable lodging, mostly within-suite bathrooms. Full meal amenities are provided as well as an array of facilities.
High class hotels, well outfitted and furnished to a very high standard of comfort, offering a very wide variety of services and amenities for visitors and guests.
Outstanding hotels with excellent quality accommodation and furnishings to the highest international standards of lavishness, providing immaculate services and wide-ranging amenities.
Rating schemes generally reduce to two major groups. Official classifications outline the basis of essential or voluntary necessities which are established by governmental agencies, such as Regional Tourist Boards. On the other hand, autonomous hotels ratings schemes may be operated by associations (such as hotel or automobile associations) or by viable organizations (such as Mobilor Michelin Travel Guides). In the UK, the national Crown scheme, which began in 1987is a voluntary one developed by the English Tourist Board (ETB) and operated by the Regional Tourist Boards. The Crown classification scheme functions in six bands from Listed, One Crown up to Five Crowns. In accumulation, establishments may submit an application for classification and grading if they deem that their quality principles are sufficiently high to merit a tourist board recommendation.
Grading as a form of benchmarking
Grading is used to sub-divide accommodation supply into categories, such as the crowns of the English and Scottish Tourist Boards (ETB, STB) or stars of the AA and RAC, frequently by assessing substantial elements of the service mix. The grading may also consist of restaurant facilities or elusive elements of service. Plans are
Grading schemes can hypothetically be setup for any aspect of service release or business performance. For example, STB is initiating a novel environmental grading scheme for accommodation establishments by assessing performance in areas such as energy efficiency, recycling and waste managing. Subsequent to its introduction into hotels, BBs and guesthouses, this fresh format will be extended to visitor attractions (Stephens, 1997). This eco-grading design pays
special attention to the significance of the material environment to the tourism industry and eco-benchmarks businesses against popular standards.
Not unlike other types of benchmarking, grading schemes have a restricted life and are time dependent. Hence, businesses need to be checked frequently in order to check that standards are being preserved, are failing, or have lingered at the same level.
Conclusions
Certain aspects of small hospitality businesses make large-scale contribution in conventional benchmarking unlikely and, in particular, comparison with other organizations may have smaller affect than comparison against reputable industry norms. Classifications, grading schemes and awards have important roles to play in bringing about enhancements in small businesses. In view of the fact that such benchmarking is done by external organizations, the cost to small businesses is significantly lessened. Classification schemes and grades can work as stimulating agent to the improvement of facilities and services. Enhancements obtained through awards can contain more professional business schemes that will have an impact on long-term business performance.
Benchmarking through such plans brings advantages to destinations and tourists, as well as to individual businesses. Destinations can quantify the degree and quality of the small business factor of their offering and plan tactically to develop it efficiently, while visitors are probable to experience superior levels of satisfaction. If organization and award schemes are sufficiently understood they will help tourists arrange their prospect in line with the amenities and service expected to be offered. Individual businesses need to assume schemes which will maintain and endorse their market position.
In the diverse small tourism business area, there will constantly be changeable levels of business performance. Low obstruction to entry mean that the industry will have new provisions, at the same time as out of date contributions are being exterminated. This method assists in keeping small business offerings in line with altering consumer requirements, but benchmarking with arrangement, grading and award schemes can also help existing businesses to satisfy market potential. The small business sector is vital in forming tourist satisfaction and a positive destination image. Accordingly, any action to encourage suitable benchmarking participation by small tourist businesses is probable to have a positive effect on the performance of the overall destination.
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