Organizational culture and performance – evidence from the fast food restaurant industry Torvald Øgaard,* Svein Larsen*† and Einar Marnburg*
*The Norwegian School of Hotel Management, Stavanger University, Stavanger, Norway; †Department of Psychosocial Science, University of Bergen, Bergen, Norway
Correspondence: Torvald Øgaard, The Norwegian School of Hotel Management, Stavanger University, N-4036 Stavanger, Norway. Tel: +47 51 83 15 97; Fax: +47 51 83 37 08; E-mail: firstname.lastname@example.org Keywords: hospitality industry, organizational culture, performance, restaurant management
This paper explores the relationship between organizational culture and the performance of managers in the restaurant industry. We also introduce the managers’ job efﬁcacy and commitment to the organization as variables intervening between organizational culture and performance. Data were collected in a restaurant/fast food operation which included franchisees as well as employed managers. Results suggest that there are relationships between culture and manager’s efﬁcacy and organizational commitment, and that some cultural aspects are related to performance variables such as personnel cost and additional sales. In addition, managers’ commitment and efﬁcacy are also related to performance.
In multi-outlet operations within the service industry, there has been a tendency to ‘production-line’ (Levitt 1972, 1976) service deliveries. As evidenced in the phenomenal success of franchise operations within the fast food business, the ‘production-lining’ and accompanying division of labour has allowed specialization and efﬁciency that may be very successful. However, two trends may have major inﬂuence on the viability of the continuing success of the standardized product. First, the general tourism literature (e.g. Poon 1994) indicates that with increasing afﬂuence, travellers and customers expect more than the standardized product, in as much as they expect sensitive attention to individual needs and customized products. The second trend is the rapid expansion of the standardized fast food/standardized service concepts that may imply an emerging market saturation of these operations. Competitiveness is thus increasingly dependent on the ability of suppliers to display the ‘best practice’ in all facets of their operations and segment and tailor their products to local variations in taste and preferences (Dwyer et al. 2000). ‘Standardized practices’ will not necessarily sufﬁce to prosper in these market segments. Local adaptation, customization and
innovativeness will probably be needed much more, also within the multi-outlet operations. Even the epitome of extreme standardization, McDonald’s, adapts to local customs, that is they adjust the menu to include for example ﬁsh in some countries, e.g. the ‘McFisk’ in Norway and ﬁsh sandwiches in Hong Kong, beer and frankfurters in Germany and McSpaghetti in the Philippines, but they also adjust the production process to receive ‘halal’ (‘clean’, ‘acceptable’) certiﬁcates in Muslim countries (Watson 1997). These changes imply that local restaurant managers will not only be required to ‘follow the book’, they will, to a larger extent, be required to adapt products and personal service to local market conditions and the needs and wants of customers. Managers will have to be more market-oriented and more willing to adapt and manage personnel innovatively to be successful. Thus, individual motivation, commitment, efﬁcacy and ability of managers to perform an extended range of market- and internally related activities will be of importance. Division of labour, rules and mass production characterizes ‘production-line’ operations, and rules tend to dominate as behaviour moderators....