Organizational Culture and Performance – Evidence from the Fast Food Restaurant Industry

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Blackwell Science, LtdOxford, UKFSTFood Service Technology1471-5732Blackwell Publishing Ltd, 20055••2334Original ArticleCulture and performanceT. Øgaard, S. Larsen & E. Marnburg

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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: 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.

General background
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....
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