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COMMENTS
Need to focus only on Halal and cut off Organic and high end restaurants. much improvement is needed going forward; in your writing and English, your knowledge of the literature and how you build a theoretical framework, the design of the study to actually address the research question, writing, understanding methodologies, etc. etc.
I gave you the suggestion of paradoxes in management. This is an important aspect of you thesis to position your work in the field of Management. The thesis does not have a management focus so far and I suggest you write a thesis that is mostly focussed on Tourism?
The topic concerns marketing strategy for restaurants which specialize in Halal food. He concisely explained the dilemma facing restaurant owners in relation to choosing to follow either a niche or generalist strategy, and the implications of that choice in relation to rigorous compared to flexible management practices.
A key part of the Panel’s feedback is that the notion of ‘rigorous management practices’ needs to be more clearly and precisely spelt out. As part of that clarification, the student needs to take into account the differences between the external rigorous demands associated with gaining Halal certification on the one hand, and rigorous management practices that are internal to the organization.
A second key feature of the Panel’s request for minor amendments is that the student current hypotheses focus on the measurement of outputs whereas the Panel encourages him to hypothesize in relation to antedents; in particular, those antecedents that lead to the decision to specialize in Halal foods.
Further discussion amongst the Panel members focused on an aspect of the topic that we consider he should highlight: the social and cultural imperatives that may be antecedent conditions for some or even most owners and how those imperatives compete or combine with the economic and financial imperatives to create more business.’
make written progress on the changes to chapter 1,2,3? Cutting out organic and high end.
Market orientation, cultural orientation (including religion)? Definitions, how we use it, etc.
Food and immigrants, taste and smell, keeping in touch with places where they grew up, etc. meeting similar people, good food they like, confidence in quality, etc.
Let’s stick to drivers and outcomes of halal
Contents
Abstract 3
Introduction 4
Rigorous Niche Practices versus Generalists Practices 5
The Research Question 6
Food and restaurants as a research setting 7
Theoretical Significance 8
Managerial Significance 11
Overview of the report 12
Literature Review 12
Creating a competitive advantage: organizational performance 13
The competitive food and hospitality industry 14
Critical success factors in the restaurant business 15
Rigorous practices in the restaurant business and stages 16
Sourcing and supply of ingredients 17
Production and the creation of food 17
Marketing and commercialization of the rigorous practice to customers 19
Different types of Rigorous Practices 20
Halal 20
Organic 21
High end restaurants 22
Theory on Paradoxes 24
Rigor versus flexibility 26
Advantages of rigorous practices 26
Uncertainty reduction 27
Better product as a result of the practice 27
Consumer appreciation and trust 27
Legitimacy 28
Reputation and status; branding power 28
Intrinsic motivation becomes higher 29
Recruiting becomes targeted 29
Disadvantages of rigorous practices 30
Restaurants in Australia statistics 31
Methodology 38
Approach 38
Sample 38
Analyses 39
References 41
Abstract
In the hospitality industry, the level of competition has increased due to an increase in the number of players. The customers’ demands have also changed, since more customers demand food that they can trust and an experience that sets the restaurant apart. Restaurants in this industry have used various methods in order to remain competitive. These methods include innovation, employment of competent managers, offering high-quality products and services, and offering organic foods, among other methods. In this study, we will determine the drivers of adopting rigorous management practices and the impact that these practices have on creating a competitive advantage in the marketplace. Since rigorous practices can relate to different aspects of the value chain and be more or less visible to customers, the marketing of the practices will also be theorized on.
Data will be collected from 200 restaurants in Melbourne. The rigorous practices relate to halal, Organic, and High-End luxury restaurants. Data will be collected through semi-structured interviews with restaurant owners, chefs, marketers, and customers.
This study contributes to the literature on key management paradoxes such as rigour and flexibility and provides in-depth knowledge on stages in the production and marketing of products that are impacted by rigorous practices. In addition, this study will help restaurant owners to take more informed decisions on the adoption of practices and the competitive implications of the practice.
Key words: Management practices, Competitive advantage, Restaurants, Hospitality, Paradox
Introduction
Organizations in most industries face increased competitive pressures from other organizations that aim to satisfy customer demands. Other than competition, organizations must deal with changing business needs, in the forms of technological advancement and globalization (Baum and Greve, 2012). This brings cultural and value exchanges, as well as new ways of doing business. Globalization has also influenced business values, as businesses are facing intense pressure to reform and improve their practices that impact stakeholders and the natural environment (Burke and Ng, 2006).
Competitive pressure has driven numerous companies to modify their business practices and replicate values from other organization to obtain competitive advantages in the belonging industry. New philosophies related to the way of how business should be conducted are also being introduced, subsequently displacing old ideologies considered obsolete in order to attract more customers, as it is the case of Islamic banking and CSR (Khan and Bhatti, 2008). This means that the traditional methods in which businesses have been performed no longer fit with the new social and technological improvements. As a consequence, organizations embracing new practices could rapidly obtain competitive advantages within the industry. The retail industry could offer an example of this, where the influence of technology and globalization has decreased the market share of traditional stores and provide a switching of consumer to online shopping. (Czinkota and Ronkainen, 2005).
Rigorous Niche Practices versus Generalists Practices
To survive and grow, organizations must make critical decisions, one of which is whether to satisfy the needs of general consumers or of specific groups, i.e., a “market niche” strategy. Many factors can determine the strategy an organization should adopt, like the market, product or service being offered, or capital. A niche strategy has been implemented by numerous companies in order to bypass the intense competition that characterized mass markets. Furthermore, this strategy brings to the organizations a competitive edge by focusing in certain area of the market or targeting specific needs from the customers. Yet, it is not easy to implement a niche strategy due to its high costs and the fact that is not suitable for every type of product (Anderson et al., 1994). For this reason, a great number of companies are adopting a generalist approach for doing business. Whilst a niche strategy allows and specialized knowledge in certain areas, a generalist strategy reduces the risk of not having an only option to obtain success. The generalist strategy also demands a holistic vision without restraining a business domain. The decision to pursue a niche or generalist strategy is critical and important; therefore common wisdom suggests that any decision should be made after careful analysis (Dalgic and Leeuw, 1994).
The understanding of how organizations decide among niche- versus- generalist approaches is becoming more uncertain, even though there is sufficient literature about each concept. As this decision represents an initial step for an organization, it is important to understand how it is made. (Kazlauskaite and Buciuniene, 2008). It is common practice that products dealing with niche markets do not present any inconvenience. However, choosing the strategy of which product and service would be accepted by more customers is not so simple. There are several factors affecting this decision, including the type of customers of an organization (Yang and Lu, 2013) capital investment, return on investment, organization’s expertise as well as marketing and financial resources. Nonetheless, in all cases the most important factor influencing on this decision is customers as very often changes within organizations are made to fulfil their requirements and needs.
Some non-business pressures can also guide the strategy decision, such as religion and public service (Vandaie and Zaheer, 2014). In the case of non-profit organizations, decision are regularly made on the basis of religious and humanitarian values because these beliefs relate to the procedures businesses use to act and expand. Similarly, there are cases where organizations may address a niche market to fit the demands of customers belonging to certain religions and sects. Therefore, products and services are offered to fulfil particular religious obligations which benefit the dual purpose of profitability and religious service (Arevalo and Aravind, 2011).
The Research Question
This research will study the operating activities performed in halal, Organic and High-End restaurants established in Australia by examining and comparing management activities, as well as conducting an analysis of the supply chain system for these types of restaurants. In addition, further review of management and supplier’s relationships, logistics, suppliers’ environment/practices, and practices in the kitchen will be conducted. As a final aspect, this research will consider the communication with customers within the objectives. The following four hypotheses will be tested in the research.
H1a: Rigorous practice (RP) has a positive effect on performance;
H1b: RP affects performance positively through customer preferences, motivation of personnel, differentiation and trust in the outcome.
H2a: RP has a negative effect on performance;
H2b: RP is negative for performance through bureaucratic effects, lack of differentiation achieved, limited fit with preferences, lack of perceived value by consumers.
These four hypotheses lead to the research questions of the proposed study are as follows: 1) what are the influences leading organizations to adopt rigorous management practices and which are the possible competitive consequences?; 2) What marketing practices organizations adopt in accordance with the rigorous management practices?; 3) How do organic, halal and High-End restaurants manage and market their rigorous practices, particularly how they have been used to compete with other restaurants?
Food and restaurants as a research setting
Food is an essential need in life and is also considered a part of the identity of various ethnic, social, and religious groups. However, some religions have their own food restrictions, such as Jews with Kosher food. Similarly, halal is a unique Islamic concept. halal food is considered to be lawful, permitted, legal, and pure in Islamic culture and it is recommended under the law of Islam (Zulfakar et al., 2014). Soong (2007) conducted a study to explore the management of halal quality in the food service industry. The mentioned study primarily investigated the implementation of halal food standards and the consequences of these practices. As the phenomenon of globalization has also impacted the food industry in regards to the production, food safety, trade and consumption area, an increase on the demand of halal foods has been noticeable not only in Muslim countries, but also among non-Muslim nations. In halal restaurants the management practices comprise quality and hygiene regulations provided by the authorities in the area of meat and livestock from Australia. These practices have allowed the creation of collaborative relationships between suppliers/farmers, processors, food premises, food handlers, logistics, food servers, and government regulators in order to fulfil Muslims’ religious needs. Moreover, management also guarantees than rules and producers appearing in the halal certification are applied. (Zannierah Syed Marzuki et al., 2012).
In regards to organic restaurants, there is a tendency towards modern technologies rather than traditional methods when it comes to the selection of suppliers. Among these preferences, there can be named suppliers using modern soil building methods with compost, animals and green manure, controlling pests, naturally rotating crops rather than pesticides and fertilizers (Edlich et al., 2007) Correspondently, in organic food restaurant other predominant motivations such as social and environmental can be found. Management also believes that customers obtain a higher benefit from the improvement of management practices as there is a guarantee for food availability in a responsible and sensible manner. Moreover, in order to become financially stable, organic restaurants are adopting environmentally friendly green philosophies. Through the focus of innovative approaches, management is offering to the customer healthy products and environments, achieving a balance between green values and economic stability as central management practices (Poulston and Yiu, 2011).
Theoretical Significance
In recent years, management scholars have become increasing interested in what organizations actually do to satisfy customers and create a competitive advantage in a growingly competitive marketplace. These daily routines, managerial decisions, sourcing of supplies, tools, and communications that ultimately determine success to some degree are often labelled management practices (Bloom and Van Reenen, 2006, Blooma et al., 2011). Namkung and Jang (2013) added that the green movement has taken over the hospitality sector where corporations are adopting green practices both as a means of promoting sustainability and increasing profitability of the firm.
This research on managerial practices argues that there is a relationship between adopting certain practices and organizational performance (Blooma et al., 2011). Key practices that have received some attention are Human Resource Management HRM practices (selection and training) and environmental practices (Lin and Ho, 2011, Chang et al., 2011). In this study, the focus is on a particular type of practices that organizations can adopt. They are prescribed practices that are based on a comprehensive set of rigorous norms and rules. On the one hand these practices are inflexible and prescriptive. However, on the other hand they can differentiate the organization from other organizations and create a competitive advantage.
This study creates theoretical insights and new knowledge on the drivers of rigorous practices and the outcomes in terms of organizational performance. Rigorous practices often are enforced and certified by a third party organization and their role will be included in the study as well. By studying rigorous practice, this study contributes to the growing field of management paradoxes (Smith and Lewis, 2011). Paradoxes are strategies that offer a different approach to tensions in the organization by identifying ways the firms may get competing demands simultaneously. A rigorous practice is a paradox because it involves inspecting organization performance and competitive advantage as the tensions arising that have to be addressed (Smith and Lewis, 2011). Effectively engaging tensions in the organization will result to increased creativity and innovation for long term success. Understanding the tensions in the organization through the study of this paradox will help the organization meet the short term goals and experience sustainability through diversification by promoting multiple varying demands (Smith and Lewis, 2011), For example, provision of cheap and quality goods to gain competitive advantage. The firm will only experience long-term success when it adopts and is able to manage paradoxical strategies simultaneously. Strategy in this case is used to refer to available products or services and how they compete in the market. The paradox represents multiple strategies that are found to be contradictory yet interrelated. For example, there are many firms that are applying social and financial strategies simultaneously while others are applying strategies that are both local and international. In addition, organizations are structuring their models on the paradoxical state of producing goods or services that are both low cost and high quality in order to remain competitive in the market (Smith, 2009).
This study is set in the restaurant business. Restaurants are organizations that daily face key challenges and constantly compete with new and existing competitors. This research will identify the gaps in management strategies and look at ways in which halal, organic and high-end food companies can adapt to have control of the market. In addition, it will evaluate the paradoxes and practices that are critical in the hospitality industry to gain a competitive advantage. This follows the conception that management is essential in the decision-making processes of the organization. Many business scholars have failed to understand the role of right management practices on the productivity of the firm. This research will link the present research to address the gaps identified in the hospitality industry.
Managerial Significance
This study tries to help managers in organizations that face questions around whether to adopt certain rigorous practices or not, especially if the practices are rigorous and inflexible and cost a fee to get certified, then the benefits of adopting these practices may not always be clear. As a result, this study tries to focus on both the outcomes and the drivers of adoption of rigorous practice. More importantly, this study will assist managers to understand that adoption, implementation, and communication of the practice is under control of management and that companies can actively manage the way how they use and market the rigorous practice to customers and other stakeholders. A business practice refers to the method, procedure or process employed or obeyed by the firm in meeting its objectives (Chang et al., 2011). For example, the management may identify that introducing innovative technology into the firm may lead to effectiveness and efficiency in meeting its objectives. Management practices are mainly applied with the aim of increasing effectiveness, improving quality of services, promoting efficiency and reducing the cost of production (Namkung and Jang, 2013).
This study will be relevant for managers in different industries but especially in the hospitality business. The food industry competitive and organizations are embracing new practices such as going green (Lin and Ho, 2011, Namkung and Jang, 2013), going vegan or organic. Organic food consumption has been on the rise especially in American society (Namkung and Jang, 2013, Poulston and Yiu, 2011). In addition, the hospitality industry has noted the relationship between going green and performance (Llach et al., 2013).
Overview of the report
The proposed research will be structured in different chapters as follows. Chapter one will provide a general background of the study, its importance as well as outline the research questions. Starting a theoretical discussion, chapter two entitled Theory of restaurants in a competitive marketplace will describe several rigorous practices adopted in the restaurant and hospitality industry. Moreover, on the same chapter it is possible to find an analysis of the implementation of such practices and the impact they have generated towards developing competitive advantages. Further, chapter three will focus on reviewing the theory of paradox to discuss the contradictory demands organization face that impact on the decision of implementing rigorous practices. By establishing a comparison between flexible and rigorous practices, on the same chapter it will be analysed the positive and negative aspects of the latter type of practices. Finally, after having set the theoretical background that informs this research, chapter four will focus on the methodology suggested to best carry out this study. Therefore, this chapter will explain the research design chosen, the methods for data collection and analysis, participants and sample as well as any other relevant aspect associated with the ways in which this research will be conducted.
Literature Review
Restaurants have faced increased competition in the current hotel and restaurant industries. In order to remain competitive, restaurants have adopted various practices. One of the practices adapted by restaurants is the rigorous practices. This paper will study the Impacts of the adoption of rigorous practices and how they contribute towards competitive advantage of the restaurants. The thesis statement of this study is “rigorous practices contribute to increased competitive advantage of restaurants”. The study will discuss various rigorous practices and relate them to critical success factors and show how they eventually lead to increase competitive advantage of the restaurants.
Creating a competitive advantage: organizational performance
There are various methods used by hotels and restaurants to create competitive advantage. After identifying the various areas where competition has intensified, restaurants have resulted to the use of various methods in order to add to their competitive advantage. Various scholars have studied various methods some of which are reviewed in this section. Piccoli (2008) sustains that for the acquisition and maintenance of new customers by restaurants, information plays a crucial role. He asserts that, through adopting methodology that enables accurate and timely information from the customers, restaurants can obtain competitive advantages. In other words, the use of advanced information, sharing and communicative interaction with customers can represent a competitive element around the industry. According to Koutroumanis (2011) websites and social sites such as Facebook, twitter, and Liked among other social platforms, can allow restaurants to share content with customers.
Another resource to gain competitive advantage amongst restaurants has been the used of culture based products. Several restaurants produce foods and offer services based on a given culture. Ahlstrom et al. (2004) argue that culture is considered another influential element granting competitive advantage to restaurants. To further explore the culture theory, Young and Ahlstrom conducted interviews to 41 entrepreneurs, government officials, and venture capitalists working in East Asia. From this study it was concluded that Chinese entrepreneurial firms with overseas investment followed mostly those overseas Chinese firms’ practices. The culture of Chinese people create advantages to encourage the use of networking, close control, and alacrity (Ahlstrom et al., 2004). Moreover, Chinese firms show reluctance to close-control culture in regards to the decentralization of the decision making process (Ahlstrom et al., 2004). In the light of these ideas, for the hotel industry it is easier and quicker to make decisions to meet their customer expectations obtaining at the same time more competitive advantages.
This chapter will also review in detail other methods to obtain competitive advantages such as innovation, halal and several religious practices, effective sourcing practices, rigorous marketing along with organic dining.
The competitive food and hospitality industry
Koutroumanis (2011) argues that restaurants and hotels face increased competition in the industry. They are actively involved in competing for more customers, skilled employees, and better locations, and that the recent area of competition in restaurants and hotel industry is information about customers. Canina et al. (2005) argue that firms that operate in the same industry use various strategies in order to better than other firms within the industry. Where a firm uses better strategies that meet customers’ needs, it is said to have gained more competitive advantage. The competition in restaurants and hotels go beyond pursuing the same customer, and includes resources and skilled employees. Therefore, the competition in the restaurant sector can reach heightened level including all their activities.
Enz et al. (2008) state that restaurants challenge themselves to find the most suitable location for their customers. Restaurants’ managers are conscious of the effect that location produces on the perception of guests in order to choose the hotel. Similarly, restaurants take in count which location grant better advantages to their customer in order to battle in the acquisition of the place (Enz et al., 2008). From this it can be deduced that the restaurant industry is highly competitive. Competition is more common among sectors related with service delivery and resource acquisition. For this reason, it is advisable for hotels to embrace the necessary diverse rigorous methods that empower them to maintain a competitive position in the industry. In order to maintain customers and gain new ones, and to see long term improvement of the restaurant financial performance, the increase of competitive advantages is vital.
Critical success factors in the restaurant business
To estimate the success of restaurants there are several factors that can be considered. These can be considered as fundamental to accomplish the restaurants’ mission of provide foods and services according to their customers’ expectations. These elements will be discussed in this section.
Providing healthy food to costumers is considered the first success factor. Namkung and Jang (2013) argue that the demand on currently consumers for healthy foods has increased considerably. Moreover, consumer theory asserts that consumers demand healthy products that prevent the occurrence of illness. In order to test this theory, Namkung and Jang (2013) performed a survey on 512 American where it was indicated the influences of green practices in customers’ perceptions. Furthermore, the results showed that a green brand image was created by those restaurants adopting green practices. From the study, it was also observed the customers preference for those restaurants that have improved their green practices. Other research by Poulston and Yiu (2011) also noted an increase in the number of people becoming aware about healthy eating practices. In their study, Poulston and Yiu (2011) indicated that 30% of the interviewed population showed interest in their health.
The focus on high quality product that fulfils customers’ expectations is considered the second success factor. A study by Llach et al. (2013) was conducted to determine the consequences that come along with implementing quality and green practices. Based on 374 surveys performed to different managers on the restaurant industry, the study revealed that quality management practice allows competitive advantages for restaurants as a direct influence. Moreover, the investigation reflected that customers would rather select those restaurants focused in quality managing practices conceding an increase in their profits. Similarly, to these ideas, another study was performed on twenty countries over 10,000 organizations by Blooma et al. (2011) in favour of applying quality management in the food industry. In this investigation, it was highlighted the relationship among high quality products and improved organizations performance.
A third success factor to take into account is sustainability. One of the consumers demand is related to a friendly environment that has influenced in a major way the management practice around several industries (Namkung and Jang, 2013). In order to fulfil the costumer expectations, several businesses have embraced the theory of sustainability. The term of sustainability is commonly referred to by several scholars including Namkung and Jang (2013) to as “greening”. According to Llach et al. (2013), environmentally friendly management drives the management practices. Other research by Lin and Ho (2011) was conducted surveying 322 restaurants in China to examine the drivers of green-practice adoption. In this study, the results indicated that customers pressure was among the factors (Lin and Ho, 2011).
Rigorous practices in the restaurant business and stages
Amongst the restaurant industry there has been an increase in competition which has result in the adoption of rigorous practices in all the operative activities involved in delivering quality services and products. The customers’ needs are complicated to be addressed and in order to accomplish this goal is necessary to review that the consumer expectations are fulfil at each stage of the restaurant business. There are various stages involved in the restaurant business, namely sourcing and supply of ingredients, production and creation of food and marketing and commercialization. Each of them is analysed below.
Sourcing and supply of ingredients
Rigorous practices are chosen by restaurants at the moment of sourcing the products that should be aligned to the customers’ expectations. The various rigorous practices involved in this stage include sustainable supply; this means, a conserve environment approach assume by the restaurants. Polonsky (2011) argues that customers preferences are influenced by organizations that tend to be concerned about the environment. Therefore, organizations should acquire resources and supplies by other entities that use friendly mechanism to the environment.
Establishment of lasting relationship with suppliers is another strategy employed by restaurants (Wu et al., 2006). Proper relationship with suppliers ensures that restaurants have the resources available. Hence, restaurants are able to provide products and service to their customers in a permanently manner which also affect in the efficiency of the restaurants due to be guaranteed the availability of products.
Production and the creation of food
Production is the process where the sourced raw materials are converted materials into for customers’ consumption. Due to the fact that food is a sensitive product, the implementation of rigorous practices is needed to best meet the customers’ expectations. The rigorous practices that are involved in the food production include the following:
At the production stage, restaurants have adopted innovation. Chang et al. (2011) argue that innovation can be encouraged in the hospitality industry by the use of human resources. This management practices in human resources are antecedents of innovation used within the tourism industry (Chang et al., 2011).
The second rigorous practice is employing of high skilled workers. Chang et al. (2011) conducted a study based on a sample of 196 hotels and restaurants from the People’s Republic of China for testing the theory that related the increase of innovation to employing multi-skilled employees. It was observed that the selection and recruitment of multi-skilled employees increased the innovation in hotels. The authors also noted that multi-skilled employees help into achieving customers’ satisfaction. Blooma et al. (2011) argue that for the production of quality products it requires experienced employees, which also leads to improved management systems. Thus, organizations can obtain competitive advantages when there is proper recruitment of employees with relevant skills.
The third method is the adoption of proactive management theories. Studies such as that by Bloom and Van Reenen (2006) indicated that a consequence of poor management practices within organizations are reported in poor competitiveness. In their study, using data from manufacturing firms form U.K., France, U.S, and Germany for a total of 732 medium-sized companies, the authors concluded that those poorly managed firms reported low performance in the financial area and market share. Smith (2009) suggests that organizations require for managing contradictions the application of a dynamic approach which ultimately will be advantageous to solving the complications that arise in the firm management. Therefore, this approach can be used by managers in order to improve their own performance and in consequence that of the organization.
Marketing and commercialization of the rigorous practice to customers
In order to expand the market share, there are numerous methods that are been used by restaurants. In this section, some sources adopted by the marketing practices in accordance to rigorous management practices will be analysed.
The first method is matching the quality of the product to the quality expected in the market. In correspondence to the consumer theory, high quality products are a valuable element for consumers. For this reason, producing high quality products and services represent a marketing practice related to rigorous management practice. Llach et al. (2013) observed the significance of high-quality products and services in the marketing of restaurants. Moreover, the authors perceived increasing sales in those restaurants that engaged this practice. They also concluded that this increment on sales was improving the financial performance of hotels.
The second method is by adoption of environment management methods to create a positive image of the restaurant. Llach et al. (2013) distinguished the consumers’ predilection for organizations practicing environmental management. The management practices can be used by restaurants as a market tool to promote their services. According to Namkung and Jang (2013) sustainability led to a positive image of the restaurant brand from the customers’ perspective. This positive image ultimately interest more customers into choosing the restaurant.
The third marketing practice adopted in relation to the rigorous management practices is dining organically. Poulston and Yiu (2011) assert that, in a global trend, restaurants stared to provide organic food in their menu motivated by satisfying the customers’ expectations, and their study across Auckland organic food restaurants perceived that the reasons behind the decision of serving this food were related to increasing their market share and profits. Also, other restaurants offered organic food motivated by environmental beliefs as their primary prerogative (Poulston and Yiu, 2011).
The fourth marketing practice is innovation. Siu and Kirby (1999) argued that innovation is used as means for marketing by some small Chinese firms. They analysed 110 undisguised published stories about owners and managers in Hong Kong who worked in small firms. They made a comparison of the marketing practices that these firms had with the practices adopted by Western countries. The study indicated that small Chinese firm’s primary focused on the production stage rather than marketing. In addition, the investigation reflected that Western firms’ orientation was centralized towards marketing. A further remark was that innovative strategies were used for the Chinese firms when they marketed their products. Therefore, the Chinese firms identified the consumers need in order to create products oriented to fulfil their consumers’ expectations (Siu and Kirby, 1999).
Different types of Rigorous Practices
There are different rigorous practices used by restaurant in order to remain competitive in the industry. The various methods include dining organically, halal and high end restaurants.
Halal
Halal in the Muslim religion is guidance for food products that Muslims are allowed to consume. Religion also influences the rigorous management practices and competitive consequences that the restaurants decide to implement. Food production is decided on the religious beliefs that predominate according to the restaurants’ region of operation. According to Freidenreich (2011) the religious principles regulate the requirements made by customers in a restaurant. An example of this is that Muslim religious laws recommend the food that is allowed and the one that should not be eaten. The halal guidelines suggest that certain types foods including pork, or food that contain blood and animals which dead was for natural causes, among others, cannot be eaten by Muslims (Freidenreich, 2011). Other prohibitions are related to alcoholic beverages and alternative intoxicants. Therefore, restaurants should be driven by these religious practices to select the options that should be offered to the clients in order to fulfil their demands.
Another example of the religion influence in rigorous management practices and the competitive consequences is the Jewish dietary law known as kashrut. These laws also dictate what Jewish people should eat and what to avoid (Nakhimovsky, 2006). For example, one of these rules constraints Jewish people to eat blood. There are also prohibitions about eating meat from some animals such as donkeys that do not have split hooves. Hence, restaurants located in areas with a predominant presence of Jewish population may ensure to prepare food in accordance to the allowance of the law they follow. These practices also apply to those religions that regulate the options in the intake consumption of its followers. Therefore, restaurants should consider the religion factor at the moment of planning the menu that will be offering to their clients.
Organic
The consumption of healthy food is a need that mayor customers have becoming aware to implement in their daily intake. Therefore, offering organics food in various restaurants has been implemented as a rigorous practice. Poulston and Yiu (2011) argue that restaurants located in different part of the world are serving organic food to satisfy their customers’ expectations. Poulston and Yiu (2011) study restaurants located in Auckland which menu was offering organic food to their customers concluding that restaurants implemented this practice in order to improve their financial position. Other restaurants also offered organic meals in response to environmental beliefs.
High end restaurants
Creating a high end restaurant is another rigorous practice that the restaurants are adopting. In this practice, restaurants efforts are dedicated to engage with their customers. As a result of the changing nature of customers’ needs and preferences restaurants should analyses these elements as trends in order to offer goods and services in accordance to the consumer request. The methods that are used by restaurant to satisfy customers are numerous. For instance, as suggested by Ali et al. (2013) the physical structure of restaurants was considered a fundamental factor that make them desirable to their customers. The three scholars collected data from 280 Malaysian hotels concluding that guests preferred those hotels which focused more on their physical environments. For customers the value and image of hotels provide a positive perception of them.
Furthermore, the rigorous practice implemented by high end restaurants can produce consequences for the management of restaurants. For example, to make restaurants appealing there are number of complexities involved. (Smith et al., 2010) argue that competent leaders are required in order to be successful in complex business models. In the same order of ideas, the authors suggest that leadership skills are a must in those leaders contributing to achieve the organization goals. Similarly, other theorists have stated that particular characteristics amongst leaders have positive effects when embracing rigorous management practices and pursuing the desired competitive consequences. Additionally, (Nohria and Khurana, 2013) argue that leaders who practice democracy endorse teamwork and motivate employees to be involved in the decision making process that include the implementation stage. Thus, the theory about democratic leadership is relevant to promote teamwork. This theory provides guidance to management towards stimulating other employees to actively participate in the achievement of the restaurant goals.
The discussed elements that were included in this chapter can be summarized by the use of a framework shown below.
Rigorous practices implemented in the business stages of chain food industries generating competitive advantages
Theory on Paradoxes
Even though the number of benefits offered by implementing rigorous practices in restaurants, there is not yet an adequate solution for the number of difficulties involved in its adoption. Ozdemir and Caliskan (2014) contend that although rigorous practices allow a restaurant competitive advantages in the modern market defined for been highly demanding; they still require various approaches to solve those challenges. This means that even when rigorous practices are solid, restaurants still face new dilemmas that entail immediate decision making (Ozdemir and Caliskan, 2014). Consequently, rigorous practices cannot effectively pursue the restaurant’s mission by themselves. In other words, they are not sufficient to provide the competitive advantage that will guarantee their remaining at the top position within the industry. To deepen in this paradox, this chapter will establish the relationships between rigor and flexibility among with the analysis of positive and negative aspects of rigorous practices.
De Wit and Meyer (2010) define strategy paradoxes as contradictory demands that organizations face in significant levels. Conversely, these strategies can be integrated by the usage of innovation. According to the situation, the person in charge of adopting a strategy should consider a mindfully approach that allow choosing the best solution of a number of alternatives.
De Wit and Meyer (2010) discuss the paradox of markets and resources. In formulating strategies to increase the competitive advantage of the restaurants, an organization can focus on the customers or the resources. The two methods are conflicting, therefore, there is need to find means through which to solve this paradox. Market driven firms aim at meeting the demands of their customers (De Wit and Meyer, 2010). For firms that are resource driven their aim is to use their resources to develop unique qualities in order to gain competitive advantage. Similar paradoxes are experienced in the restaurant industry, it is therefore, significant to use various innovation methods to combine the strategies and get the best.
In addition, there is the paradox of compliance and choice (De Wit and Meyer, 2010). Compliance involves acting in the accordance to the set rules while choice is the freedom that one can select any alternative. There exists rules in every industry and the restaurant and hotel industry is not an exemption. However, managers in the restaurants may want the liberty to make choices that will benefit their restaurants. The managers may wish to control the demand of the industry in order to make huge profits. Managers face this paradox since making choices is important and compliance is also important.
Rigor versus flexibility
Whilst rigorous practices as its name might suggest are rigid or solid, flexible practices are constantly changing. On the one hand, when rigorous practices are applied to a system, this is not modified for a long time referring to the rigid characteristic assigned to these practices. Moreover, in the adoption of rigorous practices, management would take into account several factors that allow the organization to obtain benefits for a long period of time (Heo et al., 2013). On the other hand, flexible practices constantly change which means they can only be used for short periods of times. Generally, these changes are due to current circumstances that prevail in a period of time. Moreover, the flexible practices provide short term benefits that only last for specific period of times (Heo et al., 2013). An example of this latter type of practices would be a restaurant hosts guests following various food laws that will arrange the preparation of food in accordance to the guests’ desires.
Advantages of rigorous practices
Amongst the numerous advantages restaurants obtain from the application of rigorous practices, the following could be named:
Uncertainty reduction
In comparison to flexible practices, the application of rigorous practices is designed for longer period of times. Hence, the restaurants that adopt rigorous practice will ensure that they will maintain this practice in the future. As an example of this, a restaurant that offers organic food would continue including in the menu this type of food in the future (Poulston and Yiu, 2011). Consequently, uncertainty is diminished on the basis that there is knowledge of the steps that will be held in the future. As rigorous practices provide guidance for restaurants in order to know what should be done and what services should be provided, therefore the uncertainty is reduced.
Better product as a result of the practice
Other advantage of rigorous practices is the contribution to improve the services and products offered by restaurants. Rigorous practices are assumed in order to satisfy and exceed customers’ expectations. As a result, these practices are designed and implemented for the production of goods that match the customer requirements (Llach et al., 2013). Thus, when the restaurants select the use of these practices, products with higher standard of quality will be produced.
Consumer appreciation and trust
As a result of a better production outcome driven by the application of rigorous practices, the consumer can establish an improve relationship of appreciation and trust. Consumers pay attention to the quality of products and services restaurants provide (Llach et al., 2013). Therefore, when a restaurant selects rigorous practices the resulting goods would be appreciated by consumers. This means that consumers will be satisfy for the services and products that the organization offered and they will trust in the restaurant.
Legitimacy
Rigorous practices provide legitimacy to the restaurant. For example, if a restaurant observes halal practices its products will be accepted among Muslims. Muslim religious laws are also followed in order to produce this type of food (Freidenreich, 2011). Accordingly, this practice drives to the legitimacy in the Muslim community for those restaurants that apply the rigorous practice. Legitimacy can also be seeing as meeting the customers’ expectations. Arora and Singer (2006) suggest that if restaurant management focus on those products and services required by customers, they could increase customers’ satisfaction.
Reputation and status; branding power
A restaurant’s reputation would be considered as an essential factor granting competitive advantages. Rigorous practices are engaged to increment restaurants’ competitiveness. These practices are focus on what the consumer want and need. Arora and Singer (2006) argue that satisfied customers develop a positive perception towards restaurants. Arora and Singer (2006) further explains that customers who feel satisfaction for the service or product offered regularly are likely to return. In consequence, the adoption of these practices will create a strong reputation of the restaurant. For instance, restaurants that use rigorous practices such as halal will have a positive reputation in those countries with a predominant presence of Muslims. Other reasons underpinning the offer of organic foods and use organic dining by restaurants relate to the improvement of their brand. Hence, rigorous practices can effectively lead to create a positive reputation and to empower the band.
Intrinsic motivation becomes higher
Chang et al. (2011) promote that innovation could be considered a practice that allow to fulfill customers’ expectations. For Siu and Kirby (1999) innovation requires the identification of the customers’ needs in order to create products align with those stipulations. In this identification is necessary to have intrinsically motivated employees playing management a fundamental role for this. In other words, leaders that possess qualified skills are conscious about what they need to do in order to motivate employees. Therefore, they employed practices that heighten employees’ motivation to accomplish the organizational success (Smith and Lewis, 2011).
Recruiting becomes targeted
Employees are fundamental to achieve the organization’s success. Qualified employees recruitment is one of the rigorous practices followed by restaurants’. In the process of production skilled employees are required to obtain high quality products (Blooma et al., 2011). Therefore, restaurants have their own specifications and procedures at the moment of the selection and recruitment of employees. Rigorous activities are followed in the selection process leading to form a group of qualified and experienced employees that will ensure the success of the organization. Collins and Clark (2003) underline that an ideal organizational performance require qualified personnel. Therefore, restaurants embracing rigorous activities will find that recruitment of employees is one of the principal activities leading the success of the organization.
Disadvantages of rigorous practices
Although adopting rigorous practices have proven to be beneficial as it can be seen in the previous section, there are several limitations associated with its implementation. For instance, maintaining these practices is costly as they demand investment in the form of resources and funds. This can be illustrated in the investment that organizations do in innovation where funds are needed to research and develop new products and processes. Taking as an example organic foods, these ones involved higher cost that those genetically modified products (McEachern et al., 2005). In consequence, restaurants interested in delivering organic foods, will incur in additional cost.
Another challenging rigorous practice to implement is serving halal in restaurants (Wan Hassan and Awang, 2009). There is the fact that restaurants worldwide serve different types of customers to which demands restaurants look to meet. For instance, when referring to halal consumption, restaurants must consider that food practices and rules vary depending on aspects such as religious backgrounds; therefore, halal does not apply to all religious practices. Nonetheless, based on the customers they want to serve, restaurants must produce their food following their diverse religious laws.
In general, when implementing rigorous practices, these are viewed as a long term design. Notwithstanding, in several cases known as contingency situations, flexible practices are allowed (Heo et al., 2013). In the light of these ideas, success in an organization cannot be achieved merely based on its rigorous practices
Based on the above ideas, it can be concluded that although a restaurant success can depend to some extent to its rigorous practices; these practices alone may not guarantee its success. Due to the highly competitive market of the restaurant and hotel industry, rigorous practices provide a highly valuable competitive advantage for both scenarios. From the acquisition of resources, processing, and/or marketing, these practices can be exercised at various stages to perform the activities related to satisfy the customer needs. However, it is recommended that they are implemented along with flexible practices
Restaurants in Australia statistics
The phenomenon of globalization seems to have had a positive impact in the flourish of the hospitality industry around the world. Competitors within the industry are constantly reviewing ways of expanding while at the same time maintaining clients in order to expand their business. Australia does not seem to be exempt, with a large number of restaurants located in Melbourne. Quay, Attica, Momo Fuku Seibo, Marquevue de Monde, Sepia and Est. are known as major competitors and share outstanding features that continuous to attract loyal customers.
Furthermore, in Australia the system in charge to assign the star-rating in the restaurant industry is very flexible. The scale goes from 1 to 5 rating stars guaranteeing that restaurants across the country have equally set of expectations and criteria. Moreover, the experiences that many restaurants offer are exceptional and unique. For instance, the Attica restaurant differentiates from the rest by its high standard in food serving and cleanliness (Saladino, 2013). Others provide services focused on the customer need, such as Quay which is characterized for providing a family-friendly environment and high level service.
Whilst organic foods serving has been raised significant concerns in certain parts of the world, in Australia the food industry is allowed to serve them without additional certification (Neeson, 2010). Even though certification is an internal control followed by restaurants, its primary focus is to encourage integrity, assure compliance to NOP regulations, and protection from contaminated products. In addition, there is a high demand for cooking education as consequence of the growing industry that requires more quantity of chefs in Australia. According to ABS the growth of the demand will continue arising and for the following next 5 years it is expected to reach around 14 percent. This is an accurate indicator that the hospitality industry is reaching a top position in the creation of work opportunities for the population living in Australia.
Restaurant & Catering Australia R&CA is the leader organization representing up to 40,000 cafes, restaurants and caterers in Australia. In the academia school, the students are prepared to develop their skills to introduce themselves in the work field at a manager level in the industry of Hospitality and Cooking. This academia offers courses to improve technical knowledge and skills in finance area along with quality management and staff supervision. Another institution providing cooking classes and dinner parties is Relish Mama in Melbourne’s CBD with a future move to suburban Cheltenham. This school is consolidated in the top five rank position of cooking classes offered in the city becoming the perfect choice for people who love food without age distinction. Moreover, The Hospitality Training Australia cooking school, located in North Melbourne, offers daily cooking courses. All of these schools must meet The Australian Qualifications Framework (AQF), the national policy that establishes the rules related to the qualifications in training and education field that are undertake in Australia. It incorporates the qualifications from each education and training sector into a single comprehensive national qualifications framework.
In regards to the online business in Australian restaurants, this is performed with much pride. There are full-time and reservation bases always availed to the customers’ preference. This kind of industry brought a different perception for dealing and satisfying the demands of consumers driving to a major change in Australia’s economy. This industry has also created numerous job opportunities which numbers are daily increasing; in consequence, this fact has enriched the living standards of Australia’s population. Furthermore, the growth of the food industry in Australia has remained steadily in despite of some economic such as the recent slow-down, which could have affected its progress. Conversely to this last fact, in 2013, the industry grew massively in a 5.7 percent. While statistical data indicates that this amount is relatively close to the increment observed in the retail sector, the national average spending has decreased dramatically, standing at $53 in 2014. The graph below from the correspondence period of 2011 – 2014 shows in a condensed form the performance of Australian restaurant (restaurants).
Australian restaurants performance 2011-2014
As a consequence of the continuing growth of the hospitality industries and solid competitive forces, the restaurant industry is expanding up their opportunity to get involved in the mobile phone industry. Nowadays, many individuals possess mobile devices which are able to provide technological access to the internet through 4G high-speed technology and/or WiFi. Consequently, many Australian restaurants are using this technology to get the advantages of online booking where orders can be placed leading to an increase of 40 percent in restaurant bookings (Statistics, 2008). The subsequent graph illustrates a summary of restaurant online bookings either made by desktop computers and mobile devices in the period of time from May 2013 to April 2014.
Online booking of Australian restaurant from May 2013 to April 2014
Mobile technologies have modified the way how Australian consumers locate dinners and book restaurants. Studies have discovered a growth in short – lead- bookings of 172 percent year-on-year (made with 12 hours or less), and a tendency up to 47 percent of online bookings witch are made within the 24 hours before of the dining time(Saladino, 2013).
It can be concluded that in Australian the restaurant industry have earned a vital position leading the economical grow of the country. The industry regularly offers employment for school leavers and delivers high standard courses in the hospitality industry to its customers. The industry also receives help of several regulatory organizations such as the Australian Qualifications Framework (AQF) and R&CA. Definitely, the Australian restaurant industry will remain in a higher position to be ranked as one of the best in the world.
Results from the Australia Bureau of Statistics have shown a 5.8% increase in comparison with the previous year. Whilst in July 2010, nationwide turnover shows a decrease of 1.9 percent that represented $1.51 billion, in 2009; the retail trade data shows a negative turnover which represents the first negative numbers for cafes and restaurants.
From 2004 to 2010, Melbourne food services market has increased more than a 10 percent from 12 to almost 22 percent in six years. In 2010, the contribution of the food services industry in Melbourne was $3.3 billion and to get this amount it was employed 120,000 people that is part of the overall collected for the all industries in the city that represent over $700 million employing around 30,000 people. This dramatically growth in market share drives the attention to a competitive advantage for this sector of the city. In the years from 2003 to 2009, the annual growth rate of business such as accommodation, restaurant and café was 7.8 percent in the City of Melbourne. This industry is very attached to tourism business which is predictable to have an expense of 108 million annually on food and beverage in the City of Melbourne.
Air Conditioning Alfresco Dining Bush Views BYO
City Views Car Park Degustation Menu Disabled Access
Fully Licensed Functions Licensed Bar Live Music
Private Dining Take Away Water Views Winter Fireplace
Methodology
Approach
The research design will follow the positivist paradigm and qualitative research. The positivist paradigm in qualitative research follows epistemology which basically entails a reliance on manipulative and experimental methods (Denzin and Lincoln, 2009). This is done in order to separate the researchers’ subjective biases from objective realities being studied, and against which claims are made and truths ascertained. Certain beliefs and assumptions are made in the positivist paradigm in regards to reality and knowing: representational epistemology, the assumption that people can accurately explain and describe an objective reality that they know using symbols; and realist ontology, the assumption that an objective reality exists (Rolfe, 2006).
Qualitative data collection has the advantage of being more in depth because participants are not restricted to choice answers (Golafshani, 2003).
It is important that the questions are presented in such a way that objective responses and subjective responses do not get mixed up. For instance, some questions have objective answers as they are based on objective realities. Others however will be expected to elicit subjective responses as they will be based on opinions and personal perceptions. Perceptions and opinions are affected by many subjective factors including culture, values, beliefs, personalities, backgrounds and temperaments.
Sample
Sampling will be taken from workers and managers in the restaurant sector, with interviews conducted in a quiet area for approximately 20 – 30 minutes. Signed consent forms will be obtained for all participants. Interview transcripts will be forwarded to participants for their approval and comment. Open questions will be used to elicit understandings and explore the interviewees’ perspectives (Quinlan, 2011). NVivo will be used elucidate the significant themes in factors that affect rigorous practices in halal, organic and high-end restaurants.
Interviews will be conducted in Melbourne.
The sampling will aim for as much diversity as possible within the restaurant sector. In this case semi structured interviews conducted on 200 restaurants in Melbourne will contain questions related to the topic of study which is antecedent and competitive consequences of adopting rigorous practices in the organization. The answers will be open ended and this is expected to provide the researcher with as much relevant information as possible in order to come up with a better informed solution. The sample is relatively large, and the interviews in every restaurant will interview a specified number of people in each department so as to get information from everyone’s perspective. It is likely that people at different management levels in restaurants will have different perspectives, and this will be examined in this study. Given the focus of the study on halal, organic and high-end produce, it will be important to document managerial and organisation’s staff experiences with the adoption of rigorous practices and the resulting consequences.
Analyses
Questions will be taken from a list (see attached question list) on certifications for halal or organic food and rigorous practices that support this, among other things. The content of the interviews will be semi-structured, allowing topics of interest to be explored in detail. Material will be recorded on audio equipment and transcribed.
Interviews will be analysed with initial coding according to themes, by uploading a Word version of the interview transcript and uploading to NVivo. Themes will be classified into major categories that are conceptual (Strauss and Corbin, 1990), and grouped into categories, with multiple codes in a section of transcript permissible. Similar themes will then be gathered into “several overarching dimensions that make up the basis of the emergent framework” (Corley and Gioia, 2004), to provide a framework for discussion.
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