Organizational Culture in the Restaurant Industry: Implications for Change

By Koutroumanis, Dean A.; Alexakis, George | Journal of Organizational Culture, Communications and Conflict, July 2009 | Go to article overview

Organizational Culture in the Restaurant Industry: Implications for Change


Koutroumanis, Dean A., Alexakis, George, Journal of Organizational Culture, Communications and Conflict


INTRODUCTION

Employee perspective with regard to organizations has been shown to have effects on the success of the organizations. Having employees with appropriate attitudes will enhance the probability for success in any company in any industry (Davidson, 2003). Organizations with a strong sense of customer orientation have also shown greater levels of customer satisfaction (Schneider & Bowen, 1993). The restaurant industry has a greater likelihood of being influenced by employee actions than other industries, because of its labor-intensive nature and the high level of interaction between the employees and customers (Davidson, 2003; Seidman, 2001).

The purpose of the paper was to research findings in the existing literature for suggesting directions restaurant leaders could follow with regard to cultural development. Their implementation could have a significant impact on many aspects of their operations, including increasing productivity, reducing turnover and building commitment. For the transformational change to be achieved, organizations must first understand and manage the complexities of their respective organizational cultures (Goodman, Zammuto, & Gifford, 2001) and build stronger levels of organizational commitment. The manuscript reports the findings of a study to determine how organizational culture influences full-service restaurants. The purpose of the study was to determine the most suitable cultural model for full-service restaurants among the four presented.

Restaurant Industry Challenges

Although individual restaurant entities are usually considered small businesses, the restaurant industry has been traditionally known for having a highly bureaucratic management style (Tracey & Hinkin, 1994). Classical management styles are that of highly defined, routine practices, which have strict adherence to specific rules and regulations (Smucker, 2001). The traditional management philosophy (i.e., Theory X management) in the hospitality industry does not take into effect the person or individual doing the job, but focuses more on the job itself. Identifying what the specific tasks and requirements of the job are and then training the employees to perform these duties has been and remains the norm in the food and beverage industry (Tracey & Hinkin, 1994). Generally, the restaurant industry is almost autocratic in nature. It is hence a difficult and demanding industry within which to be employed. Theory X management style works when there is little competition and local unemployment figures are high. The realities of the industry depict a different story. Industry statistics show that competition among operators is fierce and that a lack of a large labor pool has plagued the industry for a long time, which continues to be a major concern for restaurant owners and managers (Crook, Ketchen, & Snow, 2003; Enz, 2004). Ultimately, harsh organizational climates tend to discourage employees from continuing employment with foodservice operators and cause people to "job-hop." The restaurant industry is notorious for having high employee turnover rates. An industry-wide study of restaurants concluded that restaurant managers should do a better job of being an employer of choice if they are to satisfy customers and produce financial results (Koys, 2006).

ORGANIZATIONAL CLIMATE AND ORGANIZATIONAL CULTURE DEFINED

Before Pettigrew's (1979) landmark organizational culture study, research centered on the construct of organizational climate (Obenchain, 2002). Organizational climate emphasizes the importance of shared perceptions as underpinning the notion of climate (Anderson & West, 1998; Mathisen & Einarsen 2004). Reichers and Schneider (1990) defined organizational climate as "the shared perception of the way things are around here" (p. 22). According to Schein (1990), the main differences between organizational climate and organizational culture are the levels of complexity of the two constructs. …

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