Are Customer Satisfaction and Performance in Hotels Influenced by Organisational Climate?

By Davidson, Michael; Manning, Mark et al. | Australian Journal of Hospitality Management, Autumn 2001 | Go to article overview

Are Customer Satisfaction and Performance in Hotels Influenced by Organisational Climate?


Davidson, Michael, Manning, Mark, Timo, Nils, Australian Journal of Hospitality Management


Abstract

This study provides empirical evidence that organisational climate is an under-utilised hotel management tool in the understanding of the relationship between employees' perceptions and hotel performance. Organisational climate dimensions derived from a factor analysis are shown to relate to two previous studies. Importantly, it has been demonstrated that a correlation exists between organisational climate, customer satisfaction and hotel performance.

Keywords: Organisational Climate, Hotels, Customer Satisfaction

Introduction

Many organisational climate surveys have been conducted across a range of industries. However, no specific academic study of organisational climate in the hospitality industry has been undertaken to ascertain what effect this construct has on performance.

Organisational climate surveys are an excellent tool to supply information about employee perceptions and have been successfully used in a range of organisational settings. In the hotel industry, organisational climate research is confined to a small number of companies. Only one major international hotel chain regularly uses this research method, using the information gained as a management tool for improving its management and operational systems. This company, Mamott Hotels, was the only hotel company to be named in the Fortune Magazine's top 100 American companies (Branch 1999). Many individual enterprises within the tourism industry carry out individual employee surveys but they are seen as `one off -- identify a problem, fix it and carry on!' strategies. Many companies have achieved success and an international reputation but if they had been more cognisant of their employees' perceptions how much greater might have been their success?

The geographical area that has been used for this study includes the Gold Coast, Brisbane, Sunshine Coast and Wide Bay area of Queensland, Australia. This area accounted for 6 017 000 (77.7%) of the total Queensland visitors and 25 239 000 (62.3%) of total Queensland visitor nights in 1997 (QTTC June 1998). The survey included fourteen, four and five star hotels. This study reports on the dimensions of organisational climate and its linkages to both customer satisfaction and hotel performance.

Literature Overview

Not only is it important to clarify the construct of organisational climate but it is also important to understand its usefulness for the service industries as a possible tool in seeking to improve the effectiveness and quality of their service provision. The importance of climate in the hospitality industry has been highlighted by a number of theorists including, Francese (1993), who examined the effect of climate in service responsiveness; Meudell and Gadd (1994) who studied climate and culture in short life organisations; and Vallen (1993) who was concerned about organisational climate and service staff burnout.

Organisational climate has much to offer in terms of its ability to explain the behaviour of people in the workplace. Ashforth put forward the view that `climate has the potential to facilitate a truly integrative science of organisational behaviour' (1985, p.838). Schneider, Gunnarson and Niles-Jolly later discussed climate in terms of:

   `the atmosphere that employees perceive is created in their organisations
   by practices, procedures and rewards. Employees observe what happens to
   them (and around them) and then draw conclusions about the organisation
   priorities. They then set their own priorities accordingly.'

   (Schneider et al., 1994, p. 18)

Schneider, Brief and Guzzo (1996, p.9) argue that `sustainable organisational change is most assured when both the climate -- what the organisation's members experience -- and the culture -- what the organisation's members believe are the organisation values -- change'. Trice and Beyer (1993) define culture in terms of what it is not.

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Are Customer Satisfaction and Performance in Hotels Influenced by Organisational Climate?
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