Ealing Hammersmith West London College Research on Hospitality Management BIR Business Issues Report

ADNAN UL HAQ
University of Wales Supervisor Mrs.Roopa Nagori

B.I.R TOPIC

Outsourcing of services in the Hilton Hotel Park Lane, London

Abstract

The United Kingdom is one of the biggest and most coveted tourist destinations in all over the world and with the tourist density greater than any other major European city in the present day London stands as the prime tourist attraction in all over Europe. This hospitality industry is supported day and night throughout the year by several hospitality businesses in which the major ones are the hotels. The Hilton Hotels & Resorts is one of the major international hotel chains that provides full service hotels and an experience worth the premium prices. Spread across all the six continents with over 550 hotels and Conrad Hilton founded counting the Hilton hotels & resorts in the year 1943.

The research is mainly about the scope and process of outsourcing in the current hotel sector in the United Kingdom. The topic is important to understand the various stages and plans a hotel has to go through while outsourcing a certain department or service. This research is important for my professional approach to understanding why do the hotels outsource their services. The first and fore most question which will be researched is that whether outsourcing a certain department or process is profitable or will it lead to problems in longer course of time. As per Morone, General Managers really like to control whats going on in their shop. When you outsource, you lose some control. You have absolutely no control over those employees. They are not your employees.

This will help the research to generate a better understanding of the hospitality industry and its relations with the outsourcing agencies in a better manner. The research also deals with the scope of the current services that are outsourced in the UK based hotel industry and looks at the major trends of outsourcing. Implementation of successful outsourcing techniques and key objectives of a successful outsourced operation is also elaborated with relevant examples. The research explains the various aspects of the success and failures of the various outsourcing case studies in the Hilton hotel chains. The research will also overview the various outsourcing companies and their strategies to remain in business such as Spotless UK and SODTECH etc.

Acknowledgement

I would like to thank Mrs.Roopa Nagori for the valuable help and guidance that she has provided me in this Business Information Report. She has helped to format, structure and build my research report from scratch and to formulate it into useful piece of research information. I would also like to thank my friends and colleagues who have helped me to clear my doubts and attain useful and valuable information that I was able to use in this report. I would also like to thank the hotel managers and supporting staff who gave me their valuable time so that I could interview them and attain useful pieces of research data that was further used in the report with their full consent. Lastly I would also like to thank the University of Wales and Ealing, Hammersmith and West London College so as to provide me an opportunity to be able to study and research upon important articles, journals and reports based upon my topic of research in their respective on site and online libraries and databases.

TABLE OF CONTENTS Abstract Acknowledgement Chapter One: Introduction 1.1 Importance of Outsourcing 1.2 Importance of Outsourcing in relevance to the Hilton hotel at Park Lane 1.3 Research Aims 1.4 Research Objectives Chapter Two: Literature Review 2.1Theories 2.2 Strategies and outsourcing 2.3 The importance of coordination 2.4 Core Competency concept and model 2.5 Concept of Specialization 2.6 Reasons for outsourcing 2.7 Benefits of outsourcing 2.8 Controlling risk 2.9 Managing organisational change: 2.10 Advantages and disadvantages of outsourcing 2.11 Conclusion Chapter Three: Methodology 3.1 Introduction 3.2 Research process 3.3 Research limitations 3.4 Research ethics 3.5 Research design 3.6 Data collection 3.7 Data analysis 3.8 Secondary data findings 3.9 Primary data findings Chapter Four: Findings, outcomes and discussions 4.1 Introduction 4.2 Results of interviews 4.3 Results of Questionnaire Chapter Five: Conclusions, Recommendations and Future scope 5.1 Introduction: 5.2 Conclusion: 5.3 Recommendations 5.4 Future scope of research Bibliography APPENDIX A APPENDIX B APPENDIX C 2 3 5

Chapter One: Introduction 1.1 Introduction What is Outsourcing? Outsourcing is an arrangement in which one company provides services for another company that could also be or usually have been provided in-house. Outsourcing is a trend that is becoming more common in information technology and other industries for services that have usually been regarded as intrinsic to managing a business. In some cases, the entire information management of a company is outsourced, including planning and business analysis as well as the installation, management, and servicing of the network and workstations. Outsourcing can range from the large contract in which a company like IBM manages IT services for a company like Xerox to the practice of hiring contractors and temporary office workers on an individual basis. The main reason I wish to do research on the selected topic of Hospitality Outsourcing is that I wish to open a contract catering business of my own in the future. I have a considerable experience in providing service staff for contract caterer agencies such as Madhus in London. My overall approach towards the research was mainly primary research based upon the managers undertaking the outsourcing operations and then analysing these tactics based upon the secondary research done upon various outsourcing models and techniques. The report will start by the literature review which will be based upon the what outsourcing is, what are the basics of this technique and what major outsourcing models do hospitality businesses follow in their daily operations. Furthermore the next chapter will focus upon the primary research and data collected and therefore it will be followed by data interpretation and analysis which will lead to the comparison of the current outsourcing tactics followed and those which can potentially prove to be useful for the Hilton hotel at Park Lane. Finally the report will conclude with conclusions and appendices depicting the outcome of the entire research.

1.2 Importance of Outsourcing in relevance to the Hilton hotel at Park Lane The hotel in view is the Hilton Park Lane in London, which has recently been awarded the Best Business Hotel in UK 2010 by Business Traveller magazine fourth year in a row. The hotel has also been awarded England's Leading Business Hotel 2009 by World Travel Awards Europe. The hotel coasts of 13 function rooms, including 8 meeting rooms and a fully quipped and updated business centre to cater to all the business requirements of its guests. The hotel is also takes pride to offer a full 360-degree view from the 28th floor and in the Michelin starred, Galvin at Windows restaurant. As mentioned above, the hotel in perspective is a premium level hospitality business and therefore it requires a high number of manpower requirements throughout the year. This means that the hotel either has to maintain a very high number of staff, both permanent and temporary so as to meet the demands of the business and also to manage these people and the different process that they do by hiring more people to supervise, manage and train these employees. Having an all self sustained team of employees is although a lucrative offer for Hilton but on the other hand the hotel will suffer from more demands which will be in the form of a bigger supervising and managing team and also looking after a greater number of processes and operations. Although the hotel can sustain all its demands by itself but on the other hand the hotel also needs to maintain a balance between the resource division amongst all the departments and processes. This means that the amount of manpower, money and time a hotel has in total needs to be distributed in such a manner where the major core departments get a priority and the other supporting or ancillary departments get the secondary preference. To manage this distribution of resources a hotel has to take major decisions whether to perform these tasks by self or to hire an external agency to perform these tasks for the hotel. In the core departments the hotel therefore prefers to keep a direct control and perms these processes by self employed and controlled indigenous teams. On the other hand the supporting or ancillary departments are therefore sometimes referred to outsourcing agencies and management companies which therefore take a agreed fee in return for providing manpower, management, products and services to the hotel, thereby taking making the hotel concentrate on its core areas. Sources???

1.3 Research Aim The aim of the research is to investigate the major outsourcing techniques, models and tactics that hotels apply in the present day. The report also aims to focus these theories and processes down to the Hilton Park Lane hotel and therefore elaborate which departments in the hotel practise these tactics. In addition,The research attempts to find out the co-relation between these outsourcing practices and profit generation of the hotel as compared to these processes performed indigenously.

1.4 Research Objectives The research objectives of the research project include primarily to discuss what outsourcing really is and also to describe the different aspects of this process in relevance to the various theories, models and processes devised by theorists on this specific business strategy. The research also focuses on elaboration of all the steps that are taken in order to successfully implement the outsourcing of a process or staff. Another objective of the research is to establish the connection between outsourcing of staff and the profit making strategies of the hotel and this will be done while meeting the hotel's performance objectives in perspective. Finally the research will also discuss the various tactics that the Hilton Park Lane Hotel has applied over time and which of them succeeded and failed. Obj 1 To discuss outsourcing in the hotel, mainly its implications, scope and different strategies for implementation. Obj 2 To elaborate the various steps involved in the successful implementation of an outsourcing procedure. Obj 3 To analyse the underlying idea of outsourcing and profit-making in the hotel by the linking the outsourcing process with the hotels performance objectives. Obj 4 To evaluate with the help of relevant case studies the various successes and failures of outsourcing techniques in the London Hilton Park Lane hotel.

Chapter Two: Literature Review

Introduction: This chapter focus on the theories and the previous empirical researches conducted on the outsourcing. The models and theories are examined in a critical manner to understand the reasons and benefits of outsourcing and how it helps organisation in attaining the competitive advantage.

2.1Theories: In recent era, outsourcing is a popular term which has rapidly spread in the hospitality industry as it is the process which is widely in practice in the hospitality business. The simplification of a definition of outsourcing elaborates the reason of its introduction in the business world. (Greaver, 1999) defines outsourcing as a process of contracting out the functions of a business by a firm. In other words, it is a decision made by top management to contract out the functions of their respective business to external agencies so that the activities which were previously carried out internally could be done through agencies. Moreover, Domberger (1988, p12) defined outsourcing as a process of traditionally activities executed by the internals carried out are subject to contracted out to external providers. Yadav (2006) in his article described it as a business decision of strategic nature that needs to be critically examined before final execution. This indicates that outsourcing is a well planned procedure which needs to be studied in a detail manner before initiating it. Outsourcing engages two parties that are clients and the providers respectively. To strike a perfect balance, outsourcing involves immense expertise from client as well the agency (Yadav, 2006). Client is a business or the initial company which lack internally the ability and sense the need to be fulfilled by the external party, they therefore reach to a decision that the provision of services or product they required to be taken by second party. The second party is the agency or a provider which are chosen by clients to manage, provide and execute the needed products or services to their respective clients. This indicates that there is a link between these two respective parties. The linkage between the provider company through provision of its services or products to a client in return of profit motives is regarded as outsourcing (Lashley and Morrison, 2002). Outsourcing is done in numerous forms of inter-form correlation that could be ventures, alliances, partnerships, and arrangements of shared services (k&K, 2000). Before this study, Rob and Kwag (1997) included franchising in it and defined that outsourcing emerge due to franchising and the formation of virtual organisations that have workers and executives assisted by external contractors and part-time facilitators (Domberger cites Handy, 1989).

2.1.1 Basic types of Outsourcing:

1. Business Process Outsourcing (B.P.O.) Business Process Outsourcing is a type of outsourcing that involves a particular process or a specific task which is need of a client and requires to be done therefore contracted out to external agency or provider (business-outsourcing.co.uk). Outsourced task is of highly importance and professional expertise of provider is required by client therefore the provider is contacted. Due to this type of outsourcing, the time and other resources of clients are saved. Whereas Berrar and Gervais (2006) have defined B.P.O. as an undertaking of a business which involves the subcontracting of numerous types of business related operations to an external party or expert providers. Taking in account the notion of Berrar and Gervais the best example to support the Business Process Outsourcing is hospitality organisations which often outsource its department of housekeeping, food and beverage service staff or linen cleaning and laundry facilities to an outside provider.

2. Knowledge Process Outsourcing (K.P.O.) According to Shanthi Kumar (2007) the knowledge process outsourcing (K.P.O) is an allocation of a comparatively high level duty or job to external party or various distinct groups (probably in a diverse geographic setting) within the same business. The researcher further explained KPO as crucial high-end BPO. In other words, KPO is more sensitive approach that involves decision making of critical nature along with the significant processes of management and supervision therefore it is regarded as Knowledge Process Outsourcing. In context of hospitality sector, KPO is practiced widely because the hotel property is administered and supervised by an outside hospitality management company because the provision of managers, decision makers and the experts to run the entire business is provide by these external hospitality management firms. 2.1.2 Employees involvement in outsourcing: There are various levels and criterion on which relay the businesses in order to outsource its procedures, process mechanism and operations. No matter these outsourcing is done on partial or complete basis, the ratio or percentage is decided according to the level of business outsourced. The indirect control over numerous levels of operations currently operating in a business and the hierarchical stages of authority is also being decided by the level of outsourcing of a business. The level of employees involvement cannot be neglected completely as it is vital for understanding the basics of outsourcing. The basic categorization of outsourcing on the basis of employees involvement is fully outsourced and partially outsourced.

2.1.2.1 Fully Outsourced The study of Edwards and Sridhar (2005) discus the fully outsourced as the entire process of execution and operations are run by the external management. This means that the entire departments of a hotel including the department of human resource management and sub departments are administered and managed by the outsider management organisations. Gopal et al (2003) suggested that this type of outsourcing provide the ease to the owner of a hotel to focus on various other projects as he or she is more relax with the unburdening of responsibilities of administration by lending it in expert hands. Furthermore, owner is relaxed more because the trouble shooting and managing everything is the prime responsibility of the external management company. Not just the internal problem solving is the responsibility but to adhere to the industrial standards are also the responsibility of the management company Hovlin (2006). Moreover, the study of Hovlin (2006) revealed that the profit making, sales promotion and marketing is also the management companys liability and they therefore are responsible in direct mode for the business and generating revenue. In this case the Head of Departments and the General Manager are liable for reporting to the property owner and other subordinate hierarchy never comes in contact with the owner.

2.1.2.1 Partially Outsourced According to the study of K&K (2000) the outsourcing on the basis of partiality so that some of the department which require high expertise to control and run is contracted out to expert agency. If we consider this notion, it means that owner retain the management because not all responsibilities are outsourced but some of the departments are being outsourced. In this type of outsourcing, employees are taken by the company from the provider in particular contracting company in order to meet their labour demand so that they can operate in dynamics. Moreover, the employees are answerable towards contracting company as they are being paid for their services by the contracting company. This type of outsourcing is more noticeable in the hotel industry.

2.2 Strategies and outsourcing: Various empirical researches have examined the outsourcing in the framework of strategy (for instance, Shank et al., 1988; Teresko, 1990; Quinn and Himler, 1994; K&K, 2000; and Park et al., 2000). The main two reasons of outsourcing are strategies and being scale economies (K&K, 2000). The same views are being expressed by other writers also such as (Smike, 2000, p26) states that outsourcing is viewed by organisations in a strategic manner as it is managements strategy in a broader perspective rather than a simple tool for the reduction of

cost. The significance of outsourcing and its relationship with the strategy was noted by Teresko (1990) as he explained that to increase the competitiveness in the market; the strategically outsourcing is a process of determining the skills and competencies of a firm through the efforts of managers. From this we can conclude that outsourcing is traditionally insourced and integral to a strategy of a firm (Langfield-Smith et al., 2000).

2.3 The importance of coordination: Undoubtedly, the activities of a business involve and require huge cooperation and coordination (Domberger, 1998). The unhealthy relationship between the outsourcing agency and the client can hinder the long term strategies of a firm, the process of continues competitiveness and profitability although the earlier outsourcing decision had been executed well (Langfield-Smith et al., 2000, p3). The coordinations success can be affected in a negative way due to the self-interest of either party (Domberger, 1998). This means that outsourcing should be strategise in a rational manner as it require a strong bondage of coordination on the part of both sides because non cooperative behaviour can be a constrain backed by the self interest of players (Domberger, 1998).

Results of Various empirical researches (Models and Concepts)

2.4 Core Competency concept and model: According to Prahalad and Hamel, (1990) A potential access is provided by the core competence for the market in broader spectrum. It should contribute significantly towards consumers with benefits from the usage of product or service. In other words, competence is vital in determining the satisfaction of a consumer therefore, it should be difficult for other to imitate or copy. Undoubtedly a competence makes a firm different and at a same time firm has greater value over others because it stands different than other companies. "

The theory of core competency explains that reserving, preserving and protecting the core of a company is vital. This concept indicates the notion that if the strategy weakens than the future of a company may face serious problem. According to (Kandampully and Promsivapallop, 2005) The two main categorization of services of hospitality firm are services-core and supporting peripheral services. The fulfilment of primary needs of a customer is the main goal of core services while supporting services are ancillaries that add extra to the core services. The main reason of a company being in business is due to the provision of core services. The peripheral services are support function for customers to attract them. Together with core services these ancillaries create a

higher value in the minds of consumers. Using a hotel as an example, the core service includes a clean, properly equipped bedroom, whereas the peripheral service includes such services as a wake-up call, morning tea, coffee, newspaper, laundry service, shoe-shining, transport to and from the airport, and so on."

(sources: Kandampully and Promsivapallop, 2005)

The above diagram elaborates the two distinct services in order to clear the concept above core services and peripheral services. Every basic hotel provides core services and the guests also expect these services from every basic hotel such as clean and tidy room. But peripheral services are of secondary nature which stands second for customers but attracts them towards the hotel. Moreover, the primary services are availed by all guests but the secondary one is provided on the demand of guest.

2.5

Concept of Specialization:

The main advantage of an outsourcing is a specialization (Domberger, 1998; Ansley, 2000; Lagfield-Smith, 2001). In general terms specialization refers to the focusing of an organisation on a particular activities. K&K (2000) view specialization as the major benefit of outsourcing. The study of K&K (2000) indicates that utilization of investment of external suppliers is the huge advantage of outsourcing. On the other hand, Domberger (1998) argues that due to outsourcing the specialist external suppliers are able to attain the immense volume than that probable if the tasks and actions are split all across the various companies executing then inhouse. To further clarify the notion, the specialist provider has advantage of scale of economies being reaped which might not have been availed by the inhouse providers (Domberger, 1998). In the scenario of a hotel where the management want to enhance the profit margin of a specific department, the specialisation becomes a focus for them. In other words, the management decide that the expert should handle their particular task in which

they have expertise therefore outsourcing comes in play. Hiring and recruiting workers is costly activity as the training of hired worker is also essential therefore, the hotel management usually opt for contracting agencies who have specialisation in managing the labour force which do not require high training for all the activities.

The hotel searches for a contracting agency for a certain number of employees who are an expert at a certain kind of task. i.e. a bartender is a profession trait that is either semi or highly skilled. But in the case of a five star hotel where the guests are usually executive the bartender needs either to be highly skilled or sometime even a well known name in the industry. This not only increases the glamour quotient of the bar or the hotel, but it also increases the incoming revenue for the hotel, as when people come to know of a certain service that's being performed at a highly specialised level in a certain hotel, they tend to enquire about it and thus finally consume it out of curiosity. And as the service is specialised and is of a top quality, the hotel can expect high profits and good publicity.

2.6 Reasons for outsourcing: There are numerous reasons and factors that drives organisation for outsourcing but in broader perspective it is categorised in this research investigation under the heading of: to main competitive advantage, and to focus on core activities.

2.6.1Reasons for outsourcing: maintenance of competitive advantage Domberger (1998) views couple of issues linked to decisions of outsourcing, one is related to competitive advantage. To support his argument Domberger (1998) mentioned example of Microsoft which outsourced its divergent function such as customer support for a realised new software, production and distribution. This outsourcing has helped Microsoft in attaining the competitive advantage in the market. Hayward (2002) suggested that brand and the people are two things to gain competitive advantage whereas remaining everything can be copied (p.26). This explains that to maintain competitive edge, companies rely heavily on outsourcing.

2.6.2 Reasons for outsourcing: Focus on core activities K&K (2000) argues defining core competencies is not easy for organisations as it is ambiguous one (p. 674). In order to retain core activities, the outsourcings come in play. According to Quinn and Hilmer (1994), focus on the management system and intellectual skills helps in maintaining the competitive advantage for a firm. This is where core

competencies are focus by organisation and therefore they contract out their other activities to experts in order to create opportunities for new one (Domberger, 1998, p. 37). On the other hand, Quinn and Hilmer (1994) regard the customer services as core competencies. We spend time with our customers so this function wouldnt be outsourced by us (Hayward, 2002, p. 26). This statement is specifically related to customer oriented industry like hotel industry.

2.6.3 Conclusion to reasons for outsourcing: In order to sum up the reasons for outsourcing, K&K (2000) concluded in their discussion that The consequence of outsourcing rely on the activities being outsourced along with the adequate specification of assets in physical manner to conceive the desired outcomes (p. 705).

2.7 Benefits of outsourcing: From above literature it is clear that that specialization is one of the benefit that drives business into outsourcing, Domberger (1998) recognise three more benefits of outsourcing such as discipline in market, cost effectiveness and flexibility. In market discipline, the buyers are distinguished from the supplier and under contract a formal transaction take place. This means there is more choice and prime focus in the market. (According to Domberger, 1998) the supplier can be maintained as there is opportunity to switch to another supplier for supply when there is a problem aroused from one supplier. In Flexibility, firms ability o adjust in accordance with the scale and scope which means small scale organisation network linked client and manage at lower cost to changing demand. Outsourcing enables to reach to quick developed technologies and complex systems through the flexibility (K&K, 2002, refer to Carlson, 1989 and Harrison, 1994). Cost saving is viewed and realised by numerous business as noted by Domberger (1998), Ansley (2000), Smike (2000), Deans (2001), Syver (2001) and Hayward (2002).

According to PriceWaterhouseCooper partner, approximately up to 45% of cost is saved by a client through outsourcing (Haward, 2002). The other example is an Australian company which has improved its ranking by outsourcing to clients and has been cost saving one too (Dean, 2001). Some of the other advantages of outsourcing is replacement of unsatisfactory services (Teresko, 1990), a way to facilitate change (Domberger, 1998, and Mise, 2001) modified terms of employment (K&K, 2000) etc.

2.8 Controlling risk:

Two areas to divide risk are, the risk of outsourcing, and the risk of the activity itself (Domberger, 1998).as the earlier studies of researchers have identified that loss of control enhances the risk more due to the gap created between the purchaser and the supplier. Outsourcing strategically divides the risk of a company by shifting its propensity of risk to the suppliers (Bromage, 2000) and to split the risk along with the benefits are done through alliances or partnership which is originated from outsourcing (Quinn 199; K&K, 2000). In order to gradually reduce the risk of outsourcing, it is essential that the contracting out companies and agencies are up to date with technologies and best practices in their field (Stacy 1998b; Mise, 2001). By constructing the variables and fixing elements in their contract is the way to develop strategies for sharing and splitting the risk. Although the dependency of risk heavily relies on the nature of services for instance, the high labour intensity at the hotel industry is in close relation with the outsourcing risk in the industrial relations therefore bidders are required to make a plan of managing risk that identify and quantify the risk (Domberger, 1998). The controlling of risk while outsourcing is done through risk management plan in the hotel industry (Mise, 2001).

2.9 Managing organisational change: Changes here are related to the social cost as numerous researchers have viewed the significance or engaging staff at inhouse in the decision of outsourcing. Sometimes outsourcing is tending to generate outcomes of discontent because of people are opposed to changes therefore changes can create problems which is referred as Perennial gale of creative destruction (Schumeter, 1943, p. 84, cited by Domberger, P. 133). This means that anxiety and resistance internally may occur when firms opt for outsourcing. Outsourcing on other hand is vital for managing the changes in organisation. For instance if a company does not go for outsourcing, it may lose an opportunity of attaining some of the best employees from the labour market. The changes are frequent to occur and once the intention of managements outsourcing is clearly understood, the strategies of communication should be installed to remove the unrest of employee due to the changes in the organisation. The previous empirical researches such as (Murphy et al., 1999; K&K, 2000; and Smike, 2000) shows that the outsourcing has exceeded in both public and private sectors with the passage of time, therefore the changes in organisation are dealt by management when they are clear on the strategies of outsourcing.

2.10 Advantages and disadvantages of outsourcing: It is often said that every coin has two sides and it is rightly said. Considering the fact,

outsourcing also has some advantages and disadvantages. From management literature it can be said that specialisation (K&K, 2000), reduction in the cost of company (Domberger, 1998) gaining access to worldwide capabilities (Smike, 2000) sharing and reducing risk, (Mise, 2001) are some the advantages of outsourcing. But outsourcing also has demerits such as it is not always profitable (Murphy et al., 1999), change (Domberger, 1998), more supervision (Langfield-Smith, 2000) and risk (Domberger, 1998). This shows that if outsourcing is not carried out with a proper planning, it can also cost some serious problems for the management. Ansley (2002) described that outsourcing is linked with the strategic planning of an organisation because if the proper and rational strategies are not opted before outsourcing than the advantages of outsourcing can easily convert into disadvantages.

2.11 Conclusion: This chapter has provided an overview about the outsourcing decision and the general management literature about the reasons and the advantages of outsourcing. This chapter has provided the foundation for commencing research investigation in more practical manner. In the above chapter the risk, and core competence are discussed which lies in the context of control and reasons of outsourcing. The issues that was discussed in the management literature which falls outside the theoretical framework including specialization, market discipline, cost saving and flexibility. Moreover, the empirical researches on notion that core competence does not represent organisational strategies as there is relative absence of strategy in the past researches conducted on outsourcing. However, the above literature and the previous empirical researches have not measure the outsourcings benefit in context of strategy. This chapter has enable us for the next chapter as it informed us about the researchs empirical phase and also enabled us about how this study can contribute management literature. to the hotel

Chapter Three: Research Methodology 3.1 Introduction: This chapter of dissertation contains the various sources from which data has been collected using sampling techniques and tools. The vital point is to find the solution for research problem by correlating the tools and objectives. This study investigation aims to find the effects of outsourcing on the hospitality industry. 3.2 Research process: This research is about the reasons that drive hotels to opt for outsourcing and the issues related with the outsourcing. Moreover, how hotels have potential workforce through outsourcing in a cut throat competition. The process of research is divided into following stages: 3.2.1 Identifying problem The process begins with the identification of a problem and in this research we are exploring the pressures and causes that drive hotels to opt for outsourcing. The goal of this research is to identify the reasons that affect the employees and the hotel in a negative manner due to outsourcing along with the solution to those problems. 3.2.2 Sample size: Time constrain has limited the number of interviews and sample size. Three managers with the experience over 5 years in the chosen case study have been interviewed in the detail out of five people undertaken in the sample size for interview due to their availability. Apart from these 3 interviews, the questionnaire was circulated into 20 employees who have sufficient experience in the selected organisation. The appropriate findings should be generated from this small sample and due to its small size the findings are limited to present investigation. 3.2.3 Pilot testing In order to reach to any type of conclusion, the pilot testing is carried out by selecting a small group of people from the organisation to be interviewed by asking questions from the sample questionnaire selected for this research. The experience and time duration within the organisation was taken in account for pilot testing. This was done so that the questions are understood by the sample set properly so they can respond in adequate manner as pilot testing assist researcher in reaching to appropriate conclusion. 3.2.4 Credibility The credibility of an investigation is of high significance and in this research the number of respondents is small therefore the credibility assurance is done through considering the working experience and the educational background of respondents which will be indicating that the information gathered is reliable one.

3.3 Research limitations Every research is subject to some sort of limitations and in this research the main limitations are time constrain, the number of interviews and only one organisation which is the respective case study at hand. Since the study is by nature qualitative as the main method of conducting research is qualitative and the conclusion is relying on the information gathered from only three managers and 20 employees because not all of the employees were interviewed so therefore there is a possibility that the feedback may not generalized to the entire hospitality industry. The gathered information is based on the personal experiences of employees so the data may not be justified from the perspective of management. The data was detailed and lengthy but only important points are included in research as the complete data inclusion in report is not an easy one. 3.4 Research ethics Research ethics are vital as it encourages the goal of study as based on facts and free from error, for instance the deliberate misinterpretation of data, or inclusion of false information. The promotion of team work, social norms, and public support is vital therefore respondents were informed about the interviews and questionnaire and the confidentiality of respondents were maintained. The integrity of sample set was maintained who shared their experiences, ideas. 3.5 Research design The approach for this study is qualitative that discuss the issues associated with the topic with the assistance of techniques of experimentation, structured questionnaire and interviews. Questions of research are put forwards which helps in the gathering of data and analysis are followed later. Three managers are interviewed for the discussion of reasons for outsourcing and issues related to doing so. 3.5.1 Qualitative Research approach This approach targets to create understanding things that why and how they are seem, qualitative research is very beneficial in considering the attitudes of employees behaviour and attitude along with the policies of business. The ideas of making decisions and thoughts and through interviews observance will be made about the views and respondents. In depth information about the process of outsourcing will be discussed to find the reasons, causes and pressures on the selected organisation in the hospitality industry through the qualitative research. On the other hand for this type of research the quantitative approach will not be suitable. Since the life experience of respondents is not included but qualitative approach is time consuming but able to provide useful information. In the qualitative research, with individual interviews the two techniques that is used in this study is of a) Grounded theory (Glaser and Strauss 2008) and b)Delphi Hugh P.Mc kenna and Felicity Has son 29 January 2000).

3.5.2 Sampling Sampling is vital part in the data collection as it is essential on the qualitative approach, the interviews from manager are of different age having experience of managing labour through outsourcing. The employees of 300 room hotel were targeted for this research. For present investigation detailed interviews have been arranged along with the views of experts from the hospitality sectors that are the comments from renowned authors in the primary data and secondary data. 3.6 Data collection This part includes questionnaires as well detail interviews. According to Sekran (2003) this assist interviewer for detail queries about particular conditions therefore it is not just a one way conversation. The interviews assisted the researcher in asking details about the reasons of outsourcing and its impacts on the hospitality sector. Managers also shared live incidents that occurred in the organisation which lead to outsourcing and their views about those situations. 3.7 Data analysis According to Jorgensen (1989, p. 107) to reconstruct the data in a most comprehensive manner is the main objective of this process. The data collected from the respondents including examples is added to report that is generated through the interviews. To focus on the main topic the required information is only included and displayed in a manner to draw conclusion. Thought this is also important as it reduces loads of information and talk exactly to the point which is important for the report where data reduction comes in place and further we move on to data display and then conclusion drawing.

3.8 Secondary data findings DeMicco and Williams (1996) offer extra evidence of outsourcings increase in the hospitality sector on the international line, the table 3.1 reveal the approximate of contract foodservice penetration in the market in mid 90s in the UK and table 3.2 shows the figures of increase in the outsourcing in Europe n Us for 1990 and 2000. There has been potential increase in the contract caterers all across the globe while in Japan there is 50% food service markets are being outsourced.

Source: Food management 1994, cited DeMicco and Williams (1996)

According to the survey of DeMicco and William (1996) the contracting services has gradually increased its mark in different institiutions and this shows the rapid increase in the outsourcing. Table3.2 Contract Caterers 1990 Percentages 15.9 11.6 15.3 18 14.1 3 12.8 Market Penetration 2000 Percentages 24.9 23 21.7 21.3 18.3 17.1 17

Italy Netherlands UK France Portugal Germany Switzerland

% Increase 9 11.4 6.4 3.3 7.2 15.3 4.3

Source: Jacobs (1994), cited by DeMicco and Williams (1996) This above statistics revealed that there has been significant growth in the outsourcing on employees in the hospitality sector in the most of the European countries. The international journal of Contemporary Hospitality Management initiated an annual issue providing review over the hospitality research. Costa et al (1997) shows that there has been a significant and drastic change in the contract catering services in the hospitality sector of UK. Source Employees hired through outsourcing agencies in the hospitality sector.

Another table shows that the interview results of survey of Prabhu (1996) that most of the employees working in the hotel industry are either hired through contracting services currently or in the past. This indicates that outsourcing in the trends of market more with the passage of time.

3.9 Primary data findings Explanation of setting and condition- What does the support offer us? To understand the reasons of outsourcing and who are the people more in favour to join organisation through contracting in the hospitality sector we interviewed the few of employees working in the chosen organisation randomly and later on checked with the views of experts so that a better platform for discussion can be laid. The discussion proved to be beneficial in writing report. Scenario 1 or interpretation Two weeks ago we visited Hilton Park hotel for a lunch before we ordered our meal we had a time to talk, the person who attended us to sitting came and asked about the starters. We had a chance to ask him about whether he was working in the hotel through some contracting services or a reference. He told us that he was in the same organisation for last two months and it is through the agency that finds this job for him. We asked him that is the same agency give you jobs and he said that every time I am in need of work I go to them and they sometime provide me contracting jobs and sometime part times too.

Scenario 2 or interpretation Another waiter was interviewed at the same restaurant in our second visit on the following. Monday for dinner and we were assigned table 9 and this time we asked about the previous

waiter who we had already interviewed and it was said that he was off shift today so this waiter was more of relax in giving us details, he told us that he is working for more than half year and it is nice experience and he was also hired through contracting agency. He has already worked in some other organisations before but in the hotel it was his first and fine experience. He said that to him it is easy to find job and work on contract basis. But he further mentioned that he prefer to stick to same organisation.

Scenario 3 or interpretation The manager was interviewed and asked about the reasons for outsourcing employees and he said that it is the cut throat ompetition that usually force the management to opt for contract workers. They are more trained in their work and they do understand the basics of work better than others. Manager also said that it is easy to just contact the head hunters and ask them to find the right people and usually there is no conflict when right person is provided at right time which enables the hotel to run its affairs in a smooth manner. Then a questionnaire was distributed among 5 employees working in the different position to ensure their views about outsourcing and how it has affected the life and business according to them. The short interview was based on this questionnaire. The majority of respondent gave the easy of recruiting and the cost saving for organisation as the reasons for outsourcing. The impact of outsourcing was one question that all five respondents have different views to offer where we can say now that currently it is not clear that what is the main reason for a company to have outsourced or contract base employees.

Chapter Four: Findings, outcomes and discussions: 4.1 Introduction: In this segment of research, the data gathered through means of questionnaire and interviews are critically evaluated and represented in a graphical mode. Through case studies and interviews information is generated and later on examined in order to make sure that research questions are answered accurately so that correct findings leads to right conclusion. In the portion of interviews, three managers have been interviewed in detail and their views are interoperated in exact manner. The complete information about the outsourcing services of employees in selected case study was asked through in depth interviews. The similar questions of interviews were asked from three managers in separate so that more generalizability can be availed through research findings. As per the steps of the interview, the analysis of the data and their results are mentioned accordingly:

4.2 Results of interviews:

4.2.1 What are the basic departments that have outsourced its processes or staff to outside agencies? 1st Manager: The first manager responded by mentioning the whiskey mist spa, stewarding, general cleaning, night cleaners, day washers and banqueting cleaners are outsourced. 2nd Manager: The second manager replied in detail by saying that all of the casual staff is hired through contracting agencies, almost above 700 of employees are from contract and most of the departments are outsourced to imperials and a company called Element. 3rd Manager: Whereas the third manager said that in inhouse, the house keeping is a very vital department for which we need experts to find us experienced staff therefore housekeeping is outsourced. Moreover, the Whiskey mist is owned by Hilton but the management of whiskey mist from last three years is with a chap called nick house.

Discussion: From the responses of these managers, it is clear that outsourcing services is most in trend at Hilton hotel and most of its key departments are outsourced. As per our literature review, Domberger (1998) has also mentioned that most of the big organisations see the outsourcing

services as vital effort to gain the expertise of specialists. Furthermore, according to Haywards (2002) companies save their resources by outsourcing services its key departments to professionals.

4.2.2 Do the managers or supervisors of these departments consider outsourcing services to be a more profitable proposition as compared to operating these people and processes by self? 1st Manager: The first manager replied that at present outsourcing services is more in practice at Hilton and it is profitable as it reduce cost effective for the organisations. 2nd Manager: The second manager said that yes it is beneficial as a special training course is given to employees called effective rostering so that employees maintain industrial standards. It save time for management to focus on more important decisions while letting the experts handle their job. 3rd Manager: The third manager agreed that due to cut throat competitions a firm must maintain the industrial standards and for that they need workforce that is compSetent enough which come through contracting experts.

Discussion: The interview result shows that outsourcing services is beneficial for Hilton hotel as it saves time for the management and resources also, our findings is similar to the management literature reviewed in the second chapter, K&K (2000) also explained the benefits of outsourcing services various departments as it saves resources and time in the cut throat competition.

4.2.3 How has the outsourcing services of each department improved the overall product and service provided to the guest? 1st Manager: The first manager agreed that it has improved the overall services at Hilton. 2nd Manager: The second manager replied by explaining that yes it has but if sometime there is a complain

than management ensure that it leads from front and ask the outsourced department to adhered the set standards. 3rd Manager: The third manager said that yes, it has helped by improving the customer satisfaction which has increased the profit margin for the Hilton hotel.

Discussion: These responses shows that the check and balance is maintained by the top management to make sure that outsourced departments ensure that customers are satisfied and Hilton hotel has experienced profitability therefore the guests are entertained properly by the outsourced departments. Considering the views of Domberger (1998) the rapid increase in the outsourcing services is due to the positive feedback gained by organisations, if the customers are content, the organisation will opt for such services.

4.2.4 Has outsourcing services people and processes helped the senior management and the hotel to concentrate its resources on its core processes? If yes, then how, please explain? 1st Manager: The first manager responded that it helps them to spend more time with their own staff and rather than training their people the managers and supervisors can spend time on their own departments. 2nd Manager: The second manager said it help them to concentrate on their core processes. Even the security in house, separate company is used so there is more time for senior management to focus on the utilization of resources in rational manner. 3rd Manager: Yes, outsourcing services create that advantage for hotel Hilton to have a proper focus on other core functions and it has absolutely worked for hotel therefore most of the departments are managed by contracting agencies.

Discussion: From the above responses it is clear that Hilton hotel believe in the outsourcing services as it provide them that extra time to concentrate on core competencies. In the management

literature we have read the views of Domberger (1998) that outsourcing helps the big organisations to focus on their other core competencies.

4.2.5 Were these people and processes operated by the hotel directly ever? If Yes, then please explain the reasons which led to outsourcing services. 1st Manager: It is beneficial for the hotel Hilton as the rate to hire is low by means of outsourcing services. 2nd Manager: They are hired through the contract agencies but the rate is agreed between parties through mutual understanding. The orders come from management that how much to spend on which departments outsourcing services in order to ensure that resources are properly used. 3rd Manager: The process is operated by hotel in a way that it ensure that the amount paid on the outsourcing services are done in a rational manner and the reason is to make sure that everything is planned as per managements approach. Discussion: The above responses show that at Hilton hotel the outsourcing services involve the managements top to have a part so that things are decided on the basis of mutual understandings. Furthermore, the benefit of having a contractor is that there is a rate set which is reached on the mutual understanding of both parties and Hiltons management make sure that spending in each department is done adequately.

4.2.6 Which agencies do the hotel relies upon for its outsourcing services needs? 1st, 2nd, and 3rd Manager: All of the interviewed managers responded that for stewarding, the outsourcing services of Emprise is undertaken, for security, it is Security Company (TSS), for staffing purpose, the contract is given to Imperial and the hotel Hilton Lane Park has a contract with Addison lee for the staff transportation purposes only.

Discussion: Since all of the managers has given the same answer therefore the response is written in this report on basis of general aspect but this shows the important point that hotel Hilton strongly believe in the outsourcing services.

4.2.7 How has the internal hotel staffs taken these outsourcing services procedures? Any clashes or potential problems ever rise between the internal and external staff or not? 1st Manager: It has taken the outsourcing services in healthy manner as the departments level of efficiency has increased. 2nd Manager: It has provided chance to internal housekeeping department as the new blood will bring more energy in the working of hotel Hilton. In every hotel there are chances of clashes but these are solved through the senior management. 3rd Manager: There are some time conflicts but it is due to lack of training due to casual staff do not have hospitality background but internal have no problem once the outsourced employees are given proper training.

Discussion: These findings are similar to the studies of Hayward (2000) which shows that there are chances of internal conflicts but at the same time if proper training is given there are more chances of energy and enthusiasm.

4.2.8 How is the risk managed between the hotel and outsourcing services agency? In case of a process failure who is considered responsible for the losses? 1st Manager: There is always risk in every step that is taken and in this step there is also a great risk, for instance if employee had done immense wrong with customers than the hotel apologises first to the guest if but the ultimate responsibility comes on the agency. 2nd Manager: Hilton would not want to damage the brand in any case and therefore they are very careful in managing the contracts and details with the agencies. The salons are outsourced, the hotel owns the property and the salon PURITY, a company called Sense caused a few problems for the hotels. They registered on a few website and they advertised themselves to be a part of HILTON. They got a four week staff and they did not pay these staff and therefore did not pay

these staff at the end of the month and they were given a notice that your contract was ending and therefore there were a lot of problems caused by them. Every possible step was taken to resolve the issues 3rd Manager: The Hilton hotels senior management is there to look after all the issues and solve them in every possible manner, if there is a loss of any belonging etc of customer; it is paid and later on the responsibility is being help those agencies which has provided the outsourced services. Furthermore company can even issue a notice if the problems are serious. There is risk but Hilton hotel knows how to cover those risks.

Discussion: The interviews from the managers indicate that company is very strict about keeping discipline and with every business there are risks involve and these risk must be tackled in an appropriate manner which we have noticed in the study if K&K (2000) also that risk are chained with the outsourcing.

4.2.9 Does it prove cheaper to run the process by its own for the hotel or to outsource services it to an agency to run it for them? 1st Manager: In some departments it is cheaper to do the stuff by own and it becomes more expensive to give money to the agencies. 2nd Manager: It is less expensive but the agency staffs are not properly trained and therefore there is a risk of drop in service standards but as a whole it is good. 3rd Manager: It is cheaper to have outsourced services but training of employees is necessary, in case of lacking services, the hotel Hilton needs an immediate increase in the number of the staff then the agencies can provide this at a very short period of time.

Discussion: In these responses it is clear that outsourcing is less expensive but Hilton hotel make sure that employees are trained and it they are not trained, the number of staff is increased so that one employee may provide a cover for another employee.

4.2.10 Is the hotel looking forward to outsource any further processes or employees in the future? 1st Manager: It depends on the future profit of Hilton hotel and the performance of contract agencies. 2nd Manager: It is depending on senior managements decision, if the progress of contract provider remain satisfactory and there are chances of expansion than of course yes. 3rd Manager: The Hilton hotel is already looking at a certain company at the moment for outsourcing but it depends on various factors, the decision of this type rest with the Vice President but in future the hotel may outsource more in order to maintain quality because if quality comes through outsourcing than there is no compromise on this matter.

Discussion: These responses show that outsourcing services cannot be ignored in the upcoming future, if the hotel is satisfied with the performance of providers; there are more chances of outsourcing services in upcoming future.

4.3 Results of Questionnaire: 4.3.1 In your opinion which one is the factor that leads to Outsourcing services at Hilton Park Lane Hotel?

Interpretation: Out of 20 employee, 9 have considered the cost of current operations are key factor for outsourcing services, 6 employees believe that cost of contracting, 3 ticked new space and era of development and only 2 respondents opt for better utilization of space.

4.3.2 Which one is the main consideration while selecting the right partner for outsourcing the services?

Interpretation: In the response of this question, 4 employees marked turnaround time, 2 employees said cost, one each employee opted for environment and location respectively, research on existing users and contract details were answered by 3 employees each and the highest number of employees were 5 that believed that experience is most vital of all considerations.

4.3.3

Which one is the vital business expectation of Hotel Hilton with the provider company?

Interpretation: Only one employee said that business expectation is analytical, three each employees opted decision making and creative, four employees viewed proactive and innovative whereas five employees regarded able to meet deadlines as the important business expectation.

4.3.4

Which one is the personal expectation of Hotel Hilton with the provider company?

Interpretation: Three employees marked friendly, four employees opted for calm under pressure, understanding, and approachable respectively whereas five employees stick with Flexibility.

4.3.5

Which one is the most essential detail needed while in contract with the partner?

Interpretation: Two employees each markets, incentives, guarantees and bankruptcy polices, one employee suggested escape clause, 3 employees said duration and notice, 4 employees said the payment terms whereas 6 employees said communication is the vital one.

4.3.6

Which one is the important criterion for Successful Outsourcing services?

Interpretation: In the response of this question two employee each answered good planning, specific goals, and measurement and regular evaluation, 3 employees each answered the right of selection, specific contract and win win, whereas 5 employees marked good relations with the partner.

4.3.7

Which one is the most important for Hilton hotel C out of the 7 C's of Outsourcing services?

Interpretation: Two employees each opted for context, chemistry, and confidence, 3 each employees marked culture and credibility, 6 employees regarded commitment as most important c of outsourcing services for Hilton hotel whereas only one employee tick marked credentials.

Chapter Five: Conclusions, Recommendations and Future scope 5.1 Introduction: In this last chapter, the conclusion is made on the basis of interpretation of research findings, follow by the recommendations for the Hilton hotel that will prove cardinal vehicle for the better future prospect in outsourcing services. 5.2 Conclusion: On the basis of finding results and the review of management literature it can be conclude that undoubtedly, Hilton hotel rely heavily on the outsourcing services to expert contractors. It has proved profitable practice for the chosen case study also and the previous empirical researches that more output is generated through outsourcing and putting less resources in return. For Hilton Hotel this practice has so far proven successful and would continue to do so because the management of Hilton strongly believe in Let the experts do the job. When Hilton Lane Park hotel decided that it needs to opt for outsourcing, it had to consider the fact that various factors like political, economical and social are not always in control then after the proper calculation of risk, outsourcing services were considered. Outsourcing services helped the management of Hilton to develop more focus and concentrate more on the basic core tasks of the hotel by letting the supporting services be taken care by those agencies who are good at those specific tasks. 5.3 Recommendations: 5.3.1 Spin-off model Hilton hotel should opt for the Spin-off model as it has been noticed that few organisations in the hospitality sector have been successful because it changes the outsourcing services by expanding the relationship between firms and partners. The strategic planning and value adding activities of Hilton hotel can flourish in right direction. 5.3.2 Personal reservation software To further improve the working efficiency of hotel Hilton, it is recommended that technological advancement is required in the outsourcing services. They need to improve the functioning of outsourcing services by means of computerized software that will help the hotel in finding the right agency for particular services. It should also develop the personal reservation software and trained the internal staff properly about it, due to this the procedures and functioning will be at a faster rate. 5.3.3 Initiative towards development of understanding with the outsourcing contractors: There is need to develop more mutual understanding between the Hilton hotels management and the outsourcing contractors. The management of hotel should identify and explore the outsourcing practices on a spectrum ranging from out-tasking to partnership. Moreover, the level of outsourcing services will not only increase but the profitability will be more high by

the development of partnership relationship among the hotel Hilton and various outsourcing contractors. 5.4 Future scope of research: Since this research has a small sample therefore its finding is limited to this study about hotel Hilton Lane Park. But this research is indicating that the changes in the patterns and trends of business shifts and the process of globalisation, there will be more increase in the outsourcing services in the future. The present research identified the limitations of management which set up the foundation for future researchers to include the cross cultural ethical attitude and behaviour of management in opting for the outsourcing services. Since in hotel the workforce has immense diversity therefore, this present study will help the researchers in future to take it as empirical evidence to explore the management ethics about outsourcing. Furthermore, the researchers from marketing may also consider it beneficial when conducting a research on the consumer behaviour as customers are the prime focus for every profit organisation and opting for outsourcing services may lead some time problems in satisfying the consumers therefore this piece will be vital in that aspect too. This research will be considered as a management literature by researchers in future when they carry out investigation on the Hilton hotels progress in times of economic downturns. Most of the students can benefit from this research as it discus the functioning of various models operating in business and recommend the spin-off model for future researchers to analyze its impact on business and consumers. Moreover, the findings of this research will be beneficial for the management of Hilton hotel to know about the perception and mindset of its contract employees and on the basis of it, they can develop their strategies to ensure that the proper balance is maintained to progress more.

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APPENDIX A: Part A: Questionnaire for Interview from Manager of hotel Hilton Lane Park: Demographic description: Age: 18-24 32-38 Gender: Male Female 25-31 39-45 46 or above

Experience: 01-03 years 07-09 years 04-06 years 10-12 years 13 or above

Q1- What are the basic departments that have outsourced its processes or staff to outside agencies? Q2- Do the managers / supervisors of these departments consider outsourcing to be a more profitable proposition as compared to operating these people and processes by self? Q3- How has the outsourcing of each department improved the overall product and service provided to the guest? Q4- Has outsourcing people and processes helped the senior management and the hotel to concentrate its resources on its core processes? If yes, then how, please explain? Q5- Were these people and processes operated by the hotel directly ever? If Yes, then please explain the reasons which led to outsourcing. Q6- Which agencies does the hotel rely upon for its outsourcing needs? Q7- How has the internal hotel staff taken these outsourcing procedures? Any clashes or potential problems ever rise between the internal and external staff or not? Q8- How is the risk managed between the hotel and outsourcing agency? In case of a process failure who is considered responsible for the losses? Q9- Does it prove cheaper to run the process by its own for the hotel or to outsource it to an agency to run it for them? Q10- Is the hotel looking forward to outsource any further processes or employees in the future?

Part B) Questionnaire from Employees at hotel Hilton Lane Park: Demographic description: Age: 18-24 32-38 Gender: Male Female 25-31 39-45 46 or above

Experience: 01-03 years 07-09 years 04-06 years 10-12 years 13 or above

Q1 In your opinion which one is the factor that leads to Outsourcing services at Hilton Park Lane Hotel?

Current Cost of Operation Cost of Contracting New Space & Era for development Better Utilization of Space

Q2. Which one is the main consideration while selecting the right partner for outsourcing the services?

Turnaround time Cost Location Environment Research on existing users Experience

Q3. Which one is the vital business expectation of Hotel Hilton with the provider company?

Analytical Decision making Proactive Innovative

Creative Able to meet deadlines

Q4. Which one is the personal expectation of Hotel Hilton with the provider company?

Calm under pressure Friendly Understanding Approachable Flexibility

Q5. Which one is the most essential detail needed while in contract with the partner?

Duration and Notice Incentives Payment Terms Communication Guarantees Escape Clause Bankruptcy Policy

Q6. Which one is the important criterion for Successful Outsourcing services?

Good Planning Specific Goals The right selection Specific contract Win Win Measurement and regular evaluation Good Relations with the partner

Q7. Which one is the most important for Hilton hotel C out of the 7 C's of Outsourcing services?

Context Culture Chemistry Credibility Credentials Commitment Confidence

APPENDIX B: Answer scrip of interviews with managers: Answer 1 outsourced the whiskey mist spa stewarding is outsourced, general cleaning, nigh cleaners, day washers and banqueting cleaners are outsourced lt of casual staff are being outsourced above 700 then they use agency staff, at the moment they use imperial, the hotel is discussing a company called Element. housekeeping is in house whiskey mist is part owned by hilton but is managed by a chap called nick house. whiskey mist is three years old. Que 2 outsourcing is happening more than before in hilton now. yes it is profitable and the reason is that within the last 8 to 9 years hilton started selling their properties and they just manage the hotels now. in park lane it is mainly stewarding is outsourced. hilton has run a course called effective rostering to manage the in house and the outsourced staffing. they spend time to train the casual staff to maintain the industrial standards. send them to proper training courses, in beginning of july they sent them to a 3 day training course. not that many casual which can be controlled, agency os benificial because when the numbers are needed they can provide them. but the reason is that the agency people can not necessarily provide the ame industrial standards that hilton follows. Que 3 the hotel can dictate rather than lead and tell them blankly that these are the standards and you have to follow these standards. the head person on the site is employed by the hotel and the subordinating staff are outsourced. it makes it better and increases accountability. Que 4 it helps them to spend more time with their own staff and rather than training their people the managers and supervisors can spend time on their own departments and therefore concentrate on their core processes. security in house, they also use to use a separate company to use for the public area security like the lobby area, they are dressed differently to the hotel staff. in case the security needs to be bumped up then the casual security is bumped up. that is charged directly to the guests and these guests are mainly the celebrities and the VIP guests. Que 5 the benefit of having a contractor is that there is a rate set but it cant go u than this price. this is the case with the housekeeping, but the price agreed can go down but it cant go any more. its is based upon the agreement. its not shifting the

ownership its just tells them how much to spend on these specific departments. Que 6 the name of the agencies Emprise for stewarding Security company (TSS) Imperial for staffing the hotel has a contract with addison lee for the staff transportation purposes only Que 7 it was a big change for the housekeeping department, but in hilton they don't want to loose the people and therefore they want the current staf to still work with the new outsourcing agency and don't want to make them redundant. a lot of the time the agency staff are not properly trained in hospitality. in order for the agencies to make money they do not train the staff properly and therefore they just send people from different various backgrounds. hilton also has a limited budget and therefore it is very difficult to find out people with the right background within the agreed price range. level of skills are different when you ask the outsourcing agencies. so if you are asking casual staff then tyhey do not have hospitality background, but if they are asking for a headache then they have to have a proper experienced background in hospitality with an experience of working with five star hotels and restaurants. Que 8 the hotel apologises first to the guest if anything goes wrong but the ultimate responsibility comes on the agency. hilton would not want to damage the brand in any case and therefore they are very careful in managing the contracts and details with the agencies. the salons are outsourced, the hotel owns the property and the salon PURITY, a company called Sense caused a few problems for the hotels. they registered on a few website and they advertised themselves to be a part of HILTON. they got a four week staff and they did not pay these staff and therefore did not pay these staff at the end of the month and they were given a notice that your contract was ending and therefor there were a lot of problems caused by them. the bookings were advertised on GROUPON and www.lastminute.com and therefore they did a scam that they did not pay the people and only made them do the trial shifts and at the end of the day they did not get paid and therefor complained to the hotel management. the salon managers ran away 2 months before their contract was about to expire and at the end all the responsibility came on the top of the hotels management. now the hotel has the property back and the hotel is running the salon it now. Que 9 In some departments it is cheaper to do the stuff by own and it becomes more expensive to give money to the agencies. on the other hand the agency staff are not properly trained and therefore there is a risk of drop in service standards, on the other hand if the hotel needs an immediate increase in the number of the staff then the agencies can provide this at a very short period of time.

Que 10 the hotel is looking forward to outsource in the future and it all depends upon the profits that the hotel can generate, and the performance that the agencies can provide. it is dependant upon the VICE president or the area senior manager decision. the hotel is already looking at a certain company at the moment for outsourcing. the Hiton is owned by Blackstone (USA) and there are certain purchasing system and there are certain purchasing systems that the agencies need to b on. this system is called (BIRDSTONE). it is very difficult for the agencies to be on the list and only the companies on this list can be contacted for outsourcing because HILTON wants to preserve the company's standards. Quality is o prime importance and not the price.

APPENDIX C: Reflect statement

This statement is to discuss the reasons and experiences that have been encountered in this research study. The research is the mixture of various phases that I encountered while I was in the mid of my data sorting and findings. It was a very unique experience which has been very informative but some of the employees were not cooperative in the start to share their views more openly but I gathered some very important data from very reliable sources because I myself have worked for the contract services. My personal experience of working for contract providers has developed my keen interest to explore the outsourcing services in big hotels because at times there are situations in which we have to arrange the staffs in a prompt manner for clients. The reason to choose hotel Hilton Park Lane is that I read an article on internet about Hilton hotel outsourcing its most of the departments therefore I wanted to discover the motives of management behind outsourcing. To most there were the profit motives but profit could not be the only motive to do so therefore I started reading articles about cost reduction due to outsourcing. In doing so I came across the article of Hayward (2002), which said that its like adding to core competencies and concentrating more on the strategies by letting the expert handle their jobs. This inspired me that there could be other important factors also which need to be investigated. Before primary research, I had secondary research and for that I went to British Library and through internet I read online journals and books. Once I had the management literature and empirical researches of past, I develop my conceptual grounds for research. I managed for meetings with the managers of hotel Hilton Park Lane and in the start there were problems in arranging meetings as the time difference but once it was resolved, I made most from the time by asking views of experts. The questionnaire was circulated among employees after pilot testing and for general purpose I opted for monkey survey, I couldnt use those results in research to greater extent due to time constrain but it helped me in the recommendations and conclusion stage. It was quite difficult to keep my findings related to my topic because of the too many articles and books I read, there were various places where I had immense problem in remaining neutral but with all my honesty and integrity, I have included the genuine responses and tried my level best to remain neutral while conducting interviews. Undoubtedly, this research has been a great source to enhance my knowledge about hospitality sector and outsourcing services operating in the hotel sector. It is of high significance for me as it will prove to be very beneficial for my future prospect.