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? PART 1 Industry Overview
CHAPTER 3 Managers Must Manage 39
FEEDBACK FROM THE REAL WORLD
Hospitality managers must manage. It is easy to make this statement. However, what exactly do managers do when they manage?
How would you answer the following questions?
What management activities are the most important? Why?
What management activities are the most difficult to learn?
What are the most difficult challenges that confront hospitality managers?
What, if any, role does common sense play in effective management?
What, if any, role does experience play in effective management?
As you read this chapter, think about answers to these questions and then get feedback from the real world at the end of the chapter.
the title of this chapter may seem odd. Hospitality managers (along with ;ers from any other type of organization) obviously must manage. However, what do they manage, and how do they do it? These are the topics •f mis chapter.
OVERVIEW: THE MANAGEMENT PROCESS
Ihere is no universally accepted definition of management; different authors tmd industry and business observers define the process differently. However, definitions have two factors in common: a process and a goal attain-it effort. These form the basis of the definition we will use: management is ±j£ process of planning, organizing, staffing, directing, controlling, and evaluating human, financial, and physical resources for the purpose of achieving «ganizational goals.
Unfortunately, all resources are in limited supply (Exhibit 3.1). It is doubtful that any manager in any business anywhere has all the necessary re-;es available in desired (ideal) quantities. The task of a manager, then, becomes one of using resources that are in limited supply to maximize (or, at feast, to satisfy!) organizational objectives.
What types of goals do managers wish to attain? Among them are the " lowing:
Organizational goals related to long-term viability (survival). These goals are addressed by processes involving marketing (attracting
OBJECTIVE 1
Define the term management, and list seven resources that managers must manage.
management the process of planning, organizing, staffing, directing, controlling, and evaluating human, financial, and physical resources for the purpose of achieving organizational goals
Travel/tourism and hospitality managers have the following types of resources available to them that can be utilized to attain goals. All are finite (available in only a limited amount):
Labor (employees)
Money
Products (food, beverages, and supplies)
Machinery (equipment)
Minutes (time)
Methodology (work processes and procedures)
Energy
EXHIBIT 3.1 Hospitality Management Resources Are in Limited Supply
40 PART 1 Industry Overview
guests), human resources management (facilitating the work of employees), and controlling costs (minimizing expenses without sacrificing quality).
Human resources goals. For example, provision of professional development opportunities that allow staff members to learn and grow on the job and consideration of the manager's own professional goals.
Societal goals. The hospitality organization must be a good citizen within the community. It wants to meet its legal obligations and should be active in community service initiatives.
OBJECTIVE 2
Explain steps in the management decisionmaking (problem-solving) process.
budget a financial plan that estimates the amount of revenue to be generated, the expenses to be incurred, and the amount of profit, if any, to be realized from the hospitality operation
revenue the amount of money generated from the sale of products and services to guests
expenses costs incurred by the hospitality operation to generate its revenue
bottom line a slang term relating to profit; on a budget and on an income statement, the profit line is the last line of (at the bottom of) the document
THE DECISION-MAKING (PROBLEM-SOLVING) PROCESS
How do hospitality managers best utilize resources since they are in limited supply? They must make decisions about their best use. Consider, for example, money. The manager uses a budget to estimate revenue and to consider how it should be spent on numerous types of expenses to yield a bottom line that meets financial requirements.
Exhibit 3.2 shows the steps in the basic decision-making process that many experienced hospitality managers use almost without thinking. One of the most important tasks of a manager is to solve problems. (Some managers think more positively and call them opportunities or challenges.) They must make decisions as they solve problems. In fact, then, the problem-solving process is really a decision-making process.
Let's look at the process more carefully.
Step 1:
Define the Problem. A problem represents the difference between the way something is and the way it should be. For example, there is a problem when guests complain about unclean rooms or cold food. Sometimes (but not always) the problem is obvious. Declining volumes of revenue and/or increasing costs may be examples. Sometimes, however, it is much more difficult to identify the problem. Consider, for example, the view of some managers that an increasing number of job applicants are entering the work force with a lowered work ethic than their counterparts had in prior generations. (There are, probably, numerous societal, cultural, and other components of this issue that make problem identification difficult, if not impossible.) Some managers ask themselves, "What would the situation be like in the absence of the problem?" to help to define the problem.
A group decision-making (problem-solving) approach is favored by many successful travel/tourism and hospitality managers.
Unfortunately, problems seldom occur on a one-at-a-time basis. Instead, managers are typically confronted with numerous problems at the same time. They must, then, set a priority (which problems are potentially most harmful to the organization and/or which solutions, after resolution, will be most helpful?) for the problem resolution process.
Step 2: Generate Solution Alternatives. What can be done to address the
Steps
Step 1 : Define the problem
Step 2: Generate solution alternatives
Example
Guest check average for food has been declining for each of the last three months
Need to utilize suggestive selling
Need to evaluate menu (components and design) to determine if changes can increase revenues
Errors in equipment operation or procedures used to calculate data
Theft of revenue by food servers
Step 3: Evaluate solution alternatives
Guest shoppers did not observe suggestive selling; training needed to implement suggestive selling program
Menu recently redesigned; guest counts are up slightly
An auditor has found no bookkeeping problems suggesting employee theft
Step 4: Select the best solution Implement a suggestive selling program alternative
EXHIBIT 3.2 Basics of the Decision-Making (Problem-Solving) Process
check average the average amount spent by a restaurant guest: total food and beverage revenue * total guests
suggestive selling tactics used by food and beverage service personnel to increase the amount spent by each guest during a visit to the restaurant
Step 5: Implement the solution alternative
Train service staff; implement a contest (all servers with a specified minimum guest check average win complimentary meals and sweatshirts)
Step 6: Evaluate the effec- Determine the extent to which the guest check tiveness of the solution average increases after the suggestive selling training program has been implemented
cross-functional teams a group of employees from different departments within the hospitality operation that work together to resolve operating problems
CHAPTER 3 Managers Must Manage ?