Similarly, Gilbert and Strebel (1988) suggest that there are two constituents of competitive advantage for an organisation: lower delivered cost and higher perceived value. Gilbert and Strebel suggest that there is an “internal logic” to each business
system that dictates the possible combinations of perceived value and delivered cost that must exist for the whole business system. It is the primacy of one or the other of these two constituents of competitive advantage which differentiates between organisations, depending on industry position and circumstances. Either strategic position can be adopted but they can be also used together to give and organisation a superior position by offering the highest perceived value for the lowest possible cost. It is apparent that any of these strategies might apply to different hotels operating in different markets, however, the stereotypical picture of much of the UK hotel industry, in particular among smaller establishments serving the tourism sector, is that of cost leadership using Porter’s typology. The “internal logic” of the hotel industry, especially smaller establishments, leads managers to adopt a competitive strategy predominantly based upon lowest delivered cost. Among certain types of hotels, however, it is clear that wider choice of strategy, and a greater focus on perceived value, is possible. For example, using Porter’s model, a differentiation focus strategy would be most appropriate for boutique hotels or a differentiation strategy for hotels serving both a commercial and tourism market. This apparent diversity of appropriate competitive strategies in the hotel sector would be expected to result in similar diversity of HR strategy. Bratton (2003, p. 49) defines human resource strategies as meaning “the patterns of decisions regarding HR policies and practices used by management to design work and select, train and develop, appraise, motivate and control workers”. Bamberger and Meshoulam (2000) suggest that these decisions centre around two main dimensions of HR strategy: “acquisition and development” and “locus of control”. Acquisition and development is concerned with the extent to which HR strategy develops internal human capital as opposed to relying on external recruitment. Locus of control is concerned with the degree to which HR strategy focuses on monitoring employees’ compliance with processbased standards as opposed to developing a psychological contract that nurtures social relationships, encourage mutual trust, and controls the focus on the outcomes themselves. HR strategy will depend on the emphasis put on each of these variables at different times, representing a distinction between commitment (or resource-based) and control (process-based) strategies (Hutchinson, Purcell, & Kinnie, 2000). The majority of the UK hotel industry operates in a high volume, low cost product market and attempt to generate profits from increasing market share. Subsequently, the dominant “model” of HR strategy is one of process-based control, reflecting either bureaucratic and/or individual direct control, with a predominant focus on the external labour market. Such control would most likely be achieved by the use of Taylorised working practices such as job prescription, a high degree of specialisation, minimal training and a high degree of monitoring and direct supervision. Wage costs are minimised by the use of non-standard employment and subcontracting. Resourcebased HR strategies which emphasise outcome-based control and a long-term commitment to labour, underpinning an added-value competitive strategy, are generally held to be very much the exception. Some research does, however, provide evidence of more complex patterns and a greater unevenness of HRM practices. Hoque (2000, p. 27) suggests that where there is “scope for diversity in business strategies within any given industry, there is likewise scope for diversity in the approaches taken to HRM” and that there is diversity in the UK hotel industry that is related to particular hotel characteristics such as hotel size and standard (Hoque, 1999, 2000). Hoque (2000) argues that rather than the hotel industry conforming to a “one size fits all” model, individual hotels tend to adopt approaches to employee management that “fit” business strategy according to “product market logic” (Evans & Lorange, 1989). The more successful the organisation is at achieving fit between product market, business strategy and HR strategy, the more successful it is likely to be in terms of achieving organisational outcomes. For example, he suggests that a high-standard hotel is best served by adopting a strategy of quality enhancement through fostering employee commitment (e.g. through employee involvement and consultation) and continuous improvement in service provision (including high levels of training). On this basis of this discussion, it would be expected that a cross-sectional study of the hotel sector in the UK, covering a wide variety of hotel “types”, would highlight both differences
in competitive strategy and, subsequently, HR strategy. The following section discusses whether this was the case.
Similarly, Gilbert and Strebel (1988) suggest that there are two constituents of competitive advantage for an organisation: lower delivered cost and higher perceived value. Gilbert and Strebel suggest that there is an “internal logic” to each business
system that dictates the possible combinations of perceived value and delivered cost that must exist for the whole business system. It is the primacy of one or the other of these two constituents of competitive advantage which differentiates between organisations, depending on industry position and circumstances. Either strategic position can be adopted but they can be also used together to give and organisation a superior position by offering the highest perceived value for the lowest possible cost. It is apparent that any of these strategies might apply to different hotels operating in different markets, however, the stereotypical picture of much of the UK hotel industry, in particular among smaller establishments serving the tourism sector, is that of cost leadership using Porter’s typology. The “internal logic” of the hotel industry, especially smaller establishments, leads managers to adopt a competitive strategy predominantly based upon lowest delivered cost. Among certain types of hotels, however, it is clear that wider choice of strategy, and a greater focus on perceived value, is possible. For example, using Porter’s model, a differentiation focus strategy would be most appropriate for boutique hotels or a differentiation strategy for hotels serving both a commercial and tourism market. This apparent diversity of appropriate competitive strategies in the hotel sector would be expected to result in similar diversity of HR strategy. Bratton (2003, p. 49) defines human resource strategies as meaning “the patterns of decisions regarding HR policies and practices used by management to design work and select, train and develop, appraise, motivate and control workers”. Bamberger and Meshoulam (2000) suggest that these decisions centre around two main dimensions of HR strategy: “acquisition and development” and “locus of control”. Acquisition and development is concerned with the extent to which HR strategy develops internal human capital as opposed to relying on external recruitment. Locus of control is concerned with the degree to which HR strategy focuses on monitoring employees’ compliance with processbased standards as opposed to developing a psychological contract that nurtures social relationships, encourage mutual trust, and controls the focus on the outcomes themselves. HR strategy will depend on the emphasis put on each of these variables at different times, representing a distinction between commitment (or resource-based) and control (process-based) strategies (Hutchinson, Purcell, & Kinnie, 2000). The majority of the UK hotel industry operates in a high volume, low cost product market and attempt to generate profits from increasing market share. Subsequently, the dominant “model” of HR strategy is one of process-based control, reflecting either bureaucratic and/or individual direct control, with a predominant focus on the external labour market. Such control would most likely be achieved by the use of Taylorised working practices such as job prescription, a high degree of specialisation, minimal training and a high degree of monitoring and direct supervision. Wage costs are minimised by the use of non-standard employment and subcontracting. Resourcebased HR strategies which emphasise outcome-based control and a long-term commitment to labour, underpinning an added-value competitive strategy, are generally held to be very much the exception. Some research does, however, provide evidence of more complex patterns and a greater unevenness of HRM practices. Hoque (2000, p. 27) suggests that where there is “scope for diversity in business strategies within any given industry, there is likewise scope for diversity in the approaches taken to HRM” and that there is diversity in the UK hotel industry that is related to particular hotel characteristics such as hotel size and standard (Hoque, 1999, 2000). Hoque (2000) argues that rather than the hotel industry conforming to a “one size fits all” model, individual hotels tend to adopt approaches to employee management that “fit” business strategy according to “product market logic” (Evans & Lorange, 1989). The more successful the organisation is at achieving fit between product market, business strategy and HR strategy, the more successful it is likely to be in terms of achieving organisational outcomes. For example, he suggests that a high-standard hotel is best served by adopting a strategy of quality enhancement through fostering employee commitment (e.g. through employee involvement and consultation) and continuous improvement in service provision (including high levels of training). On this basis of this discussion, it would be expected that a cross-sectional study of the hotel sector in the UK, covering a wide variety of hotel “types”, would highlight both differences
in competitive strategy and, subsequently, HR strategy. The following section discusses whether this was the case.
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