Hospitality Staffing: External Environment Factors

• Staffing challenges in hospitality across countries like Dubai, the US, and the UK showcase the complex interplay of political, religious, and cultural factors.
• Successful hospitality organizations stay informed about changes in their external environment to predict trends.
• A lack of qualified local service staff can create an opportunity for an entrepreneur to develop hospitality training.
• The external environment is divided into the broad and operating environments, with the operating environment differing between firms.
• The four key elements in the broad environment: Sociocultural, Global Economic, Political, and Technological.

Sociocultural Context

• Society consists of individuals within a geographic region, with some sociocultural trends applicable nationwide.
• Current major social issues in the US: the role of government in healthcare and elder care, terrorism and levels of violent crime, security of travel and public places, global warming, war and role of the military, declining quality of education, quality & health levels of food products, pollution and waste disposal.

Analysis of Societal Trends

• Watching social trends helps firms understand preferences, strengthen ties with customers, and create innovative products.
• Paying attention to social trends allows hospitality firms to recognize opportunities, identify generational and cultural differences, enhance corporate reputation, and avoid unwanted legislation.
• Societal interest in wellness has led to the development of spas in upscale hotels and resorts.
• Population demographics are used in marketing research to understand subgroups and segments.
• Demographic trends like average age, ethnic mix, migration patterns, income, and literacy rates influence strategy development.
• Culture shapes how a social group thinks and reacts.
• Generational identity and beliefs are shaped from social, political, and economic events when preadult.

Corporate Reputation & Social Responsibility

• A positive organizational reputation among stakeholders increases demand and leads to business opportunities.
• Social media has become important for prospective hotel guests to read comments and reviews.
• Social Responsibility firms take a stance in their role, proactively going beyond what is called for by law.
• Social trends can help businesses avoid restrictive legislation.
• Important legislative and regulatory issues affecting the restaurant industry include obesity lawsuits, health and safety regulations, immigration reform, business meal deductibility, trans-fat bans, and minimum-wage regulations.

The Economic Context

• Economic forces influence organizational behavior and performance.
• Forces like economic growth and interest rates impact stakeholders.
• Economic growth, interest rates, credit availability, inflation, exchange rates, and foreign-trade balances are critical interdependent factors.
• Economic forces that are monitored and predicted:
  • Consumer demand, cost of factors of production
  • Cost of capital for new projects, customer ability to finance purchases
  • Interest rates, optimism or pessimism of stakeholders
  • Ability to remove profits from foreign ventures
  • Government policies, incentives, trade barriers

The Political Context

• Political forces influence organizational success.
• Governments provide and enforce the rules, laws, regulations, and policies that guide organizations.
• Governments can affect new-business formation through tax incentives and direct intervention.
• Governments dictate the rules and can restructure companies that do not comply with those rules.

The Technological Context

• Technological change creates new products, processes, services, and industries.
• Technology is human knowledge about products, services, and their delivery.
• Innovations often emerge from existing technologies.

Dealing with Technological Change

• To identify trends, companies participate in technological-forecasting efforts.
• Actions include:
  • Monitor trends
  • Solicit the opinion of experts
  • Develop scenarios of alternative technological futures

Change and Interdependence

• Broad environmental forces are interdependent.
• Low birthrates and improved healthcare lead to an aging population, influencing economic forces.
• Key environment factors for hospitality firms:
  • Openness of a country's borders
  • The tourism infrastructure
  • The availability of tourism support systems
  • Frequency of airline routes

Analysis of External Stakeholders

• The operating environment consists of stakeholders who the organization deals with regularly.
• This includes: customers, suppliers, and competitors.

Porter's Five Forces Model

• There are relationships between organization and stakeholders
• The five forces include:
  • Bargaining power of suppliers
  • Bargaining power of customers
  • Threat of new entrants
  • Threat of substitute products or services
  • Rivalry among existing firms
• Porter's five forces determine the type and level of competition in a market.
• Porter's model is intended to highlight opportunities for managers

Economic Power

• Customers have bargaining power because they can withhold demand.
• According to Porter Customers exhibit greater bargaining power when:
  • There are few in number
  • They make high-volume(regular) purchases
  • They are highly motivated to get good deals
  • They can esily integrate backward and thus become their own suppliers
  • If they are not concerned about the quality of what they are buying
  • if they have an information advantage

Economic Power of Suppliers

• Bargaining power of supplies is when they can raise their price.
• According to Porter Suppliers exhibit greater bargaining power when:
  • When services cannot be susbstituted
  • When there are few in their number
  • When buying industry makes up small percentage of suppliers revenue
  • When they have a depenedent customer
  • When the services are differentiated
  • With information advantage

Competition

• Competitive moves by 1 firm affects other firms (Advertising programs, Sales force expansions, New-service introductions)
• High levels can competition can be a reult of:
  • Industry is growing slowly
  • No single firms possesses dominant position
  • High fixed costs
  • Not easily differentiated
  • High exit barriers exist

Entry Barriers & Substitutes

• New Entrants can increase competiotion
• Forces that keep new competitors (entry barriers)
• Examples of Entry Barriers:
  • Economies of scale
  • capital requirements
  • product differentiation
  • inimitable resources
  • government policy

External Influence

• There are formal influences on behavior
• There are economical influences on behavior

Managing the Operating Environment and Economic Actions and Competitive Tactics

• Powerful customers can limit profitability
• Firms can take variety of economical actions
• Firms may work to prevent other firms from entering
• Industry rivals apply variety of competitive tactics such as:
  • New product launches
  • Cost reduction efforts
  • New service methods, an quality improvements
• Bench marking can assess the best practices of competitors

Political Strategies

• Organizational activities to create a political climate for the organization
• Donations
• Community Relations Efforts
• Pursue community relations efforts

Partnering

• A term that includes many types of organizational cooperation
• Joint ventures
• Networks
• Trade Associations

Interorganizational forms

• Joint Ventures Entity created if firms pool resources to create another owned identity
• Networks Hub and wheel configuration which a hub organizes the interdependencies
• Consortia- group of firms oriented towards problem and technology development
• Alliance Two or more forms establishing an exchanging relationship
• Trade organizations that are formed to collect dissemination trade information Interlocking Directives When 2 firms have directors to share coordination

Explore the external factors impacting hospitality staffing across different countries like Dubai, the US, and the UK. Learn about sociocultural, global economic, political, and technological influences on the broad and operating environments. Gain insights into how successful organizations adapt to changing external conditions to predict trends.