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«. FACULTY OF BUSINESS AND ECONOMICS UNIVERSITY OF PANNONIA Pannon Management Review EDITOR ZOLTÁN VERES This journal is produced the ...»

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As Table 1 shows the phrases meaning standardisation come from different concepts and perspectives. There is an international way of thinking (Baalbaki – Malhotra, 1993; Van Mesdag, 1999; Upton, 1994; Ritzer, 2001; Cloninger – Swaidan, 2007; Nordin et al., 2011) about standardisation which is supported by the uniformity and transferability as the benefits of the concept. It means that with the help of standardisation the different cultural characteristics of different countries the company wants to expand to can be got rid of or eased.

The other aspect is the quality perspective of standardisation (Surprenant – Solomon, 1987;

Juran, 1988; Lovelock et al., 1996; Irons, 1997; Grönroos, 2000). Quality assurance is one of the most important issues of this paper and it is essential to emphasise its role in customer satisfaction and meeting customer expectation as well as the rules or procedure standards to make processes more effective and suitable for customers and the staff as well. This kind of thinking leads to the next aspect, the effective operation of the companies (Sasser et al., 1978;

Lovelock, 1992; Anderson et al., 1997; Kotler – Armstrong, 2010; Silvestro et al., 1997;

Kurtz - Clow, 1998; Veres, 2009; Johnston et al., 2012).

The tool of standardisation is the standard itself. Service providers need to establish standards to provide guest satisfaction (Lovelock – Wirtz, 2007) and they can help management to control in service and manufacturing firms (Kullven – Mattsson, 1994). Standards show the appropriate ways for employees and help managers measure their performance (Kullven – Mattsson, 1994;

Woodruffe, 1995). Service standards could include the time parameters, the script for the correct performance, and prescriptions for appropriate style and behaviour (Lovelock – Wirtz, 2007).

Hard and soft standards are both used, but as the size of the company grows, standards are likely to be more formalised. Service quality and productivity are two sides of the same coin (Lovelock – Wirtz, 2007). They cannot focus on only productivity or quality because in this case operation and marketing are separated and there is no long term benefit in that strategy, they have to cooperate (Lovelock – Wright, 2002). Improving productivity means saving time and costs, although in the front stage it can cause large problems in the long run, if there are not enough employees processes are slower and not proper enough (Lovelock et al., 1996).

Quality standards were originally found out and used in production. They focused on the quality and the right conformance of the product. Now assuring quality does not only contain the operation part of the firm but every other department, for example marketing, as well (Woodruffe, 1995).

According to Blind and Hipp (2003) quality standards are appropriate for making the quality of products and services transparent. They state quality standards are highly needed in services because of the intangibility of services and the information asymmetries between management and the service providers.

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THE ROLE OF PROCESS STANDARDISATION AND CUSTOMISATION IN HOTEL MANAGEMENT

Horovitz (2004) states that there should be no more than 50 standards at a company level which results in about 1000-2000 lines for bigger and more complex service providers such as a theme park. The more experienced the staff, the fewer standards they need, although for new employees they still function as great help. He called standards `a safety net` which explains why they are needed at service companies as much as in manufacturing companies.

The most important issues in the case of standards are that they need to be explicit, established by the best employees, everyone in the team needs to know them, they should be used in the induction process, should always have a role in internal communication and they need to be reviewed at least every two years (Horovitz, 2004).

There are different classifications of standards. One of them identifies four types of standards (Schmenner, 1995). The first three are regulated by hotel standards as well and that is why an example was assigned to each (Table 2).

–  –  –

This research concentrates on the second and the fourth categories (Table 3). However, there can be a connection between the standardisation of processes and cultural control; cultural control means the standardisation of the norms and values in the company, which should be the base of standardisation of these processes.

–  –  –

Kimes – Mutkosky (1991) identified two important aims of standardisation efficiency and efficient service delivery. Efficiency is mentioned by Ritzer (2004) as well when he

phrased the dimensions of the term McDonaldization. This advantage is listed with others:

calculability, predictability and control through nonhuman technology. Predictability which actually is the customer expectation is an advantage because it provides a fast, predictable and perfect service for the customer which is the most important issues in order to deliver high quality service (Heppel, 2010). The last mentioned advantage (Table 4) is productivity increase which has good possibility in a service firm if they are using standardisation (Sundbo, 1994). Bateson (1985) also mentions productivity as one of the most important goals of companies and adds that these firms have to consider the self-service option as well.





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THE ROLE OF PROCESS STANDARDISATION AND CUSTOMISATION IN HOTEL MANAGEMENT

Customisation

Customisation is the situation where the service product is created in an actual situation as an individual solution to the customer’s specific problem (tailor-made or customised) (Sundbo, 2002). Customisation takes place in an economic logic, which is based on the axiom that a service product cannot be stored and therefore it must be consumed in the moment of production and the consumer must be a co-producer (Sundbo, 2002). The customisation tendency is thus driven by this logic of service marketing, which economically is the logic of old-fashioned servants. This was not rational productivity logic, but the logic of luxury – servants did not produce much that was useful, but they were nice to have and the nobleman could afford this luxury. Contemporary western economies can be seen as luxury economies;

there are large surpluses over what is needed just to survive. Therefore, buyers of services can afford, and will look for, quality and the kind of service over price (Sundbo, 1994). The customised service provision will depend on the economies of scope and the costs associated with customisation as well as the extent to which customers are prepared to pay different amounts for different variants which leads to discriminatory pricing. Consequently, when there are significant economies of scope, the cost of customisation is low and where customers are prepared to pay different amounts for the similar service variants, customised services will in general be provided (Tether et al., 2001). Customisation cannot be defined as exactly as standardisation and because of this fact it is hard to base research on this concept (Reisinger – Steiner, 2005).

There are different forms of customisation.

The classification below is made according to customisation of the product and the customisation of representation (Gilmore – Pine, 1997):

– Adaptive customisation: Low product and low representation customisation. It is a standard product which can be used in different ways by the customers themselves (choice).

– Transparent customisation: High product and low representation customisation. The product is altered according to researched customer needs but they most likely do not know about it only using it this way.

– Cosmetic customisation: Low product and high representation customisation. Only the product representation, for example the packaging, is changed according to the customers’ need.

– Collaborative customisation: High product and representation customisation. Both factors are adjusted to customer needs with customer participation.

PANNON MANAGEMENT REVIEW

VOLUME 4 • ISSUE 1 (MARCH 2015) Although these are distinct categories, companies can use more of them at the same time to find the fit with the customer and create a unique added value for them (Gilmore – Pine, 1997).

Jin et al. (2012) identified two categories of customisation analysing the product customisation in travel agencies: upgrading and downgrading. They determine that customisation influences loyalty and most customers choose upgrading because it starts with an economy package and continuously gets closer to the luxury package and they can stop in any phase they want to. It proves the price orientation of the customers. Additive and subtractive customisation (Park et al., 2000, Wang et al., 2013) or building up, scaling down processes (Levin et al., 2002) mean the same classification only using different names and they are not only applied for the travel agency industry. However, Levin’s (2002) results show that in case of pizza topping customers prefer the scaling down process which provides more revenue for the company as well.

–  –  –

The customer is willing to pay more for the service if it provides extra value for them (Sedmak – Mihalic, 2008). It is important to add that customisation only costs a little and it is worth fitting to the customer needs and expectation (Heskett, 1986). Although the risk of high costs needs to be mentioned because of the alteration of the characteristics from time to time (Nordin et al., 2011). There is no argument of customisation being able to satisfy special customer needs and create added value to the customer with finding the exceptions and dealing with them differently (Heppel, 2010), although it is essential to add the danger of only a few people interested in the special service (Ritzer, 2001). This kind of thinking suggests that customisation represents higher operational risk but less strategic and financial risk (Nordin et al., 2011). Too much customisation can be a disadvantage for the company as well, if there are too many choices customers have to consider; in this case they need attributes fitting their needs instead of all the options (Huffman –Kahn, 1998).

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THE ROLE OF PROCESS STANDARDISATION AND CUSTOMISATION IN HOTEL MANAGEMENT

–  –  –

The previous chapters introduced the advantages of the two concepts but since the paper states that it is possible to exploit all the advantages, it is relevant to present the theories used by other authors whose aim was to combine standardisation and customisation.

–  –  –

Some of the authors listed in Table 6 deal with standardisation and customisation as normally distinct categories but they create a new category which combines the two (Palmer – Cole, 1995; Lampel – Mintzberg, 1996; Silvestro et al., 1997; Van Looy et al., 2003; Mount – Mattila, 2009). Others realised that the operation of companies have changed and the two concepts are applied at the same time (Heskett, 1986; Johns, 1993; Irons, 1997; Liu et al., 2008; Lehrer – Behman, 2009). Some of the researchers’ aim was similar to the current author. Their goal was to try to find the solution to exploit the advantages of both concepts and found out a new theory. One solution is modularity introduced by Davis (1989) and apPANNON MANAGEMENT REVIEW VOLUME 4 • ISSUE 1 (MARCH 2015) plied by Sundbo (2002) for services. Modularity is a technique when the parts are standardised but the outcome is customised by the customer or guest themselves since they decide which elements they would like to use to actually produce the final product (Davis, 1989).

The essence of modularity can be explained with the following sentence: ‘Every buy is customized, every sale is standardized.’ (Davis, 1989, p. 18). Modularity is a very commonly used concept in theory and practice as well to mix the advantages of standardisation and customisation. However, according to Bask et al. (2010) the service applications are limited.

The last category contains the idea and model of the current author (Gyurácz-Németh – Clarke, 2011). According to this approach customisation and standardisation are not independent and not opposites. This means that hotels do not have to choose between standardisation and customisation. Also the role of standardisation is not only to replace customisation or vice versa. The opposite of standardisation is no standardisation and nor does standardisation not equal customisation, because if the processes of a hotel are not standardised it does not mean it will operate according to the customers’ needs. This way of thinking actually works in the case of customisation as well. If the hotel processes are not customised it does not mean that they are standardised instead, they only do not meet the customers’ needs.

The result of no standardisation is insecurity and variance which means that the processes are not specified and the employees are trained to execute them properly so this unexpected service is going to be provided to the guests who are once served this way the other time another way. If there is no customisation and guests require the personal touch, they will surely be unsatisfied with the automatic service, which is not different from a machine serving them.



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