Impact of Outsourcing Hotel Staff on Service Quality: An Analysis

This report investigates the impact of outsourcing hotel staff on service quality. It begins with an executive summary outlining the complexities and managerial dilemmas associated with outsourcing. The research aims to understand how outsourcing affects service levels in the hotel industry, considering both positive and negative repercussions. The report explores various outsourcing theories, including transaction cost economics, core competencies theory, relational theory, resource-based theory, evolutionary economics theory, knowledge-based view, and social exchange theory. It discusses the significance of outsourcing, arguments for and against it, and its effects on service quality and performance. The methodology section details the qualitative research approach, data collection, and ethical considerations. Finally, the report presents findings and analysis based on an interview with a restaurant manager, relating the interview responses to the literature review to justify the findings, with a focus on the reasons for outsourcing and its impact on service standards.

Running head: INDEPENDENT RESEARCH PROJECT
Independent Research Project
Name of Student:
Name of University:
Author’s Note:

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Executive Summary:
Outsourcing is an extremely complicated structure which comprises of numerous activities as
well as functions which give rise to a series of activities and functions causing the rise to the
series of administrative and managerial dilemmas. The aim of the research is to comprehend the
impact of outsourcing the hotel staff on the level of service or the service quality in the hotel
industry as a whole. This is due to the reason that there are several instances where organisations
take it upon themselves to perform certain functions and tasks and sometimes they outsource
either functions or people to help in their operations. This can have either positive or negative
repercussions on the organisation. This report aims to explore the given issue. In case of the hotel
industry it has been seen that be it the “laundry department, the banquet staff, the entire
housekeeping operation or even in case of the revenue management team of a hotel, the
outsourcing of hotel operations is a trend” which can be innovative but has a certain amount of
longevity. It is usually stated that the concept of outsourcing of business operations is a trend
which is expensive but there are certain added benefits of allowing the professionals to come and
also perform whatever they wish to do in order to improve the quality of specific hotel
operations, thereby increasing the overall guest experience. Therefore this particular report aims
to discuss the impact of outsourcing staff in the hotel industry. The concept of outsourcing has
become a hugely important topic which is essential in the present day scenario. This is because
of the reason that hotels all over the world in order to facilitate their operations are outsourcing
different aspects of their business and function just like other industries. Therefore this research
is crucial and its scope is very genuine are suitable in this respect.

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1. Introduction:
1.1 Background context:
Outsourcing is basically a business strategy which is responsible for moving certain
functions, procedures and decisions from within an organisation to people or organisations which
are outside providers. This is completed by means of negotiating contract agreements with a
vender who takes up the duty for the procedure of production, management of people, quality,
the levels of customer service and key asset managing activities. It is possible for the process to
reduce the fixed overhead costs in case of an organisation.
1.2 Research Problem, research purpose, aims and objectives:
The aim of the research is to understand the impact of outsourcing the hotel staff on the
level of service or the service quality in the hotel industry as a whole. This is due to the reason
that there are several instances where organisations take it upon themselves to perform certain
functions and tasks and sometimes they outsource either functions or people to help in their
operations. This can have either positive or negative repercussions on the organisation. This
report aims to explore the given issue.
1.3 Significance of the Research:
In case of the hotel industry it has been seen that be it the “laundry department, the
banquet staff, the entire housekeeping operation or even in case of the revenue management team
of a hotel, the outsourcing of hotel operations is a trend” which can be innovative but has a
certain amount of longevity. It is usually stated that the concept of outsourcing of business
operations is a trend which is expensive but there are certain added benefits of allowing the
professionals to come and also perform whatever they wish to do in order to improve the quality

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of specific hotel operations, thereby increasing the overall guest experience. Therefore this
particular report aims to discuss the impact of outsourcing staff in the hotel industry (Uçar &
Bilgen, 2013).
1.4 Scope of the Research:
The concept of outsourcing has become a hugely important topic which is essential in the
present day scenario. This is because of the reason that hotels all over the world in order to
facilitate their operations are outsourcing different aspects of their business and function just like
other industries. Therefore this research is crucial and its scope is very genuine are suitable in
this respect.
2. Literature Review:
2.1 The theories of outsourcing:
Outsourcing truly complicated that comprises of numerous activities as well as functions
which give rise to a series of activities and functions giving rise to the series of administrative
and managerial dilemmas. There are several existent theories which are there to assist the
scientists in ascertaining the nature of such organisations and also to help the managers of the
companies to handle the procedures in an efficient manner. Any specific phenomenon can be
described by means of theoretical frameworks which are based on the analogous approaches.
Therefore the concept of outsourcing is crucial (Brewer, Wallin & Ashenbaum, 2014).
2.1.1 Transaction cost economics:
The “transaction cost economics” theory has traditionally been the most widely utilized
theory of outsourcing which is considered to supply the best decision making tool in order to

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help companies in deciding which segment of their organisation need to be outsourced. In
addition to this the organisations can organize themselves for the implementation the crucial
organisational changes which arise from the concept of outsourcing. The most important aspect
of this model is the fact that this can be utilized for the analysis as well as the selected of
outsourcing contracts.
2.1.2 Core competencies theory:
The core competencies theory focuses on the theory of resources and is an evolutionary
method. It is stated that the core competencies are the combined knowledge of a company
specifically with regard to various ways of combining different productive skills as well as the
integration of types of technologies. “Core competencies theory” is aimed at improving the
competitiveness of an organisation.
2.1.3 Relational theory:
The relational theory helps in giving ideas regarding how the enterprises might gain and
keep a competitive advantage for connections with other organisations. This specific model is
usually utilized to study the phases of transition, relationship management as well as
reconsideration. The relational theory is extremely crucial in the sense that only this can be
applied to help in the enquiry of all the phases of the outsourcing process (Neves, Hamacher &
Scavarda, 2014).
2.1.4 Resource-based theory:
The major aim of the “resource based theory” is the fact that the resources and the
capabilities can differ drastically among companies and these differences can also stay stable. In

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case the possessions and the capacities of a company are mixed and utilized in an appropriate
manner they might cause the creation of a competitive advantage for the organisation. The
resource based theory is used to understand the functioning of the outsourcing procedures with
respect to the IT operations which is the most valuable approach for the organisation (Neves,
Hamacher & Scavarda, 2014).
2.1.5 Evolutionary economics theory:
There has been a huge interest in the Evolutionary economics theory and this is due to the
fact that this theory has a major assumption. This assumption is that both organisations as well as
individuals cannot ever be fully knowledgeable and they need to adjust and optimise their
performance in the local instead of in the global level. Another important assumption is that the
decision making process of the individuals and organisations is subject to certain rules and
regulations. In addition to this the individuals and organisations can emulate to a certain extent
the behaviour as well as the rules which are followed by their peers for gaining a certain level of
self confidence and bring about innovation (Young & Macinati, 2012).
2.1.6 Knowledge based view:
This theory explains the way in which individuals cooperate in order to produce goods
and for providing services. The “knowledge based view” puts forward two major methods of
knowledge sharing among the partners which include that of knowledge generation and
knowledge application. This theory puts forward the idea that the idea of knowledge sharing is
one of the most important success factors of an outsourcing procedure.

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2.1.7 Social exchange theory:
This theory focuses on the interpretation of the transactional relationships by utilization
of the “economic cost benefit analysis”. The concept of social exchange is basically an “ongoing
reciprocal process in which the actions of individuals or organisations depend on the rewarding
reactions which they receive from others”.
2.2 The significance of outsourcing:
There are several significant impacts of outsourcing. Firstly it provides the privilege to
the companies to focus on their core activities. It is natural that outsourcing helps in giving
proper attention to the business activities which are crucial and important in due course. In
several cases outsourcing specific activities or components or people helps in the reduction of
cost and efficient savings as it is seen that often foreign labour is cheaper in comparison to
domestic talent. Therefore the concept of outsourcing helps the companies to decide whether
they aim to hire the company temporarily or hire full time employees for their needs. It also
helps the companies have control in specific operations and these companies do well in the
management skills in the business as well as the companies and they also perform in an
organised and systematic manner. Outsourcing can be really proper for the company and also for
the business.
2.3 Arguments for outsourcing:
There are several arguments for outsourcing. This is supposed to mean that in case
specialists are hired there is sufficient time to focus on the core tasks which are important for the
organisation’s business. Otherwise employees usually wish to spend time which is focussed on
less valuable work which does not suit a specific area of expertise.

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Specialists also provide a company with proper access to a new job which might not have
been possible otherwise. Therefore existing employee skills are not always the best bet for a
company. In case work is sent to a specialist there is an opportunity of creation of limited
engagement with a certain amount of information.
2.4 The effects of outsourcing on the service quality and performance:
It has been sufficiently researched that the growth in the human resource outsourcing, in
this connection the outsourcing of staff has caused the organisations to forget the impact which it
has on the quality of service in organisations. This is because of the reason that the service
quality is often neglected and in many cases a proper bond is not able to be established between
the business partners. In case there is not a proper amount of stability and trustworthiness in the
relationship, it causes problems to the organisational members.
2.5 Discussion on outsourcing:
Outsourcing is a common practice in the hotel industry which includes several segments
like payroll and landscaping. Those function which involve direct guest contact such as those of
housekeeping, concierge and also front desk activities are not usually outsourced due to the
impact which these activities have on the reputation of the hotel and the amount of revenue.
Training of the hotel staff in such areas is also critical. It has been seen that that majority of the
people having a negative experience at a hotel stated that unfriendly employees were the catalyst.
The concept of outsourcing can either be a permanent or it can be a temporary arrangement in
order to bridge the gap in case of staffing. This is done in order to learn better quality techniques
or for the improvement of product designs which are faulty. Outsourcing finds importance in a
variety of fields (Qi & Chau, 2012).

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3. Methodology:
3.1 Introduction:
In the field of research, the methods of research involve different intervention strategies
and plans which are to be put to use in order to help the researcher do his or her job. The action
basically comprises of short term and long term goals and it is a type of an action plan. Research
methodologies deal with a range of ways in which the key research problems are solved. It
comprises of philosophies, ideals as well as foundations which drive the actions as well as the
methods which can be used. The research methods can also refer to the different ways in which
data can be collected for the purpose of the research project. In case a person requires
quantitative data, there might be surveys can be used and in case of qualitative data then
interview methods are utilized.
3.2 Qualitative Research Method:
In case of qualitative research method the different responses are collected from the
respondents and their responses help in the understanding regarding the situation in which they
are put. Qualitative data helps in understanding the responses of the people.
3.3 Population and sample:
There needs to be a critical understanding of the way the population is to be utilized in
order to select a sample for the collection of data. In this particular study an interview is
conducted and this is to be studied for proper understanding on the topic of outsourcing in the
hotel industry and its impact on the service quality in the industry.

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3.4 Data Collection:
Usually in case of research techniques data are to be collected from different sources and
these data need to be analysed from such sources. In this connection it can be said that there is
the interview method of data collection and the nature of the data is qualitative in nature which is
evident from the interview transcript. This method of interview differs from the normal
conversations in the sense that these are conducted in a much more rigorous way than general
normal conversation. The techniques which need to be employed in case of the interview is that,
they need to be reproducible, systematic, credible and also transparent.
3.5 Credibility:
The interviews have certain credibility in the sense that the genuineness of the
interviewee is determined before the interview is conducted. Credibility is one of the most
important criteria which needs to be established. This is because of the reason that credibility
asks the researcher to connect the research study and its finding in order to demonstrate the truth
of the research and the findings which are to be evaluated. Credibility has majority of techniques
for its establishment compared to the other aspects of trustworthiness. In order to establish
credibility the qualitative researchers use member checking in order to clarify the intentions,
correction of errors if any. Triangulation is a method which every qualitative researcher needs to
be aware of and it involves the utilization of multiple methods, sources of data and also that of
the theories.
3.6 Ethical consideration:
Being a researcher, the individual conducting the methodology of research needs to
maintain certain principles or ethics of research. In these cases there needs to be respect towards
the rights of the individuals who are participating in the research project. There needs to be the

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principles of beneficence or doing good, non-maleficence or not doing any harm and also
maintaining justice or equality. Apart from this, any individual who participates in the study
needs to have given consent freely to participate in the survey. In certain cases where there is
difficulty in getting written consent, at least verbal consent needs to be collected. In addition to
this the confidentiality of the interviewees need to be maintained at all costs.
3.7 Data Analysis:
There is often the utilization of the procedure of coding as a method of analysis. This is
because of the reason that coding actually means the attachment of a label to a selected data
segment. This is very crucial because it often happens that a code is a expressive label, a
category or a sub code or a dimension. There is not always available software capable of making
correct decisions for people. In such cases the people need to learn to appreciate the different
software features which help in the retrieval as well as the review of data. This also helps in the
modification of boundaries for the coded segments in order to rename or merge or split codes or
help in the rearrangement of the data in different ways. The procedure of development of a
proper code system is more than the concept of coding in the technical sense. Only completion of
data coding is not the end of the procedure of analysis. After the procedure of coding is complete
the data is prepared for the purpose of supplementary analysis and exploration. The used tools
are the code-coocuurence explorer and the codes-PD table.
4. Findings, discussion and analysis:
The interview process is conducted in order to find out about the outsourcing perception
in hotel by the examination of the perspectives of the manager of the restaurant which is the
reason for the purpose of outsourcing. The interview helps in understanding the ideas which play

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in the heads of the management and those who take care of the operations. The interview
transcript comprises of 16 questions in all and the answers to the questions as provided by the
manager of the restaurant. The questions are open ended, as are answered by the manager of the
hotel. Therefore the questions which are asked are related to the topic of outsourcing. The
question which relates to the number of the employers who work in the hotel from outside
sources was asked to which no particular number could be obtained. However certain amount of
information needs to be understood with respect to the functions concerned. In this connection,
the manager mentioned that the people from the housekeeping department were organised. Often
extra staff needs to be present in order to take care of guests in a better manner. This sort of
discussion is in a way related to the social exchange theory related to the theory of outsourcing
staff (Agyemang-Duah et al., 2014).
Another important factor which is to be highlighted from the interview is the importance
of keeping outsourced staff in the hotels. According to the manager of the restaurant, it is clear
that there is huge amount of importance of keeping outsourced staff in the hotels. This is because
of the fact that on the basis of the hotel operations, outsourcing is crucial. This is because of the
fact that companies always do not want to recruit and train people who are not well versed with
the responsibilities of managing staff and the customers. The hotel does not wish to waste
resources on those members of staff who are not well equipped to deal with others. Therefore
they have tried to balance staff and outside members in order to fulfil all the requirements in
peak seasons.
The main reason behind outsourcing which has been stated by the manager in the
transcript is the lack of hotel staff availability. There is often the need for quick service which is
not really possible with limited existing hotel staff or staff members who are not well trained.