Hospitality and Tourism Fundamentals

Twitter icon
Facebook icon
Google icon
LinkedIn icon

Strategic management

The term strategy is derived from the military, as part of war relations between nations and communities. Management theory adapted the term to competitive business situations between firms in terms of economic, technological, or managerial dimensions. The meaning of strategy in the organizational context involves an amalgam of decisions, characterized by unique features, aimed at reaching the goals of the organization.

Strategic groups

A strategic group is ‘the group of firms in an industry following the same or similar strategy along the strategic dimensions’ (Porter, 1980: 129). Strategic dimensions are essentially those decision variables that underpin the business strategies and competitive positioning (see generic strategies) of the firms within an industry. These include product market scope, distribution channels, level of product quality, degree of vertical integration, choice of technology, and so on.

Strategic formulation

Strategy formulation is the process of deter mining a value based strategy that considers external opportunities and threats as well as internal capabilities and constraints. This process has generally been perceived as an analytical approach, driven by formal structure and planning systems. An ongoing debate in the strategy literature has been the question of whether strategy formulation is a rational and comprehensive process (the deliberate view) or a more incremental and trial and error type of approach (the emergent view) (Farjoun, 2002).

Strategic evaluation

The strategic evaluation process assesses whether the organization is achieving the desired performance and following the correct path to remain competitive into the future. Evaluation takes place at all levels of the firm. Managers obtain clear, thorough, and accurate information from the frontline and throughout the organizational hierarchy. By synthesizing this information, managers compare actual outcomes with expectations established during the strategy formulation stage. The evaluation process creates a feedback loop to assess the success of implemented strategies and action plans.

Strategic direction

A strategic direction is essentially those policies required to provide a clear mandate for action, whether at the individual firm, industry, or community and government level. For example: a hotel may require a Business Strategy for investment, comprising of options identification and project requirements definition; while the Policy/Strategy document for an entire industry may need to seek stakeholder consensus on issues and opportunities in order to set direction and define a framework for its completion.

Strategic choice

Strategic choices relate to decisions about the future of an organization and how it should respond to environmental pressures and influences (Johnson & Scholes, 2002). According to Evans, Campbell and Stonehouse (2003), strategic choice involves three stages: (1) Formulating options for future development; (2) Evaluating available options; and (3) Selecting which options should be chosen.


Socialization is the process whereby new employees are inducted into the culture of an organization (Schultz & Schultz, 2002); norms may be regarded as those implicit standards of behavior that are accepted and shared by members of a workgroup. Within the hospitality context, the socialization process involves the transmission of values, beliefs, and attitudes embraced by individuals already within an organization, particularly those holding positions of power, influence, and salience.

Social influence

Broadly, social influence is a change in behavior due to the real or imagined influence of other people. There are three types of social influence: informational, normative, and interpersonal. Informational social influence occurs because of people’s desire to be correct and to know how to best behave in a given situation. Persuasion is the most common type of informational social influence and is discussed in another entry in this encyclopedia (see Persuasion). Normative social influence occurs because of people’s desire to conform to social norms in order to be liked and accepted.

Small business entrepreneurship

The majority of businesses in the hospitality industry are small. Establishment of small business is often related to the social and personal context as well as considerations of the entrepreneur. In fact, hospitality small business entrepreneurship has been identified as a vehicle through which entrepreneurs can achieve personal goals such as having fun, enriching their social life, generating jobs for family members, and educating their children.

Service types

‘Service’ is a term that is used to describe the manner and method in which food is served to guests in foodservice operations. In former times this often constituted an elaborate and convoluted protocol, much of which is no longer in vogue, notwithstanding that some technical terms are still in use today, particularly in Europe. When food is placed directly on plates and served to guests at the table this is referred to as service a` l’assiette. When guests serve themselves from the dish on the table with serving spoons this is referred to a service a` la franc¸aise.