Hospitality and Tourism Fundamentals

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Service profit chain

The ‘Service Profit Chain’ concept was developed through an analysis of successful service organizations. The chain illustrates relationships between service firms’ profits and customer satisfaction and loyalty, as well as employee satisfaction and loyalty (Heskett, Jones, Loveman, Sasser & Schlesinger, 1994). There are three components in the service profit chain. First, work environment and hiring practices are designed to foster employee satisfaction, loyalty, and productivity.

Scripts and schemas

The term ‘script’ refers to a schema that is retained in memory. The schema describes sequences of events or behaviors that are appropriate in a particular context. In the hospitality industry, customer scripts serve as antecedents of what customers expect to happen when they visit a hospitality operation (Shoemaker, 1998).

Schools of thought

Strategic management literature has been influenced by many disciplines such as anthropology, biology, economics, history, mathematics, military history, physics, psychology, political science, and urban planning; therefore, as the field has evolved, different views have emerged on its nature and characteristics. Starting from the 1980s, scholars have reviewed the strategic management literature and recognized groups of authors who share similar views about strategy formulation and implementation.


Whilst role formally refers to ‘an organized set of behaviors’ (Ivancevich, Olekalns & Mattesson, 1997, p. 752) and is used to define the tasks and activities undertaken as part of our work (Mount & Bartlett, 1999), one of the key issues in the discussion of role is how our individual work performance and job satisfaction are shaped by our expectations with regard to role. The study of role, and its contribution to organizational behavior and effectiveness has only emerged in the last 30 years (Bassett & Carr, 1996, p. 37).

Resource planning

Resource planning for the hospitality industry may be divided into two major streams as follows:

Material resource planning (MRP) The practice of calculating what materials are required to create a product by analyzing bill of materials data, inventory data, and/or a master production schedule; and

Enterprise resource planning (ERP) The practice of consolidating an enterprise’s planning, manufacturing, sales, and marketing efforts into one management system.

Resource-based view

The RBV of the firm posits that firm performance is ultimately a return on unique assets owned and controlled by the firm (Barney, 1991). This assertion is important in the context of the history of strategic management theory.


Renovation is the process of improving the image of a hospitality organization by modifying its tangible product by making changes in the property’s layout, such as a new extension or replacing furniture and equipment (Hassanien & Losekoot, 2002). Renovation may be essential for a number of reasons, such as improving operational efficiency, reducing costs, improving corporate image and standards, responding to new trends and technology in the market, complying with government requirements, and recovering from accidents and disasters.

Quality control

Quality control is part of the quality management process. Quality management involves three steps: quality planning, quality control, and quality improvement (i.e., the Juran Trilogy; see Juran, 1992). Quality planning refers to the steps taken to develop products and services that meet customers’ needs. Based on the process control system established in the planning phase, quality control evaluates actual quality by comparing performance to quality goals and then acting on the detected differences.

Purchase order

A purchase order is a sheet specifying particular products or services to be purchased from a purveyor. Product specifications are often used on purchase orders for food and beverage buys. In many cases, the purchase orders are sent out to competing companies for bid. While not all products are sent out for bid, those used on a regular basis or those that tend to have higher prices may be. Purveyors will submit bids to the purchaser, possibly along with a sample of the product for comparative purposes.


Proprietary means held in private ownership. In an ICT context, the term is used to describe technology such as software algorithms restricted by patent or trademark for example, Unisys’ LZW, used in GIF files. Proprietary technology is neither ‘free’ nor ‘semi free’. Hence unless authorization is obtained, it is not permitted to use, copy, modify or redistribute proprietary software either for a fee or gratis because the source code is copyrighted. The terms of use are defined by contracts or licensing agreements.