Multi-unit management in the hospitality industry: a late twentieth century phenomenon

Peter Jones: School of Management Studies for the Service Sector, University of Surrey, Guildford, Surrey, UK

Introduction

This article is designed to promote discussion. Its focus is on the concept of multi-unit operations i.e. hotel and restaurant chains, and strategic operations management, or the function and role of operational managers within chains, especially at head office level. This focus has been adopted for a number of reasons:

- as counterpoint to the Morrison and Thomas (1998) article on small business;

- to reflect the current and ongoing rise of large firms within the hospitality industry - as Ingram states [it is] increasingly dominated by large players (Ingram, 1998);

- to promote an operations perspective of the hospitality industry, too often dominated by research in strategy, marketing or human resources;

- to argue that strategic operations is poorly articulated and modelled in the generic operations management literature; and

- to propose a new model of strategic operations management, which is termed multi-unit management and explore its relevance to hospitality.

The article begins by comparing small firms and large firms and goes on briefly to map the growth of large hospitality chains over the last 50 years, especially in the UK. This is followed by a theoretical review of the literature on strategic operations management, with some thoughts on the relevance of this theory and the service firm life cycle model to hospitality. A new model of strategic operations management, particularly suited to the management of multi-unit firms, is then proposed and the implications of this for hospitality research discussed.

Large hospitality firms (in comparison to small businesses)

The key characteristic of small business is the focus on the owner/entrepreneur from a variety of perspectives. Such perspectives include the influence of ownership on small business performance, the multi-functionality of the owner, the role of the owner, dimensions of the firm, and factors affecting success or failure. In many ways, the large firm has entirely different characteristics when viewed from these perspectives.

First, ownership and management are usually separate. Some large firms continue to have professional management by major shareholders in the firm and some award stock options to their executives. But in the main, ownership is in the hands of shareholders and management is the responsibility of...