Outsourcing Performance in Hotels: Evaluating Partnership Quality

Abstract

In this study, a research model investigates the influence of various factors of the outsourcing relationship that condition partnership quality. The factors considered as determinants of outsourcing partnership quality are the strategic benefits and the degree of outsourcing. Partnership quality is based on relationships governed by confidence, commitment, business understanding, shared benefits and risks, and conflict resolution. The model also studies the influence of the partnership quality between the supplier and the hotel on the outsourcing performance, considered from the financial, strategic, and overall satisfaction perspectives. To test the hypotheses, this study used the Partial Least Squares (PLS) technique with a sample of managers in an important tourist destination in Spain. The results of the study confirm that the strategic benefits and the degree of outsourcing perceived by the manager are determinant factors of the quality of the outsourcing partnership. In addition, they show that closer relationships with service suppliers imply greater outsourcing performance. Finally, implications for theory and practice are discussed.Many organizations experience difficulties in forming and managing a successful outsourcing partnership with service suppliers. Thus, for example, in the facilities management sector, many clients and suppliers are not working in advance [9]. In addition, Tamás [10] points out that inappropriate outsourcing can negatively affect operational efficiency. In this regard, Lee [11] indicates that the nature of the outsourcing relationship needs to evolve from a contract between the service supplier and the company that receives the service to a closer relationship or partnership between the two organizations. A partnership is defined as an interorganizational relationship designed to achieve the participants' shared objectives [11].Researchers believe that when organizations have relationships with other companies, they want to reach a strategic goal where the members seek shared objectives, fight for mutual benefit, and recognize a high level of interdependence [12]. Even though the use of the hotel outsourcing strategy is gaining ground, no studies have been carried out to analyze these questions.The level of outsourcing perceived by management should influence the type of interorganizational relationships developed. Hotels outsource some of the necessary activities to provide service to the client; thus, in the process of transforming resources into goods and services (outputs), it becomes necessary to manage the relationships as part of the productive system. Because of this increase in the outsourcing of activities, managers' tasks are transformed, and they become managers of interorganizational relationships. Therefore, they not only have to take care of the management of the productive system, but they also must manage the relationships among external suppliers.Previous studies on outsourcing relationships have used social theories based on trust and commitment to explain t...

The impact of perceived benefits and risks on current and desired levels of outsourcing: Hotel managers’ perspective

“…Put differently, the extent to which department managers perceive risks of outsourcing does not significantly moderate the relationship between current and desired levels of outsourcing. This insignificant result is interesting and counterintuitive since it contradicts the existing literature around the negative role of perceived risks on managers attitude towards outsourcing (Espino-Rodríguez & Ramírez-Fierro, 2018). However, this result can be attributed to several reasons which are not mutually exclusive.…”

“…On the other side, following the RBV logic outsourcing is seen as a strategic tool for gaining competitive advantage due to focusing on core activities while outsourcing the non-core activities to specialists, thus, the firm can do better with both core and non-core activities (Espino-Rodríguez & Padrón-Robaina, 2005;Gilley & Rasheed, 2000). Empirically, scholars tried to understand the benefits of outsourcing in the hotel industry (e.g., Espino-Rodríguez & Ramírez-Fierro, 2018;Hiamey & Amenumey, 2013;Lamminmaki, 2008). For instance, outsourcing allowed hotels to focus on core activities, elasticity, specialism, endorsing swift growth, and evading capital expenditure (Lamminmaki, 2011;Sharma et al, 2015).…”

Authentic Leadership and Job Satisfaction: A Fuzzy-Set Qualitative Comparative Analysis (fsQCA)

“…In addition to causing controversy, outsourcing has sparked debate about possible feelings of low involvement and organizational commitment of these workers toward hotels, the relationships that these workers have with their direct superiors, and the differences with respect to non-outsourced employees of the same level who are hired directly by the business. Espino-Rodríguez and Ramírez-Fierro [61] analyzed 63 hotels with 3-, 4-, or 5-stars in Gran Canaria, Spain, finding that the quality of the outsourcing partnership is determined by the degree of outsourcing perceived by the manager and the strategic benefits. However, the decision to outsource services entails a series of risks, most notably the lack of knowledge of the way the business works and the loss of control [62].…”

Outsourcing and offshoring decision making and its implications for businesses - A synthesis of research pursuing five pertinent questions

“…This question encompasses not only the first time but also when it comes to renew a contract. Therefore a performance analysis of the existing partnership must be done (Espino-Rodríguez and Ramírez-Fierro 2018). If the partnership is not as expected, another provider can be searched or back-sourcing can be used (Nagpal 2015).…”