Project report

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PROJECT REPORT

Student Name: Saflor, Maricel
Student Numbers: S11006036
Programme: BA Business Programme


Level: 6
Academic Year: 2014/15
Semester: ½
Module title: Project
Assignment no.: 2
Module code: BUS602
Word guide: 8000 words
Percentage Weighting of this assignment for the module: 80%
Facilitators:
Dr Muke Ferguson
Dr. Roman Puchkov
Dr. Ying Liu
Dr Fletcher Phiri
Dr. Colston Sanger- Supervisor
Issue date: June 2014
Return date: 07th January 2014









Project title
Impacts of outsourcing strategy to the organisational performance
(A case study of Hilton Hotel)






By: Maricel Saflor
Business Management year 3
Glyndwr University-London

Supervisor:
Professor Colston Sanger






Acknowledgement

I would like to thank all my tutors and my supervisor for their valuable help and guidance in this project. I would like to thank the hotel managers who gave me their valuable time to take part on interviews and attained useful information that developed the achievement of this study.






























Table Of Contents

Project Report 1
Acknowledgement 3
Executive Summary 6

Chapter One 7
1.1 Introduction 7
1.2 Terms Of Reference 7
1.3 Background To The Topic 8
1.4 Background To The Company And Importance Of Outsourcing In The Organisation 8
1.5 Historical Aspect Of The Problem 9
1.6 Overview Of The Report 9

Chapter 2: Literature Review 10
2.1 Theories 10
2.1.1 Basic Types Of Outsourcing 10
2.2 Reasons Of Outsourcing 11
2.3 Success And Failures Of Outsourcing 12
2.4 Involvement Of Employee In Outsourcing 13
2.5 Importance Of Coordination 14
2.7 Controlling Risks 16
2.8 Conclusion 16

Chapter 3 Methodology 17
3.1 Introduction 17
3.2 Research Process 17
3.2.1 Identification Of The Problem 17
3.2.2 Sample Size 18
3.2.3 Pilot Testing 18
3.2.4 Credibility 18
3.3 Research Limitations 18
3.4 Research Ethics 19
3.5 Research Design 19
3.5.1 Qualitative Research Approach 19
3.5.2 Sampling 20
3.6 Data Collection 20
3.6 Data Analysis 20
3.7 Presentation Of Results 21
Chapter 4 Findings 21
4.1 Introduction 21
4.2 Results Of Interview 21
24
Chapter 5 Analysis And Discussion 24
5. 1 Objective 1 To Determine Why Do Hilton Hotel Outsourced Its Services 24
Objective 2 To Investigate Whether Objectives Of Improving Organisational Performance Has Been Achieved 25
5.3 Objective 3 To Analyse The Factors Associated With The Success Of Outsourcing Strategy 26
Objective 4 To Analyse The Factors Associated With The Failures Of Outsourcing Strategy 26
Chapter 6 Overall Conclusions And Recommendations 27
6.1 Introduction 27
6.2 Conclusion 28
6.3 Recommendations 28
6.4 Limitations And Suggestions 29
Chapter 7 Reflective Account 30
7.1 Introduction 30
7.2 Reflective Account On Project Management 30
7.3 Personal Professional Development 31
References 33
Appendix 1 Research Interview Questions 36
Appendix 2 Ethical Approval Form 37
Appendix 3 Supervision Records 38
Appendix 4 Gantt Chart 44









Executive Summary
London is considered as one if not the most desirable tourist destination in the world. The hospitality industry has been blossomed because of the stack of tourists who come to visit London each year. Hotels are the one who gain advantage and benefits from the popularity of the city and Hilton hotel is one of the major benefactors of the flourished of tourism industry. Hilton hotel provides full service with premium price and its brands have great reputation of high standard services across the world.

This research focuses mainly on the outsourcing process in the modern hotel industry in London. The subject is important in different stages that hotel has undergone through in outsourcing particular services in its department. The researcher professional approach is to understand the outsourcing strategy of the hotel and its impacts in organizational performance of the hotel. It has furthered factors associated on the success and failures of the process as well as problems and risks taken on deciding to outsourced services.

Qualitative approach has been applied for this study. Primary data collection through interviews has been conducted to Hilton Hotel Managers to gather practical data involving the outsourcing strategy in the organisation. Secondary data have been collected from different reliable resources for solid support of the analysis, evaluation and conclusion of the topic.

This research will help to generate better knowledge and understanding of the hospitality industry and its dealings with outsourcing agency in rational manner. It has also considered looking for the future trends of outsourcing in hotel industry and the techniques and objectives that should be implemented to a successful outsourcing operation.

Chapter One
1.1 Introduction
Together with increasing competitive pressures and globalisation, hotels have to reduce their costs and build new opportunities using internal and external resources. Mahmoodzadeh et al. (2009) claimed that strategic outsourcing explores for total business improvement and competitive advantages rather than simple cutting costs, hence, achieve its strategic goals by focusing on crucial activities to organizational success. However, tactical outsourcing has focus on minimizing operational costs or minimizing daily operations productivity (Murphy, 2004 cited by Mahmoodzadeh et al., 2009). The project focuses mainly on performance of organisation where operational risks indicates to decline on the aspect of service quality and speed of execution when service is outsourced in a hotel.

Jacques (2006) stated outsourcing as a results-oriented relationship of a company with an external provider for activities that would otherwise have been performed in house. However, Barrar and Gervais (2006) said that such definition do not capture the true complexity and richness of the phenomenon. On the other hand, Runar and Durst (2014) defined outsourcing as shifting a business activity or function from a business to an external contractor who takes control of the input of activity and afterwards performs that function, selling it back to the business.
1.2 Terms of Reference

The aim of this research is to investigate the impact of outsourcing strategy to the organisational performance of Hilton Hotel based on the following objectives:

1.2.1 To determine why do Hilton Hotel outsourced its services

1.2.2 To investigate whether objectives of improving organisational performance has been achieved

1.2.3 To analyse the factors associated with the success of outsourcing strategy

1.2.4 To analyse the factors associated with failures of outsourcing strategy
1.3 Background to the topic
The goal of the research is to identify the cause of negative manner that affect the employees and hotel along with the solutions to those problems. Hilton hotel has been outsourcing staff over time of which some have succeeded and some have failed.
Colling (2005, cited by Torrington et al., 2008, p. 14; Pilbream and Carbridge, 2010) believed that outsourcing strategy generally custom in the United Kingdom by the organisation for the ancillary services such as cleaning, transportation, security information technology, catering, legal advice, accounting, marketing, building maintenance and human resource. Therefore, outsourcing strategy is not a new practice in organisation in the country but recent years shows that outsourcing strategy have noticeably increasing trend most especially in hospitality sector.
1.4 Background to the company and importance of outsourcing in the organisation
Hilton Hotel Holland Park is a stylish hotel located in leafy affluent district of Holland park with excellent transport links to central London. Hilton hotel brand delivers premium level of hospitality and requires high number of manpowered services that varies in demand all though the year. Therefore, the hotel maintain a very high number of staffs, both agency/casual and permanent/in-house staffs, to sustain the high standard of service and meet the demand of the business. Hence, management have to manage, supervise and train these employees to meet the standard of the brand while maintaining resources and core functions of the hotel. Therefore, cost of manpower and time is considerably crucial to be well distributed where the core functions have to be treated as always a priority for management.
Although the Hilton sustain all its demands, it would not denied the fact that outsourcing strategy played a crucial role on overall success of organisational performance as the contracting agency has always been there as contact to supply necessary people who have knowledge, experience and expertise that contributed for the need, demand and call of the hotel in situation that they experience shortage, absences or inability of their in-house workforce. Therefore, this study has been considered to apply to Hilton as outsourcing impacts arises within the organisation at some point and research will be useful to understand the core values of outsourcing in the industry.
1.5 Historical aspect of the problem

Where a firm has been celebrated outsourcing to employment, a well foster argumentative reaction generates distresses to the psychological contract between firm and its employees.

In hotel industry, outsourcing must be focus on pleasing customer, however, semi skilled in-house employees compete with agency staff, consequences are the increasing three key tensions of outsourcing (Bach, 2005): first, mostly disturb employee morale as employee induce a sense of rejection as firm effectively telling employee that their skills are no longer required; second, sharing of tasks by at least two organisations that produce a sense of powerless and perceived threats to their employment terms and conditions; third, the tension within outsourcing processes between needs of the business and needs of the employee that key issues are likely to include capital assets are divided: the services responsibilities and required for outsourcing them and the level of liability and reward payable to subject to contract performance.
1.6 Overview of the report
The main purpose of the chosen topic of Hospitality Outsourcing is for the researcher to start a contract business providing service staff for contract service agency in the future. The research aims to focus on research questions that will guide the investigation of the relationships between organisational performance and outsourcing strategy:

1.6.1 What are the main reasons of outsourcing strategy in Hilton Hotel?

1.6.2 Is Hilton Hotel improved organisational performance when non-core services are being outsourced?

1.6.3 What are the factors associated with the success of outsourcing strategy in organisational performance?

1.6.4 What are the failures of outsourcing strategy in organisational performance?
Chapter 2: Literature Review

This part emphasis on the principles and the preceding practical studies conducted on outsourcing where theories and models have been critically examined to understand the benefits and reasons of outsourcing and its impact to organisation performance.
2.1 Theories

Outsourcing has become important issues for most organisations. Hui and Tsang (2004) ascertained in his article that though outsourcing the organisation could designate its scarce resources to develop core competencies in an effort to sustain competitive advantages. However, Espino-Rodriguez and Gil-Padilla (2005) and Mahmoodzadeh et al. (2009) believed that the resource and capability theory activities that are specific ought not be outsourced, as they are the ones that facilitate competitive advantage to be developed. In the article of Mahmoodzadeh et al. (2009), resource based theory has been known as an approach that could examine the role of specialized capabilities as a potential source of value creation in relationships between firms.

According to Yadav (2006), in order to walkout a perfect balance, outsourcing implicates immerse expertise from client as well as agency, respectively, thereby creating a link between two parties through the providing of its services or products to client from an agency in return of profit motives. However, Jacques (2006) stated outsourcing as a results-oriented relationship of a company with an external provider for activities that would otherwise have been performed in house. However, Barrar and Gervais (2006) said that such definition do not capture the true complexity and richness of the phenomenon.
2.1.1 Basic types of outsourcing

2.1.1.1 Business Process Outsourcing (BPO)

According to Slack et al., (2010) business process outsourcing involves a particular process that requires highly importance and professional expertise to be done then by an external agency or provider that save time and other resources of the organisation. Business process outsourcing can then be defined as contractual services of shifting one or more business process to third party provider where the latter takes over the management, continuing support and infrastructure of the full process or application (Patel and Aran, 2005).
Baines et al. (2011) discussed increasing shift of traditional activities outsourced by large and medium sized firms in order to oversee the whole brand category rather than individual service. Furthermore, Macdonald and Payne (2006) enumerated the areas that will continue to increase its outsourcing such as catering, cleaning, recruitment, training, and market research, advertising and computer services.

2.1.1.2 Knowledge process outsourcing

Alongside growing interest for outsourcing, knowledge sharing and transferring without direct interaction among participants are necessary for successful knowledge process outsourcing. Runar and Durst (2014) defined knowledge processes outsource as the high-end processes that are important in value creation that require competitive knowledge, analytical thinking and judgment specialized skills such as legal processes, finance and technical services in hotel. The motive of this type of outsourcing is basically to expand approach to expert knowledge and lower cost, whereas, Runar and Durst (2014) further regards as mainly intangible in nature or non-financial but later results in financial benefits for the organisation.

2.2 Reasons of outsourcing

Bach (2005) enumerated the motives of outsourcing services in the organisation. First, services where demand characterized by extreme peaks and troughs called capacity subcontracting. Second specialisation subcontracting where involvedness of the services required by specialist in that area. Third, power subcontracting that attempts to bypass obstacles to change by rendering these someone else problem (Atkinson, 1986 cited by Back, 2005). Fourth, power subcontracting where distinct motive is cost reduction (Patel and Aran, 2005), example, and employment costs as primary target of this contracting. Strategically, Stredwick (2005) enhanced that risks are associated with outsourcing where venture are shared with a provider however, it can bring extensive worldwide knowledge and experience in addition to competitive advantage though an expanded skills base such as in Information technology field. But most of all, buying in expertise and cost-efficiency are the top main reasons of outsourcing activities within the organisation (Pilbream and Carbridge, 2010).
Furthermore, in relevance to the Porter value added supply chain, Jenster (2005) discussed the organisation provided value though number of primary and support activities where these activities can be analysed to establish how the organisations adds value and to identify the roots of its economic advantage through controlling the key cost drivers in the value chain.

Aimed at hotels in Britain most especially in London, Jenkins (2012) detailed the most important considerations for outsourcing such as Laundry and housekeeping department: cost and quality and space. Space is another factor to consider as the building and premise may not accommodate the amount of laundry to be run in-house therefore there would be no other option but to outsource these services. However, in the article of Jenkins (2012) argued that laundry quality leaves a lasting impression from the guests to be fresh, clean and ensure quality.
According to Espino-Rodriguez and Gil-Padilla (2005), with the strategic goals, the main argument is cost reduction through sup-pliers' economies of scale because the subcontractors delivering services are more efficient than the organisation because they are more expert in the field. Additionally, costs are more flexible, converting fixed costs into variable costs depending on the seasonal needs of the firm. However, increased outsourcing also reduces production costs and decreases investment in facilities and equipment.
Additionally, Espino-Rodriguez and Gil-Padilla (2005) stated that another strategic advantages of outsourcing, an organisation can access, then difficult to obtain resources and capabilities, such as latest technology, exclusive of having to undertake the risk of obsolescence while also achieving more flexibility. Another strategic reason is the increased concentration on core competences that is associated with high levels of outsourcing (Espino-Rodriguez and Gil-Padilla (2005).
2.3 Success and failures of outsourcing

Kremic et al. (2005) stated that the expected successes and benefits of outsourcing may include accomplishing the same or better service at a lower overall cost, access to the latest technology and best talent, increased flexibility or/and quality, reduced capital expenditure, augment staff, get rid of problem functions and reduce politic pressures or scrutiny, better accountability and management, and the ability to re-focus scarce resources onto core function of organisation. In the article of Espino-Rodriguez and Gil-Padilla (2005) emphasized that it is important for a hotel to evaluate decision advantages of outsourcing based on cost reduction or tactical outsourcing as its considered to be strategic one in main argument of services and suppliers economies of scale. On the contrary, Knox (2010) argued that when referring to cost reduction using economies of scale in hotel services, housekeeping services have been reliance on the outsource staff/ agency/temporary workers when there is fluctuating demand patterns where overtime paid for permanent employees will meant to be costly for organisations.
Practically, the theoretical advantages of outsourcing thus often fail to materialise (Torrington et al, 2010) as a result of failure to grasp the concepts at appropriate levels of abstraction (Harland et al., 2005). Serious cost savings are frequently challenging to achieve because of transfer of undertaking laws demand existing staff to be held by the new service provider on their existing terms and conditions, still standards of service might actually decline. Reilley (2001, p. 135 cited by Torrington et al, 2008) list all routine of problems that occur due to differences of opinions, poor communication about the service levels being accomplished and different interpretations of terms in the contract. Trade unions often point out that outsourcing companies can do the job at lower cost is that they reduce salaries or reduce working conditions or both (Slack et al, 2010). As Knox (2010) emphasised in the article that outsourcing strategy is a way when organisation can walk away from any compensation claim of agency employee usually related to back strain and injury agonised by housekeepers at work that could be controversial and expensive. However, there are potential risks of losing customer, opportunities or reputation due to uncertainty and changing environment (Kremic et al., 2005).
2.4 Involvement of Employee in Outsourcing

There are different stages and reason on which impart the businesses in order to outsource its process, operations and procedures. Whether outsourcing will be done on full-outsource or partial, the percentage is decided according to stages of business outsourced. The hierarchical stages of authority decided on what level of operation of business to be outsources as indirect control around various levels of operations currently operating in an organisation. However, the involvement of employees cannot be fully disregarded, as it is vital to understand the core of outsourcing whether services are fully outsourced or partially outsourced.

In the article of Arvanitis and Loukis (2012) agency theory with respect to employee performance between employers and employees in combination with clashing goals and interest between two groups of performers can lead to productivity costs. Furthermore, inefficiencies can be reduced when organisation outsource part of the activities performed within to external provider and control the provider performance though outcome-based contract (Arvanitis and Loukis, 2012).

Therefore, decision to outsource can cause mush dismay or unrest among employees, if not properly consulted and if the problem on outsourcing is poorly managed, as divesting once called core activities will remain to be enigma.
2.5 Importance of Coordination

Organisations nature of work is being redefined creating strong pressures for more flexibility in work patterns ad in the workforce. As ACAS points out that workforce in United Kingdom has more diverse nowadays and expected to continue to flourish in the future reflecting the changes in society and population nature. However, employers acknowledgeable the importance of flexibility at work as it enables their employees to attain better work-life balance therefore, increase competitiveness and profitability of the business. According to Mullins (2007), the reality of flexibility means working long when necessary, therefore, large companies last resort is to book for outsource staffs to cover any extra hours, absentee, reduce long hours for permanent staffs and boost productivity. Nowadays, the use of outsourcing, most especially skilled jobs such as catering and housekeeping, are relatively common as business enables to cope with their workload fluctuation and use outsourcing agencies when they need employees for specific skills.

Unquestionably, organisational activities involve and require huge coordination ad cooperation as successful coordination can be affected though negative way of self-interest of either party (Domberger, 1998). Therefore, a rational manner strategy of outsourcing is required as solid linked of coordination on both sides, as uncooperative conduct can be force receded. The study of Espino-Rodriguez and Gil-Padilla (2005) classified the hotel operations (see Figure 1.0) into three groups from high to low strategic value operations of the competitive resources that are core competences to non-competences in a hotel. The model serves as guide in the decision of hotel on which operations to outsource as it can easily differentiate the level of core competiveness.
2.6 Issues affecting between outsourcing services and organisation performance
Where a firm has been celebrated outsourcing to employment, a well foster argumentative reaction generates distresses to the psychological contract between firm and its employees. In hotel industry outsourcing must be focus on pleasing customer, however, semi skilled in-house employees compete with sub-contractors consequences are the increasing three key tensions of outsourcing (Bach, 2005): first, mostly disturb employee morale as employee induce a sense of rejection as firm effectively telling employee that their skills are no longer required; second, sharing of tasks by at least two organisations that produce a sense of powerless and perceived threats to their employment terms and conditions; third, the tension within outsourcing processes between needs of the business and needs of the employee that key issues are likely to include capital assets are divided: the services responsibilities and required for outsourcing them and the level of liability and reward payable to subject to contract performance.
Figure 1.0 A Model Based On Internal And Relational Strategic Value
Activities Grouped According To Their Strategic Value




Therefore, coordination in relation to changes related to social cost is significant to avoid anxiety and resistance among internal staff when firms decide for outsourcing. According to (Domberger, 1998), good communication strategies among in-house staffs must be in place within the organisation to frequently update and inform the intention and validation of management outsourcing.
2.7 Controlling risks

Bragg (2006) discussed several risks to consider on outsourcing decision and how to mitigate them. The risks of changing outsourcing supplier can cause problem in outsourcing relationship creating a gap between purchaser and supplier. To avoid the risks, purchase should ensure that termination contract allows the purchaser to back out of the contract if the supplier failed to deliver the outsourced service efficiently. However, another risks will be greater if there are few competing suppliers.
Another risks is loss of confidentiality report, such as computer services, accounting, engineering and human resources where serious risks of lost of confidential data are high because of the sensitivity of the information and have a monetary incentive to sell it.
Therefore, outsourcing can severely impact operations of the company if not properly handled and evaluate alongside with the good reasons why it is good idea to outsource a function.
2.8 Conclusion

Therefore, the organisation and management literature stresses risks, cost and quality control process and benefits of outsourcing but more often focuses on the non-core activities in order for the organisation to concentrate and focus on its core activities, thus, increase production in these activities. The operational risk suggests that outsourcing has financial contribution to the hotel as well as enhance the competitiveness of hotel services, thereby, assured them in sustain the business for long term.

Chapter 3 Methodology
3.1 Introduction
Research methodology is based on qualitative approach. This chapter contains descriptive study employing narrative data by the personal interviews. Interviews with two hotel managers were arranged, then, analyses of the answers content have been carried out comprehensively. Therefore, the study was developed based on qualitative data analysis involving the use of small samples or case studies.
3.2 Research Process
The study is all about the reasons that drive the hotel to outsourced its services and issues related with outsourcing such as staff performance at workplace. The process of the research undergo with following steps:
3.2.1 Identification of the problem
Saunders et al. (2009) features the significance of clear research problem. Positive behaviour (see illustration below) is the main philosophy that the researcher viewpoint to supports the researcher to understand and evaluate the factors and issues concerning the relationships outsourcing strategy and organisational performance. The student will commence upon positive approach grounded on empirical data.

The activity starts with the identification of the problem, thereby, investigating the demands that cause Hilton Hotel to adopt outsourcing. Management failure to engage the in-house staff in outsourcing decision has resulted to resistance in the workforce. The employees has been affected in negative manner resulting to pressure and stress at workplace. There are also disagreements of the basic departments that have been outsourcing to outside agencies that are high risky from a branding point of view of Hilton Hotel. A big problem of outsourcing comes from workers themselves that reflects to the attitudes of employees' behaviour at work.

3.2.2 Sample size

Two managers working for Hilton for over 5 years have been interviewed in detailed out of three in the sample size due to their availability. The suitable findings should be produced from this small sample; however, due to its small sample size the findings are limited to present investigation.

3.2.3 Pilot Testing

Pilot testing is conducted through agreement with department manager in the hotel to be interviewed for this research. The practice and time duration within the hotel was taken into account for pilot testing.
3.2.4 Credibility

It is in high significance for this research to have a credible source of investigation as the number of the respondents are small, therefore, it is important to consider the educational background and working experience of respondents in order to gathered reliable information for credibility assurance of this research.
3.3 Research Limitations

The basic limitations of this research are time constrain; only based on one organisation and the number of respondents in the research interviews. Since the research used qualitative as the main research method, thereby, conclusion will only be based on the gathered information from two managers, therefore, the outcome of the results mat not comprehensive to the whole hospitality industry. The collected report is based on the employees' personal experiences therefore; information may not be supportable from the evaluation of management. From lengthy and detailed data collected, only related important arguments are incorporated in study, as it is not easy to report the complete data inclusion that is out of the topic of this research.

3.4 Research Ethics

The goal of the study is centred on facts and free from error such as addition of false information or deliberate misinterpretation of the data collected. Respondents were notified about the confidentiality of the data on their questionnaire and interviews were being preserved. The fairness of the sample arranged was maintained for those who shared their experiences and ideas. Information gathered from the employees are based on their personal experiences, therefore, data may not justified from the management perspective.

3.5 Research Design

The qualitative approach discussed the associated issues with the issue with the aid of methods of research and interviews. Questions of research are placed ahead that supports in the collecting of data and analysis are followed later. Reasons for outsourcing have been discussed through the interviews with two managers.

3.5.1 Qualitative Research Approach

The approach aims to generate information that will contribute to understand and consider the employees' point of view in outsourcing strategy alongside with the policies of hotel. The mind-sets of making decision and views throughout the interviews, observation will be thru about the versions of the respondents. Detailed information about the process of outsourcing will be reviewed to find causes, pressures, and reasons of Hilton Hotel though the qualitative research. However, quantitative is not appropriate in this type of research as life experiences of participants are nit included. However, its maybe time consuming to use qualitative approach but it was chosen, as it will provide useful information for this study.
3.5.2 Sampling

Sampling is essential on the qualitative approach that plays fundamental part in the data collection from interview to the managers targeted in the research. Detailed interviews have been agreed alongside with the opinions of the expert from the hospitality sectors.
3.6 Data Collection

Primary data collection is most preferred method for this research as the questions and objectives are concerned with what people do involving interpretations of behaviour of people (Saunders et al., 2009). Collecting primary data using interviews for qualitative data collection of two managers of different hotel department to help gather reliable and valid data that are significant to research questions. Manager, however, agreed for an interview rather than questionnaire.

In the area of secondary research the researcher has reviewed several articles regarding hotel outsourcing in online databases such as Emerald management journals, oxford journals and Sage journals, full text, as well as, online sources from Dawson books and libraries. Secondary data has been use for broader understanding, clarity and support for the better outcome of the study.
3.6 Data Analysis

Qualitative data requires classification and are analysed through the use of conceptualisation (Saunders et al., 2009). The generated data from the interviews have been added to the records focusing on the main topics in order to draw conclusions. Categorised data commenced analysis of the researcher with summary of interviews and copy of transcripts and answered questions.


3.7 Presentation of Results

The study has been limited to small sample across a wide range of department and organisation size. The survey methodology may be susceptible to both common method variance and misinterpretation. However, the researcher believed that at the end of the research the study will find that organisation with different levels of success at outsourcing, identify different factors, as problems in the outsourcing task not only the effect on morale and performance of employee.
Chapter 4 Findings
4.1 Introduction

In this chapter of research, the information collected though interviews are critically evaluated and analysed. Data has been generated and studied in order to ensure that investigations are fulfilled correctly so that appropriate results leads to correct conclusion. Two Managers have been interviewed in their views and in detailed using similar questions for more generalised research findings followed by interpretations in exact manner. Depths interviews were conducted in respect to the case study about outsourcing services in their departments in order to complete information.
4.2 Results of Interview

4.2.1 What are the fundamental activities that take to outsource its staffs to agencies? Why?

1st Manager
The manager identified general housekeeping services, night cleaners and room attendants as vital services that need expertise of experienced staff though cleaning agency. The manager also answered that the laundry services are partially outsourced. The main reason is the limited hotel space. Additionally, high costs of machine maintenance and staffs have also contributed for the hotel to outsourced this service. The strong dependence to contracting agency is mainly caused by sudden fluctuations in hotel occupancy; as a result, the hotel will have to choose outsourcing to minimise cost and to be flexible.
2nd Manager
The second manager replied in detail saying that outsourced staffs are booked through contracting agency that also associated company of the hotel. However, the manager said that outsourcing services has given flexibility to staffs of hospitality industry as the business operates 24 hours a day 7 days a week, therefore, any demand of services could be meet by outsourced staffs. Furthermore, absentee due to unavoidable situation can be quickly remedied by contracting agency.
4.2.2 How has the outsourcing improved the overall services provided to the guest of the Hotel?

1st Manager
The manager agreed that the overall services have been improved at Hilton Hotel. The department has been able to focus on the core functions that will create distinction of the services of Hilton hotel from its rivals.
2nd Manager
The Manager responded explaining that the overall services have been improved. However, agency/casual staffs with direct interaction to guests, such as catering services, must be equally knowledgeable, trained and experienced like permanent staffs to adhere to the set standards of service of the hotel.

4.2.3 How does outsourcing strategy helped the hotel management to concentrate its resources on its core functions?

1st Manager
The manger replied that outsourcing gave management gave more time to concentrate within the team creating better relationship and more effective employee management. Supervisors can spend more time in their own departments to ensure that guest satisfaction is not only met but also exceeded.
2nd Manager
The advantage of outsourcing in Hilton hotel is it enables management to focus on the core functions and utilize the resources in rational manner. It has absolutely driven hotel in controlled on its decision to outsource based on its need in certain services such as Information technology, human resource, food and beverage staffs, housekeeping and laundry.
4.2.4 What are the factors associated with the success of outsourcing?

1st Manager
The manager responded that the greatest achievement of outsourcing is saving time and cost for training and recruitment of outsourced services. It put pressure on management to train staff in a position when staffs later on leave the job after only few months of employment.

2nd Manager
The manager replied that success of outsourcing depends on the relationship of the hotel management and contracting agency. Managers must be empowered to exercise option in selecting the approach to managing agency staff as managers may at times doubt where the loyalty and trust of agency staff is, whether to the hotel or to contracting agency.

4.2.5 What are the risk associated in managing the hotel staff and outsourcing strategy? In case of service failure, who will be responsible for its failure?

1st Manager
Of course risks could not be avoided at times, the manager replied. However, the Hilton management is around to sort out all the issues and resolve it as soon as possible. In case guest are being affected by incident, any loses will be paid immediately to control the damage, later claimed the cost to the contracting agency if agency staffs are involved. However, severe problem should be dealt in a serious manner involving both senior management of Hilton and contracting agency to review the terms and responsibilities and to determine how to remedy and avoid any risks in the future.

2nd Manager
The manager replied that Hilton would not want to take risks in any case that is why the hotel choose to outsource its service to experts. If employee, either involving permanent or agency/casual staffs, done something wrong with customers, then the duty manager will sincerely apologise first to the guest and control the damage of the incident that will affect the Hilton brand.

4.2.6 How has the In-house staffs engaged in outsourcing processes? Any conflicts or possible difficulties ever rose between in-house and agency/contractual staff or not?


1st Manager
The Manager replied that internal staff took outsourcing services in beneficial approach as the efficiency of the department has been increased. It gives the undertaking for the internal housekeeping staffs for more energy to get by the busy working environment. Where chances of clashes occurs, the problem are resolved and settled by senior management in a professionally manner.

2nd Manager
The manager responded that lack of training or no background or experience in hospitality industry of casual staffs, referred by contracting agency, is one of the sources of clashes among the staffs. Pressures will be with internal staffs when outsourced services failed to deliver what they expected as some agency staff lack accountability to the tasks.
CHAPTER 5 AnalysIs and Discussion
5. 1 Objective 1 To determine why do Hilton Hotel outsourced its services
The responses of the managers clearly stated that outsourcing strategy is a trend in Hilton and its certain services are being outsourced. Limited space, high machine maintenance costs and labour costs are the primary reasons for outsourcing of laundry service in the housekeeping department. Furthermore, fluctuation of demand of service required contributed to outsource service. According to the literature review, Domberger (1998) stated that large organisations choose outsourcing as important strength to gain the specialist skills from external provider. However, Hui and Tsang (2004) elaborated that ideally the service provider or contracting agency must have the ability to deliver the services cost-effectively, reasonable reliability and on time performance. Furthermore, Espino-Rodriguez and Gil-Padilla (2005) stated that adaptation of outsourcing hotel services can improve capabilities and resources, making them cost effective, with positional advantages that in turn ends to better organizational performance. Furthermore, Knox (2006) explained that agency/casual staffs covers absences and period of leave of permanent staffs. However, there are instance to other organisation, according to Knox (2006) that permanent staffs overtime has been denied to offer to permanent staffs, as they are costly paid than agency/casual staffs.

Objective 2 To investigate whether objectives of improving organisational performance has been achieved

Based on the brief responses, it clearly implied that the balance and check must be maintained by management to ensure that customers are satisfied and content from their service they received from all staffs of the hotel. According to Knox (2010), hotels adheres to brand standards of its chain and properties through their service standards and monitored regularly through key performance indicators, audits and reviews. Keeping up to date monitoring of service standards will ensure that overall high standard has been constantly delivered to guests of the hotel. In respect to literature review of Arvanitis and Loukis (2012) in outsourcing activities, increase of labour productivity is vital factor impacted outsourcing that enhance the organizational performance by giving flexibility of demand to organisation in terms of number of staffs needed during seasonal period.

It has been acknowledged that that outsourcing services have given extra time for management to concentrate on core competences of the hotel to maintain the high level of services. In literature review, Sako (2006) said that outsourcing enhances productivity though greater specialization, standardization and consolidation of business process, shifting to higher value added services. Core functions of the hotel have been customized to the need of the guests, as staffs have more time to concentrate on delivering and exceeding guests demand. Furthermore, Knox (2010) elaborate that hotel avoided to employed permanent staffs in housekeeping particularly, as this is not considered to be core function of the hotel, thus, in long term it will offer potential labour cost savings in terms of recruitment and training, avoid compensation claims related to back strain and injuries; and simplifies labour budgeting.

5.3 Objective 3 To analyse the factors associated with the success of outsourcing strategy
The Managers recognised the greatest achievement of outsourcing in Hilton hotel are time and cost saving for training and recruitment process. Furthermore, managers and internal staffs are able to concentrate on improving core activities for competitive advantage of the organisation. Arvanitis and Loukis (2012) stresses that beside from saving time and cost through outsourcing service, the organisation also saves labour cost though paying lower wages to contracting agency while receiving specialized service incase of demand fluctuation. On the other hand, the use of teamwork and job sharing work is also favour of outsourcing through coordination of the costs. Hui and Tsang (2004) emphasize that organisation management must also involve in deciding of who will get a contract and also have close monitoring of outsourced services to ensure that service contract has been delivered to maintain a partnership relationship that contribute to the success of the strategy.


Objective 4 To analyse the factors associated with the failures of outsourcing strategy
Both managers accepted the fact that there are factors that associated the risks of failures of the strategy such as blame-game in the workplace as lack of authority and responsibility among in-house and agency/casual staffs happens when something went wrong. In literature review of Arvanitis and Loukis (2012), agency theory has been discussed as informal asymmetries with respect to employee performance among employers and employee in combination with complicating goals and interests concerning two groups of performers can lead to productivity losses. Therefore, the literature underlines the risks and benefits of outsourcing often confuse on the importance of outsourcing of noncore activities. Hotel management have any opportunity to change or re-negotiate outsourced service in the event that the contracting agency fails to deliver the required level of performance. Furthermore, Teirlinck et al. (2010) argued that shared responsibilities among permanent and outsourced staffs would create more open access to wider skills but will also face danger of exposure or leakage of valuable ideas. Therefore, failure to limit the nature and scope of responsibilities of outsourced services with direct contacts with guest will impact the overall organizational performance of the hotel.
In literature review, Sako (2006) said that in some situation contracting/casual staffs may lack full focus on organisational tasks or unaware about organisational culture that cause clashes among internal staffs that use to work according to organisational culture. Therefore, outsourced staffs are feeling outcasts to the organisation, as sometimes they do not know where they will give their loyalty, whether to the hotel organisation or agency that directly employed them. Hui and Tsang (2004) said that in case the contracting staffs underperform resulted to conflict with internal staff, it would be handled with reference to the legal contract terms and condition. Furthermore, Knox (2010) said that the motivation of agency staffs of not want to work extra pressure is they have lacked of chance to progress into their jobs unless management see the potential in them and expressed willingness to support transition of their contracts under liberal conditions. On the other hand, Espino-Rodriguez and Gil-Padilla (2005) elaborated that internal staffs took advantage of the extra workforce provided by the agency staffs to lean from their expertise and focus on core activities, career progression and opportunities offered to them by the organisations.

CHAPTER 6 Overall Conclusions And Recommendations
6.1 Introduction
Conclusions is made based on the research findings interpretation that followed by the recommendation that will improve Hilton hotel outsourcing strategy for the better future of the outsourcing services. Limitation of the results and recommendation has been discussed to emphasize the scope restraints discussed on the study that will suggest future areas for further studies.

6.2 Conclusion

Based on the results findings and the literature review, it can be concluded that Hilton Hotel relied on the outsourcing strategy to contracting agency on their non-core activities. It has proved that cost advantage and time saving have been generated through outsourcing and putting fewer resources in return. In case of Hilton hotel, outsourcing strategy has been successful in general and would continue to do so as the management believed that it let them concentrate on their core competency and let the experts do the job in matter of demand of its service. However, Hilton management are also aware of the risks associated on the failure of the strategy that impact the organisational performance as a whole. Therefore, preventive measures are ensuring in place for them and control the risks through proper calculation of considered outsourced services.
Essentially, good organisation relationship among in-house and outsourced staffs is the greatest factor to consider maintaining the overall success of the outsourcing strategy of Hilton hotel. The management believed that working together in a harmonious relationship and teamwork creates great atmosphere and respect of each culture for both groups. This would contributed to management on focusing on core activities rather than worrying if their staffs go well at work with each other. The management have to trust agency/casual staffs equally as to their in-house staffs in letting them completing and taken good care at those specific tasks.

6.3 Recommendations

The results of the case study lead the researcher to make series of recommendations such as:
6.3.1 A hotel must select suitable outsourced firm that will achieve the level of service that the hotel require in order to meet or exceed the guests demand. Agreement between hotel and contracting agency must reach the quality of service otherwise; re-negotiation and termination of contract must be taken immediately in order to protect the brand from poor quality service of the contracting agency.

6.2.2 Staffs welfare must be integrated as this is necessary to promote and improve working relationship of in-house and agency/casual staffs so that both parties are feel part of the organisation and also must be both knowledgeable of the culture of the hotel and its mission.

6.3.3 Management must be involved in the decision awarding outsourcing services to contracting agency, as they are the main connection to be involved in working with them. This will reduce conflicts that impacts the organisational performance in the future as relationship can be develop from the beginning and trust later on as good partner.

6.3.4 Diversified workforce must be develop and promoted in the workplace. Management must explore management ethics about outsourcing in order to sustain the success of outsourcing strategy.
6.4 Limitations and Suggestions

In spite of the effort made in the literature review and in the methodology applications, the case study has series of limitations that suggest further study is advisable. The analysis does not acknowledge the outcomes to be generalised as it has been only carried out to two department of one hotel. Therefore, other potential influential factors of impacts of outsourcing strategy to hotel should be studied. Furthermore, broaden research is necessary to identify other factors of success and failures of the outsourcing strategy of hotel that can either improve or affect organisational performance. Changes in the trends of business in hotel industry and the impact of globalisation to the business will increase outsourcing strategy in the future. Limitation of management has been identified in this research that recommend further study including cultural attitude and behaviour of organisation in outsourcing strategy. Diversified workforce immerse to influence the organisational performance, therefore, further study in management ethics can be possible in the future. The research is considered to be beneficial in improving the organisational performance at workplace and better understanding of the employees' behaviour when services are being outsourced. Furthermore, through this research, the researcher will have a better knowledge and understanding on the process and gain the benefits it offers in recognising the ups and downsides to the process of outsourcing. The results of this research contributed from the literature review for the management to change some outsourcing practices and may assist practitioners and management in designing, evaluating and assessing new or exiting programs.

Moreover, it has been a challenged to schedule an interview with managers as they have a very tight schedule due to high season demand of work. Although they completely agreed with the interview, managers also asked to maintain confidentiality of their identity in case their interviews would not please senior management. Of course, this has been granted but the researcher would want to interview a third manager but at the last hour was declined to do the interview. However, researcher maximise the opportunity of getting all the necessary information from the two managers in order to complete the case study.

Chapter 7 Reflective Account

7.1 Introduction
This last chapter is the reflection of the work of researcher on management of the project and the personal lesson learned. The researcher revealed on how the project has been plan, implemented and managed to finish the case study.

7.2 Reflective account on Project Management
The main purpose of the chosen topic of Hospitality Outsourcing is for the researcher to start a contract business providing service staff for contract service agency in the future. The research focused on research questions that will guide the investigation of the relationships between organisational performance and outsourcing strategy. The project proposal runs from June 23 to August 28, 2014. However, the project has been finished and submitted on January 7, 2015. The representation of the Time Scale is shown in Appendix 1 using of Gantt chart. It was important to keep track on time for allowing enough to produce satisfactory work results as well as to meet the deadline submission of the project. However, the project could not be completed without the guidance of supervisor during the meetings (see Appendix 2) that considerably helpful in planning all stages of this study particularly literature review and appropriate applications and designs of methodology. Assistance in preparing the interview questions was significantly beneficial as appropriate and relevant questions that helped the investigations were only asked to limit acquiring information that were not useful with the case study. Answering the research questions were directly based on the choice of methodology and secondary data of this research. It took me ample amount on researching the appropriate method while taking into account advises from my supervisor.
Nevertheless, my challenges during the last part of the project were to keep my focus on completing part of findings, conclusion and recommendation over the Christmas holiday break, as there were need to balance time for celebrating the spirit of the season and at the same time prioritizing the completion of the whole project.
To summarise, it is rational to state that all the research questions have been tackled effectively from reliable sources, relevant methodology and research findings.

7.3 Personal professional development
The experiences collected in completing this project can be described and compared to a rollercoaster as moods as well as enthusiasm are repetitively working up and down. From the collection of the topics, the experiences did not leave me indifferent, as expectation was to obtain interesting topic. This progressed with the keenness and the concern that the selected topic would be interesting certainly not minding the fact that it might be difficult one. However, outsourcing strategy became a great interest for me as starting up a recruitment agency has been always a plan upon completion of my degree. Therefore, this project is taken as an opportunity to explore more in line of the industry for better knowledge, understanding and idea of the business. There were positive motivation, enthusiasm and passion taken place while undertaking this project.

However, the following endeavours spent reading the related articles on chosen topic and brainstorming as tutors suggested it were proved to be of great value. This educated me on how to start and understand more of the topic and what were required for the project to complete. Moreover, maintaining the records of events contributed for better, more profound reflection through keeping note on specific experience, happenings or new ideas that came across my mind that allowed to look at the detailed later with different perspective and critically evaluate what I have learnt from those experiences. Likewise, separate notes have been created for the literature reviews that play an important part on the undertaking of the project. The list of articles, reports, books and information have been collected and carefully review and selected those that are helpful and relevant for the study. Careful reading and analysing thoroughly of these resources have kept the project on utilising them efficiently at the different chapters of writing the project. Therefore, it enable me to become more organized by dividing information such as source and authors, according to their use on each chapter to save time activity.

Moreover, I have presented good interpersonal and communication skills at various stages of the project. My listening skills and attention to details have improved and proven to be valuable upon understanding information from the people who contributed on this research. I believed that communication skills have taken crucial role in terms of succeeding this project as knowledge and opinions and feelings have been consider in effective manner for overall competency.

Moreover, I found the six sessions with my supervisor to be highly informative and motivational because the supervisor has increased my level of interests on managing studies and research interviews. I am grateful for what I learned with our entire meetings. I appreciated and learned from recommendations and criticisms alike.

Lastly, it was a very beneficial experience on my part on a personal level as starting up recruitment agency my plan after my studies. Therefore, I will continue studying the issues to expand my knowledge that would benefit me in the future.












References
Bach, S. (2005). Managing human resources. 4th ed. Oxford: Blackwell publishing.

Baines, P., Fill, C. and Page, K. (2011). Marketing. Oxford: Oxford University Press.

Barrar, P. and Gervais, R. (2006). Global outsourcing strategies. 1st ed., England: Gower.

Bragg, S. (2006). Outsourcing. Hoboken, N.J.: John Wiley.

Domberger, S. (1998). The contracting organization. Oxford [England]: Oxford University Press.

Jacques, V. (2006). International outsourcing strategy and competitiveness. 1st ed. Paris: Publibook.

Jenster, P. (2005). Outsourcing--insourcing. Hoboken, N.J.: John Wiley.
Patel, A. and Aran, H. (2005). Outsourcing success. Basingstoke [England]: Palgrave Macmillan.

McDonald, M. and Payne, A (2007). Marketing Plans. Oxford: Elsevier Butterworth-Heinemann.

Mullins, L. (2007). Management and organisational behaviour. Harlow: Financial Times Prentice Hall.Patel, D. and Allan, W. (2005). Financial Accounting and Tax Principles. Burlington: Elsevier.

Pilbream, S. and Corbridge, M. (2010). People resourcing and talent planning. 4th ed. Harlow: Financial Times Prentice Hall.

Slack, N., Chambers. S and Johnson, R. (2007). Operation Management. 5th ed. Harlow: Pearson Education Limited.

Slack, N., Chambers, S. and Johnston, R. (2010). Operations management. 6th ed. Harlow: Pearson Education Ltd.

Stredwick, J. (2005). An introduction to human resource management. Burlington, MA: Elsevier Butterworth-Heinemann.

Torrington, D. Hall, L. and Taylor, S. (2008). Human Resource Management. 7th ed. Harlow: Prentice hall.


Journals
Arvanitis, S. and Loukis, E. (2012). Outsourcing and firm performance a comparative study of Swiss and Greek firms. Industrial and Corporate Change, 22(3), pp.771-806.

Bettis, R., Bradley, S. and Hamel, G. (1992). Outsourcing and industrial decline. Executive, 6(1), pp.7-22.

Durbin, T. (2010). Outsourcing Agreements: A practical guide. International Journal of Law and Information Technology, 18(4), pp.379-381.

Espino-Rodriguez, T. F. and Gil Padilla, A. (2005). The relationship between outsourcing and specificity. Tourism Management, 26(5), 707-721.

Hui, E. and Tsang, A. (2004). Sourcing strategies of facilities management. Journal of Quality in Maintenance Engineering, 10(2), pp.85-92.

Jerkins, L. (2012). Hotel Laundry- in-house or outsourced. [Online] Available at: https://www.thecaterer.com/articles/342074/hotel-laundry-in-house-or-outsourced [Accessed 6 Dec. 2014].

Knox, A. (2010). 'Lost in translation': an analysis of temporary work agency employment in hotels. Work, Employment & Society, 24(3), pp.449-467.

Kremic, T., Tukel, O. and Rom, W. (2006). Outsourcing decision support: a survey of benefits, risks, and decision factors. Supply Chain Management: an international journal, 11(6), pp.467--482.

Mahmoodzadeh, E., Jalalinia, S. and Nekui Yazdi, F. (2009). Business Process Management Journal, 15(6), pp.845-864.

Runar Edvardsson, I. and Durst, S. (2014). Outsourcing of knowledge processes: a literature review. Journal of Knowledge Management, 18(4), pp.795-811.

Sako, M. (2006). Outsourcing and Offshoring: Implications for Productivity of Business Services. Oxford Review of Economic Policy, 22(4), pp.499-512.

Teirlinck, P., Dumont, M. and Spithoven, A. (2010). Corporate decision-making in R&D outsourcing and the impact on internal R&D employment intensity. Industrial and Corporate Change, 19(6), pp.1741-1768.

Bibliography

ACAS (2014). Advisory, Conciliation, Arbitration Service Codes of practice " Acas. Available on http://www.acas.org.uk/index.aspx?articleid=1878 [Accessed 6 Dec. 2014].

Lamminmaki, D. (2011). An examination of factors motivating hotel outsourcing. International Journal of Hospitality Management, 30(4), pp.963--973.

Hilton Hotels and Resorts (2014). Hilton London Kensington Hotel. Available on
http://www3.hilton.com/en/hotels/united-kingdom/hilton-london-kensington-LHRHITW/about/index.html. Last accessed on August 3, 2014.

Hilton Hotels and Resorts (2014). Awards and Brand Power. Available on http://www.hiltonglobalmediacenter.com/index.cfm/page/35. [Accessed on August 3, 2014]








Appendixes 1

Research Interview Questions
What are the fundamental activities that take to outsource its staffs to agencies? Why?

How has the outsourcing improved the overall services provided to the guest of the Hotel?

How does outsourcing strategy help the hotel management to concentrate its resources on its core functions?

What are the factors associated with the success of outsourcing?

What are the risk associated in managing the hotel staff and outsourcing strategy?
In case of service failure, who will be responsible for its failure?

How has the In-house staffs engaged in outsourcing processes?
Any conflicts or possible difficulties ever rose between in-house and agency/contractual staff or not?

How has the In-house staffs engaged in outsourcing processes?
Any conflicts or possible difficulties ever rose between in-house and agency/contractual staff or not?







Appendices 2 Ethical Approval Form






Appendices 3 Supervision Record















APPENDIX 4 Gantt Chart
(Project Schedule) August 2013 to January 2014


August 2014
September 2014
October 2014
November 2014
December 2014
January 2015
Task
12/8
19/8
25/8
2/9
9/9
16/9
23/9
30/9
7/10
14/10
21/10
28/10
4/11
11/11
18/11
25/11
2/12
9/12
16/12
23/12
30/12
2/01
04/1
6/01
Meetings with supervisor / Review of progress
























Literature search and initial Literature review
























Finalize research question and aims and objective
























Comprehensive Literature review
























Write literature review chapter
























Finalize data collection approach and data collection tools
Proposal submission
























Write Participant Information Sheet and Consent Form
























Write Methodology chapter
























Seek access for data collection
























Collect data
























Clean data and write Results chapter
























Analyze data and write 'Findings and Analysis chapter
























Write Conclusions and Recommendations chapter
























Compile first full draft
























Bind dissertation
























Similarity check and submission