MANAGEMENT

Management

Executive Summary

This study looked at the degree of participative management used by firms in the restaurant industry. Findings indicated higher levels of action plan implementation success and financial success for restaurant firms using a higher level of participation in decision-making and plan execution. Smaller firms (single unit) were more likely to use an approach with greater participation by middle-level managers and lower-level managers than larger firms (multi-unit). While larger firms had higher financial performance in general, implications include the value of higher participatory approaches by managers to enhance financial and implementation execution, particularly, for smaller restaurant firms.

Management

Introduction

Directive and participative management style in decision-making and strategy implementation process has been an area of research interest for a long time in the management literature. While some past hospitality strategic management studies were based on strategy formulation, strategy structure-debate or environmental scanning, few studies were based on directive or particpative approaches in the strategic process and implementation in the hospitality industry (Dev and Olsen, 1989; Harrington, 2004; Okumus, 2001; Parsa, 1999; Schmelzer and Olsen, 1994).

This study builds on past studies and examines the relationship between organizational members' involvement and the degree of participation in decision-making and strategy implementation process in the foodservice industry. The relationship between organizational structure, directive or participative management style, hierarchical level of participation, implementation success and financial performance are investigated. Some of the objectives of this study include the following: (1) to examine the relationship between management hierarchical level of involvement and organizational structure, (2) to determine the relationship between participative management style, strategy implementation success, and financial performance, and (3) to investigate the differences between the degree of overall participation on strategy implementation success, and financial performance.

Literature Review

As changes in the economy and in the hospitality industry continue to transpire, managers in the foodservice industry should be prepared to continuously enhance their strategic decision-making skills. Decision-making-skill is one of the many skills managers and leaders employ on a daily basis regardless of their leadership style. However, it is common knowledge that decision-making strategy varies from one manager to another depending on the leadership style or styles employed by the manager. A manager that predominantly employs a directive leadership style is likely to restrict the involvement of his or her subordinates in strategic decision-making than a manager that predominantly employs a participative leadership style (Northouse, 2004).

Directive leadership style is characterized as a leadership style where leaders instruct clearly makes decisions, set standards of performance and make them clear to their subordinates.

The major potential benefit of directive leadership style includes its ability to get the job done (Ogbeide, Grove and Cho, 2008). In contrast, participative leadership is characterized as a leadership style where leaders invite subordinate to share in the decision-making. A participative leader confers with subordinates and integrates their suggestions, ideas and opinions into the decision-making process ( Northouse, 2004). Some of the potential benefits of participative leadership (management) style include it's positive impact on employees' motivation/satisfaction, its ability to get job done, and its likelihood ...