EMPLOYEE-CUSTOMER RELATIONSHIP ON THE MANAGEMENT OF HOSPITALITY INDUSTRIES.
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CHAPTER TWO
LITERATURE REVIEW
2.0 Introduction
The literature review presents the framework of the study in addition to a review of theoretical framework on the effect of customer and employee relationship on the management of hospitality industries.
Employee – customer relationship management has become one of the most dynamic technology topics of the millennium. According to Chen and Popovich (2003), employee – customer relationship management is not a concept that is really new but rather due to current development and advances in information and enterprise software technology, it has assumed practical importance. The root of employee – customer relationship management is relationship marketing, which has the objective of improving the long-term profitability of customers by moving away from product-centric marketing.
Bose (2002) noted that employee – customer relationship management was invented because the customers differ in their preferences and purchasing habits . If all customers were alike, there will be little need for Employee – Customer Relationship Management. As a result, understanding customer drivers and customer profitability, firms can better tailor their offerings to maximize the overall value of their customer portfolio (Chen and Popovich, 2003) . The attention employee – customer relationship management is currently receiving across businesses is due to the fact that the marketing environment of today is highly saturated and more competitive.
2.1. Conceptual Framework
The Hospitality industry offers a huge potential for Social employee – customer relationship management. The Hospitality industry thrives on two basic factors- Segmentation & Uniqueness. Apart from the regular promises of customer satisfaction, it is the Identity or rather the personality of the hotel that really matters. And not to forget the Stand-out factor, that every hotel has on offering, as compared to its competitors. All these factors contribute towards the building of trust and customer loyalty, and eventually prolonged profitability.
Most hotels spend heavily towards enhancing customer experiences through various marketing ploys. They offer loyalty programs and other exclusive benefits to capture the customer’s attention. But, these promotions tend to become heavy on their pockets. Hence, including Social employee- customer relationship management mechanism in their framework will see a significant cut-down in their costs and also lessen the outreach efforts thanks to social media’s targeted reach resulting in a win-win situation.
2.2 The Role of Service in the Hospitality Industry
The hospitality industry is a significant player in the part of the economy called the service sector. This sector makes up the greater part of the economy and creates most new jobs. Therefore, service is now amatory catchword for almost all businesses and organizations. Service is defined in Webster‟s New World Dictionary as “the act or means of serving”. To serve is to “provide goods and services for” and “be of assistance to”. In other words, service is an action or set of actions taken by one person for the benefit of another person that meets a need, solves a problem, or produces a positive experience.
Service is an intangible experience of performance that customer receives along with the tangible side of the purchased product. Nowadays it is expected in all business situations. This is especially true in the hospitality industry. Now, what is good service? The answer to this question is not an easy one. Most people only notice service when they do not receive it. However, good service is the service that satisfies or exceeds customer’s needs or expectations. The customer’s expectations and perceptions of service are essential to his satisfaction. When customer’s expectations are fully met or exceeded, they perceive value in the service received. The customer’s perception of the service experience is what matters most as they form an impression about the company. Therefore, a hospitality manager must know what satisfaction really means to his customers. Once the true meaning of customer satisfaction is understood by a hospitality manager, it can be transformed into performance and specific service levels.
2.3 Characteristics of Service
The very nature of service is that it is an experience and nothing. It is intangible. It is perishable and cannot be inventoried; that is, it can only be produced when the customer needs it. In economic terms, production and consumption are simultaneous. The customer becomes a part of the company as the service is being produced. The demand for service is cyclical; busy and slow periods of business are dedicated by the customer’s needs and not the company’s needs. Because each customer has somewhat different expectations, it is difficult to standardize service without depersonalizing it. It becomes difficult to measure quality when different customers require different types of service. These are the characteristics of service.
Intangibility
Intangible things are not physical objects and only exist in connection to other things. Examples include a brands image, or goodwill. Harker (1995).Unlike physical products, services cannot be seen, felt, tasted, heard, or smelled before they are purchased. Thus in the hospitality industry, many of the products sold are intangible experiences. For example, before boarding the plane, travelers have nothing but a plane ticket and the promise of safe transfer to their destination. Or, if they have booked a hotel and they have never been there, they do not know what to expect until they have experienced the food and service. However intangibility may have failings as a differentiator between service and product. What is music, a book or a film? A product or a service? Hill (1999).Reduce uncertainty caused by service intangibility, people look for tangible evidence that could provide information and confidence about the service. Promotional materials, employees‟appearance, and the company‟s physical environment are good examples of the evidence and their quality that can Say a lot about the quality of intangible services. Therefore, a service company should review every piece of tangible evidence to make sure that each delivers the desired image to target customers.
Perish ability
Using technical criteria to define services, Smith (1776) states a service will „perish in the very instant of its performance, and seldom leave any trace or value behind them for which an equal quantity of services could afterwards be procured‟. Here Smith shows one of the important features of services, which is perishability. It may be said that services are not a stock of fixed assets and it is not possible to store services in inventories (Hill 1999; Gadrey2000). Services cannot be stored. A 100 room hotel that only occupies 60 rooms on a particular night cannot Inventory the 40 unsold rooms and then sell 140 rooms the next night. Revenue lost from not selling those 40 rooms is gone forever. This puts pressure on hospitality businesses to operate at as high level of capacity as possible, offering special rates to quantity purchasers or “last minute”prices. The characteristic of perish ability emphasizes then the importance of capacity and demand management for the success of a hospitality company.
Inseparability
Inseparability is used in marketing to describe a key quality of services as distinct from goods. Inseparability is the characteristic that a service has which renders it impossible to divorce the supply or production of the service from its consumption (Michael J. Thomas 1995). Service inseparability means that services are produced and consumed at the same time. It also means that both the service provider and the customer must be present for the transaction to happen. Customer contact employees are, therefore, part of the product. The food in a restaurant may be outstanding, but if the service person has a poor attitude or provides careless service customers will consider the overall restaurant experience as dissatisfying. However, customers play also important role in service transaction.
A couple may have chosen a hotel because it is situated in a quiet and romantic location, but if a group of loud guests live in the next room the couple will be disappointed. So managers must not only manage their employees but also their customers, so that they do not create dissatisfaction for other customers. Because the sale, production, and consumption of services take place simultaneously with the customers playing a role in the production of the service itself, there is considerable room for something to go differing cultural backgrounds, and perceived slights. Because of the involvement of the customers in the process, the hospitality employees must constantly evaluate the impact of what is taking place on the customers and change their approach accordingly. If the employees are not capable of performing this function for some reason, it is likely that the customer will have a less than satisfactory experience.
Variability
Most focus of extant literature in variability in service systems has been on customer-introduced variability (Frei 2006). Recent thinking is that managing such variability is the biggest challenge of service systems (Sampson and Froehle 2006). Services are extremely variable. Their quality depends on who provides them, when and where they are provided, and for whom they are provided. There are several causes of service variability. Services are produced and consumed simultaneously which causes quality control limitations. The high degree of contact between the service provider and the customer means that product consistency depends on the service provider‟s skills and performance at the time of the exchange. A customer can receive excellent service one day and poor service from the same employee the next day. In the case of poor service employee may not have felt well or perhaps experienced a personal problem. Lack of communication and heterogeneity of customer expectations is another source of variability. Customers usually return to a hotel because they enjoyed their last experience. When the product they receive is different and does not meet their expectations on the next visit, they often do not return. Variability or lack of consistency in the service is, therefore, a major cause of customer disappointment in the hospitality industry.
2.4 Service Culture in the Hospitality Management
Culture
Culture is a complex concept, and no single definition of it has achieved consensus in the literature. So, out of the many possible definitions examined, the following definition guides this study: culture is a set of shared and enduring meaning, values, and beliefs that characterize national, ethnic, or other groups and orient their behavior (Mulholland 1991). A culture that supports customer service through policies, procedures, reward systems and actions. Service culture can be implemented:
- Through employee communication
- Through company policies
- Through personal actions ▪ Empowers employees to solve customer problems.
- Has to start with top management and flow down.
- Organization‟s culture must support and reward customer needs attention.
The behaviors and beliefs characteristic of a workplace are its culture. The culture and structure of an organization affect one another. A structure appropriate to the organization helps to develop a healthy culture.
Customers
A customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea – obtained from a seller, vendor, or supplier via a financial transaction or exchange for money or some other valuable consideration (Reizenstein, Richard C. Kendall, Stephanie.D.2004). Customer is a person who makes use of the paid products; this is typically through purchasing or renting goods or services. He usually faces a wide range of goods and services that might satisfy his needs and makes choices based on his perceptions of delivered value. Customer value is the difference between the benefits the customer gains from a good or service and the cost of achieving it. When the customer is satisfied with received good or service, he will purchase it again. Therefore, the customer satisfaction ultimately measures a company‟s success since the customer is the one willing to pay for its goods and services. For the hospitality industry, it means that if customers are satisfied with their experience at particular hotel or restaurant they will visit it again. Simply said, customer satisfaction is the deserved outcome of hospitality industry.
2.5 Developing a Service Culture
The concept of service culture first appeared in Grönroos‟ (1990) work 20 years ago. As a specialized culture within the broader concept of organizational culture, service culture is defined as “a culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers is considered by everyone a natural way of life and one of the most important values” (Grönroos, 2007, p.418). Company culture can be defined as a system of shared values held by the members. Differing values distinguish the company from other companies. It is an overall style, feel of a company or set of key characteristics on which the company places value. In its simplest form, it is the way things are carried out in the company based on its values, behaviors, management styles, and written and unwritten policies and laws.Service culture not only refers to organizational practices but also relates to manner, values, and behavior of both the organization and its employees. If an organization has a strong service culture, it will develop employees‟ positive attitudes toward giving service to their customers (Grönroos, 2007).
Zeithaml, Bitner and Gremler (2009) further point out that this very rich definition has three main implications for employee service providers. First, service culture exists when there is an appreciation for good service. Second, good service is given to both internal and external customers. Indeed, not only do organizations need to care for their external customers but they are also required to pay more attention to their service employees (internal customers) who play a crucial role in service delivery. Finally, within service culture, good service is a way of life and provided naturally as it is a crucial norm of the organization. It is like a glue to tick to employees‟ attitudes, behavior and commitment toward giving good services to their customers (Zeithaml, et al.,2009). However, there is some confusion in the literature between service culture, service climate and service orientation.
When we want to know a customer‟s needs and meet them, we need to develop the service side of the business, specifically a service or customer oriented culture. The service culture focuses on serving and satisfying the customer and is characterized by a strong commitment to service. In a service culture, everyone automatically thinks of the customer before anyone or anything else. In order for a service culture to grow and thrive, management must have a burning desire for it to be that way and the energy to ensure that this desire spreads throughout the company and remains there permanently. Thus, the service culture has to start with the top management and flow down. Everyone, from the top down, must believe that they work for the customer. Customer service is, therefore, the responsibility of everyone in the company, not only the “customer service department”.
For example, a well worked out mission statement can help a service culture to thrive because it can provide direction for the company employees and can be a powerful force to clearly define a company‟s purpose for existence. Therefore, it should be motivating enough to make employees feel their work is significant and contributes to people‟s lives. The hospitality employees, especially front line employees are in direct contact with customers and have the ability to strongly effect the customer‟s experience. For this reason, it is important to weave a service culture into employees‟ education and training as soon as they are hired. The service orientation and professionalism of hospitality employees is the most important and include both the ability to meet customer needs with their knowledge, interpersonal skills, and their professional appearance (including attire and grooming).
2.6 Benefits of using Employee-Customer Relationship Management in Hospitality Industry
Employee- Customer Relationship Management has some obvious benefits for the hotel industry, but these are not especially different than they are for any other industry. The principal benefits that come to mind are fairly obvious –
- Increased customer satisfaction and retention, increased repeat business,
- Increased share of category spend,
- Increased likelihood of referral business.
These results come from a strategy of strengthening customer relationships by constantly providing customer value leading to satisfaction.
2.7 Business benefits of Employee- Customer Relationship Management
Implementing a customer relationship management (Employee- Customer Relationship Management) solution might involve considerable time and expense. However, there are many potential benefits. A major benefit can be the development of better relations with your existing customers, which can lead to:
- Increased sales through better timing by anticipating needs based on historic trends
- Identifying needs more effectively by understanding specific customer requirements
- Cross-selling of other products by highlighting and suggesting alternatives or enhancements
- Identifying which of your customers are profitable and which are not
This can lead to better marketing of your products or services by focusing on:
- effective targeted marketing communications aimed specifically at customer needs
- a more personal approach and the development of new or improved products and services in order to win more business in the future
Ultimately this could lead to:
- enhanced customer satisfaction and retention, ensuring that your good reputation in the marketplace continues to grow
- increased value from your existing customers and reduced costs associated with supporting and servicing them, increasing your overall efficiency and reducing total cost of sales
- improved profitability by focusing on the most profitable customers and dealing with the unprofitable in more cost effective ways
2.8 Customer Relationship Management
The Employee- Customer Relationship Management as a concept has different meanings, depending on the circumstances. For example, the concept has different meaning depending on the working environment (Baran et al., 2008; Dimitriadis and Steven, 2008; Piskar and Faganel, 2009). However, in this study, we adopt the definition offered by Mohammed and Rashid (2012). Mohammed and Rashid (2012) define Employee- Customer Relationship Management as ” a strategic approach that enables organizations to use internal resources (i.e. Technology, people, and process) to manage the relationship with customers for the whole of their lives cycles, in order to create a competitive advantage and improve an organization’s performance” (p. 221).
The Employee- Customer Relationship Management concept is the ability to manage a customer’s knowledge to understand better and serve them. EMPLOYEE- Customer Relationship Management is one of the concepts that places the customer at the center of an organization and sees the client as a pillar of the organization. Customer service is the most important part of Employee- Customer Relationship Management. For this reason, the concept is very relevant to the hospitality industry, in that, customer satisfaction and loyalty. Customer satisfaction and loyalty are the two essential components of the increase in revenues and financial performance of organizations.
Employee- Customer Relationship Management also integrates the use of information and communication technology and other business processes as a means to satisfy customer needs. In this scenario, Employee- Customer Relationship Management is defined as the integration of technologies such as website, social media, accounting programs, marketing programs for the improvement in customer relations. Thus, employee- customer relationship management is the ability to keep customers and make them become loyal customers through the use of various tools that will lead to the accomplishment of these objectives. Anything that has to do with helping an organization manages and maintain clients can be considered as employee- customer relationship management. The key to the success of any organization is the ability to support customers, generate profit and making customers loyal (Mc Kim, 2002). For this reason, employee- customer relationship management is a crucial tool for the hospitality industry, particularly, those hotels that are struggling to maintain customers because it is harder to get a new customer than to maintain an existing one.
2.9 Employee- Customer Relationship Management and Hotel industry in Nigeria
There is substantial evidence in the literature that suggests that Employee- Customer Relationship Management is critical to organizations in the profit, public and nonprofit sectors. Organizations that implement the Employee- Customer Relationship Management concept in any of its forms reap its substantial benefits. Employee- Customer Relationship Management help organizations generate information about customers that in a way help them manage their relationship with the client (Bose, 2000; Kotler, 2002; Mguyen et al., 2007). Gronroos (2004) also found that because of the intrinsic characteristics of the production and consumption of service organizations, it is necessary for these types of organizations to build relationships with customers. These go to confirm how important Employee- Customer Relationship Management is to the hospitality industry because of its nature of service oriented.
It is the requirement for all hotels in Nigeria to collect data on customers. For this reason, Kotler (2002) posits that data gathered from clients can be transformed into useful knowledge about customers (Lin and Su, 2003; Mguyen et al., 2007; Nasution and Mavondo, 2008; Dev and Olsen, 2000). For hotels in Nigeria to do well, they must be highly competitive in the business environment. Consequently, the behavior of continuously purchase and re-purchase services improves customer retention and loyalty. This can only be achieved through the implementation of Employee- Customer Relationship Management which will lead to the establishment of a relationship between hotels and their clients (Papastathopoulou et al., 2007; Verdugo et al., 2009). As reported by Mylonakis (2009) and Sigala (2005), employee- customer relationship management is one of the most effective and efficient ways to improve customer base that will, in the end, improve organization financial performance.
2.10 Managing the Hospitality Industry with Employee- Customer Relationship Management In Nigeria
The hospitality industry in Nigeria is fallen steadily and the need to develop strategic measures to rescue the sector needs urgent attention. Employee- Customer Relationship Management as a concept has different dimensions of implementation. The aspect most important to the Nigeriaian hospitality industry is the behavioral dimension. The behavioral dimension has to do with customer focus and Knowledge Management. Several studies have found employee- customer relationship management to be one of the practical solutions to any old service industry. In Nigeria, the hospitality industry is in sharp decline and the need to improve the use of employee- customer relationship management in the management of the sector is necessary.
The two behavioral dimensions indicated above are required for the improvement of the hospitality industry in Nigeria. It is important to consider these two facets of the behavioral dimension for its systematic implementation within the organization. Sin et al. (2005) and Yim et al. (2005P posit that all the dimensions are necessary for improved in organizational performance. Hence, it is necessary for the hospitality service sector in Nigeria to adopt employee- customer relationship management as a measure to rescue the industry from total collapse. In support of this, Abdullateef et al. (2010) in their study of call centers in Malaysia found that customer orientation is one of the important dimensions of employee- customer relationship management. The authors indicate that service organizations must comprehensively focus on the primary customer focus. Various studies also share similar views. In that, customer orientation is found to be one of the important dimensions of employee- customer relationship management (Sadek et al., 2011; Wang, Huang, Chen, and Lin, 2010).
2.11 Theoretical Review
Various theories formed the groundwork of this study however the study is centrally built on the foundation of the Maslow’s needs hierarchy theory, Leader-member exchange theory and social exchange theory.
Maslow’s needs hierarchy theory
The Maslow’s hierarchy of needs theory explains how important it is for employees to attain their maximum desire by attending to their various needs both socially and personally. In his theory Maslow (1943) in his paper: A theory of inspiration examined that employees can be persuaded by fulfilling their needs. In work setting employees are spurred through acknowledgment, pay, increment in responsibility, high status, gratefulness and positive input. As indicated by these theories there are two sorts of needs. Lower level and higher level needs. Lower level needs can be fulfilled externally (outwardly) and higher level needs can be fulfilled internally (intrinsically). Lower level needs are the essential organic human needs, for example, sustenance, haven (shelter), sex and dress while upper level needs are those which individuals singular endeavour to accomplish after the satisfaction of the lower level, for example, selfregard and self-realization.
Walker, Churchill, and Ford (1977) brought up that inherent rewards are elusive, for example, acknowledgment, thankfulness and acclaim. While, outward rewards are outside and unmistakable and reflect bring down request human needs, for example, sustenance, shield, sex and dress. As indicated by Maslow (1943) needs rise as a hierarchy. At the point when lower level needs are fulfilled in the hierarchy, individual take a stab at the following level. We can state that when physiological, wellbeing and social needs are fulfilled; the individual makes progress toward self-regard and self–actualization. Henceforth, Maslow’s hierarchy theory comprehensively underpins the idea that reward and acknowledgment (fundamental needs) and (self-regard needs) of employees, if met, prompt the satisfaction of the employee. The theory says that needs at various hierarchy levels reflect reward and acknowledgment. For instance, physiological needs speak to the substantial reward fit as a fiddle of salary and sustenance. Social needs are impalpable rewards given by associates and bosses to fit as a fiddle of consolation, gratefulness and positive input. Likewise, an individual takes a stab at acknowledgment which expands his self-regard. Reward and acknowledgment build up an excitement among employees, increasing the crave for work to furthermore set up a linkage amongst execution and inspiration of the employees. (Flynn, 1998).Greenberg and Baron (2003) posits that the greatest value of this theory lies in the practical implications to management of organizations on how they can make their employees become self-actualized. When this has been accomplished employees would perform at their best on the job.
Criticism to this theory, lies in the fact that if people grew up in an environment in which their needs are not met, they would be unlikely to function healthy. Kaur (2013) research testing Maslow’s theory has supported the distinction between the deficiencies and growth needs but showed that not all people are able to satisfy their higher-order needs (growth need) on the job. Accordingly only managers from higher levels in the organizations are able to satisfy both their growth and deficiency needs, while lower level managers are able to satisfy only their deficiency needs on the job without been properly motivated. Greenberg and Baron (2003) to them this model is theorized to be specially effective in describing the behavior of individuals who are high in growth need because employees who are different to the idea of increasing their growth will not realize any physiological reaction to their jobs. Graham and Messner (2000) were also critical of the need theory of motivation. They argue that the theory makes the unrealistic assumptions about employees that: all employees are alike, all situations are alike and that there is only one best way to meet needs. Likewise Basset-Jones and Lloyd (2004) presents that in general, it is as a result of the natural feeling of employees to take credit for needs met and dissatisfaction on needs not achieved.
Importance of the theory to the study creates the understanding within employees in the organization to work on what they want to achieve in an organization and how that would be done. Despite the fact that employees have different mind-set to what is important to them they would be aware of the fact that every stage of accomplishment is a successful one.
Leader-Member exchange (LMX) theory
The leader-member exchange theory (LMX) which was first proposed by Graen and colleagues (Dansereau, Cashman, & Graen, 1973; Dansereau, Graen, & Haga, 1975; Graen, 1976; Graen & Cashman, 1975) focused on the relationship between a leader and each subordinate considered independently, rather than on the relationship between the superior and the group. LMX is distinguished from other leadership theories by its focus on the dyadic relationship between a leader and a member. The leader–member exchange (LMX) theory provides a useful lens for examining the supervisor–subordinate relationship because it captures the impact of perceptions of support from supervisors, which influences employees’ morale and commitment (Brunetto, Farr-Wharton & Shacklock, 2010). LMX theory rests firmly on the assumption that leaders influence employees through the quality of the relationships they develop with them (Erdogan & Bauer, 2015). A high quality relationship is characterized by trust, liking, professional respect, and loyalty (Liden & Maslyn, 1998). Highquality relationships are characterized by exchange of valued resources in these relationships; leaders provide support, developmental opportunities, mentoring, and other benefits to the employee (Erdogan & Bauer, 2015).
The Leader-member exchange theory works when a leader initiates either an in-group or an out-group exchange with a member of the organization early in the life of the relationship after which members of the in-group are invited to participate in decision making and added responsibility. In contrast, members of the out-group are supervised within the limits of their formal employment contract (Lunenburg, 2010). One of the major draw backs of resource based view theory raised is that leaders generate an unequal opportunity for members to perform at their best by creating two groups giving priority to the in-group with greater responsibilities, more rewards, and more attention while the out-group are been discouraged (Lunenburg, 2010). Northouse (2013), relates to the critic that core idea of the theory are not fully developed and that accurate measurements of the bilateral relationship between leader and members are not set. The theory is important for this study because it enhances communication and exchange of trust and commitment in the organization among leaders and their members. It also educates leaders on the awareness of the possible and damaging bias against certain out-group members (Abuisneineh, 2014).
Social exchange theory
Social exchange theory existed from the early writings of Homans (1961), Blau (1964) and Emerson (1962, 1972) based on philosophical and psychological orientations deriving from utilitarianism on the one hand and behaviorism on the other. Homans (1961) characterized social exchange as the exchange of action, unmistakable or immaterial, fulfilling or expensive, between no less than two people. Homans clarified social conduct and the types of social association delivered by social communication in demonstrating how A’s conduct fortified B’s conduct and how B’s conduct strengthened A’s conduct consequently which was the unequivocal reason for proceeding with social cooperation clarified at the sub-institutional level. Homans summarized the exchange system into three (3) propositions: success, stimulus and deprivation-satiation proposition. Success proposition: when an employee discovers he receives reward for his action, he tends to rehash such activity. Stimulus proposition: the more often a particular behaviour has brought about a reward in the past, the more probable it is that a person will react to it.
Deprivation-satiation proposition: how often in the past a person has received a specific reward, the less significant any further unit of that reward gets to be. Blau (1964) Social exchange suggests a deliberate voluntary activity of the human capital that is roused by the profits they rely upon to acquire and ordinarily get from others. In essence, Blau has three viewpoints which are principal to social exchange: relationship, reciprocity and exchange. A social exchange relationship starts with one gathering giving a benefit to another. On the off chance that the recipient responds and after that a progression of benefits exchanges happen, this makes sentiments of common commitment between the parties. After some time, the relationship can then be described as one where the exchange partners believe each other to respond benefits gotten.
Empirical Review
Kim and Cha’s (2002) research involved 12 five-star hotels in Seoul (South Korea). These researchers used questionnaires to collect data from customers staying in the hotels for more than 20 nights. We consider that limiting the field of study to five-star hotels excludes a wide range of hotels in which quality relationships can develop and be as useful and important despite their inferior category. On the other hand, customers with shorter overnight stays can also provide evaluations of RQ. For these reasons, in this research, we propose to evaluate the model proposed by Kim and Cha (2002) in a different social context and applying a different conceptualisation with regard to the measurement model. The research was carried out in the city of Seville (southern Spain), and considers hotels of all categories, regardless of the number of nights travellers stay in the hotel. We should mention that the fieldwork took place during Holy Week (21-27 March 2005). This period is, from the perspective of tourism, particularly important in Seville. Hotel occupation rates peak, with virtually 100 per cent of the available beds occupied. The competition to capture and retain customers is extreme. The year 2004 was favourable for the tourism sector in Seville and its province (an increase of 13.47 per cent on the figures from 2003).
According to Greenberg (2004), employee – customer relationship management generally is an enterprise-focused endeavor encompassing all departments in a business . He further explains that, in addition to customer service, employee – customer relationship management would also include, manufacturing, product testing, assembling as well as purchasing, and billing, and human resource, marketing, sales and engineering. Chen and Popovich (2003) argued that employee – customer relationship management is a complicated application which mines customer data, which has been retrieved from all the touch points of the customer, which then creates and enable the organization to have complete view of the customers. The result is that firms are able to uncover and determine the right type of customers and predicting trend of their future purchases. employee – customer relationship management is also defined as an all embracing approach that seamlessly integrates sales, customer service, marketing, field support and other functions that touch customers (Chou et al, 2002) .
According to Armando (2005), successful service providers are able to meet and, whenever possible, exceed consumers’ needs and wants in delivering services, due to certain specific characteristics of services (e.g., intangibility, simultaneity, variability and perishability), and to the human element, in particular the ‘face-to-face’ interaction with the customer. In addition, Kong and Jogaratnam (2007) confirmed the fact that employee personalization and courtesy was a significant predictor of customer satisfaction.
Recent studies also tried to study the relationship between employees and customers during service encounters. Subramony and other authors (2004) found a positive relationship between employees’ internal service effectiveness and customers’ service quality perceptions. While, Nicolini and Salini (2006) demonstrated that customer evaluation of the service received is shaped by factors linked to the psychological interaction established during the exchange transaction, and by factors connected to technical-specific characteristics of the service.
Moreover, Duboff and Heaton (1999) mentioned that customer satisfaction is often at least somewhat dependent on a specific relationship with a contact employee, thus, the cost of losing such an employee includes the weakening; if not loss of key customers as well.
According to Day (1994); Day and Wesley (1988); Drucker (1954); Hooley et al., (1990); Kotler (1977), the main objective of a market-based organisation is to create and fulfill the needs of customers. As stated by Peter and Jan (1994), customers have made the decision to believe that the total of services acquired have been evaluated by the customers themselves.
Wilson and Frimpong (2004) via the findings of Isen (Isen & Levin 1972; Isen et al., 1978) mainly focused on the relationship between employee satisfaction and customer satisfaction. Employees who are in a positive mood would be more focused on helping each other, which in turn would give an impact on service quality and customer satisfaction.
Morris and Feldman’s study (1996) using Hochschild’s findings (1983) found the same findings as the study carried out by Ulrich (1992) and Ulrich et al., (1991) regarding satisfied employees who would give their commitment and follow the ethics of service. This in turn would contribute to an understanding of customer expectations and a determination for the employees to fulfill customer needs. According to Band (1988) and George (1990), employee satisfaction is a strategic weapon for achieving service quality and high customer satisfaction. This is because as stated by Ulrich (1992) and Ulrich et al., (1991), a satisfied employee would be committed towards his career.
Eisenberger et al., (1986) in their study found that employees would apply their perception of being appreciated and being taken care of by the organization to become more productive at work. Furthermore, past studies have shown that satisfied employees would demonstrate a more helpful attitude towards the customers (Locke & Lathem, 1990; Weatherly & Tansik, 1993). Schneider (1980) in his study found evidence regarding job satisfaction as a major cause for employees to provide quality service. Bitner et al., (1990); Estelami, (2000); Estelami and DeMaeyer, (2002); Keaveney, (1995) stated that employee attitude played an important role in customer satisfaction.
Parvatiyar & Sheth (2001) explored the foundations of employee – customer relationship management by examining the literature on relationship marketing and other disciplines that contribute to the employee – customer relationship management. They discussed its recent prominence being facilitated by uniting numerous other paradigms of marketing and by corporate initiatives. employee – customer relationship management has the potential to emerge as the predominant perspective of marketing and it should not be taken as just IT solution. Later Lemon in 2002 concluded that employee – customer relationship management is must to maintain and gain customers. It is very important that anticipated regret of customers must be taken into consideration and a forward looking model for customer retention that incorporates both expected future use and anticipated regret on consumers’ decisions should be build.
In 2003 Malhotra & Mukherjee, concluded that the three components of service quality (affective, continuance and normative) in banks are equally important to maintain relationship with the customers. The study further enumerates that both affective and continuance commitment lead to service quality in bank branches, while only the affective commitment has a significant relationship with service quality in call centres.
Panda (2003) stated that employee – customer relationship management has its origin in the basic paradigm of marketing i.e. to satisfy customers with the best possible alternative in the market through a relational exchange process. This is possible through the integration of four important components i.e. people, process, technology and data. It was also put forth that employee – customer relationship management also improving customer life time value.
Berndt et al (2005) stated that Customer service and relationship management, in particular, are crucial to attaining a sustainable competitive advantage in the marketplace. The implementation of a one-to-one programme within an emerging economy is the focus of this paper. In the same year i.e. 2005 Lindgreen addressed employee – customer relationship management by adopting case study method and conducted a study in one European bank recently designed and implemented and, in doing so, the article adds empirical evidence to what constitutes good employee – customer relationship management practice. The study revealed that the bank faced many challenges in relation to how customers be contacted and how their behavior can be changed towards distribution channel. In this context the author does not aspire a completely formalized deduction.
Payne & Frow in 2005 developed a conceptual framework for employee – customer relationship management that helps broaden the understanding of employee – customer relationship management and its role in enhancing customer value and, as a result, shareholder value. They identified five key cross-functional employee – customer relationship management processes: a strategy development process, a value creation process, a multi channel integration process, an information management process, and a performance assessment process. The research gave insight into the development and implementation of employee – customer relationship management strategies.
Blery & Michalakopoulos (2006), took up a single descriptive case study of one major Greek bank that has implemented employee – customer relationship management. The findings suggest that the bank fully recognizes the value of employee – customer relationship management system for its development and success in the market and for the same it has established a strategic analysis and employee – customer relationship management department which has guided to the successful implementation of employee – customer relationship management.
Payne & Frow again conducted a study in 2006 reviewing the origins and role of employee – customer relationship management and stressed the importance of adopting a cross-functional approach to employee – customer relationship management strategy formulation. They further examined the alternative approaches to employee – customer relationship management strategy development and, by using an ‘interaction research’ approach, proposed a model that addressed both employee – customer relationship management strategy and implementation programme. The study concludes that BPR and organizational learning promote success in employee – customer relationship management system implementation, which can lead to improved customer relationship quality, smoother business processes, a better understanding of customer requirements, and customer loyalty.
Research Gap
Despite the fact that customer and employee relationship on the management has recently gained wide attention in business and service literature and become of pivotal importance to many hospitality industries as the key to effective performance, through building and maintaining sustainable relationships with profitable customers; few works investigated this phenomenon empirically in the hospitality context. In responding to this call, the current study aimed to fill the existing research gap in literature and contribute to the accumulative knowledge by: (1) The Role of Service in the Hospitality Industry, Service Culture in the Hospitality Management (2) Benefits of using Employee-Customer Relationship Management in Hospitality Industry, (3) Customer Relationship Management, Employee- Customer Relationship Management and Hotel industry in Nigeria; (4) Managing the Hospitality Industry with Employee- Customer Relationship Management In Nigeria; and (5) and Empirical Review to which Employee- Customer Relationship Management is actually applied in Hospitality industires.
This study has taken a further significant step in contributing to both theory and practice of and to help address some gaps in the current body of literature. More specifically, this study has made a number of important practical (managerial) implementations and theoretical (academic) contributions.
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