Starwood Hotels Organization
Title: Apply the gaps model to a sports/leisure organisation and show, by analysis and critical evaluation, the effectiveness of its customer service management and how this might be improved.
1. Executive summary
The report aims to apply the gaps model to the leisure organization ‘Starwood Hotels & Resorts Worldwide, Inc.’ (hereinafter – Starwood). Due analysis critically evaluates the effectiveness of the customer service management and provides recommendations for further improvement. The report is based on theoretical data and empirical applications to cover the assigned issue in a full-fledged manner.
Within the framework of due research, the Gaps is critically analyzed considering the current trends of the hospitality industry that is projected to become the largest in the world by the year 2010 with more than 112 million staff employed internationally (Johnson State College, 2006). Such forecast necessitated the particular emphasis on the global findings related to the study, and therefore the choice of Starwood global hotelier network is well-reasoned.
2. Gaps model background
Within the today’s realities of business operation, customer satisfaction is regarded as the core criterion that predetermines the quality of provided services. Companies that are able to critically assess customer expectations and match those to their capacities win competitive advantage on the contemporary marketplace. The comprehension of parameters particular to services necessitates company’s management to continuously improve quality standards to assure a company leading positions in the course of fierce competition (Smith et al., 1985). Compared to goods, the parameters of service quality are more complex and vary (Lewis, 1989). Therefore, full-fledged understanding of customers’ needs and expectations is a critical issue on the today’s service rendering agenda.
The Gaps model (hereinafter – the Gaps) was developed in 1990 by Zeithaml, Parasuraman, and Berry to facilitate both small firms and multinational corporations to provide better service quality to the customers (Zeithaml et al., 1990; Berry et al., 1994). Since then, the Gaps has been referred to and applied as a conceptual model to enhance service quality. Initially, namely large corporations implemented Gaps to detect and cope with the actual gaps while rendering services to their customers. The delivery of high-quality services is a vital prerequisite of the success of any service organization competing under the conditions of the contemporary global business environment. This indicates that the assurance of quality services is of paramount importance whenever a company aims to win and maintain more customers, protect itself from price competition, and build up corporate traditions with the emphasis on the finest level of service provision which will pay the company dividends years ahead (Albrecht and Zemke, 1985).
In terms of historical context, the Gaps did not evolve in vacuum. The model’ gradual development was grounded on the similar service quality models offered by researchers and developers. One of the earliest ones offered by C. Gronroos in 1988 is known as ‘Perceived Service Quality’, wherein experienced quality and expected quality coincide to satisfy the customer’s demands (Gronroos, 1988). Subsequently, the ‘Perceived Service Quality’ model was synergized with the Gummesson’s model known as 4Q that identified four qualities, i.e. production, design, delivery, and relations as the major preconditions of service quality (Gronroos and Gummesson, 1988). Over 7 years, Zeithaml, Pnarasurarnan and Berry studied and examined the peculiarities of service quality, and in 1990 eventually detected the conceptual model consisting of four internal gaps to indicate the misalignment between the expected services provided by a service organization and those actually received by the customers (Zeithaml et al., 1990). For nearly two decades, the Gaps model has been used as the most effective measurement framework of high quality services provision.
In particular, Gap 1 identifies the discordance between the expectations of the customers regarding the rendered services and the perception of such expectations of the management’s part. Herewith, it is noteworthy that customers’ expectations are formed on the basis of their personal needs, word-of-mouth communications, communications with service organization, as well as past experiences. The essence of this gap actually consists in the insufficiency of marketing research and inappropriate application of the research findings, which causes inappropriate interaction between customers and management. Furthermore, this gap indicates the inadequacy of communication between management and personnel. Finally, the first gap means that personnel and top managers do not interact since they are separated by management levels (Zeithaml et al., 1990, p. 52).
Gap 2 marks the difference between managers’ perceptions of customers’ expectations and actual service specifications. This is mainly due to the overall lack of goal determination, lack of service quality commitment, infeasibility perception, and finally inappropriate standardization of tasks (Zeithaml et al., 1990, pp.71-72). This gap indicates that often the expectations of managers differ from those of customers’, meaning that internal corporate environment is remote from external realities. At that, technical assumptions and approaches applied by managers often prevail over the realistic customer expectations. Task standardization, in turn, requires additional time resources, and too few companies are able to afford such advantage.
Gap 3 marks the difference between a company’s performance and service specifications. This indicates that employees are often unable or even refuse to comply with the commitments required by a company’s management. Gap 3 actually defines the insufficiency of service performance. Herewith, actual problems occur when the standard of delivered services does not comply with the customer wants. According to Zeithaml et al. (1990), employees are responsible for due gap occurrence as a result of the ambiguity and/or conflict of the performed roles, inappropriateness of supervisory control systems, insufficiency of employee-job fit and/or technology job fit, lack of control perception by employees, and consequent ineffectiveness of entire teamwork (p.90). At that, role ambiguity is most often caused by the lack of preparation and/or clear instructions to be followed by employees to perform their duties appropriately. Furthermore, employees are often victims of the abovementioned role conflict wherein the latter are challenged with unrealistic assignments either from managers or customers; therefore due performance of assigned tasks is rather complicated owing to the incongruity of available resources. In addition to this, a company may hire employees whose qualifications misfit a company’s initial expectations, let alone those set by the customers. Furthermore, a company may lack sufficient technological background which disables appropriate business operation and customer service. The same concerns the lack of managerial control wherein employees may exceed or underestimate the scope of their competence. Finally, proper service quality provision largely depends on a company’s ability to establish effective teamwork wherein every team member is a goal-oriented part of overall process of service provision by a company.
Gap 4 serves as a detector between the promised services and the delivered ones by the company. The actual discrepancy indicates the difference between customer expectations and actual services delivered by a company. As Zeithaml et al. (1990) put it, the mismatch of the promised services and the delivered ones is mainly due to exaggeration of promises inn the course of interaction with customers (e.g. false advertising) , and the inadequacy of communication between corporate branches ought to cooperate closely to attain the common goal (pp.116-117).
3. The Gaps application in Starwood
Starwood Hotels & Resorts Worldwide, Inc. has been widely acknowledged as one of the leading hotel and leisure companies worldwide. The company currently meets high service standards and therefore customer expectations by implementing its best practices based on the solid values successfully developed and implemented over the years. Starwood’s hotelier’s network permanently maintains leading positions in hotel and lodging business with the promising insights in the foreseeable future. The Starwood’s hotel business is overall focused on the global operation of hotels and resorts in the luxury and upscale segment of the lodging industry. The company is successful since it applies the approach aimed at meeting and possibly exceeding customer expectations (Marks, 2006, p.1).
Since the year of its foundation, 1969, Starwood has won the status of a lead global luxury and leisure resort and hotel company on a worldwide scale. Particularly, over the last decade the company’s HR management practices have mostly relied on the implementation of the advanced technological developments. Overall, the company’s success philosophy emphasizes on the human resources as its most invaluable asset ensuring high standard of customer service. The technologically enhanced HR system almost disables the occurrence of gaps in the model’s conceptual sense outlined in the previous section of this report. Apparently, Starwood places its main strategic emphasis on the sound implementation of corporate HR management strategy. The Corporation’s best practices are becoming more and more concentrated on the advanced technological developments which improve its human resource management strategies successfully implemented over the recent years.
Having long ago reached the stabilization stage of its business performance, Starwood did its best to eliminate all possible causes assumed by the Gaps. Initially, to meet customer expectations the company much emphasized on the importance of marketing research. This enabled the company to set and maintain leading hospitality industry positions for years. The next strategic goal on the corporate agenda was to determine the exact customer expectations. To this end, the company applied a wide range of methods, including but not limited to: a) strategic application of complaints; b) assessment of customer expectations in related industries; c) questioning intermediate customers; d) studying client specificities from both corporate and industry perspectives; e) emphasizing on relevant customer expectations. At that, the company’s management applied various marketing approaches, varying from survey polls and questionnaires to viral marketing applications, to critically assess the current trends on the demand side of hospitality business.
Further on, on a particular stage of its business activity, Starwood’s management was forced to differentiate between technical competency and customers’ needs. It meant that the development and permanent interaction and communication with enormous clientele were considered not less important than the issues of internal operation such as hotel infrastructure development, for example. At that, appropriate external contacts and communications with customers involved full management’s comprehension of customers’ needs and concerns.
To eliminate the causes of Gap 2, Starwood management applied effective measures to commit to customer-oriented quality. Such commitment was enhanced through the development of proper communication to ensure that all employees receive right messages and instructions. One of the most effective solutions implemented by the company in due respect is known as a global ‘360° feedback process’ which enabled the company to ensure the consistency of service and quality of management and continually improve the performance of its leadership team. The ‘360° feedback process’ serves as a strategic tool to build up and reinforce Starwood’s corporate culture and ensures consistent quality of management. On a local level, the company’s management operates the process of questioning the company’s diverse staff on current issues, which enables the company to enable efficient communication and sound level of mutual understanding and cooperation on all possible levels, as well as to save on administrative expenses (Battista and Whitlock, n.d.). In such a way, the company managed to set service quality goals for employees in order to meet specific, realistic, accepted by employees, and well-measured customer expectations Zeithaml et al., 1990, pp. 84-86).
Striving for excellence in its business performance, the company regards flexibility as an indispensable part of its overall success. To this end, over the years Starwood’s leadership has developed close-knit relations between managers and employees to ensure that the terms of corporate performance are mutually understood and implemented. Currently, Starwood employs more than 100,000 people worldwide. Previously applied schemes of decentralized HR management failed to meet the company’s requirements. To improve the situation, Starwood implemented a ‘Web-enabled HR solution’ to serve for the sake of the company’s global HR strategy concerns. For this purposes, the company actively implements SAP R/3 Human Resources 4 to further enhance its global HR strategy, since the application enables the management to use faster and advanced HR processes as well as to reduce costs (SAP INFO, 2006, p.1).
Being well aware of all the complications assumed within the framework of the conceptual model consisting of 4 gaps, the Starwood’s management effectively implements the Web-enabled HR management solutions to operate and monitor performance management processes such as: e-recruitment, e-appraisal, e-career/succession, and e-compensation. The complex approach enables the company to select best talents from the available profile on market and train/prepare them to comply with the corporate standards that overall correspond to customer expectations. This indicates that more than 12,000 managers worldwide perform clearly set e-functions to regularly monitor employees’ performance online. Under such technologically advanced conditions, the company’s management is capable of hyper flexibility to appropriately modify current tasks considering market changes and/or efficiently adjust customers’ preferences (expectations) in each particular case. Overall, the application of new e-HR strategy eliminated almost all the existing gaps faced by the company’s management and employees. The company managed to save on administrative costs and gain real-time access to relevant data, which altogether enabled the company to appropriately respond to current market requirements and satisfy customer expectations (SAP INFO, 2006, p.2).
The following approach applied by the company consists in training its employees by applying a performance compensation system focused on service quality and customer satisfaction. This approach ensures that Starwood’s employees possess sufficient knowledge and skills to provide clients with high quality service. The company’s employees work in the environment of permanent improvement. For instance, in August 2004 the company concluded an agreement with ‘eCornell’ to purchase online courses in essential management skills, hospitality management, strategic management, and HR management (eCornell, 2004, p.1).
While operating in 80 countries of the world, the company’s management permanently exceeds customers’ expectations by furthering diversity and improving communities (Starwood Hotels & Resorts Worldwide, Inc. 2006, p.1). Such high social commitment requires the company full compliance with own promises regarding the standards of provided service. Therefore, over-promising is generally regarded as unacceptable practice avoided by the company. This is achieved by smooth operation and interaction of the company’s main departments, i.e. operations, HR, sales, advertising etc. The advertising messages delivered within Starwood network fully comply with the corporate values and principles of business activity, thus, the company matches its promises to the clients with the service standards of its business capacity.
4. Conclusions
The report critically evaluated the specificity of the Gaps in relation to service quality gaps. The theoretical analysis covered the existing studies regarding service quality improvement as well as the detailed description of each gap and its peculiarities. The empirical part of the report concerned business operation of Starwood, and the ways the world-acclaimed hotelier managed to avoid and/or eliminate the most particular gaps to the organization of such scale.
Overall, it is evident that gaps are diminished whenever an organization reaches the stabilization stage of its business operation. This means that an organization is mature enough to possess and operate sufficient resources to eliminate the occurrence of the gaps. Organizational structure, effective marketing, proper HR management and the emphasis on cutting-edge technological innovations altogether ensure that organization is capable to develop the most flexible approach to cope with the currently emerging gaps. At that, it is rather important that an organization fully realizes its own potential and understands customer expectations. As a sole structure an organization should value the contribution of its every member and strive to make him/her more competent and proficient while serving corporate needs.
The conceptual model of Gaps developed in 1990 by Zeithaml, Parasuraman, and Berry was soon acclaimed as the universal framework of service quality measurement. Until now the relevance of the model has been high on the service quality agenda and its importance ascends as never before. This especially concerns large service corporations providing high quality services on global scale. While serving international customers, corporate management is fully aware of the main causes and potential consequences of each gap, i.e. insufficiency of marketing research, communication insufficiency both on internal corporate level and on the external level of interaction with customers, lack of staff training, knowledge and skills, over-promising to customers which does not comply with the real capacities of organization regarding high quality services’ delivery.
The contemporary conditions of business operation necessitate organizations to win competitive advantage to maintain lead positions on the marketplace. Hence, corporate management applies innovations and improvements to enhance internal environment as well as to ensure that customers concerns are considered to the full extent and therefore their particular expectations are satisfied. Full comprehension of customer expectations entirely depends on the resources owned by an organization; thus, the success story of Starwood proves that decades of business experience on the highest level are required to reach the perfection of service quality.
On the grounds of critical evaluation, the report aimed to combine theoretical background of the Gaps with the empirical applications by the global lead leisure services provider – Starwood. The synthesis of theory and practice made the overall study relevant of the present realities of quality services’ provision in compliance with customers’ expectations.
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