Report on EFQM in Squire Hotel Group


Executive Summary
This report is regarding the case analysis of the Squire Hotel Group which has several quality related issues at a management level affecting the performance of the company. The Introduction sets the groundwork by describing the current scenario of the hotel industry and how service quality is an essential aspect. EQFM that is a business enhancement model, is introduced along with its history and presence. The shortcomings of EFQM in the application area are discussed at a general level by analyzing related literature. This is followed by a detailed analysis of the issues Squire Hotel Group faces in its management also including the root causes of the issues. The EFQM model is applied in the scenario of the case and its results are discussed keeping the expect results of using the model in mind. The advantages of using the EFQM model are highlighted following the conclusion of the report wrapping up the central idea. There are recommendations regarding other ways to overcome the problems in the case.

Table of Contents
Executive Summary 1
Introduction 3
Importance of Service Quality Management in Hotels 4
About EFQM 6
Companies Using EFQM Model 6
Challenges in Adaptation of EFQM 6
Evaluation of Squire Hotel Group’s Service Strategy 6
Causes for Problems 6
Application of EFQM in Squire Hotel Group 6
Analysis of Results 6
Advantages of EFQM Application in Squire Hotel Group 6
Conclusions 6
Recommendations 6
Bibliography 7

Introduction

The business environment of the hospitality industry has faced a massive change in its landscape in the recent times. Hospitality is a part of the world tourism industry, which has exceeded in dimensions and requires hotels to upgrade their service quality according to global standards. The customers of hotels are mostly tourists of either local or foreign origin. The demands regarding hotel service standards are upgraded according to their requirements. Observation of the future scenario also helps hotels to provide new kinds of services like Wi-Fi connectivity and location availability on digital maps. Tourists will also require list of services, menu and price list available online to manage their travels. (Alfirevic, et al., 2013, pp. 655-664)
The area of hospitality management is facing a major change and hotels not being able to keep up with high standards are facing shutdowns due to competition and high amount of choice for the consumers. Even the loyal customers of the hotels are being exposed to the new facilities provided by hotels due to online marketing, which makes them consider other options. These factors are the essential reason why hotels need to upgrade their standards. Service quality management plays a major role in the service structure and quality management of hotels. Service quality management is done in medium and major level hotels through the adoption of Total Quality Management (TQM) models and other self-assessment methods to assure the quality of the hotel is high and in level with global standards. (Borkar & Koranne, 2014, pp. 21-25) The European Foundation for Quality Management (EFQM) model is being followed by many major companies for sustaining quality and for self-improvement.
The purpose of this report is to analyze the case describing the service quality problem in the squire hotel group to be able to exercise the need for an EFQM model and its application results. This report will be a decisive factor for the hotel group regarding the application of EFQM model in their service quality structure. This report will also highlight the vitality of overall quality management and the concept of EFQM and its importance and relevance.
The report will initially emphasize on the importance of quality management and its implications with EFQM application and importance in reference, accompanied by the challenges in the application of EFQM. This will be followed an analytical view on the case of Squire Hotel group to ascertain the probable causes which led to the problems in its management and performance. The next point of discussion will be the application of EFQM model in the Squire Hotel Group scenario to alleviate the problems. This leads to a discussion of results running the results through several criteria. The advantages of utilizing the model in this scenario will be discussed followed by a brief conclusion summarizing the primary points of the report. The latter part of the report will feature recommendations regarding the EFQM application scenario in the case.
Importance of Service Quality Management in Hotels

Service Quality is an aspect which includes the management of business processes for providing complete satisfaction to the customer. Adopting this viewpoint is crucial for leaders to be competitive in the market. A clear link between level of quality in goods/service and profitability has been established by many researchers. (AbuKhalifeh & Som, 2012, pp. 135-141) The effectiveness of the service quality structure can only be established by monitoring and analyzing the customer’s demands and formulating the processes according to a service quality management viewpoint. (Ross, 1993, pp. 12-23)
Parasuraman et al. define Service Quality Management as “The global evaluation by customers of the overall excellence or superiority of a service”. (Parasuraman, et al., 1985, pp. 41-50)
Products can easily have quality parameters but measuring service quality requires monitoring of factors like availability, customer engagement, communication, adherence to safety standards, expertise in delivering services and many other intangible factors. All the factors for measuring service quality are either heterogeneous, impossible to contain or transient.
The excellence of service quality management can be observed by focusing on customers and perennial improvement of service delivery quality and innovation in service aspects. Traditional service quality management paradigm projects two types of approaches to observe excellence in quality: first approach is technical which is more applicable to a production oriented scenario while the second approach is customer oriented which is more applicable to the hotel management scenario. (Naseem, et al., 2011, pp. 52-56)
Total Quality Management (TQM) is a well-established concept and approach in the business scenario. Wheelen and Hunger define total quality management as “An operational philosophy committed to customer satisfaction and continuous improvement”. Total Quality Management model is a widely used model at a global scale by companies. While the TQM model only focuses on the procedures of a business, The EQFM model can be considered a more detailed approach on the procedures, results and the methods of organizations that makes it an upgraded concept in reference to the TQM model. (Wheelen & Hunger, 2010)
About EFQM

EFQM stands for the European Foundation of Quality management that introduced the EFQM model of excellence in companies which is applicable in businesses of all the sectors. The foundation was established in the year 1989 with the presidents and CEOs of 67 companies from Europe came together and declared commitment to the model. (EFQM, 2015)
The EFQM model is basically a self-assessment structure for companies through which companies can analyze their strengths and constantly find areas for improvement. The term excellence is closely associated with the aspect of quality in both goods and services. Through the improvement of quality in goods and services a company can increase their financial performance. (New Economics Foundation, 2015) The most benefitting aspect of the EFQM model is that it is applicable in a company of any sector (government or private, service or industry) or size.
Companies Using EFQM Model

Companies from many sectors use apply EFQM model in their management processes to enhance the quality of their goods/services. This framework is utilized by more than 30,000 organizations in and outside Europe. Some of the companies that use EFQM are Fiat motors, Volkswagen, BMW, Bosch, Nestle, Electrolux, Dubai Electricity and Water Authority (DEWA), Emirates Nuclear Energy Corporation, Etisalat and Grundfos. Companies in the hospitality sector like Swiss Casinos Services, Failtre Ireland, Pirktl Holiday and Swissotel management utilize the EFQM model for achieving excellence in quality. (EFQM, 2015)
German Multinational Engineering an Electricals company Bosch applied EFQM for enhancing their strategies and modifying operations also applying radar logic. It led to increased productivity by 32%, increase in machine efficiency by 30%, and increase in customer satisfaction by 10% from 80 to 90%. Ricoh, a worldwide printing and IT services company emphasized on value addition through EFQM model and achieved success over competitors and also focusing on responsibilities to conserve the environment. BMW was also able to successfully achieve high production levels without cutting costs, 99% level of employee satisfaction and reduced carbon emission levels through application of EFQM model at its Regensburg Plant in Germany. (EFQM, 2013)

9 Criteria

The EFQM model is for managers to perceive the cause and effect relationship between the efforts and results of the organization. There are 9 criteria which are the pillars of this model. Out of the 9 criteria given, 5 are associated with the actions of the organization while 4 of them are associated with the results of the organization. The criteria associated with the actions are recognized as the enablers in the process while the others are results. (EFQM, 2012)

Figure 1 – 9 Criteria Model

Challenges in Adaptation of EFQM

The EQFM model is formulated essentially for determining areas for improvement in an organization. The EFQM model is updated regularly as rapid changes occur in the functioning of companies due to advent of new technologies and changing demands of customers. (Dodangeh & Yusuff, 2011)
From a management control viewpoint, the EFQM model utilizes the eight fundamental concepts for achieving excellence doesn’t leave a room for other additional measures that the organization might have in mind. The model has also been deemed as “too simple” to deal with real-life intricate problems that might arise. (Dahlgaard-Park, 2008)Another disadvantage is that the model does not have measures to ensure excellence in tight budget environment per se. In cases where an organization is facing losses due to factors other than quality issues, the model can be ineffective in restoring or enhancing the financial performance of an organization. Dahlgaard et al also have an opposite opinion to the earlier comment regarding the model being “too simple” that the EFQM model has so many criteria and sub criteria that assessors might not be able to analyze the management system effectively with too many parameters in question. (Dahlgaard, et al., 2013, pp. 519-538)
One crucial aspect that the EFQM business/organizational excellence model faces a lack is the area of operational integration. The inconsistency that persists in this model is between the objectives of the organization and the practices that the EFQM model recommends.
Evaluation of Squire Hotel Group’s Service Strategy

The Squire Hotel Group is a chain of hotel containing 20 hotels in several distinguished locations in London. The room capacity of these hotels ranges from 40 to 120 bedrooms. The purpose of evaluating the services of this hotel chain is to look for areas of improvement in the hotels and their processes. The primary customers of this hotels are the business people who normally occupy the hotel in between the week. This indicates that the hotel group does not have a strategy to attract tourists as it relies on its commercial clientele.
The Squire Hotel Group does not have a basic system of taking suggestions and complaints. If the customers do not report their problems to the senior staff, the problems in the system will go easily unnoticed. Also, other than the profit expectations laid down by Charles harper, there is no evidence of any solid development in the system. The areas of improvement are clearly visible but no steps are being taken to solve the underlying problems. The critical problems are the speed of service, non-existent complaint/suggestion receiving system, and a dire need for innovation and change.
Causes for Problems

The root causes of the underlying problems are in the management system. No incoming complaint/suggestion taking system suggests that the management is content with the standards and the facilities that it provides. The budget cuts that the hotels are individually facing due to the market conditions and lack of new facilities are signs of stagnation deeply affecting the firm’s financial performance. The staff is being underpaid due to the budget cuts resulting in their poor performance reflecting on the speed of service.
The hotel group doesn’t believe in innovation and relies on its traditional appeal to be its success factor but there is still scope for modern facilities in the hotels for the customers. The depletion of quality in service can be projected as the root cause which has become a blaring problem due to lack of performance measurements associated with the quality of service that the hotels provide.
It becomes crucial to solve the current performance and service problems in the organization because if these problems are not solved, the hotels will lose the loyal customers due to lack of modern services and the basic necessity of speed in provision of services in the hotels. The hotel group is heading in a downward spiral unless performance measures are applied related to service quality.
Application of EFQM in Squire Hotel Group

The Squire Hotel Group as an organization is facing a crisis which should alleviated as soon as possible by utilizing performance measures. The EFQM model has a framework which can be applied to the various processes and structures in the organization in order to solve the underlying issues. The first problem that comes to notice is the system that managers are given certain targets and not being able to achieve those targets will result in their job being lost. The first element in the EFQM model that is leadership comes into play in this situation. To have an effective leadership the hotel manager needs to clarify the objectives, vision and mission of the company. It is not enough that the manager has a clear idea of those elements but it needs to be explained to the staff.
The element of communication is the next aspect to focus regarding the issue of staff performance. The vision and mission of the organization of the company should be focused on the serving the customers and to achieve the related objectives effectively, the staff needs to communicate amongst themselves in an efficient way to get work done smoothly and rapidly. The aspect of “people” in the 9 criteria is being given importance in this situation which will lead to a solution of the problems associated with customer satisfaction. Adding values for the customers is a very critical part of the model application which is essential for addressing the complaints and suggestions of the customers and introducing new services in the organization.
Effect on Results

There is a clear cause and effect relationship in the application of the model because if the speed of service improves, the potential long term customers will be attracted to the hotels and the loyal customers of the hotels will stay. The penultimate effect of the performance measures will be an improvement in the financial performance and the achievement of organizational objectives. The introduction of modern services like Wi-Fi availability and a detailed online profile will make the presence of Squire Hotel group highlighted among the competition and will pull more customers to the hotel. This change is associated with the enabler “processes, products and services” from the 9 criteria. The results in the 9 criteria that are achieved over here are people results: effective staff communication, customer results: customer retention and business results: improvement in the financial performance of the company.

Analysis of Results

The results have a long term impact on the progress of the company after the application of the EFQM model framework. The results that were expected from the application of the model was smoothening of operations after effective communication and rapid speed of service. The resolution of customer complaints through a customer opinion input system has brought many groundwork changes to the system and new facilities in the hotel after due consideration of the revised budgets according to new requirements. Even Swissotel which a hotel group in Europe has applied EFQM model and enhanced its services with “Quality in Life” as its new brand promise which suggests that the squire hotel group can also attempt using the EQFM model to serve their customers better. (Swissotel, 2015)
Advantages of EFQM Application in Squire Hotel Group

The scope of advantages related to the application of the EFQM model in the Squire Hotel Group is very profound because the problems that the organization is facing are closely associated to the lack of performance measure and the need to improve service quality. Both of these issues can be tackled and underlying challenges can be met with the application of 9 criteria model in the organization.
The improvement in the quality aspect of the management system will be achieved leading to a higher customer satisfaction and customer retention resulting in higher profits and comfortable budgets.
Conclusions

The case of the Squire Hotel Group in in focus for the analysis of its management problems and the implications of the adaptation of the EFQM model in the organization for resolution of problems. The problem in the Squire Hotel Group is a classic example of problems in service quality management and how its lack can induce losses and stagnation. The history and presence of EQFM gives a wide perspective about the myriad of applications related to the model. The rigorous analysis of problems in the organization resulted in causes and solutions of the problems in relation to EFQM application. The results derived from its application show a diverse range of effective solutions. The effectiveness of solutions and the scope of the model sheds a light on the advantages of using the model.

Recommendations
The organization can draw inspiration from the concept RADAR logic introduced by EFQM.
RADAR Logic

The EQFM model has a special method of approaching the areas for improvement in an organization and this task is done by an assessor in an organization. The process has certain specific steps which are to be followed by the assessors in order to analyze the organization’s areas for improvement. The organization follows certain processes through which they get results in the form of financial performance, customer satisfaction and other such indicators. So in the EFQM process, the evaluator in a company observes the Results, and the utilized Approach, the method of Deployment in the approach taken, and later Assesses and Reviews the approach. This process is a refined approached centered on the function of the assessors. (EFQM, 2012)

Bibliography
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Borkar, S. & Koranne, S., 2014. Study of Service Quality Management in Hotel Industry. Pacific Business Review International, pp. 21-25.
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March 7, 2018

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