MANAGERS ROLE IN IMPLEMENTING ORGANISATIONAL CHANGE:

CASE OF THE RESTAURANT INDUSTRY IN MELBOURNE

Mindy Chew Man Min & Sonja Petrovic-Lazarevic

Working Paper 25/05
May 2005
Abstract

The restaurant industry as a part of the hospitality industry is sensitive to external environmental
changes. In order to remain competitive, each restaurant should quickly react to external
environment challenges. Since in the restaurant industry there is not much physical distance among
employees and managers, relationship between them directly influences on restaurants performance
when change occurs.

The project conducted in Melbourne, known as a place of famous cuisine and restaurants,
researched the restaurant industry managers role when initiating and implementing organisational
changes in order to minimise possible employees resistance to change. The findings point to the
importance of communication, employees attitude and perception of managers undertaken actions.



This paper is a work in progress. Material in the paper cannot be used without permission of the author.
DEPARTMENT OF MANAGEMENT
WORKING PAPER SERIES
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MANAGERS ROLE IN IMPLEMENTING ORGANISATIONAL CHANGE:
CASE OF THE RESTAURANT INDUSTRY IN MELBOURNE


INTRODUCTION

Hospitality industry increases employment to the nation [25] [15]. The restaurant industry as a
constituent of the hospitality industry, dominated by small to medium businesses, provides 52 per
cent of the hospitality industry income and more than 55 per cent of the hospitality industry
employment in Australia [2]. The Australian restaurant industry is vulnerable to external
environment incidents such as Bali bombing in 2002, SARS disease in 2003 and tsunami disaster
in 2005. Its vulnerability is manifested through intensified rivalry among competitors and a need for
implementing changes in restaurants. According to the Australian Bureau of Statistics, Victoria
State has 25 percent of the Australian total population with 72 percent belonging to Melbourne
residency [3]. It signifies that whenever restaurant industry volatility takes effect, it can profoundly
influence Melbourne due to its high density of population.

Change a term that indicates reactions such as excitement, apprehension or even fear to those
who are affected is inevitable and might create chaos or new dimension in the working
environment [17][6]. Once change occurs, the operations of an organisation may be affected
causing a need to evolve to a new phase of organisational life cycle in order to maintain
competitive advantage[11][4]. In the restaurant industry change affects customers, managers and
employees [15]. Customers make part of the restaurant external environment, while managers
and employees are part of the restaurant internal environment.

Managers as initiators of change are motivated to increase organisational effectiveness.
Employees do not necessarily welcome changes [24]. Hathaway [14] argues that the greatest
enemy of an organisation to sustain its competitive advantage is in its internal environment. When
there is resistance to change from employees it can negatively influence the organisational
performance.

For Lewin [19] change has three steps: unfreezing, moving and refreezing. Minimizing obstacles
to changes and maximizing the opportunities of a change effort are accentuated in the unfreezing
process. In the moving stage, recognition of need for change and the acceptance of change have
to take place in the workforce. Accordingly, managers as change agents have to restore or
reinforce the new system actively with all employees in the refreezing step. This simple three-step
model explains the importance of implementing successful change by unfreezing the existing
situation followed by change movement and making the new behaviours and norms stick.
Throughout the course of action, managers need to ensure that all communication channels
contribute to information sharing and accurate absorption of relevant information by all employees
[8].

LeBlanc and Mills [18] state that the efficiency in the restaurant industry is dependent only on
employees. According to Enz [10] since in restaurants there is not much physical distance among
staff and managers, relationship between managers and employees directly influences on
restaurants performance. Namely, when a change takes place employees may display resistance
to change emotionally, for example anger as defence mechanism, fear as anxiety, or sadness as
low in spirits [16]. They may also blame management for not acting in their interests and perform
work with bad working attitudes towards customers to express their dissatisfaction and frustration
[13]. Walkup [26] states that a motivated employee will perform more efficiently in serving
customers better. In the labour-intensive foodservice industry, getting a group of motivated
workforce is not an easy task as each employee is a different individual with dissimilar
personalities and attitudes [5]. According to Catlette and Hadden [7], the biggest challenge
restaurant manager faces today is having qualified and motivated workforce for as long as
possible. Hence, creating a good place to work for employees in order to motivate them to perform

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better is very much in the interest of manager. That is why the role of manager in imposing change
in restaurants is of vital importance to succeed in improved organisational performance [23] [12]
[1].

The aim of this paper is to point to the restaurant industry managers to what they should pay
specific attention when initiating and implementing changes in order to minimise possible
employees resistance to change and achieve better organisational performance. In this respect,
the paper is divided into four sections. After this introduction with theoretical references, the
research methodology is explained. Section three discusses research findings. In the last section
implications to managers are presented and recommendations are made for future research.


METHODOLOGY

We have chosen Melbourne - with its famous cuisine and restaurants and as one of Australias
major cities marketed for people who focus on food and the dining out experience [25] - to find out
what managers should pay attention to when initiating and implementing changes in order to
achieve organisational sustained competitive advantage.

The study is a qualitative research. This research is a multiple descriptive and explanatory case
study. A sample of four managers (one from each restaurant) and 12 employees (three from each
restaurant) was chosen. In accordance with the ethical considerations, there was no coercion in
recruiting participants. All respondents took part in this study voluntarily.

For interviews Palmerinos approach has been adopted [21]. We conducted semi-structured and
audio-taped interviews with an average duration of 60 minutes within two months period of time,
June-August 2004. Two different interview questionnaires were used - one interview questionnaire
for managers, the other for employees. Topics covered in both interview questionnaires were the
same with few different questions for each group of interviewees.

The research questions consisted of three parts: perspectives of organisational change, impacts of
organisational change and implications of implementation of organisational change. The first part
aimed to enquire to what extent the perspectives of managers on applied change differ from
employees perspectives if they do at all. In the second part, employees true feelings and opinions
on impact of organisational change were obtained. Issues covered in the third part of
questionnaire intended to generate effective and efficient implications for managers actions in
imposing and conducting strategic changes.

Open-ended questions were carefully worded to be as neutral as possible without creating
awkward situation or offending interviewees [22]. Interview questionnaires for both manager and
employee were pilot tested to check whether there is any ambiguity or confusion of questions.

Data collected from questions in all interviews were transcribed. Post-defined coding was used by
identifying emergent themes and patterns [20]. We have also used, NUD*IST Vivo software
because of its user-friendliness and its design to perform complicated analyses of text data
contextually [9].

There are some limitations which hindered this study from proceeding efficiently. Firstly, due to
time constraint, this research project only involved four restaurants to conduct interviews with both
manager and employees from each restaurant. In addition, due to the issue of participation with no
coercion, there was a combination of both full-time staff and casual staff as participants in this
study.

Also, there was difficulty at the stage of data collection in the research process. Since this
research project only involved voluntary participations, it was challenging at approaching managers
of restaurants in seeking for approval for conducting interviews. Most of the managers expressed

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no enthusiasm or interest. As an alternative solution, a network of friends was used to search for
potential participants who were willing to take part in this study.


RESEARCH FINDINGS

The results of the qualitative analysis are depicted in Figure 1 showing positions of both manager
and employee during implementation of change in the restaurant industry.

Figure 1: Main actors in a restaurant industry organisational change

Motivation Motivation
I m p r o v e m e n t





Managers


Employees





Motivation Motivation
W o r k i n g e n v i r o n m e n t

According to the diagram main players in implementation of change in the restaurant industry are
two parties with different positions involved managers and employees. Manager is the one who
carries out change and employee has to accept and adopt it. Effective communication, employees
attitude and perception of managers actions, and working environment are important to achieve
better organisational performance.

Effective Communication

From the interviews conducted we have found that effective communication plays a significant role
in ensuring smooth restaurants operations and increasing employees productivity.
Communication is important among managers and employees, and also among employees. Most
of the interviewed employees agreed that listening skills, as part of effective communication, are
one of the competencies that manager should possess at all times. Before, during and after the
implementation of change, managers should listen to employees opinion and understand their
perception and feelings of imposed change. That would help them lead to an improvement on the
organisational change applied.

Implementation of
change in the
restaurant industry
Effective
communication
Right attitudes of
employees
Employees perception of
managers actions

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Employees Attitude and Perception of Managers Actions

The research findings indicate that in order to make change successful in the restaurant industry
managers should be alert at all times of employees reaction to change. If employees do not
cooperate with managers and do not collaborate with workmates, customer service delivery will be
negatively affected. Further, when employees resist a change, conflict among them and between
them and managers might appear. As a result, employees may provide customer service of low
performance affecting good restaurant reputation. They may also quit their job. To prevent both
bad customer service and loosing employees, it seems it is important for managers to understand
that without employees willingness and agreement to apply change, the restaurants competency
might be jeopardised. Most of the interviewees among employees suggested that managers
should in fact provide encouragement and stimulation for their staff to maintain and enhance good
customer service performances.

Continuous Improvement, Working Environment and Motivation

This research has found that managers and most employees agree there is always room for
improvement in restaurant businesses. This is presented in the Figure 1 with a frame of
Improvement. The frame indicates that both managers and employees should look for a better
way of getting things done. To managers, very often, ongoing change in the restaurant industry is
inevitable and change has to be applied for survival. The concept of there is always room for
improvement goes along with application of change. If there is no improvement, the restaurant
business most likely will become stagnant, in particular when exceptional events occur from
external environment, and find it difficult to keep pace with other competitors.

Referring to the Figure 1 again, the element as the outer core is a Working Environment.
According to interviewees in this research project, it is of common understanding that a pleasant
workplace would keep employees happy. Cheerful staff will contribute to higher motivation level
and greater restaurant performance. High-spirited employees would be able to establish and
maintain harmonious working relationship with workmates and contribute keeping high morale.
Managers should always maintain a pleasant workplace for employees to keep them motivated as
a stressful environment will bring harm to a restaurant.

Motivation being placed between the frame of Improvement and the Working Environment frame in
Figure 1, points to relevance of employees performance to sustain restaurants competitiveness.
Knowing that organisational change is conditio sine qua non, without support from managers,
employees might become de-motivated and thus be in low spirits. If having good communication
with managers and as a consequence proper information of strategic relevance of imposed
organisational change, employees may easier accept and apply change to improve restaurant
performance. Therefore, employees motivation is accentuated on importance in achieving
sustained competitive advantage in the restaurant industry.


IMPLICATIONS TO MANAGERS

This research has revealed suggestions for managers in the restaurant industry - recognised as
volatile and vulnerable businesses to external environment - to what actions to take in order to
smoothly implement organisational change.

When a decision to apply organisational change occurs in the restaurant industry, managers as
being responsible for a success of organisational change should pay attention to communication
with their employees, employees attitude, perception of managers actions, employees motivation
and continuous improvement of working environment.

Before implementing a change in a restaurant, managers should understand that different
individuals hold dissimilar opinions about change. Also, not all employees are outspoken and

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willing to be honest with their managers. Therefore, managers should have the initiative to interact
with employees and keep them informed about any organisational change.

During the implementation of organisational change, it seems vital to have employees involvement
to contribute change to succeed. Without their involvement, change effort may be in vain.
Leadership is required from managers at this stage because the managers role is to guide and
direct employees along the way. Throughout the process, motivation is essential to support and
encourage employees from being de-motivated and having low morale that could affect other
workmates.

As soon as the change is implemented, managers should be aware of employees reactions. By
being attentive, they can discover to what extent change affects employees. Organisational
change impacts that bring positive results into the restaurant industry do not necessary bring
positive outcome to employees. For example, managers should be aware that change of working
system may increase employees income with extra workload creating fatigue and low spirits.

Consequently, it is important for managers to have thorough analysis of the implementation of
organisational change in determining to what extent the change is beneficial to both better
restaurant performance and employees. Since the restaurant industry requires a high labour input,
managers should pay attention to different kinds of impacts imposed on employees. They should,
in particular, keep in mind employees motivation and create an environment that encourages
employees to accept change and sustain restaurants competitive advantage.

Further research interests will consider the longitudinal importance of the size of a restaurant to the
relationship between managers and employees when organisational change occurs and an
analysis of attitude and behaviour of employees.


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