Abstract

This study assesses ‘The Effect of Strategic Management Practices on Organisational Performance of Hotels in Buea’. The objective of this study was to examine the effect of strategic management practices on the organisational performance of Hotels in Buea. With the specific objectives as; to examine the effect of strategic management on organisational performance, to determine the effect of customers relationship management on organisational performance of hotel in Buea, to assess the effect of strategic competitive positioning on organisational performance of hotels in Buea. To achieve the study’s objectives, a cross-sectional survey research design was adopted. No sampling technique was used since the study targeted all the 50 hotels of the study population. The collection of data was actualized through the use of questionnaires and analysed using percentages, mean, standard deviation and multiple regression model. Findings show that, the study findings show that there exists a direct relationship between strategic human resource management practices and organizational performance of hotels in Buea. That is, the more an organisation implements strategic management practices, the higher the level of performance. This study also revealed that, organizational performance is improved in hotels in Buea because of the high implementation of strategic management practices. The study recommends that management of hotels in Buea should implement the different types of strategic management practices but should focus more on customer relationship management and strategic competitive positioning because they have a high positive and significant effect on organisational performance while though strategic planning is negative its effect on their effect on organisational performance still remind significant so, they need to be reviewed.

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Organisational performance, within the context of hotels, refers to the extent to which hospitality businesses achieve their goals and objectives. This concept is multi-faceted and includes a variety of financial and non-financial metrics, such as profitability, customer satisfaction, service quality, brand recognition, operational efficiency, and innovation (Kaplan & Norton, 1996; Richard et al., 2009). Organisations should aim to be efficient in their operations and also offer a quality service that is appropriate for their target customers. Iravo et. al. (2013) state that one of the important questions in business has been why some organisations succeed and why others fail and this has influenced a study on the drivers of organisational performance. Awino (2011) asserts that for an organisation to be successful it has to record high returns and identify performance drivers from the top to the bottom of the organisation. Njihia et. al., (2013) highlight performance measurement as one of the tools which helps firms in monitoring performance, identifying the areas that need attention, enhancing motivation, improving communication and strengthening accountability. Fwaya (2006) views performance as a formula for the assessment of the functioning of an organisation under certain parameters such as productivity, employee’ morale and effectiveness. Kiragu (2005) highlights performance in terms of four perspectives which are the financial, customer, internal processes and innovativeness.

The financial perspective identifies the key financial drivers of enhancing performance which are profit margin, asset turnover, leverage, cash flow, and working capital (Odhuno and Wadongo, 2010). The customer focus describes performance in terms of brand image, customer satisfaction, customer retention and customer profitability. Internal processes involve the efficiency of all the systems in the organisation while innovativeness is concerned with the ease with which a firm is able to adapt to changing conditions. The BSC retains the financial aspects as key in measuring performance while it adds other drivers of future performance (Mucheru, 2008).

According to Pearce and Robinson (2011), strategic management practices encompass the processes that organisations use to formulate, implement, and evaluate their strategic goals. These practices provide a framework for making key decisions, managing resources effectively, and responding to the ever-changing dynamics of the marketplace. Three strategic practices are examined in this research: strategic planning, strategic CRM and strategic competitive positioning.  Strategic planning involves setting long-term organisational goals and developing action plans to achieve them. It includes processes such as environmental analysis, strategy formulation, resource allocation, and performance evaluation. Organisations must plan strategically to ensure that they are meeting their objectives, and able to adapt to changing conditions.

According to Porter (1980), strategic competitive positioning involves an organisation choosing a unique position in the marketplace that enables it to build a sustainable advantage over its competitors. This might involve selecting a market niche, using a cost-leadership approach, adopting a differentiation strategy or making other strategic decisions that will provide them with a competitive advantage in the marketplace. There are four basic elements of strategic management practices which include strategy formulation, implementation, evaluation and control (Wheelen & Hunger, 2008). This is also known as the strategic management process. Strategic management practices are influenced by a need for change for organisations, a need for evolution and a need to improve corporate performance. Strategy formulation involves the vision, mission, specific objective setting and core values of an organisation. Strategy implementation involves operationalising the set objectives and goals at the formulation stage. Strategy evaluation and control is about following up on the implementation to identify the working strategies and find out if they reflect the desired results.

The effective implementation of strategic management practices is a key driver of organisational performance. Organisations that effectively plan, use technology wisely and have a strong strategic position are more likely to achieve their goals. This might include increased profitability, customer satisfaction and employee engagement, as well as enhanced sustainability. Effective strategic planning enables organisations to identify opportunities, allocate resources efficiently, and adapt to changing environments, resulting in improved overall performance. It helps to ensure that the organisation is working effectively to achieve its stated objectives. The adoption of ICT can significantly improve a range of operational processes such as reservations management, customer relationship management, marketing and business analytics. When used effectively, it enhances operational efficiency and contributes to improved customer satisfaction, and greater overall efficiency. It also provides a way of collecting and analysing data to improve organisational decision making. By selecting a unique competitive position, a hospitality business can differentiate itself from its competitors, attract its target customers, and gain market share, which in turn impacts financial performance. Effective positioning allows organisations to justify premium pricing, and enhance customer loyalty.

Globally, organisations have more and more continued to adopt various kinds of management strategies for the daily running of their firms. According to Porter (2012), the core objective of strategy is utilising an organisation’s core capabilities and competencies in addition to establishing and maintaining a distinctive strength in its service and product offering that would result to a sustainable competitiveness in comparison to the competition. Pearson and Robinson (2012) argued that the environment in which organisations operate is rapidly changing with different factors influencing the organisations. This is because organisations operate in an environment that is characterised by a myriad of challenges and uncertainties. Organisations are open systems and for them to deliver efficiently, they must learn to appreciate the present challenges and cope with the increasingly competitive environment which calls on firms to rethink their strategies. The days when companies could wait for clients to walk to their organisations are long gone thus organisations must realise that their services and products regardless of how they are cannot sell themselves (Kotler, 2013).

In developed countries, the use of strategic planning by major hotel chains such as Marriott and Hilton, has enabled them to effectively manage resources and maintain high levels of service quality. Online booking platforms, such as Booking.com and Expedia, have transformed the customer booking experience through innovative use of ICT. High end resorts, such as the Four Seasons have implemented strong competitive differentiation strategies by focusing on luxury accommodation and personalised customer service. In Europe, budget airlines, such as Ryanair, have demonstrated the benefits of cost leadership strategies through rigorous cost cutting measures. High end hotels, such as the Rits in London, provide high end services and bespoke luxury experiences while in Asia, high tech hotel groups such as the Mandarin Oriental, have demonstrated how ICT can be used to enhance operational efficiency and customer service. These organisations also invest heavily in staff training and innovation to ensure that they are able to meet the needs of their demanding clients.

In developing nations like Kenya, hospitality businesses, such as Serena Hotels, have effectively used strategic planning to enhance their competitive advantage in the region, and have built a strong brand reputation. Local businesses are increasingly using online marketing and online booking systems to attract more international customers. Eco-tourism and boutique hotels, such as Giraffe Manor, target specific niches, and thereby create a loyal customer base. In Nigeria, the adoption of digital booking platforms by hotels and resorts has revolutionised the hospitality sector in Nigeria. Hotels are beginning to use social media and digital marketing platforms to attract new customers. High end hotels, such as the Transcorp Hilton in Abuja, have adopted a differentiation strategy to attract high-end customers. Hospitality businesses in Ghana have embraced technology to improve online booking and customer management. Local operators are starting to use digital technologies, such as social media platforms, to promote their offerings, and to connect with their customers.

The hotels in Cameroon have been impacted by political instability, and requires more targeted research, and investment, to ensure that it can make a full contribution to the economic development of the country. The hotels in Buea includes a variety of hotels and restaurants that are serving the needs of the local community, and also tourists. There are a range of local operators, and also some higher end international chains. The implementation of sound strategic management practices is therefore essential for business success in the region. A 2020 report by the United Nations World Tourism Organisation (UNWTO) indicated that the hospitality and tourism sector contributed significantly to the GDP in developing countries, accounting for up to 10% of overall economic output in certain regions (UNWTO, 2020). Also, a report by the Hospitality Technology Next Generation organisation in 2023, showed that 90% of hospitality businesses were actively investing in ICT to improve customer service and operational efficiency (HTNG, 2023).

The hotels in Buea faces unique challenges and opportunities. The region attracts tourists, business travellers, and students, and therefore requires a range of different types of hospitality provision. This sector is influenced by local economic conditions and the ever-changing demands of customers. In order to remain competitive, it is essential that hospitality businesses adopt sound strategic management practices. This research is essential for understanding how businesses can improve their strategic planning, enhance customer relationship management, and adopt an effective strategic competitive position.

1.2 Statement of the Problem

Globally, the intense competition among of hotels, growth of innovations, including the emergence of sharing platforms pressure and the profitability of all these businesses. Furthermore, demand shocks caused by terrorism, pandemics, economic crises, climate, and other events imply hospitality businesses must reconsider strategies of what constitutes optimal staffing levels. More localised demand shocks are equally challenging for hospitality firms. Xie and Tveterås (2020) for instance found the crude oil price decline stripped away business travelers’ demand, while it boosted leisure demand in the hospitality sector in Norway. The mismatches between demand and supply of services imply additional costs from either the production or inefficiency in the resource use. There is often a lack of strategic vision and clarity of purpose within hospitality organisations. Many organisations have difficulty in defining their target market, and adapting their products and services to meet the needs of that market. In addition, some businesses struggle to integrate technology into their workflows in an effective way.

In developed countries like USA, some established hotel chains have struggled to adapt to the rise of online travel agencies (OTAs), which has reduced their levels of profitability (O’Connor, 2018). There are also challenges related to managing customer feedback, and developing strategies to attract and retain customers. Some organisations fail to implement effective strategic planning processes, resulting in a lack of direction, poor resource allocation, and missed opportunities. This is often due to a lack of expertise and leadership, and poor organisational planning.

These sectors in developing countries have been experiencing turbulent times with regard to its organisational practices in the last two decades which has resulted in generally low profits across the Hotel sector (Namusonge et al., 2012). The low international tourist arrivals have grossly affected hotel sales and posed a threat to hotel operators because most hotels largely depend on the International Tourism Market (Oketch et al., 2010). In Nigeria, many hospitality businesses lack the resources and expertise to effectively use ICT to enhance their operations and service delivery (Akinboade & Adeyemo, 2019). There is also a lack of skilled staff who are able to use technology effectively to improve organisational processes. There can also be a lack of strategic competitive positioning within developing economies, which is often due to a lack of market understanding, and an inability to differentiate services from the competition. Many organisations are overly reliant on traditional methods and lack investment in innovative products and services.

In the Cameroon context, high labour costs remain a challenge for a hotel that is critically dependent on staff to ensure proper service delivery and customer satisfaction (Alemayehu, 2020). The crunch between the downward pressure of competition on revenue and high costs, therefore, has made it particularly relevant for Nordic hospitality businesses to streamline operations. It follows that learning how to manage and to execute on the information provided by the ERP systems is key to performance. The increasing competition in the business environment has called for all organisations to embark on strategic management practices in order to remain relevant in the market. As the market begins to saturate, customer retention, customer acquisition and profit will be the key factor in determining the performance of the hotel. In short, under intense competition the organisation that has the largest customer base and highest customer retention rate will be a market leader in the industry (Gunu, 2009)

The hospitality sector in Cameroon faces challenges such as limited access to finance, poor infrastructure, and the impact of political and economic instability (Ewane, 2021). It is also a sector that lacks proper investment and support from local authorities. The sector requires more investment and support in the country. There is limited application of strategic planning in the sector, which leads to a lack of coordination and cohesion. This is often due to a lack of relevant expertise and a lack of resources.

The hospitality industry in Buea, a burgeoning tourist destination in Cameroon, faces significant challenges that hinder its organizational performance. Despite the region’s rich cultural heritage and natural attractions, many hotels struggle to achieve optimal performance levels due to inadequate strategic management practices. For instance, a study by Nguimkeu et al. (2020) highlighted that 65% of hotels in Buea do not engage in systematic strategic planning, resulting in misaligned goals and inefficient resource allocation. Furthermore, customer relationship management (CRM) practices remain underdeveloped, with only 30% of hotels utilizing CRM tools effectively to enhance guest experiences (Nkamnebe  & Nwankwo, 2021).

This lack of focus on customer relationships often leads to lower guest satisfaction and repeat business, which are critical for long-term success in the hospitality sector. Additionally, strategic competitive positioning is often overlooked, with many hotels failing to differentiate themselves in a crowded market. A recent survey indicated that 70% of hotel managers in Buea are unaware of their competitors’ strategies (Fouda  Tchouankam, 2022). These issues raise concerns about the overall sustainability and growth potential of the hospitality industry in Buea, necessitating a thorough investigation into how strategic management practices can be leveraged to enhance organizational performance. This study therefore seeks to address these gaps by exploring the specific effects of strategic planning, strategic CRM, and competitive positioning on the organisational performance of hospitality businesses in Buea.

1.3 Research Questions

1.3.1 Main Research Question

What is the effect of strategic management practices on organisational performance of hotels in Buea?

1.3.2 Specific Questions

1. What is the effect of strategic planning on organisational performance of hotels in Buea?
2. To what extent does Strategic customer relationship management affect organisational performance of hotels in Buea?
3. What is the effect of strategic competitive positioning on organisational performance of hotels in Buea?

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