The role of culture in implementing management contracts within the hotel industry in Oman
Creators: name: Al Amri, Sharifa Yahya Rashid
Publisher: name: RMIT University
Year: 2024
Subjects: classificationCode: 350716
subject: Small business organisation and management

description: Cultural difference is a primary factor both supporting and obstructing business cooperation. For example, international strategic alliances (ISAs) are affected by national cultures. The impacts of national cultures on ISAs in a diverse range of countries have been comprehensively explored and investigated. However, similar studies in Arab cultural contexts and emerging economies are comparatively rare, and the existing studies tend to be somewhat overgeneralised or performed by non-indigenous researchers, inviting criticism from researchers. Several types of alliances are affected by national culture. Most studies have concentrated on the area of equity multinational alliances, leaving the role played by culture in non-equity contractual alliances (such as licensing, franchising, partnership contracts and management contracts) under researched. It has been suggested that national cultural differences have stronger impacts on non-equity alliances; therefore, it is important to study non-equity alliances in the context of emerging economies in relation to the impacts of cultural differences. This thesis focuses on a type of non-equity alliance known as a management contract (MC) within the hotel industry in Oman, where the majority of five- and four-star hotels are managed by Western hotel general managers (WHGMs) and local midline managers (LMMs) under MCs.<br><br> This thesis aims to investigate the influence of cultural differences on planning, control and HRM-related issues in implementing MCs within the hotel industry in Oman. A qualitative approach to investigation, data collection and analysis was adopted and a research protocol employing semi-structured interviews was developed. Data collection involved interviewing 26 Omani and Western managers who were selected through judgemental and snowball sampling. Manual and NVivo analyses were used in equal measure to analyse data. The coding stage of the raw data began with a manual method, followed by in-depth axial coding and interpretation of different themes, implemented through NVivo 11.<br><br> The findings of this thesis contribute to the body of knowledge in several ways. First, determinants of selecting MCs as a form of collaboration in the hotel industry in Oman in preference to other types of alliances are unexplored. The following determinants are highlighted as reasons for selecting an MC alliance for collaboration in the hotel industry: using national resources without the burden of ownership; cooperative specialties; the ability to access new markets; control over management; access to skills to solve problems; performance efficiencies; local partner specialty of national rules and regulations; the ability to keep in touch with marketing schemes and new technologies; better learning outcomes; chances for greater internalisation; innovation of product and more options for local investments. Specifying these determinants for MC alliances has contributed to this research area, which is currently dominated by investigating equity alliances rather than non-equity contractual alliances.<br><br> Second, the findings uncover the main cultural differences between WHGMs and LMMs with respect to daily operational planning activities in MC hotels. The findings suggest that the aims and budgets of MC hotels are influenced by cultural differences among management and staff. Performance goals are particularly affected. Cultural differences appear to influence levels of trust among WHGMs regarding the ability of LMMs to arrange, implement and achieve major performance goals in a timely manner. The findings reveal that factors linked to cultural differences, such as views of time, level of dependency on relations and commitment levels, affect the timely achievement of performance goals and the levels of trust between WHGMs and LMMs. These findings validate the cultural differences between WHGMs and LMMs based on dimensions of cultural values: synchronised versus sequenced, universalism versus particularism, masculine versus feminine and individualism versus collectivism. Moreover, cultural differences between WHGMs and LMMs influence the allocation of budgets to different expenditures and the attainment of agreement regarding extra expenditure. The findings reveal that WHGMs demand a budget plan be followed exactly without alteration, whereas LMMs expect that budget allocation will be changed in accordance with staff needs. This finding concurs with the cultural differences between Western and Arab suggested by the universalism versus particularism cultural dimension. It was observed that studies into the impact of culture on budget in an Arab context are rare, thus these findings provide in-depth qualitative descriptions regarding culture-related inter-management differences.<br><br> Third, the findings uncover the possible differences between WHGMs and LMMs with respect to control-related issues such as competitor assessment, market assessment and dealing with consumers' responses. Cultural differences between WHGMs and LMMs, based on external versus internal, assertive versus dominant and masculine versus feminine, create different ways of assessing the market and different levels of flexibility towards necessary changes in the market. WHGMs demand that any changes with respect to the market be supported by rational reasons, whereas this is viewed as unnecessary by LMMs who believe that, because they are local, they know the local market better. These findings have contributed to the body of knowledge by investigating the impacts of cultural differences on market assessment as a substantial factor in controlling operational activities of MC hotels. Further, competitor assessment is found to be influenced by cultural differences, which create different levels of transparency in information disclosure and different levels of confidentiality in doing the assessment. The variations between WHGMs and LMMs in competitor assessment are due to cultural differences regarding the importance of personal relations, the importance placed on collective goals and the different views held regarding privacy and confidentiality between nations. These findings have contributed to the body of knowledge by linking the impacts of cultural differences on transparency level, confidentiality and control-related issues such as competitor assessment in a non-equity alliance implementation. Moreover, the findings reveal that cultural similarities between the manager and the consumer, the criteria used in assessing consumer feedback and the method of receiving complaints from consumers are crucial issues affected by cultural differences. The current findings make a significant contribution to the study of consumer response assessment and the impacts of cultural differences within an Arab cultural context, which has been hitherto neglected.<br><br> Finally, the findings reveal that HRM-related issues such as selection and recruitment, training and staff loyalty are affected by cultural differences between WHGMs and LMMs in MC hotels. LMMs appear to consider the social and cultural pressures faced by local staff a valid reason to show empathy when interviewing them for jobs. In contrary, WHGMs viewed this as unnecessary involvement of personal lives in business. This finding validates the cultural differences between Arab and Western suggested by the specific versus diffuse cultures and the concept of the 'welfare society'. Linking the impacts of cultural differences to specific HRM-related issues is another significant contribution of this thesis.<br><br> In conclusion, many studies have been conducted on the impacts of national cultural differences on the formation and performance of ISAs; however, investigation into the differential effects of these differences on various aspects of ISA operations - particularly non-equity ISAs - has been limited. Investigating this topic in an emerging economy and in an Arab cultural context thus contributes to this research area. In addition, using a precise cultural context such as the Omani culture works to address previous criticisms in the literature regarding the over-generalisation and indigenisation of Arab-context cultural studies. On the practical side, the present thesis has proposed programs to address the cultural challenges associated with operating multinational MCs in the hotel sector in Oman. These suggestions can inform policy makers, public agencies and partners in international hotel chains, helping them to address the challenges facing multicultural management teams in the