significance in determining organzsational performance”(Mullins 1999a, p.521).
The design effects efficiency and job morale as to the use of empowerment and division of work. It is the relationship between management and the people. Aramark are key investors in their people.
“Centralisation is always present to some extent in any organisation”
(Mullins 1999b, p.171).
Aramark Offshore is a decentralised because of
- rapid growth
- division of labour (UK, International)
- projects including outreach and remote areas
The Tannenbaum and Schmidt Continuum of Leadership Behaviour can compare leadership styles at Aramark U K and Sodexhio U K. Management and leadership influences the culture and design of an organisation.
Authorative Delegating
Boss Centred Leadership Empowerment
Careful control Trust
AUTHORITY OF
MANAGER
AREA OF FREEDOM
FOR EMPLOYEES
Telling Selling Constulting Joining
Mark Shipman, Chef Executive of Sedexho, has to deal with tough times due to “accounting anomalies” and will use a degree of authority to find a new balance in his organisation. In contrast Bill Toner, Aramark can delegate power to motivate staff, so he can trust them to make decisions.
Ultimate trust must be given to a specialist or when working internationally. Expatriates must portray organisation image and objectives.
2.3 Organisational Culture
As Aramark UK is a highly functional organisation, they resemble the matrix/task culture.
“To some extent, an employee’s level within the organisation hierarchy also
affects his of her perceptions about the culture of the organisation”.
(Oranisational Culture at Life Care Centres of America 2002, p.26).
The culture and design of an organisation depends on the division of labour, flexibility, empowerment level, customer expectations, and the relationship between the employees and the organisation. Aramark treat customers as partners finding solutions to their problems.
From controlling culture from the top of the organisation Aramark have an optimistic effect to the culture which reflects on employees.
“The work of key ‘cultural optimists’ show that this perspective not only
assumes the existence of unitary cultures in organisations but it also
applies that cultural control by top management is possible and desirable”
(Ogbonna and Harris 2002, p.35).
The matrix/task structure enables the expertise to spread through all levels and lets individuals slide into a different task in different contract as the organisation require. This aids Armark having expanded from traditional outsourcing in catering, cleaning and maintenance to IT, administration, helideck management and interiror design.
This may involve a specialist working for Aramark Offshore in an outreach project in Kazakhstan used to overcome a problem in Azerbaijan. Working along with B P Aramark can aid to improve living standards by using the abundance of natural resources in oil, gas and coal.
The added dimension of Aramarks optimism in internationalism is the “expatriate” in the organisation. Aramark must
“determine the right balance of influence and autonomy between a firm’s
headquarters and foreign establishments and effectively integrate
different cultures into a single organisation.”(Guzzo 1996, p.123).
By adding share incentive, this motivates staff at Aramark, who inject creativity into their projects which is preferable to a role culture where bureaucracy rules.
As said by Colin Henry (Aramark Offshore) Aramark strive to manage companies as their core objective to let the companies get on with their own business.
Locally a new, small growing partnership such at “food 4 us”, will adapt a power/web culture. This will be effective to enable control, customer contact, and delegation coming from management direct to its source. They will be centralised and have low specification. Charlton House Catering, experiencing rapid growth will be adapting by mixing role/matrix culture.
3. TRENDS AND THEIR EFFECT ON THE SECTOR
3.1 Overview of sector and Importance
In 2001 1.9 million people were employed in the U K hospitality industry, 110,720 in contract catering representing 8.1%.
Rapid growth in the industrial and the development or outreach catering and facilities management has opened opportunities for contract companies. Healthy competition has increased. New job opportunities exist. The sector contributes to the economy as part or service sector (75% UK Trade). Small catering businesses can take advantage of the Governments Small Firms Loan Guarantee Scheme from April next year.
The tables below show some of the key ratios in the UK contract catering industry.
Food as a percentage of turnover 1995-2000:
Wages as a percentage of turnover 1995-2000:
Average food cost per meal (p):
(Source British Hospitality Association 2002)
By evaluating the figures it is clear that food is becoming less important due to emphasis on facilities management. Wages are increasing and the prices of a meal are down due to budgets and customers demand for quality at a reduced price.
The table below shows annual turnover in the UK contract catering industry rose by 8.5% between 1999 and 2000.
(Source: British Hospitality Association 2002)
3.2 History of Sector
Pre war history is scarce, in the 1930’s vending commenced in the U S A (Davre Davidson), Aramarks founder. The Factory canteen order 1940 stated all firms employing more than 250 staff must provide a canteen. In 1942 the National Society of Caterers was established. Traditional catering was in factories (WW II), developing to education, healthcare, institutions, transport and military groups of people. In the mid 50’s airline travel was developing (Alpha), as were popular brands. In the 80’s travel and leisure increased as did the provision of food in offices. In the 90’s due to business needs facilities management began to grow including 1994 Aramark (previously ARA) introducing contracts to premises, office services and central services. The sector is now established globally by Compass group.
3.3 Offshore catering and facilities management
Traditionally the caterer was a “one off” provider of food offshore. Around 1984, the lobster days ended. Costs of feeding a person offshore was reduced from £10.75 per day to £3.25. (C.R.I.N.E)
Profits in catering offshore reduced to 5 -6 % from 35 – 40%.
In the early 1980’s around 10 companies provided catering facilities offshore, Aberdeen ,in 1999 only three provided 95% of services – Eurest (Compass), Aramark and Kelvin Universal.
The trend changed to facilities management, offering multi-skilled staff to operate cleaning, laundry, heli-deck, and all contracts – one invoice.
“Not so long ago” says Michael Moore, managing director Eurest, quoted “there would have been contractors for a variety of different sectors….Now we can offer one subcontractor for everything” he importantly adds “it’s the clients core objective to bring in oil from the ground.”(Platform for expansion1999, p.1).
Aramark operating out of Aberdeen have increased staff from 200 to 400, including healthy contracts with BP and Mobil. They provide a complete offshore hotel service along with business dining for functions on-shore.
Aramark are adamant that food standards will not drop. Their standards have been awarded with The European Food Safety Inspection Award on 9th September 2002.
3.4 Healthcare
More hospitals are being built increasing opportunities for facilities management and catering. The Audit Commission revealed that hospital catering must improve
The Audit stated
- Range per day from £3 - £20 spend per person
- No relation to cost and quality
- £8 million waste in unserved meals
A more recent Patient Experience Survey 20002 commissioned by Sodehxo Healthcare and Patients Association revealed
“Half of hospital patients did not receive food at the right temperature and
27% of meals delivered are not what patients asked for” (Half of hospital food… 2002)
The N H S has an annual budget of £40m to spend costing from £1.49 and £3 per day. Annual waste is around £45 million, an area available for facilities managers to improve.
Mike Munro, catering manager at Grampian University, revealed his in-house catering spent £26 per week per patient, his budget was £3million and his main problem was 25% annual staff turnover.
3.5 Education
Due to school mergers, closures and reduction in child population, employment and turnover has decreased. Trends are changing in food.
Top five favourite main courses:
Source: The Sodexho School Meals and Lifestyle Survey 2002
The trend is moving towards a new healthier diet, children choosing yogurts and the removal of chips in the top 5. Pizza still remains popular, as in many American schools and Universities ( Franchise brand pizza pizza). The catering industry has to negotiate with schools, parents and education departments to determine which food is best. Survey showed the average meal is £1.56 per day. This shows the problem the caterers have matching standards expected.
3.6. Meals on Wheels
The introduction of frozen food to the meals on wheels service has created opportunities for catering companies. Apetito is one of Europe’s biggest suppliers of frozen food and are approved by the NHS. They aim to offer nutritous food from a wide menu.
“From the end of September, private firm Apetito takes over from the
Woman’s Royal Voluntary service which has provided meals on wheels
Since 1995” (Cold comfort fear over frozen meals, 2002)
The national conference of the Advisory Body for Social Services Catering in September, Heike Hartmann of Appetite revealed that in France wine and 4 course meals, showing how cultures influence trends in food
“the French were also prepared to pay more for their meals: twice as much as the
Germans and Dutch average” (French old people…,2000).
This brings to light how catering companies have to be able to adapt to different food cultures, eating times and religions habits when considering internationalism.
3.7. Future Developments in Trends
Locally Charlton House Catering, Reading, have won the SAGE award for the best web site along with recognition for company growth. They serve up to 8 million meals a year to 800 employees.
Their turnover increased by 52% to over £22 million in 2001 with forecasted increase to £27 million this year. They are a good example of a growing trend for how to build up a business. Owner Ruby Jones and her husband started business in their spare back room.
“I started out washing dishes and I’ve done every job so I can empathise with
staff” (Lunch Lesson Eight 2002).
They use the same trend as of Aramark – their people are the unique selling point.
Bill Toner has worked with Gary Rhodes in previous employment, Trotter of Chicago, and currently with Brian Turner in Aramark (Parallel), in restaurant outreach services. This trend uses celebrities to promote Aramark and train staff. Aramark as joining sponsors of Gordon Ramsay Scholarships and will be sending their best chefs to train at Gordon Ramsey’s Restaurant Training Centre in Surrey, using £200.00 from their training budget.
Ramsay on Toner “Bill is quite young for his position – he’s dynamic and constantly pushing his guys”. (Afyia 2002, p.24).
Aramark use the recent ‘intranet trend’ for effective in-house training, significantly reducing training costs.
4 CONCLUSIONS AND RECOMMENDATIONS
Opportunities exist in the sector, and the rapid growth is a potential career opportunity for those as dynamic as Bill Toner, or as entrepreneurial as a small business manager.
Trends, in organisational structure include better working conditions and incentives.
Recommendations for Aramark are to keep control of management in relation to accounts, continue with improved staff welfare and to consider pressure on employees when setting goals.
5. References
Afiya, A. 2002, Licence to Skill, Caterer and Housekeeper 26 September, Reed Business Information, p.24.
About ARAMARK – Our vision, 2002, Aramark.com [Online], Available World Wide Web: , p.1. (Accessed 28 November 2002)
Birley, S and Muzyka, D. F. 2000, Financial Times Mastering Entrepreneurship, Prentice Hall, p.295.
Cold comfort fear over frozen meals, 15 August 2002, BBC News [Online], Available World Wide Web: , p.1. (Accessed 29 November 2002)
Guzzo, R. 1996, ‘The Expatriate Employee’, in Trends in Organisational Behaviour, Vol.3., eds. C.L.Cooper and D. M. Rousseau, John Wiley & Sons, West Sussex, England, p.123.
French old people enjoy most lavish meals service in Europe, 20 September 2002, Caterer.com [Online], Available World Wide Wed: ... (Accessed 13 November 2002)
Half of Hospital Food served cold, says survey, 28 November 2002, Caterer.com. [Online], Available World Wide Web: (Accessed 29 November 2002)
Lunch Lesson Eight – Motivation, Working Lunch, 6 March 2002, BBC News, [Online], Available on World Wide Web: (Accessed 4 November 2002)
Mullins, L.J. 1999a, Management and Organisational Behaviour. 5th ed. Pitman Publishing London, p.59.
Mullins, L.J. 1999b, Management and Organisational Behaviour. 5th ed. Pitman Publishing London, p.521.
Mullins, L.J. 1999c, Management and Organisational Behaviour. 5th ed. Pitman Publishing London, p.171.
Ogbanna, E. and Harris, L.C. 2002, Managing organisational culture: insights from the hospitality industry, Human Resource Management Journal, 12(1) p.35.
Organisational Culture at Life Care Centres of America, 2002, based on Helms, M.M. and Stern, R. Exploring the factors that influence employees, Human Resource Management Journal International Digest, 10(4) p.66.
Platform for expansion, 25 March 1999, Caterer.com. [Online], Available World Wide Web: ..., p.2. (Accessed 31 October 2002)
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