Understanding the practice of strategy communication and implementation between family and non-family members: a study of family-owned restaurants in New Zealand
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The increasing growth of family-owned restaurant businesses in New Zealand and the high uncertainty in the hospitality business environment have suggested the need for family-owned business owner/managers to develop appropriate strategies that can help enhance the business competitiveness and sustain long-term profitability. Researchers in business studies agree that communication is critical to the success of strategy implementation. However, communicating strategy in family-owned organisations can be problematic, due to the complexity of family in the organisations. Considering that there has been little research exploring strategy communication in the field of family-owned hospitality businesses, this study sought to investigate the practice of strategy communication. Specifically, it provided an exploratory study of how family business owner/managers communicate their strategies to non-family employees, how the employees interpreted the strategies communicated, what advantages to communication are provided by the family-owned business structure, and what barriers to communication, if any, are encountered during the implementation of strategy. To understand the issues concerning the practice of strategy communication, a qualitative research methodology was adopted in this study. Data were collected from semi-structured interviews with five business owner/managers and five non-family employees who worked in different family-owned restaurants and who were selected using a snowball sampling technique. Data were then coded and analysed based on identified themes using a grounded theory strategy. The research concluded that the communication of strategies in NZ family-owned restaurants was not ideal. Results reveal that there was apparent absence of strategy development in the participating restaurants. Strategies tended to be communicated merely as tactics or spontaneous actions. Many employees were also found to view strategies as instructions rather than defined action plans. In their attempt of achieving a shared understanding of strategies, owner/managers adopted various formal and informal tools when communicating the strategic messages, while non-family employees mainly relied on clarification, verification, and feedback seeking strategies. However, despite the findings that family business structure allowed the flexibility of strategic decision making, less formalised work relationships between the owners and employees, and frequent interactions among members to occur and therefore, supported the activities of strategy communication, many participants encountered issues relating to the failure in achieving a mutual understanding of the strategies. Factors such as inconsistent information provided by family owner/managers, the perceptual differences between the owner/managers and the employees on how to deal with strategic issues, and language problems were identified in this study. This study recommends that family-business owner/managers need to improve their skills and knowledge in strategic management and collaborate with strategic experts or forum discussion to share knowledge with other business practitioners, so that the issues of strategy communication can be eliminated and the need for careful strategy formulation in relation to business’ long-term sustainability can be acknowledged. In addition, it is also recommended that the owner/managers improve the use of socialisation tools and establish culture to support the achievement of desired strategic outcomes.