ࡱ> 5@ Nbjbj22 XXRI9 XXXl---8,..lm2/:"0"0"08013]4Tlllllll$oRTqlX:1"1::l"080em???:8"0X80l?:l???a0@Xd80/ Ԑo-;b$j4m0mcBrn=BrHdllBrXd4M6&?s7_8444llll!)"?jll)FACTORS WHICH INFLUENCE THE SUCCESS OF SMALL HOSPITALITY ENTERPRISES Ph.D. Ines Milohni Faculty of Tourism and Hospitality Management, Opatija ines.milohnic@fthm.hr Summary This paper explores the factors which influence the increase of the success of small hospitality enterprises based on extensive research based on interviews with 115 managers of these enterprises in the Kvarner Riviera region. The aim of this research is to identify the manners and possibilities of increasing business success in consistence with the needs of modern market. The research comprises the quality grades of business success of small hospitality enterprises, as well as the factors which influence the business of small hospitality subjects. Results of the research point to the fact that the management is not the only factor which influences the success since the important factors, which influence the business, exist on a mezzo (local community) and macro (state) level. Proposals of measures and actions which can improve the small hospitality enterprises business success with the purpose of increasing competitiveness are stated in the closing section of the paper. The research had shown that the only possible solution is the partnership which should be ensured at all management levels, as the basis for competitiveness of both small hospitality enterprises and the tourism destination itself. Key words: small hospitality enterprises, management, success, partnership INTRODUCTION It is an irrefutable fact that the business success of the company to the fullest extent depends o its leadership, i.e. management. Management is the biggest factor which influences the success, nevertheless, there is a wide range of other factors which are difficult to spot or change. Those other factors which, besides management, can influence the success of a particular hospitality enterprise were explored and are to be discussed in this work which is based on an empirical research of small hospitality enterprises management. The research has, among other, included all views of small hospitality management on problems which they face on a daily basis in their business, and in the end, made proposals of measures and actions which are to be undertaken in order to increase the competitiveness. METHODS OF RESEARCH This paper will present only a part of the results obtained through the research of small hospitality enterprises management. It is a descriptive research taken on a specially chosen sample, on a one-time basis. Target group are the managers/owners of small hospitality companies. The results were obtained through the interview method, on a sample of 115 managers/owners of small hospitality companies on a model of Kvarner region. Data was collected through a specially structured questionnaire. Criterion which was set while forming the sample is based on the remarks on Trade law  and Accounting law which define the criteria for small companies, which in Croatia are companies that do not exceed two of three following criteria: Income in 12 months before balance 16 mil. kn (2,2 mil. ) Sum of balance after the loss deduction shown in active 8. mil kn (1,1 mil. ) Average number of employees in a year 50 Basic group was defined using the database of Ministry of sea, tourism, traffic and development. Elements were taken out from the core database into a sample carefully chosen for Primorsko-goranska County, especially within each of the countys districts separately, to obtain the best possible global proportionate picture on a Kvarner region level. Sample was obtained from 115 managers working in 37 different small hospitality enterprises in Kvarner Riviera. Small business subjects are, according to legal form of their business a majority (40 or 66,7%) registered as a private legal person i.e.(d.o.o.), while a third of the sample is registered as a trade (20 or 33,3%). Largest number of small entrepreneurs employ up to 20 people (86,7 %). The greatest group, also in the structure, is from 10-19 employees (38,3 %), followed by entrepreneurs who employ 6-9 employees (31,7 %), and 1-5 employees(16,7 %). The largest number of employees in the sample was 43. When comparing the type and category of accommodation objects, it is possible to conclude that the largest number is small hotels categorized with 3* (65 %). On second place are those with 4*(23,2 %). Therefore, hotels with 3* and 4* make 88,2 % of the sample, although objects from the Other objects for accommodation category were taken into account. Research methods are based on two basic principles which understand the use of descriptive and inferential analysis and the SPSS package version 11.0 (9) was used to analyze the data. FACTORS WHICH INFLUENCE THE SUCCESS OF SMALL HOSPITALITY COMPANIES Research on role of a manager in the increase of companys business success, managers personal traits, knowledge and skills was used to state the problem in this paper. Or the needs of this paper, it was necessary to spot the conceptual framework and put it into a model which includes the entirety of the most important connections and relations with the aim of stating the role of small hospitality companies in the increase of destination competitiveness. Picture  SEQ Slika \* ARABIC 1. Conceptual framework of the problem set through the research  Success of a company is largely influenced by its leadership, i.e. management. The research itself has shown that the most common problems are the following factors: state, local community, personnel, market and the existing ownership structure. Therefore, the following section of the paper will present the proposals and measures which are to increase small hospitality companies business success. Personnel The situation when the success of an organisation is questioned due to bad motivation of the personnel, i.e. their insufficient knowledge and skills, should undertake certain changes. Stressed changes could be approached in two ways: by constant personnel learning, educating and training or by employing new staff. Changes which are caused by implementing new technologies and changes in organisational strategy cause changes in the personnel. No only that, number of employees, in small hospitality companies of a seasonal character, is minimized. This is the very reason why these companies accept the approach of employing new personnel (they are open only during the season) and not the approach of constant personnel learning, educating and training. Flexibility to changes is essential for the success of a particular company. As employees are very sensitive to changes, this is the reason for accepting the right approach towards the changes, giving the proper significance to perfecting the knowledge, capabilities and skills of the employees with the purpose of accepting the changes more easily. The research has shown lack of quality staff which knows well the work in hospitality profession as a key problem in small hospitality companies business. To greatly improve the situation, the following is proposed: a) to give greater significance to hospitality profession, b) to change old-fashioned education programs and c) to work on permanent connection between science and practice in order to increase the quality (case study, work shop). Using the proposed measures, problem of personnel can be solved in a long run. Local community It is necessary to carry out an urgent change in the way of work and the local community actions, from a todays bureaucratic into a partnership oriented organisation. Ensuring a more successful business, not only in hospitality, but in all other fields connected to it (trade, agriculture, construction, crafts and other) in a long run is possible only through a partnership relation between local community and entrepreneurship. Besides the stated, the role of the state cannot be left out when discussing the entrepreneurship stimulation. State Duties of the state should be priority-tied to: a) introducing the changes and new definitions of tourism and hospitality developmental policy, b) ensuring new reasonable credit conditions, c) creating acceptable tax conditions (by lowering fiscal and parafiscal strains), d) redefining the strategic aim of already undertaken privatization of this sector and e) creating the goods and services market. Taking into account all elements in its surrounding, and playing the role as an active participant of the community (with the aim of improving the quality of life), is the most important task of management. Described actions are imposed as inevitable since the companys survival directly depends on the success of mutual actions with all the elements from the surrounding. This is the very reason why measures and actions from the management field should be approached. Management All present changes have contributed the change of the management paradigm. As a result, changes in style, tasks, strategy and overall role in modern companies have happened. Old characteristics of managerial success disappear and are broken, and completely new arise. Table  SEQ Tablica \* ARABIC 1. Characteristics of managerial success OLD, WHICH ARE DISAPPEARING NEW ONES, WHICH ARE EMERGING Slow reactionsFast reactionsStabile operationsFlexible operationsWide/multiple orientationFocused orientationAnalysis of the pastPrediction and intuitionHigh hierarchyLow networksStructured canalsFluid flowLarge, gaudy, vagariousFoundationsLists of actionsProceed till the end of the actionOrder and controlFreedom and dignityFeatureless relationsFriendly relationshipsSmoothing the problems overFacing the problemsAversion towards riskRisk is acceptableSource: Bahtijarevi `iber, F.; Management ljudskih potencijala, Golden marketing Zagreb, Zagreb, 1999, pg. 66 Tasks of successful managers are becoming huge. They need to know how to accept the chaos as a fact, but also as a market opportunity and not a problem. Modern manager is expected to act proactively, think positively and act innovatively. Foundations of such behaviour lay in skills, knowledge, information, and also in ethical norms, which are given a more and more important meaning. Management and employees are main carriers of progress, changes and competitive capabilities of the company. Therefore, more important importance should be given to managers permanent education, ethical behaviour training, business decision making, code of conduct introduction, but also development of a proactive creative spirit which brings benefits in a long run, and managers in hospitality industry today are not familiar enough with it. In short, if we want to become a part of a modern Europe, we need to have a sociably responsible management - management which knows well and uses the partnership method. Partnership is a methodology which creates a positive selection of quality managers under the existing competitors. Therefore, a sociably responsible management in the hospitality profession is not possible without the partnership. It is a carefully created relationship during a long period of time. A part of the relation are, in the first place, local partners (suppliers, customers, town and district tourist communities, competitors etc.) from the regional (county, inspectorial services, craft associations) to state level (relevant ministry, Tax authorities, Government etc.). As main measures and actions which should be implemented in the management field the following are proposed: a) to ensure the consolidation of business and enriching the contents, b) to create the prerequisites for a management oriented privatization, c) to create the development projects for investments stimulation and d) to stimulate the education and training of both managers and the personnel. Proposed actions are consistent with the European commission guidelines on small and medium entrepreneurship in tourism. Table  SEQ Tablica \* ARABIC 2. Present state and desired measures of small and medium entrepreneurship in the EU tourism Present state in the MSP managementMeasures to be undertakenNon-homogenous SMEPerfecting the advisory and developmental services for SMELack of high-skilled personnelPerfecting the elements of tourism education programs and the financial, marketing and management elementsLimited capacity and business information in the relationship of pleasing the overall demandImplementing permanent education programs Stimulating SME to create common organizationsDifficulties in business success measurementDeveloping market statistics Developing advisory services for SMELimited access to capitalIntroducing credit programs for SMESource: European Commission: Yield Management in Small and Medium-Sized Enterprises in the Tourism Industry, General Report, Luxemburg, 1997, pg. 1-328 Today we are witnesses of frequent discussions on development of small and medium enterprises in hospitality which stress the necessity of special care of wider community with the aim of creating favourable entrepreneurship surrounding, although relevant ministries, chambers, associations and banks have not yet shown a sufficient interest. Nevertheless, enrichment of the hospitality product and services has to be done by management, i.e. entrepreneurs. For this purpose, it is necessary to change entrepreneurial management ambience of Croatia tourism, toward the one which will, as the highest criterion of success, cherish capability of accepting new knowledge and technologies and transforming them into profit. Managers in the hospitality profession must know how to think and tackle extremely complicated, new, innovative, broader and radically different topics than ever before. Reasons for this can be found in a turbulent surrounding since the changes happen almost on a daily basis. To differ successful from unsuccessful managers, it is necessary to state that successful ones are those who, on time, recognize the need to change, they have adequate knowledge and skills to implement the changes and find a good way to implement the necessary changes. Changes of the so-far actions are to be implemented in at all levels: state, local, staff, banking and management field. In this manner, general development will be helped, above all, small entrepreneurship in hospitality. Therefore, small family objects will have the best chances on the market. CONCLUSION Kvarner Riviera has a long year experience and tradition in tourism and hospitality. Constant development of this profession has been deeply effected by the war and aggression in the 90s. Future must be based on an intensive valorisation of our own competitive advantages. Quicker adaptation to market changes can be ensured through small hospitality companies as the carriers of changes and destination development. Thanks to their significant advantages, these companies are today in the focus of a modern society and represent a growing competition to large hospitality companies. Therefore, stress should be made on forming the so called clusters of small hospitality companies, since the possibility of bonding the management still has not been widely used. This would enable stronger competitiveness of the companies mentioned, and, in the end, the overall destination. Small hospitality companies reflect and strengthen the characteristics which are unique and specific for the destination through food and beverages, architecture, language, local heritage, customs and the culture. They stress the differences and originality, therefore representing the leading role in ensuring and offering the best. Their business always has a certain dose of personality and individuality which cannot be achieved by large companies due to their standard procedures and actions. Market situation today is extremely complicated. Changes in the surroundings which are imposed occur more and more often, demanding a great flexibility of each of the companies towards market changes. It all influences the occupancy rates, better usage of equipment and technology, better motivation of the employees etc. These very possibilities positively affect the competitive abilities of these companies, i.e. the success of the present market position. Constant changes in the surrounding, stimulated by the socio-economic, political, market and other changes, impose and imperative of raising the competitiveness, no only of the management subjects, but the tourist destination, as well. Results of the research indicate the need of establishing a broader, stronger and partnership-oriented relationship of small hospitality management on one hand, and state, local community, banks and other institutions connected to them, on the other hand. In short, to date bureaucratic relationship needs to be replaced by a partnership one. The increase of competitive advantages of small hospitality companies, through an important role of management and other factors, will ensure a competitive destination. 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Wiley, Chichester, 2003 Ministarstvo mora, turizma prometa i veza Republike Hrvatske, www.mmtpv.hr/kategorizacija/25.10.2005./ Morrison, A.,Thomas, R., The future of Small Firms in the Hospitality Industry, ,International Journal of Contemporary HospitalityManagement, Vol. 11, No. 4., 1999 Sousa, S. D. at al., Performance Measures and Quality Tools in Portuguese Small and Medium Enterprises: Survey Results, Total Quality Management, Vol.16, No. 2., 2005 SPSS; Complete and to-end analysis with SPSS 11.0 Technical Report, 1-34 available at http:// www.spss.com/home_ page/up107.htm/17.10.2005/ Zakon o obrtu, (NN RH 43/03.) Zakon o ra unovodstvu, (NN RH 90/92, article 16.)   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