Introduction to Management in the Hospitality Industry, 10th Edition , Clayton W Barrows, Tom Powers

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Introduction to Management in the Hospitality Industry, 10th Edition By Clayton W. Barrows, Tom Powers, Dennis R. Reynolds

Email: richard@qwconsultancy.com

Chapter 1 Test Bank and Answers The Hospitality Industry and You Multiple Choice Choose the one best answer.

1. When we define the hospitality industry, we mean a) any operation that provides food and/or shelter to people away from home. b) any operation that entertains guests with liberality and good will. c) a “hospice” for travelers. d) all types of hotels and restaurants.

2. The notion of “liberality and good will” a) applies principally to commercial hospitality operations such as hotels and restaurants. b) can be applied to all aspects of the hospitality industry. c) has limited application in school lunch. d) is not really relevant to health care.

3. The notion of “liberality and good will” should be taken to heart by a) front line employees. b) front line employees and supervisors. c) front line employees, supervisors and managers. d) all employees, managers and owners.

4. The point of the “one industry” concept for students is that a) mastery of all elements of the industry is indicated. b) the size of the industry is encouraging because it suggests continuing growth. c) your next opportunity may come in an area of the industry in which you did not expect to work. d) the hospitality industry is part of tourism.

5. In terms of career advancement, the hospitality industry calls for a) a specialized work. b) a broadly-gauged generalist. c) a skill-centered education. d) a person with computer skills.

6. The basic work of managers in the hospitality industry calls for a) leadership, good attitude, and commitment to work. b) making the guest welcome, making the operation run correctly, and keeping control of operating costs. c) offering liberality and good will, running a tight ship, and keeping prices in line. d) being able to perform each job in the organization and make a profit.

7. Making a profit means that a) the operation always makes an excess of income over costs. b) an operation can lose money if there is a “negative” profit which is determined by debt repayment and return on investment including taxes. c) losses are covered by subsidies in institutional settings. d) in addition to recovery of costs there is enough left over to pay debts and provide a return to the owner.

8. Profit in the organization, as used in this chapter a) includes all revenue. b) can be considered to be negative, positive, or as “zero.” c) is a sign of personal greed. d) is not as important as good service to the customer in the long run.

9. According to management expert Peter Drucker, the most productive worker in today’s society is the a) knowledge worker. b) apprentice-trained worker. c) manager. d) skilled worker.

10. A knowledge worker is one who a) has extensive computer skills. b) applies ideas, information and knowledge to their work. c) has a post-secondary degree. d) has technical training and management expertise.

11. The hospitality industry is not a) service-oriented. b) one that produces a product on premise. c) one that has face-to-face dealings with guests. d) concerned with manufacturing and marketing a packaged goods product.

12. The answer below that is not cited by students as a reason for selecting a hospitality management program is: a) personal work experience. b) family background. c) enjoy working with people. d) the remuneration.

13. The outlook for employment in the hospitality industry looks as if it will be a) better than it has ever been. b) solid in most segments. c) bleak. d) about the same as it has been for the last 50 years.

14. In today’s social context, work a) is a necessary evil for survival. b) is just a job. c) produces something of value for other people. d) is a job with improved working conditions.

15. The hospitality industry offers excellent opportunities for a) those trained in the kitchen. b) those studying to be managers. c) entrepreneurs. d) people with various types of interests and capabilities.

16. The “job benefit mix” means a) the money and knowledge gained from any job. b) the compensation package (pension, health care, etc.) that are part of a job. c) the mix of financial and psychological benefits such as job security in a particular job. d) the benefit to be gained by working in a range of different jobs.

17. Profit in a business is treated in two ways a) Return on investment and return on asset. b) Dividends and tax. c) Return on investment and retained earnings. d) Gross profit and net profit.

18. Which of the statements about many part-time jobs in the hospitality industry available to students is not true: a) Most are dull and poorly paid. b) Students should select only the better paid jobs. c) These jobs are not very challenging. d) These jobs can provide skills and knowledge.

19. The concept of retained earnings as applied to work experience means a) saving a portion of your earnings for the interest it will earn. b) joining a stock-purchase plan with your company. c) accepting only a well-paid job that compensates you for your education. d) seeking learning as well as income from your job.

20. Who is responsible for what and who reports to who is an aspect of a) an empowerment organization. b) a formal organization. c) a social organization. d) a leadership organization.

21. The informal organization refers to a) a term used by some companies to describe their organization chart. b) a style of management that emphasized the use of employees’ first name. c) how formal relationships are arranged between employees in informal departments. d) the pattern of groups or cliques found within any social organization.

22. The “back of the house” of a restaurant refers to the a) entry or foyer outside the dining room. b) waiting area. c) dining room and other areas used by the guest. d) kitchen.

23. Important areas for observation in a field experience are a) formal and informal organization, physical plant, and management style. b) management training, opportunities for advancement, and customer type. c) uses of centralized systems, management by objectives, and location analysis. d) patterns in problem areas, management integrity, and the formal and informal organization.

24. Seeking work abroad in the hospitality industry a) is enhanced by having job experience. b) is relatively easy because U.S. companies operating abroad tend to hire Americans. c) does not require language skills because most tourists speak English. d) attracts many because of higher wages than at home.

25. Most personal job concerns of hospitality students include the elements of a) food preparation, service, and front desk skills. b) income, satisfaction, and professional status. c) job placement in restaurants, hotels, and institutional food service. d) job mobility, fringe benefits, and hourly wages.

26. The statement about work in the hospitality industry which is not true is: a) most students would prefer to work in a luxury hotel. b) fast tracking to the top is most likely in the QSR segment. c) institutional food service jobs have more regular hours. d) hotels and clubs offer more entry jobs than any other industry segment.

27. Some factors causing change in the hospitality industry are a) competition, service, technology, security, and diversity. b) trade barriers, sanitation, security, and internal competition. c) tourism, empowerment, sanitation, service, and prices. d) security, polarization, stagnant management, and computers.

28. The terrorist attacks in the U.S. on September 11, 2001 a) have both short-term and long-term effects on the hospitality and tourism industries. b) only affect the hospitality and tourism industries in North America. c) have not much effect in the hospitality and tourism industries. d) should be ignored by hospitality texts.

True/False 1.

The hospitality industry includes institutions that provide food and/or shelter, not just hotels and restaurants.

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The word “hospice” is another term for hospitality.

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One must posses a university degree to be successful in the hospitality industry.

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Quick service restaurants can provide opportunities to be promoted quickly.

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The hospitality industry today calls for a person with highly specialized training.

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You should choose your career path carefully because it is difficult to shift from one phase of the industry to another (such as from restaurants to hotels).

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The hospitality industry has a lot of movement of management personnel from one segment to another.

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It is important to learn skills like cooking and waiting tables because, as a manager, you may need these skills.

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An unskilled job in the restaurant or hotel industry has little value for hospitality management students.

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It’s better to take a good-paying summer job outside the industry than to accept one in the industry like dishwashing that won’t teach you anything.

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An organization chart is a diagram of the formal organization of a company.

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An important asset for a person entering the hospitality industry is an ability to work well with people.

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One way to become an independent business person is to buy a restaurant franchise.

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The informal organization is not so important and can be ignored.

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Today, the majority of Americans work principally for job satisfaction, but not for money.

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The notion of a job benefit-mix implies there’s both learning and earning potential in a job.

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Retained earnings in a business refers to the profit not paid out to stockholders.

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Retained earnings in your career refers to what you learn on a job which you can use to build your career.

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Learning on the job refers strictly to learning the job skills you’re employed to perform.

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The most important learning on a job may come from your observation of the way the operation is organized and run.

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Personal appearance, especially appropriate attire, is important when seeking a job.

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Checking up on the status of your employment application in person is not a good idea.

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Working on your own time on jobs you want to learn is really just another way to get ripped off.

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It is possible to learn about an operation from the vantage point of an unskilled worker.

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Who reports to whom in the organization is called its social organization.

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An organization chart is an excellent way to chart work areas with equipment and dining areas.

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One of the reasons that students gravitate to careers in fine dining restaurants and luxury hotels is because of the perceived glamour.

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Students prefer the hotel industry but the truth is that there are more jobs and faster tracking in the food service industry.

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With increasing polarization within the hospitality industry, a competitive advantage is to differentiate service.

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Travel and accommodation seem to reach the activity levels equal to those prior to September 11.

Short Answer Questions 1. The word “hospitality” was derived from __________________________________________ 2. According to management scholar Peter Drucker the “knowledge worker” is: ___________________________________________________________________________ ___________________________________________________________________________ 3. Giving up “income” early in your career means: ___________________________________________________________________________ ___________________________________________________________________________ 4. Retained earnings, as referred to in the text as a guide for hospitality career planning, are choosing those jobs which ___________________________________________________________________________ ___________________________________________________________________________ 5. The job-benefit mix is: ________________________________________________________ ___________________________________________________________________________ 6. Although one may have a menial job in a hospitality operation, it is still possible to learn a good deal through studying the following areas of the operation: a) ________________________________________________________________________ b) ________________________________________________________________________ c) ________________________________________________________________________ d)

_______________________________________________________________________

7. The areas that make up the front-of-the-house and the back-of-the-house in a restaurant are: a) The front-of-the-house is __________________________________________________ ________________________________________________________________________

b) The back-of-the-house is ___________________________________________________ ________________________________________________________________________ 8. Factors driving change in the hospitality industry are (describe at least four): 1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________ 4)_________________________________________________________________________ 9. Polarization in the lodging industry has basically divided operations into two categories of operations: 1)_________________________________________________________________________ 2)_________________________________________________________________________ 10. Describe the work of managers in the hospitality industry. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 11. Going “green” is reflects ______________________________________________________ 12. What does it mean when a hotel is awarded LEED ® certification? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 13. Name two changes related to globalization that have resulted in hotel companies operating in multiple countries.

1)_________________________________________________________________________ 2)_________________________________________________________________________ 14. Consider an international hotel company with whom you might like work. Identify the countries in which it operates. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 1 Multiple Choice 1.

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Short Answer Questions 1.

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hospice, originally meaning a medieval house of rest for travelers and pilgrims The knowledge worker is the man or woman who applies to productive work ideas, concepts, and information. focusing more on the knowledge side of the work, which will help gain higher income later. provide learning to benefit future career in the hospitality industry.

The job-benefit mix makes up income and knowledge derived from a job. managerial organization, physical plant, the back of the house, and the front of the house.

Front-of-the-house: dining room; back-of-the-house: kitchen polarization, competition, service, value consciousness, technology, empowerment, diversity, security, food safety and sanitation, globalization limited service and full-service (service-intensive) operations Answers will vary.

Corporate responsibility It means that the hotel has met the requirements for Leadership in Energy & Environmental Design established by the U.S. Green Building Council.

The two changes discussed in the chapter are ease of financial transactions and information flow.

Answers will vary.

Chapter 2 Test Bank and Answers Forces Effecting Growth and Change in the Hospitality Industry Multiple Choice Choose the one best answer.

1. The hospitality industry is shaped by a) sudden event such as the September 11th attacks. b) some gradual changes such as demographic changes. c) social and economic factors. d) all of the above.

2. The most important force driving changes in hospitality services is a) the baby boom. b) consumer demand. c) family structure. d) working women.

3. The baby boom refers to a) the repeated surges in young children that result from an earlier generation all coming of age more or less at the same time. b) the generation now aged 5 to 25. c) the impact of high spending of parents on their children for all kinds of goods and services. d) the surge in young children born after World War II between 1946 and 1964.

4. “Generation Xers” a) are affluent, middle-aged yuppies. b) favor formality and fine dining. c) are relatively young and face a competitive job market. d) are generally not price conscious.

5. The Generation Y are a) the children of baby boomers. b) the children born during the “baby bust.” c) another term to describe conformity found among baby boomers, especially in their dining and other food habits. d) the children born immediately after the end of the baby boom.

6. Between now and the year 2020, marketing aimed at appealing to families with children under five a) will become more sophisticated because of growing electronic supervision. b) will mean children’s menus in most food service operations. c) will probably be of less importance due to the decline in that age group. d) will target families using special rates and child-oriented services.

7. Teenagers and young adults between the year 2010 and 2020 a) will decrease significantly as a percentage of the population. b) will positively impact QSRs. c) will impact food service little because they have little buying power. d) will not affect the family and tourism markets.

8. After the year 2012 the demand for a) food service in all sectors will increase because of immigration. b) increased income is expected to drive the food service industry. c) services will increase for retirees. d) food service for baby boomers will decrease.

9. Psychographics refers to a) people’s interests. b) people’s different patterns of activities. c) people’s opinions. d) all of the above.

10. The percentage of women in the work force a) was less than 50% as recently as 1980. b) surpassed 50% in 1990. c) is increasing overall. d) is increasing in the employee ranks but decreasing in the managerial ranks.

11. Women in the hospitality industry a) rarely become bartenders, a job dominated by males. b) are under-represented in the executive ranks. c) are less numerous today compared to men in waitstaff positions. d) do not compete with men for managerial positions.

12. Family composition affects hospitality industry demand and the following has occurred: a) Families without children spend more on take-out than groceries. b) Empty-nesters have little disposable income because their children have spent it, leaving them with less to spend. c) Single-person households’ disposable income is the same regardless of gender and these households tend to spend approximately the same on food service. d) Single parents eat out more often than the average person because of work pressures.

13. Since 1980, the a) middle class has grown both in numbers and as a percentage of the total population. b) income of the lower class has increased the most proportionately. c) income of the mid-range middle class has stagnated, showing neither increase nor decrease. d) income of $75,000 or more has increased both in numbers and proportion.

14. Which statement is not correct about households without children? a) They are the largest segment of U.S. households. b) They spend more on take-out food than grocery. c) They are decreasing in numbers since 1970. d) They spend more on travel than any other household.

15. Income compared with dining-out occasions shows that a) the lowest income group does not dine out. b) the lowest and highest income groups dine out infrequently. c) as income decreases, people dine out less often. d) people with low incomes dine out as frequently as others, but choose lower-priced establishments.

16. Land resources are an important supply factor in the hospitality industry because of a) existing operations and environmental pressures. b) psychographics. c) population growth and capital costs. d) an increase in population mobility.

17. One reason cited in the text that some restaurant chains were bought by other chains was to a) diversify. b) acquire capital. c) downsize. d) acquire locations.

18. Food supplies are expected to a) continue to decline in the future but without threatening a crisis. b) are likely to enter a crisis stage by the year 2010. c) pose no major price changes in North America in the foreseeable future. d) be affected by the technology of automation.

19. Employee turnover in the hospitality industry is highest in a) full-service restaurants. b) casual restaurants. c) institutional food service. d) QSRs. 20. The female work force participation rate a) is expected to decline after the year 2020. b) has begun to decline. c) is expected to continue to grow at about the same rate as it has since 1975 until the year 2020. d) is expected to grow more rapidly for women over the age of 45.

21. Growth in the food service labor force in the near future is expected a) to increase in most skilled positions. b) to increase except for cooking positions. c) to decrease for wait staff. d) to double for tourism employees.

22. An example of “target-marketing” employees is a) a demographic study of the labor force. b) an application of psychographics. c) enticing retirees to work part-time in food service jobs. d) to hire illegal immigrants.

23. Work force diversity in the hospitality industry refers to a) the extreme variations in pay scale related to skill. b) the widely different availability of labor in different markets. c) the shortage of skilled as opposed to unskilled jobs. d) the presence of more minority workers and women in the work force.

24. In the future, solving labor problems in the food service industry will a) mean higher employee turnover. b) force management to lower wages. c) invariably mean higher food service prices. d) mean fewer fringe benefits and reduction of those already in place.

25. Forecasted growth in the food service industry over the next decade is expected to be a) about equal to growth in the workforce overall. b) exceed growth in the workforce overall. c) far less than the workforce overall. d) negative.

True/False 1.

Basic market forces such as consumer demand drives the hospitality industry today and in the future.

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Changing demographics impact all sectors of the hospitality industry.

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Demographics refers to the changing political structure of a country.

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The baby boomers brought about changes to food service as they passed from children to middle age.

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The growth of midscale limited-service properties was due, to some extent, to the baby boomers’ desire for informality and good value.

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Because of changing demographics, children will not be target marketed in the near future.

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A group that will be expanding between 2010 and 2020 is seniors.

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Diversity has stimulated the development and success of ethnic restaurants.

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The Native American population is expected to triple between 2000 and 2050.

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The majority of women who are in their prime child-bearing years are working.

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The composition of the family affect how disposable income is spent on food away from home.

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An interesting thing about income distribution is that people as a whole, no matter which level of income they are in, are food service customers.

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The minority population in the United States is growing rapidly.

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Single women spend about twice as much as single men on food away from home.

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Single parents eat out less often than average, but they are still food service customers.

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In 1980, over 50 percent of women were at work away from home.

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Even though people today are working, most plan their time so that they can prepare meals from scratch.

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Asian workers will grow more than 40% between 2010 and 2020.

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Locations for hospitality services are becoming scarcer because of recent changes in transportation systems.

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“Busy parents” account for the greatest percentage of dining out occasions for dinner.

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By the year 2020 there will a greater demand for food service workers.

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All segments of the hospitality industry will need more workers in the near future than today.

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The challenge for food service managers in the near future will be to attract and keep good employees because many other operations will have a greater need for employees.

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Most employees who work part-time in the hospitality industry would prefer to have fulltime jobs.

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The diversity of people entering the workforce in the near future is dramatically changing.

Short Answer Questions 1. The basic market forces shaping the hospitality industry are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. Some changes the hospitality managers are expected to cope with: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. Characteristics of Generation X that affect hospitality services are: ___________________________________________________________________________ ___________________________________________________________________________

4. In the next few years, which generation will have its greatest level of disposable income? ______________________________________________________________________________ ______________________________________________________________________________

5. What is occurring in the Middle East that is similar to changes in the U.S. in the 1960s? What are the primary causes? ______________________________________________________________________________ ______________________________________________________________________________ 6. The four basic structural changes which will shape the demand for hospitality services in the 21st century are: 1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________ 4)_________________________________________________________________________ 7. What is the rate of growth in terms of the U.S. population for Hispanics and African Americans? ______________________________________________________________________________ ______________________________________________________________________________ 8. What are the three most popular ethnic cuisines today? What other types of cuisine will likely to become more popular?

1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 9. One way in which family composition impacts on food service is: ___________________________________________________________________________ ___________________________________________________________________________

10. Describe the changes that have taken place in the income distribution in the middle class: ___________________________________________________________________________ ___________________________________________________________________________ 11. An environmental pressure that affects food service is: ___________________________________________________________________________ ___________________________________________________________________________ 12. The problem of hospitality locations today is ___________________________________________________________________________ ___________________________________________________________________________ 13. Define the term food miles. Why is it important that we reduce food miles? ___________________________________________________________________________ ___________________________________________________________________________ 14. How would you respond to the future needs in the labor force? ___________________________________________________________________________ ___________________________________________________________________________ 15. The biggest job for managers in the future with regard to labor force will be __________________________________________________________________________ __________________________________________________________________________

Answer Key Chapter 2 Multiple Choice 1.

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demand from consumers and supply of those things required to supply service Gradual changes such as demographic changes, fluctuating food costs, resource scarcity and work force diversity; sudden changes such as the September 11th attacks and SARS. They have a reputation for being worldly wise and pragmatic since they have lived through down-sizing years; they prefer informal and casual; they have a modest average income and are price conscious; ten years from now they will be in an excellent job market (this last comment should be a bonus as it is pulled from later material in the chapter).

Baby boomers Large number of births. A number of factors, including lower infant mortality rates, immigration, and an increase in the size of families, have all contributed to this region’s population growth. changing age composition of the population, diverse population, the proportion of women working, changing family composition and changing income distribution The U.S. population of Hispanics and African Americans continues to grow with percentages as a total of the population of 13 and 16%, respectively.

Americans’ favorite cuisines are Chinese, Italian, and Mexican, in no particular order.

Answers to what other cuisines will be added to this list will vary.

Answers will vary, but choices could include: families without children, empty nesters, single person households (male and/or female), single parents.

“Winners” have been University-educated people, retirees with investment income and women with full-time jobs; women’s income has increased; in 1998, the average income of the poorest fifth increased by only 2.4%, about the same amount that the top fifty increased. These changes are not as drastic as they have been in previous years—Industry Practice Note 2.3.

Scenic locations have been taken; environmentally sensitive locations are unavailable; resistance to restaurants because of noise, odor, and crowding; restaurants zoned out of locations land, i.e., scarcity of locations, and environmental pressures This term refers to the distance food is transported—in essence, from farm to fork. By reducing food miles, we can reduce the associated negative effects associated with greenhouse emissions from the transportation, among others. Reducing food miles can also enhance the sustainability for the related items as they must be produced closer to the place where the food is served.

Answer will vary. It is expected that there will be a shortage of labor; food service will be in competition with other service industries; managers will compete for employees and finding and retaining employees will be the biggest job of managers. The text suggested target marketing employees.

To find and retain employees

Chapter 3 Test Bank and Answers The Restaurant Business Multiple Choice Choose the one best answer.

1. Consumers spend approximately the following amount of their food budget on food away from home: a) nearly three quarters. b) almost half. c) almost one-third. d) less than one-quarter.

2. A recent survey indicated that a) 50% of households had eaten out in the past week. b) 25% of households had eaten out in the past week. c) 25% of households had eaten out in the last month. d) 98% of households had eaten out in the past month.

3. Food service expenditures a) have not competed with grocery store sales. b) have increased as a percentage of consumer food dollars. c) have decreased in real dollars spent on food. d) are concentrated in hotel restaurants.

4. The on-site sector of the food service industry accounts for a) 14% of food purchased away from home. b) 50% of food purchased away from home. c) 20% of food purchased away from home. d) 5% of food purchased away from home.

5. Total food service sales (in dollars) are highest in the following segment/s: a) the restaurant, cafeteria, and fast food areas. b) bars and taverns. c) contractors and caterers operations. d) on-site food service.

6. A segment within the commercial food service industry which has declined in sales is a) QSRs. b) drive-through restaurants. c) delivery restaurants. d) employee cafeterias.

7. The largest growth segment (as a percentage increase) in food service has been a) on-site food service. b) off-premise food service. c) motel restaurants. d) vending food service.

8. One reason of fine dining restaurants’ sales decline is a) more formalized service. b) Increased interest in value of food service. c) decline in sales as an industry segment. d) decreased interest in value by consumers.

9. Food service in the near future is expected a) to continue to grow. b) to decline. c) to remain about the same. d) to grow only in the fine dining area.

10. Dining is predominantly a) an event when people set out to impress their neighbors. b) a social event. c) a value-conscious event. d) a family-oriented event.

11. The role of the server in a restaurant is principally a) a mechanical one, that is, bringing the food. b) to entertain the guest. c) a combination of promptness and efficiency with anticipation of the guest’s needs. d) to represent the dignity of the restaurant and of the service profession.

12. Fine dining restaurants are not a) able to achieve major increases in productivity. b) basically labor-intensive operations. c) concerned with excellent service. d) located in large population centers.

13. In general, the eating and dining markets a) differ in that one serves biological needs and the other social needs. b) are the same because most restaurants fall into both categories. c) are in each restaurant segment, but QSRs fall into the dining market. d) do not overlap.

14. The terms “eating market” and “dining market,” as used in the text, refer to a) a contrast in the quality of food. b) a contrast between a predominantly biological and social event. c) the needs of some people for a subsistence diet contrasted to the wish of the wealthy for entertainment. d) human needs as opposed to social needs.

15. The most notable example of a restaurant serving the eating market is a) fast food restaurants. b) cafeterias. c) theme restaurants. d) ethnic restaurants.

16. Quick service restaurants are dominated by chains because of a) simple management. b) small crew size. c) frequent transfer of managers among stores. d) economies of scale and highly standardized product.

17. The proportion of off-premise food a) has remained about the same for some years. b) sold in drive-throughs has increased dramatically. c) has declined as a percent of total food sales. d) sold through carry-out has been declining steadily as sandwich shop sales have grown.

18. Delivery-only units make sense because a) any restaurant workers can be hired and they will have the required experience. b) they can be located on less expensive real estate. c) a peak meal time can be avoided. d) they eliminate driver liability.

19. In a QSR chain operation a) skilled labor is necessary at the operating level. b) prices may be somewhat higher because of marketing costs than in non-chain operations. c) menus invariably become complex. d) operations are simple but the system is complex.

20. Fast food management a) is simple because of small crew size and limited menus. b) is complicated by variable sales volume and employee schedules. c) concentrates its attention at the corporate rather than the operational level. d) is characterized by high turnover.

21. The following is a characteristic that distinguishes QSRs from other types of restaurants: a) highly stable sales volume. b) high degree of table service. c) chain domination. d) use of skilled labor.

22. New product introduction in fast food chain operations a) has occasionally disrupted national food prices. b) is easier and quicker than in traditional operations. c) has to be done frequently. d) confuses the customer.

23. A POD is a a) way of increasing market presence. b) marketing term for advertising in chain restaurants. c) management term for a computer analysis. d) specialized type of purchasing.

24. Family restaurants a) are dominated by independents. b) have rigid menus that are difficult to change. c) are characterized by complex service systems. d) use straightforward operating systems.

25. HMRs are a) most popular among singles b) in demand mostly because of increased income. c) operations that serve food off-premise. d) used mostly by low- and middle-income married couples.

26. Which is not the same characteristic of pizza, seafood, and other midscale restaurants a) limited menu and service. b) highly efficient productivity. c) low food cost. d) extensive service.

27. “Eatertainment” restaurants a) are categorized as casual restaurants. b) feature food as entertainment. c) are unique because they are located in theme parks. d) are generally low-budget operations.

28. A “freestanding” restaurant is a restaurant that is a) owned by an independent operator and is not part of any chain. b) part of a chain, but the restaurant is owned by the franchisee and not by the company. c) a restaurant that is not leased, but wholly owned by its operator. d) not part of a larger entity, but rather is located in its own building.

29. A characteristic common to restaurants that are part of larger organizations is a) they were originally built as a service to customers who were drawn to the location for another purpose. b) that they operate at a non-profit level as a service to the primary business. c) that they are generally free-standing units. d) extensive menus, usually family or casual in type.

30. Overall, restaurants a) are growing at about the same rate in all segments. b) have become less specialized. c) have outpaced population growth in sales. d) in the fine dining market are becoming successful in small towns.

True/False 1.

Americans spend approximately one-third of their total income in commercial restaurants.

2.

The largest growth sector in food service has been off-premise sales.

3.

While eating and dining are integral to each other, in some settings eating is more important than dining.

4.

The “eating market” emphasizes economy and speed.

5.

QSRs, casual dining restaurants, and on-site food services have all shown a healthy growth in recent years.

6.

Customers today are generally displeased with the value they receive at fast food restaurants.

7.

Successful fine-dining restaurants owe their achievement to the chef’s ability and excellent service.

8.

Casual dining, unfortunately, means poor quality food and unprofessional service.

9.

The three most popular types of ethnic restaurants are Mexican, Italian and Chinese.

10.

Fine dining has gained more market share from casual upscale dining in recent years.

11.

Multiple-concept chains do not operate well in the casual restaurant segment.

12.

To compete with casual restaurants, some fine dining restaurants have moved to a less formal atmosphere and lower prices.

13.

The segment of the restaurant industry that is patronized by nearly everyone is QSRs.

14.

A reason why it is difficult to add delivery to an existing restaurant operation is that delivery customers and restaurant customers order meals at the same time.

15.

The highest volume of off-premise sales occurs at lunch time.

16.

One of the three reasons customers give for buying carryout dinners is that they want home cooking.

17.

Because of the power of advertising, it is impossible for small regional chains to compete successfully with the national chain leaders.

18.

In the future, QSRs are expected to continue to provide excellent opportunities and generous compensation for qualified managers.

19.

Family restaurants are another term for QSRs.

20.

The top two restaurant chain types are hamburger and pizza.

21.

Characteristics of fast food restaurants are domination by chains, simplified menus and operating formats.

22.

Even though menus are simple in chain-operated QSRs, purchasing is complex.

23.

Distribution, as a marketing problem, means gaining market presence in a variety of food service markets.

24.

PODs, as developed recently in food service markets, are an example of expanding “distribution.”

25.

A characteristic of family restaurants is a full-service menu and a small preparation staff.

26.

Ethnic restaurants are not a mainstay in the U.S. restaurant industry and people’s interest in ethnic food is decreasing.

27.

“Eatertainment” is a restaurant concept which combines entertainment and food service.

28.

Food courts, usually associated with shopping malls, are now found in other settings such as in hotels and hospitals.

29.

Most modern executive chefs do not cook in the kitchen, but focus on managing food costs, labor costs and other operational expenses.

30.

Midscale restaurants make use of systems similar to those of fast food such as simplified menus and production system but add table service.

Short Answer Questions 1. Define the dining market and the eating market: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. List the three main types of off-premise dining and give an example of one of each in your community: 1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________ 3. List reasons why it is difficult to add delivery service to established restaurants: ___________________________________________________________________________ ___________________________________________________________________________ 4. Fine-dining restaurants generally require the combination of three attributes which are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________

5. Name the unique characteristics that distinguish QSRs from other restaurants: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 6. Explain the fast-casual segment and why it becomes more popular. Give one example of a restaurant in this category: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 7. Compare family restaurants with quick service restaurants: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 8. Restaurant types that are important players in the hospitality industry are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 9. The three types of casual restaurants described in the text are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 10. Chain operators generally employee two methods for launching a new concept or brand.

Describe each of these. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

11. Sales at QSRs have increased over the last several decades. As a percentage, what are the sales from QSRs as compared to total restaurant sales? How much customer traffic do they see? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 12. Which segment appeals to you the most in terms of a possible career? In your answer, provide information about the segment as well as specific restaurants within that segment, including a complete description of the chain or concept. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 13. Referring to Industry Practice Note 3.1, what made Larry Swanger successful and an franchisee? What traits do you have that are similar? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 14. Consider a fast-casual restaurant that you have visited. What did you like best about it? What items on the menu would not likely be found in a QSR? ___________________________________________________________________________ ___________________________________________________________________________ 15. Give an example from your community of a food service operation that is part of a larger organization: ___________________________________________________________________________

Answer Key Chapter 3 Multiple Choice 1.

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b d b a a d b b a b c a a b a

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d b b d b c a a d c d a d a c

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F T T T T F T F T F F T T T F

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T F T F T T T T T T F T T T T

Short Answer Questions 1.

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Restaurants serve the dining market predominately for their social needs, and the eating market for their biological needs. carry-out, drive-through and delivery; answer will vary for example of each the peak demand for food is the same for both and service skills are different 1) a large market, 2) skilled workers, and 3) devoted management location makes eating-out convenient, simplified menus, unskilled labor in operation, attractive price, simple operating format, fast service, and self service; see also table 3.3 The fast-casual segment is a natural extension of the traditional quick service segment. It offers full service quality food in a quick service format. This kind of restaurant is needed because the baby-boomers enter middle age and can afford a more expensive restaurant with a more upscale environment and more extensive service.

Examples will vary.

Family restaurants offer a wider selection than QSRs thus resembling full service; the preparation staff in family restaurants is often limited to a few cooks, thus resembling fast food; most foods are prepared-to-order like fast food, but frozen and convenience foods are commonly used; family restaurants are dominated by chains as are QSRs; family restaurants use a straightforward operating format as do QSRs; the cost of training employees in both is simplified; family restaurants use table service compared with selfservice for QSRs. QSRs, midscale restaurants, casual, and high-check average (fine-dining restaurants; or, student could use the categories of luxury, family, cafeterias, and fast food). Both categories were given in the text. specialty, ethnic and “eatertainment”

10.

Concepts for a new chain operation (whether casual upscale or otherwise) are developed through extensive market research, tested in one or more pilot operations and, once proven, rolled out to the regional or national market. The other approach involves the purchase of a promising independent operation, fine-tuning the concept for a wider market, and then rolling it out to regional and national markets.

11. QSRs account for slightly less than half of all restaurant sales (compared to 28% in 1970) and nearly three-quarters of customer traffic.

12. Answers will vary.

13. Larry Swanger has a passion for the product, knew that he wanted to buy into a franchise rather than develop his own concept, and identified Subway’s growth potential. He is a hard worker and values honesty and integrity. The second part of the answer will vary by student.

14. Answers will vary.

15. Answers will vary.

Chapter 4 Test Bank and Answers Restaurant Operations Multiple Choice Choose the one best answer.

1. If you wish to be promoted rapidly in the restaurant business, usually your best avenue is through a) human resources. b) accounting. c) marketing. d) operations.

2. The key responsibility for the front of the house is a) fast service. b) excellent food presentation. c) guest satisfaction. d) personal charm.

3. The kind of service that should be delivered has a great deal to do with a) socializing with guests. b) what guest wants and expects. c) suggestive selling. d) speed of service.

4. Empowerment in the front of the house refers to a) training servers to not tolerate rudeness from guests. b) the power management has to control the service transaction. c) the right of the guest to personal satisfaction in the dining experience. d) giving employees enough discretion to favorably affect the guest’s experience.

5. Control in the front of the house a) is an accounting office function. b) involves guest check and cash control. c) is no longer a problem since POS systems take care of it. d) must be accomplished in a way the guest cannot detect.

6. A role not that of the front of the house is a) greeting. b) seating. c) cashiering. d) food preparation.

7. In the front of the house, supervision is a) ideally performed by a senior manager. b) unnecessary since each server is in charge of their own station. c) best accomplished indirectly. d) really in the hands of the guest who decides whether to tip or not.

8. The back of the house has as its main responsibility the a) fast and efficient preparation of food. b) cash control. c) quality of service. d) good working relationships with service staff.

9. Cost control in the back of the house is accomplished most effectively by a) a POS system. b) portion control. c) purchasing practices. d) keeping track of what guests eat and reducing portions if possible.

10. Controlling costs and quality in the back of the house a) cannot be combined. b) are parallel activities with food production. c) are under different groups of managers. d) are the responsibility of the cooks rather than the manager.

11. The most important factor in portion control that will control costs is to a) give portions that, on average, are a certain weight or measure. b) keep portions small to control costs. c) give precisely the same portion to each guest. d) give generous portions if the price of food decreases.

12. Which one is not a strategy to increase safety in restaurants: a) to replace the chef with several cooks and a kitchen manager. b) to install cameras at entry points. c) to open and close the restaurant by pairs of managers instead of individuals. d) to re-evaluate the opening and closing procedures.

13. The major functions of the restaurant “office” are a) administrative coordination and accounting. b) personnel management and clerical. c) correspondence and accounting. d) personnel administration and correspondence.

14. Bookkeeping and clerical work is a) unnecessary in small units of chain operations. b) usually the duty of a full-time accountant in most small independent food service operations. c) a task performed by the general manager in a large operation. d) highly automated in chain food service operations.

15. “Management presence” is a) the need to have the manager on duty to greet guests and represent the operation. b) the use of video cameras in areas where cash or other valuables are in use. c) the need to have someone in the unit who is in charge at all times. d) the need to have the restaurant manager in the food production area to control portions and other costs.

16. When more than one manager is present in a food service operation, a) their function is to spell each other in the front of the house. b) their primary responsibility is to insure profitability. c) they generally have entirely different roles and responsibilities. d) they must act as a team to maintain costs and quality standards.

17. Opening duties in a restaurant a) must be carried out by the manager. b) are unimportant and performed by a lead employee. c) involve unlocking secure areas and starting equipment. d) include making set-ups and cleaning the back and the front of the house.

18. Work in the front of the house that is done by the waitstaff outside of meal times is called a) back of the house work. b) set up work. c) sidework. d) paper work.

19. The stakeholders in restaurants are a) guests, owners, and the government. b) stockholders, suppliers, and guests. c) guests, employees, and owners. d) people who are owed money by the restaurant.

20. The basic approaches to increasing profits are to a) raise prices and reduce costs. b) increase check averages and attract new customers. c) increase sales and reduce costs. d) build a sold reputation with good operating practices and intensive advertising.

21. Increasing the size of the customer base a) can be accomplished by suggestive selling. b) is risky because it can result in decreased sales. c) is generally done with advertising, promotion, and word-of-mouth. d) is done by increasing prices.

22. Using a restaurant’s existing customer base, sales can be increased by a) decreasing the check average. b) bringing in new customers. c) selling to more people in the community. d) menu redesign, “bundling” of food items, and suggestive selling.

23. Basically, the bottom line in increasing restaurant sales is a) consumer demand. b) employee training. c) manager’s devotion. d) the owner’s mandate to make a profit.

24. Reducing costs in a restaurant a) usually results from finding cheaper materials with which to make a food product. b) is best accomplished by cutting payroll. c) is less important than it appears. d) can result from improved efficiency.

25. Cost of sales is a) sales and marketing expenses. b) fixed costs. c) cost of product consumed by the guest. d) bar (or beverage cost) less food cost.

26. Controllable expenses are a) variable costs. b) programmed fixed costs. c) interest, rent, and taxes. d) costs that cannot be controlled by employees.

27. Capital costs are a) unchanging, fixed costs. b) costs that vary with the value of fixed assets. c) stockholder or owner’s expenses. d) a fee based on net capitalization imposed by local governments.

28. A profit-and-loss statement is also called a) a statement of income and expense. b) an accounting statement. c) a statement of sales, controllable expense, and capital costs. d) a profit statement.

29. An average check a) is the total sales divided by the number of guests. b) is different from the average cover. c) is the total sales divided by the number of guest checks or parties in the restaurant. d) is an example of a prime cost.

30. Food cost is generally higher in a) quick service restaurants. b) casual restaurants. c) family restaurants. d) fine-dining restaurants.

True/False 1.

The front of the house is an operating system, a business place, and a social setting.

2.

The biggest job in the front of the house is to satisfy the guest.

3.

Service in restaurants differs based on customer needs and expectations.

4.

Speed of service is the most important part of good service in all restaurants.

5.

Servers should take responsibility for securing payment for everything ordered by customers.

6.

Employee empowerment is a characteristic of an earlier restaurant industry.

7.

Service is unimportant in QSRs.

8.

It does not matter if a manager is not on duty during meal times in the front of the house.

9.

The back of the house is the part of the operation where employee-guest interaction is at a minimum.

10.

Portion control is less important today than it once was.

11.

While back of the house responsibilities emphasize control, that is not true in the front of the house.

12.

Sanitation and housekeeping are primarily a front-of-the-house responsibility.

13.

The “office” is where the manager works.

14.

Management presence, as used in the text, refers to the manner managers adopt in public places.

15.

Closing responsibilities in a restaurant are usually those of a manager.

16.

A complete setup is necessary in the food production area.

17.

Sidework is best done during meal periods.

18.

Today it is critical that a restaurant have written policies for serving alcohol.

19.

Salary levels for food service managers vary depending upon the size of the operation, the location of the restaurant, and its sales volume.

20.

Sanitation and security are key responsibilities in closing duties.

21.

The only way to increase sales is to bring more customers into a restaurant.

22.

A combination meal can reduce the price per item, but increase the check average.

23.

Generally, by reducing menu prices to attract customers, food costs are increased and labor costs decreased.

24.

Controllable expenses in a restaurant are costs that may be expected to vary to some degree and over which operational management can exercise direct control.

25.

Labor costs are controllable expenses.

26.

Capital costs include rent, taxes, insurance, interest, and depreciation.

27.

Food costs reflects management pricing and the kitchen staff’s efficiency.

28.

Increasing sales by bringing more customers into a restaurant and without changing menu prices, should not change the food cost percentage.

29.

If a restaurant cannot handle any more customers, sales cannot be increased.

30.

The number of covers is also termed “guest count.”

Short Answer Questions 1. The two major operational areas in restaurants are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 2. Typically, the three defined areas of the restaurant are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 3. In dealing with restaurant complaints in the front of the house, there are two steps that are taken: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 4. The major responsibilities of the supervisor or manager of the front of the house are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 5. The principal responsibilities of the back of the house are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 6. The areas of responsibility in the “office” are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

7. The responsibilities of managers who act as a team is to ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 8. The basic stakeholders in a restaurant operation are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 9. Restaurant sales can be increased by: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 10. The common techniques in the restaurant business for reducing costs are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Problems 1. Determine the food cost percent: Food cost = $ 9,520 Food sales = $32,138 Food cost % = _____________________ 2. Determine the beverage cost percent: Beverage cost = $2,810 Beverage sales = $8,040 Beverage cost % = __________________ 3. Determine the average food cost percent and beverage cost percent: Food sales = $46,500 Beverage sales = $3,720 Food cost = $13,252 Beverage cost = $893 Food cost % = ______________________ Beverage cost % = ___________________

4. Determine the average cover: Food sales = $831.76 Number of checks = 37 Number of patrons served = 148 The average cover = ___________________ 5. A 60 seat restaurant operating 7 days a week has an average check of $8.00 and serves 270 persons, on average, each day. Determine the total increase in sales each day if the average cover can be increased to $8.25.

The daily increase in sales is _____________________ The increase in sales for one year would be ______________________.

Answer Key Chapter 4 Multiple Choice 1.

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d c b d b d a a b b c a a d c

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d c c c c c d a d c a b a a d

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T T T F T F F F T F F F F F T

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T F T T T F T T T T T T T F T

Short Answer Questions 1. the front of the house and the back of the house 2. the front of the house, the back of the house, and the “office” 3. a willingness to listen to guests’ complaints and a system in place that permits any error to be corrected 4. guest service (meet and greet, deal with complaints), employee training, assessing quality of the operation, cost control and dealing with cost problems, waitstaff and cashiers, opening and closing duties 5. preparation of quality food, food safety, sanitation, cost control of food, management of supplies, timely service of food 6. administrative assistance to the general manager and staff, office routines such as correspondence, phone calls, etc.; bookkeeping (processing of cashier’s deposits, payroll, bill payment, cost-control reports, etc.)

7. give direction to the unit, to maintain standards (quality and cost), and to secure the best possible experience for the guest 8. the customer, the employees, and the owners 9. increase the customer base or increase sales to customers that you already have 10. careful scheduling of employees, improved portion control, careful monitoring of supplies; the key to reducing costs is to carefully review the operation to find places where waste can be reduced without loss of quality; see also figure 4.1 Problems 1.

29.62% 4. $5.62 2.

34.95% 5. the daily increase in sales is $67.50; the 3.

Food cost % = 28.5%; beverage cost % = 24% increase in sales for one year would be $24,637.50

Chapter 5 Test Bank and Answers Restaurant Industry Organization: Chain, Independent, or Franchise Multiple Choice Choose the one best answer.

1. When discussing independents and chains a) there are few competitive advantages of independents as compared with chains. b) franchised units have aspects in common with chains but not with independents. c) independents have strengths in some areas that chains find difficult to compete with. d) the role of chains is changing but that of the independent has remained static.

2. Economy of scale means a) that as a chain grows the unit cost of centralized activities decreases. b) the benefits of advertising are more advantageous to the independent operator. c) the opposite of the “additive effect.” d) that reductions in total cost are made.

3. Brand recognition advantages go to a) chain specialty operations in the national market because of their ability to use mass media effectively. b) chain specialty operations because people in a mass market have developed a market preference for chain operations. c) independents because of personal acquaintances. d) chain specialty operations because of their generally high-speed service.

4. The market share of restaurant sales controlled by the 100 largest chains is a) one-fourth. b) one-third. c) over half. d) two-thirds.

5. Advantages in the mass media for chain specialty restaurants arise principally from a) the fact that chains are represented in more markets. b) the willingness of consumers to identify with jingles and personalities like Ronald McDonald. c) simplicity of message, enormous spending, and the additive effect. d) public relations efforts in local media which provide a backup to national advertising.

6. The level of marketing spending as a percentage of sales is usually a) higher in full service restaurants than limited service restaurants. b) lower for multi-unit than for independent QSRs. c) much higher for multi-unit, high-check-average chains than single-unit independents. d) more for independents because they need to establish their name.

7. Access to capital a) is usually easier for a local operator than for a chain. b) for a large company is often coupled with lower borrowing costs. c) is not a problem for most food service operations since restaurants are not considered risky businesses. d) is decreasing for restaurants because of the “credit crunch.”

8. If a restaurant wishes to expand, remodel, or rebuild a) it is difficult to borrow from a bank if the restaurant is franchised. b) an independent usually has the advantage over chains because they know the local people at the bank. c) a franchisee usually goes to the franchisor for a loan. d) lower interest rates are often given to publicly traded companies.

9. Site selection a) is also important for the independent restaurant that focuses on a unique dining experience. b) is best achieved through the owner’s personal experience about the community. c) could not cause conflict between the franchisor and the franchisees. d) has an exact formula to follow.

10. Investment in point-of-sale systems in chain operations a) mean that problems are not identified until days after the event. b) are usually an example of economies of scale. c) are much more costly than in an independent restaurant. d) are a disadvantage because information often does not reach the central office.

11. Standardized procedures in the company training programs of chain operations a) increase the overall cost of training. b) do not work for unskilled jobs. c) have been shown to actually increase turnover. d) often include interactive computer-based programs.

12. A restaurateur owns her own restaurant and is affiliated with a national chain of restaurants.

This restaurant is classified as a) an independent. b) a chain. c) a franchisee. d) a multi-unit.

13. The following characteristic is a unique strength of independent operators: a) purchasing economies. b) access to capital. c) access to market information. d) flexibility.

14. A competitive advantage of independents over chain operations is: a) the independent can move more slowly than a chain in menu change and see if changes made by a chain work before trying them. b) the independent is much closer to the operation and can quickly respond to challenges. c) the independent has access to more marketing information. d) the independent can achieve more economies of scale.

15. Independents a) can differentiate their operation by establishing a presence in their community. b) can easily find a good site in their local community without much expense because they know the area. c) usually can get outside equity capital without giving up part of their ownership. d) can usually build a restaurant using IPOs. 16. Cost control in independent operations a) is more report-oriented than in a chain. b) is usually unnecessary because of the hands-on style of the owner. c) is managed by using local accounting firms. d) can make use of sophisticated POS systems to generate reports.

17. An independent operator is most likely to build clientele by a) offering a dining experience that is uniquely its own. b) duplicating the menu of a successful chain. c) changing its entire menu frequently. d) changing its director annually.

18. Independent group operators are a) independent restaurateurs who own and operate a few units. b) a type of franchise arrangement. c) chains that own more than one type of restaurant. d) groups of restaurants that are similar in type.

19. New product development a) is easier to achieve in an independent restaurant. b) is one advantage of the franchisee to receive from the franchisor. c) is conducted better in chains through research and test. d) is avoided in chains as to maintain a standard image.

20. The type of franchise that hospitality businesses buy is almost always a a) trade name franchise. b) service franchise. c) business format franchise. d) product franchise.

21. A major benefit of franchising for the franchisor is a) reduced capital investment. b) being a low risk owner. c) lower labor costs. d) savings on legal fees.

22. The statement below which best summarizes a franchise agreement is: a) A franchise is a contractual relationship setting forth the rights and responsibilities of each party. b) The franchise agreement is limited to the financial obligations of each party. c) The franchisee agrees to contribute all the resources necessary to establish and maintain the franchise. d) The franchisor agrees to pay an initial franchise fee and continuing royalties to the franchisee.

23. Business format franchising gives the franchisee the right to use the a) product and trademark only. b) trademark and business format only. c) marketing strategy and operating manuals only. d) product, service, trademark, and business format.

24. Franchisors provide franchisees with a) all needed capital. b) a business format. c) buildings. d) land.

25. A franchise a) guarantees a profit depending upon the original investment. b) offers a business plan, but the risk is taken by the franchisee. c) guarantees a profit no matter how small. d) agreement stipulates that the franchisor will come to the aid of the franchisee if financial help is needed.

26. Screening is a franchisor service in which a) employees are interviewed by the parent company. b) potential franchisees are evaluated. c) customers are interviewed in potential markets. d) managers are evaluated at the units.

27. The franchisor allows the franchisee freedom to act without approval to a) choose site. b) design the layout of the physical plant. c) furnish and decorate the interior. d) hire staff.

28. The franchisee a) often has less marketing information because of lack of access to reports. b) is disadvantaged if there is a lack of franchisor field support. c) maintains a quality control staff in food manufacturing plants that supply product. d) is able to respond to a changing marketplace by adding new menu items.

29. A disadvantage of being a franchisee is a) lower profits per unit. b) loss of independence. c) legal fees incurred.

d) an increase in managerial time.

30. A disadvantage of being a franchisor to a chain that also owns units is a) profits from the franchised stores are lower than for owned stores. b) a higher cost of field staff for franchised units compared with owned units. c) loss of royalties after three years. d) the advertising costs that are incurred by the franchisor.

True/False 1.

Most restaurant chains include restaurants that they own and operate and restaurants that they franchise.

2.

Franchised units have some aspects in common with both independent and chain operations.

3.

Economies of scale are usually common to independent operations.

4.

Chains can generally afford national TV advertising while independents usually cannot.

5.

Television advertising in chain restaurants is an example of an “economy of scale.”

6.

Restaurant chain companies usually have real estate departments that select restaurant sites.

7.

Franchisees can get financial support from franchisors.

8.

The rate of restaurant failure is higher among franchised fast-food restaurants than among other types of restaurants.

9.

Chain operations can usually purchase food and supplies at a better price because of the quantity purchased.

10.

The cost of training managers is insignificant compared with training unskilled workers.

11.

Chain restaurant sales account for over half of restaurant sales in the U.S.

12.

Established restaurant chains have little to worry about as far as competition is concerned.

13.

Achieving differentiation means that an independent develops a restaurant concept that is unlike chain competitors.

14.

SBA participation in a loan reduces risk to a bank but does not eliminate it since the SBA guarantees part of a loss if there should be one.

15.

The SBA acts as a bank in terms of offering loans to restaurants.

16.

“Going public” means that ownership changes from private to public ownership.

17.

The factor of size could also be an advantage for the independent restaurant.

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While independents are usually not large enough to obtain price advantages in purchasing food products, they can demand high-quality, consistent product by maintaining good relationships with suppliers.

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Today independents can purchase POS systems that will provide them with complex and sophisticated management information.

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Advantages of being an independent operator are flexibility and fast decision making.

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Many successful independent restaurants could become the chains of tomorrow.

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Differentiation is more important in chain restaurants than in independent ones.

23.

Independent group operators are single-unit operators who have expanded to include more units, but are not large enough to be a chain.

24.

The essential ingredient in a successful franchisor’s “proven way of doing business” is not just a great idea but an operational concept.

25.

The franchisee gives up a significant amount of independence, usually including budgetary discretion.

26.

Fewer franchised businesses fail than businesses overall, but new unproven concept franchises are risky.

27.

Restaurant franchises are called trade name franchises.

28.

Franchise agreements allow for limited operating freedom by the franchisee.

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The franchisee can be considered an employee of the franchisor.

30.

Operating a franchised unit has no business risk.

31.

Operation manuals for franchised operations generally include recipes for all products on the menu.

32.

The services provided to the new franchisee by the franchisor are essentially the same as those provided to all other franchisees.

33.

Since a franchise is a proven business concept, the franchising company does not have to make changes to their product and services.

34.

An advantage of being a franchisor is the ability to expand rapidly.

35.

The cost to the franchisor of servicing a franchise is generally more than 5% of sales.

Short Answer Questions 1. The areas of strength for chain restaurant systems are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. Name three reasons that lead to success in creating brand recognition as demonstrated by McDonald’s: 1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________

3. Why are chain restaurants more likely to use television advertising? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 4. Is site selection getting simpler or more complicated? Explain your answer fully. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 5. Why might an entrepreneur looking to open an independent restaurant have more difficulty securing capital from a bank or other lender than someone looking to open a franchised unit of an established brand? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 6. Many consider training programs in chain restaurants to be better than those found in a typical independent restaurant. Why? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 7. The challenges chains will face in the future are ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 8. The advantages of being an independent restaurant are ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 9. The two elements of the independent’s differentiations are: ___________________________________________________________________________ ___________________________________________________________________________

10. Name and describe the attributes of the type of franchising found in the hospitality industry: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 11. Identify three characteristics of franchise agreements in the hospitality industry: 1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________ 12. Some questions you might ask a franchisor if you wished to buy a franchise are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 13. In becoming a franchisee, the operating freedom that is usually retained is ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 14. Some of the ways a franchsor in the hospitality industry helps a new franchisee are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 15. Expanding the number of units by a franchisor is advantageous because ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 5 Multiple Choice 1.

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c a a c c a b d a b d c d b a

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d a a c c a a d b b b d b b a

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T T F T T T T F T F T F T T F T T T

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T T T F T T F T F T F F T F F T F

Short Answer Questions 1. There are seven areas of strength: 1) marketing and brand recognition 2) site selection expertise 3) access to capital 4) purchasing economies 5) centrally administrated control and information systems 6) new product development 7) personnel development programs.

2. (1) simplicity of message, (2) enormous spending on marketing, and (3) the additive effect 3. Television advertising, even at the local level, is very expensive. To advertise regularly on national or even regional television is so expensive that it is limited to the very largest companies. Chains can pool the advertising dollars of their many units to make television affordable. Few independents, however, can afford to use television.

4. Site selection, most experts would agree, is only getting more complex, and successful companies are becoming more sophisticated in their approach to it. To quote one industry observer: “Restaurant site selection is increasingly complicated business these days. Demographic studies, focus groups, consumer surveys, consultants, and endless number crunching are all part of the formula.”

5. Most bankers and other lenders have traditionally treated restaurants as risky businesses, making access to capital (at least from this source) problematic. Because of this fact, an independent operator who wants to open a restaurant may find it difficult to raise the needed capital. Failure is much less common among franchised restaurants than among independent

operations. Thus, banks not only make capital available to units of larger companies and to franchised units but also offer lower interest rates on these loans.

6. Many restaurant chains have established sophisticated training programs for hourly employees, using computer-based and, increasingly, Internet-based techniques to demonstrate the proper ways of performing food service tasks and jobs. The standardized procedures emphasized in company training programs, in turn, lower the cost of training and improve its effectiveness, which is not achievable in an independent restaurant.

7. fierce competition from regional chains; shifting consumer preferences and competitive patterns 8. flexibility, closeness of owner-manager to the operation, and the ability to differentiate the independent operation 9. 1) the personal identity of its owner 2) its reputation as a local firm 10. business format franchising which includes the product, service and trademark and the entire business format, i.e., a marketing strategy and plan, operating manuals and standards, quality control and continuing two way communication 11. The most common characteristics of a franchise agreement are (student should include three of these): 1) Use of trademarks 2) Location of the franchise 3) Term of the franchise 4) Franchisee’s fees and other payments 5) Obligations and duties of the franchisor 6) Obligations and duties of the franchisee 7) Restrictions on goods and services offered 8) Renewal, termination, and transfer of franchise agreement 9) Operating procedures and advertising and promotion 10) Other services provided by the franchisor on a fee basis 12. See Industry Practice Note 5.1.

13. choice of some suppliers, additions to and renovation of physical plant, significant budgetary discretion, hiring 14. screening the franchisee, financial support, site selection and planning, pre-opening training, operations manuals, operating and control procedures, information management, quality control, training, field support, purchasing, marketing, advertising, new products, new concepts 15. expansion of units without use of its own capital; achieving a presence in the marketplace; economies of scale with advertising; better geographic coverage; national TV advertising is possible; lower supervision costs per unit (owners are more motivated)

Chapter 6 Test Bank and Answers Competitive Forces in Food Service Multiple Choice Choose the one best answer.

1. The statement that best describes competition in the restaurant business is a) There has not always been competition. b) It has been possible for a few companies to control the market. c) There are few buyers and sellers in today’s market. d) The nature of competition has changed because the better locations have been taken.

2. In the food service market today, a) the giants in the chain industry compete for market share. b) there is a rapidly expanding market. c) new chain concepts are entering the marketplace with frequency. d) competition is mostly between chains and independents.

3. Some hospitality companies have sold off their restaurant divisions because a) they were becoming too large to manage. b) of falling stock prices. c) they were less profitable and competition was increasing. d) they could get enormous profits by doing so.

4. Independent operators today a) have a larger share of the restaurant market overall. b) are usually either large or fill niche markets. c) are becoming chain operations or face bankruptcy. d) have maintained their market share compared with the last ten years.

5. The marketing mix consists of a) flexibility, differentiation, conceptualization and diversification. b) product, price, place and promotion. c) introduction, growth, maturity and decline. d) branding, couponing, POD and advertising.

6. The meaning of “new product” a) is limited to genuine innovations. b) includes both “new to chain” and “new to world” products. c) includes “new to world” products but not those that are copies from another chain. d) excludes new-sized portions of existing products.

7. The term “product” in the restaurant setting includes a) the total guest experience. b) the quality of the food. c) the ambience. d) the service of the food.

8. Extension of concept is to describe a) the impact of increased advertising and media saturation. b) changing the nature of the a product to serve new markets. c) the growing similarity between fast food and coffee shops. d) the casualizing of fine dining.

9. An example of possible “extension of concept” is a) the introduction of downsized units with limited versions of a franchise brand’s menu. b) franchising a new concept. c) a change in advertising and promotion of a chain’s primary product. d) a single specialty restaurant.

10. Branding a) is considered a “price” characteristic. b) is used less today than in the past. c) is sometimes used to incorporate a manufacturer’s name into a restaurant product. d) is not considered part of the marketing mix.

11. Which of the following is defined as an establishment where high traffic is likely to offer potential high volume sales? a) Point of distribution b) Contract company c) Host d) Market niche 12. The concept of life cycle is another way of saying that a) once a concept reaches its peak sales, it’s all downhill. b) sales during the expansion period are greater than during maturity. c) that concepts need to be periodically redeveloped or replaced. d) concept blur is here to stay.

13. The reason cited in the text for thinking of the restaurant concept as a product is a) that individual menu items come and go so fast that it is not useful to think of them as a product. b) a restaurant concept is what franchisees sell to a franchise. c) the view of product embraces the whole of the consumer’s experience. d) that the term “concept” is so all-encompassing that it includes the products served.

14. The strategy of pricing products lower is called a) project gold. b) value pricing. c) competitive pricing. d) couponing.

15. Customers, it is true, like price reductions, a) but it has been shown that reductions are viewed as lowering quality. b) but they must result in increased sales volume to be successful. c) and it is a sound strategy to offer discounts on an on-going basis. d) but temporary price reductions usually erode sales.

16. The concept of distribution refers to a) providing multiple locations to reach customers on the run. b) media blitzes that reach every household. c) radio advertising that reaches customers when they are on the road. d) the use of billboards to advertise a restaurant.

17. The greatest strategy change by multi-unit companies in regard to “place” has been a) attention to site selection on the outskirts of metropolitan areas. b) the expansion of real-estate offices to regions. c) to “capture” customers wherever they might be. d) to concentrate on a narrower distribution.

18. The development of PODs by food service chains a) is currently the direction many are taking. b) is of no concern to franchisees. c) is strictly reserved to QSRs. d) falls under the marketing “P” of promotion.

19. Currently, spending on advertising a) by the food service industry is low compared with other industries. b) should be part of a long term communications strategy. c) is higher as a percent of sales for table service restaurants than for QSRs. d) is ineffective because of the saturation of restaurants, and competition in the marketplace.

20. The wealthiest consumers a) are a target market of all restaurants. b) seldom change their spending behaviors. c) are defined differently according to various criteria. d) are unknown for food service companies.

21. Sales promotion differs from advertising because a) it includes all forms of media promotions. b) it excludes “deals.” c) it includes other activities. d) it is directed at increasing sales over a long period of time.

22. Advertising includes a) television ads. b) couponing. c) deals. d) games.

23. Generic competition a) is a form of dealing. b) is a consumer need to give up restaurant dining. c) is giving away inexpensive, generic products in a promotion. d) is competition of food service with other industries.

24. The major advantage which petroleum companies bring to the C store food service sector is a) availability of gasoline at their locations. b) availability of a gasoline company brand name for faster consumer recognition. c) that consumers can use an oil credit card to charge their food service purchases. d) that customers are motivated to spend and check averages are higher.

25. The statement that is true about supermarkets in competition with food service is: a) Supermarkets are not considered a possible part of concept blur because both sell food. b) Supermarkets are responding by adding PODs and more take-out foods. c) The restaurant share of the dollars spent by consumers at supermarkets has been decreasing. d) Supermarkets do not really compete with restaurants for the consumer’s food dollar.

26. Overall, the chain restaurant industry is operating in a a) mature market. b) specialized market. c) uncompetitive market. d) price-cutting market.

27. New food products a) stimulate interest and can renew an existing operation. b) create concept blur. c) should be introduced quickly and often, without regard to quality. d) are called “distribution” in marketing terms.

28. Price cutting in the restaurant industry a) is focused on the long term. b) means a decrease in total sales but an increase in profits. c) is generally effective in off-seasons. d) should never be used in a competitive market.

29. When we speak of “places” as a part of the concept of “place,” we refer to a) distribution of products more widely. b) chain operation. c) analyzing population density. d) downscaled units.

30. The newest medium used to advertise restaurants is a) television. b) radio. c) the Internet. d) newspapers.

True/False 1.

Companies in the food service industry find it difficult, nearly impossible, to control prices and competitive practices.

2.

In the restaurant expansion of the 1970s, the challenge to chains was to expand rapidly and secure locations, but now it is distribution in all kinds of venues.

3.

A large portion of good restaurant locations have reached a saturation point.

4.

The marketing mix is a term that has little to do with restaurant competition.

5.

“Product” in food service marketing terms refers only to the food served in a restaurant.

6.

Restaurant chains have found that new products blur their image and it is better not to change their menu.

7.

An increase in competition between chains has resulted in new competitive strategies.

8.

A food product that a chain copies another chain’s product is considered a new product.

9.

Most new product sales are highest during the expansion period of the product life cycle.

10.

When a product matures, it can sometimes be rejuvenated by changes in its marketing mix.

11.

An example of new product is a change in décor including a new menu cover.

12.

By changing the nature of their products, some food companies have been serving new markets successfully.

13.

Branding is associated with “place” in the marketing mix.

14.

Today restaurants are combining brands of more than one company to increase sales.

15.

Value pricing, when introduced by restaurants, is most effectively used to increase sales over a long period of time.

16.

A lower price could be risky as it indicates a cheaper product to the customer.

17.

Downsizing of restaurant units has been partly in response to the scarcity of good locations for chain restaurants.

18.

Distribution in the restaurant business today has decreased with the use of PODs.

19.

A retail “host” offers “venues” to food service establishments.

20.

An advertising campaign consists of a single ad placed in a variety of media.

21.

The object of sales promotion is to create an immediate increase in sales.

22.

A disadvantage of the use of sets of promotional merchandise is that it does not result in repeated patronage.

23.

Take-out and delivery meals have been a food service response to generic competition.

24.

Although grocery stores and food service have always been in competition for the consumers’ food dollar, food service’s share has been increasing.

25.

That people spend more and more time at home, or the “cocooning” trend, will affect the food industry to a great extent.

Short Answer Questions 1. In general terms, how has competition in food service changed in the last 60 years? ___________________________________________________________________________ ___________________________________________________________________________ 2. What is the key to success for independent restaurants in terms of the competitive landscape? ___________________________________________________________________________ ___________________________________________________________________________ 3. For the food service industry, how do we define marketing? ___________________________________________________________________________ ___________________________________________________________________________ 4. The four elements of the marketing mix are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 4) ________________________________________________________________________ 5. Define “new-to-world” and “new-to-chain” products: _______________________________ ___________________________________________________________________________ ___________________________________________________________________________ 6. An example of a competitive strategy changing the product concept that you have observed is: ___________________________________________________________________________ ___________________________________________________________________________ 7. The stages in the restaurant concept life cycle are: ___________________________________________________________________________ ___________________________________________________________________________ 8. Provide an example of a restaurant or chain for the two life-cycle stages in the second generations of the restaurant concept life cycle. ___________________________________________________________________________ ___________________________________________________________________________

9. How did Taco Bell extend its concept? ___________________________________________________________________________ ___________________________________________________________________________ 10. Give three examples of locations where a downsized restaurant unit would be appropriate in your community: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 11. The difference between the “host” and the “venue” when discussing PODs is ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 12. The advantages and disadvantages of “value pricing” are ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 13. The two common forms of paid promotional activities in the restaurant industry are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 14. Common sales promotion activities in the restaurant industry are ___________________________________________________________________________ __________________________________________________________________________ 15. Briefly describe how C stores compete with restaurants: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 6 Multiple Choice 1.

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d a c b b b a b a c c c c b b

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a c a b c c a d c b a a c a c

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T T T F F F T T F T T T F

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T F T T F T F T F T T T

Short Answer Questions 1.

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The nature of the competition has changed from the growth of new chain concepts in a rapidly expanding market—roughly from the mid-1950s to the early 1980s—to a time today when established food service giants struggle with each other over a much more slowly growing market.

Success appears to having a very distinct way of differentiating themselves from their competitors.

Marketing is defined as communicating to and giving . . . customers what they want, when they want it, where they want it, at a price they are willing to pay.

The four “P’s”: the product, the product’s price, the place (and places) in which it is offered, and promotion of the product.

“New-to-world” are those that have not been served in a commercial operation while “newto-chain” products are imitations of products offered by another operator.

Answers will vary. The text uses a number of examples in the section on new products.

First generation: concept development, expansion, maturity; evolutionary period: concept redevelopment, rejuvenation; second generation: expansion, maturity.

Answers will vary.

Taco Bell sold the rights to its brand name and entered into partnership with food manufacturers that handle development of the product and its distribution (including sauces and salsas) as a method to extend its concept.

Answers will vary. Examples given in the text are in retail stores, colleges, airports, manufacturing plants and theme parks.

The host is an establishment such as a shopping mall or large retail store that has high traffic volume and the host offers a location (the “venue”) to a food service operator, usually a chain, and the “POD” is usually a downsized restaurant unit.

Advantages: increased customer volume and sales.

Disadvantages: lower profit margin; cheap product image; strategy copied by competitors. advertising and sales promotion “deals” which include coupons, games and promotional merchandise They compete for the snack market as well as for meals and are directly competitive with food service, especially for beverages and sandwiches.

Chapter 7 Test Bank and Answers On-Site Food Service Multiple Choice Questions Choose the one best answer.

1. In on-site food service, success is measured by a) sales volume. b) advertising budgets. c) menu diversity. d) the participation rate of the guests.

2. The following is not considered one kind of on-site food service: a) college cafeteria. b) private club restaurant. c) shopping mall food court. d) in-flight lunch.

3. A trend in on-site food service is a) the use of national brands. b) consolidation of accounts. c) an increasing number of self-ops. d) less profit orientation.

4. The statement which best describes the difference between a guest and a client is: a) Clients in the institutional sector are virtually captive. b) The client refers to the institution and the guests are the people being serviced. c) The guest refers to the institution and the clients are the people being serviced. d) There is no difference between the meaning of the two terms.

5. A sub-segment of the business and industry segment is a) employee cafeterias. b) bed-side feeding. c) school lunch. d) elderly feeding.

6. A characteristic of the business and industry segment is a) an increase in the number of manufacturing accounts. b) increased out-sourcing by businesses. c) less aggressive marketing efforts. d) decreasing economies of scale.

7. An advantage of adopting branded formats is: a) branded formats have an identity that can help build participation. b) brands are less complex. c) operating costs for brands are higher. d) brands have menu flexibility.

8. Over the next decade, college enrollments are expected to a) show modest increases. b) show modest decreases. c) show significant increases. d) show significant decreases.

9. One feature of the school food service model is a) competition. b) fast food. c) pooled subsidies. d) board plans.

10. In college and university food service a) board plans are becoming more rigid in structure. b) board plans provide a level of predictability. c) there is less profit potential than in other segments. d) students prefer board plans to other types of programs.

11. The position that is not likely to be found in a health care food service operation is that of a) clinical dietician. b) dietetic technician. c) dietary manager. d) nutrition therapist.

12. In health care feeding a) most are becoming less profit oriented. b) fewer facilities are being contracted out. c) there are many different diets to manage. d) struggling to cope with extended patient stays is a major problem.

13. The segment that has the highest penetration by contract management companies is a) B & I. b) health care. c) schools. d) colleges and universities.

14. The segment that has the lowest penetration by contract management companies is a) B & I. b) health care. c) schools. d) colleges and universities.

15. The following is the biggest concern in school food service: a) food service will be stable over the next few years. b) lunch program will not grow. c) child obesity. d) education of good nutrition.

16. The typical response to funding changes in school lunch programs has been a) a focus on reducing costs. b) a focus on marketing. c) to reduce waste. d) to do nothing.

17. The recent changes in USDA regulations focus upon a) food groups. b) calories, nutrients and fat. c) total cholesterol. d) cost.

18. The following is not an element in the school food service model: a) providing nutritious meals to needy children. b) pooling of subsidies. c) high volume. d) providing special diets for special needs.

19. A relatively new area for contract management companies is a) vending. b) retailing. c) recreation. d) elder care.

20. The best definition of a congregate meal program is that it a) provides free meals for the elderly. b) provides meals for elderly who can pay if they are able. c) is self supporting. d) is aimed principally at those who cannot pay for the meals.

21. Retirement housing communities a) cater to people between 55 and 65. b) are modeled after a “one-size-fits-all” mentality. c) may take a variety of forms. d) are dominated by hotel companies.

22. The method of delivering food service that makes food available where full food service operators are not economically feasible is called: a) institutional food service. b) contract company food service. c) vending. d) self-service.

23. Included under recreational food service a) are private clubs. b) are stadiums and arenas. c) is transportation. d) are health clubs.

24. The following statement is true about private clubs: a) Most private clubs tend to be similar. b) Private clubs may be owned by members. c) Private clubs are open to the public. d) Few club managers have food and beverage experience.

25. The following is not true regarding transportation food service: a) The segment is dominated by in-flight food service. b) The focus is on providing more choices in terminals. c) All in-flight food service is out-sourced. d) Some companies have introduced national brands.

True/False 1.

The Piccadilly Cafeteria chain is an example of an institutional cafeteria.

2.

ARAMARK, and other companies, often provide other services in addition to food service.

3.

Food service in B&I is restricted to improve because the client (the employer) wants to reduce cost.

4.

College and university food service is expected to maintain steady growth.

5.

Campus identification cards are becoming popular in college feeding.

6.

Most contract management companies are becoming less retail oriented.

7.

Hospital beds have increased recently, which will affect the food service operation.

8.

A hospital food service director must also be a registered dietitian.

9.

Companies which provide on-site food service may also have commercial lines of business.

10.

On-site food service operations no longer need to market their product, since most of their customers are captive.

11.

Branding is the introduction of recognized concepts into institutional facilities.

12.

Brands are becoming more common in all lines of on-site food service.

13.

Contract companies are penetrating more and more in B&I segment.

14.

Contract management companies are included in the on-site/noncommercial segment even though they operate for a profit.

15.

If an on-site food service operation is not contracted out, it is said to be a self-op.

16.

Most school feeding is out-sourced.

17.

Contract companies are not allowed to manage hospital food service operations.

18.

“Attended” vending refers to a cafeteria which is serviced by “real live people.”

19.

Vending represents over 2% of overall food service sales.

20.

Food service in college and universities is declining because more students eat off campus now.

21.

Theme parks would be considered a part of the larger recreation segment of the hospitality industry.

22.

Most hospitals serve more meals to non-patients than patients.

23.

On-site food service is not concerned with profits or costs.

24.

A board plan provides a predictable level of sales over a fairly long period of time.

25.

Many of the changes taking place in transportation food service is actually taking place in air flights and airports.

Short Answer Questions 1. What does “on-site food service sector” refer to? Give some examples. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. Define on-site food service. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. Define participation rate. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 4. What are some of the things that colleges and university food service operations are doing to better market their services to college students? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 5. What is a dietitian? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

6. What are some of the unique challenges associated with providing food service in the health care environment? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 7. Besides meals for patients, what other food might an on-site operator prepare in a healthcare setting? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 8. List two approaches for lowering healthcare costs.

1)_________________________________________________________________________ 2)_________________________________________________________________________ 9. How has the nonpatient side changed food service in this segment? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. List the four elements of the school food service model: ___________________________________________________________________________ ___________________________________________________________________________ 11. Describe some of the reasons that an institution may want to outsource its food service: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 12. List some changes that are occurring with in-flight food service: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 13. List several characteristics of vending. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

14. What are some of the trends in on-site food service? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 15. Would you rather work for a contract management company or a self-op? Why? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 7 Multiple Choice 1.

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d c a b a b a a c b d c a

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c c c b d d b c c b b c

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F T F T T F T F T F T T T

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T T F F T T F F T F T T

Short Answer Questions 1.

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It consists of all locations where food is served outside of the home but where food service is not the primary business. Examples may vary.

On-site food service consists of all food outlets in business and industry, schools, universities, hospitals, skilled-nursing centers, eldercare centers, correctional facilities, recreation facilities such as stadiums, and child care centers.

Participation or capture rate refers to the percentage of the captive audience who patronizes the on-site operation. eliminating (or creating more flexible) board plans, offering cash cards, introducing brands According to the International Committee of Dietetic Associations, a dietitian is a person with a legally recognized qualification [in Nutrition and Dietetics], who applies the science of nutrition to the feeding and education of groups of people and individuals in health and disease. special diets; different services such as patient, cafeteria, dining room; increasing emphasis upon costs Other meals might include those served in the hospital café and those offered in catered events.

(1) Develop alternative arrangements for those patients needing less intensive care. (2) Consolidate food production facilities.

The nonpatient side of hospital food service has offered major opportunities for increasing sales.

1) It meets defined social needs; 2) it pools subsidies; 3) it attracts a high volume of attendants; and 4) local administration so they can focus on their core business, to have it run by food service specialists, to share the burden and the costs changing level of services, partnering, increasing choices in airports method of delivery, most common in colleges and universities, greater flexibility, improving products and services increased marketing of services, use of brands, outsourcing, entry into other areas Answers will vary.

Chapter 8 Test Bank and Answers Issues Facing Food Service Multiple Choice Choose the one best answer.

1. Health, diet, nutrition and exercise as issues in food service a) are growing in importance to consumers. b) are important to consumers but seem to be a little less important in the 1990s. c) are unimportant to most consumers. d) have meant that consumers are more interested in these than in the taste of food.

2. The American public’s greatest concern is a) diet. b) nutrition. c) obesity. d) genetically modified foods.

3. The object of consumerism is to a) harass business people. b) raise consumer consciousness. c) raise money for consumer interest groups. d) reassure consumers about the validity of the market system.

4. In general, the food service industry has responded to key consumer problems a) by ignoring them. b) only when pressed to do so. c) positively as these concerns surface. d) by trying to convince consumers that they should not be concerned with advertising.

5. Consumerism a) does not affect marketing and advertising. b) is a reaction to companies’ emphasis on selling a product. c) is a reaction against consumer needs and expectations. d) begins with the company’s product and how to sell it.

6. The best way to think of consumerism is as a) a social movement. b) a fad. c) a nuisance. d) a marketing pitfall.

7. Dietary schizophrenia refers to a person who a) is always on a diet. b) dislikes diets. c) expresses interest in nutrition but does not always choose healthful food when eating in restaurants. d) demands that restaurants list nutritional information for each item on the menu.

8. Junk food a) is a good description of fast food. b) is a problem that naturally goes with vending. c) will be eliminated by nutritional labeling. d) is a problem of American dietary habits.

9. A program in which one person does not drink and is responsible for driving other people home is called a a) liability reduction program. b) designated driver program. c) driver reward program. d) bartender awareness program.

10. At the present time, nutritional labeling covered by the Nutrition Labeling and Education Act a) is required only in franchising restaurants. b) is required only in QSRs. c) is required only for menu listings with nutrient or health claims. d) does not apply to restaurants.

11. Restaurant menus can claim a health benefit, approved by the government, for a) fruits and vegetables in arthritis claims. b) any foods to alleviate children’s diseases. c) fiber-containing fruits, vegetables, and grains in relation to cancer-prevention claims. d) any healing food if the claim can be proven.

12. In nutritional labeling, you must not use the following terms carelessly on your menu: a) lean/extra lean; free; reduced. b) made on premise; home-made. c) full-flavored; delicious; attractive. d) inexpensive source of; cheap.

13. Requirements of nutritional labeling for menu items covered under law in restaurants a) is enforced by the FDA. b) make it necessary to do a nutrient analysis of each food in a menu item. c) is mandated by the CSPI. d) allow the restaurant to supply nutrient profiles on request.

14. The HACCP sanitation program a) reflects a systems approach to food safety. b) is a training program using traditional food safety practices. c) is a trouble-shooting program when there is an outbreak of a food-borne illness. d) requires empowerment of food production workers.

15. Food service establishments that sell alcohol a) are not liable for the behavior of their customers. b) have experienced an increase in liability insurance rates. c) overall have found that customers are drinking more. d) receive a lower profit margin from alcohol than from food.

16. The major contribution food service can make to our environment is a) the elimination of aerosols from all purchase orders. b) reducing products which rely on animal testing. c) managing the waste stream. d) serving only line-caught fish.

17. Solid waste has gained attention from restaurant operators principally because of a) the threat to the environment from methane released from landfills. b) the soaring cost of landfills. c) the greenhouse effect. d) water contamination.

18. Sanitary landfills are a) located far from cities and hence do not create problems for people. b) relatively inexpensive to build. c) lined with clay or a synthetic liner. d) successful in returning waste matter into compost quickly.

19. The amount of waste an average American person generates each day is: a) 4 pounds. b) 10 pounds. c) 25 pounds. d) 40 pounds.

20. Plastic products, in recycling systems, a) must be incinerated before they are recycled. b) cannot be recycled. c) will compost fairly quickly. d) must be sorted by resin before they can be recycled.

21. Recycling a) is worth doing because of the value of the recycled materials. b) today is cost-effective because of the high cost of dumping in landfills. c) is worthwhile for glass and paper, but not for aluminum cans. d) is impractical except for composting.

22. A practical form of reusing and recycling for restaurants is a) to switch from paper to china. b) to buy products that can be recycled. c) to use disposable skids. d) install bins for paper, plastic, glass, and food waste and ask customers to sort it.

23. The problem/s with incineration a) are air pollution and ash disposal. b) is inability to use the heat generated. c) is public relations. d) is only political in nature.

24. Incineration a) contributes methane gas to the atmosphere. b) is not a political issue and is the best choice for most paper products. c) is an excellent choice because the ash residue can be used as a fertilizer. d) is less attractive than recycling if the latter is possible.

25. Composting a) converts food waste to a useful product. b) is not very well advanced. c) has not been shown to reduce garbage removal and landfill costs. d) should be used only in extreme circumstances when all other means have failed.

26. The development of automation appeals to restaurant operators mainly because it can a) lower labor costs. b) lower food costs. c) bring robotization. d) bring affordable computer-operated food production systems.

27. Computerization in food service operations in the near future will a) replace workers. b) aid management with cost control reports. c) be too expensive for all but large restaurants. d) not be applicable in many food service operations.

28. Computers are used in the front of the house a) to replace the server. b) to take orders and deliver food from the kitchen. c) for order-taking and sending the orders to the kitchen staff. d) but they reduce the interaction between customer and server.

29. One of the new technology used in the restaurant industry is a) completely automated kitchen equipment. b) the use of induction heating. c) robots replacing servers. d) machine-cooking of food as ordered.

30. The real issue in the future of restaurant equipment and automation is a) heightened use of computers. b) what is technically feasible. c) what makes good social policy. d) the need to reduce employee hours.

31. The following statement about chilled prepared foods is correct: a) Chilled foods are held at a higher energy cost than frozen foods. b) The shelf life for chilled foods is six months. c) Chilled foods, while cost effective, are inferior in quality and have inherent microbiological problems. d) Chilled foods permit scheduling flexibility and productivity.

32. Internet web sites for restaurants a) will probably be of limited use. b) can provide couponing, promotion, and display menus. c) are commonly a transaction vehicle. d) in the future will be strictly an advertising medium.

33. For managers, computerized POS technology a) could link directly to their suppliers’ computers. b) allows unskilled workers to do the manager’s job. c) provides a great deal of information but does not identify cost problems. d) can help in the accounting area, but not in the operational such as in banquet sales.

True/False 1.

Consumers today are concerned about health and diet.

2.

Although concerned about health and nutrition, many restaurant consumers today tend to primarily eat foods that are high in fat.

3.

Consumerism is a social movement designed to increase the number of health food restaurants.

4.

Consumption patterns show that Americans eat less beef, more chicken, and fruits and vegetables, but that obesity is still increasing.

5.

The response to a demand for lower-fat products was that QSRs launched low-fat burgers with instant success.

6.

In the area of nutrition and diet, restaurants must choose to go in the direction of healthy, low-fat food or in the opposite direction of high-calorie, tasty menu items.

7.

Obesity is American people’s number one concern, and over 50% of the population over 20 years old is overweight.

8.

It is the duty of restaurants to offer their customers only what is good for them on their menus.

9.

While consumerists have a say in health and nutrition, the bottom line is the consumer, and what the consumer wants is what the restaurant will serve.

10.

A health claim usually relates the food to prevention of a specific disease.

11.

According to nutrition labeling regulation, if a nutrition claim is made on the menu, a nutrient analysis must be performed on all menu items.

12.

If a restaurant wishes to use nutrient analyses on its menu, it is acceptable, by law, to use an analysis found in a cookbook.

13.

The enforcing agency for nutritional labeling in the restaurant business is the FDA.

14.

Mass production of restaurant foods has lessened the likelihood of food borne illnesses.

15.

A response that the restaurant industry has made to the issue of sanitation has been the certification of food-handlers in sanitation programs.

16.

HACCP is a program designed to prevent food safety problems by identifying potential problem areas and dealing with them before a problem can occur.

17.

Today, restaurant liability indicates a policy for alcohol service be in place.

18.

Public concern over the environment has declined significantly in recent years.

19.

A practical solution to disposable paper products is to replace them with reusable china and glassware.

20.

Dump sites remain plentiful in most part of the country.

21.

The “tipping fee” is the amount paid “on the side” to landfill operators to permit excessive dumping of hazardous waste.

22.

Environmental decisions in food service are affected as much by public perception as by science.

23.

Aluminum recycling is fairly simple but among the least cost effective of all potential waste streams.

24.

Because of new scrubber technology for smoke stacks, incineration no longer presents environmental problems.

25.

The concept of the waste stream is basically the management of garbage.

26.

Composting is possible for food waste and actually turns this waste into usable soil.

27.

Automation in the front of the house can improve guest service.

28.

Chilled prepared foods remain fresh flavor and quality, and allows cooking to take place during normal working hours.

29.

While the most common application of the Internet is a web site, guests in some homedelivery restaurants can order and pay for food on the web.

30.

Technology has improved equipment to save energy and enhance ventilation.

31.

Nutritional labeling legislation does not limit health claims if a restaurant can prove the claims.

32.

Chilled foods permit scheduling flexibility and productivity.

33.

Because of the complexity of the environment and the cost of cleanup, food service operators can do nothing about waste management.

34.

Computer technology today is primarily used in the area of guest service and to control costs.

35.

Technology in the food service industry is feasible only if cost effective and customers accept it.

Short Answer Questions 1.

Some consumer issues today in the restaurant industry are: ___________________________________________________________________________ ___________________________________________________________________________

2. The restaurant industry has responded to health and diet concerns by ___________________________________________________________________________ 3. Why were products like McDonald’s McLean Deluxe unsuccessful? ___________________________________________________________________________

4. List the five recommendations for attaining optimal health.

1)_________________________________________________________________________ 2) 3)_________________________________________________________________________ 4) 5)_________________________________________________________________________ 5. What is dietary schizophrenia? ___________________________________________________________________________ ___________________________________________________________________________ 6. Consumerism can be defined as ___________________________________________________________________________ ___________________________________________________________________________ 7. Visit a local QSR. List the items that would be considered a nutritionally challenging meal.

At the same restaurant, list items that would be low in fat and calories but would still make for a satisfying meal. ___________________________________________________________________________ ___________________________________________________________________________ 8. The legislation that affects nutrition labeling is ___________________________________________________________________________

In the restaurant industry it legislates ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 9. List the guidelines restaurateurs must follow in making health claims on menus. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. The seven elements of the HACCP program are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 4) ________________________________________________________________________ 5) ________________________________________________________________________ 6) ________________________________________________________________________ 7) ________________________________________________________________________ 11. The three ideal solutions to deal with the waste stream are 1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________ 12. The problems of recycling trash in a restaurant are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 13. The advantages of recycling trash in a restaurant are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

14. Examples of technology used in the back of restaurants are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 15. An example of how the Internet is used by restaurants today is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 8 Multiple Choice 1.

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b c b c b a c d b c c a d a b c b

True/False 18.

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c a d b b a d a a b c b d d b a

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T T F T F F T F T T F T F F T T T F

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F F F T F F T T T T T T F T F T T

Short Answer Questions 1. health, nutrition, diet and health; junk food; labeling; truth in dining; food safety and sanitation; alcohol abuse 2. While restaurants have responded positively by providing low-fat alternatives to rich foods and more salad offerings, they have found that only a small proportion of their customers choose them.

3. These items were unsuccessful because people customers were more interested in taste than in the reduced calories.

4. 1) Achieve energy balance and a healthy weight. 2) Limit energy intake from total fats and shift fat consumption away from saturated fats to unsaturated fats. 3) Increase consumption of fruit and vegetables, as well as legumes, whole grains, and nuts. 4) Limit the intake of sugars. 5) Increase physical activity—at least 30 minutes of regular, moderate-intensity activity on most days.

5. Consumers are concerned about their health—and about pleasing themselves. Sometimes they act on their concerns—and sometimes on their need for pleasure.

6. Consumerism is, first of all, a social movement. It is a movement by which society, through representative groups and individuals, seeks social change. Consumerism has as its specific objective to achieve a balance of power between buyers and sellers. It is an effort to equalize the rights of buyers with the rights of sellers.

7. Answers will vary.

8. The Nutrition Labeling and Education ACT (NLEA); it legislates only the menu listings which make nutrient or health claims.

9. Fiber-containing fruits, vegetables, and grains in relation to cancer-prevention claims; Fruits and vegetables in relation to cancer-prevention claims; Fiber-containing fruits, vegetables, and grains in relation to heart disease-prevention claims; Fat in relation to cancer; Saturated fat and cholesterol in relation to heart disease; Sodium in relation to high blood pressure (hypertension); Calcium in relation to osteoporosis; Folate and neural-tube defects; Dietary sugar alcohol and dental caries; Soluble fiber from certain foods; Coronary heart disease and soy protein 10. The seven elements are 1) analyze hazards 2) identify critical control points 3) establish preventive measures 4) establish procedures to monitor the critical control points 5) establish corrective action to be taken 6) establish procedures to verify that the system is working properly 7) establish effective record keeping to document the HACCP system 11. reduce, reuse, and recycle 12. requires considerable effort—sorting, providing space for bins, persuading customers to do the sorting; “training” the customer in how to sort; providing compartmentalized dumpsters and trucking it away 13. economics—reduces landfill costs and positive public relations with customers 14. 1) Food production-equipment to enhance energy efficiency 2) Refrigeration and chill systems to improve productivity and schedule flexibility.

3) Refrigerated drawers to place refrigerated food right under work stations.

4) Smart kitchen that connects multiple pieces of equipments.

15. Answers will vary. Examples given in text are web pages, electronic couponing, frequent browser promotion and on-line review of menu offerings; customer email sections and correspondence to company management; allows customers to order food for home delivery and complete the payment on line.

Chapter 9 Test Bank and Answers Lodging: Meeting Guest Needs Multiple Choice Choose the one best answer.

1. Motels were built after World War II because of the a) housing shortage. b) hotel shortage. c) huge growth in auto ownership and its effect on travel. d) huge growth in travel by the baby boomers.

2. A motel in the first part of the 20th century a) must have a swimming pool. b) offered a wide range of services. c) was usually located at the edge of town. d) met both family and business traveler’s needs.

3. The smallest size settled on by motor hotel chains for full-service hotels as economically viable is a) 20 units. b) 75 units. c) 100 units. d) 200 units.

4. A limited service hotel a) typically offers guest rooms only. b) offers a wide range of facilities and amenities. c) features unique décor and furnishings. d) usually provides concierge service.

5. A large hotel with 500 or more guest rooms, extensive meeting and function space, and large ballrooms is a) a commercial hotel. b) a convention hotel. c) a motel. d) an executive conference center.

6. Which of the following type of hotels offer an important “extra” service- transportation to and from the airport? a) Luxury hotels b) Downtown hotels c) Highway hotels d) Airport hotels

7. Generally speaking, which type of property has the highest rate? a) Full-service hotels b) All-suite hotels c) Resorts d) Convention hotels 8. A property offering well-designed learning environments, a variety of small meeting rooms with full audiovisual and technological support is a) an executive conference center. b) a resort. c) a health spa. d) an extended-stay hotel.

9. Which of the following statements is not true about an ecotourism resort? a) It is usually located in areas of natural beauty. b) It open only in summer. c) Its design blends with the surroundings and protects the ecosystem. d) It can be found in the Great Barrier Reef of Australia.

10. Vacation ownership a) is the slowest-growing segment in the travel industry. b) only exists in the U.S. c) restricts the buyer to one property only. d) Is a type of shared ownership in which the buyer purchases the right to use a residential dwelling unit for a portion of the year.

11. The major difference between “all-suite” rooms and traditional hotel rooms is a) room size. b) room rate. c) services. d) a kitchen.

12. The highest percentage (52%) of travelers are a) leisure travelers. b) transient business people. c) association travelers. d) conference attendants.

13. Transient business people a) usually travel in a group. b) are typical male at the age between 35 and 54. c) are commuting between home and office every day. d) usually do not make reservations.

14. Association business travelers a) work in for-profit organizations. b) spend more money in traveling compared with corporate travelers. c) usually travel alone. d) often are cost-conscious than the corporate segment.

15. SMERF refers to a) summer resorts. b) business that originates from five resources: social, military, educational, religious and fraternal. c) a kind of governmental travel. d) small-sized hotels.

16. A major reason for international travel is a) low cost of lodging facilities in other countries. b) global economic expansion. c) high cost of videoconferencing. d) inefficiency of communicating by phone, fax, and e-mail.

17. Hotel segmenting means that a) different types of hotels have been built to respond to specific traveler needs. b) destination of travelers is the key. c) transportation patterns have provided a homogeneous type of hotel. d) hotels are now motor hotels, catering to travelers.

18. The fundamental need for business travelers is a) tele-conferencing. b) full-length mirrors and coffee makers in the room. c) the access to information. d) free airport shuttle service.

19. Which type of travelers show the least seasonal travel pattern? a) family travelers b) senior travelers c) female travelers d) business travelers 20. Which of the following best describes the impact of technology on lodging? a) Technology makes guests “connected” from any location in some hotels. b) Technology is gradually replacing personal service. c) In-room technology is becoming more and more complicated for the guest. d) Technology is only applied in luxury hotels.

21. Which segment is growing the fastest with 70% of increase in the last ten years a) transit business travelers b) association business travelers c) female travelers d) child travelers 22. Accommodations in private homes are known as a) inns. b) personal facilities. c) homes-away-from-home. d) bed and breakfasts.

23. After the event of 9/11, which kind of travel seems to be more important to Americans? a) international travel b) family travel c) business travel d) rural travel 24. Quality service a) consistently meets and exceeds customer expectations. b) is more important in the luxury segment than in the limited-service hotels. c) charges an extra fee. d) focuses on employees’ interaction with customers, but does not include the standards furnishings and décor.

25. To treat employees as internal customers, which of the following is a fundamental aspect of the organizational culture? a) flexible benefit plans b) extensive employee recognition programs c) a positive work place d) quality service concept

True/False 1.

Lodging has developed new products in recent times for different market segments.

2.

Motor hotels and motels have more similarities than differences in numbers of guest rooms, meeting rooms, and food and beverage facilities.

3.

The success of early motels was their location convenient to highways.

4.

Downtown hotels generally have a higher rate than motor hotels because of land cost.

5.

Hotel construction started in the U.S. after WWII when people started to take vacations.

6.

Economy hotels offer a wide range of facilities and amenities, compared with budget hotels.

7.

Airport hotels were designed in the 1950s and 1960s to accommodate air travelers.

8.

Resorts can be further classified according to the destination or seasonal basis.

9.

Health spa is a kind of resort setting with additional amenities.

10.

Although resort hotels overall are small in number compared with other lodging segments, they are highly profitable.

11.

Conference centers and convention hotels serve the same market.

12.

At an executive conference center, meals and use of recreational facilities are often included in the quoted daily room rate.

13.

A problem with vacation ownership is that the purchaser finds them extremely rigid in terms of travel flexibility.

14.

The majority of U.S. hotels (57.6%) have fewer than 75 rooms.

15.

The bed and breakfast market has changed to include some small scale resorts.

16.

Technology in some hotels allow guests to “virtually connect” with Internet from any location in the property.

17.

Price is the most important factor in determining where a business traveler stays.

18.

Most targeting of business travelers is limited to full-service properties.

19.

Less than 25% of business travelers are women.

20.

Trips taken for pleasure have the highest percentage among all trips.

21.

International travel to the U.S. has a larger share than to any other country.

22.

As a result of international travel, American brands are expanding rapidly in other countries.

23.

Family travelers tend to take more mini-vacations, consisting of four nights or less.

24.

Quality service is more important in luxury hotels than in limited-service hotels.

25.

High turnover is one of the reasons the hotel industry need to attract and retain the best people as employees.

Short Answer Questions 1. Referring to the discussion on the history of lodging, what era produced similar products to today’s motor hotels? Explain your answer fully. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. Where were the first luxury hotels built? What was one of the first built in the United States? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. Who revolutionized the lodging industry with the motor hotel? What led him to this? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

4. Identify a motor hotel in your area. What amenities do they offer? ___________________________________________________________________________ ___________________________________________________________________________ 5. The distinction between hotels and motels used to be clear. Why is that not the case today? ___________________________________________________________________________ ___________________________________________________________________________ 6. What areas of the world are experiencing the highest growth in the number of hotels? ___________________________________________________________________________ ___________________________________________________________________________ 7. Which factors below have produced distinct segments in today’s professional lodging operations? a. b. c. d.

Food service Rental cars Changing transportation patterns Varying special needs of travelers

8. Match each type of operation with its description.

(1) Motel ___ (2) Motor hotel ___ (3) Convention hotel ___ (4) Commercial hotel ___ (5) Health spa ___ (6) Vacation ownership ___ a. Combines a hotel’s broad range of services with a motel’s convenience to attract the auto travelers. b. Developed in response to the explosive growth in auto travel after World War II c. Small with 100 to 500 rooms. Close to business destinations and large city’s entertainment centers. d. Large with 500 or more rooms. Offering extensive meeting and function space. e. A type of shared ownership in which the buyer purchases the right to use a residential dwelling unit for a portion of the year. f. Providing additional amenities focusing on needs ranging from losing weight to reducing stress to pampering oneself.

9. What are the different types of resorts based on location and season? What are the customer and hotel characteristics in each category? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. What are the three types of hotels categorized by price?

1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________ 11. What are the two kinds of business travelers?

1)_________________________________________________________________________ 2)_________________________________________________________________________ 12. Which sentences below describe business travelers’ needs. (a) Access to the Internet (b) Full-length mirrors and coffee makers (c) Airline information (d) In-room video-games (e) Daily newspapers 13. Why is international travel expanding? How should hotel companies correspond to this change? ___________________________________________________________________________ ________________________________________________________________________ _______________________________________________________________________ 14. Name two major types of hotel rating systems in North America and their conducting organizations.

1) ________________________________________________________________________ 2) ________________________________________________________________________ 15. Give three examples of how hotels treat employees an important “internal customers.” ___________________________________________________________________________ ___________________________________________________________________________ _________________________________________________________________________

Answer Key Chapter 9 Multiple Choice 1. c 2. c 3. c 4. a 5. b 6. d 7. c 8. a 9. b 10. d 11. a 12. a 13. b

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d b b a c b a c d b a c

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Short Answer Questions 1. The Romans built an extensive system of paved roads and included way stations and inns at regular intervals along the way.

2. The first grand hotels of the world were, for the most part, in Europe, including such landmarks as the Grand Hotel in Rome, the Paris Ritz, and the Savoy of London. The Waldorf Hotel in New York City was one of the first properties in the States to provide many of the European amenities.

3. Kemmons Wilson. In 1952, he took his family on a vacation trip. He was depressed by the dearth of accommodations to meet his family’s and the business traveler’s needs. He returned to Memphis with a vision of a new kind of motel property that combined the advantage of a hotel’s broad range of services with a motel’s convenience to the auto traveler.

4. Answers will vary.

5. The basic distinction between hotels and motels has become more complex as different types of lodging properties have emerged.

6. Asia and the Middle East.

7. a, c, d 8. (1) b (2) a (3) d (4) c (5) f (6) e 9. By location, some resorts are “destination resorts”. Hotel guests tend to have to travel at least several hundred miles to reach such a resort and travel is typically by air. Visits to destination resorts tend to be infrequent as in usually once a year or less. Other resorts are nondestination or regional resorts that involve a two- to three-hour trip for visitors and are usually traveled to by car. The visits to such locations are more frequent but usually for shorter periods of time.

Seasonal classifications include summer, cold winter (i.e. ski resorts), warm winter and yearround. Today, most resorts operate year-round with group business and lower-rate packages bringing in guests during the less desirable times of the year.

10. 1) limited-service hotels; 2) full-service hotels; 3) luxury hotels 11. Corporate travelers and association travelers 12. a, c, e 13. As the global economy expands, an increasingly number of people travel internationally.

The U.S. companies have to have properties in those markets. The best way to publicize a chain at the points of origin of international travel is to have a property in the country. This makes local people familiar with the brand.

14. The Forbes Travel Guide offers a one-star to five-star rating system.

The American Automobile Association (AAA) rates lodging properties based on a system of one to five diamonds.

15. Answers should include English classes for international employees, childcare assistance, tuition reimbursement, flexible benefit plans, or extensive employee recognition programs.

Chapter 10 Test Bank and Answers Hotel and Lodging Operations Multiple Choice Choose the one best answer.

1. In a large hotel, the person under the general manager who assumes responsibility for day-today operations is the a) resident manager or hotel manager. b) executive assistant manager. c) assistant manager. d) food and beverage manager.

2. The size and type of hotel determines, to a great extent, its organization. The following statement related to the size of hotel organizations is generally correct: a) All hotels have a food and beverage department. b) Smaller properties have functional areas but often do not have departmental heads for each function. c) Large properties, over 1000 rooms, require more than one general manager. d) The resident manager in most properties is in charge of the food and beverage department.

3. The majority of hotel properties offers how many units on average? a) Fewer than 50 b) 50 to 100 c) 100 to 300 d) Over 250 4. The major source of profit in hotels is, in most cases, from a) room sales. b) food sales. c) beverage sales. d) meeting and banquet sales.

5. In a typical rooms department, the departmental income should be about a) 15 to 20%. b) 30 to 40%. c) 50 to 60%. d) 70% or more.

6. In a typical food and beverage department the departmental income should be about a) 15 to 20%. b) 30 to 40%. c) 50 to 60%. d) 70% or more.

7. The department that is most crucial to the financial success of a typical hotel is the a) rooms department. b) food and beverage department. c) engineering department. d) accounting department.

8. The system that improves operational efficiency by eliminating repetitive tasks and improves service by providing information more quickly and accurately is a) POS (Point-of-sale). b) key clerk system. c) yield management. d) PMS (Property management system).

9. The department that is notified as soon as a guest checks out of a hotel is a) the bell staff. b) bookkeeping. c) housekeeping. d) rooms.

10. The most time-consuming duty of the morning front desk shift is a) completing the night audit. b) taking room reservations. c) confirming the log book. d) checking out guests.

11. In upper upscale hotels, the person who provides guest information is the a) travel agent. b) valet. c) bell captain. d) concierge.

12. The night audit requires a) that yesterday’s closing balance be added to all payments made today. b) that all charges guests made today should be deducted from yesterday’s closing balance. c) that today’s closing balance will be the result of adding all charges guests made today to yesterday’s closing balance. d) that today’s closing balance is the addition of all charges guests made today to the closing balance from yesterday minus all payments received today.

13. The process of balancing the day’s charges and cash receipts against the guests’ accounts is referred to as a) the night audit. b) back-office work. c) the tray-ledger. d) the shift balance procedure.

14. The property management system a) is a computerized payment system. b) is used primarily by the controllers in the hotel office. c) automates much of the procedural work on the front desk. d) is part of the real estate office in large hotels.

15. A central reservation system a) is used by chains as a reservation service. b) cannot be used by franchised properties. c) is a new technology dependent upon the Internet. d) cannot be interfaced with a PMS. 16. Yield management as used by hotels a) is produced by analyzing the posted room rate. b) determines the room rate by evaluating competitor’s rates. c) has increased room rates during times of low occupancy. d) maximizes the room rate when occupancy is high.

17. The major security problems in a hotel are a) inadequate electronic locks and room safes. b) access to the hotels from the outside and stolen keys. c) safety of guests and their property, fire prevention and natural disaster contingencies. d) insecure hallways and public space.

18. The department that is found in a full-service hotel and not in a limited-service hotel is a) the food and beverage department. b) the engineering department. c) security department. d) housekeeping department.

19. When the food and beverage department of a hotel is designated as a profit center, it means that a) it is the most profitable department in the hotel. b) it is the aim of the hotel that the food and beverage department make a profit. c) the food and beverage department is only a key marketing activity to obtain hotel guests. d) the food and beverage department can lose money as long as the hotel makes a profit overall.

20. A chef a) is another name for “cook.” b) does not deal with food purchase and employment. c) is an investment for some hotels. d) is becoming less important with the availability of frozen food.

21. Marketing in a small-scale hotel a) means personal selling by a sales manager. b) today is targeted to national conventions. c) is determined by the corporate office in a chain. d) is a function of general management that involves all levels of operation.

22. The Hospitality Sales Marketing Association International (HSMAI) a) is an organization founded to protect hotel marketers from liability. b) conducts educational and information programs. c) is an organization for sales managers only. d) is a consumer advocate group protesting high room rates.

23. Which is not a function of the accounting department? a) payroll b) accounts receivable c) wage and benefit administration d) accounts payable 24. When a patron who is not staying in a hotel wants to charge her meal at the hotel’s restaurant to her hotel charge account, the transaction is posted in the a) city ledger. b) house ledger. c) restaurant ledger. d) general ledger.

25. Human resources in a hotel refers to a) employment and staffing functions. b) a labor union. c) techno-computer experts. d) the department that deals with guest relations.

26. The engineering department in a large hotel is responsible for a) the rooms department. b) designing new facilities. c) the mechanical equipment. d) building and repairing structures.

27. The cost that is considered to be an “undistributed operating expense” is a) payroll. b) laundry. c) beverage cost. d) maintenance costs.

28. The cost that is considered a capital cost is a) supplies. b) music and entertainment. c) depreciation. d) utilities cost.

29. RevPar is a) average rate. b) number of guest per occupied room. c) revenue per available room. d) revenue per sold room.

30. On a hotel income statement, capital costs include a) rooms, food and beverage. b) telephone, rentals, and other operated departments. c) property operation, maintenance, and utility. d) property taxes, depreciation, insurance and other municipal charges.

31. Average rooms cleaned per maid day is determined by a) number of rooms occupied divided by number of 8-hour maid shifts. b) number of rooms occupied divided by total number of housekeepers. c) number of shifts multiplied by the number of rooms. d) number of housekeepers multiplied by average number of rooms occupied.

32. Leverage is a financial term and means a) that profits can be exaggerated by stock transactions. b) it is an integral part of the uniform system of accounts. c) that a small amount of capital can draw much larger amounts of borrowed funds. d) that capital costs can be depreciated over time.

True/False 1.

Full-service hotels, regardless of size, all have the same functional areas.

2.

A resident manger in a large property is usually responsible for departments related to rooms.

3.

Smaller properties often operate effectively without department heads if the functional areas are covered.

4.

The food and beverage area contributes more to the profitability of a hotel than any other department.

5.

Credit policies of hotels are carried out by the front-desk clerk.

6.

The person who balances the ledgers making sure than all guest charges and payments are posted is the manager of the front desk.

7.

The hotel’s PMS simplifies the clerical tasks of the front desk.

8.

Today, both the food and beverage and housekeeping departments are commonly interfaced with the front-desk computer.

9.

Yield management is used by hotels when they go public and shares are sold.

10.

Yield management assures the guest that their hotel room is safe.

11.

A biometric safe is one which involves a thumb scan for entry.

12.

Most average-sized hotels maintain a separate telephone department.

13.

In the housekeeping department, renting rooms that have not been cleaned is sometimes necessary.

14.

The hotel concierge’s duty of supplying information to tourists and other guests is a function that is not performed in the average-sized hotel.

15.

Limited-service hotels do not have a full-service restaurant on premise.

16.

Hotel food and beverage departments can generate sizable sales volume, but their profitability is much less than the rooms department.

17.

A problem in hotel restaurants is the need to staff the operation for early breakfast and late dinner customers.

18.

For group meetings in hotels, food and beverage profit is not as much a concern as is the service to the rooms customer.

19.

In most hotel restaurants, the person in charge of sanitation is the assistant restaurant manager.

20.

Offering several restaurants in the hotel increases its service, but does not gain enough profit.

21.

Marketing is a responsibility of general management that does not involve other levels of the operation.

22.

Capital costs include the management fee, property taxes, insurance and other municipal charges.

23.

Accounts receivable are payments that have been made by guests.

24.

The house ledger contains a record of bills that are owed by guests and other patrons of the hotel.

25.

In hotels, records of charges made by guests in the hotel and customers who are not staying in the hotel are kept in separate ledgers.

26.

In most hotel operations, initial screening of employees is made by the human resources department, but the hiring decisions are made by department heads.

27.

Revpar refers to revenue per available room.

28.

The uniform system of accounts for hotels arranges income and expense so that the efficiency of each department can be measured.

29.

Undistributed operating expenses are sometimes difficult to allocate to the various departments in a hotel.

30.

The best measure of success of a hotel is “fixed charges.”

31.

Capital costs are all those directly related to the cost of the building, excluding furnishings and fixtures.

32.

An occupancy rate of 70% means that, on average, the cost of a room sold was 70% of the posted rate.

33.

Depreciation is the amount of the value of a building, furniture, and fixtures that can be written off over their useful life.

34.

Leverage is a term that means that a small amount of funds allows the investor to borrow much larger quantities of money.

35.

The hotel industry is capital intensive but is not highly leveraged.

Short Answer Questions 1. The major functional activities found in full-service hotels are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. Why are front-desk employees so important in terms of guest interaction? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. What are a night auditor’s typical duties? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 4. What system performs many of the tasks previously performed manually by the night auditor? What overall benefits does this automation provide? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 5. Why should the POS system interface with the PMS? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 6. If the housekeeping system is not interfaced with the PMS, how can a front-desk cleark determine if a room is ready? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 7. Yield management is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

8. Describe some ways hotels provide security to guest rooms: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 9. The role of marketing a hotel is threefold: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 10. The “house ledger” and the “city ledger” are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 11. General management should be involved in engineering by: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 12. Undistributed operating expenses are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 13. The average rate is: ___________________________________________________________________________ ___________________________________________________________________________ 14. The occupancy rate is: ___________________________________________________________________________ ___________________________________________________________________________ 15. RevPar is: ___________________________________________________________________________ _________________________________________________________________________

Answer Key Chapter 10 Multiple Choice 1.

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c a b c d b c a a c d c c d a c

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Short Answer Questions 1. The rooms department or division, which usually includes the front desk, uniformed services, housekeeping, telecommunication, gift shop, security, etc; the food and beverage department; and staff and support activities including accounting, engineering, human resources and marketing.

2. The front-desk receptionists have an integral role in determining guests’ first impressions and last impressions of the hotel property. The attentive, warm greeting of a front-desk receptionist can have a tremendous impact in making guests feel welcomed. If something goes wrong, most guests will complain first to the front desk. When the guests leave, the desk clerks check them out.

3. The auditor oversees processes such as posting those charges not posted by the earlier shifts, including (most especially) the room charge. He or she then audits the day’s guest transactions and verifies the total balance due the hotel from guests as of the close of the day’s operations. He or she verifies that the balance is the correct result of deducting all payments from yesterday’s balance and adding all of today’s charges.

4. Property management system (PMS). The PMS improves operational efficiency by eliminating repetitive tasks and improves service by providing information more quickly and accurately. At the same time, the PMS improves operational control.

5. Front-office clerical routines are further simplified. When guests settle a dinner or bar check by charging it to their room number, the cashier in the food or beverage outlet posts this entry on his or her POS terminal, and that posting is automatically entered on the guest’s bill at the front-office terminal.

6. The clerk would have to call housekeeping.

7. Yield management puts together occupancy and the average daily rate (ADR), and using forecasting based on the history of past sales, sets out to get the best combination of occupancy and ADR. It involves varying room rates according to the demand for rooms in any given time period.

8. electronic or card-based locks, “contactless” smart cards, biometric locking systems for the door or the safe 9. The role of marketing a hotel is threefold: 1) Creating customers―designing a hotel’s facilities and services to suit the needs and tastes of potential guests, 2) encouraging guests to choose your property by emphasizing all of those service activities that make the property pleasant and convenient, 3) promoting the property among various potential guests and groups of guests.

10. Also called the tray ledger, the house ledger, kept at the front desk, is made up of bills owed by guests in the house. The city ledger contains charges by guests who have checked out, and charges by other persons, such as restaurant patrons not staying at the hotel.

11. General management should be involved in engineering by: 1) determining what periodic maintenance of equipment is required, 2) establishing a schedule for accomplishing that work, 3) developing a reporting system and physical inspection system that assures management that this work is carried out properly and on time.

12. Costs that cannot be perfectly assigned to one department in a hotel. These costs include administrative and general expense, marketing and guest entertainment, property operation, and maintenance and energy costs.

13. dollar room sales divided by number of rooms sold 14. rooms sold divided by total rooms available 15. revenue per available room. RevPar = Rooms revenue ÷ Available rooms or Paid occupancy percentage × ADR (Average daily rate)

Chapter 11 Test Bank and Answers Forces Shaping the Hotel Business Multiple Choice Questions Choose the one best answer.

1. The lifetime of a new hotel and the cycle of hotel building a) are the same. b) has meant times of excess capacity. c) has meant a less capital-intensive industry. d) has led to a reduced influx of capital into hotel building projects.

2. The demand for hotel rooms changes direction a) at the same time that the economy does. b) three to six months after the economy does. c) one to two years after the economy does. d) three to six months before the economy does.

3. The major factor that sets off over-building in the hotel industry is a) an increase in demand for rooms. b) a lot of excess capital in the market. c) too many old and out-dated hotel properties. d) that the national economy is in a down-turn.

4. When domestic economy has become better in 2003, the hotel industry a) experienced a building surge. b) was faced escalating land and construction prices. c) still couldn’t recover from all terrorist and natural disasters. d) became not so efficient in management as before.

5. Which is not correct about asset managers? a) They work for the benefit of the hotel owner. b) They help evaluate the management company’s work. c) Only a few hotels in the U.S. apply asset management. d) They also benefit the operators by helping the communication with the owner.

6. Which of the following terms refer to ownership? a) Mortgage b) Bond c) Debenture d) Equity 7. Securitization refers to increased use of a) stock. b) debentures. c) financing from public markets. d) mezzanine financing.

8. A major change in hotel financing has been a) the growth of funds from public markets. b) capital from private investors. c) the lessened risk of hotel building. d) more money available from banks.

9. Conduit lenders a) use funds from other companies to make loans. b) specialize in loans from private sources. c) have decreased the risk in hotel borrowing. d) consolidate and sell mortgages to public and institutional investors.

10. Mezzanine financing a) increases the amount of money the borrower must provide. b) is higher risk than mortgage debt and thus has a higher interest rate. c) means that a mortgage is not required when money is borrowed. d) is a publicly-traded stock.

11. A CMBS is a) commercial mortgage-backed security. b) less available to hotel developers after September 11th. c) a type of mutual fund. d) the same as gap financing.

12. A REIT a) raises money by issuing stock. b) usually increases the cost of borrowing funds. c) is unpopular because returns are below average. d) raises money through leveraged financing.

13. A problem with REIT financing in the hotel industry is a) high income tax on profits. b) not enough capital available. c) REITs cannot operate hotel properties. d) they do not pay dividends to their shareholders.

14. C Corps are a) hotel franchise companies. b) publicly held hotel companies. c) mutual funds. d) only available in the hotel industry.

15. In 2005, REITs were responsible for how much of hotel industry investment a) 80%. b) 50%. c) 90%. d) 20%.

16. M&A activity will increase when a) competition in the hotel marketplace is severe. b) hotel chains become popular. c) capital is easily available and less costly. d) capital is not available.

17. The M&A activities of REITs in the 1990s a) increased the concentration of hotel ownership. b) nearly eliminated competition in the hotel industry. c) decreased public ownerhip of hotels. d) have enabled some segments within the hotel industry to control prices.

18. A potential problem associated with publicly held hospitality companies is that a) the image of the company blurs. b) management within individual units have no incentives for advancement. c) a long-term vision of the company suddenly becomes short-term. d) capital is unavailable for expansion and renovation.

19. Investment in a hotel is attractive when a) interest rates are high. b) inflation is a real possibility. c) the value of hotel assets are at their peak. d) profits are decreasing.

20. A highly leveraged hotel a) is one that has a special architectural feature. b) is one with high interest rates and low profit. c) is one with most of its capital borrowed money. d) involves borrowed capital on which no interest is paid.

21. Tax savings on hotel investments a) have disappeared in the 1990s. b) are from tax credits today. c) are made today by deducting loan interest from income. d) are offset by the cost of going public.

22. Hotels as an investment in inflationary times are advantageous because a) real estate remains stable in price. b) more capital is available to build hotels. c) rates can quickly be increased. d) there is a tremendous increase in demand in hotel rooms.

23. With regard to the real estate component of the hotel business, the following statement is correct: a) Hotels have generally been considered a poor inflation hedge. b) The income stream of a hotel is likely to fall over the long run by enough to offset inflation. c) The appreciation value of the real estate may be more important than the profitability of the hotel. d) The ability to increase revenue is less in hotels than other real estate projects such as malls which are generally fixed by long-term leases.

24. Hotel segmentation that results in a company franchising more than one property in an area a) appeals to real estate developers if more than one franchise brand is available. b) is always driven by customer demand. c) prevents a company that owns more than one brand from building more than one property. d) results in a non-competitive atmosphere in that area.

25. “Encroachment” refers to a) franchisees taking on more than one kind of hotel franchise. b) management contract companies who “bundle” their properties in one or a few cities. c) the general practice of overbuilding by real estate developers. d) the practice of building more than one franchised hotel in a market, using the same franchise or a competitive brand in the same market.

26. As a result of growing problems with encroachment a) it is unlikely that franchisees will be allowed to merge more than one brand. b) management companies will tend to spread their properties over a wider geographic area. c) overbuilding is unlikely in the future. d) it is less and less likely that any franchise agreement would be written without specific geographic protection.

27. The written agreement between a hotel management company and the hotel owner is called a a) management contract. b) independent contract. c) franchise contract. d) operating contract.

28. Hotel chains which serve as hotel management companies usually a) do so to expand their business. b) offer more operating flexibility than independents. c) do so for their franchisees. d) do so without a written contract.

29. The essence of lodging finance is that lodging a) is capital intensive and cyclical. b) is stable over time and costly, but profitable. c) closely follows economic swings. d) demand and building coincide.

30. As the number of hotels expanded rapidly in the 1970s and 1980s, much of the development was handled by people with experience in a) hotel operations. b) management. c) finance and real estate. d) mergers and acquisitions.

True/False 1.

The lodging industry is both capital intensive and cyclical in nature.

2.

The hotel industry has been plagued by periods of overbuilding followed by over-capacity.

3.

A problem of the hotel industry is that decisions to build a hotel take so long that economic conditions and demand can change after a company has made a commitment to build the hotel.

4.

Hotels are always built because there are not enough rooms for the number of guests.

5.

The cycle of hotel building covers the same time span as the lifetime of the hotel.

6.

The hotel building cycle is caused when an undersupply of hotel rooms sets off a building boom that can’t be stopped when it is clear that there will be an oversupply of rooms.

7.

Growth in the hotel industry can be fueled by tax breaks.

8.

Securitization has meant that capital in the hotel business has switched from public to private funds.

9.

CMBS debt is backed by a pool of commercial mortgages.

10.

Conduit lenders allow mortgages to be sold to investors.

11.

Gap financing is the same as a first mortgage.

12.

The impact of September 11th resulted in very few funding for the hotel industry for about 18 months.

13.

A disadvantage of a REIT is that it must pay income tax on the earnings it distributes to shareholders.

14.

REITs limit their investments to hotel properties.

15.

REITs are often valued because of a reputation for paying a more reliable yield to their investors.

16.

A “secondary offering” simply means that a publicly traded company issues more shares.

17.

M&A activity has decreased in the 1990s.

18.

REITs are able to buy individual or groups of hotels with borrowed money.

19.

REITs have an advantage in that interest need not be paid on borrowed funds.

20.

IPOs are first-time offerings of a company’s stock to the public.

21.

Companies like Hilton or Marriott that are publicly owned are called “C Corps.”

22.

One result of REITs has been the concentration of large numbers of hotels owned by single REITs.

23.

Public ownership of a lodging property reduces the pressure on the operator to perform well each year.

24.

With the economic challenges from 2001, management contracts tend to be in shorter-term than before.

25.

When hotel profits are low and interest rates are high, a leveraged hotel purchase is advantageous.

26.

Hotel properties are not attractive to real estate developers during inflationary periods.

27.

Some hotel companies are also real estate developers.

28.

Hotel segmentation often meets the needs of real estate developers who wish to develop a single area.

29.

Hotels who share different brand names but who have the same market and franchisor are impacted by encroachment.

30.

Chain management companies offer flexibility in contract terms.

Short Answer Questions 1. The reason the hotel business is cyclical in nature is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. Some of the factors that lead to over-building hotels, related to the hotel cycle, are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. Several events over the last 20 years have affected the hospitality industry in terms of pricing and demand. List three of these. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 4. Explain RevPar and why RevPar alone is not adequate to measure hotel performance: __________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 5. What is the most expensive hotel built to date and how much did it cost? __________________________________________________________________________ ___________________________________________________________________________

6. Are hotel companies also in the real-estate-development business? Why or why not? __________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 7. What is an operation challenge related to condo-hotels? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 8. Where is the largest growth area for U.S.-based hotel companies—in the U.S. or abroad?

Provide an example to support your answer. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 9. Securitization in the hotel industry is defined as ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. The difference between debt and equity is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 11. A CMBS is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 12. The three factors or dimensions in making a decision to invest in a hotel are: 1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________

13. Encroachment is ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 14. Name the two kinds of management companies and describe how they differ: 1)_________________________________________________________________________ ___________________________________________________________________________ 2)_________________________________________________________________________ ___________________________________________________________________________ 15. From the real estate development’s point of view, why is a hotel built: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 11 Multiple Choice 1.

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b b a b c d c a d b a a c b d

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c a c b c c c c a d d a c a c

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T T T F F T T F T T F T F F T

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T F T F T T T F F F F T T T F

Short Answer Questions 1. Because of the difference between the lifetime of a hotel and the cycle of hotel building, meaning that frantic building is followed by periods of excess capacity.

2. The complexity of the decision to build a hotel, the lead time required, the preliminary expenditures, and the public corporate and individual commitment to a decision to build a hotel make it difficult to back out after 1 to 2 years of planning 3. Answers include 9/11, Persian Gulf War, Katrina, the recession beginning in late 2007, and the Middle East conflict or in more general terms, a combination of a depressed economy, terrorism, war, travel complications, and outbreaks of severe acute respiratory syndrome.

4. RevPar refers to revenue per available room. It is sometimes heavily influenced by factors managers cannot control.

When RevPar growth is dominated by occupancy increases there are also increased costs in servicing the extra rooms and guests. Therefore, the profit is less. Only when Average Daily Rate is also raised with RevPar, the profit can be increased.

5. The Emirates Palace Hotel, which opened in Dubai in 2006, is reported to be the most expensive hotel ever built at a cost of $3 billion.

6. Hotel companies are highly active as real estate developers. Marriott, for instance, sustains its growth in part by buying, developing, and then reselling land and hotel properties. Indeed, such companies have a real interest in continuing expansion of their brands to gain a greater share of the market and to ensure that their brands have a presence in the widest number of local markets. Naturally, they also want to gain the profits from development.

7. Because condo owners are not using their rooms at the same time, coordinating with blocking section in advance for group or convention use to maximize revenue sometimes can be difficult.

8. More growth is found outside of the U.S. China is a good example where there are some 208,847 rooms in some stage of development.

9. The influx of funds into the industry in return for equity and debt securities issued by publicly traded hospitality companies 10. Debt refers to borrowed funds such as mortgages, bonds, debentures and the like. The term equity refers to ownership, here in the form of stock sold to individual and institutional investors.

11. A CMBS is a commercial mortgage backed security, often a bond rated by bond agencies, backed by a pool of commercial mortgages which will generate future payments of interest and principal.

12. Availability of financing, real estate values, and hotel operations.

13. The practice of loading additional franchisees into the same market with one or more existing franchisees.

14. Chain management companies are hotel organizations such as Hilton, Marriott or Promus that manage hotels under their franchises. They typically operate properties of more than 300 rooms and require a minimum management fee. Independent management companies operate under-300 room hotels, often under different franchises. They offer owners more control over daily operations and more flexibility in contract terms.

15. 1) The area or community needs the property.

2) The underlying value of the real estate and its appreciation are more important to the investors than the profitability of the hotel.

3) In inflationary times, hotel pricing is flexible and can be raised overnight.

Chapter 12 Test Bank and Answers Competition in the Lodging Business Multiple Choice Questions Chose the one best answer.

1. The framework for the analysis of competition in the hospitality industry is a) task analysis. b) profit and loss statements. c) advertising strategies. d) the marketing mix.

2. A fragmented hotel industry is a) one in which there are a few dominant brands. b) a highly concentrated one. c) characterized by many owners. d) one with little competition.

3. A characteristic of the hotel industry of the beginning of the 21st century is a) many small firms competing for survival. b) a uniformity of amenities and products. c) a relatively non-competitive marketplace. d) a few large chains dominating the marketplace.

4. Which of the following is not a factor of competition for the hotel industry a) a fragmented market. b) a cyclical market. c) the weakening economy. d) technological revolution.

5. The “low variable cost” of a hotel room means that a) fixed costs are low. b) the cost associated with selling a room is low. c) there is a low margin over costs and prices cannot be cut in a competitive market. d) hotels today are relatively inexpensive to build compared with the past.

6. Which of the following is likely to fundamentally change the way hotels do business? a) The marketing mix b) The Internet c) The cyclical nature of the industry d) Market competition 7. The hotel industry can be characterized competitively as a) highly competitive. b) somewhat competitive. c) non-competitive. d) monopolistic.

8. The best description of the lodging “product” is a) physical goods. b) the guest room. c) the guest’s experience. d) guest service.

9. Hotel room prices are a) fixed. b) the rack rate. c) changed with demand. d) unaffected by the cyclic nature of the industry.

10. Promotion in the lodging industry a) includes individual and mass communication media. b) refers to advertising. c) means P.R. d) excludes rewards for brand loyalty.

11. Strategies and tactics in the lodging market today focus mostly on a) differentiating product and service offerings. b) pricing the product consistently. c) communicating offerings via the Internet. d) guest amenities.

12. A “target” market is a) a type of advertising scheme. b) a specific guest segment and their needs. c) non-specific in nature. d) focused on guest services.

13. The “downstairs” market a) includes hotels without restaurants. b) is service intensive. c) is a limited-service segment. d) focuses on guest rooms in a hotel.

14. The “upstairs” guest is interested in a) the finer things in life and superior services. b) being roomed on an upper floor where it is quiet. c) food and beverage services and other amenities such as meeting rooms. d) a clean, comfortable guest room.

15. In addition to the guest room, the “downstairs” guest is interested in a) an ultra high service level. b) a ground floor room with easy access to his or her car. c) food and beverage services and other amenities such as meeting rooms. d) special convention rates.

16. Food service is more important to a) the upstairs guest. b) the transient businessman. c) the downstairs guest. d) family and other personal travelers.

17. Limited service properties generally provide a) rather indifferent service. b) a very small restaurant and bar. c) sous vide cooking. d) an advertised, standardized free breakfast.

18. The major disadvantage to leasing a hotel’s food service is a) its cost to the hotel. b) that it uses hotel space that could be better utilized. c) that there are two companies running the hotel business. d) food quality.

19. Franchised brand name restaurants in lodging operations a) are commonly found in luxury hotels. b) require more effort to manage than a regular hotel restaurant because of franchise complications. c) provide consistent quality operations and free up hotel management from a timeconsuming operation. d) are found only in the case of a strategic alliance or cross-licensing operations.

20. The most difficult differentiating service to copy in hotels is a) fitness centers. b) concierge services. c) personal amenities. d) food service.

21. One of the appeals of a good hotel restaurant to the owner of the hotel is a) its higher profit level compared with guest room rental. b) increased occupancy in the hotel. c) it provides an important element of luxury. d) that it is much preferred by the upstairs market.

22. Services such as superfloors and amenities a) are becoming the norm for most hotels. b) are only found in luxury hotels. c) serve to differentiate properties. d) are necessary if food service is eliminated.

23. Business centers in the lodging industry a) are “away-from-business” mini-offices for travelers’ use. b) are mini-malls in large hotels. c) provide guest services such as computers, photocopying, Internet, printers and fax machines. d) are hotels surrounded by local businesses, usually in downtown cores.

24. Price boundaries in the hotel industry are set by a) building costs. b) profits. c) competition and cost. d) fixed and variable costs.

25. Yield management in lodging a) provides consistent rooms pricing. b) does away with market fragmentation. c) combines a history of room demand with a current demand. d) is a formula for room rates based on expected profits and fixed costs.

26. The complex system of providing information and reservation services to travelers is called a) travel agent systems. b) channels of distribution. c) referral services. d) representation companies.

27. The type of advertising hotel franchisers use for their chains is called a) brand advertising. b) national advertising. c) reservations advertising. d) franchising advertising.

28. Hotel reservations through the Internet a) are limited to luxury hotels. b) do not affect conference planners. c) have forced many travel agencies to niche market. d) are still too complicated for individual travelers.

29. Frequent stay programs in the hotel business a) cost the marketing department little since rooms would otherwise be empty. b) were first introduced early in the 19th century. c) reward guests for brand loyalty. d) have not been successful.

30. Guest data bases a) permit hotels to gather information about their guests. b) are reservation systems. c) are generated by surveys. d) are part of mass communication programs.

True/False 1.

The framework for the analysis of competition in the lodging industry is the “marketing mix.”

2.

The lodging industry today can be characterized as a fragmented industry with many independent operators.

3.

A hotel “flag” refers to the brand name of a hotel.

4.

Hotel conversions in the 2000’s indicate that brand loyalty is important to operators.

5.

Conversion of properties from one brand to another is mostly limited to new properties.

6.

The lodging industry is cyclical, creating periodic over-capacity.

7.

Over-capacity has not been a problem in the hotel industry.

8.

Hotel room sales have a high variable cost.

9.

Technology has changed the way hotel rooms are sold.

10.

“Product” in the marketing mix includes only physical goods.

11.

“Marketing communication” includes persuasive promotional activities.

12.

Tangible aspects of lodging are guest rooms and physical space such as meeting and convention rooms.

13.

All-suite properties do not offer food service, but provide meeting and banquet facilities.

14.

A disadvantage to leasing hotel food service is conflict between the company that runs the hotel and the company than runs the food service.

15.

Some limited service hotel chains have solved the food service problem, in part, by leasing brand-name restaurants on their hotel sites.

16.

Hotel restaurants generally are more profitable than the other hotel departments.

17.

The “upstairs market” hotel can offer attractive room rates because they do not have the costs associated with food service facilities.

18.

The basic function of the concierge is to provide guest service and information.

19.

Physical fitness facilities are found only in upscale hotel properties.

20.

Competitive tactics in the hotel industry are successful because most services and amenities are difficult to copy.

21.

The goal of pricing in the lodging industry today is to maximize profit.

22.

Prices in individual hotels and in chains are uniform.

23.

A yield management system in a hotel is designed to sell hotel rooms at the best price during peak periods and is prepared to lower prices during slow periods.

24.

The competitive nature of the hotel business has led to price discounting.

25.

A tool that is used by developers and hotel builders is the “feasibility study.”

26.

Referral services are considered to be “channel members.”

27.

A franchiser can provide its franchisee properties international central reservation system.

28.

Individuals’ use of Internet to make travel arrangements does not affect travel agencies’ business.

29.

Airline and hotel partnerships have not been successful in increasing hotel occupancy.

30.

Profiles of hotel customers allow the hotel to provide better services for their guests.

Short Answer Questions 1. Name three conditions that have currently affected competition in the lodging industry: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 2. What do we mean when we say the hotel business is fragmented? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. The four “Ps” of marketing are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 4) ________________________________________________________________________ 4. The difference between the upstairs and the downstairs markets is: ___________________________________________________________________________ ___________________________________________________________________________ 5. The advantages and disadvantages of a hotel leasing their food service operation are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 6. Why did Marriott Courtyard reduce its food servce? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

7. Why might a hotel operator continue to operate a restaurant when it is not profitable as a stand-alone entity? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 8. Today, is it more likely that a hotel restaurant operates at a loss or contributes as a profit generator? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 9. Name some services that hotels provide to differentiate their properties: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. How do franchisors manage quality assurance? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 11. Yield management is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 12. Channels of distribution in the hotel industry are (define and name one channel member): ___________________________________________________________________________ ___________________________________________________________________________ 13. Some advertising media for mass communication are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

14. Sales promotion is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 15. Name three types of distribution channels through the Internet: 1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________

Answer Key Chapter 12 Multiple Choice 1.

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c d c c d b c c c c b a c c a

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T T T F F T F F T F T T F T T

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F T T F F T F T T T T T F F T

Short Answer Questions 1. Conditions of competition in the lodging industry are 1) a fragmented market resulting in unpredictability and higher risk 2) a cyclical market which makes for periodic over-capacity 3) a low variable cost which makes discounting look easy 4) securitization—a recent inflow of investment capital which has helped the industry to expand capital 5) the technological revolution which has altered the way in which hotel rooms are offered for sale 2. Ownership in the hotel business is not highly concentrated.

3. The four “Ps” of marketing are 1) product 2) price 3) place 4) promotion 4. The “upstairs market” guest is interested in what you find upstairs in a hotel, that is, guest rooms, while the “downstairs market” guest needs the more extensive services of a fullservice hotel or finds them desirable, such as dining rooms, cocktail lounges, meeting and banquet facilities, and the like.

5. The advantages and disadvantages of a hotel leasing their food service operation are: 1) Advantages: food service is difficult to manage; a leasing company has expertise in food service; a good food service company can increase the hotel’s revenue; if a franchised

restaurant is used, the franchise company has a successful food service format, field supervision, and the power of an additional brand.

2) Disadvantages: loss of control of food service; two companies can create conflict in one operation; in business slow-down periods the restaurant has to cut costs and services to survive which is in conflict with what the hotel has to do to survive.

6. When the company determined that, although it had strong breakfast and lunch sales, its dinner business was minimal, it closed its restaurant at dinner and eventually for lunch, leaving the restaurant open for breakfast only.

7. In many markets, food service adds points to occupancy rates and secures local referrals. The resulting higher occupancies more than offset the lower profit on food service.

8. Hotel food and beverage departments have become much more profit-driven. After all of the restructuring, downsizing, reimaging, and outsourcing, there is evidence that suggests that food and beverage service has begun to contribute to a hotel’s profitability.

9. Answers will vary. The text mentions the upstairs and downstairs market; distinctive physical plant features and products, for example, the concierge, superfloors, fitness facilities, and business centers.

10. Franchisors management quality assurance through inspection systems.

11. Yield management is a method that can help a firm sell the right unit to the right customer at the right time and for the right price. It guides the decision of how to allocate undifferentiated units of limited capacity to available demand in a way that maximizes profit or revenue.

12. Channels of distribution are the complex system for providing information and reservation services to travelers. Channel members include hotel chains, franchise systems, referral services, travel agents, hotel sales and representation companies, airline CRS, and the Internet.

13. Some advertising media are 1) print (newspaper and magazines) 2) electronic media (television and ratio) 3) outdoor media (billboards) 4) direct mail 5) Internet 14. Sales promotion is a marketing communication activity that offers an incentive to immediate action such as special events or individualized rewards for frequent guests.

15. Answers may include: 1) the chain’s own web site 2) channels that use data and reservation from Global Distribution System (GDS), such as Expedia and Travelocity 3) the web-based channel with inventory and reservation database maintained on line, such as WorldRes 4) the auction-style web site, such as Priceline.com

Chapter 13 Test Bank and Answers Tourism: Front and Center Multiple Choice Choose the one best answer.

1. The statement about tourism that is not correct is: a) Hotels derive almost all of their sales from travelers. b) The tourism industry is a major factor in providing jobs during economic downturns. c) The most significant factor in fueling the growth of tourism has been infrastructure improvement. d) Leisure travel accounts for 77% of all domestic person-trips in 2002.

2. The percentage of restaurant sales attributed to tourism is a) 5% b) 10% c) 25% d) 40% 3. A “person trip” is a) the number of trips times the number of people taking each trip. b) one person traveling 100 or more miles away from home. c) a term used for international travel. d) a single individual traveler rather than a group.

4. The most common means of tourist travel is by a) automobile. b) train. c) bus. d) airplane.

5. The following has not contributed to the growth of tourism: a) leisure time b) rising family income c) decreased cost of leisure activities d) demographic trends 6. For families today, vacation needs are for a) two- to three-week vacations. b) inexpensive vacations c) “quality time” vacations. d) theme park vacations.

7. The age group that travels most is a) 25 to 34 years of age. b) 35 to 44 years of age. c) 45 to 54 years of age. d) 55 to 65 years of age.

8. The following statement is correct about demographics as a major tourism factor: a) People over 65 years of age are an unimportant market segment. b) Middle-aged travelers often choose group travel at off-peak times and seasons and tend to be more price conscious. c) Two-income families have become a major factor in tourism. d) Generally, most people over 80 years of age are unable to travel.

9. The most significant reason that people give for traveling is a) to visit friends and relatives. b) business and convention travel. c) outdoor recreational travel. d) travel to sightsee and for entertainment.

10. People are traveling more than they have in the past in part because of the a) increase in the number of two-income families. b) increase in the number of hotels and motels. c) increase in long-weekend trips. d) improved infrastructure.

11. A recent vacation trend among younger travelers has been a) weekend mini-vacations. b) 10-14 day vacations c) 4 week vacations. d) spending vacation time at home.

12. The following statement about the economic significance of tourism is correct: a) In total business receipts, tourism has consistently ranked fifth or sixth among all retail businesses. b) Tourism provides about the same number of jobs as most other service industries. c) Approximately one in every 100 civilian employees is employed in an activity supported by travel expenditures. d) The travel “multiplier” effect and actual travel receipts make tourism one of the top retail businesses.

13. The tourism “multiplier” refers to a) the growth rate of tourism. b) the effect of repeated spending resulting from the initial tourism expenditure. c) the attempt to increase visitors from overseas by the USTS. d) specific kinds of tourism promotion.

14. Over the last 20 years since 1988, the number of overseas visitors to the U.S. has increased a) 20%. b) 50%. c) 80%. d) 100%.

15. International tourism is measured by a) arrivals and receipts. b) the number of people visiting a country. c) travel miles. d) airline receipts and travel miles.

16. A major factor that the U.S. has become an important international destination a) the increase in purchasing power of the American dollar. b) decreased interest rates. c) the strong American economy. d) the world’s rising standard of living.

17. Airlines with “hub-and-spoke” systems are characterized by a) flights scheduled to all major cities. b) a large investment in people and equipment. c) simplified scheduling with many scheduled stops. d) fewer customers on long-distance, high-volume flights.

18. Short-haul airlines providing point-to-point service a) offer little competition from “hub-and-spoke” carriers. b) usually have no-frills service and lower fares, thus minimizing staff and investment. c) are likely to drive “hub-and-spoke” systems out of business. d) provide no frills service with lower fares.

19. The result of discounted airline fares has been a) less price competition. b) a rise in personal travel costs. c) a rise in personal travel. d) an increase in costs for weekend travelers.

20. The “load factor” refers to a) hotel occupancy. b) percentage of airline seats sold. c) partnerships. d) franchisors.

21. The travel infrastructure crisis is a) expected to have no affect on tourism growth. b) refers to airport capacity and road problems. c) likely to positively affect tourism. d) strictly an environmental issue.

22. Channels of distribution in the tourism industry a) are the layers of businesses between manufacturers and customer. b) include travel agents and tour operators. c) are the same as infrastructure. d) are insignificant.

23. Travel wholesalers a) purchase and resell travel space and services. b) are the same as travel agents. c) have declined in significance as a channel member. d) make arrangements for individual travelers.

24. A recent important development in reservation systems has been a) to combine travel agents and airline reservation systems. b) to simplify selling points. c) expanded information access so that travel agents are unnecessary. d) linkages between air, lodging, and auto reservation systems.

25. Besides economic impacts, tourism can also generate a) crowding. b) noise and odors. c) local pride. d) all of the above.

True/False 1.

Tourism is important to the U.S. economy but not to most of the rest of the world.

2.

The tourism industry excludes organizations that support tourism retail activities.

3.

A person trip is one person taking one trip; if two persons go on that trip, it still equals a one person trip.

4.

The popularity of weekend vacations and shorter trips combining pleasure and business seems to be concentrated among younger travelers.

5.

In total business receipts, tourism has consistently ranked second or third among all retail businesses.

6.

Measuring the industry in terms of employment, tourism provides more jobs than does any other industry except the health services.

7.

Working women have changed the tourism industry because they no longer have the time to travel.

8.

For two-income families, travel means “quality time,” focusing on value rather than lowcost recreation.

9.

Business travel is difficult to predict because it does not always rise and fall with the economy.

10.

Travel growth has resulted more from pleasure travel than from business travel.

11.

In the 1990s, the vacation that has become increasingly popular is a “minivacation” of two to three days.

12.

The world’s largest industry is tourism, accounting for about 10.3% of the world’s overall economic activity.

13.

Counting the number of people who arrive in a country and the number who leave a country is one way the volume of international tourism is measured.

14.

The travel gap in the late 1990s was negative, with more people arriving in the United States than leaving it.

15.

Since 1996, the U.S. enjoys a favorable travel trade balance.

16.

Most tourism industries are very sensitive to the general economic climate.

17.

Short-haul airlines specialize in “hub-and-spoke” service.

18.

Available Seat Miles in the airline industry is a measure of volume.

19.

Business travelers may often be charged much more for airline tickets than pleasure travelers just because they are traveling on business.

20.

Airline load factors have decreased because of airline partnerships.

21.

“Through fares” have become less expensive with airline partnerships.

22.

The greatest boon to growth in air travel has been the infrastructure improvement.

23.

More and more travelers make their own travel arrangements, and some travel agencies provide consultancy rather than selling tours.

24.

A travel wholesaler can sell space on tours to customers through travel agents.

25.

The travel marketplace has become more competitive because of the ease with which individuals can make their own bookings on the Internet.

26.

The local populace in a tourist area always welcome tourists because of the money they bring into the community.

27.

If a beach used by local people is purchased and its access restricted to tourists, the term “crowding out” is applied.

28.

The most common reason for travel is business, and secondly, pleasure.

29.

Travel is not generally price sensitive since most people travel for the purpose of visiting family.

30.

Foreign visitors to a country improve that country’s balance-of-payments.

Short Answer Questions 1. Is the importance of tourism increasing or decreasing? Explain fully. ___________________________________________________________________________ ___________________________________________________________________________

2. Tourism is defined as ___________________________________________________________________________ ___________________________________________________________________________ 3. Describe a traveling household. ___________________________________________________________________________ ___________________________________________________________________________ 4. Which two age groups represent a substantial demographic development for tourism and why? ___________________________________________________________________________ ___________________________________________________________________________ 5. What are the two leading reasons for domestic travel in the U.S.?

1) ________________________________________________________________________ 2) ________________________________________________________________________ 6. How has trip duration changed over the last several decades? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 7. Name five businesses and organizations that serve the tourism industry: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 4) ________________________________________________________________________ 5) ________________________________________________________________________ 8. Factors influencing the growth of tourism are: ___________________________________________________________________________ ___________________________________________________________________________ 9. A “person trip” is defined as ___________________________________________________________________________ ___________________________________________________________________________

10. The travel multiplier effect is: ___________________________________________________________________________ ___________________________________________________________________________ 11. Two ways used to measure the volume of international tourism are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 12. A negative “travel gap” is ___________________________________________________________________________ ___________________________________________________________________________ 13. The advantages and disadvantages of the “hub-and-spoke” system are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 14. The “carrying capacity” of an area is ___________________________________________________________________________ ___________________________________________________________________________ 15. Travel agencies are defined as ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 13 Multiple Choice 1.

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d a d b b c b b b a d d

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Short Answer Questions 1. The importance of tourism to the hospitality industry is increasing each year. As employment in smokestack industries—that is, manufacturing—continues to fall, the service industries, including those businesses serving travelers, must take up the slack by providing new jobs.

Tourism, then, is central not only to the health of the hospitality industry but also to the economy as a whole.

2. Tourism is defined as the collection of productive businesses and governmental organizations that serve the traveler away from home.

3. Traveling households are more likely than overall households to be headed by someone who is married and/or more highly educated.

4. The 55- to 64-year-old group will grow by almost 19 percent between 2010 and 2020 as the first baby boomers move into their mature years. This segment will be a very active group of consumers seeking new experiences and learning to deal with extended leisure, that is, the ability to take longer vacations as seniority increases vacation entitlements and as retirement approaches or as early retirement permits. In addition, the 65- to 74-year-old age group will grow over 13 percent during the same period.

5. The most frequent reason for domestic travel is to visit family and friends. Other pleasure travel, for outdoor recreation and entertainment, is just behind that.

6. As two working spouses in a family have become more common, vacations have become shorter. The typical vacation of the 1950s and 1960s was an annual event lasting 10 to 14 days. During the 1970s and 1980s, vacations, on average, were shortened to five to seven days, and taken twice a year. In the 1990s, the two- to three-day “minivacation” became

increasingly popular. Today, most domestic trips that are taken are only one to two nights in duration.

7. Businesses and organizations that serve the tourism industry: 1) restaurants 2) hotels and motels 3) resorts 4) transportation organizations 5) travel agents 6) gasoline service stations 7) national and state parks or recreation areas 8) various private attractions 9) supporting firms such as advertising companies, publications, transportation equipment manufacturers, and travel research and development agencies 8. Factors influencing the growth of tourism: 1) leisure time 2) rising family income 3) demographic trends 9. A person trip is defined as one person taking one trip. If two persons go on that trip, that equals two person trips. A trip is any travel 100 miles or more away from home.

10. The travel multiplier effect measures the effect of initial spending together with the chain of resulting expenditures.

11. The volume of international tourism is measured by: 1) arrivals and departures which measure the volume of people traveling 2) receipts and payments which measure money spent 12. A negative “travel gap” means that more people and dollars are leaving a country than are coming into that country from travel.

13. The advantages and disadvantages of the “hub-and-spoke” system are: 1) Advantages: economies of scale—large aircraft can fly with efficient load levels on high volume routes by assembling passengers at a central point (hub) by smaller aircraft that form commuter airlines.

2) Disadvantages: complex schedules are required to service the “hub-and-spoke” system; traffic control and weather delays can create serious problems since delays multiply throughout the system increasing costs; this system requires a large investment in people and equipment, raising fixed costs.

14. The “carrying capacity” of an area is the number of visitors that an area can accept without being hampered as a desirable destination.

15.

Travel agencies make travel reservations for the public and sell transportation, lodging and other travel services on behalf of the producers of the services.

Chapter 14 Test Bank and Answers Destinations: Tourism Generators Multiple Choice Questions Choose the one best answer.

1. For cultural reasons, the destination people would travel to is the a) West Edmonton Mall. b) Smithsonian Museum. c) Mayo Clinic. d) Super Bowl.

2. The destination which is not an example of a primary tourist destination is a) Dollywood. b) the Grand Canyon. c) Las Vegas. d) Disney World.

3. The term “mass market tourism” refers to a) tourist destinations that cater to the young at heart. b) tourist destinations that cater to the athletically inclined. c) theme parks. d) destinations that attract a wide variety of visitors.

4. Planned play environments a) include national parks. b) are artificial environments created for the enjoyment of tourists. c) date back only a few years. d) are synonymous with shopping malls.

5. Theme parks a) are always primary destinations. b) cater to people’s need for fun and fantasy. c) are the same as amusement parks. d) were developed in the 1970s.

6. Which description below is not correct about Legoland California? a) The majority of its visitors are from within the state. b) It is a traditional amusement park. c) It is a secondary destination attraction. d) The park consists of entertainment, shopping, rides and shows.

7. The following is not a factor that has influenced the growth of gaming: a) it is more acceptable as a form of entertainment. b) its convenience. c) deregulation of the industry. d) the government’s need for funds.

8. One of the causes of Las Vegas’ continued success is a) proximity to natural attractions. b) the number of hotels. c) its ability to offer the “entire package.” d) lack of gaming options nationally.

9. The following statement best reflects how gambling has changed over the last 10 to 20 years: a) There is a decreasing emphasis upon slot machines. b) Gambling is still limited to places like Las Vegas and Atlantic City. c) Gambling has become a part of living in the 1990s. d) There are not as many work opportunities for hospitality graduates in the gambling industry.

10. Fairs and festivals can best be characterized as a) temporary amusement parks. b) important mainstays of numerous communities. c) having nothing to do with the hospitality industry. d) being held mostly in warm weather areas.

11. Fairs and festivals are examples of a) regional theme parks. b) natural tourist destinations. c) national theme parks. d) temporary tourist destinations.

12. Casino hosts a) approve markers. b) handle problems at the tables. c) supervise between two and five dealers. d) are change people.

13. The most prominent impact of man-made tourist attractions is a) overcrowding and congestion. b) to take business away from hotels and restaurants. c) economic benefits to the community. d) a decrease in visits to national parks.

14. In contrast to traditional amusement parks, modern theme parks a) serve chiefly an educational function. b) do not feature rides. c) operate on a huge scale. d) are designed primarily for adults.

15. The most important group for regional theme parks is a) international visitors. b) young professionals. c) visitors from nearby. d) conventioneers.

16. One of the basic beliefs of theme parks is a) that education has no place in theme parks. b) that education can be fun. c) that education should be a part of every aspect of the park. d) that education is the job of schools.

17. Planned play environments are described as being relatively new because a) there is no earlier precedent. b) they are unique with regard to size and scale. c) they eliminate thrill rides. d) they are usually free to visitors.

18. The destinations cited in the text as country music destinations were a) Nashville and Branson. b) Branson and New Orleans. c) New Orleans and Baltimore. d) Boston and San Antonio.

19. An example of a regional theme park is a) Las Vegas. b) Disney World. c) Dollywood. d) Mall of America.

20. Employment opportunities in theme parks a) do not include the food section. b) may fluctuate between seasons. c) are not important as most are only summer jobs. d) do not provide training programs.

21. Urban environment centers are a) national parks, zoos, convention centers. b) museums, national parks, convention centers. c) zoos, aquariums, shopping centers. d) casinos, theme parks, eco-resorts.

22. The definition of ecotourism is: a) tourism in a natural environment. b) tourist activities which promote and are friendly to the natural environment. c) hotels which recycle waste. d) any type of tourist activity which doesn’t harm the environment.

23. The country’s first national park was a) Atlantic City National Park. b) Yellowstone. c) Yosemite. d) Big Bend.

24. The cities which have introduced successful waterfront development projects are a) Boston and Baltimore. b) Boston and Atlanta. c) Baltimore and Atlanta. d) Atlanta and Santa Fe. 25. Which is not an example of out-of-the-ordinary destination? a) The Spy Trail in London. b) The Ice Hotel in Quebec. c) The International UFO Museum in Roswell, New Mexico. d) Rainforest in Brazil.

True/False 1.

Only the very large cities can afford to have full-sized convention centers.

2.

Visits to national parks are increasing.

3.

Among all parks, theme parks are less in number, but earn more in receipt.

4.

Gambling in the United States is limited to Las Vegas and Atlantic City.

5.

Travel destinations more and more cater to the elite.

6.

Theme parks are basically similar to amusement parks.

7.

Secondary destinations draw people from nearby areas or induce people to stop “on their way by.”

8.

Primary destinations have a wide market and draw people from great distances.

9.

Non-gambling expenditures by tourists in Las Vegas amount to more than the money spent on gambling.

10.

Country music has a fifty percent market share.

11.

Gambling has been legal in Atlantic City since the city was founded.

12.

High rollers often receive comps from casinos where they play.

13.

As a means of educating the populace, zoos and aquariums are among the most effective of the new urban environment centers.

14.

The NRA show occurs once every two years and moves from city to city.

15.

Fairs and festivals are of recent origin.

16.

Gaming can be considered a voluntary tax.

17.

Junkets are essentially a type of “tour.”

18.

Recreation is as old as society itself.

19.

Disney does not operate any hotels on its grounds.

20.

Theme parks offer good seasonal employment opportunities for students.

21.

Riverboat gaming was introduced in Iowa in 1991.

22.

Fairs and festivals are typically rather small gatherings.

23.

Las Vegas is repositioning itself as a family destination.

24.

St. Louis Centre is considered a mega-shopping center.

25.

Space tours will be popular for travelers in the future.

Short Answer Questions 1. What are the reasons that people travel? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. List some of the differences between a primary destination and a secondary destination. Give examples of each. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. Some affluence has always been required for recreational travel. What has changed relative to this? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 4. What is a planned play environment? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 5. Provide two examples of the earliest planned play environments.

1) ________________________________________________________________________ 2) ________________________________________________________________________

6. How do theme parks differ from traditional amusement parks? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 7. Identify the nearest theme park. What is the theme and how (if at all) does it tie to your location? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 8. What are the three primary forces driving the current growth in gaming?

1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 9. What makes Atlantic City and Las Vegas stand out from other communities which offer gaming? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. What is the casino host’s role? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 11. What do you think explains the popularity of the new mega-malls? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 12. What are some of the factors that attract tourists to fairs and festivals? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

13. List some of the benefits that a local community can derive from hosting a successful fair or festival: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 14. What do you think are some of the reasons that people visit national parks? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 15. List some examples of hospitality conferences and conventions with which you are familiar: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 14 Multiple Choice 1.

2.

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b a d b b b c c c b d b c

True/False 14.

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c c b b a c b c b b a d

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F F T F F F T T T F F T T

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F F T T T F T T F T F T

Short Answer Questions 1. Religion, good health, sporting events, scenic beauty, culture, theatre and spectacle, etc.

2. A primary destination attracts from a wide market and typically requires an extensive hospitality infrastructure. Examples include World Disney World and Las Vegas. A secondary destination is usually a stopover—on the way to someplace else, requiring fewer services per visitor. Examples include Atlantic City and any of the smaller theme parks.

3. What has changed is the degree of affluence in our society. We have become what economists refer to as an affluent society.

4. A planned play environment is a man-made entertainment environment be it a casino, theme park, or mega-mall.

5. Answers may include the following: Fairs and festivals at which work (or trade) and play were mixed date back to the mid-1800s in the United States and to medieval times, or even earlier, in Europe. Amusement parks are anything but a twentieth-century American phenomenon—according to the International Association of Amusement Parks and Attractions, early amusement parks in Europe included Bakken in Denmark, (established in the 1500s,) and Vauxhall Gardens in England, built in the 1600s. In contrast, the oldest continually operating U.S. amusement park, Lake Compounce (in Connecticut), dates back to the early 1800s. Others date from the 1940s and 1950s.

6. Theme parks are different from traditional amusement parks not only because they are based on a theme, or several themes, but also because of their huge operating scale.

7. Answers will vary.

8. The first is a change in consumer tastes in which people have come to see gaming as a legitimate form of entertainment. A second force is convenience. A third force is the intense need state and local governments have for funds.

9. Gaming is the main focus for the traveler.

10. Casino hosts serve a very important function at many casinos around the world. They help customers in a variety of ways, from handling special requests to helping to interpret for international visitors. They also handle problems that may arise at the tables. High rollers are assigned their own hosts when they are in the casino.

11. Answers include: uniqueness, scale and magnitude, multitude of offerings 12. Entertainment, education, to support the community, it offers a diversion 13. Fairs and festivals can help define the community, can provide financial support, and can serve as the basis for additional tourism.

14. National parks offer a relatively inexpensive experience, they are part of the American consciousness (e.g. Grand Canyon), and they offer an escape from the pace of everyday life.

15. Answers may vary.

Chapter 15 Test Bank and Answers Management: A New Way of Thinking Multiple Choice Choose the one best answer.

1. The work of a supervisor does not involve a) the direction and leadership functions of management. b) staffing. c) work at the operating level. d) setting policy.

2. The job that both managers and supervisors perform is a) goal setting. b) supervision. c) strategy planning. d) long term organizational planning.

3. Management as a field of study a) has ancient roots. b) has been organized like society since the Middle Ages. c) has been a development of the public sector. d) is relevant to non-business areas such as administrative dietetics.

4. Management, as practice and as a field of thought a) reflects unchanging principles. b) is evolving with our society. c) is a precise science. d) is really just an art learned through experience.

5. The term a) management usually includes supervision. b) supervision should be separate from management. c) management means the direction of supervisors in productive tasks. d) supervision and management can be considered to have no difference in meaning.

6. Consumer decisions and competition are integral to the a) market system. b) command system. c) traditional system. d) economizing system.

7. The man who developed “scientific management,” as a way of analyzing tasks was a) Henri Fayol. b) Elton Mayo. c) Frank Gilbraith. d) Frederick Taylor.

8. The controlled shop a) is a union dominated organization.

b) is one in which unskilled workers need not be trained to do a simple task. c) is based on time and motion study. d) involves management’s study and planning of work.

9. The work process focus a) began with Taylor’s scientific management movement. b) is that part of management concerned with “grand organizational design.” c) is the starting point for the “functions of management.” d) refers to the function of production control in a factory.

10. The “task idea” a) focuses on the one best way to do the job. b) relies on brute strength. c) is a management function. d) is out of date and is no longer of concern to managers.

11. Taylor’s “high priced man” a) was paid higher wages at the bargaining table because of strong unions. b) could be paid a wage which was high for its time because of increased productivity. c) was an unusually intelligent, skilled worker. d) was the end result of the social welfare movement.

12. The “therblig” was coined as a) a term for a low paid, unskilled worker. b) worker involvement in the system design. c) the smallest unit of human movement that can be measured. d) a system for charting work operations.

13. The important thing about the therblig is that it a) is Gilbreth spelled backwards. b) is a part of scientific management. c) simplified and speeded the work of the industrial engineer. d) is the work of H.L. Gantt.

14. Fayol, an early pioneer in administrative management, a) was concerned with the task idea. b) was concerned with departmental division and coordination. c) ran the first controlled shop. d) was a disciple of Frederick Taylor.

15. Taylor, Fayol and Mayo’s contributions to management began the studies in the areas of a) task analysis, management functions, and human relations. b) the controlled shop, time and motion study, and productivity. c) profitability, administrative management, and marketing. d) staffing, organizing, planning, and control.

16. The first to study the problems of the organization and staff roles was a) Mayo. b) Taylor. c) Gilbreth. d) Fayol.

17. Human relations is concerned with a) making people happy at the work they must do for a living. b) helping others in a work group setting. c) the way people react in groups to changes in the level of lighting. d) social interactions in work groups.

18. Statler a) developed the first full-service, popularly-priced hotel. b) first used ideas of Taylor, Gantt, and Therblig in the hotel industry. c) redeveloped the first use of the line concept in the restaurant industry. d) developed a new kind of luxury hotel for the upper class around the turn of the century.

19. The Stouffer brothers are known for a) operating craft-based kitchens. b) introducing the controlled shop into the kitchen. c) using participative management. d) luxury dining at popular prices.

20. The pioneer in hospitality franchising was a) Ray Kroc. b) Kemmons Wilson. c) Harlon Sanders. d) Howard Johnson.

21. The following statement is an important advantage of franchising: a) Franchise organizations concentrate the centers of authority rather than multiplying them. b) The franchisor’s capital and credit are supplemented by debt financing from the franchisor. c) Each franchised operation is a manageable small business investment, but in aggregate, franchisees create a huge capital plant that can spread worldwide. d) Franchising flourishes because of the contracts that are based on well-established legal principles.

22. Franchising systems are organizations in which authority is based on a) voluntary acceptance based on self-interest. b) the power of large scale inherent in the franchisor. c) the sense of the market place. d) state and federal legislation and regulation.

23. The chains founded by Ray Kroc and Harlon Sanders were basically solutions to problems of a) marketing and distribution. b) customer need and operations at low cost. c) production and use of unskilled labor. d) limited menu and the controlled shop.

24. Kemmons Wilson pioneered by a) developing unique food service systems. b) developing the controlled shop idea for lodging. c) developing the first chain brand and operating system in mid-range dining. d) bringing the idea of franchising to the lodging industry.

25. According to Drucker, the basic purpose of business is a) to manage and control employees. b) to determine unfulfilled consumer needs and find a way to fill them. c) to create a successful organizational structure. d) to earn more money.

26. Drucker suggests that, ultimately, what the business is, is determined by a) the unterneymer. b) management. c) management and the worker. d) the customer.

27. The “fallacy of the unterneymer” a) is no longer a fallacy. b) refers to the long standing practice of participative management in Germany. c) refers to the fallacy that only the top man is responsible for making decisions. d) is principally a technological phenomenon.

28. The example of who a customer is not a) franchisees of restaurants. b) working mothers of children who consume school lunches. c) the union in an in-plant feeding operation. d) an unterneymer.

29. The evolution of a business, according to Drucker, a) is usually a series of lucky breaks. b) responds to the question of what will and what should our business be. c) is the result of rational problem solving. d) results from a changing view of the task idea.

30. The franchisee owner of a restaurant and the people who eat there a) represent two levels of customers. b) are examples of an unterneymer. c) create conflicts within an organization. d) work together to create consumer needs.

True/False 1.

The field of management is one concerned with primary unchanging principles.

2.

Because the hospitality industry is steeped in tradition, modern management has not made much impact.

3.

If a person does not have an innate ability, they cannot aspire to become a successful manager.

4.

Supervision and management are basically the same.

5.

Staffing and control are a major part of the supervisor’s work.

6.

The term management does not usually include supervision.

7.

Management as an organized body of thought is a recent development in our civilization.

8.

Modern business management techniques can be used in such “non-business” areas as nonprofit school lunch programs and hospital dietary programs.

9.

Individual profit is one of the driving forces in market economy.

10.

The complexity of problems within large corporations created a need for research and knowledge which led to the birth of the field of management.

11.

In our society, currently the profit motive is the major basis of economic action.

12.

“Command” is the mode of social control used by management today.

13.

The market system is governed by consumer decisions, competition, and individual interests.

14.

The tradition-bound society of the past has been replaced in the U.S. by an economizing society and the market system.

15.

The task idea was a key to increasing productivity.

16.

The controlled shop is no longer a realistic approach to management.

17.

Taylor’s “high priced man” was able to receive a better wage because his productivity was raised.

18.

An example of the controlled shop in the hospitality industry is the traditional chef kitchen.

19.

Fast food operations are excellent examples of a controlled shop.

20.

Gantt charts adapted for hospitality employee scheduling are no longer in use now.

21.

Human relations, or organizational behavior, is concerned with the human and social needs of workers.

22.

Mayo, Roethlisberger, and Dixon began the work in the field of organizational behavior.

23.

The findings in human relations have been developed into a body of knowledge containing undisputed theories.

24.

Elton Mayo was one of the first to study people in organizations.

25.

Taylor proposed that trained workers guided by management could increase productivity and these workers could be paid higher wages from increased profit.

26.

Fayol originally developed the notion of the functions of management but in a somewhat different form from what is used today.

27.

The “Hawthorne Studies” proved that increasing light level will raise productivity while lowering it will decrease productivity.

28.

A study of factory lighting led to studies of human interactions in work groups.

29.

Statler was the first in the hospitality industry to use a centralized corporate staff.

30.

The Stouffer kitchen produced its good food because of the chefs in their kitchens.

31.

The basic purpose of management, according to Peter Drucker, is to know who your customers are and what they want.

32.

Marketing, while an interesting subject, has very little to do with supervision.

33.

Innovation is the concern of top management in today’s modern organization and should be avoided by lower level supervisors.

34.

One central idea in the “market” economy, identified by Heilbronner, is the notion of individual gain.

35.

The rapid expansion of Holiday Inns was made possible by enlisting ownership financing of many local investors in local projects using local mortgage financing.

Short Answer Questions

1. What is the derivation of the word supervisory? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. According to the economist Heilbroner, the three means of organizing society and dealing with its economic problems are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 3. How do traditional societies differ from our modern, market-system society? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

4. The task idea is described as ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 5. Briefly describe the controlled shop: ___________________________________________________________________________

___________________________________________________________________________ ___________________________________________________________________________ 6. What is therblig? Explain fully. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 7. The three original concepts developed by Taylor, Fayol, and Mayo, that remain at the heart of hospitality management, are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 8. The span of control is ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 9. What was Ellsworth Statler’s unique (for the time) central perception? ___________________________________________________________________________ ___________________________________________________________________________ 10. What were the effects of the recipe kitchen? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 11. How did Howard Johnson change the restaurant industry? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

12. The original McDonald’s restaurant solved two key problems. What were they and what were the solutions? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 13. What was the target market for Kemmons Wilson’s Holiday Inns? ___________________________________________________________________________ ___________________________________________________________________________ 14. The central functions of business, according to Peter Drucker are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 15. For a franchise company, who are the customers?

1) ________________________________________________________________________ 2) ________________________________________________________________________

Answer Key Chapter 15 Multiple Choice 1.

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d b d b a a d d d a b c c b a

True/False 16.

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d d a b d c a b d b d c d b a

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F F F F T F T T T T T F T T T F T F

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T F T T F T T T F T T F T F F T T

Short Answer Questions

1. The word supervision is derived from two Latin words that, taken together, mean “to oversee.”

2. According to Heilbroner, the three means of organizing society and dealing with its economic problems are 1) tradition 2) command 3) market system 3. Traditional societies are based principally on community interests, but the market system encourages, indeed exalts, individual interest.

4. Carefully studying work and the worker to increase productivity 5. A productive process in which management planning rather than worker skill directs the process.

6. Therblig (Gilbreth spelled backward) is the smallest unit of human movement that can be measured. Developing standardized therbligs for all work motions speeds and simplifies the task of the industrial engineer.

7. The three concepts developed by Taylor, Fayol, and Mayo are 1) the task idea or work process focus or efficient production methods 2) administrative management 3) organizational behavior or human relations 8. The number of people a manager can efficiently supervise 9. The central perception of Ellsworth Statler was that a national market existed for quality accommodations for the growing American middle class.

10. The management-controlled recipe kitchen greatly improved productivity over the traditional kitchens of the day. Closer management control also ensured remarkably low food costs. The result was a highly competitive price.

11. He hit upon the idea of a restaurant with a standard appearance and menu and quality standards that would be immediately recognizable to travelers and then built these around the county.

12. The first was a customer need, and the second was an operating problem. Customers needed inexpensive meals, which the restaurant solved by selling an entire meal for less than a dollar. The operating challenge was met by offering a limited menu and then taking the notion of the controlled shop to the extreme.

13. Businesspeople and vacationing families 14. The central functions of business, according to Peter Drucker are 1) innovation 2) marketing 15. 1) the guests 2) the potential franchisees

Chapter 16 Test Bank and Answers Planning in Hospitality Management Multiple Choice Choose the one best answer.

1. Absence of planning by the organization at all levels leads primarily to a) loss of revenue and possibly bankruptcy. b) planning by employees. c) lack of seating charts in the dining rooms. d) lost profit opportunities.

2. Planning in organizations at the upper level a) is short-term. b) is a low resource commitment. c) is general in nature. d) involves many persons.

3. Planning by supervisors in an organization usually a) is short-term. b) is general in nature. c) involves few persons. d) is a heavy resource commitment.

4. A plan a) attempts to describe future events and how they will be ordered to achieve the organization’s goals. b) is usually complex. c) is only written down in one place. d) only includes strategic but not tactical elements.

5. A general guide for dealing with the future which indicates how to reach a decision is a) a plan. b) a policy. c) a strategy. d) a procedure.

6. A reasoned means of moving toward some goal which may include rules, methods, procedures, standards, and budgets is a) a plan. b) a policy. c) a strategy. d) a procedure.

7. A procedure that must be carried out in an organization without deviation is a a) budget. b) strategy. c) standard. d) rule.

8. The specifications of both procedures and outcomes are a) rules. b) standards. c) budget. d) plans.

9. A sequential set of operations in an organization that cannot be deviated from is a a) procedure. b) rule. c) standard. d) strategy.

10. Large-scale, high-level and long-term commitment is contained in a business a) procedure. b) standard. c) tactic. d) strategy.

11. The dollar results expected from a plan of operation is found in a a) procedure. b) standard. c) budget. d) tactic.

12. Tactics are a) less important than strategies. b) required to carry out business strategies. c) general in nature. d) long-term commitment.

13. Strategies a) are general guides for dealing with the future. b) indicate how a job is to be done. c) are specific procedures for carrying out tactical decisions. d) are high level and long term.

14. The characteristics of a well-thought-out goal is that it is a) clear and precise. b) understood by all. c) carefully reasoned. d) objective and measurable.

15. The adoption of a recipe kitchen is an example of a a) procedure. b) goal. c) standard. d) strategy.

16. Tactics a) leave no room for discretion regarding execution. b) indicate how a standard job is to be done. c) specify standard procedures. d) are short-range plans.

17. The logical place to begin goal setting is a) to use the past as a starting point. b) with upper management. c) with the guest. d) with business tactics.

18. A long-term planning tool to determine return on capital investment is the a) capital return analysis. b) marginal revenue. c) payback period. d) breakeven point.

19. The principal decision-making guide in business is a) dollar profit earned. b) customer satisfaction. c) the budget. d) costs.

20. If an investment of $1,000 will result in a weekly savings of $10, a) the payback period is 100 weeks. b) the breakeven point is 100 weeks. c) the rate of return is 10%. d) does not have an adequate rate of return.

21. If an investment of $10,000 will result in an annual savings of $2,000, a) the payback period is five months. b) the breakeven point is ten years. c) the rate of return is 20 percent. d) the investment should not be made.

22. A hotel plans to add a banquet room. The average cover is forecast at $7.50 and food cost will be 50%. Fixed expenses are $3,750 per month. The breakeven point a) cannot be determined without more information. b) is 1,000 meals per month. c) is $7,500 monthly sales volume. d) is $75,000 annual sales.

23. Planning at the lowest level in the operation is done by the a) individual worker. b) supervisor. c) manager. d) corporate executive.

24. The following statement about the topic of planning is correct: a) Planning does not differ greatly from one organizational level to another. b) At higher levels, planning involves more people and more detail. c) The goal of management planning is to let employees make their own plans. d) The higher the level of decision-making, the more widespread the effects of poor planning will become.

25. The term used to refer to the need to design and present an organization’s goals in such a way that organizational goals and individuals goals mesh is known as a) management by objective. b) goal congruence. c) goal setting. d) objective behavior.

True/False 1.

Lack of planning in an organization often allows employees to do the planning, which usually leads to management goals anyway.

2.

Planning is necessary at all levels of the organization except at the individual worker level.

3.

Managers must learn to plan the work of others.

4.

Planning for your personal career can be done in the same fashion as business planning.

5.

Young people in an organization often fail to recognize that they are part of someone else’s work plan.

6.

Planning is most detailed and specific at the highest level of the organization.

7.

Short-term and long-term planning are essentially the same.

8.

Policies specify what exactly is to be done in an organization.

9.

A plan reflects the policies of an organization.

10.

An operations manual of a company is an example of a plan.

11.

Rules state what must be done in a given situation.

12.

Business goals are written statements of the company’s rules, procedures, strategies, budgets, and tactics.

13.

Business tactics are concerned with overall goals while business strategy is specific, relating methods to individual circumstances.

14.

Business planning, in essence, today takes a marketing approach.

15.

Management by objective involves goal setting.

16.

Well-thought-out goals will fit most similar operations.

17.

Goal congruence refers to the way individual and organizational goals mesh.

18.

A well-thought-out goal will be objective and measurable.

19.

Strategies are long-term plans.

20.

Strategies are more important than tactics because strategies lie at the upper end of an organizational structure.

21.

Business strategies deal with where an organization is heading and why, while tactics deal with how to get there.

22.

Goal setting starts from the highest person in a company.

23.

In restaurants, the menu is really part of the business plan.

24.

Actively courting community favor by supporting local groups is an example of a business strategy.

25.

All costs and benefits in business situations have dollar amounts.

26.

Cost-benefit analysis is a measure of return on investment.

27.

Planning is a function for individuals as well as for firms.

28.

The payback period indicates how long it should take to earn back an investment.

29.

The breakeven point indicates the sales that are needed to cover fixed costs.

30.

It is useful in the long run to consider a job in terms of skill learning rather than just income.

Short Answer Questions 1. Lack of planning in the workplace leads to what two potential types of problems?

1)_________________________________________________________________________ 2)_________________________________________________________________________ 2. Planning is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. The difference between long-term and short-term planning is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 4. Organizational policies are defined as: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 5. A plan is:

___________________________________________________________________________ ___________________________________________________________________________ 6. Organizational rules are: ___________________________________________________________________________ ___________________________________________________________________________ 7. A budget is: ___________________________________________________________________________ ___________________________________________________________________________ 8. Who should we consider first when goal setting and why? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 9. Why is the goal: “Our goal is better service” inadequate? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. Why should a goal be measurable? ___________________________________________________________________________ ___________________________________________________________________________ 11. A breakeven point is ___________________________________________________________________________ ___________________________________________________________________________ 12. Cost-benefit analysis is: ___________________________________________________________________________ ___________________________________________________________________________ 13. The difference between a business strategy and tactics is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

14. Management by objective is: ___________________________________________________________________________ ___________________________________________________________________________ 15. Goal congruence can be defined as: ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 16 Multiple Choice 1.

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b c a a b a d b a d c b d d d d c c a a c b a d b

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F F T T T F F F T T T F F T T F T T T F T F T T F F T T T T

Short Answer Questions 1. First, because employees must know what their employers expect of them, an absence of management planning leads to confusion at work. Second, to settle that confusion, employees often plan for themselves. Their plans may be aimed at goals completely unrelated to the organization’s goals.

2. Planning is the work managers do to visualize the future in a concrete way and to determine courses of action that will achieve the organizations’ goals over a definite period.

3. Long term planning occurs in the upper levels of management, fewer persons are involved, and the plan and commitment is general in nature. Short term planning occurs at the worker level, involves more people and detail.

4. Policies are general guides for dealing with the future. They don’t tell what to do; they indicate how to reach a decision. Policies leave much to the discretion of the decision maker.

But they provide a predetermined, agreed-upon basis for decisions.

5. A plan is a reasoned means of moving toward some selected goal.

6. Rules state what must be done (or what must not be done) in a given situation. Rules leave no discretion in their execution.

7. A budget is a numerical plan, generally expressed in dollars, although sometimes units of weight or time may be used as well.

8. The logical place to begin goal setting is with the person who indirectly sets the goals: the guest. Accordingly, we should take a marketing approach to our operations. If the guests’ needs and wants aren’t met, they will take their business elsewhere.

9. This is a very subjective goal statement. Specifically, what does it mean? In the process of setting goals, we might better ask ourselves, “How will I know when I achieve the goal?”

10. If it isn’t measurable, there is no way to assess if it is achieved.

11. The break-even point is a quantitative planning tool. It is determined by dividing fixed costs by marginal revenue.

12. Cost-benefit analysis is used when not all variables can be measured in dollars. The first step is to identify costs and savings. This is weighed against the potential effects of a change in plan.

13. A business strategy is a long-range basic plan while tactics are short-range plans for implementing policy.

14. Management by objective is goal setting in organizations, involving well-thought-out goals, the objective behavior to attain the goal, and the measure of the effectiveness of the objective behavior.

15. Goal congruence is the need to design and present an organization’s goals in such a way that organizational goals and individual employee goals mesh rather than clash.

Chapter 17 Test Bank and Answers Organizing in Hospitality Management Multiple Choice Choose the one best answer.

1. The work managers do to bring order to an organization is called a) planning. b) organizing. c) staffing. d) controlling.

2. The basis for formal organization within an organization is a) law. b) a social institution. c) common practice. d) acceptance.

3. The ultimate basis of management authority in our society is a) ownership or legislative act. b) group acceptance. c) competence. d) social pressure.

4. The legal basis of management authority is a) community force. b) the board of directors. c) worker acceptance. d) ownership or legislative act.

5. Acceptance as a basis for authority a) is an expression of whether or not a manager is a likeable person. b) makes the legal basis of authority unimportant. c) is helped by “keeping your distance” from workers. d) requires that the manager be a person who is qualified for responsibility.

6. The statement that correctly describes the “informal” organization is: a) An informal group is organized by a manager along the same lines as the organization of the formal group. b) An informal group has a formal leader who is recognized by management. c) An informal group develops its own expectations as to what constitutes a fair day’s work. d) Informal groups are invariably opposed to management.

7. To deal with an informal organization, the manager should a) ignore it. b) recognize it as a formal part of the organization. c) accept it as a part of natural things. d) try to destroy it.

8. Dividing authority within an organization is called a) delegation. b) the span of control. c) line management. d) ad hocracy.

9. The scalar principle refers to a) vertical mobility. b) shared authority. c) the relationship of authority and responsibility. d) informal authority.

10. One reason delegation is practised is a) because the manager can’t be everywhere and do everything. b) to “put the blame” on somebody else. c) to keep employees open to change. d) to avoid appearing bossy.

11. The span of control a) is a mechanical concept related to automation. b) refers to the number of people one person can supervise. c) refers to the number of people a manager interacts with. d) results from the scalar principle.

12. Downsizing has changed the span of control successfully because a) the size of units has changed. b) of the empowerment of managers. c) of the unity of command. d) of the power of the informal group.

13. Span of managerial responsibility refers to a) delegation of authority but not responsibility b) the principle of unity of command. c) departmentalization. d) the number of people who have routine and unhindered access to a manager.

14. Span of managerial responsibility refers to the number of a) supervisors reporting to a manager. b) persons with whom the manager interacts. c) managers an organization should have. d) persons a manager can supervise.

15. The principle of unity of command a) applies mainly to the military. b) indicates that everyone will have just one boss. c) is always followed in the hospitality industry. d) applies to line but not to staff.

16. Line management refers to a) people who get things done. b) the people who are directly concerned with managing operations and service to the guest. c) an advisory function. d) the need for conformity in management groups.

17. The type of departmentalization usually found in restaurants is a) geographical. b) functional. c) service. d) product.

18. The relationship of staff to line is a) an advisory one. b) an authority relationship. c) largely personal. d) hardly seen in the hospitality industry.

19. Staff work in small organizations is often a) incorporated into the work done by line people. b) neglected. c) not feasible. d) poorly done.

20. Staff roles in an organization generally a) provide specialized assistance to line management. b) are generalists who are able to act in an advisory capacity on many matters. c) are not allowed to represent management. d) render services directly to the guest.

21. Functional staff authority a) in practice leads to so much confusion that it is not worth the effort. b) makes specialized assistance and supervision available to individual units. c) makes the general manager just a figure head. d) does not occur in the hospitality industry.

22. Committees a) are a waste of time. b) facilitate communication between concerned persons and departments. c) are essential to secure consent. d) place authority well.

23. Bureaucracy a) refers to government organizations. b) is a model of rational problem solving in large organizations. c) avoids waste. d) has become outmoded.

24. Ad hocracy a) is really a term for a space age bureaucratic organization. b) refers to specialization organizations. c) is in use in the engineering department of many hospitality organizations. d) means that an organization changes as necessary when tasks change.

25. A large casino resort hotel in North America a) usually is a major factor in the convention business. b) usually does not feature stage shows. c) only deals with gamblers. d) usually does not have restaurants.

True/False 1.

In a small firm, authority is often based on ownership.

2.

Informal authority has its basis in law.

3.

An informal group can limit a manager’s authority.

4.

Supervision of workers can be carried on without any detailed understanding of the work they are doing.

5.

The informal organization refers to organization outside the work place.

6.

Authority can be delegated but responsibility cannot.

7.

A manager can rightly be held responsible for results as far as his or her authority extends.

8.

The effective manager does not rely upon the legal basis for authority.

9.

Decision-making is less effective when there is a distinct line of authority.

10.

Delegation of authority is usually less important in a small organization than in a large.

11.

Assigning bright and eager employees with increased responsibility can keep them engaged and excited about their work.

12.

People who began as skilled workers have confidence in their skill and usually find it easier to delegate.

13.

When you can do a job better than your subordinates, it’s a good idea not to delegate the job.

14.

It has been suggested that the number of people a manager can supervise is between three and eight.

15.

The principle of unity of command refers to the one-boss concept.

16.

Service, food production, and sanitation are examples of functional departmentalization.

17.

Area supervisors illustrate geographical departmentalization.

18.

People often play more than one role in an organization.

19.

Many large casino resort hotels cater to three markets: the casual visitor, the convention guest, and the junketeer.

20.

Staff people never exercise line authority.

21.

The exercise of functional staff authority varies in intensity with function and circumstance.

22.

Staff people are sometimes given functional authority over line people.

23.

Staff roles in small organizations are often performed by outside organizations.

24.

Committees offer a chance to develop junior management people.

25.

Committees are widely accepted as a means to save time.

26.

Bureaucracy emphasizes impersonality in managing organizations.

27.

Ad hocracy refers to a flexible, dynamic approach to organization.

28.

It is an axiom of organizational theory that the manager can be rightly held responsible for results only as far as his or her effective authority extends.

29.

To all intents and purposes, the terms “authority” and “responsibility” are interchangeable.

30.

The number of persons with whom the manager routinely interacts is known as the “span of managerial responsibility.”

Short Answer Questions 1. The management function, to “organize”, is defined as: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. Formal authority has its basis in law; what limits it? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. The introduction of McDonald’s fish sandwich was a breach of authority. Explain. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 4. What is the simplest way a subordinate can undermine a manager’s authority? ___________________________________________________________________________ ___________________________________________________________________________

5. The difference between the formal organization and the informal organization is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 6. Delegation is important in organizations because ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 7. The scalar principle is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 8. Power is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 9. Influence is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. The span of managerial responsibility is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 11. Webster’s definition of bureaucracy is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

12. The five common bases for dividing work into departments are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 4) ________________________________________________________________________ 5) ________________________________________________________________________ 13. Line management is ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 14. An organizational chart is ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 15. Ad hocracy as used by Alvin Toffler is ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 17 Multiple Choice 1.

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b a a d d c c a c a b b a

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b b b b a a a b b b d a

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T F T F F T T T F T T F F T T

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T T T T F T T T T F T T T F T

Short Answer Questions 1. Organizing is the work managers do to bring order to the relations between people and work as well as among the various people at work.

2. The way that people in the work group perceive the organization and their relation to it places limits on that authority.

3. A McDonald’s franchise in 1963 was suffering very poor sales on Fridays due to many of restaurant’s frequent customers following the Catholic practice (at that time) of not eating meat on that day and decided to sell a fish sandwich to help boost sales. Ray Kroc, the chain’s founder (discussed in Chapter 15), was against the idea. Since franchisees cannot legally introduce new menu items, this created a problem. Ultimately, the franchisor and franchises worked together and test marketed the sandwich. The resulting sales provided proof that it was a suitable product, so it was added to the menu permanently throughout the chain.

4. The simplest way is to quit and get another job. Or an employee can stay and simply ignore orders whenever the manager’s back is turned.

5. The formal organization established by management has its basis in law, but there are limits placed on that authority by the way people in the work group perceive the organization and their relation to it. The informal organization is the social organization that grows up within the work groups.

6. Delegation is important in organizations because it shares authority. It is particularly important in a large organization where it is necessary to get the work done.

7. The scalar principle asserts that authority extends uninterrupted, in a series of steps from the top to the bottom of an organization.

8. Power is the ability to influence another person.

9. Influence is the process of affecting thought, behavior, or feelings of another person.

10. The span of managerial responsibility is the number of persons with whom the manager routinely interacts, that is, the number who have direct and unhindered access to the manager.

11. Bureaucracy is a means of avoiding the arbitrary exercise of power as in an absolute monarchy. It seeks the most efficient solution to problems on strictly impersonal, rational grounds.

12. The five common bases for dividing work into departments are: 1) function 2) product and service 3) geographical 4) customers 5) process 13. In line management, authority passes from one person to another in an organization in a steplike fashion.

14. An organization chart shows the organizational relationships in a business or other activity.

15. Ad hocracy in an organization means that the organization responds forcefully to particular situations in an environment that constantly changes.

Chapter 18 Test Bank and Answers Staffing: Human Resource Management in Hospitality Management Multiple Choice Choose the one best answer.

1. Staffing is significant in the hospitality industry because a) of the importance of the right person in a job to personal service. b) the guest expects it. c) the difficulty in finding good help today. d) there are good tools for problem-solving in that area.

2. The staffing costs (labor costs) of a typical hospitality operation as a percentage of sales range between a) under 25%. b) 26-40%. c) 41-55%. d) 56-65%.

3. The labor market in the hospitality industry today has a) an oversupply of employees. b) about as many employees as are needed to run an operation. c) has an undersupply of employees d) too many older workers and not enough employees entering the hospitality work force.

4. The most important factor in developing effective employees is a) worker qualification standards. b) reducing turnover. c) to save on labor costs. d) training.

5. The work managers do to determine their specific personnel needs is called a) planning. b) organizing. c) scheduling. d) staffing.

6. Today, proper management in the hospitality industry staffs their organization a) by selecting the right person for a job. b) by tradition. c) on the basis of wage rates. d) with whoever can be hired at the lowest wage rate.

7. The first step in staffing a position is to define the a) physical requirements of the employee. b) job to be done. c) intellectual ability of the employee. d) principal duties.

8. Human resource management is important in the hospitality industry because a) the success of the operation may rest upon the kind of employee and how he/she performs a certain job. b) it reduces the cost of training employees. c) of low wages in the restaurant business. d) it increases turnover.

9. The selection of employees is most effective when it involves a) gathering information from difference sources about the applicant. b) analyzing an applicant’s handwriting to determine honesty. c) using your judgment to make hiring decisions. d) newspaper advertising.

10. Minimum standards for applicants for hospitality jobs can be expressed in terms of a) physical, social, and intellectual abilities. b) attractiveness. sociability, and intelligence. c) physical, intellectual, and attitudinal qualifications. d) physical, emotional, and social qualifications.

11. A job description includes a) the wages to be paid and benefits. b) the formal organization of the operation. c) the minimum standards for the worker. d) an overview of the organization.

12. Job standards a) include the physical requirement for a job. b) are written by a labor organization. c) are not usually applicable to hospitality operations. d) make it difficult to hire the right person for a job.

13. Internal sources for recruiting a) include former employees, current employees and their relatives and friends. b) are usually adequate for major staff additions. c) produce a lot of personnel problems. d) are limited, in practice, to recruiting part-time employees.

14. Interviewing in most cases a) serves as the basis for hiring decisions. b) serves to clarify facts for both applicant and employer. c) serves the employer poorly because it allows too much room for personal prejudice. d) is frequently misused.

15. When a worker arrives at work for the first time, he or she is given a) an orientation period. b) a job description. c) a uniform and put to work. d) on-the-job training.

16. Orientation for new employees should include a) rules, procedures, and job training. b) an introduction to the workplace, fellow workers, and the job. c) sanitation and health requirements, and task analyses. d) fringe benefits, the training program, and follow-up.

17. One reason that training is appropriate for new employees is because a) it doesn’t cost much. b) it avoids alienation. c) it helps reduce turnover. d) employees expect it.

18. Training for managers a) is usually unnecessary because managers’ skills are transferable. b) is done by pairing a new manager with the boss. c) is accomplished by task analysis. d) can provide a pool of assistant managers for expansion.

19. The essence of rapid job training in many hospitality companies nowadays is a) to train in tasks, but not generally in a job. b) to train everyone to do most jobs in an organization. c) that after training is completed, no further time is needed by management. d) the employee takes charge of the training.

20. Pre-opening training is used a) in a restaurant just before its opening hours. b) in a hotel before installing a computer system. c) in hotel kitchens. d) in hospitality operations about to open.

21. The most commonly used training procedure in the hospitality industry is a) role playing. b) pairing an inexperienced worker with a trained worker. c) task analysis. d) basic training.

22. The tools for scheduling discussed in the text are a) daily and weekly schedules. b) computerized scheduling systems. c) departmental analyses. d) payroll precosting.

23. An operating needs schedule a) is the same as a job description. b) is a long-term staffing plan. c) ensures that each work station need is covered. d) is usually made up by workers such as waitstaff and cooks.

24. Staff planning begins by identifying a) numbers of persons needed. b) breaks. c) hours of operation. d) work stations.

25. Part-time employees should be used a) as little as possible. b) to avoid overstaffing and secure flexibility. c) to reduce the number of people on the payroll. d) when full-time employees can’t be hired.

True/False 1.

A well-thought-out staffing plan usually increases labor costs.

2.

Staffing includes the management functions of planning, controlling, organizing and directing.

3.

In the modern hospitality industry there is little room for disabled workers.

4.

In the hospitality industry it is still true that employee training is ignored in many operations.

5.

Jobs for workers are often planned using task analysis.

6.

The practice of employees recommending their friends for jobs within an organization should be discouraged.

7.

The major advantage of internal sources of recruiting is the ability to deliver large numbers of people.

8.

The strength and weakness of newspaper recruiting is the large number that may respond.

9.

Newspaper ads for employees involve a major time commitment by management.

10.

The charge to employers for the service of the state employment service is substantial.

11.

Because of our work force, recruiting has become a selling process.

12.

Job specifications tell the requirements that a person must bring to a job.

13.

A job applicant often gives a great deal of information in the way he or she approaches the application form.

14.

Reference checks need be run only on applicants for executive positions.

15.

In a proper orientation program an employee should first be shown how to do his or her job.

16.

Training never stops: if a new employee does not receive intended training, he or she will be influenced by the general environment.

17.

Skimping on training employees increases the possibility of losing customers as a result of poor service.

18.

On-the-job training techniques grew out of rapid-training techniques developed in World War II.

19.

A worker is best trained in a series of tasks rather than the entire job in a single session.

20.

On-the-job training begins with explaining the job and ends with demonstrating to an employee how to do a job.

21.

Praising employees in public and reprimanding in private is a good rule for supervisors to follow.

22.

Staff planning in the hospitality industry insures coverage when it is needed and avoids coverage when not needed.

23.

Some companies intentionally hire people with no experience and are willing to bear all of the training costs.

24.

It is often haphazard in the hospitality to pair a new employee with just any available experienced employee.

25.

One reason large firms are committed to training is that it is not an expensive process.

Short Answer Questions 1. The management function, “staffing” is defined as: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. Human resource management is a concern in hospitality management because ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. Name the seven steps in the job selection process.

1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 4) ________________________________________________________________________ 5) ________________________________________________________________________ 6) ________________________________________________________________________ 7) ________________________________________________________________________

4. What is the difference between a job description and a job specification? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 5. What are the major sources of prospective employees?

1) ________________________________________________________________________ 2) ________________________________________________________________________ 6. What is a job preview? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 7. What external source is relatively new but is widely adopted in the hospitality industry (among others)? ___________________________________________________________________________ 8. The three qualifications of a worker that are evaluated for minimum standards are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 9. The two major internal sources for prospective employees are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 10. The strengths and weaknesses of advertising in newspapers for employees is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 11. The object of the employee selection process is ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

12. Employee orientation should include ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 13. The four steps in on-the-job training (rapid training task analysis) are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 4) ________________________________________________________________________ 14. Staff planning begins with ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 15. How useful is the weekly schedule as a management tool: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 18 Multiple Choice 1. a 14.

2. b 15.

3. c 16.

4. d 17.

5. d 18.

6. a 19.

7. b 20.

8. a 21.

9. a 22.

10. c 23.

11. c 24.

12. a 25.

13. a Short Answer Questions

True/False b a b c d a d b a c d b

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F T F T T F F T T F T T T

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F F T T T T F T T T T F

1. Staffing is the work that managers and supervisors do to determine the specific personnel needs of their operations—to attract qualified applicants and to choose from these the best suited for employment and training.

2. The success of the whole enterprise often rests on the kind of employee and how he or she performs a certain job. A second reason is the significance of labor costs.

3. 1) Initial screening 2) completed application 3) Employment test 4) Comprehensive interview 5) Background examination if required 6) Medical/physical examination if required (conditional job offer made) 7) Final job offer 4. Job descriptions define the duties, tasks and responsibilities while job specifications specify the exact requirements (such as skills and experience) that a person must bring to a job 5. The major sources of prospective employees are the operation itself (the internal source) and various outside sources.

6. How the company describes the job to potential applicants.

7. On-line recruiting.

8. 1) physical requirements 2) mental or intellectual abilities 3) emotional or attitudinal characteristics 9. 1) Friends and relatives of current employees 2) former employees.

10. The numbers of applicants—employer can choose the best qualified from a large pool of applicants, but processing a large number of applications is time consuming.

11. To find the right person for the job.

12. An introduction to the operation, a statement of the standards of the operation, introduction to fellow workers, and finally, an introduction to the job (where he or she will work, a full description of the job, and observation of the work in action).

13. 1) tell me 2) show me 3) let me do it 4) follow up 14. Identifying each working station in the operation.

15. It ensures that: 1) seven-day needs are determined (such as day-off relief) 2) coverage for each job is provided each day 3) each employee is given an appropriate time off

Chapter 19 Test Bank and Answers Control in Hospitality Management Multiple Choice Choose the one best answer.

1. Measuring standards against performance and taking corrective action if necessary is at the heart of a) planning. b) control. c) directing. d) organizing.

2. The cybernetic loop refers to a) computerized control systems. b) control systems which provide information to serve as a basis for management corrective action. c) a kind of automation which largely replaces middle management and supervision with computerized reports. d) a function of staffing in an organization.

3. The cybernetic loop is used to describe control because continuous information a) makes for a well-informed manager. b) is reviewed and action taken when necessary. c) repeats itself and eventually self-corrects. d) prevents errors from being made.

4. Control is, most importantly, a) principally concerned with the past. b) historical and numerical. c) the study of what has happened undertaken with an eye to the future. d) a part of the formal accounting system.

5. A system that collects, transcribes, and summarizes information about transactions is called a) a control system. b) a transaction system. c) an information system. d) a management summary.

6. In designing an information system, most important is the a) information output required. b) transaction records. c) cybernetic loop. d) corrective action.

7. A cashier’s report, in the control system, is an example of a) a P&L statement. b) a transaction system. c) information output. d) statement of customer needs.

8. A characteristic of a control system is that a) it is collected from time to time. b) data is analyzed yearly. c) action is continually taken. d) it must provide for corrective action.

9. The text differentiates information systems and control systems on the basis that a) information systems are concerned only with financial data. b) control systems include information but also include provision for corrective action. c) control systems are used by accountants while information systems serve managers. d) control systems are more common.

10. Management by exception is control aimed at a) key points. b) information systems. c) variance reports. d) transactions.

11. To achieve control, managers use two kinds of accounting: a) key cost and product cost. b) balance sheet, and profit and loss. c) responsibility and decision. d) financial and managerial.

12. Financial accounting statements a) are prepared according to the rules of the accounting profession to help outsiders analyze operations. b) do not exist in school food service. c) are uniform only within the hotel field. d) are sometimes non-numeric.

13. The “balance sheet” in a hospitality operation a) is used almost daily. b) is also called a statement of income and expense. c) is a statement of value and ownership. d) evaluates the performance of an operation.

14. The advantage of following the Uniform System of Accounts is that it a) permits comparisons between different operations as well as of between departments within an organization. b) facilitates preparation of statements for the IRS, FEC and other government agencies. c) puts everybody in the same boat. d) facilitates automation or computerization of operations.

15. Managerial accounting in the hospitality industry is a) performed according to the conventions of the accounting profession. b) prepared for insiders and outsiders. c) focused principally on food and beverage cost control, payroll cost control, and other direct operating costs. d) used principally in strategic planning.

16. Expense budgets are generally based on a) current costs. b) estimates of future costs. c) past costs and predicted future trends. d) annual sales.

17. A budget is used in responsibility accounting a) the same as a statement of income and expense is used. b) but is not an effective tool in institutional operations such as school lunch programs. c) to determine variance from target and initiate corrective action. d) to compare with the previous year’s balance sheet.

18. The indicator of a department head’s performance in a hotel is the a) house profit. b) departmental net income. c) total income before fixed charges. d) net profit.

19. Holding heads of departments accountable for their costs is called a) managerial accounting. b) cost accounting. c) information accounting. d) responsibility accounting.

20. “Precosting” refers to a) the process of marking all items received with their unit cost. b) determining the cost of a portion of food or beverage in advance of service. c) scheduling practices related to payroll forecasting. d) a method to avoid past errors.

21. Payroll control a) uses scheduling techniques to provide adequate coverage and avoid excess coverage. b) verifies the accuracy of paychecks. c) is principally an historic control. d) is a relatively new form of management accounting.

22. Decision accounting a) is a specialized kind of financial accounting. b) follows the conventions of the accounting profession. c) assembles information on a one-time basis making assumptions appropriate to an immediate decision. d) reflects the needs of operations managers.

23. The best example of an asset is a) accounts receivable. b) accounts payable. c) accrued expenses. d) retained earnings.

24. The best example of a “liability” is a) accounts receivable. b) inventory. c) furniture and fixtures. d) accrued expenses.

25. In control systems, when costs get out of line, managers a) adjust their budget to account for a loss. b) take corrective action. c) develop an information system. d) write off the losses because it is too late to do anything.

True/False 1.

Because of their complex nature, control procedures are performed by the accounting office of a large hospitality organization.

2.

Control cannot be future oriented because it focuses upon records of past events.

3.

Control procedures are set up to find out who is responsible for what goes wrong.

4.

The control function is completed when reports on costs are prepared.

5.

The purpose of control is to correct past errors in the future.

6.

Information systems are of use only for reporting financial results.

7.

To be useful, the summary of an information system must be provided to all levels of management.

8.

A cash register tape is part of an information system.

9.

Some information systems used in restaurants do not consist of data on reports.

10.

Guest comment cards are an example of an information system.

11.

A control system must not only provide information, but also provide for corrective action.

12.

Management by exception is related to the key point characteristic of control systems.

13.

Action is separate from control as a management function.

14.

The hospitality industry has to develop and maintain a workable control system because of low profit margins.

15.

The Uniform System of Accounts collects information in a way that pinpoints performance against responsibility.

16.

The key to designing an information system is to determine just what information is needed by management, when it is needed, how often, and in what form.

17.

Managerial accounting is prepared according to accounting procedures that enable those outside an organization to evaluate an organization’s performance.

18.

Food and beverage control is considered to be a form of managerial accounting.

19.

A balance sheet is a part of managerial accounting.

20.

Managerial accounting follows the conventions of the accounting profession.

21.

Budgets are numerical estimates of future operating results.

22.

In health care budgeting, sales are the starting point.

23.

Both financial accounting and managerial accounting are cyclical and repetitive.

24.

Decision accounting is related to strategic planning.

25.

Decision accounting tends to focus on direct variable costs and to ignore expense items such as depreciation.

Short Answer Questions 1. The management function, “control” is defined as ___________________________________________________________________________ ___________________________________________________________________________ 2. To what does cybernetic refer? What do we mean by cybernetic loop relative to the control function? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. Drawing from your experience, provide an example of a cybernetic loop. ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 4. An information system is ___________________________________________________________________________ ___________________________________________________________________________

5. The four common characteristics of a control system are: 1) ________________________________________________________________________

2) ________________________________________________________________________ 3) ________________________________________________________________________ 4) ________________________________________________________________________ 6. The example discussed in the chapter of a company with effective controls in place included what three steps?

1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 7. Management by exception is ___________________________________________________________________________ ___________________________________________________________________________ 8. The two accounting tools managers use are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 9. What are the two principal financial reports used in financial accounting?

1) ________________________________________________________________________ 2) ________________________________________________________________________ 10. What is responsibility accounting? ___________________________________________________________________________ ___________________________________________________________________________ 11. The Uniform System of Accounts is: ___________________________________________________________________________ ___________________________________________________________________________ 12. The difference between a statement of income and expense and a balance sheet is ___________________________________________________________________________ ___________________________________________________________________________ 13. Precosting is ___________________________________________________________________________ ___________________________________________________________________________

14. Decision accounting differs from financial and managerial accounting because ___________________________________________________________________________ ___________________________________________________________________________ 15. Depreciation is ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 19 Multiple Choice

True/False

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b b b c c a c d b a d a c a c c c b d b a c a d b

F F F F T F F T T T T T F T T T F T F F T F T T T

Short Answer Questions 1. Control is the work that managers do to measure performance against standards, detect and analyze variance from target, and initiate corrective action.

2. The word cybernetic is derived from the ancient Greek word for the steersman on a ship. In early times, the steersman would aim the ship toward some point on the horizon. If the ship’s course veered to the left, he’d move the tiller to steer a bit in the other direction. Today management serves a similar role in changing direction as needed relative to the control function. The term loop is used in conjunction with cybernetic because the process is continuous.

3. Answers will vary.

4. An information system is any means for collecting information and translating this raw information into usable form.

5. The four common characteristics of a control systems are

1) it is continuous 2) it is timely 3) it is aimed at a key point (management by exception) 4) it is action oriented 6. (1) It hires managers who are aware of the importance of control, it ties rewards to performance, and it provides adequate support in this area; (2) it prepares a carefully developed budget with input from various sources; and (3) it holds weekly meetings to review progress, focusing on controlling costs that include costs not typically considered a direct management responsibility.

7. Management by exception is control aimed at a key point and taking action only when needed.

8. The two accounting tools managers use are 1) financial 2) managerial 9. The principal financial reports used in financial accounting are the balance sheet and the statement of income and expense.

10. The term responsibility accounting describes the means of classifying and reporting financial information.

11. The Uniform System of Accounts shows accountants how to classify income and expense.

12. A statement of income and expense evaluates a unit’s or company’s operating performance while the balance sheet is a statement of the firm’s value and ownership.

13. Precosting is a tool used in managerial accounting to determine in advance the cost of a portion of food or drink (or an entire meal), enabling an operator to predict food and beverage costs with reasonable accuracy.

14. Decision accounting differs from financial and managerial accounting in that it is not cyclical and the information for a decision is assembled in numerical form on a one-time basis.

15. Depreciation is making an assumption of the useful life of an asset and writing off the cost of the item via an accounting entry.

Chapter 20 Test Bank and Answers Leadership and Directing in Hospitality Management Multiple Choice Choose the one best answer.

1. As a result of social science research, the following conclusion has been drawn about the concepts of leadership and direction: a) Management scholars differentiate between direction, a social function, and leadership, which they see largely as a management function. b) Leadership is basically the art or process of influencing people so that they will strive willingly to attain group goals. c) If direction is effective, the result will be employee performance above the minimally acceptable norm. d) The distinction between authority and leadership is not theoretically valid.

2. In relationship to the other management functions, leading a) must be based on the other four functions and cannot be carried out successfully without them. b) is closest to the organization function because the legal basis of ownership is at the heart of management authority. c) relies most heavily on the planning function because the manager who looks ahead can best serve the long-run interests of the organization. d) is the most important function because good, inspiring leadership can usually overcome failure in other areas.

3. Leadership in organizations a) is viewed by management scholars as the same as directing. b) influences workers to obtain their full voluntary cooperation. c) assumes that workers respond only to the boss’ authority. d) requires inherent skills.

4. The following statement is true about worker motivation: a) There are many different motives for working. b) Money is the most important motivation for working. c) Workers are self-motivating and managers waste their time if they spend time trying to motivate them. d) A worker in a dull, monotonous job cannot be motivated.

5. One of the following statements about company policy as work motivation is true: a) Company policies are taken for granted by employees and do not affect their performance. b) All fringe benefits are required by law, so they are not used to attract good employees. c) Only the physical working conditions, not the social ones, can affect employees’ motivation. d) Other things being equal, employees choose a friendlier environment to work.

6. Douglas MacGregor’s Theory X statement about attitudes towards work a) states that physical and mental effort at work is as natural as play or rest. b) recognizes the value of employee work definition. c) considers that employees would prefer to have responsibility. d) uses reward and punishment as major keys to employee productivity.

7. Douglas MacGregor’s Theory Y statement about attitudes towards work states that a) the average employee responds well to paternalism. b) external control is a principal means of securing effort. c) employees have a greater capability for problem-solving than most organizations realize. d) reward and punishment are the major keys to employee productivity.

8. In applying MacGregor’s theory of leadership, a) Theory X is more appropriate than Theory Y in service industries, i.e., food service. b) Theory Y is more appropriate than Theory X in service industries, i.e., food service. c) Theory X is virtually out of date. d) Theory X and theory Y cannot be compared directly because the appropriate approach depends on the situation.

9.

Theory X is based on a) rewards and punishments. b) self-direction. c) individual responsibility. d) self-fulfillment.

10. Theory X and Theory Y a) are two different ways of solving management’s problems. b) are two different ways of looking at a worker’s attitude towards work. c) are an important response to the labor union movement. d) have been largely disproved by social scientists.

11. The correct answer to the problem posed by Theory X and Theory Y is to a) choose Theory X and accept that most people don’t like to work. b) choose Theory Y and accept that “work is as natural as play.” c) avoid the artificial complications raised by the theory and accept the world as it is. d) accept the fact that neither is an answer but that the theory helps us identify and consider the issue better.

12. Authority is a) based on legal rights of business ownership. b) based upon the manager’s personalities. c) shared by formal and informal leaders. d) shared equally between the franchisor and the franchisee.

13. To maintain productivity, along with efforts to improve morale, a manager must a) increase wages and fringe benefits. b) encourage and praise workers. c) make sure there is adequate lighting in the workplace. d) stress quality and quantity work standards.

14. The best statement about authority in today’s workplace is: a) Authority gives the manager the right to reward or punish. b) The formal leader can impose informal authority upon the workers. c) The formal leader expresses authority because of legal rights. d) Authority must be tempered by fairness to workers.

15. Authority, both formal and informal a) is established by legal rights. b) is limited by the psychology of individual workers. c) is relatively unaffected by group pressures in the workplace. d) results from the inherent leadership of the work group.

16. The following characteristic describes the work group: a) When people come together at work they tend to respect each other’s individuality and do not develop a social organization. b) A work group uses management guidelines to develop its own norms of work. c) In most work groups, a pattern of social conduct or group structure (often cliquish) will evolve. d) Management can often raise its formal authority to do away with clique formation within the work group.

17. Employee morale in the hospitality industry a) is related to productivity. b) is more important than in factory settings. c) does not include attitude towards work. d) does not make a difference if the work gets done.

18. The best kind of praise a) will keep employees from leaving the work. b) is your respect for the worker and your appreciation of the work well done. c) can often be used in place of a raise. d) is a good way to win workers to your side.

19. Since the work group develops into a social group, managers a) must give way to the norms and authority of the work group. b) try to identify and get rid of informal group leaders. c) try to build a link of communication with the informal leader. d) should try to become popular with the group leader.

20. Potential barriers to communication at work are a) semantic, different social backgrounds, and the immediate environment. b) different meanings attached to words, use of “loaded” words, and the organizational level. c) different values, different backgrounds, and lack of education. d) self-concept, humiliation, and hierarchical organization.

21. Morale in a service organization is important because a) happiness in the work place leads to productivity. b) if people aren’t happy in their work, they will leave and turnover will increase. c) employees are involved in guest contact and their attitude becomes a part of the service. d) it is really more important to worry about how people feel than how they do their work.

22. In responding to norms that workers develop among themselves, a manager a) does best to back off when confronted with strong consensus. b) must at all times preserve management’s prerogative to determine what will be done. c) should always remain above personal bickering. d) should be able to communicate effectively with group leaders.

23. Semantic barriers to communication means that a) workers may not share the manager’s enthusiasm for the job. b) the worker has been impacted negatively by public criticism. c) words may not have meaning or may be misunderstood. d) body language is more telling than a spoken message to workers.

24. Worker participation in decision making a) should be undertaken no matter what the circumstances are. b) is a dangerous precedent in today’s society. c) can be beneficial because workers can sometimes anticipate problems. d) enables managers to let workers decide what work is to be done.

25. In speaking of “establishing direction” in the section dealing with “leadership and change,” the text suggests that management a) express an understandable vision of where the organization must go. b) make use of those charismatic aspects of his or her personality that will leave lasting impressions. c) draw on group consensus. d) be confident of their ability to exert management’s prerogative.

True/False 1.

Social science research models itself on the kinds of definitive, quantitative proofs found in the physical sciences, but it may never reach definitive conclusions about such subjective concepts as leadership.

2.

Money is an economic reward, but employees often regard it as a form of social recognition.

3.

Fringe benefits may account for up to one-third of some employers’ wage bills.

4.

Research finds a high correlation between high morale in the workplace and productivity.

5.

It is desirable, but not really essential, that the employee selection process should take into account whether or not a prospective employee is likely to fit in and accept the interpersonal norms which management and the work group expect.

6.

Fortunately, employees in service systems are not particularly interdependent, and consequently, less emphasis needs to be put on an ability to work with others.

7.

It is not possible for a supervisor to be both a formal and an informal leader at the same time.

8.

The distinction between leadership and direction is invalid theoretically and doesn’t tell us much about practice.

9.

Without organization, the strongest individual becomes the authority figure.

10.

People work not only for money but also for more money.

11.

Most motivations to work are selfish in nature.

12.

In modern America, the threat of being fired remains a principle force in making employees accept direction.

13.

Personal ambition to get ahead seldom motivates hourly employees in the hospitality industry.

14.

Some people work hard principally because they enjoy their work.

15.

Encouragement, praise, and recognition are strong motivators for all employees.

16.

Company fringe benefits and working conditions are stronger motivating forces for longterm than for short-term employees.

17.

If worker morale is high, the work will automatically go well.

18.

Theory X and Theory Y answer the central issue of authority in modern management.

19.

Theory X refers to a set of negative, pessimistic assumptions about people’s desire to work.

20.

Theory Y refers to a set of positive, optimistic assumptions about people’s desire to work.

21.

The formal leader and the informal group leader are doomed to be in opposition.

22.

Managers should consider the informal group leader a threat to their authority, and avoid working with him or her.

23.

The social organization of the work group does not affect the authority of the supervisor.

24.

Informal group leaders can provide an important communication link between the formal leader and the work group.

25.

Listening is as important in communication as clarity of expression.

26.

Employees who are involved in a serious change at work are the least capable of making decisions if consulted because they are too personally involved.

27.

To go beyond proper training for a task, a good leader attempts to motivate an employee to be willing to do the work.

28.

Management uses intuition and common sense for leadership success rather than the study of management theory and practicing that theory.

29.

The leadership style to be used changes with the situation.

30.

Leadership style is something you are born with, for better or for worse.

Short Answer Questions 1. Leadership is ___________________________________________________________________________ ___________________________________________________________________________ 2. The difference between a formal and an informal leader in an organization is ___________________________________________________________________________ ___________________________________________________________________________ 3. Motivations that people have for working are (name five): 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 4) ________________________________________________________________________ 5) ________________________________________________________________________ 4. What are fringe benefits? ___________________________________________________________________________ ___________________________________________________________________________ 5. What is meant by working conditions? ___________________________________________________________________________ ___________________________________________________________________________ 6. What is morale? Does high morale lead to high productivity? ___________________________________________________________________________ ___________________________________________________________________________ 7. The difference between Theory X and Theory Y is: ___________________________________________________________________________ ___________________________________________________________________________ 8. A characteristic of the work group is ___________________________________________________________________________ ___________________________________________________________________________

9. Why should managers understand the effects of cliques? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. Employees’ participation in decision making includes: 1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________ 11. Name three barriers to communication: 1)_________________________________________________________________________ 2)_________________________________________________________________________ 3)_________________________________________________________________________ 12. Two elements in good communication are: 1)_________________________________________________________________________ 2)_________________________________________________________________________ 13. Elements of leading and directing in day-to-day business are: ___________________________________________________________________________ ___________________________________________________________________________ 14. The three basic elements of the work of the leader in changing an organization are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 15. Why is character important relative to leadership? ___________________________________________________________________________ __________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 20 Multiple Choice 1.

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b a b a d d c d a b d a d

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d b c b b c a c d c c a

1. T 2. T 3. T 4. F 5. F 6. F 7. F 8. F 9. T 10. T 11. T 12. F 13. F 14. T 15. F

16. T 17. F 18. F 19. T 20. T 21. F 22. F 23. F 24. T 25. T 26. F 27. T 28. F 29. T 30. F

Short Answer Questions 1. Leadership is generally defined simply as influence, the art or process of influencing people so that they will strive willingly toward the achievement of group goals.

2. A formal leader is in charge because of legal rights while the informal leader exercises a more subtle leadership coming from the work group.

3. Motivations that people have for working are 1) necessity 2) advantage 3) personal satisfaction 4) independence 5) encouragement, praise and recognition 6) money 7) company policy: benefits and working conditions 4. Fringe benefits include, among other things: vacation; sick leave; paid holidays; free or reduced-price employee meals; uniforms; group health, accident, and life insurance; educational benefits; child- care assistance; and pension plans.

5. Working conditions include both the physical and the social aspects of the workplace.

6. Morale is the attitude of a worker or work group feels or expresses toward the work. There is no direct correlation between high morale in the workplace and productivity. However, in hospitality industry, employee morale may be more important than it is in most other work.

7. Theory X is that people must be coerced, controlled, directed and threatened with punishment to get them to work. Theory Y views work to be as natural as play and recognizes self-direction as a strong motivation to work.

8. Characteristics of the work group are: individual motivations for work, the social organization of the work group with its own leadership, its own norms of work and social conduct, and, very often, a cliquish structure.

9. Sometimes relations between cliques are friendly or neutral; sometimes they become unfriendly or downright hostile. Management cannot do away with clique formation, but knowledgeable managers can arrange their directing activities so that they take these strong forces into consideration.

10. Managers can involve workers to participate by keeping employees informed about matters that affect their work, consultation in decisions that will affect the workers, and involvement in the decision-making process.

11. Semantic barriers, social background and immediate environment.

12. 1) Listening—to listen and observe both verbal and body language 2) Empathy—to put yourself in the other person’s shoes 13. The elements of leading and directing are 1) orders 2) instructions 3) training 4) motivating 5) sanctions 14. The three basic elements of the work of the leader in changing an organization are: 1) establishing direction 2) aligning people 3) motivating and inspiring 15. According to Malcolm Gladwell, character, “ . . . isn’t what we think it is or, rather, what we want it to be. It isn’t a stable, easily identifiable set of closely related traits, and it only seems that way because of a glitch in the way our brains are organized. Character is more like a bundle of habits and tendencies and interests, loosely bound together and dependent, at certain times, on circumstance and context.”

Chapter 21 Test Bank and Answers The Role of Service in the Hospitality Industry Multiple Choice Choose the one best answer.

1. Service is a) the performance of the organization and its staff, from the guest’s point of view. b) often produced in one place and then consumed at a later time. c) by definition, performed by people. d) always performed for money as defined.

2. The hospitality “product” a) includes tangible goods and intangible services. b) includes services only. c) means that which can be consumed or physically used. d) is the same as the service “experience.”

3. A characteristic of service is: a) it is tangible. b) it is dependent on tight control of procedure. c) service “inventorying” such as waiting lines are common. d) it is experience for the guest and performance for the staff.

4. The performance standard for service organizations should be a) zero defects. b) zero defects, but defects are defined by the type of operation and the guest’s expectations. c) a certain acceptable percentage of defects. d) a policy that says if defects are acceptable to the customer, no action need be taken.

5. Because “service happens to someone,” a) guests are unwilling to forgive errors in personal service. b) some operations keep their prices low so guests won’t be too demanding. c) defects must be defined against a scale of absolute perfection. d) there can be no recall of a defective product.

6. The reason that mechanical transactions must be carefully planned and programmed is that a) people don’t like machines. b) when something goes wrong, there is no one to speak personally for the operation. c) the poverty of time which most people experience today means they don’t have time for errors. d) jammed or empty machines mean lost revenue and profits.

7. In service transactions, the significant definition of defects is in terms of a) the guest’s expectation. b) what the competition can achieve. c) the industry standard. d) National Bureau of Standards (NBS) measurements.

8. In a service organization, there is pressure to operate at maximum capacity because a) breakeven points are higher in service. b) face-to-face contacts and their sense of gratification are important to everyone. c) very high fixed costs leave little room for error. d) unsold inventory has no value.

9. Face-to-face transactions a) are the most powerful in making an impression on the guest. b) should be tightly scripted to ensure conformity to predetermined standards. c) are best left to the discretion of the individual employee. d) are being replaced by mechanization and computers and are less important than a generation ago.

10. The core conditions for a helpful and friendly manner involve a) technical competence which eliminates server anxiety. b) empathy. c) deep acting. d) surface acting.

11. Direct personal transactions involve a) contact with the front desk by telephone. b) buying food from a vending machine. c) being served by a waitperson in the dining room. d) making an advance reservation.

12. The two aspects of personal service the text identifies as crucial are a) procedure and scripting. b) procedure and detail. c) helping skills and empathy. d) interpersonal and task.

13. The “task” component of service a) is procedural with emphasis on detail. b) is focused on interpersonal skills. c) does not lend itself to systems. d) is a type of assembly line process.

14. Interpersonal skills in hospitality organizations a) rarely demand empathy in a server. b) cannot be learned because they are inherent in an individual. c) are part of successful training programs. d) do not include body language or eye contact.

15. If employee training emphasizes that “how you do things” is more important than “what you do,” this is a) a product view. b) a mechanical view. c) a systems view. d) a process view.

16. A “product” view of service a) emphasizes service as a task. b) empowers employees to solve the guest’s problems. c) concentrates on what the guest wants. d) stresses interaction with the guest.

17. The attribute that is particularly critical in developing a service culture is: a) commitment of top management. b) above-average salary levels. c) establishing comprehensive procedures for technical competence. d) thorough employee training in dealing with customer complaints.

18. The process view of service best fits a) fast food. b) institutional and other cafeteria oriented operations. c) upscale operations that involve personal attention and individualized service. d) upscale and economy operations that involve personal interaction.

19. The process view of service a) closely controls behavior. b) has set standards of production. c) calls for meeting guests’ needs as the first priority. d) is also a production view of service.

20. Empowerment is a term that a) relates principally to the product view of service. b) involves giving employees the power to solve guest problems. c) relates to increasing power for unit managers. d) fits only a narrow part of the industry.

21. Controlling service tasks is the focus of a) the process view of service. b) the procedural view of service. c) a Theory X oriented view of service. d) the product view of service.

22. For excellence in service, a service strategy is developed by an organization a) standardizing sameness in styles of service. b) using market segmentation as its basis. c) which focuses on particular occasions. d) excluding price, atmosphere, and location.

23. Advertising for service should a) arouse maximum expectations in customers. b) focus on the concrete elements in the offering. c) avoid over-promising. d) use humor whenever possible.

24. The prerequisite to developing a service culture is a) above average salary expectations. b) to regularize bureaucratic tendencies. c) commitment of top managers to the program. d) ambitious policy statements that inspire.

25. The following statement is correct: a) Since the consumption of “service” and its production usually occur at different times, service can be stockpiled. b) The food service “product” is primarily a tangible good. c) Since “services” are not as complex to make as manufactured goods, quality control is relatively easy. d) “Service” should emphasize the guest’s total experience.

True/False 1.

More and more, in today’s food service industry, differentiation is achieved best by service.

2.

In highly competitive times in the hospitality industry, stressing customer service has been a successful strategy.

3.

Zero defects means that a service has been performed according to management’s expectations.

4.

Some indirect personal transactions, such as reservation services, are generally repetitious in nature, and subject to careful scripting, so the employee can be trained in detail what to say and when to say it.

5.

The product view of service focuses on the interaction between the service organization and the guest.

6.

It is not a matter of having to choose between the product and the process view of service, but of adapting each approach to the needs of particular operations.

7.

Luxury hotels should change operating and accounting rules and procedures to help employees serve guests better.

8.

Research suggests that, generally speaking, profitability will be higher in those operations where what should happen (according to company policy) is in fact, actually happening.

9.

Some lodging and restaurant services are provided by mechanical or computerized devices.

10.

“Service” is all the actions and reactions that customers perceive they have purchased.

11.

Service is ultimately under the control of the service employee who can ensure success.

12.

In service training, it is fair to say that the tangible side can readily be offset by a pleasant smile and a kind word.

13.

The server’s behavior is an integral part of the product in the service industries.

14.

Quality control is generally easier with services than with products because you can always apologize since the guest is right there.

15.

Service transactions are numerous, diverse, and often private.

16.

Face-to-face transactions have become more important as automation increases.

17.

The most challenging areas of service today involve the increasingly automated operation, and its programming and planning.

18.

Interpersonal skill training is based on a model developed for psychotherapists.

19.

Smiles should really be considered a part of the job of service.

20.

Developing a service culture requires commitment of top management in word, policy and action.

21.

Empowerment and control are two different words to describe one approach to service.

22.

The production line approach to service has become outmoded.

23.

The process view of service emphasizes interaction with the guest.

24.

The three types of service interaction are: mechanical, indirect, and face-to-face.

25.

Service transactions have an interpersonal and a task aspect, and failure in task competence can generally be overcome by an effective personal style.

Short Answer Questions 1. “Service” is defined as: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. What is meant by zero defects? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 3. What is sigma six? ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 4. The three general types of service transactions in the lodging industry are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 5. Give an example of a mechanical transaction and tell how it is perceived by guests: ___________________________________________________________________________

___________________________________________________________________________ ___________________________________________________________________________ 6. The two basic aspects of personal service are: 1) ________________________________________________________________________ 2) ________________________________________________________________________ 7. The “product” view of service is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 8. What obstacles does the product view of service include?

1) ________________________________________________________________________ 2) ________________________________________________________________________ 9. The “process” view of service is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 10. An example of empowerment that you have observed or was described in the text is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 11. Market segmentation is: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 12. What are the four steps in setting a service strategy?

1) ________________________________________________________________________ 2) ________________________________________________________________________ 3) ________________________________________________________________________ 4) ________________________________________________________________________ 13. Company culture is defined as: ___________________________________________________________________________

___________________________________________________________________________ ___________________________________________________________________________ 14. What is the prerequisite for establishing a strong service culture? ___________________________________________________________________________ ___________________________________________________________________________ 15. Tools used by management to get results from employees are: ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________

Answer Key Chapter 21 Multiple Choice

True/False

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a a d b d b a d a b c d a c d a a c c b d b c c d

T T F T F T T T T T F F T F T T F T T T F F T T F

Short Answer Questions 1. Service is all those actions and reactions that customers perceive they have purchased.

2. Zero defects refers to the only acceptable performance standard for a service organization.

3. Six Sigma is a statistically based business strategy that companies attempt to apply to help in reducing (and virtually eliminating) defects in products and services.

4. The general types of service transactions are 1) electronic-mechanical 2) indirect personal 3) face-to-face transactions 5. Answers will vary: the text mentioned automatic wake-up calls, which are generally acceptable and sometimes even preferred by the guest.

6. Two basic aspects of personal service are: 1) technical competence 2) personal interaction between the guest and server 7. The “product” view of service focuses on controlling the tasks that make up service.

8. First, the pool of employees that hospitality service firms draw from shrinks and expands from time to time. In light of the occasional shortage of employees, employers often look for means to make service jobs artificially more attractive. Second, because many employees prefer to be able to use their own judgment rather than just follow the rules, the close control of behavior required by the product view is increasingly called into question.

9. The “process” view of service concentrates on guest-server interaction.

10. Examples of empowerment will vary. The text provides three examples under the topic of “The process view.”

11. Market segmentation identifies groups of customers and prospects sharing sufficient characteristics so that a product and service can be designed and brought to market for their particular needs.

12. 1) choose market segment or segments 2) determine appropriate service level 3) don’t overpromise 4) meet or exceed expectations 13. Company culture is a system of shared meaning held by members that distinguishes the organization from other organizations. This system is, on closer examination, a set of key characteristics that the organization values.

14. Commitment by top management 15. Tools used by management to get results from employees are: 1) employee selection 2) training 3) motivation 4) employee award and reward programs