The Silent Diffusion of Sticky Costs in the HoReCa Industry
Keywords:
cost behaviour, overhead cost management, qualitative research, VUCA (volatility, uncertainty, complexity and ambiguity)Abstract
Sticky costs materialize when costs increase more with rising an activity than they decrease with falling of the very same amount of the activity. Over time a silent diffusion of sticky costs can be observed in the HoReCa (HOtel/REstaurant/CAtering) industry. In sticky costs literature the cost behaviour is evaluated by correlating the current growth in Selling, General and Administrative costs – often referred to overhead - with current revenue growth. Recently, research identified several attributes affecting the hysteresis (Greek: remaining even if the cause is no longer there) of cost. Managerial oversight, external regulatory conditions and company culture are an example of such attributes. First insights indicate that the dependence of a system on its history is the driving force to determine the severance of cost stickiness. It depends for different sizes of corporations on the corporate governance model and on the successful variabilization of costs. This paper presents the most important attributes affecting sticky cost. Further, the various implementations in real managerial decision-making processes in the HoReCa industry are described on the example of the region of Opatija, Croatia. A qualitative research using ATLAS.ti as Computer Assisted Qualitative Data Analysis Software (CAQDAS) is the chosen approach for unveiling the desired findings.
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
References
Boadu, M., Sorour, M. K. (2015), ”On utilizing grounded theory in business doctoral research: Guidance on the research design, procedures, and challenges”, International Journal of Doctoral Studies, Vol. 10, pp. 143-166.
Cerovic, Lj., Drpic, D., Milojica, V. (2014), ”The possibilities for repositioning of the Opatija Riviera’s tourism offer“, UTMS Journal of Economics, Vol. 5, No.1, pp. 121-130.
Charmaz, K. (1980), ”The construction of self-pity in the chronically ill”, Studies in Symbolic Interaction, Vol. 3, pp. 123-145.
Charmaz, K. (2008), ”Grounded theory”, in Smith, J. A. (Ed.), Qualitative psychology: A practical guide to research methods, Los Angeles sage Publications, pp. 81-110.
Cheung, J., Kim, H., Kim, S., Huang, R. (2018), ”Is the asymmetric cost behavior affected by competition factors?”, Asia-Pacific Journal of Accounting & Economics, Vol. 25, No. 1-2, pp. 218-234.
Corbin, C. B. (1992), ”The effects of verbal feedback on intrinsic motivation and perceived competence of cricketers”, Australian Journal of Science and Medicine in Sport (AJSMS), Vol. 24, No. 4, pp. 94–99.
Eisenhardt, K. M. (1989), ”Building theories from Case Study Research”, Academy of Management Review, Vol. 14, No.4, pp. 532-550.
Hall, S. (1992), “New Ethnicities”, in Rattansi, A., Donald, J. (Eds.), Race, Culture and Difference, Sage Publications, pp. 252-259.
Hughes, J., Wood-Harper, T. (1999), ”Systems development as a research act”, Journal of Information Technology, Vol. 14, No. 1, pp. 83-94.
Jones, M., Alony, I. (2011), ”Guiding the Use of Grounded Theory in Doctoral Studies – An Example from the Australian Film Industry”, International Journal of Doctoral Studies, Vol. 6, pp. 95-114.
Krol, C. (2017), “Time-Starved B2B Buyers: Move Towards Shorter, More Targeted Experiences”, Demand Gen Report, pp. 1-12.
Martin, P. Y., Turner, B. A. (1986), “Grounded theory and organisational research”, Journal of Applied Behavioural Science, Vol. 22, No. 2, pp. 141-157.
Orlikowski, W. J. (1993), ”CASE tools as organisational change: Investigating incremental and radical changes in systems development”, MIS Quarterly, Vol. 17, No. 3, pp. 309-340.
O'Hagan, A. O., O’Connor, R. (2015), ”Towards an Understanding of Game Software Development Processes: A Case Study”, in the Proceedings of the 22nd European Conference on Systems, Software and Services Process Improvement, Ankara, Turkey, Springer, pp. 3-16.
Slivar, I., Božić, S., Batković, A. (2016), ”Innovation in Tourism: Perception of Tourism Providers from Croatia and Serbia”, Review of Innovation and Competitiveness, Vol. 2, No. 4, pp. 37-56.
Sorros, J., Karagiorgos, A. (2013), ”Understanding Sticky Costs and the Factors Affecting Cost Behavior”, Working paper, University of Piraeus, Greece.
Strauss, A. L, Corbin, J., (1998), ”Basics of Qualitative Research: Techniques and Procedures for developing Grounded Theory”, Sage Publications Ltd, London.
