Fine restaurants: Creating inimitable advantages in a competitive industry

This dissertation investigates sources of sustainable competitive advantage in the restaurant industry by investigating one highly successful restaurant group, Union Square Hospitality Group (USHG), to understand the internal processes that lead to the development of competitive advantage. This study employs the resource-based view of the firm, identity theory, and institutional theory to understand the micro-processes that underlie competitive advantage. The findings reveal that the success of this organization resides largely in strategic human resource management practices and organizational identity.; This dissertation is composed of two studies. The first, qualitative study uses participant observation and interviews (n = 72) to investigate the source of sustainable competitive advantage at one of the USHG restaurants, Union Square Cafe. The results indicate that Union Square Cafe achieves its differentiation strategy of “Enlightened Hospitality” through a synergistic set of human resource management practices involving three key practices: selection of employees based on emotional capabilities, respectful treatment of employees, and management through a set of simple rules that stimulate complex and intricate behaviors benefiting customers. The human resource management system provides Union Square Cafe with inimitable capabilities that confer a sustainable advantage.; The second study investigates the concept of layered identities and explores continuity of identity over time and across contexts, using qualitative and quantitative methods in four restaurants owned by the Union Square Hospitality Group. Successful growth of this organization resides in the development of both a core identity that is unique, valuable and consistent across restaurants, and strategic identities that vary across restaurants and allow each restaurant to compete in its niche. The sustainability of this system is rooted in management's ability to successfully develop and transfer both core and strategic identities, and in the institutional practices that continuously support and maintain the identity.; This research contributes to the literature by challenging the “black box” of strategy research to understand the micro-processes that underlie competitive advantage. Both the RBV and SHRM literatures fail to specifically link resources and capabilities with competitive advantage. This study offers a specific case in which management capabilities produce a sustainable competitive advantage. Marrying RBV with the SHRM literature, and institutional theory with organizational identity, helps to clarify the mechanisms by which HRM and identity lead to sustainable competitive advantage.