Toward cost-effective service excellence: Exploring the relationship between managers’ perceptions of quality and the operational efficiency and profitability of restaurants

Abstract This study investigates the relationships between managers’ perceptions of service quality, operational efficiency, and profitability. The DINESERV tool was applied to assess managers’ perceptions of service quality, and firms’ financial reports were used to analyze operational efficiency and profitability. Exploratory Factor Analysis (EFA) was performed to analyze managers’ perceptions of quality, Data Envelopment Analysis (DEA) was used to assess operational efficiency, and Structural Equation Modeling (SEM) was used to assess the model. Results reveal that, according to managers’ beliefs, only three quality dimensions – empathy, assurance, and tangibles – are important for delivering high-quality services. Based on the results of DEA and SEM, four groups of restaurants were formulated: lower success and lower efficiency (A), higher success and higher efficiency (B), lower success and higher efficiency (C), and higher success and lower efficiency (D). Results reveal that managers’ perceptions of quality significantly vary depending on the level of operational efficiency and profitability.