Critical success factors

The critical success factor (CSF) approach has been in existence for some considerable time, mainly in the information systems field, and in later years, its application was extended to the generic management field. Critical success factors can be defined as the limited number of areas in which ‘things must go right’ in order to ensure predetermined ‘goals’ are achieved. Furthermore, it is important to determine suitable ‘measures’ to monitor and control the results of CSFs. Thus, CSFs represent priority areas for on-going information provision and form the basis for a company’s management decision-making. The approach is based on a framework of ‘goals–CSFs–measures’ called ‘CSF analysis.’ For example, in a hotel business, if the goal is to improve room revenue, then the key elements (critical success factors) to be managed are essentially the number of rooms sold and the room rate charged, thus involving the measurement of room occupancy, average room rate, and RevPAR to monitor the results.

The CSFs will normally vary from company to company within an industry and among the individual managers within companies, thus, they are related to the specifics of a particular manager’s situation.

References
Brotherton, B. and Shaw, J. (1996) Towards an identification and classification of Critical Success Factors in UK Hotels Plc. International Journal of Hospitality Management, 15 (2), 113–135.

Geller, A.N. (1985) Tracking the critical success factors for hotel companies. Cornell Hotel and Restaurant Administration Quarterly, February, pp. 76–81.