Research Paper Examines K-12 Outsourcing

An article published in the February issue of the International Journal of Hospitality Management uses a survey of school administrators mostly from districts where food service is outsourced to create a cost and benefit framework for K-12 food service operations outsourcing decisions.

The article, “Cost-Benefit Framework for K-12 Food Service Outsourcing Decisions,” uses the costs and benefits that respondents cited as being important in their decision-making process to outsource food services. The authors also incorporated input from stakeholders, parties that would be influenced by the cost and benefit items.

“There has been a continued focus on how schools can be instrumental in making kids understand healthy eating and provide balanced eating options for them,” says co-author  Amit Sharma, associate professor of hospitality management at Pennsylvania State University. “The question that comes up frequently is: Should food service operations be outsourced? It’s a business decision, it’s a financial decision and, at the same time, it’s a decision that is associated with health outcomes. Meanwhile, school administrators want to make sure that the new, third-party operator is going to do a good job in all of these aspects.”

According to the U.S. Census Bureau, there are roughly 14,000 school districts in the United States. Between 12 and 15 percent of them outsource their food services, with almost half of these outsourcing districts located in the states of New York, New Jersey, Illinois, Michigan and Pennsylvania.

Costs that were identified in the proposed framework included poor performance, lack of student or parent support, a poor contract or vendor selection, hidden costs and low morale of staff. Benefits included access to skilled staff, quality improvement, quality of taste, nutritional quality of food, reduced operating costs, and better accountability and management of legal compliance.

“The Food Decisions Research Laboratory investigates decisions and choices of managers and consumers in the foodservice industry,” Sharma says. “We are particularly interested in how actual and perceived costs and benefits impact such decisions. In this paper we have laid out a possible map of what these costs and benefits could be. We will now leverage this knowledge to dig deeper into how these costs and benefits might impact food decisions.”

Future research questions proposed by the study could include: How are costs and benefits perceived and assessed in outsourcing decisions? How can costs and benefits be estimated, measured or quantified to enhance decision-making?

“We were not expecting this to be an easy answer,” Sharma notes. “It’s not supposed to be an easy answer. It is more complicated. The main takeaway for us is that the decision involves a balance of pros and cons, the benefits and costs. How the decision is made, which one of these factors was weighted more, that requires further investigations about the complexity of such and other related food decisions.”

Further research could also compare the nutritional outcomes and effectiveness of achieving nutrition and wellness objectives in outsourced verses other food service operations, the authors said. Additionally, extending research into students’ behavior and food choices could further help researchers understand the value of outsourcing, they said.

“While previous research has shown that transactions have costs, and recently included potential benefits in the discussion, our studies are trying to disentangle these cost and benefit elements of the food decision transactions,” Sharma says.

Co-authors aside from Sharma include Joonho Moon, hospitality management graduate student, Javid Baig of Sodexo, Jeong-Gil Choi of Kyung-Hee University in Korea, Kwanglim Seo of University of Hawaii Manoa and Lorna Donatone of Sodexo.