Tips and Impact on the Economy and Business.

Cite this


This work aims to achieve multiple objectives; on one hand, it serves to identify two papers of research on any topic pertaining to the hospitality industry, and critically evaluates these in light of the research objectives, methodology employed for the research, it’s philosophical roots, justifications on the validity of the research methodology to suit the needs of research objectives and how the research findings have been used to conclude the research projects under review.

In this work, two research papers have been selected based on a phenomenon very common in the hospitality industry: tipping. Papers selected to serve the needs for this assignment are:

  1. The Implications of Tipping for Economics and Management (Azar, 2002)
  2. Incentives and Service Quality in the Restaurant Industry: The Tipping-Service Puzzle (Azar, 2008)

The analysis begins with an analysis of the overall objectives of the research and the philosophy underlying both the projects.

Research Philosophy

Research philosophy lays the foundation for progression of the research project under study. It aims to guide and facilitate the accomplishment of research objectives by digging out roots on which a specific type of research project (Swepson, 1995) depends. If this is unclear, the entire project can turn towards failure. The philosophy of research used in both the research projects is harmonious to the philosophy of knowledge, epistemology. Both of these research projects rely on achieving a two-pronged purpose: directive and interpretive.

Paper I – The Implications of Tipping for Economics and Management


Tipping, or “gratuity to in return for a service, beyond the compensation agreed on” (Princeton University, 2006) has become a norm in today’s social circles, aimed towards rewarding on performance or creating a motivation for ensuring the same level of performance on repeat transactions. Although not adopted by the US till the 19th century, tipping has frequently evolved as a show of status, respect and gaining acceptance among individuals coexistent in the society.

There is however, one more face to it. When seen from the server’s end, it is a major economic activity that comprises a major part of the server’s overall income. There has been a significant increase in this trend as well and it poses new challenges on how it affects society, labor and management providing services to its customers as well as the behavioral effects of tipping on individuals.

An exhaustive effort by Ofer H. Azar’s, (2002) research paper had the the following research objectives:

  1. Identify tipping and how it serves as an economic activity
  2. How does tipping interact and set the social and cultural norms for the environment we live in
  3. The way in which tipping affects behaviors of individuals being tipped as well as those giving offering tips

These objectives cover quite significant ground in identifying what has long been ignored as a large source of income for people related to the hospitality industry. Tipping has a major role in identifying the economic well-being of the labor involved, as well as its effects on management and society, in general.

Research Methods

Qualitative (2004) methods aim to identify behaviors and patterns based on personal experiences or attitudes that are usually unquantifiable and rather categorized on the intensity of the occurrence of the behavior that allow us to generalize the overall behavior in favor of or against the research hypothesis. This project has been done with an aim to identify the characteristics identifying tipping as an economic activity and how these characteristics interact with environmental forces to shape individual’s behaviors towards this social phenomenon.

Research Methodology

For this study, the researcher has employed secondary research, based on the scope of the research project as well considering it a new frontier towards understanding this phenomenon. Information is gathered from various sources such as literature reviews, databases, libraries and others. Considering the nature of the project, secondary research was sufficient enough to narrow down the research objectives, scope and refining the methodology used in conducting the research.

Although secondary research has allowed the researcher to lay the foundations for the overall effort, it is however it is questionable whether it can create relationships between the factors centering this phenomenon with environmental, behavioral, social and management forces, based on studies conducted for projects with different objectives. The usage of these relationships in future research is extremely important as some of the behaviors require elaboration to allow quantification, before any further efforts are induced into the project.

Paper II – Incentives and Service Quality in the Restaurant Industry: The Tipping – Service Puzzle


Tipping is an activity that generates a sizeable portion of income for the overall hospitality industry. The second research study has also been carried out by Azar (2008) which tries to find out whether a relationship exists between tipping and the quality of service delivery to the customers. This research paper has been prepared by the same author with the specific purpose of providing two papers with different methodologies, philosophies and approaches, from the same author so as to receive two entirely different perspectives on, tipping.

According to Azar (2008) tipping is not dependent on service quality, except in cases where a strong relationship influences and strengthens the relationship between service quality and the tip offered. Using a simple model, the author has aimed this research to conclude that tipping can actually improve service only if there is a sensitivity to quality.

This research paper has been aimed to achieve the following research objectives:

  1. Outline the phenomenon of tipping in general
  2. To understand, based on the available information, impact of tipping on behaviors, norms etc.
  3. From the available information, develop interpret interrelationships between variables involved with tipping, and develop a utility function that determines how it is actually incentive-driven and affects service quality, where it is dependent on tipping.

Research Methods

This paper discusses previous research in a detailed review of literature, however, to actually study the interrelationships and interdependencies between tipping and quality levels of services rendered. In case of quantitative research it is important to narrow down the interdependencies to a narrower framework. Usually quantitative methods aimed at quantifying these relationships, characteristics and behaviors in an attempt to identify the magnitude and direction of these, to project, using a mathematical model and reach a conclusion are used where additional relationships can be identified to support the research project, in general.

Research Methodology

In context of this research study, the researcher has employed literature review for laying out the foundation of the research project. For this purpose, the researcher has resorted to using different sources of information such as literature reviews, libraries, papers, books, websites and others. Based on the scope of the research project, the secondary research was highly useful in setting a premise for the research project, as well as allowing for narrowing down the research objectives to an extent whereby based on the nature of the research project, the scope of the research project can be controlled.

The literature review provided the basic framework, while primary research was conducted in an attempt to find the relationship between service quality and tipping. This research is more of an experimental nature rather than following an information-driven structure that uses deduction to reach conclusions.

When evaluated, this model has some weaknesses. Seeing from one perspective, this model has been created based on previous research projects aimed at studying different aspects concerned with how tipping goes about, what are the preliminary behaviors that catalyze this process, the aftereffects of it, and the many aspects associated with the social, psychological and other interpretations of this phenomenon. Each of these research projects had been developed with a different set of research objectives, specific to that project, and not generalizable to the current research in context. This may suggest the relevance of research projects used in literature review as well as subsequent researches, and might be inapplicable as a whole.

Also, identifying relationships between incentives (tips) and service quality is fruitful, furthered for use in the model suggested in this research, however, the utility of this model has not been tested from the data gathered on-need for this project. The model has been designed based on the information available from previous researches that may validate or invalidate its applicability and fitness for this purpose.

Comparison & Contrast

The prime purpose of this assignment has been to identify, analyze, interpret and critically suggest the approaches to research, different in both the selected papers. Although the objectives of the two papers focus on a single premise, to understand tipping, they vary largely in the areas used to address working around this phenomenon.

A point to consider here is the selection of the two papers from the same author. This has helped in the context of providing a similar approach to the overall research problem at hand, as well as the approach of the research in execution of the overall process. On the other hand, the two projects differ largely based on their primary and secondary premises aimed to understand factors / variables surrounding the tipping phenomenon.

Research methodology employed for both studies has largely been qualitative; however, a large amount of effort has been inducted (Trochim, 2006) into gathering information from previous researches.

A major difference between the two projects, however, was the method in which research and data collection was actually carried out. In the first project, the research objectives and questions were narrowed using literature reviews, while in second, similar information gathering was done through experimental research, building on preliminary literature reviews at the initial stage.

Secondly, while the first research project is highly deductive, another relies on an experimental model to be used to determine results. In the project for determining the understanding of tipping as a behavior etc, less time was dedicated overall. In the second project, however, extensive research was conducted, to design a mathematical utility model aimed at identifying the relationship between service quality and the incentive being offered as a gift in addition to the services rendered.


Both of these research projects were of significant importance, but in different circumstances. One research stresses the importance of tipping as a social norm that simultaneously affects the behaviors of individuals involved, directly or indirectly, factors shaping this behavior, the overall importance of tipping as an economic force, and its impact on the various environmental forces shaping the society. Literature reviews were conducted to facilitate the process. It is felt that the duration designated to literature review should have been more and that experiential research should also be conducted in such scenarios allowing more vivid information, as well as thoughts and opinions about this phenomenon and its overall impact.

The second research identifies the relationship between service quality and the extent of tipping. The beauty of this project has been to identify how multiple faceted relationships exist at the same time between the two and how the overall process changes, when any of the factors changes. This research was more extensive and direct in its approach. A significant amount of time was dedicated to preliminary research, with considerably small duration dedicated towards the experimental model defined for studying the relationship and the effects on service quality when controlled through the extent of tipping.

These projects differed in their objective of determining the usefulness of literature review process and the information available. While the first research project only served the purpose of providing interpretive information, the second one, being more elaborate, ensured that it is both interpretive, for researchers and simultaneously deductive / directive, allowing researchers to suggest new models for having a greater understanding of this social phenomenon that has become largely important part of the income of the individuals involved.


(2004) Chapter 4 – Quantitative and Qualitative Research. Social Sciences Academic Resource Center. Web.

Azar, Ofer H. (2008) Incentives and Service Quality in the Restaurant: The Tipping-Service Puzzle. Negev : Ben-Gurion University of Negev.

Princeton University. (2006) WordNet Search – Tip. WordNet Princeton University.Web. 

Swepson, Pam. (1995) Action research: understanding its philosophy can improve your practice. Action Research. Web. 

Azar, Ofer H. (2002) The Implications of Tipping for Economics and Management. Evanston : International Journal of Social Economics.

Trochim, William M. K. (2006) Deduction & Induction. Research Methods Knowledge Base. Web.

Cite this paper

Select style


BusinessEssay. (2022, December 12). Tips and Impact on the Economy and Business. Retrieved from


BusinessEssay. (2022, December 12). Tips and Impact on the Economy and Business.

Work Cited

"Tips and Impact on the Economy and Business." BusinessEssay, 12 Dec. 2022,


BusinessEssay. (2022) 'Tips and Impact on the Economy and Business'. 12 December.


BusinessEssay. 2022. "Tips and Impact on the Economy and Business." December 12, 2022.

1. BusinessEssay. "Tips and Impact on the Economy and Business." December 12, 2022.


BusinessEssay. "Tips and Impact on the Economy and Business." December 12, 2022.