- Email: [email protected]
Knowledge-management issues in China’s hotel industry
Annals of Tourism Research xxx (2015) xxx–xxx
Contents lists available at ScienceDirect
Annals of Tourism Research journal homepage: www.elsevier.com/locate/atoures
Research Note
Knowledge-management issues in China’s hotel industry Tommy Wong ⇑, Linda French 1, Mark Wickham 2 University of Tasmania, Australia
The Knowledge Management (KM) concept has been extoled across multiple disciplines as a control process whereby organisational knowledge is generated, retained and leveraged to enhance competitiveness and organisational growth (Cooper, 2006; Diakoulakis, Georgopolous, Koulouriotis & Emiris, 2004). Organisational efforts to strategically manage their store of knowledge continue to intensify as the business environment becomes progressively competitive, and new, dynamic markets continue to emerge (Tuomi, 2002). Despite substantial investigation of KM control practices in many Western industries and markets, unexplored areas within the KM domain still remain in the emerging Chinese market (Hall & Paradice, 2005); one such area concerns the effective KM by Western firms in the highly competitive Chinese hotel sector (Cooper, 2006; Hallin & Marnburg, 2008; Peng, Moffett, & McAdam, 2010). China represents one of the most attractive markets for international hotel chains seeking growth opportunities outside their highly saturated (and stagnant) domestic Western markets (Bose, 2012; Enderwick, 2009; Wong & Wickham, 2015). Yet, despite Western hotel chains investing heavily in the Chinese market (e.g. Marriott, Hilton, and Hyatt), their ability to compete effectively remains an issue of ongoing concern (see: Ahlstrorn & Bruton, 2001; Hays, 2008; Jagersma & van Gorp, 2003; Tsui-Auch & Möllering, 2010). Focussing on two hotel chains operating in China (namely, Marriott International and the Parkyard Hotel Group), this paper presents an empirical exploration into the issues inherent to KM control processes in the Chinese hotel industry, as well as an agenda for future research into KM in that context. In order to explore the KM issues inherent to the Chinese hotel context, primary data were gathered over a four year period (i.e. 2010–2013) from senior executives of Marriott International and Parkyard Hotels operating in China (i.e. 32 semi-structured interviews with General, Human Resource, Sales and Marketing Directors). The semi-structured technique gave interviewees sufficient latitude for introspection, and an opportunity to pursue and openly report their personal perspectives on matters that they considered critically important (Clandinin & Connelly, 1994). These individualised recollections subsequently gave the researchers direct access to additional matters of fact and detail
⇑ Corresponding author. Tel.: +61 3 6226 2849; fax: +61 3 6226 2170. E-mail addresses: [email protected] (T. Wong), [email protected] (L. French), [email protected] (M. Wickham). 1 Fax: +61 3 6226 2170. 2 Tel.: +61 3 6226 2159; fax: +61 3 6226 2170. http://dx.doi.org/10.1016/j.annals.2015.11.022 0160-7383/Ó 2015 Published by Elsevier Ltd.
Please cite this article in press as: Wong, T., et al. Knowledge-management issues in China’s hotel industry. Annals of Tourism Research (2015), http://dx.doi.org/10.1016/j.annals.2015.11.022
2
Research Note / Annals of Tourism Research xxx (2015) xxx–xxx
that could only be recorded in individual memory (Samuel, 1982), and served to strengthen enquiry by counteracting any potential bias in secondary documents (Burgess, 1982). Analysis and interpretation of primary and secondary data and verification of the conclusions drawn was facilitated using the QSR NVIVO (version 10) software package. Analysis of data revealed three key KM issues inherent to the Chinese hotel context. Firstly, the data revealed a fundamental lack of Western-style service quality knowledge in the domestic labour force. As the Chinese hotel industry was in the maturity stage of development, data suggested that this KM issue stemmed not from a lack of understanding about hotel management per se, but rather from the insular and uncompetitive industry structure that had ‘‘. . .led to complacency and a lack of competitive pressure to improve employee knowledge and skills” (General Manager A, 2012). Data further indicated that this KM issue was most prevalent in the period directly after China’s ‘Open Door’ policy, and persisted for some 20 years due to a general resistance to change, and unwillingness by the domestic labour market to adopt Western-style service standards. This suggests that the effectiveness of any KM processes by Western hotels’ in China is highly reliant on their capability to overcome the extant ‘state of inertia’ in this regard, and to stimulate domestic labour market motivation to align their behaviours and skill development with Western (and/or international) standards. The second KM issue detected in the data concerns the difficulty that Western hotels experience when attempting to socialise domestic employees into their organisational culture. Respondents indicated that the effective socialisation of domestic employees into a Western hotel organisation culture was crucial to establishing a link between their ‘way of doing business’ and the domestic employees’ knowledge and skill development. To illustrate, Marriott’s experience demonstrated that effective training and development courses needed to focus on more than just day-to-day tasks associated with a particular job role. Rather, they needed to ‘‘. . .clearly address the manner in which tasks were done, and demonstrate how these tasks were connected to other functional departments, the organisation’s core mission, and ultimately to career advancement” (HRM Director A, 2013). The third key KM issue in the Chinese hospitality industry concerned the transient nature of skilled labour across organisations and labour market boundaries. Data suggested that as domestic employees gained Western-style service skills, they become ‘highly visible’ in the labour market and were headhunted by organisations from a range of industry sectors. This head-hunting (along with greater pay incentives and limited exit barriers for hospitality workers) led to significant levels of leakage, as many higher-skilled employees chose to change employer (and/or their career). This transience served to reduce the store of knowledge, and hence the ability to strategically implement KM processes for organisational growth in the hotel context. This issue suggests that a sector-wide approach to KM is needed—namely to convince the labour market that the Chinese hospitality industry offers a competitive long-term career choice. In summary, this study indicated that effective KM in the Chinese hotel industry is predicated on operators’ ability to become an employer-of-choice (EOC) and attract, train and retain employees that are socialised effectively into an organisation’s culture. By extension, results suggested that a sectorwide approach may be needed to promote hospitality as an industry-of-choice (IOC), and thus stem the outflow of highly-skilled employees and protect the store of industry-wide knowledge. The success of such a strategy however, is reliant on individual hotel operators and employees (both international and domestic) being willing to overcome inertia and resistance to the adoption of Western-style competitive practices in the Chinese hospitality sector. Given these insights, we suggest two main areas for future research: an analysis of the link between KM and the concepts of ‘employer-of-choice’ and ‘industry-of-choice’ in the Chinese hospitality industry. Such investigation will contribute to and extend the existing store of KM theory, and provide valuable insights for KM practices of Western hotels operating in the Chinese hospitality sector. At the organisational level, such investigation will inform KM practices and facilitate the design of human resource and marketing strategies that impart expected international standards of skill and behaviour on domestic employees, and foster the organisational culture required for Western organisations to become employees-of-choice in the Chinese context. An important implication at the industry level is the recognised need for industry-wide marketing efforts to promote hospitality as an industry of choice which provides a valued long-term career option. The lack of such industrybased marketing efforts will essentially turn the hospitality industry into a training ground for those Please cite this article in press as: Wong, T., et al. Knowledge-management issues in China’s hotel industry. Annals of Tourism Research (2015), http://dx.doi.org/10.1016/j.annals.2015.11.022
Research Note / Annals of Tourism Research xxx (2015) xxx–xxx
3
alternate industries better able to effectively market their career opportunities. It is anticipated that outputs from this research agenda would benefit both international hospitality operators engaged in (or considering) foreign direct investment within the Chinese market, and domestic operators looking to improve their competitive stance within this highly dynamic market. References Ahlstrorn, D., & Bruton, G. D. (2001). Learning from successful local private firms in China: Establishing legitimacy. Academy of Management Executive, 15(4), 72–83. Bose, T. K. (2012). Advantages and disadvantages of FDI in China and India. International Business Research, 5(5), 164–174. Burgess, R. G. (1982). Field research: A sourcebook and field manual. London: Routledge. Clandinin, D. J., & Connelly, F. M. (1994). Personal experience methods. In N. K. Denzin & Y. S. Lincoln (Eds.), Handbook of qualitative research. California: Sage Publications. Cooper, C. (2006). Knowledge management and tourism. Annals of Tourism Research, 33(1), 47–64. Diakoulakis, I. E., Georgopoulos, N. B., Koulouriotis, D. E., & Emiris, D. M. (2004). Towards a holistic knowledge management model. Journal of Knowledge Management, 8(1), 32–46. Enderwick, P. (2009). Large emerging markets LEMs and international strategy. International Marketing Review, 26(1), 7–16. Hall, D. J., & Paradice, D. (2005). Philosophical foundations for a learning-oriented knowledge management system. Decision Support System, 39(3), 445–461. Hallin, C. A., & Marnburg, E. (2008). Knowledge management in the hospitality industry: A review of empirical research. Tourism Management, 29(2), 366–381. Hays, J. (2008). Foreign companies and foreign investment in China. Available at:, viewed on July 3rd, 2014. Jagersma, P. K., & van Gorp, D. M. (2003). Still searching for the pot of gold: Doing business in today’s China. Journal of Business Strategy, 24(5), 27–35. Peng, J., Moffett, S., & McAdam, R. (2010). Knowledge management in China: A review. Journal of Technology Management in China, 5(2), 158–175. Samuel, A. G. (1982). Phonetic prototypes. Perception & Psychophysics, 31, 307–314. Tsui-Auch, L. S., & Möllering, G. (2010). Wary managers: Unfavorable environments, perceived vulnerability, and the development of trust in foreign enterprises in China. Journal of International Business Studies, 41, 1016–2506. Tuomi, I. (2002). The future of knowledge management. Lifelong Learning in Europe, 7(2), 69–79. Wong, T., & Wickham, M. (2015). An examination of Marriott’s entry into the Chinese hospitality industry: A brand equity perspective. Tourism Management, 48(C), 439–454. Received 15 April 2015. Revised 26 November 2015. Accepted 30 November 2015. Available online xxxx
Please cite this article in press as: Wong, T., et al. Knowledge-management issues in China’s hotel industry. Annals of Tourism Research (2015), http://dx.doi.org/10.1016/j.annals.2015.11.022
Contents lists available at ScienceDirect
Annals of Tourism Research journal homepage: www.elsevier.com/locate/atoures
Research Note
Knowledge-management issues in China’s hotel industry Tommy Wong ⇑, Linda French 1, Mark Wickham 2 University of Tasmania, Australia
The Knowledge Management (KM) concept has been extoled across multiple disciplines as a control process whereby organisational knowledge is generated, retained and leveraged to enhance competitiveness and organisational growth (Cooper, 2006; Diakoulakis, Georgopolous, Koulouriotis & Emiris, 2004). Organisational efforts to strategically manage their store of knowledge continue to intensify as the business environment becomes progressively competitive, and new, dynamic markets continue to emerge (Tuomi, 2002). Despite substantial investigation of KM control practices in many Western industries and markets, unexplored areas within the KM domain still remain in the emerging Chinese market (Hall & Paradice, 2005); one such area concerns the effective KM by Western firms in the highly competitive Chinese hotel sector (Cooper, 2006; Hallin & Marnburg, 2008; Peng, Moffett, & McAdam, 2010). China represents one of the most attractive markets for international hotel chains seeking growth opportunities outside their highly saturated (and stagnant) domestic Western markets (Bose, 2012; Enderwick, 2009; Wong & Wickham, 2015). Yet, despite Western hotel chains investing heavily in the Chinese market (e.g. Marriott, Hilton, and Hyatt), their ability to compete effectively remains an issue of ongoing concern (see: Ahlstrorn & Bruton, 2001; Hays, 2008; Jagersma & van Gorp, 2003; Tsui-Auch & Möllering, 2010). Focussing on two hotel chains operating in China (namely, Marriott International and the Parkyard Hotel Group), this paper presents an empirical exploration into the issues inherent to KM control processes in the Chinese hotel industry, as well as an agenda for future research into KM in that context. In order to explore the KM issues inherent to the Chinese hotel context, primary data were gathered over a four year period (i.e. 2010–2013) from senior executives of Marriott International and Parkyard Hotels operating in China (i.e. 32 semi-structured interviews with General, Human Resource, Sales and Marketing Directors). The semi-structured technique gave interviewees sufficient latitude for introspection, and an opportunity to pursue and openly report their personal perspectives on matters that they considered critically important (Clandinin & Connelly, 1994). These individualised recollections subsequently gave the researchers direct access to additional matters of fact and detail
⇑ Corresponding author. Tel.: +61 3 6226 2849; fax: +61 3 6226 2170. E-mail addresses: [email protected] (T. Wong), [email protected] (L. French), [email protected] (M. Wickham). 1 Fax: +61 3 6226 2170. 2 Tel.: +61 3 6226 2159; fax: +61 3 6226 2170. http://dx.doi.org/10.1016/j.annals.2015.11.022 0160-7383/Ó 2015 Published by Elsevier Ltd.
Please cite this article in press as: Wong, T., et al. Knowledge-management issues in China’s hotel industry. Annals of Tourism Research (2015), http://dx.doi.org/10.1016/j.annals.2015.11.022
2
Research Note / Annals of Tourism Research xxx (2015) xxx–xxx
that could only be recorded in individual memory (Samuel, 1982), and served to strengthen enquiry by counteracting any potential bias in secondary documents (Burgess, 1982). Analysis and interpretation of primary and secondary data and verification of the conclusions drawn was facilitated using the QSR NVIVO (version 10) software package. Analysis of data revealed three key KM issues inherent to the Chinese hotel context. Firstly, the data revealed a fundamental lack of Western-style service quality knowledge in the domestic labour force. As the Chinese hotel industry was in the maturity stage of development, data suggested that this KM issue stemmed not from a lack of understanding about hotel management per se, but rather from the insular and uncompetitive industry structure that had ‘‘. . .led to complacency and a lack of competitive pressure to improve employee knowledge and skills” (General Manager A, 2012). Data further indicated that this KM issue was most prevalent in the period directly after China’s ‘Open Door’ policy, and persisted for some 20 years due to a general resistance to change, and unwillingness by the domestic labour market to adopt Western-style service standards. This suggests that the effectiveness of any KM processes by Western hotels’ in China is highly reliant on their capability to overcome the extant ‘state of inertia’ in this regard, and to stimulate domestic labour market motivation to align their behaviours and skill development with Western (and/or international) standards. The second KM issue detected in the data concerns the difficulty that Western hotels experience when attempting to socialise domestic employees into their organisational culture. Respondents indicated that the effective socialisation of domestic employees into a Western hotel organisation culture was crucial to establishing a link between their ‘way of doing business’ and the domestic employees’ knowledge and skill development. To illustrate, Marriott’s experience demonstrated that effective training and development courses needed to focus on more than just day-to-day tasks associated with a particular job role. Rather, they needed to ‘‘. . .clearly address the manner in which tasks were done, and demonstrate how these tasks were connected to other functional departments, the organisation’s core mission, and ultimately to career advancement” (HRM Director A, 2013). The third key KM issue in the Chinese hospitality industry concerned the transient nature of skilled labour across organisations and labour market boundaries. Data suggested that as domestic employees gained Western-style service skills, they become ‘highly visible’ in the labour market and were headhunted by organisations from a range of industry sectors. This head-hunting (along with greater pay incentives and limited exit barriers for hospitality workers) led to significant levels of leakage, as many higher-skilled employees chose to change employer (and/or their career). This transience served to reduce the store of knowledge, and hence the ability to strategically implement KM processes for organisational growth in the hotel context. This issue suggests that a sector-wide approach to KM is needed—namely to convince the labour market that the Chinese hospitality industry offers a competitive long-term career choice. In summary, this study indicated that effective KM in the Chinese hotel industry is predicated on operators’ ability to become an employer-of-choice (EOC) and attract, train and retain employees that are socialised effectively into an organisation’s culture. By extension, results suggested that a sectorwide approach may be needed to promote hospitality as an industry-of-choice (IOC), and thus stem the outflow of highly-skilled employees and protect the store of industry-wide knowledge. The success of such a strategy however, is reliant on individual hotel operators and employees (both international and domestic) being willing to overcome inertia and resistance to the adoption of Western-style competitive practices in the Chinese hospitality sector. Given these insights, we suggest two main areas for future research: an analysis of the link between KM and the concepts of ‘employer-of-choice’ and ‘industry-of-choice’ in the Chinese hospitality industry. Such investigation will contribute to and extend the existing store of KM theory, and provide valuable insights for KM practices of Western hotels operating in the Chinese hospitality sector. At the organisational level, such investigation will inform KM practices and facilitate the design of human resource and marketing strategies that impart expected international standards of skill and behaviour on domestic employees, and foster the organisational culture required for Western organisations to become employees-of-choice in the Chinese context. An important implication at the industry level is the recognised need for industry-wide marketing efforts to promote hospitality as an industry of choice which provides a valued long-term career option. The lack of such industrybased marketing efforts will essentially turn the hospitality industry into a training ground for those Please cite this article in press as: Wong, T., et al. Knowledge-management issues in China’s hotel industry. Annals of Tourism Research (2015), http://dx.doi.org/10.1016/j.annals.2015.11.022
Research Note / Annals of Tourism Research xxx (2015) xxx–xxx
3
alternate industries better able to effectively market their career opportunities. It is anticipated that outputs from this research agenda would benefit both international hospitality operators engaged in (or considering) foreign direct investment within the Chinese market, and domestic operators looking to improve their competitive stance within this highly dynamic market. References Ahlstrorn, D., & Bruton, G. D. (2001). Learning from successful local private firms in China: Establishing legitimacy. Academy of Management Executive, 15(4), 72–83. Bose, T. K. (2012). Advantages and disadvantages of FDI in China and India. International Business Research, 5(5), 164–174. Burgess, R. G. (1982). Field research: A sourcebook and field manual. London: Routledge. Clandinin, D. J., & Connelly, F. M. (1994). Personal experience methods. In N. K. Denzin & Y. S. Lincoln (Eds.), Handbook of qualitative research. California: Sage Publications. Cooper, C. (2006). Knowledge management and tourism. Annals of Tourism Research, 33(1), 47–64. Diakoulakis, I. E., Georgopoulos, N. B., Koulouriotis, D. E., & Emiris, D. M. (2004). Towards a holistic knowledge management model. Journal of Knowledge Management, 8(1), 32–46. Enderwick, P. (2009). Large emerging markets LEMs and international strategy. International Marketing Review, 26(1), 7–16. Hall, D. J., & Paradice, D. (2005). Philosophical foundations for a learning-oriented knowledge management system. Decision Support System, 39(3), 445–461. Hallin, C. A., & Marnburg, E. (2008). Knowledge management in the hospitality industry: A review of empirical research. Tourism Management, 29(2), 366–381. Hays, J. (2008). Foreign companies and foreign investment in China. Available at:
Please cite this article in press as: Wong, T., et al. Knowledge-management issues in China’s hotel industry. Annals of Tourism Research (2015), http://dx.doi.org/10.1016/j.annals.2015.11.022