Conceptualising Firm-Level Innovativeness: A Tourism Service Perspective Margaret Walsh, Patrick Lynch, Denis Harrington, & Mary T. Holden Waterford Institute of Technology
1.
Abstract
Due to the narrow research focus on „determinants of organisational innovation‟ or on „innovation output‟ rather than understanding the dimensions, the term innovativeness lacks clarity and has become a notoriously ambiguous construct for tourism practitioners and academics. Reliable and valid constructs of firm-level innovativeness have not been well established in the tourism service literature. Accordingly, there is an absence of significant empirical research activity on innovativeness within the small tourism service firm. Using exploratory qualitative research in the form of interviews, this paper aims to disentangle the innovativeness construct and identify its key dimensions. The authors offer a new multidimensional conceptualisation and integrated conceptual model of firm-level innovativeness. Keywords: Firm-Level Innovativeness, Tourism and Hospitality Industry, Conceptualistaion, Model Development, Interviews, Ireland Paper Type: Qualitative Research Paper
2.
Introduction
There has been a recent increase in the interest directed at firm-level innovativeness, whereby it has almost become an axiom in the new service development literature that a service firm‟s long-term survival may rely more on overall strategic-level innovativeness that produces dynamic capabilities (Barney, 1991), which in turn enhances the development of innovations, and less on actual innovations (Trott, 1998). Hence, the defining factor of long-term survival through innovation appears to be based not on specific, discrete innovations but rather on an overarching, organisation-wide innovation capability structure, termed „firm-level innovativeness‟ (see Siguaw et al., 2006). Based on this enthusiasm, it is reasonable to assume that reliable and valid constructs of firm-level innovativeness have been well established in the service innovation literature. However, this is not the case. Like any developing body of knowledge, the innovativeness literature is not short of confusion, ambiguity, and conceptual and empirical voids and difficulties. There are concerns about the ambiguity of terminology and measurement of innovativeness, whereby the concept of innovativeness itself has not been clearly defined or formally conceptualised for operationalisation and measurement. This has resulted in inconsistent and non-comparable conceptualisations and definitions of 1
innovativeness, which have impeded the study of this concept. Hence, the study of tourism firm-level innovativeness is still rather embryonic. Although there is a lack of research attention devoted to the study of firm-level innovativeness, the term „innovativeness‟ has been frequently used in the tourism and service innovation literature. However, a mix of conceptualisations and interpretations prevail caused by terminology issues and measurement issues, where innovativeness is often inappropriately used interchangeably with the terms „innovation‟ and „innovation orientation‟. Nevertheless, unlike innovation, innovativeness is not an end but rather a means to an end, and it is this “idiosyncratic aspect that captures the significant difference between innovativeness and innovation” (Menguc; Auh, 2006, 65). Hence, innovativeness is the precursor to innovation, and represents a firm‟s ability to innovate (see Hult et al., 2004). Essentially, innovation is the outcome of innovativeness. Because of the lack of construct clarity, definition, operationalisation, and valid and reliable measurement scales, little significant empirical research activity on innovativeness within the small tourism service firm has been attempted. Furthermore, the few studies that do exist typically remain only at a descriptive or conceptual level. Even within the broader innovation literature, the focus has been on the large manufacturing organisation (see Avlonitis et al., 1994) with very little focus on the smaller tourism service firm. This lack of research attention may be to some degree attributable to blind spots in the traditional research literature, which assumes tourism is generally a non-innovative industry with little environmental turbulence and change. Considerable stability is generally assumed in tourism. However this is not the case as the tourism industry is constantly in flux (Russell; Faulkner, 2004) due to the highly dynamic nature of its operational environment. From an extensive review of the extant literature on this subject, it appears that the role of tourism innovativeness has been either underestimated or not completely understood. This has led to extensive knowledge gaps and widespread confusion, thus warranting greater research attention going forward if we can begin to advice tourism practitioners on how they can achieve greater firm-level innovativeness. Hence, this paper aims to provide an integrated view of firm-level innovativeness in a conscious effort to eliminate much of the ambiguity and confusion caused by weak conceptualisations, taxonomies, and the inconsistent and conflicting use of terminology. Much work has been already published on firm-level innovativeness, but very little work has been published in a tourism context. In addition, the vast majority of articles do not offer a very strong definitional, theoretical, or methodological foundation for the innovativeness construct. This often leaves the reader in a rather confused state who is forced to interpret what the researcher means by the term „innovativeness‟. With this paper, the authors hope to provide some insight into the conceptualisation of innovativeness, shedding new and important light on this important construct. This paper provides a new multidimensional conceptualisation and integrated conceptual model of firm-level innovativeness in a tourism services firm context, helping to fulfil an identified gap in the current literature. The model has significant research and managerial implications. From an academic research perspective, this work helps to “demuddle” and disentangle the 2
innovativeness concept and the enormous confusion that currently surrounds it. In terms of managerial implications, the model developed in this paper provides small tourism and hospitality service providers with a very useful tool for diagnosing and understanding their level of innovativeness; as well as identifying which dimensions their innovativeness is currently suffering on in order to improve their innovative mode and ultimate competitiveness. The rest of this paper is structured as follows. The next section provides details of the research method adopted. Next, the authors present the findings emerging from the comprehensive literature review and interviews, linking them with eachother in an effort to identify similarities and differences. The paper ends with the new tentative definition of firm-level innovativeness and the integrated conceptual model.
3.
Research Method
This paper incorporates both a conceptual and an empirical phase. The purpose of phase one was theoretical development, while phase two involved theoretical testing and validation via qualitative research.
3.1.
Phase One: Theoretical Development
In order to scope the parameters of the study, we firstly conducted an extensive literature review. The review focused on empirical research and conceptualisations reported by researchers published in a wide range of journals, books, and working papers. Although this may have led to some variation in quality, the key consideration was whether the study contributed to the stock of knowledge on understanding the innovativeness construct. It is also important to note that on occasion, findings from research in other areas are also included in this review, because in their course of discussion on topics, such as, management, marketing, service innovation, tourism, organisational behaviour, consumer behaviour, psychology, and economics; they may have identified or addressed specific issues that impact on the innovativeness construct, or, provided context or corroboration for work in the area, and so warrant inclusion in this particular study. In addition, it is also important for the reader to be aware that when conducting a literature review, some degree of arbitrariness in the selection of materials is inevitable. Indeed, with any synthesis, decisions have to be made about what is central to a topic, and so not all reviewed articles are referred to in the paper. Nevertheless, such problems with synthesing literature were diminished through a thorough and meticulous review process. It is not the intention to claim that the selection of material examined here on firm-level innovativeness is all-inclusive. Indeed, there will be both academic and practitioner publications missed (e.g., studies not written in English). Yet, the material retrieved and examined is extensive. Furthermore, at all times and to the best of the authors‟ knowledge; concepts, quotes, and hypothesis extracted from articles and books were used in their proper context. In addition, support material was referenced in order to ensure that the authors‟ interpretation of other researchers‟ work is appropriate and accurate. The literature review encompassed empirical research and conceptualisations reported by researchers published in 37 journal titles from a wide variety of 3
specialisations, covering the period from 1961 to 2009. The studies eventually presented for review were selected after conducting an exhaustive search of business, management, marketing, innovation, and tourism-related databases (for example ABI/Inform, Business Source Premier, Emerald Full text, and Science Direct) using key-related words and consulting the referenced literature of each piece of work in order to move through the relevant pieces of literature. The entire journal catalogue where the articles appeared were systematically reviewed and studied by an established qualitative research method known as Content Analysis. In essence, each piece of literature was used as a platform for a more thorough literature search. Articles not contained in databases were ordered through inter-library loans in the Luke Wadding Library at Waterford Institute of Technology. The main source for those articles ordered in this way was the British Library. In total, 65 articles, conference papers, and books were reviewed for this literature. The material retrieved and examined is extensive.
3.2.
Phase Two: Theoretical Testing and Validation
The exploratory and tentative nature of the research indicated that a qualitative research technique would be the most reasonable and most informative approach at this stage of furthering knowledge about the firm-level innovativeness concept. Interviews were conducted with experts in the tourism domain, that is, owners and managers of tourism, hospitality, and cultural businesses. The researchers wanted to gain the opinions and insight of the study‟s population of interest in order to ensure that our interpretation and conceptualisation of innovativeness based on the literature review matched reality. The context of our study was the Irish tourism and hospitality services industry. The unit of analysis was small tourism and hospitality firms. In order to ensure that the study incorporated the views of all key stakeholder groups across the entire industry, it was necessary to conduct the research with hotels, B&Bs/Guesthouses, restaurants (licensed and non-licensed), and tourism services and attractions (TSAs). Data was collected by going in to the field and gathering ideas, insights, perspectives, and feedback from experts and strategic decision makers in the research area, using the key informant technique (i.e., owners and managers). According to Segars and Grover (1998), “key informants” are not chosen randomly. They are chosen selectively, because they possess certain capabilities, status, or specific experience and knowledge (Segars; Grover, 1998). The data collection method was structured face-to-face in-depth interviews, usually taking an average of 40-45 minutes to complete. Although the interviewer asked three predetermined standardised questions, the questions were merely designed to guide discussion. As questions were open-ended, there was ample opportunity and sufficient scope and flexibility for the interviewee to respond in their own words and thoughts. Hence, although the interviews were strategically conducted and structured, they nevertheless allowed reasonable flexibility and sensitivity to the specific research context and situation. In addition, this method also enabled the interviewer to adequately probe participants for more in-depth information and responses as required; as well as elicit specific details and ensure that all important angles of the topic were covered by the interviews. By having the three standardised 4
questions, the interviewer ensured that all interviews were conducted in a similar manner; enabling results to be compared in a meaningful manner. The key objective of the interview was to gather adequate feedback from tourism and hospitality practitioners on the tentative findings that had emerged from the literature review in order to empirically validate and refine the antecedents, dimensions, and outcomes of innovativeness. Since no reliable or valid multidimensional conceptualisation or innovativeness measurement scale currently exists in the tourism and hospitality literature, it was deemed necessary and essential to rely on other bodies of literature to guide the interview questions. The researchers used an established technique in the marketing and consumer literature known as the human personification metaphor (see Davies et al, 2004). Metaphor is often useful to make what is complex accessible for researcher and respondent alike (Black, 1962). Based on this thinking, we adopted this technique in our own research to make it easier for participants to comprehend what was being asked, and to appropriately answer the question being asked. This technique was especially useful for question one, whereby the interviewee was asked to describe an innovative company by using verbs, words, or phrases in the same way that they would describe an innovative individual. Based on work conducted on human personality and brand personality (e.g., Goldberg, 1990; Aaker, 1997), the researchers expected the innovativeness concept to be multidimensional. Sampling Geographical focus was the main factor driving the sampling method. The sampling frame for this research was the Golden Pages telephone directory1 in the relevant area codes (south-east Ireland region) which gave the researchers a solid foundation on which to build a suitable database of hotels, B&Bs/Guesthouses, restaurants, and tourism services and attractions (TSAs) located in the south-east region of Ireland, which incorporates five respective counties. Having created an extensive database of such businesses, it was deemed necessary to identify and purposefully select a more defined sample for the study using purposive sampling. It was decided to use one particular city in one particular county for the duration of the research for ease of access to data collection sites. This data collection location is not named here for confidentiality and anonymity reasons. This approach allowed us to study in depth a smaller number of very carefully selected businesses (n = 16), divided into small, homogeneous subgroups (according to type of business) using stratified random sampling. In total, 5 hotels, 5 restaurants, 4 B&Bs/Guesthouses, and 2 TSAs were interviewed. In this way, we could make generalisations and statistically valid comparisons between subgroups, as well as make generalisations to the total population of interest. Also, stratified random sampling ensured that we captured a balance of views from each subgroup, ensuring that results were not biased. Based on criterion sampling, a specific and predetermined sampling and selection criteria was used in order to ensure the highest degree of credibility and reliability of 1
Golden Pages refers to a telephone directory of businesses, categorised according to the product or service provided. 5
the study‟s final sample. Businesses were selected for inclusion in the study based on the consistent display of innovative behaviour over the last 3 years. This was established by using innovativeness measurement criteria such as whether the firm held any innovation awards or accolades. Participants were first contacted via telephone to obtain their consent to participate in the study. Once consent had been obtained, normal interviewing procedures were followed. To facilitate transcription, interviews were tape recorded and extensive notes were taken during and after each interview. Data was interpreted and analysed using Nvivo. A content analysis was undertaken, firstly to identify references made to themes and elements that coincided with the literature review; and secondly to identify new themes and elements that had only emerged from the interviews.
4.
Phase One: Theoretical Development of the Innovativeness Construct
Due to space limitations in this paper, the authors have presented the antecedents, dimensions, and outcomes of innovativeness emerging from the literature review using a table format. However, for a more detailed and comprehensive discussion of each of these components, readers should refer to earlier work that the authors have published on this topic (Walsh et al., 2009a, 2009b, 2009c, 2009d; and Lynch et al., 2010). The top row displays the name of the antecedent/dimension/outcome, with a list of authors displayed on the side. This is by no means an exhaustive review. It is merely a selection of studies spanning across various disciplines. Author
Gilbert (2007) Siguaw et al. (2006) Simpson et al., 2006) Atuahene-Gima and Ko (2001) Tang (1999) Hurley and Hult (1998) Hoffman et al. (1998) Tang (1998) Amabile (1997) Amabile (1996) Amabile et al. (1996) Damanpour (1991) Ekvall et al. (1983) Burns and Stalker (1961) Lokshin et al. (2009) Belderbos et al. (2004) Souitaris (2002) Håkansson and Snehota (2000)
Organistaional Innovation Orientation X X X X X X X X X X X X X X
Firm-Specific Competences and Capabilities
Networking and Collaboration X
X
X X X X 6
Birchall et al. (1996) X Davis and Devinney X (1993) Rothwell (1992) X Cooper (1984) X Cooper (1979) X Holmen et al. (2005) Fischer (1999) Dyer and Singh (1998) Table 1: The Antecedents of Innovativeness Author
Creativity
Reckhenrich et al. (2009) Yusuf (2009) Feinstein (2006) Salavou (2004) Wang and Ahmed (2004) Hult et al. (2004) Avlonitis et al. (2001 Dertouzos (1999) Markides (1998) Tang (1998) Sundbo (1997) Amabile (1997) Lumpkin and Dess (1996) Menguc and Auh (2006) Cotte and Wood (2004) Hurley and Hult (1998) Lumpkin and Dess (1996) Kundu and Katz (2003) Stamboulis and Skyannis (2003) Berthon et al. (1999) Hjalager (1997) Hjalager (1996) Avlonitis et al. (1994) Gounaris et al. (2003)
X
Openness to New Ideas
X X X
Intention to Willingness Capacity to Innovate for RiskInnovate Taking
X X X X X X X X X X X X X X X
X
X X X X X X X
X X 7
Fell et al. (2003) Dertouzos (1999) Ahmed (1998) Cooper and Kleinschmidt (1987) Midgley and Dowling (1978) Sundbo et al. (2007) Gilbert (2007) Cooper (2006) Hurley et al. (2005) Hult et al. (2004) Gebert et al. (2003) Tang (1999) Tang (1998)
X X X X X X X X X X X X X Table 2: The Dimensions of Innovativeness
Author
Increased Innovation
Enhanced Performance
Wang and Ahmed (2004) Ruppel and Harrington (2000) Deshpandé et al. (1993) X Wolfe (1994) Gronhaug and Kaufmann (1998) Table 3: The Outcomes of Innovativeness
Enhanced Competitiveness X X
X X X
Following an extensive literature review whereby the antecedents, dimensions, and outcomes of firm-level innovativeness were carefully identified and systematically content analysed, the researchers formulated three research questions to guide the subsequent phase of the study: RQ1: What are the key antecedents of firm-level innovativeness? RQ2: What are the key dimensions of firm-level innovativeness? RQ3: What are the key outcomes of firm-level innovativeness?
5.
Phase Two: Theoretical Testing and Validation
The purpose of phase two was to test the conceptual findings emerging from the literature review in order to verify that theory adequately reflected reality. This section of the paper presents and discusses the primary research findings against the backdrop of the literature review.
5.1.
Antecedents
Table 4 provides a comparison of the antecedents of the innovativeness concept that were identified by interview participants and those emerging from the literature. Following careful evaluation and analysis of the interview findings, the researchers 8
observed a close relationship between the set of antecedents that were derived from the literature and those later emerging from the interviews. Each of the three antecedents received very strong agreement among the interview participants across all four groups (i.e., hotels, B&Bs/Guesthouses, Restaurants, and Tourism Services and Attractions) as being highly important and key foundations of the innovativeness concept.“Very strong agreement” is defined here as very strong reference being made to a particular antecedent in all interviews, where interviewees spent a considerable amount of time discussing an antecedent in detail. This confirms and reinforces the strict importance of these three antecedents from both an academic and a practitioner perspective, since there was no significant disparity between the literature and the interview findings. Thus, the researchers are confident that the literature adequately reflects reality in terms of the key antecedents of innovativeness. Antecedent Organisational Innovation Orientation Firm-Specific Competences and Capabilities Networking and Collaboration
Interview Findings X X X
Literature Review X X X
Table 4 Comparison of Antecedents Extracted from Interview Findings and Literature Review
Organisational Innovation Orientation received considerable discussion amongst all interview participants. This was discussed using similar indicators as observed in the literature including human and financial resources, climate, culture, management, leadership, strategy, structures, teamwork, motivation, and communication. Human resources was described as “having the right people” who can “receive and understand the rationale for the innovation”, with one restaurateur commenting that “people are everything”. Another restaurateur strongly believed that “having good staff is crucial” who “can move the business forward”. The idea of a common mission or common goal surfaced in most interviews, described as “having the right staff who are working in the same direction as the owner”. In relation to this, another restaurateur strongly emphasised the importance of having employees “who are not just here to work, but must have a common interest in the business”. Some participants even went as far as to say that there should be “a feeling of fraternity” throughout the entire organistaion. Financial resources were identified as “having the money and financial support to innovate”. Organisational climate and culture received substantial attention from all interview participants, where a caring and innovation-oriented environment was considered important. Coinciding with the literature (e.g., Hurley; Hult, 1998) interviewees used indicators such as “creating an environment where innovation can flourish and develop”, “fostering a company mindset where innovation can flourish”, and “creating a „family-type‟ environment with an open plan setup and free flow of communication and ideas”. The literature equally states that an innovative inductive climate is typified by extensive dynamism, flexibility, trust, proactiveness, empowerment, and support (Gilbert, 2007). Siguaw et al. (2006, 566) note the importance of making the concept of „continuous improvement‟ an innate aspect of the firm‟s organisational culture, stating that “those firms who are classified as innovation-oriented normally 9
develop operational competencies that encourage and facilitate new learning, continuous change, and improvement...” In terms of management and leadership, participants referred to the crucial role managers and owners play in fostering firm-level innovativeness by possessing an innovative mindset and a positive attitude towards innovation. Similarly, the literature states that it is management‟s/owner„s favourable attitude and mindset towards innovation, change, and risk (Damanpour, 1991; Read, 2002); which subsequently facilitates a creative work climate (Amabile, 1997; 1996; Amabile et al., 1996; and Ekvall et al., 1983). Referring to the crucial role of managers and leaders, interview participants used key descriptors such as “lead by example”, “cannot do everything on your own”, “instilling a positive mindset and attitude in employees towards innovativeness”, “getting everybody on board”, “the ability to work with people”, “charisma”, “strict but fair”, “listen to everyone regardless of level in the business”, and “all ideas are considered and discussed”. Moreover, participants strongly believed that management must give employees “enough scope to allow them to generate new ideas and try different things”. Moreover, it was deemed important that management has “confidence in staff to be innovative”. Management must also possess a clear vision and strategy. Participants alluded to the significance of having an organisational structure in place that “enables innovativeness”. Teamwork was consistently highlighted as important, where “working together as a team” was repeatedly mentioned. In fact, some participants felt that teamwork was more important than financial resources, since “money on its own is no good without an effective team to deliver innovation”. Nevertheless, having the team and not the money was also deemed insufficient. Hence, teamwork and financial resources were described as “a two edge sword”. Management must be able to “motivate” and “incentivise” employees to be innovative. Participants considered communication to be critical, representing “a two-way continuous process between management and staff, whereby management must carefully communicate the rationale for a new initiative to employees to ensure that all employees “buy in to the new idea”. Another hotel manager emphasised the criticality of “explaining new ideas to staff well in advance and getting their full support in order to sell the idea to customers...since it is the employees and not the management who will be ultimately selling the initiative to customers”. Hence, the ability of management to communicate with employees was perceived to be highly important. In turn, participants stressed the pressing need for management to be prepared to change ideas and initiatives in light of employee feedback and current situations. Likewise, effective communication practices are extensively discussed in the literature, with academics arguing that such practices foster team spirit and increases morale, with teams and teamwork thought to play an important role in fostering innovativeness through collaboration and integration (Siguaw et al., 2006; Tang, 1998). Firm-Specific Competences and Capabilities was represented by discussions about the importance of having the necessary competences and capabilities in place to be innovative. Participants commonly talked about the importance of knowing what your key competences and capabilities are, and capitalising upon these in 10
order to become renowned for one unique facet of your business. Also, the ability to know the basics or underlying principles of your business was deemed important for innovativeness, with one participant cautioning “to be careful not to destroy your foundations”. This echoes the literature which suggests that to be innovative, firms have to possess competencies relating to technology and customers (Belderbos et al., 2004). Souitaris (2002) considers four main firm-specific competences that produce innovative capabilities, namely technical, market, human, and organisational competences. Networking and Collaboration emerged from some interviews, with one restaurant owner stressing the importance of networking and collaborating to increase innovative ideas. In this particular situation, one restaurant owner who specialises in ice-cream and pizza mentioned that they will be attending an upcoming ice-cream festival in Florence, Italy in May 2011 to discover new trends and ideas. The literature states that interaction in tourism innovation networks provides firms with some of the necessary conditions required for innovativeness, namely, information transfer (Dyer; Singh, 1998, 665), learning (Fischer, 1999, 14), and the coordination of production and product development activities (Holmen et al. 2005; Håkansson and Snehota, 2000). Hence, to provide an answer to RQ1, the key antecedents of firm-level innovativeness are (1) organisational innovation orientation, (2) firm-specific competences and capabilities, and (3) networking and collaboration.
5.2.
Dimensions
Table 5 provides a comparison of the dimensions of the innovativeness concept that were identified by interview participants and those emerging from the literature. Firstly, the interview findings strongly confirmed the importance of all five dimensions extracted from the literature: creativity, openness to new ideas, intention to be innovative, willingness for risk-taking, and capacity to innovate. Each of these five dimensions received very strong agreement among the interview participants across all four groups (i.e., hotels, B&Bs/Guesthouses, Restaurants, and Tourism Services and Attractions) as being highly important and key dimensions of the innovativeness concept.“Very strong agreement” is defined here as very strong reference being made to a particular dimension in all interviews, where interviewees spent a considerable amount of time discussing a dimension in detail. The interviews revealed one additional dimension, namely, proactiveness. Dimension Creativity Openness to New Ideas Intention to Innovate Willingness for RiskTaking Capacity to Innovate Proactiveness
Interview Findings X X X X
Literature Review X X X X
X -
X X
Table 5 Comparison of Dimensions Extracted from Interview Findings and Literature Review
11
Creativity is a critical component of innovativeness (Amabile, 1997; Lumpkin; Dess, 1996), considered by Dertouzos (1999, 31) to be "perhaps the most important ingredient of successful innovation“. "Think outside the box” is the slogan of numerous creativity experts who connect creative thinking to firm innovativeness (Reckhenrich et al., 2009). Tang (1998: 298) believes „creativity is a prerequisite for innovation‟. Equally, Yusuf (2009: 3) considers the immense importance of creativity in innovation, stating that it serves as „a springboard for creative loops to fruitful innovations‟, positioning creativity as a means of facilitating the successful realisation of innovation (i.e., innovativeness). Both Salavou (2004) and Sundbo (1997) discuss a firm‟s thinking capability to produce ideas that are new and distinctive, which for Markides (1998) can lead to new and applicable insights. Wang and Ahmed‟s (2004) definition implies an ability to exceed routine thinking processes, which involves going beyond the obvious to discover newness (Avlonitis et al. 2001). It is a creative mindset to produce “some new process, product, or idea in the organization‟‟ (Hult et al. 2004, 430) thus leading to innovation. Feinstein (2006) considers creativity in terms of adopting new ways of doing things, in so far as combining various elements together, a combination that had been perhaps previously overlooked. The interview findings strongly concur with the literature in so far as participants consistently adhered to the importance of the firm‟s ability to see different angles and perspectives, and being constantly prepared to learn; which we labelled as Ability to see Different Angles and Perspectives. Being at the Leading Edge of Your Field emerged as an important aspect of innovativeness, with interviewees talking about the importance of “standing out from the crowd”, “being at the leading edge of hospitality”, “doing new things successfully and better than the competition”, “being first to do things in your field”, “willing to be the pioneer”, and “constantly looking for the edge”. Openness to New Ideas is an underlying assumption of most definitions of firmlevel innovativeness, deemed to be an important aspect of the organisation‟s culture (Hurley; Hult, 1998). Menguc and Auh refer to as a firm‟s receptivity and “willingness to forgo old habits and try untested ideas” (2006, 66). Cotte and Wood (2004) conceptualise innovativeness as the tendency to embrace change and try new things. This thinking strongly implies that innovativeness requires a company mindset or propensity to listen to “all voices”, either internally or externally (Ahmed, 1998), and to explore and experiment with ideas (Lumpkin; Dess, 1996). Interview participants equally expressed the significance of „openness to new ideas‟. In this regard, participants adhered to the notion of Non-Complacency and Modesty, manifesting itself in such comments as “modesty is the key thing in order to learn new things...you cannot have a sense of pride, you must always be open to learning new things, be prepared to learn, and be open to suggestions from others”. One hotel manager expressed the importance of being “prepared to ask for help”. Intention to Innovate is the firm‟s commitment or devotion to the innovation process (Berthon et al. 1999) and its intention to be innovative (Kundu;Katz, 2003). Avlonitis et al. (1994, 14) consider the „manifested strategic innovation intentions of the firm‟, consequently denoting firm-level innovativeness as a carefully planned and designed strategic phenomenon. This interpretation strongly resonates with Ajzen‟s Theory of Planned Behaviour (1991) in the consumer behaviour literature. From a behavioural perspective, Avlonitis et al. (1994) treated innovativeness as the behavioural willingness, intention, and commitment of the firm to innovate. This notion of 12
behavioural change is quite common in all tourism innovation studies (e.g., Hjalager, 1997; 1996). The idea of a firm having a strategic intention to innovate resonated throughout all interviews, with words such as “committed”, devoted”, “passionate”, ambitious”, “driven”, “persistent”, and “determined” arising. The idea of planning featured in several interviews. Interviewees interpreted innovativeness as “being connected to what you as a manager or owner want to do with the company”, “foreseeing the future”, “looking outside the immediate future”, “future-looking”, “forward thinking”, and “planning ahead of the competition”. Planning with a specific purpose in mind was considered key to achieving greater innovativeness, with one participant noting that “you should not change just for the sake of change”. Moreover, plans should be realistic. One restaurateur mentioned the strict importance of “being realistic; getting the right balance between inventing something new such as a new recipe or new menu item and ultimately making the customer happy”. Therefore, it is about having the Common Sense to know what the customer needs and wants and meeting those needs and wants. Willingness for Risk-Taking is prevalent in most definitions of innovativeness throughout the literature. Gounaris et al. (2003) consider the notion of risk in light of the level of difficulty, uncertainty, and ambiguity associated with innovation. In this vein, Fell et al. (2003) state that introducing new products (i.e., an innovation) is burdened with risk, especially since it is estimated that up to one third of new products fail at the launch stage (Cooper and Kleinschmidt, 1987). Midgley and Dowling (1978) align the notion of „innate innovativeness‟, that is, the underlying innovative human personality trait, with perceived risk and the tendency to make risky decisions. The interviews coincided with the literature, with one hotel manager said that in their opinion, innovativeness means “having an idea and sticking to it; listening to your „gut‟ feeling; listening to your heart or your head”. Participants acknowledged that innovation is burdened with risk, but believing in your ability to succeed was deemed important. As one participant stated, “innovation is about going outside your comfort zone and not being afraid to try new things. Another participant summarised innovativeness as “not being afraid to move forward”. In a work context, Ahmed (1998) considered the notion of risk, whereby individuals feel at ease with taking risks knowing that they are free to experiment with ideas, challenge the status quo, try new things and fail, „dumb‟ ideas will be discussed, mistakes will not be punished, and basically expect that innovation is part of their job. Once again, participants agreed that employees should be allowed to make risky decisions and be free to explore and experiment with ideas. One restaurateur strongly believed that “it is important to listen to ideas from every single employee in the business, regardless of level or position”. Capacity to Innovate represents an extremely widespread component of innovativeness both in the academic literature and the interviews. For instance, Avlonitis et al. (1994) argue that it is not sufficient that a firm only has the behavioural willingness, commitment, devotion, passion, and strategic intent to innovate; but it must also possess the necessary technological capacity to realise this willingness. Hurley and Hult (1998, 44) view a firm‟s capacity to innovate as “the ability of the organisation to adopt or implement new ideas, processes, or products successfully”; treated as a „cultural precursor‟ that provides the „social capital‟ to facilitate innovative behaviour (Hurley et al., 2005). Likewise, Hult et al. (2004) 13
rationalise innovativeness as a firm‟s capacity to introduce new processes, products, or ideas in the organisation. Gebert et al. (2003, 42) define innovativeness as “the capacity of an organisation to improve existing products and/or processes and the capacity to utilise the creativity resources of the organisation to the full”. Interview participants placed great emphasis on the ability of the firm to be able to capitalise on its existing pool of assets and resources. This manifested itself in comments such as “to produce more innovations, you must build upon and develop the company‟s strengths and facilities by focusing on existing assets”. Proactiveness emerged from the interviews as being a significant dimension of the innovativeness concept, receiving considerable attention from all interviewees, cited by one restaurant owner as being “a fundamental aspect of the restaurant business”. One B&B/Guesthouse owner stated that it is very important to be proactive in “attracting new business and keep trying lots of different things, such as, Trip Advisor where customers leave comments and reviews about the B&B”. This interviewee‟s rationale was that it is much better to capitalise on the internet as printed material is no longer the first point of information for potential guests because it can be easily discarded amidst the high volume of junk mail that people receive. This B&B owner spoke about the “willingness to change and adapt, and move with the times”. Other interviewees frequently spoke about the need to change, adapt, be flexible, and adopt new ways of thinking; even if the owner or manager does not necessarily agree with the new initiative. For instance, the idea of social networking sites such as Facebook, received considerable discussion, whereby it was considered important to advertise on Facebook given its high volume of usage by potential customers and guests. Also, flexibility in terms of reducing prices during the recession was frequently alluded to. Furthermore, the idea of not alienating your market was seen as important. For example, in the past, many B&Bs/Guesthouse refused to accept children. However, one B&B/Guesthouse owner stated that he accepts families with small children, portraying his establishment as a family-oriented B&B, where small children are not just “accepted” or “tolerated”, but they are “welcomed”. This participant added that “a lot of people still ring to ask if we take children because many B&Bs still do not take children”. This notion of being proactive and changing to suit the market situation was dominant in the majority of interviews. Being a trend watcher and a trend setter was deemed important together with the theme of market and consumer-sensing, whereby the organisation is constantly watching the market for new trends and being the first to respond more effectively and efficiently than the competition. When asked to summarise what innovativeness means, one participant defined it as “always being aware and be always one step ahead of the competition”. It is about “staying on top of things”. Market and consumer awareness was repeatedly mentioned. One restaurateur placed considerable importance on “knowing your customer, market, and suppliers inside-out”. The firm must “try to anticipate customer/market needs” and “do not wait for the customer to ask for things”, but instead be proactive. In terms of customer needs and wants, one restaurateur commented that market and customer needs and wants are changing due to the recession; and hence, it is important for restaurants to be innovative to maintain business in so far as “selling luxuries as needs”. This basically means having the ability to portray eating out as a need as opposed to a luxury. This particular restaurateur‟s rationale was during the recession, customers naturally have less disposable income to allocate to such luxuries as going to restaurants. 14
Therefore, this participant deemed it important that the restaurant acknowledges this challenge and “give people the illusion that they are having a nice evening out with the family, away from cooking and cleaning, without it costing a lot of money”. Hence, to provide an answer to RQ2, the key dimensions of firm-level innovativeness are creativity, openness to new ideas, intention to innovate, willingness for risk-taking, capacity to innovate, and proactiveness.
5.3.
Outcomes
Table 6 provides a comparison of the outcomes of the innovativeness concept that were identified by interview participants and those emerging from the literature. All three outcomes, that is, increased innovation, enhanced performance, and enhanced competitiveness were upheld throughout the study. Outcome Increased Innovation Enhanced Performance Enhanced Competitiveness Enhanced Business Survival
Interview Findings X X X -
Literature Review X X X X
Table 6 Comparison of Outcomes Extracted from Interview Findings and Literature Review
Increased Innovation was consistently highlighted both in the literature and the interviews as an important outcome of firm-level innovativeness, with participants frequently labeling it as an “obvious outcome”. Moreover, one restaurant owner made a distinction between an innovative organisation and a successfully innovative organisation; whereby the former can be innovative in the short term but not necessarily in the long term. In this participant‟s opinion, “that is the difference between a successful innovative company and a not so successful innovative company”. Hence, innovativeness does not always guarantee long term innovation success. To be truly innovative, an organisation must constantly change and evolve to suit the market. Simply, it is not a static process, but a continuous loop. Enhanced Performance received considerable attention from all interview participants. Indicators such as “greater profitability”, “increased sales”, “more clients”, “customer loyalty”, “employee loyalty”, “return business”, “wonderful customer experience”, “reputation benefits”, “market leader”, “seen by the market as a best practice organisation”. Thus interviews confirmed the literature where the general consensus is that more innovative firms tend to perform better. In this regard, researchers and scholars in the innovation diffusion literature have forged a strong link between innovativeness and organisational performance (see Deshpandé et al. 1993), implying that firms need to be innovative “to gain a competitive edge in order to survive and grow” (Gronhaug; Kaufmann 1988, 3). Enhanced Competitiveness was identified by interview participants as a key outcome, receiving considerable attention during all interviews, expressed in terms of price, market share, marketing, advertising, and branding advantages. Likewise, theorists widely agree on the strict importance of innovativeness to firm 15
competitiveness and effectiveness (Wolfe, 1994, Ruppel; Harrington, 2000; Wang; Ahmed, 2004). Hence, to provide an answer to RQ3, the key outcomes of firm-level innovativeness are increased innovation, enhanced performance, and enhanced competitiveness.
6.
Firm-Level Innovativeness: Conceptualisation and Definition
The purpose of this exploratory research was to disentangle the innovativeness construct and identify its key dimensions; distinguishing it from its antecedents and outcomes. By conceptually and empirically exploring the meaning of innovativeness, the authors can now offer a new multidimensional and tentative conceptualisation of this complex construct. Based on the foregoing analysis and discussion of the literature and interview findings, the researchers define firm-level innovativeness as follows:“The organisation-wide knowledge and capability structure that facilitates increased innovation, business performance, and competitiveness; composed of creativity, openness to new ideas, intention to be innovative, willingness for risk-taking, the capacity to innovate; and proactiveness; shaped by organisational innovation orientation, firm-specific competences and capabilities, and networking and collaboration”. A tentative conceptual model of firm-level innovativeness (figure 1) has been developed as follows: Antecedents
Organisational Innovation Orientation Firm-Specific Competences and Capabilities Networking and Collaboration
Dimensions
Creativity Openness to New Ideas Intention to Innovate Willingness for Risk-Taking
Primary Outcomes
Increased Innovation Enhanced Performance Enhanced Competitiveness
Capacity to Innovate Fig.1 A tentative integrated conceptual framework of firm-level innovativeness
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7.
Concluding Comments
The purpose of this paper was to make a meaningful and valuable contribution to our understanding of innovativeness in a small tourism firm context to enable academic researchers to advice tourism firms on how they can become more innovative. By disentangling and dissecting the concept, the authors have successfully identified the key antecedents, dimensions, and outcomes of innovativeness from both an academic and practitioner perspective. Hence, as one of its primary contributions, this paper helps to explain the fundamental sources, dimensions, and outcomes of firm-level innovativeness which may prove useful to managers in trying to achieve it in their organisations. Apart from its practical implications, this paper makes a valuable impact on academic research in this area, enabling researchers to build a foundation for the systematic development of a theory-based definition of firm innovativeness. The integrative conceptual model helps to move towards a new, multidimensional conceptualisation of the innovativeness concept, helping to close the identified gap in knowledge on this complex phenomenon. The authors of the present study believe that a comprehensive framework is now in place for further research in this domain where researchers can increase their understanding of the innovativeness construct and its underlying dimensions, allowing researchers to provide a sense of continuity to their definition of firm innovativeness. Although the contribution is indeed only incremental, the research does offer some interesting pieces to the puzzle on firm-level innovativeness, providing academics and tourism practitioners with a solid framework.
7.1.
Limitations
Given the rudimentary scope of the present research due to its exploratory and tentative nature, conclusive results cannot be obtained at this point. The objective is to gather preliminary information that will help define problems and suggest research hypotheses for more definite testing and investigation.
7.2.
Further research
Because the conceptual framework presented in this paper is only a first attempt, and is only a starting point on the path to understanding the inherent complexity of the innovativeness concept, it has its shortcomings and raises perhaps more questions than it answers. For instance, is it necessary to weigh the importance of each component of the model according to the individual organisational context? Hence, the model requires further challenging, testing, and amplification in the form of additional qualitative work in collaboration with a selection of tourism practitioners to explore its wider applicability; and to ascertain whether particular aspects require further modification. Further qualitative work will therefore extend and deepen the theoretical propositions and understandings emerging from this particular study. Indeed, building upon the model presented here will form the researchers‟ future research agenda.
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8.
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9.
Author Address
Margaret Walsh, Ms. Graduate Student Waterford Institute of Technology Department of Management & Organisation School of Business Cork Road Waterford Ireland
[email protected] Patrick Lynch, Dr. Senior Researcher & Marketing Lecturer Waterford Institute of Technology Department of Management & Organisation School of Business Cork Road Waterford Ireland
[email protected] Denis Harrington, Dr. Head of Department of Graduate Business Waterford Institute of Technology School of Business Cork Road Waterford Ireland
[email protected] Mary T. Holden, Dr. Senior Researcher & Marketing Lecturer Waterford Institute of Technology Department of Management & Organisation School of Business Cork Road Waterford Ireland
[email protected]
10.
Acknowledgements
The authors would like to sincerely thank all those who contributed to this research, including the anonymous reviewers who kindly provided useful comments and feedback on the abstract; and the interview participants who gave up their extremely valuable time to partake in this study. 22
