The effect of competitive strategies and organizational structure on hotel performance

Abstract

PurposeThe purpose of this paper is to investigate the influence of competitive strategies and organizational structure on hotel performance and to explore whether organizational structure has a moderating effect on the relationship between competitive strategies and hotel performance.Design/methodology/approachThis study employed a causal and descriptive research design to determine the cause‐and‐effect relationships among competitive strategies, organizational structure, and hotel performance based on previous studies. A 28‐question self‐administered questionnaire comprising three sections was employed. The target population for this study was US hotel owners and general and executive managers whose e‐mail addresses were listed on a publicly available database. A census survey was carried out and e‐mails were sent to all of the hoteliers listed in the database.FindingsThe results show a competitive human resources (HR) strategy to have a direct impact on a hotel's behavioral performance, and a competitive IT strategy to have a direct impact on a hotel's financial performance. Organizational structure is found to have a moderating effect on the relationship between both of these strategies and behavioral performance, a result similar to those reported by Jogaratnam and Tse and by Tarigan. However, the results of the current study show that organizational structure has no influence on the relationship between a brand image strategy and a hotel's behavioral performance, nor does it have any moderating effect on the relationship between a hotel's financial performance and its competitive brand image, HR or IT strategy.Practical implicationsWhen hoteliers face an uncertain environment, they need to select which form of organizational structure to adopt with care. Hotels that adopt an organic structure allow greater flexibility in the workplace, meaning that they may lose control of their employees and productivity. A mechanistic organizational structure, in contrast, gives hoteliers the power to monitor employee behavior and productivity, which may help them to achieve goals and boost financial performance.Originality/valueThe paper provides further evidence of how competitive HR and IT strategies help to explain hotel performance, whereas a brand image strategy and organizational structure are not good explanatory factors in this regard. Hotels with a mechanistic such structure enjoy a greater relationship between a competitive HR strategy and behavioral performance than their organically structured counterparts. With regard to IT strategic implementation, in contrast, hotels with an organic structure enjoy superior behavioral performance to those with a mechanistic structure.