The Impact of Knowledge Sharing on Hotel Industry Effectiveness in UK - Literature review Example

?Review of Literature: In the wake of recent economic recession that has had negative implications for nations across the world, the UK hotel and hospitality industry also has witnessed a setback. On the other hand, the number of rooms available considerably surpasses the number of consumers renting them, which entails stiff competition and hotels become forced to bring the “rents drastically” down (Jin-Zhao & Jing, 2009, 55). Despite a decrease in international arrivals during previous years, the trend reversed in 2011 and United Nations World Tourism Organisation (UNWTO) has forecasted a “continued growth in 2012” (Sloan, Legrand & Chen 2013). Similarly, major events such as Olympics and Queen’s Diamond Jubilee, have further boosted the industry in the UK. This, in turn, can have positive implications for London hotels, restaurants and the tour operators and increase their overall profitability. However, the number of hotels keeps increasing and the competition becomes tougher as the market share gets divided among a large number of players, which decreases profitability of individual hotels. From the current trend, it transpires that the hospitality market shows a mixed response and factors such as region and sector do exercise a crucial influence in determining the trends in profits. Similarly, the profitability in certain regions and sectors may be reflecting the impacts of certain temporary phenomenon such as some major events and the consequent surge in tourist flow rather than a sustainable change in market structure. On the other hand, the advent of computer and internet technologies has facilitated an environment where hotels have access to about “1000 times more data than a decade ago” and hotels can make use of it for furthering their business (Toedt 2013:15). In a market condition, which remains uncertain and volatile due to its dependence on a variety of variants, companies have to look for appropriate strategies to cushion the risks and set off possible failures in the market. Thus, they have to integrate all possible management concepts in their day to day functioning to ensure their smooth operation and optimizing their potential in the marketplace. This becomes especially relevant in the case of companies in the hospitality and hotel industries because of their unique characteristics that make them susceptible to seasonal fluctuations apart from conditions that apply to other industries. Similarly, some of the major management concepts that are being integrated to other industries are not being implemented in hospitality industry. A good example of this is Knowledge Management (KM), which emerged in the recent years as a management concept to enable companies to attain optimum efficiency and “sustainable advantage” over their competitors (Isa et al 2008:103). Hotels need to explicitly manage their “intellectual capital” by incorporating knowledge management principles into their day to day functioning (103). With the advancement in information and communication technologies, major changes have occurred in all spheres of management, to stay compatible to the ever evolving technologies and to update employees with the emerging innovations. Similarly, there is an imperative requirement for employees engaged in the hospitality industry to keep themselves abreast of the latest developments in technology and other fields so that they can understand the effects of such changes in different “elements of business” and easily adapt to the changes occurring the society around them (Carina Antonia Hallin & Einar Marnburg 2007). Christensen (2003) argues that in the recent years, knowledge has become the significant component of business operations to achieve as well as “sustain competitive advantages” (2). He defines knowledge management as process that involves several “mechanisms and structures” necessary to handle knowledge as well as understanding various aspects and stakeholders of such knowledge that one pursues (3). In the backdrop of a dramatic transformation in technology, the competitive environment for industries, especially that of hospitality, has increased manifold and experts in the field feel that the shift from analogue to digital technology has far reaching impact on “all service enterprise sectors” (Dana Tesone 2010:168). With this change the flow of data has become speedier and more efficient and the need to manage data with higher proficiency also arose. Under the circumstances, knowledge management emerged as the best solution for the industries, especially those in the service sector such as hospitality. The impact of the changes in communication technology has reflected significantly in the field of marketing also, which again enhanced the prominence of knowledge management in hospitality industry to properly manage the information flow and management. Similarly, the enhanced capabilities that technology has offered also entailed various innovations in marketing concepts and a need arose to “infiltrate” the internal aspects of operation and connect them with “outside sources” and to accomplish an appropriate system of knowledge management becomes imperative (175). It becomes relevant here that in the modern day, due to the advent of Information and Communication Technologies, access to information and communication have become cheap on the one hand and quick on the other. Thus, people across the world use internet as well as social networking, for information sharing especially when they intend to go on vacation. Evidence from different studies such as Orfila-Sintes & Mattson (2009) suggests that competitiveness in hotel industry can be attained through the provision of “improved services and products” with the integration of information and communication technologies (ICT) including the internet (Orfila-Sintes & Mattson 2009:381). Therefore, when the customers obtain information through internet, the tourism industry also needs to respond to the changing nature of customer behaviour by enabling internet based information access in their sector. To attain this, the employees and managers working in this industry need to possess adequate knowledge in ICT, so that they can interact appropriately with the customers. This will also enable them to update their knowledge and access required information from the internet and other web sources as per their needs. On the other hand, the authors also argue that providing additional value added services such as the internet will “positively affect all types of innovation” and facilitate customer satisfaction (384). Thus, in the context of the modern day customers, who are highly internet savvy and do tourism related activities online, hospital industry also has to modulate the functioning of their employees to match their customer behaviour. Therefore, like other industries, hospitality sector also needs to integrate knowledge management, with a specific focus on information and communication technology, into their day to day function to optimize their efficiency. Similarly, the identification and development of competencies in managers, to a large extent, depends on the integration of technology into organisational functioning and studies have suggested that “new technologies emerge” from the “accumulated knowledge” of employees for which knowledge management is essential (Daud & Yusoff 2010:140). The knowledge base of hotel industry derives from Social Capital (SC), comprising “customer service and relationships as well as information on customers and the perceptive of the market (136). Thus, it transpires that in order to tap the best potential of the market, hotels have to integrate their knowledge management process with ICT and share the available knowledge within the organization among all employees. In this context it becomes relevant that the situation warrants the availability of skilled employees who are proficient in IT field and integrate an efficient system of knowledge management into all aspects of their business operations. When proper IT systems are integrated into their day to day work, it will ensure maximum satisfaction to the customers and thereby increase their level of satisfaction and, thus, facilitate more profitability to the business. On the other hand, quality training is an integral part of knowledge management act as a promoter of the “quality of hotelling services” (Khanfar 2011:89). This will help the managers to access as well as update the knowledge that will help them to understand the needs of customers and provide better quality services to ensure customer satisfaction. Thus, it becomes evident that with the alignment of knowledge management within their system, business organisations in the hospitality industry will easily be able to overcome such problems. On the other hand, Mohammed & Rashid (2012) contend that high competitiveness is an essential component of the hotel industry for them to be efficient and profitable and hence they must attain “continuous repurchase” and sustained customer retention on a long term basis. In order to achieve such ambitious goals they need to implement appropriate Customer Relationship Management principles also into their system and take into account the large volumes data about customers as well as transform it into “useful knowledge” about their patrons (221). Knowledge is the most effective and efficient tool that will be instrumental in enabling the capabilities in the employees to properly manage such information and to logically deploy it in retaining their customers and attracting new consumers. They further find that proper knowledge management will enable the hotels not only to collect and manage data relating to customers but also help them to “authenticate such data” for developing future relationships that will benefit them in terms of increasing profitability (223). Moreover, they point to a dearth of research delineating the role of KM in the context of hospitality industry and feel that by disseminating information properly through KM, will enable hotels to implement appropriate strategies for “meeting their customer needs” (223). On the basis of a study, conducted on 621 employees in the hospitality industry sector, Hu, Horng and Sun claim that people working in the service and tourism industries need to have the ability to attract customers through meeting and surpassing their “increasingly sophisticated demands” (Meng-Lei Monica Hu, Jeou-Shyan Horng, Yu-Hua Christine Sun 2008). When one considers any service industry in the UK, especially hotels, it can easily be seen that customers coming to the country for business or tourism will be highly sophisticated, technology savvy and their expectation of the quality of service as well as response to all their needs will be quite high and, therefore, the employees working in the industry need to be compatible with their level of knowledge of technology and other aspects. Only organisations that have the proper knowledge management systems will be able to elevate the level of their employees to meet the expectation of customers of a high profile. The authors thus find that recent researches emphasize the need for knowledge management and knowledge sharing in “supporting innovation” and to respond to the “rapidly changing marketplace” (41). The researchers have based their study on 4 aspects of knowledge sharing (KS) such as: KS relates positively to service innovation performance (SIP) and new service development (NSD); it enhances the employee service innovation behaviour (ESIB); and it “predicts ESIB” and it “predicts NSD” (43). Their research finds that in order to attain a high level of SIP organizations in the hospitality industry initially must “develop and ensure” knowledge sharing behaviour and imbibe a “team culture” to achieve enhanced SIP (47). They also argue that the proper implementation of knowledge management will enable managers to better understand the relevance of knowledge sharing and help them meet all the “service needs” of the industry as well as customers (47). A study by Guillermo Herrera Pinilla finds that in the post-globalisation era where regional, linguistic and cultural barriers have become blurred, organisations in the hospitality need a diverse workforce with “professional skills and knowledge” that can handle people from different cultural and language backgrounds (Pinilla 2002:11). However, the author points to a “relative shortage” of workers which can only be compensated through an effective system of knowledge management so that the organisation can respond adequately to the expectations of the customers from diverse backgrounds (11). Similarly, in their recent study, Hassandoust and Farzaneh (2011) maintain that due to the advancement in information and communication, there have been drastic changes in the “knowledge, attitudes and behaviours” of travellers from across the globe (Farkhondeh Hassandoust & Mehdy Farzaneh 2011:4). Again, travellers who visit UK either on business or for pleasure, will b of a rather high profile with good knowledge of recent technology and related aspects. In addition, UK also hosts several significant events of a regular basis and as such dignitaries from all over the globe visit here. Therefore, the hotel industry will have to cater to a highly sophisticated clientele from across the world and thus they need to have a highly skilled workforce. In order to manage their skills and knowledge, especially in the context and allied activities, the implementation of KM is imperative. Similarly, studies by the Hospitality, Leisure, Sport and Tourism find that in the post globalization era, workforce in various industries has changed their nature and become more diverse and, as such, managing the multicultural human resources calls for “life-long learning” (Resource Guide 1). In order to facilitate life-long learning in a work environment, knowledge sharing and management are necessary to that all the members of the staff get information about various aspects relating to their job as well as understand the culture of one another. This will also enable them to cater to the tastes of diverse customers who hail from different cultural and ethnic backgrounds. Hu, Horng and Sun (2008) further claim that teams working within an organisation that share knowledge will be able to offer “new and more creative products and services” (41). They also emphasise the role of team culture as well as knowledge sharing in the success of an organisation and they further maintain that these factors are essential for “customer satisfaction” in the hospitality industry (47). Thus, it becomes evident that in a country like UK, where a diverse group of domestic and international customers are present, business entities in the hospitality industry need to encourage knowledge sharing and team culture in their hotels to facilitate the upgrading of knowledge of all their employees and thus deliver innovative service to their customers. Therefore, the implementation of knowledge management becomes crucial in hospitality industry in the UK. The review of a wide range of literature reveals that knowledge management is a vital component of business operation across all industries to attain sustained competence. However, while other industries have been quick enough to understand the significance of this branch of management in their day to day functioning, hospitality industry has been slow in following the trend, which may hamper them from optimizing their full potential in attracting their customers and attaining profitability. Similarly, with the advent of digital and internet technologies the customers across the globe have been able to access information about recent developments in every field. They also use the online media frequently for making reservations and transacting other business relating travel and tourism. As such, the workforce in the hospitality industry also needs to upgrade their knowledge and skills in ICT related activities so that they can serve their customer in better ways. This is especially relevant in the context of UK as the country keeps receiving a huge influx of tourists and businessmen apart from other dignitaries who come to the country to attend various political and cultural events. It also transpires from the literature review that for innovation and service performance, the integration of IT and knowledge management into the service is essential so that the employees in this sector are capable of responding to the ever increasing demands of modern customers, who are well versant with most sophisticated technologies. On the other hand, employees in the hospital industry also have to handle diverse customers from different parts of the world, especially in the context of the blurring of regional and linguistic boundaries as an aftermath of globalization. This becomes especially relevant in the context of UK, where people from all parts of the world visit for business as well as tourism purposes. Thus, hospitality industry in the UK has to integrate knowledge management into their system to tap the benefits and to respond appropriately to a highly mobile and sophisticated customer base from across the globe. 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