Leonidou Et Al 2015

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Dynamic capabilities driving an eco-based advantage andperformance in global hotel chains The moderating effect of international strategy

Leonidas C Leonidou a Constantinos N Leonidou b Thomas A Fotiadis c Bilge Aykol d

a School of Economics and Management University of Cyprus Kallipoleos 75 PO Box 20537 CY-1678 Nicosia Cyprusb Leeds University Business School University of Leeds Maurice Keyworth Building Leeds LS2 9JT United Kingdomc Democritus University of Thrace 2 Dorilaiou Street 55133 Kalamaria Thessaloniki Greeced Faculty of Business Dokuz Eylul University Izmir Turkey

h i g h l i g h t s

Focus is on organizational capabilities driving an eco-based competitive advantage Use of dynamic capabilities theory and testing the model among global hotel chains Organizational learning shared vision and cross-functional integration are key drivers An eco-based competitive advantage positively affects global 1047297nancial performance Certain international strategy dimensions moderate the advantageeperformance link

a r t i c l e i n f o

Article history

Received 28 August 2014

Accepted 14 March 2015

Available online 3 April 2015

Keywords

Dynamic capabilities

Environmental management

Competitive advantage

Performance

a b s t r a c t

Building on the dynamic capabilities theory a model of organizational capabilities driving an eco-basedcompetitive advantage and performance in the global hotel industry is tested Data obtained from 102

hotel chains reveal that organizational learning shared vision and cross-functional integration areconducive to creating a green competitive advantage though this is not the case with relationshipbuilding and technology sensingresponse In turn an eco-based advantage positively affects global1047297nancial performance Certain dimensions of international strategy namely foreign entry through joint

ventures and decision-making decentralization positively moderate the advantageeperformance linkwhile no moderation effect exists for global market con1047297guration and standardizationadaptation

copy 2015 Elsevier Ltd All rights reserved

1 Introduction

Major concerns with protecting the natural environment in the

last decades have signi1047297cantly reshaped the landscape in whichorganizations operate in both domestic and international markets

(Miles amp Covin 2000) For example consumer preferences haveshifted toward more environmentally friendly goods and services(Grove Fisk Pickett amp Kangun 1996) while the general public has

become increasingly aware of and sensitive to the role of key

environmental issues (Menon amp Menon 1997) In addition variousexternal (eg governments) and internal (eg shareholders)

stakeholders have begun demanding that the business communitystop ignoring ecological matters and take drastic measures to

protect the bio-physical environment (Heather amp Ditte 2006)In response to these trends environmental issues have gained

heightened attention from both business practitioners and aca-demics (Chabowski Mena amp Gonzalez-Padron 2011) Speci1047297cally

evidence indicates that a growing number of 1047297rms (especially indeveloped countries) engage in eco-friendly activities to improvetheir competitive edge and enhance their 1047297nancial position (Miles

amp Munilla 1993) Moreover in a recent review of the environ-

mental literature Leonidou and Leonidou (2011) revealed (1) anexponential growth in both the quantity and quality of articles

Corresponding author Dokuz Eylul Universitesi Isletme Fakultesi Kaynaklar

Kampusu Buca 35390 Izmir Turkey Tel thorn90 232 30182 35 faxthorn90 232 453 50

62

E-mail addresses leonidasucyaccy (LC Leonidou) CLeonidouleedsacuk

(CN Leonidou) thomasfotiadisyahoogr (TA Fotiadis) bilgeaykoldeuedutr

(B Aykol)

Contents lists available at ScienceDirect

Tourism Management

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httpdxdoiorg101016jtourman201503005

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Tourism Management 50 (2015) 268e280



written on ecological issues (2) a signi1047297cant diversity in the routesfollowed to study the subject together with increased in-depth

coverage of the various topics examined and (3) a marked transi-tion of this 1047297eld from an identi1047297cation and exploration stage to-ward a phase characterized by greater maturity sophistication andrigor

Despite these positive signs the pertinent literature has beenrelatively silent on three critical issues surrounding environmental-related phenomena First environmental studies have concen-trated mainly on manufacturing 1047297rms with the hotel industry (and

the wider service sector) receiving much less attention (Carmona-Moreno Cespedes-Lorente amp de Burgos-Jimenez 2004) Howeverinvestigating the green business practices of hotels is of paramountimportance because (1) they are usually heavy users of resources

(eg electricity) with potential harmful effects on the environment(2) they rely on ecological aspects of their product offering to in-

1047298uence the level of satisfaction in customer experience and (3)they increasingly face stricter environmental regulations necessi-

tating greater incorporation of sustainability elements in their op-erations (Alvarez-Gil Burgos-Jimenez amp Cespedes-Lorente 2001)

Second studies on green-related international business topics

are generally limited though many signs highlight the need to

examine them further (Peng amp Lin 2008 Pinkse Kuss amp Hoffman2010) For example many foreign markets contain a growingsegment of consumers who are sensitive to ecological matters and

strive to purchase productsservices from 1047297rms adopting an eco-friendly perspective (Miles amp Covin 2000) Moreover anincreasing number of 1047297rms prefer to compete against their localandor foreign competitors on environmental and other socially

responsible dimensions (Bellesi Lehrer amp Tal 2005) Furthermorerecent developments in communication information and socialmedia help expose positive or negative elements of the 1047297rmsenvironmental actions to buyers and other stakeholders around the

globe (Kirchoff Koch amp Nichols 2011)Third the factors leading to the creation of an eco-based

competitive advantage and business performance remain unclear

(Rodriguez amp Cruz 2007) For example although research is rela-tively adequate on the internal determinants of the 1047297rms envi-ronmental competitive edge such as company size (El Dief amp Font2010) organizational design (Sharma 2009) top managementeducation level (Rivera amp de Leon 2005) and green-sensitive

leadership (Smerecnik amp Andersen 2011) the role of more dy-namic 1047297rm elements (eg organizational capabilities) in achievingan eco-friendly advantage has only been tangentially tackled Inaddition studies have examined the performance outcomes of the

1047297rms environmental behavior (eg Alvarez-Gil et al 2001Kassinis amp Soteriou 2003) but knowledge of how an eco-basedadvantage can enhance the 1047297rms 1047297nancial performance is limited

This study aims to shed light on these crucial issues by devel-

oping and testing a model of the organizational capabilities driving

an eco-based competitive advantage and performance in globalhotel chains It speci1047297cally focuses on three key research questions(1) How can different organizational capabilities of a global hotel

chain namely organizational learning relationship buildingshared vision cross-functional integration and technologysensingresponse help create an eco-based competitive advan-

tage (2) How can such an advantage which is derived from theadoption of an environmentally friendly behavior (such as pollu-tion control energy saving and recycling) enhance the hotelchains global1047297nancial performance (3) What is the speci1047297c roleof

certain dimensions of the hotel chains international strategynamely global market con1047297guration foreign entry mode decision-making autonomy and business standardizationadaptation inmoderating the association between competitive advantage and

1047297nancial performance

The study is theoretically grounded on the dynamic capabilitiesparadigm which posits that over time organizations can integrate

build and recon1047297gure internal and external competencies toaddress environmental volatility and generate new forms of advantage (Teece Pisano amp Shuen 1997) The dynamic nature of these capabilities enables the 1047297rm to acquire combine and trans-

form tangible (eg 1047297nancial) and intangible (eg reputational)resources in different ways so as to match constantly changingmarket conditions and offer values of strategic intent (MorganKatsikeas amp Vorhies 2012) In essence dynamic capabilities are

the means for activating organizational resources updating theirstatus and even safeguarding their mere existence In brief they actas connecting bonds that help the 1047297rm effectively adapt to changesin the overall business environment enhance its competitive edge

and improve its performance (Krasnikov amp Jayachandran 2008)

2 Green hotel management literature

Scholarly efforts on environmentally-related issues in the hotelindustry have signi1047297cantly intensi1047297ed in the past decade Howeveronly a few studies (eg L opez-Gamero Claver-Cortes amp Molina-

Azorin 2008) have focused on the organizational capabilities

competitive advantage and performance implications related tohotel eco-friendly practices Moreover with the exception of somestudies with an international focus (eg Bohdanowicz Zientara ampNovotna 2011) the bulk of this research has adopted a domesticperspective or drawn comparisons across countries The pertinentliterature can be organized into three broad areas internal driversof environmental behavior green management practices and

strategies and eco-friendly competitive advantage andperformance

21 Internal drivers of environmental behavior

Internal factors driving hotel environmental behavior havemainly involved 1047297rm demographic characteristics Speci1047297cally

while research has found that size chain af 1047297liation star class andmodernization level (age) of the hotel are positively related to pro-environmental behavior (Alvarez-Gil et al 2001 Carmona-Morenoet al 2004 El Dief amp Font 2010 2012) foreign ownership statusyields mixed results (Shah 2011) Moreover the adoption of (or

intention to adopt) environmental management practices is posi-tively in1047298uenced by hotel organizational design (Sharma 2009)the presence of a written environmental policy (Shah 2011) theuse of certain operations management techniques (Alvarez-Gil

et al 2001) the extent of staff training (Chan amp Hawkins 2012)and the possession of voluntary-based business values (El Dief ampFont 2010) Furthermore top management characteristics suchas age (El Dief amp Font 2010) level of education (Rivera amp de Leon

2005) and altruisticmoral behavior (Garay amp Font 2012) have a

favorable effect on the adoption of hotel ecological practicesResearch also reports that certain organizational resources (eg

physical 1047297nancial) and capabilities (eg strategic proactivity

continuous innovation) are conducive to an eco-friendly hotelbusiness approach For example Shah (2011) stresses foreignownership chain af 1047297liation and 1047297nancial availability as vital re-

sources in building a corporate environmental responsibilityamong hotels Fraj Matute and Melero (2015) also report thatlearning orientation and innovativeness are instrumental organi-zational capabilities in the execution of proactive environmental

strategies Moreover L opez-Gamero Molina-Azorin and Claver-Cortes (2011) distinguish between lsquoexistingrsquo and lsquonewly acquiredrsquo

resources and capabilities while the former refer to sets of tech-nologies skills and knowledge generated and enlarged over time

the latter correspond to the acquisition of new resources resulting

LC Leonidou et al Tourism Management 50 (2015) 268e 280 269



from the 1047297rms implementation of eco-friendly strategies such asgreen technologies ecological infrastructure and social reputation

22 Green management practices and strategies

Green management practices involve the hotels deliberate ac-

tions to control change in1047298uence or adapt to inputs related toecological matters (Clark Varadarajan amp Pride 1994) Within thiscontext some scholars have investigated the extent to which hotelsundertake speci1047297c measures such as energy saving solid waste

treatment and water conservation (Baloglu amp Jones 2014 Erdogan

amp Baris 2007) Other studies have focused on the determinants of resource consumption that in1047298uence hotels environmentalconductsuch as laundry load for water use (Deng amp Burnett 2002)

air temperature for energy use (Chan amp Mak 2004) and occupancyrate for waste produced (Chan amp Wong 2006) In addition somescholars focused on the development of environmental manage-ment systems indicators that can be used by hotels for the evalu-

ation of environmental performance (Geuroossling 2015 HsiaoChuang Kuo amp Yu 2014) while others introduced new environ-mental management approaches for hotels and resorts (Kasim

Gursoy Okumus amp Wong 2014 Rutty Matthews Scott amp Del

Matto 2014)Regarding hotel environmental strategies research has focused

on strategic andor technicaloperational aspects (eg L opez-

Gamero et al 2008 2011) While the strategic aspects mainlyinvolve incorporating environmental concerns in business plansand budgets brand positioning marketing communications pur-chasing employee training and guest education (Alvarez-Gil et al

2001 Sharma Aragon-Correa amp Rueda-Manzanares 2007) tech-nicaloperational dimensions include engagement in and control of issues such as water conservation energy saving recycling noisereduction and bio-diversity (Kassinis amp Soteriou 2003 Le

Hollenhorst Harris McLaughlin amp Shook 2006 Smerecnik amp

Andersen 2011) Some studies have focused on environmentaltargeting and positioning developing green-related services

setting prices in relation to green issues selecting eco-friendlydistribution channels and using green advertisingcommunica-tions (Hudson amp Miller 2005) Notably empirical evidence shows apositive link between eco-conscious tourist targeting and thedeployment of environmental strategies (El Dief amp Font 2010

Shah 2011)

23 Eco-friendly competitive advantage and performance

An eco-friendly competitive advantage refers to the 1047297rms su-periority over competitors in implementing environmental strate-gies These can take the form of either lower costs (eg betterutilization of resources more energy savings stricter process con-

trol) or differentiated market offerings (eg ecologically designed

productsservices safer products quality improvement) (Porter ampvan der Linde 1995) Despite its importance only a few studieshave emphasized the role of organizational resources and capa-

bilities in the creation of an eco-based competitive advantage inhotels For example L opez-Gamero et al (2011) show that pursuingenvironmental management practices in a hotel setting has an in-

direct effect on differentiation (but not cost) competitive advantagethrough the mediation of newly generated resources and capabil-ities while Fraj et al (2015) report that the employment of proac-tive environmental strategies has a positive in1047298uence on

organizational competitiveness Bagur-Femenias Lach and Alonso-Almeida (2013) on the other hand 1047297nd that environmental prac-tices have a direct positive impact on a hotels competitive positionand an indirect effect on competitiveness through operational

improvement

Many studies have shown that hotel adoption of environmentalactivities can have direct or indirect effects on environmental

1047297nancial and market performance For direct effects research hasfound that the implementation of an eco-friendly strategy is eitherpositively (Carmona-Moreno et al 2004 L opez-Gamero et al2011) or negatively (Rivera amp de Leon 2004) related to environ-

mental performance de1047297ned as the extent towhich a 1047297rm succeedsin reducing its harmful impact on the environment (Klassen amp

McLaughlin 1996) In addition while some studies report a directpositive effect of environmental management practices on 1047297nancial

performance (Alvarez-Gil et al 2001 Garay amp Font 2012 Molina-Azorin Claver-Cortes Pereira-Moliner amp Tari 2009 Rodriguez ampCruz 2007 Segarra-O~na Peiro-Signes Verma amp Miret-Pastor2013 Singal 2014) others do not reveal any signi1047297cant associa-

tion between these two variables (Carmona-Moreno et al 2004Claver-Cortes Molina-Azorin Pereira-Moliner amp Lopez-Gamero2007 Inohue amp Lee 2011) L opez-Gamero et al (2011) also reportthat an ecological competitive advantage favorably affects 1047297nancial

performance Finally Kassinis and Soteriou (2003) 1047297nd that envi-ronmental management practices indirectly affect market perfor-mance through the mediating effects of customer satisfaction and

loyalty

In light of the above inventory of knowledge our study aims tocontribute to the tourism literature in four ways First it in-vestigates the environmental behavior of hotel organizations from

a dynamic capabilities theoretical perspective which has rarelybeen used in prior research Second it identi1047297es which organiza-tional capabilities are essential in building an eco-based competi-tive advantage for hotels in global markets Third it illustrates the

positive effects of possessing such an advantage in enhancing ahotel chains global 1047297nancial performance Fourth it stresses thecontingent role of certain international strategy factors in fosteringthe effect of an eco-based competitive advantageon global 1047297nancial

performance thus adding to the under-developed internationalbusinesseenvironmental management dialogue

3 Model and hypotheses

Fig 1 presents the studys conceptual framework which positsthat the global hotel organizational capabilities act as antecedentsto the creation of an eco-based competitive advantage which

subsequently helps enhance global 1047297nancial performance Inaddition certain aspects of a hotel chains international strategymoderate the competitive advantagee1047297nancial performance link

31 Organizational capabilities and competitive advantage

Organizational capabilities can take various forms such asoutside-in processes (eg market sensing) inside-out processes

(eg environment health and safety) and spanning processes (eg

new productservice development) (Day 1994) By default theyspan different functional areas within the organization involvepeople from various managerial levels and serve multiple purposes

(Amit amp Schoemaker1993) As such theyare expressed in the formof complex patterns of skills and knowledge that over time becomeembedded as routines and are performed better than those of the

1047297rms competitors (Bingham Eisenhardt amp Furr 2007) Bycombining different types of resources 1047297rms can maintain theircapabilities change their content or generate new ones to respondto market changes as is the need to accommodate various

ecological problems (Eisenhardt amp Martin 2000) However toobtain a competitive edge and enhance business performance the

1047297rms capabilities should be constantly superior to those of com-petitors (Prahalad amp Hamel 1990) Several capabilities are instru-

mental in an eco-friendly approach to business including

LC Leonidou et al Tourism Management 50 (2015) 268e 280270



organizational learning relationship building shared vision cross-functional integration and technology sensingresponse (Aragon-Correa Hurtado-Torres Sharma amp Garciacutea-Morales 2008 Russo ampFouts 1997 Sharma Aragon-Correa amp Rueda-Manzanares 2004Sharma amp Vredenburg 1998)

Organizational learning capability refers to the 1047297rms ability toacquire process and make use of information to better sense

environmentally related issues such as new green technologiesevolving regulatory frameworks and changing consumer ecolog-ical needs (Sharma et al 2004) This knowledge is vital in adopting

new approaches in decision-making executing specialized tasksand deploying resources that support the organizations ecologicalinitiatives (Russo amp Fouts 1997) Such initiatives may include forexample the development of eco-friendly innovations trainingemployees to become more ecologically-oriented and cultivating a

proactive green thinking (Sharma amp Vredenburg 1998) It alsohelps the 1047297rm achieve a competitive advantage by better under-standing how to handle ecological risks conform to environmentalregulations and adopt new green technologies (Sharma et al

2004) This is particularly vital for hotels operating in multipleforeign markets because of the high uncertainty volatility anddiversity of the business environment which make decisionsregarding green-related issues more complex costly and risky

(Christmann 2004 Pinkse et al 2010)

Building relationships with suppliers customers and otherparties is also a key organizational capability because it helps the

1047297rm to better understand and effectively accommodate the green

requirements of various environmentally sensitive groups (eggovernments local communities environment activists) well inadvance of the competition (Rodriguez-Diaz amp Espino-Rodriguez

2006) Hotels with this capability may also be in a better positionto monitor and swiftly respond to the demands of green consumersthrough their wide network of partners (Banerjee Iyer amp Kashyap2003) They also have the opportunity to form strategic alliances

with other 1047297rms to collectively handle ecological issues share in-vestment expenditures exchange expertise and knowledge andbetter face pressures from different stakeholders (Erkus -euroOztuumlrk ampEraydin 2010) Geographic cultural and business differences be-

tween the home and foreign markets coupled with the multiplicity

of environments confronted by hotels internationally elevate evenmore the critical role of this capability in gaining an advantageousposition over competitors (Morgan Kaleka amp Katsikeas 2004)

The cultivation of a shared vision among employees aboutenvironmental matters is a key capability that helps the 1047297rm tobettergather organize and use organizational resources to developsustainable business practices (Sharma et al 2004) Through

shared diagnoses and discussions of various ecological trade-offshotel employees can develop collective thinking and commitmentto these matters more effectively and ef 1047297ciently than competitors

(Aragon-Correa et al 2008) The adoption of eco-friendly practicesinvolves radical changes in new technologies equipment andprocedures which are doomed to fail without the full under-standing of and support from everybody in the organization (Russo

amp Fouts 1997) In addition operating on a global scale makes the

role of this organizational capability even more crucial because thediversity in ecological requirements between countries necessi-tates common thinking among employees to harmonize the 1047297rmsgreen activities across its foreign subsidiaries (Rugman amp Verbeke

1998)The complex dynamic and costly nature of environmental is-

sues calls for cross-functional integration in the 1047297rm expressed inthe form of intensive interactions among employees from different

functional areas (eg procurement operations marketing) (Stone

Joseph amp Blodgett 2004) Such an interaction facilitates theongoing exchange of ideasknowledge the prompt sharing of in-formation and the joint collaboration in activities that can help

exploit opportunities and avoid threats related to ecological mat-ters (Stone amp Wake1047297eld 2000) Speci1047297cally cross-functional coor-dination within a global hotel chain is critical in gaining an

advantage in (1) sensing and accommodating green customer re-quirements (2) understanding competitors movements thatincorporate green elements (3) developing new eco-friendlyproducts and services (4) adopting innovative environmental

management technologies and (5) conforming to existing andornew environmental legislation (Russo amp Fouts 1997 Sharma et al2004) The great physical and psychological distance betweenhome and host countries also makes the coordination of functional

activities to accommodate environmental problems essential

H3dH3c

H2

H1e

H1d

H1c

H1b

H1a

Organizational

learning

Relationship

building

Shared

vision

Cross-

functional

integration

Technology

sensing amp

response

Eco-based

competitive

advantage

Global

financial

performance

Global

market

configuration

Foreign

market entry

mode

Decision-

making

autonomy

Business

standardization

adaptation

H3a H3b

Fig 1 The conceptual model




because the 1047297rm must operate in diverse business settings char-acterized by high levels of uncertainty and complexity (Azzone

Brophy Noci Welford amp Young 1997)The 1047297nal organizational capability is technology sensing

response which re1047298ects the extent to which a 1047297rm is aware of newtechnological developments related to ecological issues and the

speed of adopting such technologies (Aragon-Correa 1998 Sharmaet al 2007) This capability becomes more important in the case of hotels operating internationally because of differences in techno-logical levels regulatory requirements and technical standards

across countries (Rugman amp Verbeke 1998 Srinivasan Lilien ampRangaswamy 2002) Eco-friendly technologies are uniquebecause they change rapidly involve signi1047297cant investments anddiffer from conventional technologies while their application cuts

across many areas ranging from energywater conservation andwaste minimization to new green productservice developmentand recycling materials (Shrivastava 1995) Rapid adoption of neweco-friendly technologies helps the hotel reduce the level of un-

certainty surrounding green-related investments and gain differ-entiation (eg incorporating eco-friendly elements in productsservices) andor low cost advantages (eg reducing expenses

through waste minimization programs) against rivals (Sharma

et al 2007) Based on the above we can hypothesize that

H1 The global hotel chains organizational capabilities related to

(a) organization learning (b) relationship building (c) shared

vision (d) cross-functional coordination and (e) technological

sensing lead to an eco-based competitive advantage

32 Competitive advantage and global 1047297nancial performance

By capitalizing on an eco-based competitive advantage the 1047297rm

can improve its 1047297nancial performance in international markets(Banerjee et al 2003 Menon amp Menon 1997 Orsato 2006)Indeed evidence from empirical studies in both the general envi-

ronmental 1047297eld (eg Klassen amp McLaughlin 1996) and the greenhotel sub-1047297eld (eg Carmona-Moreno et al 2004 L opez-Gameroet al 2011) indicates the positive in1047298uence of eco-based compet-itive advantage on 1047297nancial outcomes (eg Carmona-Moreno et al2004 Klassen amp McLaughlin 1996 L opez-Gamero et al 2011)

Within the context of global markets multinational 1047297rmsengagement in environmentally friendly (and other sociallyresponsible) activities can also be bene1047297cial to international busi-ness performance (Peng amp Lin 2008)

This positive impact on the 1047297rms 1047297nancial results can comefrom two directions The 1047297rst involves the lsquoproduct differentiationrsquo

bene1047297ts that stem fromengaging in eco-friendly business activitiesFor example enriching the companys offering with ecological el-

ements helps enhance the existing customer base satisfaction

levels and secure repeated sales in the long run (Dechant amp Altman1994) The 1047297rms engagement in environmental initiatives alsohelps attract new customers especially those who want to reward

1047297rms that behave in a socially responsible manner (Azzone amp

Bartele 1994) In addition enriching products with green ele-ments boosts a brands quality image making it more appealing

especially to more af 1047298uent consumers (Miles amp Covin 2000) andalso allows the 1047297rm to stress its superiority to competitors prod-ucts and (if this 1047297ts its overall pricing strategy) to charge higherprices (Menon Menon Chowdhury amp Jankovich 1999)

The second route is lsquocost minimizationrsquo which is achievedthrough more ef 1047297cient use of resources such as waste reductionwaterenergy conservation and package recyclability (Orsato2006) The lower potential for litigation expenditures the pay-

ment of reduced insurance fees and the prevention of penalties

associated with violations of environmental laws can also reducecosts (Miles amp Covin 2000) Finally greening the companys of-

fering can make the productservice more economical to usemaking it a more attractive purchasing option for both existing andpotential buyers (Miles amp Covin 2000) Taking into considerationthe 1047297nancial bene1047297ts derived from a product differentiation andor

cost minimization standpoint we may posit that

H2 The global hotel chains eco-based competitive advantage en-

hances its 1047297nancial performance

33 International strategy dimensions as moderators

The conceptual framework indicates that the internationalstrategy pursued by the global hotel chain moderates the associa-tion between an eco-based competitive advantage and global

1047297nancial performance Speci1047297cally four key international strategy

dimensions with a potential effect on this association are identi-

1047297ed global market con1047297guration foreign entry mode decision-making autonomy and business standardizationadaptation

Regarding global market con 1047297 guration hotel chains adopting a

global perspective are more likely to foster green issues acrossdifferent countries and try to gain advantage from it than hotelsfollowing a market-extension approach (which emphasizes the

home market) This is because such a global perspective makes the1047297rm more accountable to stakeholder pressures pertaining toenvironmental (and other social) issues coming from external (eggovernments) andor internal (eg subsidiary employees) sources

(Husted amp Allen 2006) A global approach to international businessalso helps the hotel establish best practices related to ecologicalprotection across geographical boundaries as well as transfer

1047297nancial technical experiential and allied resources across coun-

tries to provide balanced support of environmentally friendlyprograms worldwide (Christmann 2004 Strike Gao amp Bansal2006)

The foreign market entry mode of the global hotel chain (whether joint ventures or wholly owned subsidiaries) could also play amoderating role Speci1047297cally 1047297rms entering foreign markets using

joint ventures rather than wholly owned subsidiaries are morelikely to take environmental issues seriously into consideration

because (1) the existence of national participation in the owner-ship structure favors greater social involvement of the subsidiary inthe foreign countrys ecological needs (2) investors from the hostcountry especially those having institutional status usually show

stronger sensitivity and interest in positively responding to thesocial needs of their local communities and (3) partners in foreigncountries are usually better able to understand and exploit localmarket needs such as those related to eco-sensitive consumers

(Deniz-Deniz amp Garciacutea-Falcon 2002 Turban amp Greening 1997)

Thus a hotel chain entering foreign markets mainly through jointventures will achieve more 1047297nancial bene1047297ts from the properexploitation of an eco-based competitive advantage

Our third moderator is the degree of autonomy in decision-

making whether centralized (ie the headquarters closely controlsand directs the activities of subsidiaries in foreign countries) or

decentralized (ie subsidiaries in host countries have considerableautonomy to develop strategies for local conditions) (Muller 2006)Firms operating on a cross-cultural basis face diverse environ-mental pressures and encounter different types of stakeholder

groups which makes the task of accommodating green issues incentralized organizational structures rather cumbersome andcostly due to heightened complexity risk and response time (Peng

amp Lin 2008) Conversely a decentralized approach can be a more

1047297nancially sound option because it allows subsidiaries to (1)




achieve greater responsiveness to local environmental matters at amuch lower cost (2) secure a more proactive undertaking of

environmental initiatives which will be more geared to hostcountry conditions and (3) obtain greater 1047298exibility in usingenvironmentally related attributes to attract new customers(Muller 2006)

Finally in foreign business standardizationadaptation the 1047297rmeither standardizes its business policies worldwide or allows itssubsidiaries to adapt them in accordance with local conditions(Christmann 2004) Hotel chains with an adapted approach in in-

ternational business are more likely to give greater leeway to theirsubsidiaries to adjust their environmental technologies technicalstandards and procedures to the speci1047297c requirements of thecountries in which they operate (eg regulatory frameworks in-

dustry norms buyer expectations) (Pinkse et al 2010) As a resultthey are in a more advantageous position than their counterpartsthat employ a standardized route in more effectively exploitinggreen-related opportunities in foreign markets which subse-

quently yields higher 1047297nancial returns Thus

H3 The association between an eco-based competitive advantage

and global 1047297nancial performance is stronger when the global hotel

chain adopts (a) a global rather than a market-extension con 1047297 g-uration (b) a joint venture rather than a wholly owned subsidiary

foreign entry mode (c) a decentralized rather than a centralized

decision-making approach and (d) an adapted rather than a

standardized foreign business approach

4 Study methodology

41 Scope of research and sampling procedures

The empirical setting used to test the research hypotheses isthe global hotel industry which plays a signi1047297cant role in inter-national business This industry was chosen for conducting thestudy because (1) 1047297rms have strong links with the natural envi-

ronment and the social context within which they operate( Jennings amp Zandbergen 1995) (2) global hotel units are stronglyconsumer-oriented and as consumer demand is one of the key

drivers of ecological behavior they increasingly undertake eco-friendly initiatives (Rodriguez amp Cruz 2007) (3) the hotel in-dustry itself is highly competitive with many 1047297rms searching fornew ways (such as being ecologically-oriented) to achieve

competitive advantage (Menon amp Menon 1997) (4) environ-mental and social issues have topped the agendas of hotel asso-ciations in the past few decades (Zhou Brown Dev amp Agarwal2007) and (5) the global nature of the industry allows for more

thorough examination of the moderating role of various interna-tional strategy-related factors in ecological practices (HolcombUpchurch amp Okumus 2007)

The study sample came from ldquoHotels 2007 Giants 325 ExecutiveDirectoryrdquo which contains contact information on the worldslargest global hotel chains1 The directory is published by ldquoHotelsrdquo

magazine and its editor-in-chief provided us with an endorsementletter which described the purpose of the study and the potential

bene1047297ts that directory members would gain from its 1047297ndings Theunit of analysis for the study was the hotel chains headquarters

which is in a better position to comment on organizational capa-bilities environmental practices and 1047297nancial performance across

countries than its subsidiaries The headquarters could also offermore information on various aspects of the hotel chains interna-tional business strategy2

42 Scale development

Appropriate scales of the key constructs employed came fromprevious research published in reputable sources having as a keycriterion the reported Cronbachs alpha to be greater than 70

(Nunnally amp Bernstein 1994) (see Table 1) All scale items usedwere measured on seven-point Likert-type scales ranging fromstrongly disagree (1) to strongly agree (7) The only exception was

1047297nancial performance (operationalized in terms of operating

pro1047297ts return on assets sales turnover and cash-1047298ow) which wasmeasured compared to the hotel chains main competitors over thepast twelve months on a seven-point scale ranging from muchworse (3) to much better (thorn3) The four dimensions of interna-

tional strategy were derived from the international business liter-ature (Christmann 2004 Husted amp Allen 2006 Muller 2006Strike et al 2006) These were measured on a dichotomous scaleas follows global market con1047297guration (global expansion versus

market extension) foreign market entry mode (joint venture versus

wholly owned subsidiary) decision-making autonomy (centralized

versus decentralized) and foreign business standardizationadap-

tation (standardization versus adaptation) Three academics withextensive experience in the1047297eld helped verify the face validity of allscales These were re1047297ned further on input from informal discus-sions with 1047297ve hotel managers on the idiosyncrasies of global hotel

chains

43 Questionnaire design and testing

The structured questionnaire consisted of four major sections

The 1047297rst section comprised questions related to the 1047297ve organiza-tional capabilities of the hotel chain The second section focused onthe 1047297rms competitive advantage gained from adopting environ-mentally friendly practices The third section contained the 1047297nan-

cial performance implications associated with the hotel chainseco-based competitive advantage The 1047297nal section sought infor-mation about elements of the hotel chains international strategyThe end of the questionnaire included four questions on a seven-

point scale measuring the respondents role in the organizationfamiliarity with the subject knowledge of topics and con1047297dence inproviding information on the issues (Cannon amp Perreault 1999)Before launching the full-scale study the questionnaire was pilot-

tested with 1047297ve hotel managers to measure its length ensure its1047298ow and resolve any misunderstandings

44 Data collection and respondent pro 1047297le

The mail survey was designed following Dillmans (2000)

proposed guidelines All 1047297rms registered in the directory were

1 Initially the idea was to focus exclusively on green hotels included in the

directory of ldquoGreen Hoteliers Clubrdquo as provided on the clubs website (httpwww

greenhotelierorg) However to obtain a more balanced sample and avoid selection

bias the Giants 325 directory focusing on the top 325 hotel chains was 1047297nallyselected This is because the latter directory includes not only purely green hotel

chains but also hotel chains that have partially implemented environmental ac-

tivities or no environmental practices at all

2 To minimize the possibility of perceptual bias in the study the following

safeguards were taken (1) anonymity and con1047297dentiality in the answers of re-

spondents who participated in the study were strongly emphasized in the ques-

tionnaire thus ensuring an unbiased response to the questions raised (2) only

respondents who were familiar with the subject knowledgeable of the topic and

con1047297dent about providing information on the issues mentioned in the question-

naire were included in the 1047297nal sample while respondents who failed the keyinformant competency check were excluded from the 1047297nal analysis and (3) a

common method bias test based on Lindell and Whitneys (2001) methodology

veri1047297

ed the non-existence of such bias in the study




1047297rst contacted by telephone to gauge their willingness to partici-pate and identify appropriate key informants Of these only 185responded positively while commonly cited reasons for non-participation included a company policy against taking part in

surveys lack of available time and company ceasingsuspendingoperations Senior managers from the headquarters who agreed toparticipate received a cover letter explaining the nature purposeand bene1047297ts of the study The questionnaire was posted (and

sometimes sent electronically) to all hotels agreeing to participatein the study accompanied by instructions on how to administer itA reminder letter was sent two weeks after the initial mailing anda replacement questionnaire one month later Several follow-up

calls were made to encourage respondents to reply and to assessreasons for non-response

In total 109 responses were returned (589 response rate) anda non-response test conducted among early and late respondents(Armstrong amp Overton 1977) revealed no particular bias Of thequestionnaires received four were eliminated from excessive

missing data and another three were removed from failure to meetthe key informant requirements Thus the 1047297nal sample contained102 1047297rms which on average had the following characteristicsnumber of employees (2205) number of beds (22000) and num-ber of operating foreign markets (23)

5 Analytical method and research 1047297ndings

The Partial Least SquareseStructural Equations Modeling(PLSeSEM) was employed using the SmartPLS 3 package (Ringle

Table 1

Scale items reliabilities and factor loadings

Constructs and scale items Factor loading

Organization learning (a frac14 92 CR frac14 94 AVE frac14 80)

(Seven-point scale adapted from Sharma et al (2004))

We continuously update our knowledge of the forces affecting the global hotel industry with regard to green issues 91

We try to look at solutions to environmental problems regarding the hotel industry from f resh angles 87

We use both formal and informal channels for exchanging infor mat ion regarding enviro nmental issues 84

In our 1047297rm both line and staff managers are involved in developing new eco-friendly practices processes systems 87In our 1047297rm there are incentives and rewards for those employees who 1047297nd solutions to green problems (D) e

Relationship building (a frac14 93 CR frac14 95 AVE frac14 82)

(Seven-point scale adapted from Morgan et al (2004))

We fully understand foreign customer requirements regarding environmental issues 92

We fully understand requirements of other stakeholders (eg travel agents local authorities) regarding green issues 94

We fully establish and maintain close relationships with suppliers (eg food toiletries) regarding green issues 93We establish and maintain close collaboration with internal and external strategic partners regarding green issues 84

Shared vision (a frac14 92 CR frac14 94 AVE frac14 79)

(Seven-point scale adapted from Aragon-Correa et al (2008))

All our employees have a very clear idea about our 1047297rms environmental objectives 93

All our employees make signi1047297cant efforts to reach our 1047297rms environmental objectives 95Managers and employees always agree on the right environmental procedures for our 1047297rm 82

Employees often offer valuable ideas for improving our 1047297rms ability to achieve its environmental objectives 85

Cross-functional integration (a frac14 84 CR frac14 90 AVE frac14 76)(Seven-point scale adapted from Aragon-Correa (1998))

We have informal systems for better coordinating environmental issues among departments in our 1047297rm 82

We have formal systems for better coordinating environmental issues among departments in our 1047297rm 90

We work around projects (not departments) with multi-disciplinary teams regarding environmental issues in our 1047297rm 89

Technology sensing amp response (a frac14 89 CR frac14 93 AVE frac14 82)

(Seven-point scale adapted from Srinivasan et al (2002))

We are often one of the 1047297rst in the industry to detect technological developments that may affect our green efforts 89

We actively seek int ell igence on t echnological changes t hat ar e l ike ly t o affect our e nvironmental effo rts 92We gener ally r espond ver y quickly to technolog ical changes that have to do with envir onmental issues 91

Our 1047297rm lags behind the industry in responding to new technologies that have to do with environmental issues (R) (D) e

Eco-based competitive advantage (a frac14 93 CR frac14 94 AVE frac14 73)

(Seven-point scale adapted from Banerjee et al (2003))

Being environmentally conscious has led to substantial cost advantages for our hotel chain 86

Our 1047297rm has realized cost savings by experimenting with ways to improve the green quality of our productsservices 80

By regularly investing in new eco-friendly technologiesprocessesstrategies we have gained leading market position 89Our hotel chain has managed to enter lucrative new markets by adopting environmental strategies 83

Our hotel chain has managed t o increase service quality by making its cur rent processes mo re e co- friendly 89

The negative green impact of our 1047297rm s activitie s has le d t o a quality improv ement in pr oductsservice s provided 91

Financial performance (a frac14 94 CR frac14 95 AVE frac14 84)

(Seven-point scale adapted from Moorman and Rust (1999) and Zhou Brown and Dev (2009))Operating pro1047297ts 94

Return on assets 92

Sales turnover 90

Cash-1047298ow 91

Notes (R) denotes a reverse scale (D) denotes that the item was excluded as a result of scale puri 1047297cation procedures




Wende amp Becker 2014) to analyze the data and test the research

hypotheses3 This method is (1) robust especially for small samplesizes and relatively high numbers of constructs (2) stable because

improper or non-convergent solutions are unlikely to occur and(3) reliable because its bootstrapping capabilities can provide solid

results even in limited samples (Kumar Heide amp Wathne 2011)

51 Data puri 1047297cation procedures

First the correlation between the constructs was calculated anddata from the outer model were used to assess their validity andreliability (see Table 2) This was performed by examiningdescriptive statistics scale reliabilities individual factor item

loadings and the average variance extracted (AVE) for eachconstruct Convergent validity was met since each item loadedhighly on its assigned constructs with the lowest value being 80while the AVE for each construct was above the recommended

threshold of 50 (Hair Black Babin Anderson amp Tatham 2012)Discriminant validity was also evident since any cross-loadingbetween items and constructs was low while the squared root of AVE between each pair of constructs exceeded their shared corre-

lation (Fornell amp Larcker 1981) Composite reliability values wereequal to or greater than 90 implying a highly reliable measure-ment of each theoretical construct (Bagozzi amp Yi 1988)

Common method bias (CMB) was tested using the marker var-

iable approach by employing a theoretically unrelated construct(ie respondent tenure) in the analysis as a proxy for commonmethod variance (Lindell amp Whitney 2001) The marker variabledid not exhibit any signi1047297cant correlation with the model con-

structs The average correlation coef 1047297cient for this marker variable

(r M frac14 033) was subsequently used to compute the CMB-adjusted

correlations for the variables under investigation ( JohnstonKhalil Jain amp Cheng 2012) A comparison between the original

and CMB-adjusted correlation matrices revealed no statisticallysigni1047297cant differences (at a frac14 05) All these suggest that common

method bias was not a problem in the study

52 Testing main effects

To test the signi1047297cance of the main hypothesized paths a

structural model following a bootstrapping procedure of 5000 sub-samples was run (Hair Hult Ringle amp Sarstedt 2014) Thefollowing evaluations were subsequently made the quality of theinner model by inspecting the number of signi1047297cant associations

among the constructs the percentage of variance explained by theendogenous latent variables (ie R2) the predictive relevance of each dependent variable (ie Q 2) and the effect size for each hy-pothesized relationship The results revealed that more than 50

percent of the hypothesized relationships were accepted while thevariances explained for eco-based competitive advantage andglobal 1047297nancial performance were high (ie 67 and 34 respec-

tively) In addition using the blindfolding procedure the modelproduced values greater than zero for eco-based competitiveadvantage (ie Q 2 frac14 47) and global 1047297nancial performance (ie

Q 2 frac14 08) which indicates that the model exhibits adequate pre-

dictive relevance while all signi1047297cant effect sizes were at leastmoderate and in some cases strong (Hair et al 2014) Finally themodel produced an acceptable Standardized Root Mean SquareResidual (SRMR frac14 07) which enhances con1047297dence in the quality of

the model (Sarstedt Ringle Henseler amp Hair 2014)4 The results of the analysis appear in Table 3 With the exception of H2 and H5 all

hypotheses related to direct effects were acceptedThe 1047297ndings con1047297rmed H1a H1c and H1d linking eco-based

competitive advantage with organizational learning (b frac14 17

t frac14 242 p lt 05) shared vision (bfrac14 24 t frac14 199 p lt 05) and cross-functional integration (b frac14 41 t frac14 280 p lt 01) Speci1047297cally thestudy con1047297rmed the vital role of the 1047297rms ability in informationacquisition processing and dissemination to reduce the un-

certainties and overcome the complexities in building a competi-tive advantage based on ecological issues (Sharma et al 2004) This

1047297nding is consistent with the fact that shared vision which

Table 2

Correlations and summary statistics

Measures Correlationsa

1 2 3 4 5 6 7

1 Organizational learning 1

2 Relationship building 59 1

3 Shared vision 64 59 14 Cross-functional integration 61 48 74 1

5 Technological sensing amp response 68 76 70 68 1

6 Eco-based competitive advantage 65 56 73 75 66 1

7 Global 1047297nancial performance 07 22 19 30 06 34 1

Summary statistics

Number of items 4 4 4 3 3 6 4

Mean 556 585 537 523 549 505 544

Standard deviation 117 116 111 119 127 118 94

a Correlations greater than jplusmn19j are signi1047297cant at p lt 05

3 The Partial Least SquareseStructural Equations Modeling (PLSeSEM) is an

alternative approach to Covariance-based Structural Equation Modeling (CB-SEM)

PLSeSEM produces models that maximize explained variance of the endogenous

latent variables by estimating partial model relationships in an iterative sequence of ordinary least squares (OLS) regressions (Hair Ringle amp Sarstedt 2011) while CB-

SEM estimates model parameters in such a way as to minimize discrepancies be-

tween estimated and sample covariance matrices (Monecke amp Leisch 2012)

Neither technique is superior to the other as each uses different statistical methods

and both are considered to be appropriate depending on research objectives data

characteristics and model con1047297guration (Hair et al 2014) PLSeSEM (also called

PLS-Path Modeling) though related is not equivalent to PLS Regression (PLS-R)

The former relies on pre-speci1047297ed networks of relationships of constructs and

between constructs and measures (Hair et al 2014) The latter explores linear re-

lationships between multiple independent variables and single or multipledependent variable(s) by constructing composite factors and reducing dimensions

through principal components with the aim of removing multicollinearity and

improving predictive validity (Mateos-Aparicio Morales 2011)

4 Though the SRMR value is considered to be acceptable within SEM research

(ie lt08) unfortunately there are no established guidelines or accepted thresholds

yet in the literature to guide its use with PLSe

SEM (Sarstedt et al 2014)




capitalizes on such knowledge to develop a collective under-standing of environmental aspects cultivates a collaborative spiritto continuously support green initiatives (Russo amp Fouts 1997)Cross-functional integration is also required to coordinate every-

body in the organization to better exploit environmental oppor-tunities so as to stay ahead of the competition in internationalmarkets (Sharma et al 2004 Stone et al 2004)

H1b and H1e referring to the links of relationship building

(b frac14 11 t frac14 96 p gt 05) and technology sensingresponse (b frac14 02

t frac14 13 p gt 05) with green competitive advantage were notcon1047297rmed An explanation for this 1047297nding might be the uniquenature of hotel organizations which (1) have business associates

such as members of the supply chain that usually do not possessthe means to inform them about new environmental de-velopments (2) are always in direct contact with end-users tograsp the needs of the market for green requirements and (3) are

not intensive users of sophisticated environmental technology intheir operations (Erdogan amp Baris 2007)

The study con1047297

rmed that achieving an eco-based competitiveadvantage can enhance the global hotel chains 1047297nancial perfor-

mance (b frac14 34 t frac14 244 p lt 05) in support of H2 This is in har-mony with the 1047297ndings of other previous empirical studies in thehotel industry (eg Carmona-Moreno et al 2004 L opez-Gameroet al 2011) which also underscored the favorable effects of pos-

sessing an eco-based competitive advantage on the 1047297rms 1047297nancialperformance The qualitative input received from hotel managersduring our exploratory interviews clearly indicate that such anadvantage helps enrich the company offering makes it more

attractive to customers (especially those who are sensitive to greenissues) and leads to signi1047297cant savings in resources (ie waterenergy) Such an advantage also enhances the hotel chains repu-tation both locally and internationally and creates positive pub-

licity through word of mouth (WOM)

53 Testing moderation effects

To test the moderating effects of the hotel chains internationalstrategy a sub-group analysis was employed Speci1047297cally the data

for each moderating construct were divided into two groupsdepending on the responses recorded Eco-based competitiveadvantage was then regressed on 1047297nancial performance using thenew data sub-groups The Chow test assessed the statistical sig-

ni1047297cance of the difference in the regression coef 1047297cients acrossevery two sub-groups for each moderating variable (Becker Greve

amp Albers 2009) The results revealed that foreign marketentry mode (F frac14 394 p lt 05) and decision-making autonomy

(F frac14 498 p lt

01) moderate the eco-based competitive

advantage 1047297nancial performance link while global market

con1047297guration (F frac14 73 p gt 05) and business standardizationadaptation (F frac14 93 p gt 05) exert no signi1047297cant moderating effectsThese results lead us to accept H3b and H3c but reject H3a and H3d

(see Table 4)Speci1047297cally the 1047297ndings suggest that the competitive advanta-

geeperformance path is signi1047297cant when global hotel chainschoose joint ventures (bfrac14 50 t frac14 466 p lt 01) rather than wholly

owned subsidiaries (b frac14 14 t frac14 60 p gt 05) as a foreign marketentry mode This stresses the role of national partners in bettersensing green requirements by local stakeholders (eg govern-ments pressure groups buyers) and in taking care to maintain a

good lsquocorporate citizenrsquo image in the communities in which theyoperate (Deniz-Deniz amp Garciacutea-Falcon 2002) In addition the

1047297ndings support the hypothesis that a decentralized (b frac14 72

t frac14 423 p lt 01) rather than centralized (b frac14 10 t frac14 88 p gt 01)

decision-making structure enhances the impact of eco-basedcompetitive advantage on 1047297nancial performance This is consis-

tent with prevailing views about the bene1047297

ts associated withdecentralization in multinational corporations such as 1047298exibility

responsiveness and proactivity which are critical success factors inenvironmental initiatives (Muller 2006)

However the 1047297ndings do notsupport the view that the adoptionof a global (b frac14 26 t frac14 199 p lt 05) rather than a market-

extension (b frac14 22 t frac14 134 p gt 05) approach leads to a strongereffect of competitive advantage on performance To some extentthis is because a vast number of countries now require a minimumset of environmental standards thus making the adoption of eco-

friendly programs compulsory regardless of whether the stra-tegic emphasis is on the home or global market Finally the asso-ciation between competitive advantage and performance does notbecome stronger when the hotel chain adopts an adapted (b frac14 21

t frac14 177 p gt 05) rather than a standardized (b frac14 32 t frac14 109

p gt 05) approach to its international business activities This mightbe explained by recent evidence indicating that the standardiza-tionadaptation decision is situation speci1047297c in the sense that it

depends on ensuring a proper lsquo1047297trsquo between the particular condi-tions prevailing in a foreign country and the characteristics of theorganization to yield superior performance (Katsikeas Samiee ampTheodosiou 2006)

6 Conclusions

This study examines the antecedents and outcomes of an eco-based competitive advantage in global hotel chains an issue of strategic importance in light of growing stakeholder pressures to

protect the natural environment With regard to antecedents the

Table 3

PLS path coef 1047297cients and results

Hypothesized main path Path coef 1047297cient t-Value Result

Organizational learning eco-based competitive advantage 17 242 Supported

Relationship building eco-based competitive advantage 11 96 Not supported

Shared vision eco-based competitive advantage 24 199 Supported

Cross-functional integration eco-based competitive advantage 41 280 Supported

Technological sensing amp response eco-based competitive advantage 02 13 Not supported

Eco-based competitive advantage global 1047297nancial performance 34 244 Supported

R 2 for eco-based competitive advantage 67

R 2 for global 1047297nancial performance 34

Q 2 for eco-based competitive advantage 47

Q 2 for global 1047297nancial performance 08

Standardized Root Mean Square Residual (SRMR) 07

p lt 05 (two-tailed) p lt 01 (two-tailed)




emergence of organizational learning shared vision and cross-

functional coordination as instrumental capabilities in the crea-tion of an eco-based competitive advantage in hotels is in harmonywith the 1047297ndings of other empirical studies in the wider environ-mental management 1047297eld (eg Aragon-Correa 1998 Russo amp

Fouts 1997 Sharma et al 2004 Sharma amp Vredenburg 1998)These capabilities comprise important ingredients of the 1047297rms

market orientation process which means that they are also criticalin becoming an environmentally-oriented organization (Day1994)However two other capabilitiesdnamely relationship buildingand technology sensingresponsed although crucial formanufacturing 1047297rms (especially in heavy industrial sectors) were

downplayed in hotel organizations due mainly to their lessertechnology-intensive nature

The positive impact of eco-based advantage on the global hotelchains 1047297nancial performance is also congruent with the results of

prior empirical studies conducted mainly among manufacturing1047297rms (eg Klassen amp McLaughlin 1996) Despite concerns that thecostly nature of environmentally friendly programs usually resultsin higher prices for end-productsservices (with all the negative

consequences that this mayentail for sales market share and other1047297nancial indicators) this study shows that the bene1047297ts accruedfrom an eco-based competitive advantage (eg new customerattraction customer loyalty reputation) outweigh these damaging

effects In the case of hotels investments related to environmentalprograms do not have the magnitude and diversity of those inmanufacturing 1047297rms to create pressures on increasing end-userprices

Hotels entering foreign markets through joint ventures andadopting a decentralized decision-making approach gain 1047297nancialbene1047297ts from eco-friendly activities which underscores the keyrole of local knowledge in the foreign market to respond more

effectively and ef 1047297ciently to green issues Such knowledge seemsimportant to quickly grasp environmental developments (eg newregulations) solve any ecological problems regarding the 1047297rmsbusiness practices (eg water pollution) and proactively imple-

ment eco-friendly initiatives that can boost the 1047297rms reputation(eg maintaining clean beaches) However the study showed thatin the case of hotel organizations environmental success is notcontingent on the 1047297rms global expansion or standardization

adaptation strategy

61 Managerial implications

The study has several implications for global hotel chain man-

agers First they should instill mechanisms to continually learnhow to identify analyze and swiftly respond to eco-friendly op-portunities (and accommodate environmental problems) in theforeign markets in which they operate Such capability would help

them understand inter alia governmental actions competitors

movements and buyers needs with regard to green issues They

should also develop a common mental frame of reference amongemployees (through for example seminarsworkshops assimila-tion exercises and on-site visits to foreign markets) to help theminterpret and face environmental challenges in a consistent

manner However to achieve maximum effectiveness and ef 1047297-ciency in the way green issues are handled it is crucial to maintain

a high level of coordination among the various functional areas of the organization under the aegis of the environmental or othersenior manager in the hotel chain

Hotel chain managers should also capitalize on the favorableeffects of an eco-friendly competitive edge on 1047297nancial perfor-

mance In this respect they should incorporate into their commu-nication programs elements on both their lsquointernalrsquo eco-friendlybehavior (eg energywater conservation recycling activitieswaste minimization) and lsquoexternalrsquo efforts to protect the bio-

physical environment (eg taking initiatives in drafting industryassociation green-related codes sponsoring community eco-friendly events actively participating in environmental associa-tions) Along with other company offerings the adoption of such a

green approach will help attract eco-sensitive buyers improvecustomer satisfaction and boost company reputation which inturn will improve 1047297nancial results

To further enhance the positive role of eco-friendliness on

1047297nancial performance hotel chain managers should carefully selectthe appropriate international strategies Speci1047297cally collaborationwith local partners in foreign countries should be cultivated (ratherthan relying solely on their own forces) to better understand local

nuances in terms of environmental regulations customer eco-sensitivities and competitive green activity They should also givesubsidiary managers autonomy to handle the environmental issuesin their respective countries Such a decentralized approach would

help them quickly grasp green requirements in the local marketgain a rapport with domestic pressure groups (eg environmentalactivists) and adopt a more proactive stance in exploiting eco-friendly opportunities

62 Future directions

Future research could compare and contrast green-relatedorganizational capabilities of global hotel chains with headquar-

ters in different countries since there are signs that the domesticinstitutional environment plays an important role in developingeco-friendly business thinking (Rugman amp Verbeke 1998) On thesubsidiary side research could shed more light on the nature of the

foreign markets in which the global hotel chain 1047297rm operates Somevariables to examine include (1) the degree of regulatory intensityof ecologicalissues(2) thenature of greenpracticesadoptedby bothdomestic and international rivals (3) the degree of psychological

distance separating headquarters from host countries (4) the level

Table 4

Results of moderation analysis

Hypothesized moderating effect on eco-based advantage eglobal 1047297nancial performance link

Sub-groups R2DR2 b t -Value F -value

H3a Effect will be stronger when adopting a global rather

than a market-extension con1047297guration

Global con1047297guration (n1 frac14 62) 07 02 26 199 73

Market-extension con1047297guration (n2 frac14 40) 05 22 134

H3b Effect will be stronger when adopting a joint venture

rather than a wholly owned subsidiary entry mode

Joint venture entry mode (n1 frac14 70) 25 23 50 466 394

Wholly owned subsidiaries mode (n2 frac14 32) 02 14 60

H3c Effect will be stronger when adopting a decentralizedrather than a centralized decision-making approach

Decentralized decision-making (n1 frac14 20) 46 43 72 423 498Centralized decision-making (n2 frac14 82) 03 10 88

H3d Effect will be stronger when adopting an adaptedrather than a standardized foreign business approach

Foreign business adaptation (n1 frac14 75) 08 04 21 1 77 93Foreign business standardization (n2 frac14 27) 04 32 109

p lt 05 p lt 01




of public awareness and knowledge in the host country with regardto environmental matters and (5) the stage of economic develop-

ment of the foreign country whether underdeveloped or advancedAnother line of research could focus on the hotel chains stra-

tegic approach to ecological issues whether reactive (the 1047297rmpassively responds to competitors moves andor environmental

regulations) or proactive (the1047297rm takes a more aggressive stance toexploit environmental opportunities) Other international strategicissues with a potential effect on the hotel chains ecologicalbehavior that warrant investigation include whether the 1047297rm fol-

lows (1) a concentrated (ie operating in a few markets) or aspreading (ie having activities in many markets) internationalmarket expansion (2) a green1047297eld (ie establishing entirely newbusiness ventures) or an acquisition (ie taking over already

established 1047297rms) approach when entering foreign markets and(3) a geographical (ie organized along geographic regions) orfunctional (ie organized according to enterprise functions)structure

Finally the data of this study are subjective in nature relying oninput from a single key informant in each organization Althoughthe literature provides many examples of how perceptual data

corroborate with objective factual organizational data (eg Judge amp

Douglas 1998 Morgan et al 2004) future research (whenever thisis feasible) could utilize objective archival data which would enable

1047297ndings to be veri1047297ed Another limitation of the study refers to the

cross-sectional nature of the data collected which are based onevents collected at a speci1047297c point in time However since sometime has to elapse before organizational capabilities can help toachieve a competitive advantage and a competitive advantage to

yield a superior 1047297nancial performance it is also important toembark on longitudinal monitoring of changes in the ecologicalbehavior of hotel chains A more qualitative analysis in the form of case studies would also facilitate a deeper understanding of the

interconnections of the constructs used in this study

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Amit R amp Schoemaker P J H (1993) Strategic assets and organizational rentStrategic Management Journal 14(1) 33e46

Aragon-Correa J A (1998) Strategic proactivity and 1047297rm approach to the naturalenvironment Academy of Management Journal 41(5) 556e567

Aragon-Correa J A Hurtado-Torres N Sharma S amp Garciacutea-Morales V J (2008)Environmental strategy and performance in small 1047297rms a resource-basedperspective Journal of Environmental Management 86 (1) 88e103

Armstrong J S amp Overton T S (1977) Estimating nonresponse bias in mail sur-veys Journal of Marketing Research 14(3) 396e402

Azzone G amp Bartele U (1994) Exploiting green strategies for competitiveadvantage Long Range Planning 27 (6) 69e81

Azzone G Brophy M Noci G Welford R amp Young W (1997) A stakeholdersview of environmental reporting Long Range Planning 30(5) 699e709

Bagozzi R P amp Yi Y (1988) On the evaluation of structural equation models

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Baloglu S amp Jones T (2014) Energy ef 1047297ciency initiatives at upscale and luxury USlodging properties utilization awareness and concerns Cornell HospitalityQuarterly 56 1e11

Banerjee S B Iyer E S amp Kashyap R K (2003) Corporate environmentalismantecedents and in1047298uence of industry type Journal of Marketing 67 (2)106e122

Becker J U Greve G amp Albers S (2009) The impact of technological and orga-nizational implementation of CRM on customer acquisition maintenance andretention International Journal of Research in Marketing 26 (3) 207e215

Bellesi F Lehrer D amp Tal A (2005) Comparative advantage the impact of ISO14001 environmental certi1047297cation on exports Environmental Science amp Tech-nology 39(7) 1943e1953

Bingham C B Eisenhardt K M amp Furr N R (2007) What makes a process acapability Heuristics strategy and effective capture of opportunities Strategic

Entrepreneurship Journal 1(12) 27e

47

Bohdanowicz P Zientara P amp Novotna E (2011) International hotel chains andenvironmental protection an analysis of Hiltons we care program (Europe2006e2008) Journal of Sustainable Tourism 19(7) 797e816

Cannon J P amp Perreault W D Jr (1999) Buyeresupplier relationships in businessmarkets Journal of Marketing Research 31(4) 439e460

Carmona-Moreno E Cespedes-Lorente J amp de Burgos-Jimenez J (2004) Envi-ronmental strategies in Spanish hotels contextual factors and performanceService Industries Journal 24(3) 101e130

Chabowski B R Mena J A amp Gonzalez-Padron T L (2011) The structure of sustainability research in marketing 1958e2008 a basis for future research

opportunities Journal of the Academy of Marketing Science 39(1) 55e

70Chan E S W amp Hawkins R (2012) Application of EMSs in a hotel context a case

study International Journal of Hospitality Management 31 405e418Chan W W amp Mak B L (2004) An estimation of the environmental impact of

diesel oil usage in Hong Kong hotels Journal of Sustainable Tourism 12(4)346e355

Chan W W amp Wong K (2006) Estimation of weight of solid waste newspapers inHong Kong hotels Journal of Hospitality and Tourism Research 30(2) 231e245

Christmann P (2004) Multinational companies and the natural environmentdeterminants of global environmental policy standardization The Academy of Management Journal 47 (5) 747e760

Clark T Varadarajan P R amp Pride W M (1994) Environmental managementthe construct and research propositions Journal of Business Research 29(1)23e38

Claver-Cortes E Molina-Azorin J F Pereira-Moliner J amp Lopez-Gamero M D(2007) Environmental strategies and their impact on hotel performance

Journal of Sustainable Tourism 15 663e679Day G S (1994) The capabilities of market-driven organizations Journal of Mar-

keting 58(4) 37e52Dechant K amp Altman B (1994) Environmental leadership from compliance to

competitive advantage Academy of Management Executive 8(2) 7e20Deng S amp Burnett J (2002) Water use in hotels in Hong Kong International Journal

of Hospitality Management 21(1) 57e66Deniz-Deniz M D C amp Garciacutea-Falcon J M (2002) Determinants of the multina-

tionals social response Empirical application to international companiesoperating in Spain Journal of Business Ethics 38(4) 339e370

Dillman D A (2000) Mail and internet surveys The tailored design method (2nd ed)New York John Wiley

Eisenhardt K M amp Martin J A (2000) Dynamic capabilities what are theyStrategic Management Journal 21(10e11) 1105e1121

El Dief M amp Font X (2010) The determinants of hotels marketing managersgreen marketing behavior Journal of Sustainable Tourism 18(2) 157e174

El Dief M amp Font X (2012) Determinants of environmental management in theRed Sea hotels personal and organizational values and contextual variables

Journal of Hospitality amp Tourism Research 36 115e137Erdogan N amp Baris E (2007) Environmental protection programs and conser-

vation practices of hotels in Ankara Turkey Tourism Management 28(2)

604e

614Erkus -euroOztuumlrk H amp Eraydin A (2010) Environmental governance for sustainabletourism development collaborative networks and organization building in theAntalya tourism region Tourism Management 31(1) 113e124

Fornell C amp Larcker D F (1981) Evaluating structural equation models with un-observable variables and measurement error Journal of Marketing Research

28(1) 39e50Fraj E Matute J amp Melero I (2015) Environmental strategies and organizational

competitiveness in the hotel industry the role of learning and innovation asdeterminants of environmental success Tourism Management 46 30e42

Garay L amp Font X (2012) Doing good to do well Corporate social responsibilityreasons practices and impacts in small and medium accommodation enter-prises International Journal of Hospitality Management 31(2) 329e337

Geuroossling S (2015) New performance indicators for water management in tourismTourism Management 46 233e244

Grove S J Fisk R P Pickett G M amp Kangun N (1996) Going green in the servicesector social responsibility issues implications and implementation European

Journal of Marketing 30(5) 56e66Hair J F Jr Black W C Babin B J Anderson R E amp Tatham R L (2012)

Multivariate data analysis Englewood Cliffs NJ Pearson Prentice-HallHairJ F JrHultGT MRingleCamp Sarstedt M(2014) A primeron partial leastsquares

structural equation modeling (PLS eSEM) Los Angeles CA Sage PublicationsHair J F Ringle C M amp Sarstedt M (2011) PLS-SEM indeed a silver bullet The

Journal of Marketing Theory and Practice 19(2) 139e152Heather S amp Ditte H (2006) Corporate UK plays the green card Progressive busi-

nesses are taking environmental issues seriously but others still need a prodLondon UK The Observer

Holcomb J L Upchurch R S amp Okumus F (2007) Corporate social responsibilitywhat are top hotel companies reporting International Journal of ContemporaryHospitality Management 19(67) 461e475

Hsiao T Chuang C Kuo N amp Yu S M (2014) Establishing attributes of anenvironmental management system for green hotel evaluation International

Journal of Hospitality Management 36 197e208Hudson S amp Miller G A (2005) The responsible marketing of tourism the case of

Canadian Mountain Holidays Tourism Management 26 (2) 133e142Husted B W amp Allen D B (2006) Corporate social responsibility in the multi-

national enterprise strategic and institutional approaches Journal of Interna-tional Business Studies 37 (6) 838e849




Inohue Y amp Lee S (2011) Effects of different dimensions of corporate social re-sponsibility on corporate 1047297nancial performance in tourism-related industriesTourism Management 32 790e804

Jennings P D amp Zandbergen P A (1995) Ecologically sustainable organizations aninstitutional approach Academy of Management Review 20(4) 1015e1052

Johnston W J Khalil S Jain M amp Cheng J M S (2012) Determinants of jointaction in international channels of distribution the moderating role of psychicdistance Journal of International Marketing 20(3) 34e49

Judge W Q amp Douglas T J (1998) Performance implications of incorporatingnatural environmental issues into the strategic planning process an empirical

assessment Journal of Management Studies 35(2) 241e

262Kasim A Gursoy D Okumus F amp Wong A (2014) The importance of water

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Kassinis G I amp Soteriou A C (2003) Greening the service pro1047297t chain the impactof environmental management practices Production and Operations Manage-ment 12(3) 386e403

Katsikeas C S Samiee S amp Theodosiou M (2006) Strategy 1047297t and performanceconsequences of international marketing standardization Strategic Manage-ment Journal 27 867e890

Kirchoff J F Koch C amp Nichols B S (2011) Stakeholder perceptions of greenmarketing the effect of demand and supply integration International Journal of Physical Distribution amp Logistics Management 41(7) 684e696

Klassen R D amp McLaughlin C P (1996) The impact of environmental managementon 1047297rm performance Management Science 42(8) 1199e1214

Krasnikov A amp Jayachandran S (2008) The relative impact of marketing research-and-development and operations capabilities on 1047297rm performance Journal of Marketing 72(3) 1e11

Kumar A Heide J B amp Wathne K H (2011) Performance implications of mis-matched governance regimes across external and internal relationships Journalof Marketing 75(2) 1e17

Le Y Hollenhorst S Harris C McLaughlin W amp Shook S (2006) Environmentalmanagement a study of Vietnamese hotels Annals of Tourism Research 33(2)545e567

Leonidou C N amp Leonidou L C (2011) Research into environmental marketingmanagement a bibliographic analysis European Journal of Marketing 45(12)68e103

Lindell M K amp Whitney D J (2001) Accounting for common method variance incross-sectional research designs Journal of Applied Psychology 86 114e121

L opez-Gamero M D Claver-Cortes E amp Molina-Azorin J F (2008) Complemen-tary resources and capabilities for an ethical and environmental management aqualquan study Journal of Business Ethics 82 701e732

L opez-Gamero M D Molina-Azorin J F amp Claver-Cortes E (2011) The relation-ship between managers environmental perceptions environmental manage-ment and 1047297rm performance in Spanish hotels a whole framework International

Journal of Tourism Research 13 141e163Mateos-Aparicio Morales G (2011) Partial least squares (PLS) methods origins

evolution and application to social sciences Communications in Statistics eTheory and Methods 40(13) 2305e2317

Menon A amp Menon A (1997) Enviropreneurial marketing strategy the emer-gence of corporate environmentalism as market strategy Journal of Marketing61(1) 51e67

Menon A Menon A Chowdhury J amp Jankovich J (1999) Evolving paradigm forenvironmental sensitivity in marketing programs a synthesis of theory andpractice Journal of Marketing Theory amp Practice 7 (2) 1e15

Miles M P amp Covin J G (2000) Environmental marketing a source of reputa-tional competitive and 1047297nancial advantage Journal of Business Ethics 23(3)299e311

Miles M P amp Munilla L S (1993) The eco-orientation an emerging businessphilosophy Journal of Marketing Theory and Practice 1(2) 43e51

Molina-Azorin J F Claver-Cortes E Pereira-Moliner J amp Tari J J (2009) Envi-ronmental practices and 1047297rm performance an empirical analysis in the Spanishhotel industry Journal of Cleaner Production 17 516e524

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Moorman C amp Rust R T (1999) The role of marketing [Special issue] Journal of

Marketing 63 180e

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performance a theoretical model and empirical assessment Journal of Mar-keting 68(1) 90e108

Morgan N A Katsikeas C S amp Vorhies D W (2012) Export marketing strategyimplementation export marketing capabilities and export venture perfor-mance Journal of the Academy of Marketing Science 40(2) 271e289

Muller A (2006) Global versus local CSR strategies European Management Journal 24(23) 189e198

Nunnally J C amp Bernstein I H (1994) Psychometric theory (3rd ed) New YorkMcGraw-Hill

Orsato R J (2006) Competitive environmental strategies when does it pay to begreen California Management Review 48(2) 127e143

Peng Y amp Lin S (2008) Local responsiveness pressure subsidiary resources greenmanagement adoption and subsidiarys performance evidence from Taiwanesemanufactures Journal of Business Ethics 79(12) 199e212

Pinkse J Kuss M J amp Hoffman V H (2010) On the implementation of a lsquoglobalrsquoenvironmental strategy the role of absorptive capacity International BusinessReview 19 160e177

Porter M E amp van der Linde C (1995) Green and competitive ending the stale-mate Harvard Business Review 73(5) 120e133

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performance Costa Ricas certi1047297cation for sustainable tourism Policy Sciences 38(23) 107e127

Rodriguez F J G amp Cruz Y M A (2007) Relation between socialeenvironmentalresponsibility and performance in hotel 1047297rms International Journal of Hospi-tality Management 26 824e839

Rodriguez-Diaz M amp Espino-Rodriguez T F (2006) Developing relational capa-bilities in hotels International Journal of Contemporary Hospitality Management18(1) 25e40

Rugman A B amp Verbeke A M (1998) Corporate strategy and internationalenvironmental policy Journal of International Business Studies 29(4)819e833

Russo M V amp Fouts P A (1997) A resource-based perspective on corporateenvironmental performance and pro1047297tability Academy of Management Journal40(3) 534e559

Rutty M Matthews L Scott D amp Del Matto T (2014) Using vehicle monitoringtechnology and eco-driver training to reduce fuel use and emissions in tourisma ski resort case study Journal of Sustainable Tourism 22(5) 787e800

Sarstedt M Ringle C M Henseler J amp Hair J F (2014) On the emancipation of PLSeSEM a commentary on Rigdon (2012) Long Range Planning 47 (3)154e160

Segarra-O~na M Peiro-Signes A Verma R amp Miret-Pastor L (2013) Doesenvironmental certi1047297cation help the economic performance of hotels Evi-dence from the Spanish hotel industry Cornell Hospitality Quarterly 53(3)242e256

Shah K U (2011) Strategic organizational drivers of corporate environmental re-sponsibility in the Caribbean hotel industry Policy Sciences 44 321e344

Sharma S (2009) The mediating effect of information availability between orga-nization design variables and environmental practices in the Canadian hotelindustry Business Strategy and the Environment 18 266e276

Sharma S Aragon-Correa J A amp Rueda-Manzanares A (20 04) A contingentresource-based analysis of environmental strategy in the ski industry (pp1e26) ASAC

Sharma S Aragon-Correa J A amp Rueda-Manzanares A (2007) The contingentin1047298uence of organizational capabilities on proactive environmental strategy inthe service sector an analysis of North American and European ski resorts

Canadian Journal of Administrative Sciences 24 268e

283Sharma S amp Vredenburg H (1998) Proactive corporate environmental strategyand the development of competitively valuable organizational capabilitiesStrategic Management Journal 19(8) 729e753

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Singal M (2014) The link between 1047297rm 1047297nancial performance and investment insustainability initiatives Cornell Hospitality Quarterly 55 19e30

Smerecnik K R amp Andersen P A (2011) The diffusion of environmental sus-tainability innovations in North American hotels and ski resorts Journal of Sustainable Tourism 19(2) 171e196

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Dr Leonidas C Leonidou (PhD MSc University of Bath)is a Professor of Marketing at the School of Economics andManagement of the University of Cyprus His currentresearch interests are in the areas of international mar-ketingpurchasing relationship marketing strategic mar-keting socially responsible marketing and marketing inemerging economies He has published extensively inthese 1047297elds and his articles appeared in various journalssuch as the European Journal of Marketing Industrial Mar-keting Management International Business Review Inter-

national Marketing Review Journal of the Academy of Marketing Science Journal of Business Ethics Journal of Business Research Journal of International Business Studies

Journal of International Marketing Journal of World Busi-ness Management International Review and TourismManagement

Dr Constantinos N Leonidou (PhD University of LeedsMBA Cardiff University) is an Associate Professor of Mar-keting at Leeds University Business School University of Leeds UK His main research interests focus on sustain-ability international marketing consumer behavioradvertising and tourism marketing His research hasappeared in various journals such as European Journal of Marketing Industrial Marketing Management Journal of the

Academy of Marketing Science Journal of Business Ethics Journal of Business Research Journal of International Mar-keting Journal of World Business and Tourism Management

Dr Thomas A Fotiadis (PhD MBA University of Macedonia MSc Aristotle University of Thessaloniki) isan Assistant Professor of Marketing at Democritus Uni-versity of Thrace Greece His research interests are sus-tainability tourism marketing and high-tech marketingHe has published in various journals including TourismManagement Journal of International Marketing and Inter-national Business Review

Dr Bilge Aykol (PhD MBA Dokuz Eylul University) is anAssociate Professor of Marketing at the Faculty of Businessof Dokuz Eylul University Her research interests center oninternational marketing industrial marketing and expe-rience marketing Her articles appeared in Journal of In-ternational Marketing Management International Reviewand Journal of Small Business Management




written on ecological issues (2) a signi1047297cant diversity in the routesfollowed to study the subject together with increased in-depth

coverage of the various topics examined and (3) a marked transi-tion of this 1047297eld from an identi1047297cation and exploration stage to-ward a phase characterized by greater maturity sophistication andrigor

Despite these positive signs the pertinent literature has beenrelatively silent on three critical issues surrounding environmental-related phenomena First environmental studies have concen-trated mainly on manufacturing 1047297rms with the hotel industry (and

the wider service sector) receiving much less attention (Carmona-Moreno Cespedes-Lorente amp de Burgos-Jimenez 2004) Howeverinvestigating the green business practices of hotels is of paramountimportance because (1) they are usually heavy users of resources

(eg electricity) with potential harmful effects on the environment(2) they rely on ecological aspects of their product offering to in-

1047298uence the level of satisfaction in customer experience and (3)they increasingly face stricter environmental regulations necessi-

tating greater incorporation of sustainability elements in their op-erations (Alvarez-Gil Burgos-Jimenez amp Cespedes-Lorente 2001)

Second studies on green-related international business topics

are generally limited though many signs highlight the need to

examine them further (Peng amp Lin 2008 Pinkse Kuss amp Hoffman2010) For example many foreign markets contain a growingsegment of consumers who are sensitive to ecological matters and

strive to purchase productsservices from 1047297rms adopting an eco-friendly perspective (Miles amp Covin 2000) Moreover anincreasing number of 1047297rms prefer to compete against their localandor foreign competitors on environmental and other socially

responsible dimensions (Bellesi Lehrer amp Tal 2005) Furthermorerecent developments in communication information and socialmedia help expose positive or negative elements of the 1047297rmsenvironmental actions to buyers and other stakeholders around the

globe (Kirchoff Koch amp Nichols 2011)Third the factors leading to the creation of an eco-based

competitive advantage and business performance remain unclear

(Rodriguez amp Cruz 2007) For example although research is rela-tively adequate on the internal determinants of the 1047297rms envi-ronmental competitive edge such as company size (El Dief amp Font2010) organizational design (Sharma 2009) top managementeducation level (Rivera amp de Leon 2005) and green-sensitive

leadership (Smerecnik amp Andersen 2011) the role of more dy-namic 1047297rm elements (eg organizational capabilities) in achievingan eco-friendly advantage has only been tangentially tackled Inaddition studies have examined the performance outcomes of the

1047297rms environmental behavior (eg Alvarez-Gil et al 2001Kassinis amp Soteriou 2003) but knowledge of how an eco-basedadvantage can enhance the 1047297rms 1047297nancial performance is limited

This study aims to shed light on these crucial issues by devel-

oping and testing a model of the organizational capabilities driving

an eco-based competitive advantage and performance in globalhotel chains It speci1047297cally focuses on three key research questions(1) How can different organizational capabilities of a global hotel

chain namely organizational learning relationship buildingshared vision cross-functional integration and technologysensingresponse help create an eco-based competitive advan-

tage (2) How can such an advantage which is derived from theadoption of an environmentally friendly behavior (such as pollu-tion control energy saving and recycling) enhance the hotelchains global1047297nancial performance (3) What is the speci1047297c roleof

certain dimensions of the hotel chains international strategynamely global market con1047297guration foreign entry mode decision-making autonomy and business standardizationadaptation inmoderating the association between competitive advantage and

1047297nancial performance

The study is theoretically grounded on the dynamic capabilitiesparadigm which posits that over time organizations can integrate

build and recon1047297gure internal and external competencies toaddress environmental volatility and generate new forms of advantage (Teece Pisano amp Shuen 1997) The dynamic nature of these capabilities enables the 1047297rm to acquire combine and trans-

form tangible (eg 1047297nancial) and intangible (eg reputational)resources in different ways so as to match constantly changingmarket conditions and offer values of strategic intent (MorganKatsikeas amp Vorhies 2012) In essence dynamic capabilities are

the means for activating organizational resources updating theirstatus and even safeguarding their mere existence In brief they actas connecting bonds that help the 1047297rm effectively adapt to changesin the overall business environment enhance its competitive edge

and improve its performance (Krasnikov amp Jayachandran 2008)

2 Green hotel management literature

Scholarly efforts on environmentally-related issues in the hotelindustry have signi1047297cantly intensi1047297ed in the past decade Howeveronly a few studies (eg L opez-Gamero Claver-Cortes amp Molina-

Azorin 2008) have focused on the organizational capabilities

competitive advantage and performance implications related tohotel eco-friendly practices Moreover with the exception of somestudies with an international focus (eg Bohdanowicz Zientara ampNovotna 2011) the bulk of this research has adopted a domesticperspective or drawn comparisons across countries The pertinentliterature can be organized into three broad areas internal driversof environmental behavior green management practices and

strategies and eco-friendly competitive advantage andperformance

21 Internal drivers of environmental behavior

Internal factors driving hotel environmental behavior havemainly involved 1047297rm demographic characteristics Speci1047297cally

while research has found that size chain af 1047297liation star class andmodernization level (age) of the hotel are positively related to pro-environmental behavior (Alvarez-Gil et al 2001 Carmona-Morenoet al 2004 El Dief amp Font 2010 2012) foreign ownership statusyields mixed results (Shah 2011) Moreover the adoption of (or

intention to adopt) environmental management practices is posi-tively in1047298uenced by hotel organizational design (Sharma 2009)the presence of a written environmental policy (Shah 2011) theuse of certain operations management techniques (Alvarez-Gil

et al 2001) the extent of staff training (Chan amp Hawkins 2012)and the possession of voluntary-based business values (El Dief ampFont 2010) Furthermore top management characteristics suchas age (El Dief amp Font 2010) level of education (Rivera amp de Leon

2005) and altruisticmoral behavior (Garay amp Font 2012) have a

favorable effect on the adoption of hotel ecological practicesResearch also reports that certain organizational resources (eg

physical 1047297nancial) and capabilities (eg strategic proactivity

continuous innovation) are conducive to an eco-friendly hotelbusiness approach For example Shah (2011) stresses foreignownership chain af 1047297liation and 1047297nancial availability as vital re-

sources in building a corporate environmental responsibilityamong hotels Fraj Matute and Melero (2015) also report thatlearning orientation and innovativeness are instrumental organi-zational capabilities in the execution of proactive environmental

strategies Moreover L opez-Gamero Molina-Azorin and Claver-Cortes (2011) distinguish between lsquoexistingrsquo and lsquonewly acquiredrsquo

resources and capabilities while the former refer to sets of tech-nologies skills and knowledge generated and enlarged over time

the latter correspond to the acquisition of new resources resulting




















Shah 2011)








improvement








loyalty















































H3dH3c

H2

H1e

H1d

H1c

H1b

H1a

Organizational

learning

Relationship

building

Shared

vision

Cross-

functional

integration

Technology

sensing amp

response

Eco-based

competitive

advantage

Global

financial

performance

Global

market

configuration

Foreign

market entry

mode

Decision-

making

autonomy

Business

standardization

adaptation

H3a H3b











































































4 Study methodology






















chains
























veri1047297













Table 1





































Return on assets 92

Sales turnover 90

Cash-1047298ow 91



































Table 2



1 2 3 4 5 6 7







Summary statistics


Mean 556 585 537 523 549 505 544











































(F frac14 498 p lt




















6 Conclusions



Table 3






























adaptation strategy






















Table 4
















p lt 05 p lt 01



































47
























604e
















































Marketing 63 180e







































































Shah 2011)








improvement








loyalty















































H3dH3c

H2

H1e

H1d

H1c

H1b

H1a

Organizational

learning

Relationship

building

Shared

vision

Cross-

functional

integration

Technology

sensing amp

response

Eco-based

competitive

advantage

Global

financial

performance

Global

market

configuration

Foreign

market entry

mode

Decision-

making

autonomy

Business

standardization

adaptation

H3a H3b











































































4 Study methodology






















chains
























veri1047297













Table 1





































Return on assets 92

Sales turnover 90

Cash-1047298ow 91



































Table 2



1 2 3 4 5 6 7







Summary statistics


Mean 556 585 537 523 549 505 544











































(F frac14 498 p lt




















6 Conclusions



Table 3






























adaptation strategy






















Table 4
















p lt 05 p lt 01



































47
























604e
















































Marketing 63 180e


















































































H3dH3c

H2

H1e

H1d

H1c

H1b

H1a

Organizational

learning

Relationship

building

Shared

vision

Cross-

functional

integration

Technology

sensing amp

response

Eco-based

competitive

advantage

Global

financial

performance

Global

market

configuration

Foreign

market entry

mode

Decision-

making

autonomy

Business

standardization

adaptation

H3a H3b











































































4 Study methodology






















chains
























veri1047297













Table 1





































Return on assets 92

Sales turnover 90

Cash-1047298ow 91



































Table 2



1 2 3 4 5 6 7







Summary statistics


Mean 556 585 537 523 549 505 544











































(F frac14 498 p lt




















6 Conclusions



Table 3






























adaptation strategy






















Table 4
















p lt 05 p lt 01



































47
























604e
















































Marketing 63 180e





























































































































4 Study methodology






















chains
























veri1047297













Table 1





































Return on assets 92

Sales turnover 90

Cash-1047298ow 91



































Table 2



1 2 3 4 5 6 7







Summary statistics


Mean 556 585 537 523 549 505 544











































(F frac14 498 p lt




















6 Conclusions



Table 3






























adaptation strategy






















Table 4
















p lt 05 p lt 01



































47
























604e
















































Marketing 63 180e



































































4 Study methodology






















chains
























veri1047297













Table 1





































Return on assets 92

Sales turnover 90

Cash-1047298ow 91



































Table 2



1 2 3 4 5 6 7







Summary statistics


Mean 556 585 537 523 549 505 544











































(F frac14 498 p lt




















6 Conclusions



Table 3






























adaptation strategy






















Table 4
















p lt 05 p lt 01



































47
























604e
















































Marketing 63 180e































































Table 1





































Return on assets 92

Sales turnover 90

Cash-1047298ow 91



































Table 2



1 2 3 4 5 6 7







Summary statistics


Mean 556 585 537 523 549 505 544











































(F frac14 498 p lt




















6 Conclusions



Table 3






























adaptation strategy






















Table 4
















p lt 05 p lt 01



































47
























604e
















































Marketing 63 180e





















































































Table 2



1 2 3 4 5 6 7







Summary statistics


Mean 556 585 537 523 549 505 544











































(F frac14 498 p lt




















6 Conclusions



Table 3






























adaptation strategy






















Table 4
















p lt 05 p lt 01



































47
























604e
















































Marketing 63 180e









































































(F frac14 498 p lt




















6 Conclusions



Table 3






























adaptation strategy






















Table 4
















p lt 05 p lt 01



































47
























604e
















































Marketing 63 180e



































































adaptation strategy






















Table 4
















p lt 05 p lt 01



































47
























604e
















































Marketing 63 180e






















































































47
























604e
















































Marketing 63 180e


















































































Marketing 63 180e































































Documents

Leonidou Et Al 2015