The antecedents and performance outcomes of service innovation: the perspectives of hotel industry in Sarawak / Margaret Lucy Gregory

For the past decade, the service sector has seen innovation-led changes that result in
greater dynamism productivity growth rate. Despite the importance of innovation to
all organisations, prior research has mainly focused on high technology and
manufacturing industries. The hotel industry is characterised as a human-intensive
service provider, therefore, innovation, particularly service innovation, does not
generally depend on technological and scientific contributions. Most often, innovation
in this industry is derived from human interaction that often leads to little adjustments
or continuous improvement to meet potential customer expectations and to satisfy the
current customers. Although several recent studies have begun to address this issue,
an understanding of service innovation in low-technology and service industries,
particularly hotel firms, is less well understood. Applying the resource-based theory
and supported by a dynamic capabilities’ perspective, this study attempts to investigate
the antecedents and performance outcomes of service innovation of the rated hotels
with one to a five-star rating in Sarawak. Although antecedents of innovation have
been studied, studies focusing on antecedents of service innovation between various
services are scant. A non-probability sampling of purposive sampling was used in this
study whereby only hotels that have a star rating from one to five stars were chosen
and included in the sample based on the list of registered hotels provided by Sarawak
Ministry of Culture, Arts and Tourism Malaysia. The partial least square (PLS-SEM)
was applied to examine the direct and mediating effects of hypotheses. Only
entrepreneurial orientation and market orientation were confirmed to have a significant
positive relationship with service orientation. Service innovation was also found to
mediate the relationships between entrepreneurial orientation and firm performance
and between market orientation and firm performance as well. This study provides
several theoretical and managerial contributions and provides further insights on the
antecedents and performance outcomes of service innovation particularly in the hotel
industry in Sarawak. Several potential avenues for future research were also identified
and proposed. In short, this study provides an understanding of the antecedents and
performance outcomes of service innovation, particularly in the hotel industry.