Strategic value and resources and capabilities of the information systems area and their impact on organizational performance in the hotel sector

Strategic value and resources and

capabilities of the information systems area

and their impact on organizational

performance in the hotel sector

Antonia M. Gil-Padilla and Toma´s F. Espino-Rodrı´guez

Abstract

Purpose – An improvement in the management of information system (IS) based resources and

capabilities of hotels must affect competitive advantage. Based on that premise, this work has two aims.

The first is to determine how the strategic value of the IS area affects the organizational performance of

three-, four- and five-star hotels. The second is to check how it influences the resources and capabilities

used in the IS area of hotel companies in a determined tourist destination, and their relationship with

organizational performance.

Design/methodology/approach – The study was conducted on a representative sample of hotels in

Gran Canaria, Spain. It takes the framework of Bharadwaj as a reference to help companies tackle the

management of the IS area and to develop a superior capability in that activity.

Findings – The results of the study indicate that the more valuable, non-substitutable and inimitable the

IS area is, the better the non-financial performance is. The results also show that the resources and

capabilities that most affect hotel performance are the internal and external technical resources and the

capabilities of the IS area to influence and strengthen relations with users and with different areas of the

hotel. The work also finds that organizational capabilities have a particular influence on non-financial

performance, especially that related to organizational quality.

Research limitations/implications – This study helps to establish a new framework of analysis in the

literature on IS management by introducing a perspective of analysis for the study of the strategic

deployment of IS attributes that is based on the resource based view of the firm.

Practical implications – This paper constitutes a suitable framework to begin the diagnosis of the

situation of each hotel regarding its available IS resources and capabilities and to identify and select the

IS resources and capabilities that make greater contributions to hotel profitability and quality.

Originality/value – This work serves to help identify which IS resources and capabilities are most

important in the development of distinctive hotel competences.

Keywords Information systems, Hotels, Value analysis, Competitive strategy,

Organizational performance

Paper type Research paper

1. Introduction

The continuous adaptation to the international context, and the fierce competition that

today’s hotels face are leading some of them to consider improving their competitiveness by

identifying new strategies to help them improve performance. One way of doing so is to give

strategic value to the management of information systems (IS) resources. In this respect, we

consider it necessary to know the strategic approach that can be attributed to those

resources, and their possible links with performance. In the case of tourism companies, it is

essential that the business information, together with the technologies and systems

supporting it, is managed effectively and efficiently in order to favor the development of a

distinctive capability that leads to a sustainable competitive advantage. Investment in IT

DOI 10.1108/16605370810901562 VOL. 63 NO. 3 2008, pp. 21-47, Q Emerald Group Publishing Limited, ISSN 1660-5373 j TOURISM REVIEW j PAGE 21

Antonia M. Gil-Padilla and

Toma´s F. Espino-Rodrı´guez

are Associate Professors,

both at the University of Las

Palmas de Gran Canaria,

Las Palmas de Gran

Canaria, Spain.

thus benefits the hotel if it enables customers to have a better experience and the hotel staff

to work more efficiently to attend customers better (Law and Jogaratnam, 2005).

Therefore, a new perspective of the application of the IS resources that fully exploits their use

must be proposed. That means not only using them well, but also developing the ability to

use them better than the competition (Cornella´, 1994). In this context, the management and

the strategic value of IS resources become a priority and may be a determining factor in

improving competitiveness and achieving advantages over the competition. In this paper,

we propose the following objectives:

1. To analyze the relationship between the strategic value of the IS area and organizational

performance.

2. To evaluate the management of the IS area according to the contribution of the resources

and capabilities used in that activity to hotels’ organizational performance.

With those objectives in mind, we have structured the work in three sections. In the first part,

we establish the theoretical framework that serves as a reference in the analysis of the IS

activity according to its contribution to organizational performance within the context of the

resource and capability based view of the firm. In the second part, we explain the setting of

the research and the methodology employed to identify the principal resources and

capabilities that hotels use in the IS area. In the third part, we present the results obtained

and analyze the data in order to test the objectives. Finally, the principal conclusions of the

empirical work are presented.

2. Theoretical foundations

In recent years, the impact of information systems/information technology (IS/IT) on

organizational performance has been a concept of great interest to researchers. There are

fewer studies of the hotel sector that analyse the relationship between IS/IT resources and

capabilities and performance hotel. However, the analyses in the different studies have

focused on describing the potential offered by those tools to obtain competitive advantages

in other sectors. That tendency is reflected in the number of studies analyzing the role of IS

area resources and capabilities and their impact on firm performance (Turner, 1982; Cron

and Sobol, 1983; Strassman, 1990; Sabnerwal and King, 1991; Henderson and

Venkatraman, 1993; Mahmood and Mann, 1993; Kettinger et al., 1994; Mata et al., 1995;

Ross et al., 1996; Hitt and Brynjolfsson, 1996; Bharadwaj et al., 1999; Sircar et al., 2000;

Hayes et al., 2001). However, despite the fact that some works have found that the IS/IT have

a significant impact on firm performance, others produced contradictory results that are

difficult to compare given the heterogeneity both of the objectives of the studies and of the

methodologies and measurements used. This may explain why the fundamental

mechanisms that link performance to IS/IT have been the subject of few research works

(Bharadwaj, 2000).

Based on the above, DeLone and McLean (1992) consider that future efforts should focus on

the study of the impact of the IS/IT area resources on organizational performance. Therefore,

we propose to analyze the relationship between the management of the IS/IT area resources

and capabilities and hotel performance. In this respect, few research works confirmed the

existence of a direct link between those aspects. The shortage of works that examine that

relationship is explained by the difficulty in explaining the contribution of those resources

and capabilities to organizational performance, especially in measuring that performance,

since there is no universally accepted measurement of that concept.

Various studies have used the Resources and Capabilities Theory to examine the

relationship between the IS/IT resources and firm performance. Those studies centered on

identifying the IS/IT resources that are likely to be valuable and inimitable (Mata et al. 1995;

Ross et al., 1996). One fundamental aspect common to those studies is their emphasis on

intangible resources as a source of competitive advantage (Sambamurthy and Zmud, 1997;

Feeny and Wilcocks, 1998; Bharadwaj, 2000). Those works propose the existence of a direct

relationship between IS/IT resources/capabilities with performance. However, other authors

(Clemons and Row, 1991; Powell and Dent-Micallef, 1997; Makadok, 2001) consider that

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