Knowledge management in hospitality and tourism ricarda b bouncken, sungsoo pyo

BounckenSungsoo Pyo Editors Knowledge Management in Hospitality and Tourism Knowledge Management in Hospitality and Tourism has been co-published simultaneously as Journal of Quality Ass

Ricarda B Bouncken

Sungsoo Pyo

Editors

Knowledge Management

in Hospitality and Tourism

Knowledge Management in Hospitality and Tourism has been co-published simultaneously as Journal of Quality Assurance in Hospitality & Tourism, Volume 3, Numbers 3/4

perspec-BiUy Bai, PhD

Assistant Professor Tourism & Convention Administration Department Wiltiam F Harrah College

of Hotel Administration University of Nevada at Las Vegas

More pre-publication

REVIEWS, COMMENTARIES, EVALUATIONS

GREAT VALUE

Intro-uces the concepLs

associ-ated wilh knowledge management

and provides examples of these

concepts through case studies and

unique real-world applicaiions .

A LOT OF GREAT INFOEtMATION

ON A FASCINATING TOPIC The

authors do a good job of explaining

the complex ideas and concepts of

knowledge management while

ad-dressing such topics as knowledge

networks, data mining, and

infor-mation technology As an

informa-tion technology professor, I found

the chaptei:s on the technology

ap-plications and data mining

particu-larly interesting."

Cary C Countryman, PhD, CHE

CHTP

Director of tbe Technology Research

and Education Center

Conrad N Hitton College of Hotel

and Restaurant Management

THHP

The Haworth Hospitality Press

The Journal of Quality Assurance in Hospitality & TourisnP^^ Monographic

"Separates"

Executive Edilor: Sungsoo Pyo

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which we also call a "DocuSeriai.")

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Knowledge Management in Hospitality and Tourism, ediled by Ricarda B Bouncken aiul Sungsoo

Pyo (Vol }• No 3/4 2(K)2) "Of^irctil vahw Inlroditce.s ihe concepts assiKtated wilh

knowledge management and provides examples of llie.se concepl.s ihrougb case studies and unique real-world application.^ A lot off-reat informalloit on a fascinating topic " {Cary

C Countryman PhD CHF., CHTI' Director Technolofiy Research and Education Cenler Cnnrad N Hilton College of Hotel and Restaurant Management)

Henehmarks in Hospitality and Tourism, cd'ilcii by Simgsoo Pyo (Vol 2 No ,V4 2(H)1) "A handy

.••ingle volume that clearly e.\plains the principles and current thinking about benchmarking, plii.<^ useful insight.s on how the techniques can be converted into profitable bu.<^iness operations Include.s conceptual, practical, and operational (or 'how-it-is-done') chapters," (Chris Ryan PhD MEd, MPhil BSc (Econ) Hons, Profe.ssor of Tourism The University of Waikato.

Hamilton New Zealand)

Indexing, Abstracting &

Website/Internet Coverage

This section provides you with a list of major indexing & stracting services That is to say, each service began covering this periodica! during the year noted in the right column Most Web- sites which are hsted below have indicated that they will either post, disseminate, compile, archive, cite or alert their own Website users with research-based content from this work (This list is as current as the copyright date of Ihis publication.)

ab-Ahslracling Wehsitc/Indexing Coverage Year When Coverage Began

• CIRET (Centre Inteniatiotial de Recherches et d'Etudes

Touristiqttes) Compttterized Toiiristique & General

Bibliography <www.ciret-tourism.cotn> 2000

• Ci\PI EC Reference Guide: Chinese National Directory

of Foreign Periodicals 20<H)

• INSPEC <www.iee.org.tik/publish/> 2000

• Leisure, Recreation & Tourism Abstracts

(c/o CAB Intl/CAB ACCESS) <www.cabi.org> 200(»

• Management & Marketing Abstracts 2(MH>

• Sotith African Assnfor Eood Science & Technology

(SAAFOST) 2000

• TOURISM: an international interdisciplinary journal 200(1

(continued)

• ^'Travel Research Bookshelf "a current awareness service

ofthe Journal of Travel Research "Abstracts

from other Journals Section"published by the Travel &

Tourism Association 20(H(

• World Publishing Monitor 2(»00

Special Bibliographic Noie.s related to special journal issues

(separates) ami inde.xing/ah.siracthig:

• intlexing/ahslracting services in this list will also cover material in any

"separate" that is co-published simultaneously vt'ilh Haworth's special thematic journal issue or DocuScrial Indexing/abstracting usually covers nuiterial at the article/chapter level.

• monographic co-editions are intended for eilher non-subscribers or braries which intend to purchase a second copy lor their circulating collee- tions.

li-• monographic co-editions are reported to all jobbers/wholesalcrs/approval plans The source journal is listed as the "series" to assist the prevention of duplicate purchasing in the same manner utilized for books-in-series.

• to faeilitnte user/access services all indexing/abstraeting services are couraged to utilize the co-indexing entry note indicated at the bottom of the first page of each artiele/chapter/contribution.

en-• this is intended to assist a library user of any reference tool (whether print, electronic, online, or CD-ROM) to locate the tnonographic version if the library has purchased this version but not a subscription to the source jour- nal.

• individual articles/chapters in any Haworth publication are also available through the Haworth Document Delivery Service (HDDS).

ABOUT THE EDITORS

Ricarda B Bouncken, Prof., Dr., oec, habil, Guest Editor, is Chair

for Planning and Innovation Management, Brandenburg Universily ofTechnology Cottbus, Germany Dr Bouncken is the winner of eight re-search awards and author of over 38 publications, tnany of them in ref-ereed German and international journals She is an active member of theStrategic ManagemetU Society, the Academy of Management, and theAcadetny of International Business Dr Bouncken's research interestsinclude organizational theory, strategic management, service manage-tnent, knowledge management, competeticies, innovation, and externalcollaboration

Sungsoo Pyo, PhD, is Professor in the Department of Tourism

Man-agement at Kyonggi University in Seoul, Korea, and the editor of the

Journal of Quality Assurance in Hospitality <& Tourism (Haworth) He

is the author or co-author of five books and over 40 professional articlesand has presented numerous papers at seminars Dr Pyo is on the edito-

rial boards of five journals, including the Journal of Travel & Tourism Marketing and Tourism Analysis He is President of Tourism Systetns

and Quality Management Research Association in Korea, and the editor

of the Journal of Tourism Systems and Quality Management, published

by the Association In addition, he is the recipient ofthe Sosung Awardfor Academic Excellence, awarded by the President of Kyonggi Uni-versity (1997) and the Outstanding Service Award from the Interna-tional Management Development Association at the Sixth AnnualIMDA World Business Congress (1997) Dr Pyo's current research in-terests include destination marketing engineering, quantitative analysisand TQM lor destination managetnent Dr Pyo is a member of AIEST-the Intemational Association of Scientific Experts in Tourism

Achieving Competitiveness

Through Knowledge Management

Ricarda B Bouncken Sungsoo Pyo

SUMMARY Effective knowledge managemeni conlributes in

estab-lishing competitive advantages over competitors in the hospitality andtourism industry Reuse of already proven knowledge and readiness ofknowledge to use are the major benetits of knowledge management Thispaper introduces views of editors about knowledge managemeni and dis-

Ricarda B Bouncken is Chair tor Planning and Innovation Management,Brandenburg University of Technology Cottbus Erich-We inert-Str 1,03044 Cottbus,Germany (E-niail: bouncken@tu.cottbus.de)

Sungsoo Pyo is Protessor, Kyonggi University, Republic of Korea, and VisitingScholar Department of Leisure vStudies, University of Illinois, 1206 S 4lh Street, 104Huff Hall Champaign, IL 61820 USA {E-niail: pyos@choltian.net)

[Haworih co-inclcxing entry note]: ''Achieving ConipeiitivcnobS Through Knowledge Maiiagenient,"

Bouncken, Ricarda B., ant! Sungsoo P>'o Co-piiblished simullaneously in Juiinial uf Qiuiiity Assiirtmce in

Hospitality <6 Tourism (The Hawonh Hospilaliiy Press, jin imprini of The Haworih Press, Inc.) Vol 3 No.

3/4, 2Of)2 pp 1 -4; and: Knowledge Mimagemcnt in Hospitality and Tourism (ed: Ricarda B Bouncken and

Sungsoo Fyo) The Haworth Hospitality Press, an imprint ol'The Haworth Press Inc., 2002, pp I -4 Sitigle or multiple copies of this article are available for a fee from The Haworth Doeunieni Delivery Service [ 1 -800-HAWORTH, 9:00 a.m - 5:00 p.m (EST) E-mail address: tiocdelivery@haworihpress,com].

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iO.13OO/JI62vO3nO3 01 , /

KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

cusses its possible applications, in addition to the papers included in this

volume I Article copies available for a fee from The Haworth Document

Deliv-ery Service: ]-800-HAWORTH E-mail address: <(}ocdelivei-y@ha\vorthpre.ss com> Website: <http://www.HaworthPress.com> © 2002 by The Haworth Press, Inc All rights resented.!

KEYWORDS, Knowledge management, tourism, hospitality, reuse of

knowledge

Core of knowledge management involves acquisition, explication, andcommunication of mission-specific professional expertise in a mannerthat is focused and relevant to an organizational participant who re-ceives the communication (King, 1999: 70) Research on knowledgemanagement has attracted increasing interest in the past years, which isindicated by a growing number of articles and management tools Alarge number of articles have discussed the theoretical basis of knowl-edge or stressed the importance of knowledge in firms

Knowledge management contributes to effective operations and tablishes competitive advantages over competitors in the hospitalityand tourism industry When the proven knowledge during the field op-erations is re-used, knowledge developed during various formal and in-formal procedures can be incorporated in operations (Pyo, Uysal andChang, 2002) As a result, duplication of research can be avoided, thecost of research and developtiient is reduced, and effectiveness of oper-ations is increased Recognizing this fact, reuse of already developedknowledge is awarded in six sigma practices

es-Knowledge is ready to be used as a result of knowledge management.This is a drastic change from the traditional practice that searches and de-velops knowledge after recognizing its need Knowledge managementprovides knowledge in hand in advance, in anticipation of the knowledgeuse (Pyo, Uysal and Chang, 2002) When the knowledge is in hand, thespeed of operations improves greatly by eliminating knowledge searchingtime When the knowledge is based on internal team cooperation, copyingthe competitive advantage by the competitors can be very difficult.Although tourism and hospitality, with their geographically dispersedunits, can profit from an enhanced knowledge management system, only

a small number of firms have implemented knowledge management uptill now A recent empirical study shows that although managers inmany hotels consider knowledge tnanagement and information transfer

liilroduciion 3

to be relevant concepts, they report being confronted with too many andunclear knowledge management strategies, activities and implementa-tion techniques As a result, they are not sufficiently familiar withktiowledge managetnent and reject implementing knowledge tnanage-tiient This special issue will increase the understanding of the conceptsand will aid the implementation of knowledge management in hospital-ity and touristii

In this special issue, six articles are included The articles deepen cific topics of knowledge management and show examples and cases ofknowledge tnanagement, and the theme is well reflected in the articles al-together The first paper describes mostly mental and conceptual aspects

spe-of knowledge management The next two articles are theoretical and alsoinclude practical considerations in hospitality and airlines The next pa-pers include software application developments in knowledge manage-ment in general, in hospitality and tourism and eross-border destinationmanagement The final paper deals with database marketing with datamining and knowledge discovery

Kahle introduces the concept of mental models into tourism Mentaltnodels can be understood as landscape of a persons' concepts and theirinterrelations They are strongly influenced by individual experiencesand the socialization process Mental models are fundatnental for peo-ple's understanding of the world and their strategies to cope with the en-virontnent In tourism, people are confronted with very dissimilarmental models This helps to produce a high variety of ideas and con-cepts, but this variety can produce tnisunderstanding, mistrust and eanleadtoconfiicts Kahle argues that if people involved in tourism under-stand and internalize the concept of different inental models, they willdevelop lower degrees of mistrust and can operate more efficiently.Bouncken introduces an integrated concept of knowledge manage-tnent This article describes knowledge management in hotels, presentscase-studies and gives strategie advice and structural recomtnendationsfor its implementation While developing theoretical concepts whichunderpin the theory, the article provides reflections about knowledgeand analyzes different ditnensions of knowledge management in hotels.Further, it presents major infiuences on strategic and structural aspects

of knowledge tnanagement in hotels and suggests structures for the plementation of ktiowledge tnanagement

im-Hattendorf develops a matrix that combines strategic operative pects of knowledge management He illustrates his concept accorditig

as-to requirements in the airline industry The knowledge supply chain trix allows the balancing of various aspects within knowledge manage-

ma-4 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

ment aspects The knowledge supply chain matrix assesses four genericfactors (strategy, structure, process, resources) that are ahgned accord-ing to core processes wilhin knowledge management Hattendorf de-rives the knowledge supply chain matrix from a generic business modeland shows the way to apply it within a knowledge management project

in the airline industry

Gronau explains an IT-based knowledge management system, whichprimarily helps to manage explicit knowledge Gronau develops theidea of a Knowledge Cafe and introduces it to hospitality and tourism.This knowledge management system contains layers of sources, reposi-tories, taxonomy, services, applications and user interfaces

Pechlaner, Abfalter, and Raich explain issues in cross-border tion Management Their example of the new project "AlpNet" demon-strates how important cooperation and member-specific requirements arefor tourism and other economic industries when establishing knowledgenetworks

Destina-Finally, Cho and Leung discuss knowledge discovery techniques indatabase marketing for the tourism industry Data mining deals with thecomplex task of extracting and managing any potential knowledge em-bedded inside databases This paper introduces the common techniques

in data mining, including decision tree classifiers, regression analysis,induction programming logic, and probabilistic rules Suggestions aremade about how these techniques can be used in order to Improve thedatabase marketing By utilizing database marketing, a company canincrease its competitiveness and build entry barriers for others

Most of the papers in this volume are theoretical or conceptual andpractical, rather than empirical This tendency is due to the rather shorthistory of research about knowledge management in hospitality andtourism This volume will contribute not only to the understanding ofknowledge management in hospitality and tourism, but also to the ad-vancement in research methods and research areas

REFERENCES

King, William R, (1999) "Inlcgraling Knowledge Managemeni inio IS Slnilegy."

In-fonmtiioti Sy.slems Matutganeni Vol 16 No 4 pp 70-72.

Pyo, Sungsoo Uysal MuzaiTer and Chang Hyesook (2002) "Knowledge Discovery

in Database lorTouri.si de.slinalions." Journal of Travel Research Vol 40 pp

396-403.

Implications of "New Economy" Traits

for the Tourism Industry

Egbert Kahle

SUMMARY The tourism induslry is a knowledge-based induslry The

rcccnl dcvelopmcnls in information processing and knowledge tion and transfer have implications for the processes and relations in thetourism industry The main aspects are the change of the structure oftransaction costs, the increasing importance of networks and the impact

produc-of the conditions produc-of knowledge transfer on the inter-industrial relations.The concept of cognitive maps is used to explain the processes of infor-mation transfer The overall result ofthe different aspects ofthe knowl-

Egbert Kahlc is Dean of Faculty University of Lueneburg, Schamhoistslr 1.21332Lueneburg, Germany (E-mail: quass@uni-lueneburg.de) His research is concentrated inplanning and organization SMEs change and risk management and decisions under un-certainty

[Hawortli co-indexing emry ]KHO|: •"Iiiiplicaiidns of "New Economy' Trails for the Tourism IiKiusiiy,"

Kahlc ligbeil Co-puiilishu-d iiiiiulumeoiisly in lountal of Quality Assunmcc in Hospitality & Tourism (Tlie

Hawonh Hospilaliiy Press, un inipiint of The Haworth Press, Inc.) Vol 3, No 3/4 2002 pp, 5-23; and:

Knowledge Mana^emmt in Hospitality and Tourism (ed: Ricarda B Bouncken and Sungsoo Pyo) The

Hiiworih Hospitality Press, lui imprint of The Haworih Press, Inc 2002, pp .'i-23 Single or inuliiple copies of this article are aviiiliible lor a fee from The Haworth IXiciimcnt Delivery Service 11-800-HAWORTH 9:00 a.m - ,'i:00 p.m (hIST), E-miiil address: tlocdelivery@hawonhpress.com].

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10.1300/JI62v03n03_02 5

KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

edge orientation of the lourism industry is the importance of trust as the

core instrument in this industry [Ariicte copies available for a fee frotn The

Hawot-th Doctituetit Delivety Scti'ice: 1-800-HAWORTH E-tmtil adchess:

<docdeliver\@hawotihpfe.ss.cotn> Website: <hiip://\v\v\\.Ha\\onhPress com>

©2002 by fhe Haworth Ptess, Inc- AU tights resened.j

KEYWORDS Asymmetric information, attributes of knowledge

pro-duction, cognitive maps, knowledge transfer, networks, organizationalarrangements, transaction costs, trust

KNOWLEDGE MANAGEMENT AND KNOWLEDGE

INTENSITY IN THE TOURISM INDUSTRY

Knowledge Intensity As a Core Attribute of Tourism

The travel itidustry or touristn itidustry is a very heterogeneous area

of service prodttctioti The first denomination is used tnore for busitiesstravelers, whereas the second one is used for leisure traveling Both will

be included iti the following discussions although the writer respects thegreat differences in the kitids of services required in each group This is

a cotnplex field with different areas of production distributed in ent countries and regions The products and the processes of operatioti.which are used for the achievetnent ofthe resulting services, are related

differ-to different types of industries, but they have one cointnon tor: They are knowledge-based or knowledge-intensive service pro-cesses The tourism system consists mainly of five areas, within whichdiffering elements compete and co-operate with each other These areasare (Boiincketi, 2000: 91) the Agency, the Tour Operator, the Carrier,the In-Cotning-System and the Hotel There may be additional areaslike Entertainmetit, Shopping and the like for the support of the travel-ers at Ihe destination The special attributes of the travel industry as aservice process, the intangibility ofthe product atid the simultaneity ofproduction and consumption (Corsten, 1985: 173; Langeard, 1981:233), have been discussed widely elsewhere (Bouncken, 2000: 91-93).The focus of this paper lies in the touristn service as a knowledge-basedprocess, which is greatly influenced by the developtnetits of infonna-tion and cotntnutiication technologies

denotnina-Within each of the main areasof tourism, there are a large nutnberofparticipants as suppliers and purchasers of services, which partly coop-

Egbert Kahle 7

erate and partly compete with each other These cooperative and petitive relations are embedded in flows of knowledge and information.The elements of these systems are contiected in various ways with oth-ers in the system, which results in quite different configurations of ele-ments Hence, we find many different forms of organizational arrange-tnents for the coordination ofthe service process These arrangementsare changing or have the opportunity to change due to developments ininformation processing methods One of the more important aspectsconcet ning this development is the increasing use of networks as a form

com-of organization, which tends to be an organizational form com-of its own yond tnarket and hierarchy (Fischer, 2001: 124-136; Gerutn, 2001: 10)and not between them (Williatiison, 1985: 751) In these tietworks, themain coordination mechanism is trust, whereas in markets it is contractsand in hierarchies the authority to issue instructions

be-The Main Features of ''New Economy'* and Knowledge Economy

The intetisive use of knowledge in the process of service productionand the vast amounts of infonnation connected with the numerous andvarying cooperative and cotnpetitive relations handled with tnodernIT-equiptnent put the touristn industry close to the New Econotny, eventhough it is part ofthe Old Economy The intensive use of ktiowledge orinfonnation is the main feature of all the New Economy industries (Kahle,2002a: 175), so we may subsutne the touristn industry here, because to-day this industry is in tnany ways knowledge-based For these indus-tries have been argued (Kelley, 1997: 140) that economic laws like

"diminishing marginal growth of returns" or the theory of transactioncosts are no longer valid The actual development in the stock marketsindicates sotne doubts to that and for further discussion we will lookinto the special attributes of knowledge as an economic good, especiallyits cotiditions of production atid sale These attributes are (Rode, 2001):

• The utility of knowledge in the process of knowledge transfer isdependent on the receiver (due to differences in the preferences,cotnpletnentarity, the reflexivity of knowledge and to the co-pro-duction-problem)

• The transfer of knowledge is-in contrast to the transfer of tiiatioti-very time-expensive (due to the limited lingual, psycho-logical and pragmatic compatibility and to a limited speed oflearning)

infor-8 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

• The owner of knowledge can only with difficulties be protectedagainst unlicensed proliferation and use ofthe knowledge (due tounlimited usefulness of the knowledge, minimal costs of repro-duction and transport, and the impossibility of returning the givenknowledge to the owner)

These attributes imply three different causal relations in the analysis

of preparation and use of knowledge goods:

• The rapid increase, or more a jump, in the velocity of informationtransfer changes the structure of the transaction costs drastically.The consequences of "high velocity environments'" for strategicdecision processes have been discussed earlier (Bourgeois & Eisenhiudt,1988:816)

• The conditions of using knowledge induce a cost structure, wherethe variable costs arc nearly dispensable and only the fixed costsare relevant for the strategic decisions This is combined with theintroduction of standards by the successful "First Mover."

• The "classic" framework of "simple" contracts in a market is nolonger existent and the hierarchical structure of organizations isaccording to changing limits of time and space in the informa-tional relations no longer relevant

These three developments, which are discussed in detail in the nextthree sections, are accompanied by an increasing complexity of thestructure of service and management relations, where the high velocity

of the reactions induces within a short time dynamic, i.e., "time-laggedcausal" effects The great number of transactions per day, exchangingservices, information and money, makes it possible that within shortperiods of time, very small variations in the transactions processes ac-cumulate to big differences

The Impact of Change in the Structure of Transactions Costs

The change in the structure ofthe transactions costs has two differentconsequences for the tourism industry The reduction of transactioncosts in the pre-contract stage (preparation of contract) increases thenumber of possible partners Instead of seeking scarce informationabout partners, we have today the situation of "information overload,"where huge masses of information can be scanned by intelligent agents(Hecker, 1999: 41 and 137) hiformation about the possible partners is

Egbert Kahle 9

available for each of the elements in the system, the travelers, the cies, the carriers, the hotels Private travelers, tourists, may not have theIT-technoiogy to scan all this information, but all professional travelers,the travel agencies, the carriers and most hotels will have access lo thisinformation The result is that instead of a few selected market partners(Theisen, 1970) there are great numbers of them from which they canchoose This increase of potential partners, which provides for morefreedom of choice and a wider variety of partners, is connected withgreater anonymity of these partners, with the consequence that experi-ence-based or trust-based goods and services are more difficult to eval-uate The services in the tourism industry are mostly experience- ortrust-based (Bouncken, 2000: 89), and the problem of asymmetric in-formation exists in the supplier-customer relations of these goods,which will be addressed further below When the quality of the service

agen-is only assessable after some time or experience, questions such as thefollowing are raised:

• What happens if the service doesn't meet the expectations or theconditions of the contract?

• Where and how are such problems dealt with?

• Is the service assessable at all, either ex ante or ex post?

Normally, these questions are answered by the rules and customs ofthe industry But with the numerous new partners, there is no "custom

of the industry," because they may come from different industries orcountries Hence, intercultural differences (Hofstede, 1993) and barri-ers may exist which must be overcome (Kusters, 1998; Kahle, 2002c).This shall be carried out with the concept of cognitive maps Such cul-tural differences will be found when the services in the different parts ofthe tourism process are given in different countries Different culturalstandards are related to the four dimensions (Hofstede, 1982): "powerdistance," "uncertainty avoidance," "individualism" and "masculinity"which lead to different interpretations of given information Even so,simple things like nodding the head means "Yes" in some cultures and

"no" in others, and the traveler will have problems if he nods to a tion and does not get correct answers The same problems arise whenstaff members from different countries are working together in the sameservice production process, where the differences in contextuality oflanguage (high context vs low context) induce misinterpretations of in-formation (Hall and Reed Hall, 1990)

ques-10 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

As a result, we find that the reduction of transaction costs leads to anincrease in the amount of information and to an increase of cultural di-versity, which is to be expected in the increased number of possiblecontacts

The Impact of Knowledge Production Conditions

The special condition of knowledge production and sales is the otherimportant aspect Whereas the production and transfer of knowledge isquite expensive-due to the preference and complementarity differences

of the users, the co-production problem, the limited learning speed andthe limited compatibility of the knowledge transfer partners-the costs

of transfer of information have decreased drastically When knowledge

is easily externalized (Nonaka et al., 1994) the transfer process ofknowledge depends on the learning capacity of the information receiverand also on the matching of the relevant cognitive maps The sender ofthe information can be a firm in one of the parts of the tourism industry

or its employees that provide information about their services, prices,conditions and partners involved The receivers are the potential travel-ers themselves or employees of the agencies, tour operators, carriers inthe foregoing phases of the process If they have similar cognitive maps

on the core information, then they can understand the information veryeasily If the maps don't match well, then the embedding process of thereceived information will need time and will result in changes of the un-derlying knowledge For example, "The climate at the destination inApril is quite fair and warm" will mean very different real temperatures

if one is speaking about Helsinki, Kairo or Rangoon So the receiver ofthe information must have a pre-iiiformation, what "quite fair and warm"

is in this case

Today, the process of knowledge transfer has emancipated from theinformation transfer process Whereas in the past the information trans-fer process was characterized by the activities "hearing" or "reading"and "writing," which are accompanied partly by understanding the in-formation and thereby creating knowledge in the receiving person, to-day by copying or by electronic exchange of data These activities don'ttouch the receiver's cognitive map Therefore, there is a great amount ofinformation available in the tourism industry, but without the necessarycultural and technical context, it doesn't create knowledge in the re-ceiver of the information

Another aspect of the problem is the impression that the law of minishing returns is no longer valid This may be induced by the follow-

di-Egbert Kahle II

ing argument: The information transfer processes themselves have verysmall variable cosls-tnarginal above zero-therefore it seetns that whenthe price is not zero, that there are increasing marginal returns since thesituation is changed on the cost side

Most important is the irrevocability of the knowledge transfer Oncethe knowledge has been acquired by another person, it cannot be takenback Therefore the validity of the "quid pro quo" must be secured byother meastires than those applied to physical goods that can be returned.This implies that there is greater moral hazard in the knowledge transferprocess than in other services rendered The knowledge acquired by per-sons is not only irrevocable, but it is changed in the process of adaptationand embedding in the cognitive map For the acquirers it becotnes theirowti knowledge, which as their property gives them the right to use ac-cording to their own choice (Radetzki, 1999: 256)

These attributes of the knowledge transfer process imply that firmswhose competitive advantage relies on a knowledge advantage shouldnot externalize too much of their knowledge and share it with others,except if they are able to produce new knowledge as fast or faster thanthey give it away This implies for the tourism industry that the knowl-edge about elements and relations in the five basic parts of tourismshould not be made accessible to everybody, because it could be copiedand allow competitors to match the offers of the firm

Trust as a Main Factor in Tourism Industry Relations

The third important aspect ofthe knowledge intensity in the tourismprocesses-implied by the two first aspects-is the increasing importance

of trust in the relations between the acting elements (Bouncken, 2000).Trust as the expectation that the tnisted will be able and willing to fulfillthe positive expectation of the trustee is a social relationship Thetrusted may be an individual, then we speak of personal trust, or an insti-tutioti, where we speak of institutional trust (Luhtnann, 1989) There is

a third kind of trust, the ontological trust (Bohtne, 1998), which meansthe reliance on one's own cognitive maps, built up by experience Theability to give and take trust-to be trusted and to be a trustee-is an indi-vidual attribute and is acquired in the process of socialization (in thegeneral meaning of Piaget, 1979: 88) The knowledge intensive ser-vices and relations in the tourism industry need trust, because the ex-changed goods underlie asymmetric information These trustful relations-either personal or institutional-can only be established over titne Thehigh speed of the infonnation transfer processes is compensated by the

12 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

low speed ofthe trust building processes Only within existing trustfulrelations will the advantages of the high speed infonnation ptocessesproduce the economic gains expected from them

Therefore the known and trusted partners will be the basis for theeconomic success in the tourism industry and trust as a part ofthe im-plicit knowledge (Polanyi, 1966) of persons and organizations will be acore competence in this industry This is valid for the B2B relations inthe touristn industry and applies too for travelers who don'l want to besurprised by unexpected qualities of the services For the travelers veryoften instead of personal experience the source of ttust is the reputation

of agencies, operators or carriers or the persotial recotntnendation bytrusted friends The latter case could be called a "second order" trust,which is quite necessary in the touristn industry, because the travelersnormally have no tegular and much repeated relations with the travelagencies or the other partners in the tourism system

COGNITIVE MAPS IN THE APPREHENSION

OF PROCESSES IN THE TOURISM INDUSTRY

The Concept of Cognitive Maps

In the discussion of knowledge transfer the concept of cognitivemaps plays an itnportant role We believe that the processes of construc-tion or re-construction of reality in the individual mind and withinorganizations-where we have difficulties to localize physically theplace of the tnind-<:an be described and represented with the concept ofcognitive maps or cause maps Both words and concepts have been inuse for more than twenty years (Taylor & Lerner, 1996: 260) This con-cept is used in different relations and levels of analysis, so we have torefer to four different concepts or views of cognitive maps

In the first view-and il was the only one in the beginning and it is thebasic view for all the other concepts-"cognitive map" is a metaphoricdescription of all the processes involved in obtaining, storing, retrievingand adapting knowledge and of the structure of knowledge, which isemerging and continuously varying These processes and structurescontain models of description, models of explication and decision mod-els which initiate action (Kahle, 2001: 18) The analogy of "map" isquite limited, because the cognitive map contains much more than anornial map Il contains rttles of observation, interpretation and action

of these descriptions of knowledge items and their relations are given in

a two-dimensional picture, which is quite insufficient to represent thecomplexity and dynamics of the underlying process There are waysand possibilities to produce more complex and tnore realistic pictureseither by using computer-aided dynamic models like the GAMMA-tool(Hub, 1994) or by adaptation of the Helidem-concept (Kahle & Wilms,1998)

When the processes and structures of knowledge emergence and tribution such depicted are no individual traits but organizational ones,which means that they describe the existence and distribution of knowl-edge within and between groups (of managers), we have the third concept

dis-of cognitive maps, which is for enhancement dis-of the difference attributed

"organizational cognitive maps." They contain the systems of conceptsand relations produced (Laukkanen, 1996: 28) or used (Taylor & Lerner,1996: 260) by managers to understand their world and the strategies tocope with it When these shared concepts of a group are visualized by anobserver-mostly by diagrams of items and relations-we have the fourthofthe levels of conceptualization of cognitive maps {for an example seeLaukkanen, 1996: 10 ff.) In the following context, we refer mostly tothe third and fourth level

Implications ofthe Concept of Cognitive Maps for Organizational Theory

The most important consequence of the introduction of this conceptinto organizational theory is the change of view concerning communi-cation in organizations Whereas up to this point it was accepted that or-ganizations exist and develop by communication, it is now to be seen

14 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

that organizations exist in communication (Taylor & Lerner, 1996:260) It is quite acceptable to believe that managers discuss organiza-tional topics and, in these discussions, find the rules and structures oforganizations that make sense and utilize them They interpret and mod-ify those rules and structures, and produce organizational changes of theunplanned type in the continuous process (Staehle, 1994: 849)

The new view of organizational communication enhances this tion and proceeds towards a concept in which the communication ofmanagers is the organization In this view communication includes theunsaid, but obvious, which is the most important aspect Those itemsand relations which are so obvious that nobody mentions them but ev-erybody is taking them for granted as necessary Underlying assump-tions of own decisions and actions are the core assumptions and values

posi-of an organization These basic values and assumptions have been dressed as the basis of organizational culture (Schein 1997: 16) Theshared values and views of a group (of managers) need not be expressedexplicitly, because they are known, believed and u.sed by everybody.They are only discussed if and when there are differences about the im-plications of a value or a rule in a specific situation The values andnorms mostly are numerous and make a complex system The explana-tions of the rules and values caused by such a doubt about implicationsand consequences of certain rules and values modify and re-interpretthe rules and values, sometimes even the basic assumptions There isnormally no doubt in the validity of the values and rules, but a possibledifference about the point, which rule or value is concerned in a certainsituation and how conflicting prescriptions of different rules are solved

ad-In a firm whieh is part of the tourism industry the managers will have anorganizational cognitive map of the industry and their field of action,but with the increasing amount of new and partially contradictive infor-mation there will be much discussion about the interpretation of theseinformation and the ways of action

This concept of processes and structures of knowledge about zation which emerge by speaking about them and implying some sharedassumptions and Values, which in themselves make sense to the organi-zational actions of the managers, is in some way similar to the concept

organi-of organizational learningandtheroleorgani-of modeling within it (Morecrorgani-oft

& Sterman, 1994: XV and 6) In this concept of modeling, the ment and use of models is not intended to provide the managers withtools for complicated optimization algorithms, whieh they do not reallyunderstand, but to create for them a model of the real world, a simplifiedpicture of future developments, which they can grasp and understand

develop-Egbert Kahle 15

through the modeling and in which they can try and train useful ods of analysis and ways of action The models themselves are in thisview not seen as instruments of analysis or optimization, but as arenas

meth-of discourse or as training areas

This view on modeling is here widened and applied to managerialcommunication So whenever managers speak about their joint actionsand all that these actions involve, as for example the situation, the futuredevelopments including the invention of new products or techniques, theexisting and possible competitors, the qualities atid quantities of theirown human resources and so on, they describe their individual cognitivemaps (type I) to the other managers By discussion and by explicit orimplicit acceptance they reach a shared cognitive map (type 3), whichdefines the stage at which each of them is acting their role In militaryeducation very often the "sand table" is used as a tool for tactical prac-tice In this sand table a piece of landscape is built in a miniature formand an offensive or defensive situation is constructed This sand table isnow the cognitive map (type 4) for the group, which discusses andlearns tactical and strategic actions

For this group, the model-the landscape represented on the will become reality, so far as development and evaluation of tactical orstrategic moves are concerned The actors plan and conduct their ac-tions and the quality of their planning is judged along orthodox tacticsand strategies applicable in this model situation Through this methodthe espoused theories ofthe group are not only shown in detail but theyare continuously evaluated and modified Afterwards, which means af-ter having played numbers of such "war games," everybody knows theespoused tactics and strategies of his group and the managers will havethe confidence that the other members ofthe group will understand theiractions without much communication and they will accept the deci-sions, when they go along with the espoused theories, irrespective oftheoutcome of the actions The information asymmetry between highermanagement or levels of command and the acting manager does not be-come more transparent, but easier to understand In the tourism indus-try, where the planning process and the strategies are oriented at "cam-paigns" mostly consisting of a type of destination and a clearly definedtimetable, the evaluation of the last campaign and the comparison withformer campaigns is a widely used instrument and has the same results

table-as the playing of "war-games."

16 KNOWLEDGE MANAGEMENT IN HOSP!TAUTY AND TOURISM

Further Aspects of Cognitive Mapping in the Totiristn Industry

Beyond these basic implications of cognitive mapping for tions there are three other aspects that should be considered First,within the service rendering ftrms-the travel agencies, the carriers, thehotels-there are a great number of varying cognitive maps of type 3,which help to create the necessary variety (Ashby, 1958) to cope withcomplexity This happens, because the individual cognitive maps (typeI) are not erased with the emergence of the type 3 maps, but stay alongwith the individual The different groups in the organization, consisting

organiza-of varying members, will create or allow different cognitive maps toemerge The employees of the agencies, carriers or hotels have differentexperiences and often different cultural backgrounds This induces di-versity of the cognitive maps Diversity and doubt lead to more flexibil-ity of the strategic options of the tourism firms, but they threaten thestability of the organizational cognitive maps, which is needed for aclear understanding of each other The organizational cognitive map isonly a general way of speaking but no real phenomenon It is the ficti-tious fuzzy quantity of shared assutnptions and views

The second and most important aspect of sense-making in the gerial communication is the making similar ofthe respective views, that

mana-is the adaptation of the individual views to the common view Such atrivialization (von Foerster& Schmidt, 1996) is necessary for organiza-tional processes of learning and for the diffusion of organizational inno-vations, because a unified and definite interpretation is necessary Thiscreates a contradiction to the point above, because flexibility requires acertain atiiount of diversity, whereas organizational acceptance needsclear-cut interpretations With increasing numbers of participants in anorganization, the stability will increase and the possibility for flexibilitywill decrease For the firms in the tourism industry it is important to de-velop an accepted and understandable concept of the firms" activitiesatid additionally for the employees and clietits

A third point is that new information in these cognitive maps is ways contiected selectively with the existing knowledge in such a waythat the implications ofthe existing knowledge ate tiiaximized This has

al-to be examined very cautiously because misinterpretations may tesult

So if some very innovating information is introduced, which cannot beconnected with the existing levels of information, it will not be consid-ered any further due to the fact that it cannot be conceptualized againstpre-learned experience or meaning

Egbert Kahle 17

A further consequence of these interpretations of organizational

cotii-munications is a possible explication for the emergence or existence ofstrategic narrow sightedness or the groupthink syndrome (Radetzki,1999: 68 f.) By the joint constaiction of their reality managers tend toexclude all information that does not stabilize this shared view To cre-ate the model world or the sand table, problems have to be simplified,observations have to be unified and doubts are excluded To solve aproblem jointly, one needs a joint problem view This is in most casesthe simplest form ofthe problem, the minimum common denominator.When this is the accepted view in the group, other views and conceptsfor solving the problem are no longer accessible The explicit use ofcognitive map type 4 may help to clarify this dilemma of problem solv-ing, because a meta-level of understanding is created (Kahle, 1995).These general observations on cognitive maps can be applied to thetourism industry We have the situation that in the five different stages

or areas ofthe industry there exist various different forms of tional arrangements and of knowledge transfer processes The partici-pants are culturally quite diverse (Bouncken, 2000: 91), so it can beexpected that the cognitive maps of individuals and organizations fromdifferent countries will vary widely By this greater variety the process

organiza-of knowledge transfer will be impeded, because the implications organiza-of theinformation are less clear On the other side this variety reduces the ten-dency towards group thinking, because the groups are confronted with

an increase of contradicting information

This problem of connectivity of one's own cognitive map with those

of others in a field of many unknown and potentially different partnersenhance the use of tried partners With these tried partners one sharesthe experience of joint activities and a common understanding of situa-tions and rules This explains the possibility and the necessity of trust inthese inlerorganizational and intercultural relations in the tourism in-dustry (Bouncken, 2000: 92, 97)

ASYMMETRIC INFORMATION

IN THE PROCESSES OF TOURISM Forms of Asymmetric Information

Asymmetric information implies information deficits on one side of

a transaction This deficit may exist randomly or systematically in tain situations The partners of a transaction are usually called "princi-

cer-18 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

pal" and "agent," where the principal gets a certain result and the agentdelivers (and produces) it The ftve different parts of the tourism indus-try constitute together with the travelers a six-stage or six-level princi-pal-agent problem In effect each component within the system can beprincipal or agent depending upon the context of the situation con-cerned

The basic assumptions, problems and possible solutions of agent problems have been discussed widely (Picot, Dietl & Franck, 1999:85-131; Jensen & Meckling, 1976; Pi-att & Zeckhauser, 1985; Spremann,

principal-1988, 1989, 1990), so we wili, after a brief description of the core lems, focus on the industry-specific aspects

prob-There are four kinds of asymmetries related to the different attributes

of the situation between the principal and the agent: "Hidden istics," "Hidden Actions," "Hidden Information" and "Hidden Inten-tions." They are connected with each other and there are a number ofpossible actions to deal with these asymmetries, which shall be dis-cussed under the specific aspect of tourism industry

Character-Hidden characteristics imply that the agents or their products have tributes known to themselves, but not made known to tbe principals.Akerlof (1970) fu'st discussed this problem for the market of used cars,where the seller knows what is wrong (or not) with his car The potentialbuyers aren't aware ofthe "real" condition ofthe vehicle and are there-fore only willing to pay the price for an "average" car Therefore thegood cars will not be offered in the market which means that cars in av-erage condition will be of an increasingly lower standard This "adverseselection" leads to "a market of letiions." In the tourism industry, thecarriers are possibly in a comparable situation in respect to their qualityand security standards and their price policy: The travelers cannot ktioworevaluate(this would be a case of hidden information) the good or badstandards ofthe various carriers, so they are only willing to pay the av-erage standard; therefore better standards will vanish from the marketand the average will deteriorate

at-Hidden action is possible, if the agents deliver their product or vice that can be evaluated by the principals but those cannot see how theagents have carried out the work So the agents may make less effortthan they have promi.sed and the principals can do nothing to further theefforts This is typical for the "back office" operations in the tourism in-dustry which are unseen and may cost much less than the fees that thetravelers have to pay If the travelers ask for a special or personal (tai-lor-made) travel product, it can be easily produced since the agency hasaccumulated so much information about the products But the travelers

are charged them more than Ihe standard fees For the tour operators theproblem of hidden action lies with the carriers and hotels, whose perfor-mance is not directly observable There are instruments such as moni-toring to make observations, and sometimes the open observation of anemployee by the principal is helpful, although it induces second orderagency problems

Hidden information is much similar to hidden action, only that herethe principals may be able to observe the agents and their efforts, butthey have no means to evaluate the efforts That is typically so withknowledge based operations, where the principals cannot evaluate thequality of the knowledge of the agents (that could be a hidden character-istic) and the effort of the knowledge retrieval and use The risk lying inall both these kinds of asynunetric information is the "moral hazard,"the opportunity for the agent to "cheat."

In the case of hidden intentions it is assumed that there are conflictinggoals (at least partially) between principals and agents, and the agents

do not state that fact before the agreement At a later stage the agentscan-within the limits of the contract-further their own goals at the dis-advantage of the principals In the tourism industry this may happen, forexample, when the traveler is at the destination and services, and have

to pay extra although the tour package is inclusive This is called a

"Hold Up" situation (Goldberg, 1980)

Forms of Reduction the Risks of Asymmetric Information

There is a great number of possible actions to reduce the moral ard, either on the agent or principal side (Picot, Dietl & Franck, 1999: 91;Dixit & Nalebuff, 1993: 95; Kahle, 2002b: 26) Some of the actions can

haz-be used on either side Actions for the principal are screening and toring Actions for the agent only are signaling, guarantees, securities,building up reputation and destroying bridges to opportunistic behavior.Whereas contracts, developing tnist by teamwork, ceasing communica-tion, automatic responses, small steps and using "professional" interme-diates are possible instruments for either side

moni-The u.se of these activities to reduce the risks of asymmetric tion is expensive which the travelers normally will not be willing to pay

informa-To achieve a maximum of efficiency the costs of risk reduction should

be minimized Monitoring activities to reduce risks that are known tothe agents are the most important The next important instrument isbuilding up reputation as a quality brand Then follows in importance

20 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

guarantees to the travelers as a token of commitment The division ofactivities between principals and agents depends mostly on the marketposition Who gains more from the process will take the risk reductionmeasure

The least-cost-activity-in monetary terms-to reduce the risk is trust

as a reciprocal relation Trust needs no monitoring nor any other ments and therefore does not cost money Trust is a good "sui generis"(Schuize, 1997: 70) that losses and gains are counted in other than mon-etary dimensions Therefore, trust is the important dimension in thetourism industry The importance has grown with the increased amount

instru-of information and the increased velocity instru-of information processing.Trust is the core criterion in defining a network with the least-cost lo re-duce the risk of asymmetric information

CONCLUSION

The tourism industry has all the necessary features to be characterized

as a "new economy" industry The abundance of available information,the high velocity of information transfer, the change of transaction coststructure and the impacts ofthe special attributes of knowledge assets in

an intercultural area of action create a special situation for the people volved in the tourism industry The advantages ofthe developing neweconomy will only be secured if they are matched with stable relations

in-to known and trusted partners An important instrument for the betterunderstanding and functioning of trust between these partners is theconcept of cognitive maps The use of this concept gives a cognitive ba-sis to the trusted relations and will enhance understanding between theinvolved partners Such a cognition-based trust will be able to reducethe problems of asymmetric information in the relations within the tour-ism industry

Egheri Kahle 21

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Knowledge Management for Quality Improvements in Hotels

Ricarda B Bouncken

SUMMARY Holels can improve their service quaiily by enhancing

em-ployees" knowledge abiiut customer's preferences and the correspondingservice prtKedurcs Service qtiality depends strongly on the ability of holels

to acquire, lo develop, to accumiilule and lo distribute knowledge assets.Despite the popukirity of knowledge management in other industries, ho-tel-s|)ecific concerns have been hugely neglected in the lileniturc andknowledge management has jusi rudimentarily been implemented in hotels.Especially hotel chains, which have to deliver an overall quality staiiditrd ingeographicully distributed htHels, can exploit, knowledge management'sbenefits Nevertheless, the implementation of knowledge managemeiu rv-quii"cs considerations Tliis article describes knowledge management inhotels, presents case-studies and gives strategic advice and ^.tmctural rec-ommendations for its implementation An examination of hotels' knowl-edge management requires theoretical tinderpinning Therefore, this articleprovides rvllections about knowledge and analyzes different dimensions ofknowledge management in hotels Ftirther, it presents major inlluenccs on

Ricurda B Buunckeii is Chair for Planning and Innovation Management bure llni\orsity of Technology Coithus Erieh-Wcinert-Slr I 03044 Collbus Gennaiiy(E-mail: ht)uncki.'n(fi!tu-coubus.i!e)

Branden-The aulhor w ould like to express gratitude to Accor Hotels (Mr Ciseo Human souives: Mr Sengcr Human Resource Direelor: Mrs Werner Assistant General Man-agL-ment) to Besi Western Hotels (Mr Smola Manager Hotel Services), and toMaritim Hotels (Mrs Lindemann Marketing Manager) Ibr the interviews

Re-IHawonh co-indexing ejiiry mtic|: -Kiiowltilgf Managcmcni Un Quality Improve[ncnis in Holels." Bottrifki'ii Kitaiilii B, Co-publishcil sniiiiliaiii'Duslj in Jminitil nf Quulitv Af-Mtmncv in ItnspiiolHx A Imr-

liwiiThtHuwonhHospiialiiy ftess an imprinutt The Hawnrih Press, liic.l Vol, 1 No, -V4.:(KT2 pp 2fi-Sy;

uiid; k'mmleiJiif Mimuiicmfiii in flo^piinlit}' and Tourism led: Ricaida B Bounckcn and SuiigsiHi Pyo) The

Hawonh Hospilalil> Pa-ss an iniprinr ot The Haworth Press IIIL, 2(X)2 pp 25-59 Singte or mullipte copit'>

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© 2()02 by The Haworth Press Inc All rights reserved.

i 0.1300/J162v()3nO3_()3 25

26 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

slratcgic and sinictural aspccls of kno\vlcdj:c munaycnieni in h o l d s and

suggests slnicluiics fur the implcnientauon of a kriowlolgc niiuiaycmcnl lAnidc

copies avaHahle for a fee from The Haworfh Document Delivery Senice: l-800-HAWORTH E-nuiH aildre.ss: <clo(deliveiy^luiwniihpress.cont> Weh.site:

<btti>:/A\n\v.Ha\\ortliPre.\\.com> 0 2002 hy Tlie Htiwonh Press Inc All rights served.!

re-KEYWORDS Hotels, knowledge maniigcnicnt inlcrrirm

communica-tion, service quality

INTRODUCTION

The major task of hotels is to promote customer satisfaction and alty while establishing acotiipetitive advantage (Nightitigale 1985) Amajor factor on customer satisfaction and loyalty is quality (Fallon &Schofield, 2000; 30) Hotel gucsfs quality perceplioti is mainly inllu-enced hy the service encounter that can range beiween secotids undtnonths and is determined by the type of hotels, and the type of hotelguests with dilferenl service experiences (Medlik 1990: lOt.; Teare,Mazaiiec, Crawford-Welch, & Calver, 1994: 6: Powers, 1995: 19).Therefore, hotels requite staff which are able to cope with dilTerentguests and their preleretices However, many quality problems occurbecause the staff does tiot fully utiderstand the consequences of serviceinteractions and guest's preferences Consequently, itiiproving employ-ees' ktiowledge about custotiier's preferences and the correspondingservice procedures is becoming iticteasingly important in hotels Thisrequires the retrieval and utilization of other staff members' experi-ences tbat sulTers from:

loy-• a high rate of employee turnover (bearing risk of knowledge loss)

• a high rate rotating employees between hotels (forcing to build upnew team knowledge)

• a high percentage of unskilled workers or a low status employees(Reiser, 1989: I I3f.) (necessity to build up standards, knowledgeand foster learning), and

• it regular and seasotial detnand and changing customer preferencesconfronting a stable capacity (problems of volatility and flexibil-ity) (Kciscr 1989: 122)

Consequently, hotels have to save experiences, wbich should not belost, when employees leave the hotel or rotate between liotels They also

Riciinla B Botincken 27

need to suppon unskilled workers und new employees with other phiyces* e.xperiences build up easily understandable standards and fosterlearning Hotels can particularly benefit from u knowledge managementsystem, which helps to transfer and save knowledge within the hotel andsupports the staffs service interactions Hence, knowledge manage-ment, wbich has recently emerged as a means of improving businessperformance (Spender, 1994; Grant, 1996; Teece, 1984), needs to beimplemented and improved regarding the specific requirements inhotels Knowledge management must help to identify, generate, accu-mulate, save, retrieve, and distribute knowledge to contribute towardsimproving company-wide service qualily Nevertheless, knowledgemanagement in holels can benefit from the service encounter thai offersthe possibility to achieve knowledge directly about existing and chang-ing customer expectations

em-Despite the popularity of knowledge manageineiu in other indusuies, tel-specific concerns have thus been neglecteti in tlie literature and knowl-edge management has just mdinicntarily been implemented in hotels This isespecially valid for hotel chiiins, which have to deliver an overall qualitystandard in geographically distributed hotels (Medlik, 1990; 153)

ho-To nil the identified gap the paper concentrates on hotel chains First,the paper analyzes the theoretical background of knowledge, which af-fects a knowledge management strongly iti hotels Here, matters of dis-cussion are diverse fonns of knowledge that require specific ways ofknowledge retrieval, transfer and accumulation Second, strategy andstructure based recommendations on knowledge management in hotelswill he explained This article provides a rellection on forms and criteria(hat determine the knowledge strategy in hotels It also supplies thereader with insights about different instrtiments, which facilitate theidentification, generation, accumulation, and distribution of knowl-edge A major impact on hotels* knowledge management has a hybridknowledge based strategy of personalization and codification (see Fig-ure 1) According to the envisaged form of knowledge a personal trans-fer, retrieval, and conservation or a codified transfer, retrieval, andconservation is suitable

THEORETICAL BACKGROUND

OF KNOWLEDGE MANAGEMENT

Scientists, managers, and consultants provide us with different perspectives of knowledge and an unequivocal definition of knowl- edge (Senge, 1990; Nonaka, 1991; von Krogh, Roos, & Slocum, 1994;

e

KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

FIGURE 1 Elements of Knowledge Management

Grant, 1996; Druckcr Dyson, Handy, Saffo & Senge, 1997; Drucker,1999; Lathi, 20()0) This paper follows the cognitive and constructivistunderstandingof knowledge (Spencer Brown 1969; von Foerster, 1984:Luhmann, 1985; von Glasersfeld, 1997), which concentrates on socialprocesses of knowledge generation and understands knowledge as in-terpreted and interconnected information (von Foerster 1998; 44; vonGlasersfeld 1998; 19; Luhmann, 2000: 100-102; Mir & Watson, 2000:943)

While different fonns of knowledge are notable, and these have ent implications on knowledge transfer and utilization, we need to selectand to distinguish between major fonns of knowledge A popular differ-entiation exists since Polanyi distinguished explicit and tacit knowledge(Polanyi, 1967) Explicit knowledge is open to codification in docu-ments, books, databases, and reports (Lathi, 2()(X); 66) Formal processeslike a methodical language offer mechanisms to transfer explicit knowl-edge Instead, tacit knowledge is very complex, involves viewpoints, in-tuition, deeply grounded statements, meaningful behavior, and values(hat people develop through experience (Nonaka, Byosiere, Bt)rucki, &Konno, 1994: Leonard & Sensij->cr, 1998: 113) The U-ansfer of tacit knowl-edge requires a process of understanding that is near to action, commit-ment, and involvement in a specific context (Nonaka & Tageuchi,

differ-Ricarda B Bouncken 29

1995) Tacit ktiowledge contains cognitive and ''technical" elements.Cognitive elements like paradigms, schemes, and beliefs help individu-als to understand the environment Technical elements enclose skillsand emheddcd know-how for specific actions

The transfer of knowledge always requires finding redundaney andconnections between (he items ofthe individual mind and the transfenedknowledge Therefore, direct interrelations that are richer with informa-tion foster the transfer of identical or tacit knowledge (see: Chapter 5.1)

A second major categorization of knowledge differentiates ual and collective knowledge, which contains commonly held knowl-edge Individual knowledge can be perceived as sources individuals usefor their actions and cognitions (Boisot, 1998: 12) There is a great simi-larity between iticlividual knowledge and individual mental tnodelsfrom It cognitive point of view The literature undetstands mental mod-els as internal symbolic representations of the world or aspects of theworld (Johnson-Laird, 1983) An individual's mental model coticerning

itidivid-a specific topic includes the individuitidivid-al's definitions, procedures, exitidivid-am-ples, etc (Carley, 1997: 535) Mental models employ tacit and implicitknowledge

exam-The literature often focuses on individual knowledge in tions, but a great amount of knowledge is produced and held collec-tively in firms (Seely Brown & Duguid, 1998: 91) Organizationalknowledge originally foutided in collectively held models compromisesknow-what and know-how, which several organization members share.While the firms" competencies to outperform the tnarketplacc lie in theongoing generation and synthesis of collective, organizational knowl-edge, lor firms to add valtie iVoni knowledge it is especially relevant tobuikl up organizational knowledge (Leonard, 1995; Seely Brown &Duguid, 1998) Nonaka thus concentrates on organizational knowledgecreation, which he understands as the "capability of a cotnpany as awhole to create new knowledge, disseminate it throughout the organiza-

organiza-tion, and embody it in prcKlucts, services, and systetns" (Nonaka &

Tageuchi, 1995:3)

The organizatiotial knowledge literature focuses either on sharedktiowiedge in the organization or on distributed knowledge that existswith referetice ofthe organization (Kim, 1993:4Iff.; Lyies, 1994:460)

In the case of shated knowledge, otily redundant mental models act asorganizational models This neglects the positive effects of combinedspecialized knowledge bases in firms Therefore, organizational knowl-edge should contain shared knowledge (mental models) and distributed

JO KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

knowledge (mental model), which are pooled wilh reference of ihe gunization

or-CATEGORIES OF KNOWLEDGE IN HOTELS

Offeritig services iti lodging, food, recreation, and sports hotels havecomplex work processes and guest interlaces that can be dilTerentialed

Task-specific knowledge coniains the specific procedures, sequences,

actions and strategies to fulfill a task (Cannon-Bowers & Snlas 2(.X)I:1961.) Task-specific ktiowledge is only open to generalization ol a sitni-lar task's other instances (Cannon-Bowers & Salas, 2(X)I: 197), Task-specific knowledge allows employees to act in a c(x>rdinated way with-out the need to communicate extensi\ely (Cannon-Bowers, Salas &Converse, 1993) Explicit and tacit components ot" task-specific knowl-edge secure goal fulfillment in fimis Common task-specific knowledge

in hotels fosters compatible expeciations of tasks and outcomes Oftendetails of task-specific knowledge can be articulated and codified, buttieed to be Inlernali^ed by training Task-specific knowledge contains,e.g., specified frotit- iuid back-office operaiiotis which cati be codified indocuments or databases, but need to be trained and made into a routineaspect for the enhancement of service quality in hotels Task-specificknow-how contains a high rate of tacit knowfedge and interiut!i/cd ser-vice routities in hotels, which allow continuous service quality in hotels.The transfer ol task-specific know-how required training, advisory, atidexetcise, Intetnalized and uained task-specific ktiowledge allows set-vice procedures wilh less cognitive attention and retiection to the spe-cific task This enhances employees' tiicntal capacity to listen to theguest, fulfill specific preferences, act friendly, and develop new or alter-native service operations The guests' service quality perception can beitnproved,

Task-reluled knowledge contains individuals' shared knowledge not

of a single task, but of related tasks, e.g., the form of teamwork in thefirtii (Rentsch Heffner, & Duffy, 1994) Task-related knowledge con-

Riiiinla B Bouncken 31

tributes to the team's or group's ability to internalize similar workingvalues or tu fulfill a broader task and intertwined tasks Task-relatedknowledge contributes to the shared values of teamwork, but also com-promises lhe ability to reach a distinct level of quality in different ser-vice operations Shared quality standards in the different departments(lodging, food and recreation) where different tasks have to be fulfilledact as common task-related knowledge Quality dimensions like empa-thy, reliability, and assurance in different service operations are exam-ples for task-related knowledge Although task-related can be articulated,service personnel need to internalize the task-related quality standardsand behavioral rules The broadest category of task-related knowledgeare shared values, norms and beliefs, e.g., shared beliefs (Cannon &Edniondson 2001) and cognitive consensus in the organization (Mo-hammed Klimoski, & Rentsch, 2000) Shared attitudes and beliefs fos-ter compatible interpretations of the environment Further commonattitudes, norms and beliefs support a mutual understanding i)f inteire-lating employees Shared values, norms, and beliefs that lead the behav-ior and attitudes of employees can also guide task-specific knowledgeand the ciuality of service operations

At Myatt they believe that a great hotel should offer more than agood night's sleep It should create an environment thai awakensguests' senses This is one of the many intangible qualities a guestshould experience at every Hyatt hotel These statements illustrate val-ues at Hyatt, which are task-related knowledge Maritim hotels followfive cornerstones of cosmopolitan attitude, hospitality, individuality,open-mindedness, and professional congress and special-event facili-ties Ritz Carlton hotels strive for indulgent luxury with sumptuous sur-roundings and legendary service and gracious elegance Shared valuesand norms act as groundbreaking levels of customer service Rilz Carltonemployees shared values collectively called The Gold Standards: TheCredo The Three Steps of Service The Motto and The Twenty Basics.All 22,000 employees of The Ritz-Carlton know, embrace and energizethis task-related knowledge, aided by their constant presence in thewritten form of a pocket-sized, laminated card The Gold Standards areintroduced for new employees' orientation Thereafier, the concepts arereinforced in daily departmental '"line-ups" attended by all employees.The Gold Standards provide the basis for all ongoing employee train-ing

A transactive memory includes decentralized knowledge of the other

organizational members'cognitive models ([Wegner, I985#174O; Wegner,1987; Wegner, 1995 #16811) Transactive memory's relevance lies in

32 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

the circumstance that working partners need to understand some of Iheothers' knowledge, preferences, weaknesses, and work values How-ever, a transactive tnemory does not presume a high level of sharing; itconsists of intertwined distributed mental models The shared elementsare concerning the common interrelations and connections between themembers A transactive memory corresponds to know-who, to find theright person for a specific task The time and intensity of interactingmembers promotes the generation of a transactive memory system Atransactive memory assists goal fulfillment by helping members tocompensate for each othei, piedict each other's action, provide infor-mation before being asked, and support the connection of the members'expert knowledge (Cannon-Bowers & Salas 2001: 197) While work-ing together for a longer period, members are better able to predict theothers' behavior in accordatice with what they expect from them Hetice,each member of the transactive memory has a better understanding ofthe others' idiosyncratic knowledge and competencies Knowledge inthe concept of transactive memory can be task-.specific, task-relaied orusefiil across a variety of tasks Hence, a transactive memory systemcontains team-specific knowledge A transactive memory can be found

in all team structures and in hotels (e.g., in front and back-office teams).Moreover, a transactive memory exists when employees know aboutother colleagues' knowledge in the hotel chain Various connectionsmay occur in regional dispersed hotels (e.g., between hotel directors indifferent regions or countries)

Guest-Related Knowledge

While staff and guest interrelate directly in the ser\'ice encounter guests'expectations and actions infiucnce many operations in hotels Customers'requests have impacts on one or more employees, and can modifytask-specific or task-related knowledge in a hotel or more hotels and canrequire inter-hotel learning Therefore, customer interactions are tangledwith task-specific knowledge, task-related knowledge, transactive mem-ory, and shared attitudes, norms, values and beliefs Customer-relatedknowledge includes the knowledge of:

• What a specific customer actually wants

• what a specific cust(.)mer of tlie hotel chain wishes in ihe future,and

• what customers in a hotel's target group generally desire

Ricarda B Bouncken JJ

Cohen and Levinthal label the firm's ability to recognize the value ofnew external knowledge, to assimilate it and apply it to its new prod-ucts and services as absorptive capacity (Cohen & Levinthal, 1990:128; Van den Bosch, Volberda, & de Boer 1999) As hotels have directcustomer interactions, absorptive capacity concentrates on customer re-lationship and the acquisition of customer related knowledge For ex-ample, a customer may initiate new meal patterns or recommend newservices Absorptive capability depends on the firm's level of prior re-lated knowledge because prior accumulated knowledge enhances theacquisition of new knowledge and the ability to remember anil useknowledge (Cohen & Levinthal 1990; Lane & Lubatkin 1998: 464f.).The premise of the dependence on prior knowledge stresses the impor-tance of the personal service experience for knowledge generation As-sociative learning develops the ability to generate new knowledge,which requires establishing links between different stocks of knowl-edge and connections between old and new knowledge Consequently,individual and organizational knowledge limits the ability to absorbcustomer related knowledge and to exploit new opportunities (Leonard.1995: 189-2(X)) Atlditionally a hotel's absorptive capacity refers notonly to the individual's capacity but also to the hotel's competence inaocunuilating and exploiting knowledge This stresses the acquisition,transfer, and accuniuiation of customer-related knowledge betweenstaff and hotei and ihe transfer of knowledge between the subunits of ahotel chain

KNOWLEDGE MANAGEMENT SYSTEM IN HOTELS Overview

Knowledge management facilitates a continuous progress in learningand unlearning to ensure the renewal of organizational goals, as well topromote organizational awareness to better anticipate opportunities andthreats (Young & McCuiston, 20(K): 315) Therefore, hotels can en-hance their service quality The implementation of knowledge manage-ment requires a systemic knowledge orientated atlaptation of hard andsoft factors in hotels Soft factors generally include openness, trust, re-spect, frames of reference, values, beliefs, an orientation toward contin-uous development and expanded personal communication (Lyles 1994:

4611 Hard factors fostering the acquisition, retrieval and storing of ternal and external knowledge can contain databases, libraries, com-

in-34 KNOWLEDGE MANAGEMENT IN HOSPITALIT)' AND TOURISM

municiition technologies and seminars or orgiuiizationiil structures.Both factors infiuence service quality, while service includes "a pack-age of implicit and explicit benefits performed within a supportingfacility and using facilitating goods" (Fitzsimmons & Fitzsimmons,1994: 24) Knowledge management requires the combination of differ-ent activities in hotels Although knowledge management combinesthese tightly intertwined activities and implementation possibilities, toolsand structures to foster the activities generally fulfill different puiposesand are applicable to different knowledge processes Nevertheless, togive an understanding of the knowledge management as a continuousmanagement concept, the following explains the elements stepwise

Knowledge Goals

To detemiine the field and the directions of knowledge acquisition,generation, distribution, retrieval and accumulation, hotels can set spe-cific goals concerning intcr-hotel and intra-hotel knowledge manage-ment (e.g an Internet-based information system mighl be installed).Knowledge goals can also be formulated to enhance the acquisition andutilization of customer-related knowledge Therefore, guest cards, whichcontain all data of frequent clients can be implemented enabling front-and back-office to organize guests preferences immediately after book-ing Moreover, guests' satisfaction will be improved when the guest re-ceives automatically her prefen'ed rooms or services Knowledge goalsmight also concentrate on better communication with tourist offices togive the possibility of absorhing regional trends more easily

Best Westell! hiternatiorial Inc., is the world's largest hotel brand withmore than 4.(XX) independently owned and operated hotels throughoutAustralia, Asia and Southern Africa, Canada, the Caribbean Europe, theMiddle East Mexico, Central and South America and the United States

It is also the only non-profit membership association in the industry though Best Western accomplishes a franchise system with limited hi-erarchical power to the hotels, they explicitly follow the vision that allhotels should exploit every chance transferring or utilizing their em-ployees' knowledge Best Western assumes that knowledge is the basislor superior service quality leading to competitive advantage SinceBest Western aims to improve their hotels" knowledge base they pro-vide a range of infrastructure and programs to their franchise partners

Al-A training institute offers seminars at a reduced rate for their partners.Besides, international and regional conferences explain Best Western'scorporate strategy and allow informal knowledge transfer between ho-