International hotel development : hotel owners' application of partner selection criteria in strategic alliance formation with hotel management companies

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International hotel development : hotel owners' application of partner selection criteria in strategic alliance formation with hotel management companies

 

Author: Mabey, James A.
Title: International hotel development : hotel owners' application of partner selection criteria in strategic alliance formation with hotel management companies
Degree: DHTM
Year: 2013
Subject: Hospitality industry
Strategic alliances (Business)
Hong Kong Polytechnic University -- Dissertations
Department: School of Hotel and Tourism Management
Pages: x, 266 p. : ill. ; 30 cm.
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b2673131
URI: http://theses.lib.polyu.edu.hk/handle/200/7336
Abstract: A wide body of research has been collected on firms seeking competitive advantage through participation in strategic alliances. Hospitality and tourism industry firms often take advantage of strategic alliances. A common form of strategic alliance in this industry is one between a hotel owner and a hotel operator. Real estate developers, who own hotels, have increasingly specialized in real estate development, while hotel operators have increasingly divested of fixed assets and focused primarily on the operation of hotels. This specialization has given hotel owners and operators competitive advantages and also pressured them to share resources since the hotel owners have assets to manage, but lack management ability; while hotel operators lack assets to manage, but have management expertise. While a plethora of studies across multiple industries has proven the viability and popularity of strategic alliances, many studies have also documented a high failure rate. It has been suggested that partner selection is perhaps the most critical part of a strategic alliance and poor partner selection is one of the primary factors in strategic alliance failure. Previous studies on strategic alliances and partner selection have concentrated predominately within the context of joint ventures. Recently, researchers have begun to explore strategic alliances and partner selection in hospitality and tourism. Unfortunately and surprisingly, considering the immense number of strategic alliances in hotel development and management, only limited attention has been given to the topic of how hotel owners choose management companies as strategic alliance partners. Therefore, this study explores partner selection criteria employed by hotel owners when choosing management companies. It investigates the existence of ancillary factors that are related to the partner selection process from the perspective of hotel owners and presents conceptual models of the functional interaction of partner selection criteria and ancillary factors in the context of economic judgment and choice principles. This research incorporates a qualitative design model that facilitates the systematic implementation of procedures that allow for the simultaneous execution of collecting and analyzing data, developing and modifying theory, elaborating or refocusing the research questions, and identifying and addressing validity threats. The study incorporates the Straussian strand of grounded theory that promotes developing emergent theories of social action through the identification of analytical categories and the relationships between them.
This research utilized data from in-depth interviews and participant observations. Twelve participants were interviewed and interacted with over a seven month duration that included, on average, five meetings and more than a dozen communications by email or phone. The total interface time with each participant was on average more than seven hours. The observational data of this study was collected on seven partner selection processes spanning from one to seven months. Four of the observations were triangulated directly with the data gathered from interviewees during the partner selection processes. In addition, in one case, an interview was paired with a six-month observation that was then further corroborated by an interview with a second hotel owner who was assisting the original interviewee in the partner selection process. The results of this study include a list of partner selection criteria that are employed by hotel owners when choosing hotel management companies. This list of 38 criteria is organized into three categories (a) Strategic Criteria, (b) Organizational Criteria and (c) Management Contract Terms and Conditions. In addition, the results of this study present a list of 18 ancillary factors. These factors are found to be dynamic in nature. In certain circumstances, they are consciously treated by hotel owners as partner selection criteria. In other circumstances, however, these ancillary factors become influencing factors that affect an owner's perception of other criteria. The results of this investigation also expose a deeper level of the partner selection process. The hotel owner may emphasize certain criteria based on the influence of ancillary factors; however emphasizing a certain criterion is relevant only as far as it is distinguishable among potential partners. Hence, criteria are first recognized or qualified by an owner and then compared among potential partners, with only distinguishable factors playing a role in the partner selection. The study reveals that a key aspect of this distinguishing process entails the implementation of judgment and choice heuristics as postulated in behavioral economic theory. The culminating results of this research include conceptual models of the functional interaction of partner selection criteria and ancillary factors in the context of economic judgment and choice theories.

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