barriers affecting organisational adoption of higher order customer engagement in tourism service...

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Barriers affecting organisational adoption of higher order customer engagement in tourism service interactions Prakash K. Chathoth a, * , Gerardo R. Ungson b , Levent Altinay c , Eric S.W. Chan d , Robert Harrington e , Fevzi Okumus f a Department of Marketing, School of Business and Management, American University of Sharjah, Sharjah, United Arab Emirates b College of Business, San Francisco State University, San Francisco, USA c Oxford School of Hospitality Management, Oxford Brookes University, UK d School of Hotel and Tourism Management, The Hong Kong Polytechnic University, Hong Kong e Department of Foods, Human Nutrition, and Hospitality, School of Human Environmental Sciences, University of Arkansas, Fayetteville, USA f Department of Hospitality Services, Rosen College of Hospitality Management, University of Central Florida, Orlando, USA highlights This paper uses a qualitative research methodology with the purpose of: Examining consumer engagement from a service-dominant logic perspective. Identifying barriers to successfully engaging customers. Exposing the type of barriers ranging from strategic, consumer, technological and management structure & culture. Building on the limited literature on consumer engagement. article info Article history: Received 18 February 2013 Accepted 1 December 2013 Keywords: Consumer engagement Organisational barriers Value-creating network Co-creation Service-dominant logic abstract In this study, consumer engagement was examined from a service-dominant logic perspective in tourism service interactions. Extensive eld interviews and focus groups in the context of three upscale hotels in Hong Kong identied numerous barriers towards successfully engaging consumers, extending from consumer, technological, and strategic cases to organisational cases. In all, a rms overall strategy, organisational structure and culture are the most important barriers determining whether consumer engagement as depicted in the literature can be successfully deployed within hotel organisations. Im- plications call for a more intensive study of engaging consumers from an organisational context with a reassessment of progressive stages that include leadership interventions and the incorporation of con- sumer feedback at all stages of the rms value-creating network. Ó 2013 Elsevier Ltd. All rights reserved. 1. Introduction Technological advances, particularly the digitalisation of social media and access to real-time information at any time of day have ushered in a new imperative: Consumers are better informed, more expectant of services due to them and much more willing to switch service providers if they are dissatised with a given service. However, beyond satisfaction, consumers expect to be integral participants in the creation of basic services. This trend towards rising consumer engagement (CE) underscores what scholars call a major shift from a goods dominant logic (G-D) to a service-domi- nant (S-D) logic perspective (Brodie, Hollebeek, Juri c, & Ili c, 2011; van Doorn et al., 2010; FitzPatrick, Davey, Muller, & Davey, 2013; Grissemann & Stokburger-Sauer, 2012; Vargo & Lusch, 2004a). As per the literature, S-D logic (Vargo & Lusch, 2004a) empha- sises service as the fundamental basis of exchange; hence, market with consumersinstead of market to consumerswas at the crux of such exchanges (sdlogic.net). CE in this paper was dened from Brodie et al. (2011) as something that occurs by virtue of interactive, co-creative consumer experiences with a focal agent/object (i.e., a brand) in focal service relationships(p. 260); through association and activities established by the consumer and/or the rm (Vivek, Beatty, & Morgan, 2012). Despite previous research into CE (Bowden, 2009; Brodie et al., 2011; van Doorn et al., 2010), there has not been as much attention directed at the inherent barriers to adopting such an approach in the context of the new service logic (including co-creation) applied * Corresponding author. Tel.: þ971 65154177. E-mail address: [email protected] (P.K. Chathoth). Contents lists available at ScienceDirect Tourism Management journal homepage: www.elsevier.com/locate/tourman 0261-5177/$ e see front matter Ó 2013 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.tourman.2013.12.002 Tourism Management 42 (2014) 181e193

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Tourism Management 42 (2014) 181e193

Contents lists avai

Tourism Management

journal homepage: www.elsevier .com/locate/ tourman

Barriers affecting organisational adoption of higher order customerengagement in tourism service interactions

Prakash K. Chathoth a,*, Gerardo R. Ungson b, Levent Altinay c, Eric S.W. Chan d,Robert Harrington e, Fevzi Okumus f

aDepartment of Marketing, School of Business and Management, American University of Sharjah, Sharjah, United Arab EmiratesbCollege of Business, San Francisco State University, San Francisco, USAcOxford School of Hospitality Management, Oxford Brookes University, UKd School of Hotel and Tourism Management, The Hong Kong Polytechnic University, Hong KongeDepartment of Foods, Human Nutrition, and Hospitality, School of Human Environmental Sciences, University of Arkansas, Fayetteville, USAfDepartment of Hospitality Services, Rosen College of Hospitality Management, University of Central Florida, Orlando, USA

h i g h l i g h t s

This paper uses a qualitative research methodology with the purpose of:� Examining consumer engagement from a service-dominant logic perspective.� Identifying barriers to successfully engaging customers.� Exposing the type of barriers ranging from strategic, consumer, technological and management structure & culture.� Building on the limited literature on consumer engagement.

a r t i c l e i n f o

Article history:Received 18 February 2013Accepted 1 December 2013

Keywords:Consumer engagementOrganisational barriersValue-creating networkCo-creationService-dominant logic

* Corresponding author. Tel.: þ971 65154177.E-mail address: [email protected] (P.K. Chathot

0261-5177/$ e see front matter � 2013 Elsevier Ltd.http://dx.doi.org/10.1016/j.tourman.2013.12.002

a b s t r a c t

In this study, consumer engagement was examined from a service-dominant logic perspective in tourismservice interactions. Extensive field interviews and focus groups in the context of three upscale hotels inHong Kong identified numerous barriers towards successfully engaging consumers, extending fromconsumer, technological, and strategic cases to organisational cases. In all, a firm’s overall strategy,organisational structure and culture are the most important barriers determining whether consumerengagement as depicted in the literature can be successfully deployed within hotel organisations. Im-plications call for a more intensive study of engaging consumers from an organisational context with areassessment of progressive stages that include leadership interventions and the incorporation of con-sumer feedback at all stages of the firm’s value-creating network.

� 2013 Elsevier Ltd. All rights reserved.

1. Introduction

Technological advances, particularly the digitalisation of socialmedia and access to real-time information at any time of day haveushered in a new imperative: Consumers are better informed, moreexpectant of services due to them and much more willing to switchservice providers if they are dissatisfied with a given service.However, beyond satisfaction, consumers expect to be integralparticipants in the creation of basic services. This trend towardsrising consumer engagement (CE) underscores what scholars call amajor shift from a goods dominant logic (G-D) to a service-domi-nant (S-D) logic perspective (Brodie, Hollebeek, Juri�c, & Ili�c, 2011;

h).

All rights reserved.

van Doorn et al., 2010; FitzPatrick, Davey, Muller, & Davey, 2013;Grissemann & Stokburger-Sauer, 2012; Vargo & Lusch, 2004a).

As per the literature, S-D logic (Vargo & Lusch, 2004a) empha-sises service as “the fundamental basis of exchange”; hence, “marketwith consumers” instead of “market to consumers”was at the crux ofsuch exchanges (sdlogic.net). CE in this paper was defined fromBrodie et al. (2011) as something that “occurs by virtue of interactive,co-creative consumer experiences with a focal agent/object (i.e., abrand) in focal service relationships” (p. 260); through associationand activities established by the consumer and/or the firm (Vivek,Beatty, & Morgan, 2012).

Despite previous research into CE (Bowden, 2009; Brodie et al.,2011; van Doorn et al., 2010), there has not been as much attentiondirected at the inherent barriers to adopting such an approach inthe context of the new service logic (including co-creation) applied

P.K. Chathoth et al. / Tourism Management 42 (2014) 181e193182

to the tourism sector. Understandably, previous research insteadfocused on a basic advocacy for CE, such as proposed antecedents,processes and consequences (Bowden, 2009; van Doorn et al.,2010; Vivek et al., 2012). van Doorn et al. (2010) identified ante-cedents of CE behaviour as consumer factors and firm-based fac-tors, including the brand, processes and platforms supportingspecific consumer actions, the consumer information environment,and rewards and incentives. Additionally, previous research(Grissemann & Stokburger-Sauer, 2011) focused on processes andconsequences, such as company support (e.g., open and transparentcommunication with consumers; effective employee/consumerinteraction), and leadership and culture (as facilitators of innova-tion and creativity that led to a higher level of CE (Lafley & Charan,2008; Yang, 2008)). More recently, Vivek et al. (2012) identified thefirm’s external antecedents of consumer engagement as theparticipation and involvement of current or potential consumers.

However, it is well-recognised that intra-organisational factorscan be both facilitative and obstructive in the process of change.Recognising this research gap, van Doorn et al. (2010) called forresearch investigating the drivers of CE in terms of firms’ compe-tences and capabilities, structures and systems, i.e., “how can firmactions enhance, mitigate or neutralize different forms of ConsumerEngagement Behaviour (CEB)?” Therefore, they called for researchthat highlighted “processes, policies, systems, and cultural changesthat need to be made in firms so their employees are more receptive toCEBs” (p. 263). Based on this call by researchers to explore intra-organisational factors, it was imperative to delve into the ele-ments (Brodie et al., 2011) that influenced a higher level of con-sumer engagement/service orientation from a S-D Logicperspective, which Bharwani and Jauhari (2013), Cabiddu, Lui, andPiccoli (2013), Chathoth, Altinay, Harrington, Okumus, and Chan(2013), Crick and Spencer (2011), FitzPatrick et al. (2013), Ritchie,Tung, and Ritchie (2011), and Shaw, Bailey, and Williams (2011)have also alluded to from a tourism/hospitality context.

Accordingly, the aim of this paper was to evaluate the influenceof different intra-organisational factors on consumer engagementin tourism organisations. This paper adopted the assumption thatfirms may or may not have an alignment between the precursorsand outcomes of CE (hence, the exploratory nature of the inquiryprocess adopted in this paper). Therefore, it should be noted that CEin the context of this paper was broached from a firm’s context as tohow internal firm factors affected the superior engagement of theconsumer.

Responding to a call for empirical research by Shaw et al. (2011)into enhancing tourist experience through engagement platforms(including co-creation), this study explored how intra-organisational factors influenced consumer engagement in thecontext of tourism firms. The paper established that these intra-organisational factors acted as barriers or impediments towardsengaging consumers in the context of tourism firms. The evaluationof these barriers led to the development of a framework that illu-minated the internal challenges (barriers) that tourism organisa-tions face in their attempts to engage their consumers. The studyalso discussed possible avenues that organisations in the tourismindustry might consider to overcome these barriers while movingfrom the conventional G-D logic to the contemporary S-D logic.

2. Consumer engagement: conceptual underpinnings

The popularity of S-D logic (Lusch & Vargo, 2006; Lusch, Vargo,& O’Brien, 2007; Vargo & Lusch, 2004a, 2008) led to an emphasis onvalue-in-use (Payne, Storbacka, & Frow, 2008; Vargo & Lusch,2004a), which underscored the continuity between productionand consumption with an increased emphasis on value creationduring consumption. Note that CE was effectuated when use value

was emphasised in a service transaction. According to the litera-ture, use value came to the fore when the product/service inquestion was able to satisfy the consumer’s specific need/want(Payne et al., 2008).

Historically, the roles and involvement of consumers and pro-viders have been explored and documented in the literaturethrough the works of Bowen and Jones (1986), Hsieh, Yen, and Chin(2004), Lovelock and Young (1979), and Rafaeli (1989), amongmany others. In this vein, Bitner, Faranda, Hubbert, and Zeithaml(1997) and Hubbert (1995) argued that the level of consumerparticipation in marketing exchanges, whether passive, moderatelyactive or highly active, will depend in large part on the type ofgoods-service bundle. Consequently, consumer involvement andthe composition of the goods-service bundle (Brodie et al., 2011)during service interactions and the exposure of the firm to uncer-tainty as a result of the consumer’s role needed to be taken intoconsideration, which may affect the implementation of CE/co-creative processes. In this regard, external antecedents such asparticipation and involvement became the precursor to engagingconsumers (Vivek et al., 2012).

Although the extant literature focused on purported levels ofconsumer interest and expectations, considerations relating to thenature of uncertainty arising from consumer proactive or reactiveinvolvement and the combination of (material) good-(fungible)services brought to the forefront the prevailing predispositions offirms towards a higher level of CE. This suggested that engagingconsumers in transactions should start at the early stages of thefirm’s value chain, yet consumer orientation in many firmsappeared in the final stages of throughput (Normann & Ramírez,1994; Wikström, 1996). This opened up the issue of intra-organisational factors and their role in developing consumerengagement platforms. In this regard, Brodie et al. (2011, p. 260)highlighted the importance of precursors (including firm-specificfactors/resources) in their the definition of CE: “it occurs under aspecific set of context dependent conditions generating differing CElevels; and exists as a dynamic, iterative process within service re-lationships that co-create value.”

3. Intra-organisational factors impacting consumerengagement

Previous research revealed that organisations would be betteroff moving towards higher order CE platforms (Brodie et al., 2011);yet, the factors that needed to be in place and the barriers thatneeded to be overcome to achieve this from an intra-organisationalperspective had not been explored in the past. In particular, anumber of organisational factors, including the firm’s strategy,management structure, culture and technology, had been identifiedas the antecedents of consumer engagement (Kristensson,Johansson, & Matthing, 2008; Payne et al., 2008; Shaw et al.,2011). However, it is as yet not known how these intra-organisational factors will influence higher order consumerengagement (including co-creative modalities) in the context oftourism firms. With this as the precursor, the following sub-sections provide an account of how information flows as well asthe impact of communication, culture, technology, and other in-ternal factors that have influenced consumer involvement in ser-vice transactions.

3.1. Information flow, communication, and culture

High consumer engagement requires firms to adopt a proactiveorganisational posture that would facilitate information sharing ina dynamic, iterative process. In this vein, van Doorn et al. (2010, p.258), while referring to Bolton and Saxena-Iyer (2009), suggested

P.K. Chathoth et al. / Tourism Management 42 (2014) 181e193 183

that “consumer information environments can strongly affect con-sumer engagement behaviours (CEBs).” Accordingly, what remainedintegral to the involvement of the consumer in effectuating trans-formations (Abramovici & Bancel-Charensol, 2004) from anorganisational perspective was the information the consumershared with the service provider, which was essentially a vitalcomponent of the input resources (Bancel-Charensol, 1999; Ennew& Binks, 1999; Mills & Moberg, 1982; Yen, Gwinner, & Su, 2004) andfor creating the requisite platform for CE to emerge (van Doornet al., 2010). In this regard, effective communication between theorganisation and consumers was also seen as an important ante-cedent for consumer involvement and by which co-creationemerged (Grissemann & Stokburger-Sauer, 2011; Payne et al.,2008).

Studies of service innovation management in hospitality indi-cated that a strategic approach for seeing the business through theconsumer’s eyes was critical for making significant service inno-vation changes, requiring an effective communication strategy fornew hospitality service concepts (Ottenbacher & Harrington, 2009).The findings in innovation management indicated that the four keydeterminants for new service performance success required stra-tegies that ensured service quality, market assessment, innovationprocess management and organisational structure that wouldfacilitate creativeness, employee empowerment and behaviour-based evaluation (Ottenbacher & Harrington, 2010).

Furthermore, researchers acknowledged the close relationshipbetween strategy and culture (Harrington & Ottenbacher, 2011;Okumus, Altinay, & Chathoth, 2010). A culture was developed toensure that responses followed norms to increase the likelihood ofsuccess based on demands for adaptation, reduction of uncertaintyand internal integration. Many times these learned responses tookthe form of organisational processes (Saffold, 1988). Thus, culturewas thought to be an antecedent impacting organisational pro-cesses, including those impacting consumer engagement.

If these antecedents that included the appropriate organisa-tional culture, supportive leadership, and open and transparentcommunication were not in place, value might be co-destroyedduring high consumer-firm interactions (including co-creation)(Plé & Cáceres, 2010). It was essential to note the difference be-tween consumer involvement and engagement. Involvementrelated to the consumer’s level of interaction throughout variousstages of the service production process. These interactions tookplace at the cognitive, individual, and response based levels(Laaksonen, 1994). On the other hand, CE reflected the degree towhich a consumer was physically, cognitively and emotionallyconnected with a service organisation (Patterson, Yu, & De Ruyter,2006). Bitner et al. (1997) and Hubbert (1995) both argued thatthe level of the consumer’s role in marketing exchanges, whetherpassive, moderately active, or highly active, depended in a largepart on the type of goods-service bundle. Consequently, consumerinvolvement and the composition of the goods-service bundle(Brodie et al., 2011) during service interactions and the exposure ofthe firm to uncertainty as a result of the consumer’s role needed tobe taken into consideration, which could affect the implementationof CE or co-creative processes.

In addition, Lusch et al. (2007) highlighted the importance oforganisational culture by stating that S-D logic should be anorganisational philosophy well embedded within the entire orga-nisation. Such a philosophy would lead to a more market- andconsumer-driven approach to product and service provision. In anenvironment in which S-D logic was well embedded, employeeswere the primary source of innovation and value creation, and therole of the manager was that of a servant leader (Lusch et al., 2007,p. 15) who supported the employees and facilitated their attemptsat developing new and creative ways of providing service.

Therefore, in such environments, relationships between consumersand providers became the focal point of engagement platforms(Sashi, 2012) with trust and commitment as the basis to foster suchrelationships (Bowden, 2009; Morgan & Hunt, 1994). The organi-sation would then move along the consumer engagement cyclefrom connection and interaction at the initial stages towardssatisfaction, retention, commitment, advocacy, and engagement atthe higher levels (Sashi, 2012).

Such collaboration required open communication and trustbetween the leadership and employees (Shaw et al., 2011). To do so,organisations needed to manage their capabilities and compe-tencies that formed their value activities (Möller, 2006). Given theuncertainty and complexity of superior consumer engagement,emphasis was given to empowering the consumer (Prahalad &Ramaswamy, 2004a; Ramaswamy, 2009) allowing for value co-creation to emerge (Brakus, Schmitt, & Zarantonello, 2009; Brodieet al., 2011; Prahalad & Ramaswamy, 2004b).

3.2. The role of technology

As described in the literature, consumers expected a continuousflow of information, active dialogue and transparent communica-tion, which would help them to co-construct personalised experi-ences (Prahalad & Ramaswamy, 2004a, 2004b) that would form theprecursors to consumer engagement. Therefore, all channels ofcommunication and the technologies on which they depend,needed to be put into place in order to engage consumers(Kristensson et al., 2008; van Doorn et al., 2010) to share all kinds ofexperience and knowledge (Kristensson et al., 2008).

In today’s environment, information technology facilitates theflow of information and knowledge among managers, employees,suppliers and consumers and thus enhances collaboration for valuecreation (Cabiddu et al., 2013; Lusch et al., 2007). However, it is alsoimportant to consider how technology can be used effectively toengage consumers (Verhoef, Reinartz, & Krafft, 2010), including ininteractions using virtual platforms (Füller, Mühlbacher, Matzler, &Jawecki., 2009). Organisations need to consider both ‘consumer’and ‘employee’ readiness when evaluating the benefits or costs ofthe use of technologies (Shaw et al., 2011).

As indicated earlier, an infrastructure that would facilitateemployee empowerment and creativity appears to be a criticalantecedent for hospitality innovation. Because hotels often have thesamebasic “hardware”, newservice approachesor innovationswouldrequire using employees as theultimatemoderator fordifferentiatingservices due to the direct impact on consumers’ satisfaction(Ottenbacher & Harrington, 2010; Zeithaml & Bitner, 2006).

3.3. Other organisational factors

Additionally, Plé and Cáceres (2010) argued that when theavailable competencies and capabilities of organisations weremisused or not properly managed, there was a decline in the sys-tem and thus in value creation. For example, in those firms inwhichleadership did not treat employees as operant resources and themanagement approach was based on the manipulation of rewardsand punishments, the solidarity among the levels weakened;thereby, hindering the organisation’s ability to co-create value withits consumers. Likewise, if employees did not receive propertraining, they may not have the skills and knowledge to engage invalue-creating activities (Plé & Cáceres, 2010). Through previousresearch (Grissemann & Stokburger-Sauer, 2012; Lafley & Charan,2008; Möller, 2006; Verhoef et al., 2010; Yang, 2008), theseorganisation-specific variables had been identified as factorsinfluencing an organisation’s ability to engage consumers in thevalue-creation proposition.

Table 1Firms’ profiles.

Hotel 1 Hotel 2 Hotel 3

Segment Upscale Upscale UpscaleModal choice (mgt. contract/

franchise)Managementcontract

Managementcontract

Franchising

Level of service Full service Full service Full serviceOrganisation (chain, single unit) Chain Chain ChainBrand (American/European, etc.) American American EuropeanSize (no. of rooms approx..) >500 300e500 >500Properties owned by parent

company>1000 300e500 100e300

Scope/reputation (international/local)

International International International

P.K. Chathoth et al. / Tourism Management 42 (2014) 181e193184

Although the literature did not pinpoint the barriers to engagingconsumers, generic consumer value-creation related barriers weredeemed to be related to the employee dimension and the processdimension (Lin & Lin, 2006). Barriers related to the employeedimension included “depression and discouragement, inadequateknowledge, distrustful environment, experience shortage, lack of avalue-creation culture, insufficient rewards, deviation of recogni-tion, discouraging activities and environment, poor value man-agement, heavy workloads, and poor consumer relationship.”Barriers that related to the process dimension included “short-of-core technology, bad services and attitudes, lack of long-termperspective, short-of-market segmentation, poor resource sup-port, emphasis on profit rather than value, mutual distrust, poorvalue-chain activities, arrogant and conceited attitude by theorganisation, and lack of an understanding of consumers’ needs”(Lin & Lin, 2006, p. 98). Note that these were generic barriers thathad not been uncovered from the context of CE among higher levelsof service.

In essence, consumer and employee empowerment and a senseof self-determination were prerequisites for CE. Therefore, it wasimportant for managers or empowered frontline employees toprecisely communicate their expectations and to show their will-ingness to apply resources to attain a high level of CE through allpossible means. Also, interaction by means of interviews, experi-ments, etc. could be employed to convince the consumers that theorganisation shared their perception of value-in-use rather thanimposing a unidirectional means for consumers’ input. Barriers toengaging consumers in service interactions also surface when theinput from end-users was adopted prematurely, in other words, tooearly in the process of transforming inputs to outputs that involvedinformation and knowledge sharing between producers and con-sumers (Hoonhout, 2007).

In a nutshell, as per the literature, the S-D logic perspective andco-creative modalities provided the required impetus to move to-wards higher order CE platforms. However, intra-organisationalfactors needed to be assessed and exposed in order to better un-derstand how such an orientation could be achieved. In this regard,two overarching questions guided the research enquiry: What isthe firms’ (internal) posture towards high levels of CE through thelens of the S-D logic? How do different organisational factors affectthe adoption of superior levels of CE?

Using the foregoing questions as the basis of inquiry, this paperused an exploratory research method to uncover the intra-organisational factors influencing consumer engagement plat-forms. The following section provides a description of the meth-odology, which was used for the study.

4. Methodology

A field study was conducted with the two overarching researchquestions noted above as the precursor to explore CE in an upscale/luxury setting among the units of three international chain hotels inHong Kong. The hotel industry appears to be a driving force intourism success serving as a core element of the tourism experienceinfrastructure (Ottenbacher, Harrington, & Parsa, 2009). Therefore,the investigation of enhancing the tourist experience through CEplatforms in the context of hotelswaswarranted. The choice ofHongKong was purposeful in that high consumer expectations, hospi-tality standards, and the competitive environment, as compared toother such contexts, gave it the requireddistinction for inclusion in astudy such as this. In short, high-end hospitality services in an in-ternational setting provided defensible grounds for examining andassessing consumer engagement activities.

The focus on high-end hospitality services, comparedwith otherservice providers, provided a fair test of CE: highly demanding

consumers frequent such luxury hotels, and these hotels chargehigh prices and offer high levels of differentiation. Moreover, thesethree hotels had international reputations for excellent service andconsummate consumer satisfaction. The parent companies of thehotels were top-ten hotel firms globally, and the three units were inthe top ten in terms of brand recognition and market presence inHong Kong. To ensure comparability, cases were carefully chosenbased on similarities in hotel characteristics, including the type ofhotel, its product-service attributes and the existing serviceframework (as shown in Table 1).

The data collection process was scheduled during threeconsecutive weekdays at the identical hour of the day to control forany possible interviewing biases and external factors such as theseason of the year, workload, etc. In each hotel, a two-stage processwas used, which was adopted from White, Hede, and Rentschler(2009), who used both in-depth interviews and focus groups toexplore the S-D Logic framework of co-production. Krueger (1994)noted that the latter could be used to “produce qualitative data thatprovide insight into the attitudes, perceptions, and opinions of par-ticipants” (p. 19).

The following two stages as per White et al. (2009) wereincluded: (1) In-depth, one-on-one interviews were first conductedbetween the team of researchers and the General Manager of thehotel (Table 2 summarises the profile of the three General Man-agers from the three studied hotels); and (2) interviews were thenconducted with focus groups comprised of at least six participants(O’Neill, 2012; Rabiee, 2004), which included department heads/senior managers and frontline executives from key operating de-partments (see Table 3 for profile of respondents). A total of 20executives participated in the focus groups across the three hotelsrepresenting various organisational levels and operational pro-cesses (regardless of front-end or back-end status) so as to include amore comprehensive and holistic account of consumer service/engagement activities. The two-stage process allowed for a morein-depth exploration and verification of findings and to arrive atconclusive and consistent findings, which in turn increases thereliability associated with them.

A semi-structured interview format was chosen to allow certainflexibility for exploratory and clarification purposes. An interviewguide was developed with the input of all the researchers involvedand this interview guide was piloted before the fieldwork started.Some questions that were not understandable were changed, somewere combined, wording of secondary questions were adapted andadditional prompt questions were developed. As suggested byTaylor and Bogdan (1984), interview questions were revised andimproved during the data collection stage as well. The interviewguide was designed in such a way that the interview process wouldhave three phases:

� The first phase of the interview included a short briefing aboutthe aim of the research, purpose of the interview, a statement of

Table 2Demographic profile of in-depth interview respondents.

Firm Age Total workingexperience

Work experience inpresent hotel

Position

Hotel 1 35e45 >11 years <1 year General managerHotel 2 35e45 >11 years 1e3 years General managerHotel 3 46e55 >11 years 5.1e7 years General manager

P.K. Chathoth et al. / Tourism Management 42 (2014) 181e193 185

confidentiality and request for permission to use a tape recorder.This phase also incorporated general questions about in-formants’ backgrounds, role and experience.

� The second phase of the interview process involved askingbroad, open-ended questions. Informants were asked to explainhow they engaged their consumers in service interactions andwhat factors influenced the consumer’s engagement. Overall,the researchers aimed to construct a channel leading toknowledge regarding consumer engagement in hotel serviceinteractions and factors that would constitute engagementbarriers. To ensure that all relevant facets of an informant’sconstructed reality was explored, the researchers made surethat the followingmain questions were addressed at some pointduring the interview, without disrupting its flow. In order toensure internal consistency and validity and also facilitate theanalysis, as suggested by Altinay and Paraskevas (2008), theresearchers took notation of the possible linkages between theinterview questions and the literature. The goal was to be asexplicit as possible in terms of the knowledge an informant’sanswer supplied with regard to the research area covered in theliterature.a. What role do consumers play in adding value to the existing

products and services? (Aimed at finding out the importanceand the role of consumer engagement in improving existingproducts and services.)

b. What role do consumers play in new product/service devel-opment? (Aimed at finding out the importance and the role

Table 3Demographic profile of focus group respondents.

Firm Age Gender Total workexperience

Workexperiencein presenthotel

Position

Hotel 1 35e45 Male >11 years <1 year Director (F&B)46e55 Male >11 years > 11 years Director (services)35e45 Female 9.1e11 years 1e3 years Director (engineering)35e45 Male >11 years 1e3 years Executive chef26e34 Male >11 years 1e3 years Director (rooms)35e45 Male >11 years <1 year Director (S& M)

Hotel 2 46e55 Male >11 years 3.1e5 years Assistant manager(front office)

46e55 Female >11 years >11 years Director (housekeeping)35e45 Male >11 years 9.1e11 years Director (IT)35e45 Female >11 years 3.1e5 years Director (catering &

conferences)26e34 Male >11 years 5.1e7 years Assistant director (sales)35e45 Male >11 years 1e3 years Duty manager46e55 Male >11 years 1e3 years Director (quality

management)Hotel 3 35e45 Female >11 years <1 year Front office manager

35e45 Female >11 years 1e3 years Assistant manager (S&M)35e45 Female >11 years 1e3 years Executive housekeeper26e34 Male >11 years 1e3 years Assistant director (F&B)18e25 Female 3.1e5 years 1e3 years Learning & development

manager35e45 Female >11 years 1e3 years Director (human

resources)Notshared

Female Not shared 9.1e11 years Marketingcommunicationsmanager

of consumer engagement in improving new products andservices.)

c. How often do you engage your consumers for feedback onyour products/services? How do you benefit from consumerfeedback? (Aimed at finding out if the organisations have anymechanisms and how they use thesemechanisms to facilitateconsumer engagement in improving the current products/services and thus benefit from this process of engagement.)

d. How do you benefit from consumer engagement and feed-back in new product/service development? (Aimed at findingout if the organisations have any mechanisms and how theyuse these mechanisms to facilitate consumer engagement indeveloping new products/services and thus benefit from thisprocess of engagement.)

e. What constitutes barriers to consumer engagement? (Aimed atexploring the factors which would impede consumerengagement.)

f. How can technology facilitate consumer engagement?(Aimed at finding out how the technological infrastructurecould either positively or negatively influence consumerengagement in service interactions.)

g. How can organisational strategy stimulate consumerengagement? (Aimed at finding out how the strategy of theorganisations could either positively or negatively influenceconsumer engagement in service interactions.)

h. How can management structure underpin consumerengagement? (Aimed at exploring the influence of eitherpositively or negatively management structure on consumerengagement in service interactions.)

i. How can organisational culture support consumer engage-ment? (Aimed at finding out how organisational culturecould enable consumer engagement in service interactions.)

� In the final phase of the interview process, informants wereasked whether they would like to add anything else related tothe consumer engagement in service interactions. By asking thisquestion, it was hoped that issues that had not been coveredduring the interview could be reverberated by the informants.Moreover, informants could clarify some of the issues whichwere discussed during the interview.

To ensure consistency and eliminate further interviewing biasesfrom the in-depth interviews, the same set of pre-set guidingquestions was used, and the same two interviewers were assigned(with one interviewer as the facilitator) in all three interviews. Thefocus group was comprised of five researchers including the facil-itator (same for both stages).

In the first phase, the aimwas to determine the extent towhich CEwas reported by respondents ranging from the standard practices tomore sophisticated levels (possibly including co-creation). As a followup, specific examples of such probable occurrences were also inves-tigated. Specifically, the various aspects of consumer service pro-grammes were probed, including the engagement of consumers inservices; feedback from consumers; how feedback from consumerschanged services; level of personalisation of services and for whom;utilisation offirm resources (including technology) to facilitate higherlevel of consumereemployee engagement; level of decentralisationand empowerment of consumerecontact staff; the role and involve-ment of service employees’ interactionwith consumers; barriers andimpediments to engaging consumers in service interactions from thefirm’s and the consumer’sperspectives (i.e.,managerialperceptions ofbarriers); and how to overcome such barriers. Note that the foregoingquestions led to several probing questions that formed the essence ofan in-depth investigation during both stages.

All interviews with managers and the focus groups were tran-scribed verbatim and reviewed for accuracy. These transcripts were

Table 4Findings categorised by context and barriers.

Categories Barriers Findings

Consumers Beliefs and attitudesrelatingto value creation are notshared by consumers

� Risk perception of consumers� Lack of prior knowledge by

consumers� Consumer complaints and

dissatisfaction� Lack of consumer interaction

Technology Lack of access totransformationalchannels

� Secondary role of informationtechnology

� Lack of technology integrationStrategy Differentiation services

are not justified byprevailing prices; lackof co-alignmentbetween producerand consumer goals.

� Lack of information sharing� Lack of innovation� Excessive control of brand

Managementstructure &culture

Risks attendant toexcess differentiation;inadequate incentivesfor risk taking.

� Geographical context� Lack of flexibility� Traditional marketing methods� Predominant profit motive� Traditional approach to

organisational structure� Failure to recognise and

acknowledge roles

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then analysed for context, specifically for common patterns. Giventhat the literature on CE (including barriers) is limited, a theoreticalapproach as well as an inductive approach were employed (Miles &Huberman, 1994; Yin, 2009) which provided an opportunity toexplore issues that emerged from the empirical data. An interviewprotocol and coding schemewere derived from the literature reviewwhich then served the purpose of categorising the transcripts ofsemi-structured interviews and focus group interviews. All of theempirical data were sifted and charted according to core categories.Key themeswere then redefined, the rangeandnatureofphenomenawere mapped, and associations or explanations were sought. Basedon this procedure, nominal categories relating to organisationalbarriers from a CE perspective were constructed and used as theorganising structure for specific comments and quotations.

5. Findings and discussion

Thedata revealed that insofarasmanagersacknowledge the roleofthe consumers in the production of services, they did not have aprocess in place to support higher CE to facilitate co-created value.None of the respondents reported the use and occurrence of co-creative processes (even after follow-up questions that related tosignificant firmeconsumer interactions and exchanges). In fact, noneof these hotels had an underlying philosophy of engaging the con-sumer at higher levels beyond consumer satisfaction programmes(CSPs). These programmes were steeped in G-D logic in that theywere, byand large, definedby thefirmbasedonhistorical orientationsand traditionalism (explained below). The engagement of consumers,as defined by the firm, was cosmetic in nature, which led to severalprobing questions on orientation and philosophy, resource commit-ments and underlying logic. As a result, the bulk of the answerscovered barriers to implementing higher levels of CE, a subject thatwas explored in greater depth in the focus groups. In all, numerousbarriers relating to the conceptualisation, orientation, andprovisionofproducts and services for different CE behaviours were identified.

The above barriers were organised into the following categories:consumers, technology, strategy, and management structure andculture (see Table 4 and Fig.1). Within each section that follows, therelevant barriers for each category are defined, and the specificbarriers obtained from the field interviews are elaborated. Thebarriers relating to any lack of adaptation in this regard relate tovalues that were not shared by the providing parties, resulting inspecific comments relating to risk, lack of prior knowledge, and lackof deep engagement.

5.1. “Barriers relating to consumers”

5.1.1. Risk perception of consumers and lack of information sharingAccording to Hotel 1 managers, consumers might withhold

providing feedback and information regardless of their experience.The managers attributed this to a misplaced belief by consumers ofrisk exposure if information was shared. This was reflected in thestatement from the GM of Hotel 3: “We are the service provider, youknow, giving us personal information like that.you will never knowwhere it goes..” The managers did not elaborate on what the hotelwas doing to encourage consumers to share information that wouldhelp the firm to provide superior services. This was also alluded toby the GM of Hotel 2. The lack of communication between the firmand the managers in managing the risk perception of consumersregarding information exchange with firms was seen as a barrier.

5.1.2. Consumers were expected to have prior knowledge of thebrand standards

The managers were of the opinion that their firms’ consumersneeded to have information on the brand/service standards prior to

engagement. According to them, hotels shared brand/servicestandards with consumers and expected consumers to follow thestandards to reap the benefits. Inherent in this was a level ofstandardisation given the “brand standards” defined at the strategicbusiness unit (SBU)/corporate level. In fact, Hotel 1 managers wereof the view that consumers might not be willing to share theirpreferences with the firm. Instead, they would be willing to engageonly if they knew a prioriwhat the firmwas willing to provide. TheHotel 2 GM went on to suggest that “They (consumers) would knowwhat to expect.which are their brand expectations and our brandstandards. So when they (consumers) come to our hotel, situated nextto another hotel, they have specific expectations that we meet and tryto exceed.” This was contrary to what experts had suggested aboutthe role consumers had begun to play in service interactions, whichin turn clearly reflected the firm-centric, G-D approach to servicemanagement in these firms. Needless to say, in an environmentwherein managers were of the view that consumers preferredgeneric service standards, defined as a priori by the firm, the exis-tence of a more dynamic CE was difficult to achieve.

5.1.3. The geographic context affected consumer expectations ofproducts and services

One of the major barriers to engaging consumers was high-lighted in the interviews when the Hotel 2 GM suggested that “Aguest who stays at the hotel in Albuquerque for a seminar and thencomes to an event in Tokyo or Seoul subsequently and consumes thesame brand has very different expectations.the same guest, the samebrand, but different expectations. He knows in America, he is the one tocarry the luggage. But here in Asia, it’s all ‘yes sir..no sir,’ and theconsumers know that. So the expectations change very muchdepending on the countries (geographic context).” The barrier in thisparticular situationwas that consumers consuming the same brandin two different geographic contexts may have had different re-quirements and expectations. The different consumer re-quirements/expectations of a given brand led to differentexperiences for the same consumer. Firms found it difficult to trackdown the different requirements and expectations and capturethem in their guest history systems, especially if these systems hada low IT interface. Moreover, it was even more difficult to managethe value-creation process when consumers consumed products

Fig. 1. Organisational barriers affecting consumer engagement.

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and services of the same genre (and brand) differently in differentgeographic contexts.

5.1.4. Absence of consumer-interaction platformsInteraction with consumers before the service was not given

enough emphasis in the context of the three firms. The roles ofdepartments (and employees) were defined by the standard oper-ating procedures (SOPs), and the rigidity of the system was re-flected in the response, which suggested that the consumerinteracts with departments per his/her requirement. To this end,the GM of Hotel 2 mentioned that any personalised level of inter-action for service co-creation results only when the consumerinitiates the process. Moreover, “The consumers don’t like to be askedtoo many questions.they will tell you what they want you to know.”The GM also was of the opinion that consumers preferred not toshare this information through on-line mechanisms; instead,“.they just want efficiency.” Although Hotel 3’s GM pointed out thathis staff did interact with consumers, his perspective was thatguests seek recognition when they interact with the hotel and thatthese interactions were ad hoc and did not have a structure (i.e.,

they do not emanate from a system-driven approach). This wasreflected in his statement: “I think the guests are looking for recog-nition nowadays. You know they feel they are recognized, then theybecome our regular guests. We meet with them a lot and put theirpreferences into our system, so that the next time they come, we havethe room or everything they want the way they like it, but we do nothave a structure for their engagement.” This reflects that there wasno platform/system in place to engage consumers in service in-teractions. When the GM of Hotel 3 was asked about IT-basedinteractive platforms that could enable consumers to input theirpreferences into the firm’s database through an on-line interface,the GM stated, “I have not heard about it, it would probably happen, Iwouldn’t be surprised if it did happen, but I am not sure how easilypeople are willing to put their personal details into it.” Note that thelinkage between the consumer’s idiosyncratic needs and the needto engage the consumer in a dialogue with the firm was not high-lighted in any of the discussions by the firms’ managers.

In fact, consumer interactions during and after the service wereemployed only for the reason of eliciting consumer feedback. Forexample, the remark of Hotel 2’s GM that consumers constantly

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engaged with him and his colleagues to provide “solicited and un-solicited feedback” was indicative of the system prevalent in thehotels, which was predominantly a post-transactional feedback-based system. The GM of Hotel 3 pointed out that, “We have thispaper, sort of a questionnaire in the rooms, anyone fills them out, wewill actually follow-up with a letter, ‘thank you for your goodcomment’ or ‘thank you for your constructive criticism’. wepersonalise the letter.” This approach of waiting for consumers toprovide feedback on services was reflected in the traditional ‘G-D’approach (Vargo & Lusch, 2004b, 2008). All three hotels relied on a“questionnaire-based approach” to obtain feedback from con-sumers. This again shows the traditionalism inherent in the sys-tems used by the hotels included in this study.

5.2. “Barriers relating to technology”

5.2.1. Lack of innovationThe managers of all three hotels alluded to innovation as being

critical; however, this was in reference to competition rather thanthe consumer’s perspective. Despite this, the platform to integrateIT in hotels was restricted as pointed out by a manager of Hotel 2.The reason for this was the very nature of the hotel product-servicebundle, in that the “hardware” was difficult to innovate given thefixed nature of the assets. Nonetheless, the manager did not explainwhy the elements of the product-service bundle that could bemanipulated through a technology interface were not as “innova-tive” (this was well documented in the literature of Chathoth, 2007;Chathoth & Law, 2011).

As the manager of Firm 1 stated, “Your business excellence modeltells you where you’re engaging, who you’re engaging, when you’reengaging, and why you’re engaging. In the case of hotels.you justcan’t put them (the where, who, when, and why) in a sequencebecause.you’re dealing with human beings. For me, it can work (inany sequence), you know a guest can tell me (something).10 daysbefore his arrival, and he can.demand something else when he ar-rives.” This, according to the manager, affected the innovationaspect. Here again, the manager did not elucidate on how state-of-the-art technology could play a role in superior innovation in hotelproducts and services, while being instrumental in manipulatingthe components of the “business excellence model” and therebybringing about flexibility in the system. This could be attributed toboth bounded rationality and traditionalism inherent in the oper-ations of such firms (this has been expanded on in the ensuingparagraphs of this section). Based on the above, it could be statedthat the level of innovation in all three firmswas at the lower end ofthe spectrum as being driven by rigid brand and product standards.

5.2.2. Secondary role of information technologyManagers at all levels across all three firmswere of the view that

technology had improved and on-line technology advancementhad reached a high level of sophistication. However, they believedthat service excellence and a higher level of consumer satisfactionwould result regardless of the use and sophistication of technology.In other words, they believed that employee attitude and ability toserve the consumers were the key to advanced service orientationand CE. The role IT plays in this regard was secondary. This washighlighted in the comment of one of the Hotel 2 managers: “I thinkit (technology) helps you store the data and gives you something toanalyse, but not necessarily really in the service itself.” This notionwas supported by most managers who participated in the study.The lack of awareness of the role of technology and its use inconvincing consumers to engage in services was a major barrier inadopting the co-creation framework. This further affected theintegration of technology in service interactions within these firms,as detailed below.

5.2.3. Lack of technology integration in servicesThe role of technology in services was well documented in the

literature. Despite this, the level of technology use in all three firmswas at the lower end of the spectrum. These firms expected gueststo use traditional methods of communication despite the high levelof sophistication seen in the current age of information technology.For instance, technology was not used to set the temperature in theroom as “guests could do this themselves.” One of the managers ofHotel 2 went on to suggest that “.Actually, the guests can (do itthemselves).there’s a switch control in the room, they can adjust bythemselves, but then some guests do not know how to use theswitch.they will come back to us.” This clearly reflected the lack ofintegration of technology in such interactions. Note that the firmswith a centralised system for controlling the room temperaturethrough a technology interface predominantly (with some excep-tions) did so to standardise the process.

Face-to-face interactions were seen to generate more informa-tion than on-line engagement, which was contrary to the assertionsof researchers (Sawhney, Verona, & Prandelli, 2005). The integra-tion of technology in facilitating services that would increase CEwas viewed as not so “service-oriented,” as in the following remarkby the Hotel 2 GM: “Our system doesn’t have that (i.e., a more so-phisticated technology component to engage consumers), but quitefrankly, from colleagues that do have that in their hotels, nobody usesit for the simple reason.it’s so much cheaper to just pick up the phoneand order. People don’t want to be bothered.they just pick up thephone (to order). That’s what I see, at least in the five-star hotelenvironment.” Moreover, the GM of Hotel 3 suggested that “.Thehotel business, at the end of the day, still is ‘smile-on-the-face’ and‘thank you sir’..and to me this is it.that will not change, and I can’tsee that changing.I think technology takes away the service.but theservice, I think it is what we want them to experience.and in someway, yes (the service is diminished by the technology),” alluding to thefact that perhaps technology did not matter much in serviceinteractions.

Such an approach was probably related to the lack of under-standing of the role of technology in creating a superior serviceexperience through effective information-sharing processes asoutlined by Chathoth and Law (2011). In fact, the sophistication thattechnology brought about in getting firms to engage with all con-sumers alike and to manage these interactions was not mentionedby any of the executives who were involved in both stages of theinterview process. This lack of understanding of the role of infor-mation technology (which was evident in the response provided bymanagers across all three firms) in setting up a CE platform togenerate meaningful and valuable interactions with consumers(Sawhney et al., 2005) which would have resulted in a superiorconsumer service experience proved to be a barrier in itself.

5.3. “Barriers relating to strategy”

5.3.1. Lack of information sharing/processingA proactive approach to information processing was not part of

the approach adopted by the hotels. In other words, the firms’managers alluded to using post-transactional information providedto the Sales and Marketing team and on the Internet (blogs) as avehicle for finding out more about consumer needs and wants andobtaining feedback on their services. There was no system in placefor interacting with the consumer before the service to capture thespecific wants and needs of a particular guest. This approach defiedinnovative interventions given the lag that existed between con-sumer feedback and adoption of changes during the post-transactional phase. The assumption inherent in this approachwas that a given consumer’s needs and wants would remain con-stant across two different interactions over two different time

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periods. This was reflected in the statement by the GM of Hotel 3:“At the moment we have a paper questionnaire, which is selectedrandomly by the system at the corporate level. As long as we havearound 70 to 80 questionnaires, they are sent to the corporate systemin sealed envelopes for report generation.” Even though the GM ofHotel 3 mentioned that this feedback system would be going on-line, IT interventions were not used effectively to make the sys-temmore efficient and proactive in dealing with informants relatedto the wants and needs of consumers. This was a major barrier indeveloping effective CE platforms.

What was perceived as an even greater barrier was that theinitiative of sharing information and the consumer-interactionprocess needed to be defined by the consumer and not by thefirm. In other words, the consumer had to take the initiative in theinformation-sharing process. To this end, the GM of Hotel 3 pointedout that they primarily dealt with guest comments through thequestionnaires for initiating changes. The post-transactional in-formation received through these questionnaires was used as themedium for becoming more consumer-oriented.

Hotel 2’s managers also alluded to this in their response as tohow informationwas processed and how consumers were engagedin service interactions. However, the platform provided by the firmused to engage the consumer was more traditional than IT-based,which made it difficult for the consumer to get involved insharing information in the first place. The traditional nature ofservice orientation and the lack of IT integration were reflected inthe Hotel 2 manager’s response, “I train my staff to remember guests’names and remember their faces.” The obvious question thatemerged here was: How would this staff member be able to dealwith the complexity associated with information gathering andprocessing on a daily basis while at the same time handling oper-ations, if a technology platformwas not effectively used during theservice process? Note that employees of major hotel corporationswere adept at handling consumer complaints but were not trainedto handle information (Yang, 2010).

5.3.2. Excessive control on the brand and product experienceBrand standards were seen as barriers to CE. In the context of

hotel services, an upscale brand that was part of a firm’s brandfamily had brand standards to adhere to that were set at thecorporate level. This confirmed that brand standards could inhibitfirms from nurturing consumer engagement, unless the platformused to engage consumers was redefined. This was reflected in theresponse given by one of the operations manager of Hotel 2 that“.We have a standard of 23 degrees Celsius for all rooms.”

regardless of consumer preferences. Amenities were pre-defined byhotels based on a priori categorisation of guests using their profile,and themanagers expected consumers to request changes based ontheir specific needs and wants. As a result, there was a peckingorder of service engagement and orientation, given that VIPs weregiven greater importance than consumers who were not asimportant to the firm (based on the firm’s definition), despiterequesting the same service and paying the same price. This can bededuced from the statement of the GM of Hotel 3: “We personalizeservices for certain consumers, the VIPs that come regularly, that is, ifthey are members of the loyalty program.” The managers of Hotel 3further pointed out that “.Every morning, we have a VIP arrival listso that we know who’s coming.and if there are any particular thingsthey need, we prepare them (prior to their arrival).” Needless to say,the special needs of VIPs were deemed more important than thoseof the average consumer.

Therewas no effort on the part of the firms to proactively engagewith consumers to identify their specific needs and wants. Themanagers of Hotel 1 were of the view that the hotel plays a biggerrole in creating experiences for consumers, as these consumers

may not be “.willing to tell you (the firm) what they want.” WhenHotel 2 managers were asked about the corporate level’s role indefining the brand standard and if the SBU simply followed thebrand standards, the answer was an unequivocal ‘yes’. However,one of the managers of Hotel 1 suggested that a slight deviationfrom set standards was possible “.as long as it is reasonable”. Thetop-down approach of hotel firms and the traditionalism thatemanated from such an approach led to a culture and philosophythat emphasised control over the brand and product experience. Tothis end, the GM of Hotel 3 pointed out that the amenities (i.e.,minibar) in the room were standardised, and deviations to thestandard based on guest requirements were “not really too much”;these deviations include, for example, “If guests we know don’t drinkthe beer (in the minibar), they drink another beer, we change it, butthose are some cases.” Note that service was defined by level ofsophistication rather than the need it addresses. This in itself was amajor barrier.

5.4. “Barriers relating to management structure and culture”

5.4.1. A ‘consumer complaints-oriented’ mind-set of managersMost managers from all three firms alluded to consumer com-

plaints as the precursor to changing SOPs. This again reflected thattraditionalism driven by a “consumer complaints” approach was atthe crux of the development of service systems in the three hotels.In this regard, a manager from Hotel 2 suggested that “.If we getrepeated negative comments (on a product or service), then we changeaccordingly.” This suggested that a change was initiated only whenthings go wrong, which reflected the lack of proactiveness andconsumer orientation in relating to the market.

5.4.2. Lack of flexibilityWhereas branding had an effect on CE, the service architecture

used by the three “upscale” firms created more hindrance for co-creative processes to emerge. The level of flexibility of such sys-tems was at the lowest level in the two hotels (Hotels 1 and 2) thatused management contracts. The hotel (Hotel 3) that used a fran-chising contract was more flexible as far as standardisation ofsystems and processes was concerned. Therefore, ownershipstructure of firms in the lodging industry may have an impact onflexibility in service architecture whether corporate owned, man-agement contract, franchised or some other form of structure andits reflection in SBUs organisational culture (this structure issue isdiscussed further in a sub-section below).

5.4.3. Traditional marketing methodsAll three hotels used traditional segmentation methods pri-

marily driven by geographic and demographic profiles. Consumersand their feedback were analysed using their nationalities andsegment profiles (group related). As a Hotel 3 manager said, “Thereare limitations (to processing individual guest requests).we probablyhave guests of about 200 nationalities.so obviously we couldn’t caterfor every individual nationality.” There was no mention of the use ofpsychographic profiles, which gave the impression that traditionalmethods had been more popular in practice for the firms includedin this study. Notably, all three hotels viewed Sales and Marketingas the lynchpin by which contact with consumers was initiated andmaintained. To this extent, a manager from Hotel 3 stated that“.Actually for us from Sales and Marketing, we do sales every day, sofor us it is easy to get feedback from the consumers.” This was seen asa barrier to dynamic CE.

5.4.4. Profit motive superseded service innovationThe firm-centric approach to service had led to a mind-set of

leaders that was driven by the firm’s core profit-making objectives.

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All three firms’ managers alluded to the existence of the profitmotive as a barrier to engaging state-of-the-art systems in devel-oping services, which was seen as a major barrier to the imple-mentation of service co-creation. For instance, the Hotel 2 GMalluded to the owner’s profit motive as a factor that determined thelevel of service, innovation, and flexibility in the following quote:“Well depending on your owners and how understanding they are, butthe problem is owners; they all have bottom-line expectations, andthose are pretty inflexible. So, if you give the house away, you are goingto know it pretty soon.”

5.4.5. A traditional approach to organisational structure andmanagement

A major factor that affected innovation and proactivity wasorganisational structure. A top-down approach was at the heart ofoperations and management in the three hotels included in thisstudy, which was seen as a barrier to co-creation. This existed at theunit level, brand level and chain level. The growth of the chain-hotel organisation during the past two to three decades hademphasised the importance of this control, resulting in a co-production-based orientation. Given that the main premise of theS-D logic was on the decentralisation of the power of control on thebrand and product experience (Collins &Murphy, 2009; Gutknecht,Dörflinger, Froschauer, & Voth, 2010), the fact that hotel firms hademphasised such control was seen as a major barrier to engagingconsumers at a higher level.

5.4.6. Failure to recognise the role of the consumer and employeeNone of the managers were aware of the emerging role of the

consumer in service interactions and how they responded differ-ently to different consumer service programmes. Note that therewere differences even among consumers of the same gender andage group and even among people from the same cultural back-grounds, ethnic origin and religion. This suggested that someconsumer groups might not be willing to be part of ‘service-ori-ented solutions’ as this participative service consumption mightnot be culturally well perceived or might contradict with thetraditional consumption patterns. For example, the managers ofHotels 2 and 3 suggested that Japanese consumers were not willingto share their feedback during their stay in a hotel but waited untilthey returned home to write the hotel about their overall experi-ence (also see Huang, Huang, & Wu, 1996). Moreover, there alsomay be differences between business and leisure travellers in termsof their engagement behaviours. For example, business travellersusually travel alone and stay in a hotel one or two nights. They maynot always use formal channels such as filling in consumer satis-faction cards for feedback exchange. Therefore, the traditionalapproach used by firms to recognise the role of consumers may notbe instrumental in influencing superior CE. This, coupled with thefact that employees did not have the tools (i.e., ICT platform) toengage with consumers in a more iterative process, was reflectiveof the lack of recognition of the role of employees (and the plat-form) in CE. Note that a failure to recognise the above as influencingfactors to create CE platforms was a major barrier.

6. Summary and conclusions

The first research question related to the internal posture oftourism organisations towards CE. The overall response was thatthis was neither practised nor seriously contemplated by the re-spondents who participated in this study. If indeed an orientationtowards S-D Logic was reflective in service interactions of the firmsthat participated in the study, there would have been a reference toa superior level of CE. However, themanagers did not even allude toS-D logic in the way it was applied to service interactions, let alone

delve into an advanced level of CE (including co-creative pro-cesses). This was despite the numerous attempts to follow up onthe issue through probing questions. This lack of orientation re-flects a disconnect between research and practice in the context ofthe three hotels, which could be extended to the upscale segmentwithin the hotel industry given the global stature of the companiesthese hotels represent.

The second research question related to how different intra-organisational factors affected the adoption of CE platforms thatcould facilitate co-creation. It became apparent that these intra-organisational factors acted more like barriers to rather than fa-cilitators of co-creation. The major barriers were the corporatemanagement structure and culture, which was consistent with thegeneric strategy implementation literature (Okumus, 2003;Okumus et al., 2010). What was even more surprising in the re-sults of this study was that traditionalism (based on historic normsand practices) had seeped into the structure and culture of firmsmaking the adoption of CE platforms almost impossible. Re-spondents were of the view that the firm orchestrates the con-ceptualisation of services in these upscale hotels, which wasdiametrically opposed in philosophy and orientation to the litera-ture (notably Prahalad & Ramaswamy, 2004a, 2004b; Vargo &Lusch, 2004a). What was even more intriguing was that theabove response was consistently reflected in the response ofmanagers at various levels of the organisations within these glob-ally recognised brands. If this responsewas reflective of the generalorientation of managers within the industry (note that these hotelswere widely recognised for setting the service standards world-wide and were a standard for other hotel firms within the tourismindustry), it would not be inappropriate to suggest that adoption ofsuperior CE platforms (including co-creation) might not be a pri-ority of these managers for some time to come. As indicated earlier,the fact that the managers were not even aware of the need tochange their service package in partnership with the consumer,called into question whether superior CE (and co-creation) wasrelevant as a prospective strategy from a managerial standpointwithin the tourism industry.

In addition, consumers were seen as a barrier to the extent thatthey lacked the necessary knowledge, were prejudicial about theirviews or were limited in terms of conceptualising the total valuecreation. Strategy was a barrier when there was a lack of co-alignment or shared values between the hotels and their con-sumers regarding the value of shared participation. Technology wasa barrier to the extent that it did not provide an accessible plank. Incontext, although the respondents considered co-creationintriguing and provocative (after it was explained to them inpost-interview sessions), they did not think that their corporate,strategic and institutional mind-sets had progressed sufficiently tothe point where the benefits of co-creation exceeded the costs interms of implementation.

Despite these findings, the authors argue that these barriers donot abrogate the potential application of superior CE and future co-creation. Even firms with high service sophistication e e.g., RitzCarlton and Disney e are predisposed to a consumer experiencethat is still firm-centric; whereby, the “overall orchestration of theexperience is primarily controlled by the firm” (Prahalad &Ramaswamy, 2004a, p. 8). Interestingly, despite this orientation,such practices remain couched in consumer focus and underscoredby consumer relationship management during or after the ex-change process (Gouthier & Schmid, 2003; Sigala, 2005). It couldvery well be that, in practice, the prerequisite to co-creation intourism services, which are considered radical developments, is thesustained success of consumer engagement platforms.

Unless these barriers are fully surmounted, it is not likely thatthis will occur, at least not without major cost in implementation.

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Because barriers to co-creation are evenmore significant than CSPs,it is prudent to approach this challenge in a progressive and in-cremental manner. For the service transformation in firms to leadto value creation at the highest level, consumer attitudes, newtechnologies and the firm’s service orientation have to be inte-grated with management systems and a corporate culture thatencourage a high level of collaborationwith the consumer. To movetowards a consumer-centric context would require a greateremphasis on empowering both the employees and the consumers.Needless to say, firms that focus on controlling their consumers’service experience alone, or a culture that stifles risk and innova-tion among employees, may find it even more difficult to reorientthemselves towards superior CE. Essentially, deeper and moremeaningful consumer interactions, more transparency and greateraccess (Prahalad & Ramaswamy, 2004a) will lead to active andsuperior CE.

Understandably, the subject of CE has high currency in thetourism management literature. Results suggest that barriers to CEare prevalent. The results, by way of the findings, are contextualbarriers, but far less so in regard to successful engagement platforms.To this end, if the information that is received ismanaged properly inthe first place, the outcomewill be that consumer complaints at theend of the service will diminish. Although such information is a keyinput variable in the production of services, it is still utilised asfeedback formore concerted attempts to improve consumer service.To the extent that superior levels of CEmight be a viable option in thefuture, leadership should encourage and provide employees withopportunities to assure thatknowledge is gatheredanddisseminatedthroughout the organisation and its value-creating network. In otherwords, the firm should champion the creation of an overall knowl-edge base to be able to meet consumer needs and compete moreeffectively (Melancon, Griffith, Noble, & Chen, 2010).

Another potential point of intervention to enhance CE is a morecomprehensive analysis of selected consumer segments. Consumerexpectations differ according to age, gender, occupation, maritalstatus, purpose of travel and, more importantly, their culturalbackgrounds. The ultimate outcome and evidence of these differ-ences are the growing number of brands targeted to differentconsumer groups in the industry. Despite continuously changingconsumer needs and wants and increasing competition, hotel firmshave been criticised for not being market-oriented and, conse-quently, service-oriented (Altinay, 2010; Quintana-Déniz, Beerli-Palacio, & Martín-Santana, 2007; Ramanathan & Ramanathan,2011). Therefore, the findings have been explained as the extent oftraditionalism in the industry, which is acting as a huge barrier tochange, and the lack of competences and skill sets among leader-ship and employees.

In conclusion, it is essential to address the limitations to thisresearch. Principally, field interviews of hotel executives wereemployed in this study. Although there are reasonable criticisms asto whether these constitute a “fair” test, and the extent to whichfindings are generalisable from these cases, an inductive investi-gation at this time is needed to capture the concomitant barriers toCE, if so applicable. In this paper, the barriers have been prominentand provide deeper insights into the potential application of su-perior engagement platforms (both affirmation and disconfirma-tion possibilities). Clearly, more intensive cases with moreextensive analysis of the barriers to CE is recommended in thefuture. Exemplars (i.e., case studies) for superior CE and co-creationin the tourism field would shed light on how barriers can be brokenand serve as a benchmark for tourism service delivery. If co-creation and S-D logic through an orientation towards increasedCE are to be given credence by practitioners, it is imperative thatthese barriers are overcome through a strategic reorientation at alllevels of the upscale hotel firm’s structure.

Acknowledgement

This research project (1-ZV3T) was funded by the Hong KongPolytechnic University.

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Prakash K. Chathoth is an Associate Professor in theDepartment of Marketing, School of Business and Man-agement at the American University of Sharjah, UAE. Hisresearch interests include strategic and service manage-ment, organisational trust, and more recently, organisa-tional assimilation in the hospitality and tourism industrycontext.

Gerardo R. Ungson is the Y.F. Chang Endowed Chair andProfessor of International Business at San Francisco StateUniversity. His teaching and research areas have been onglobal strategy, strategic alliances, poverty alleviation, andAsian business. He has co-authored six books, and his nextbook, co-authored with Seung Ho Park and Nan Zhou,Rough Diamonds: Four Successful Traits of Breakout Firmsin BRIC Countries, will be published in May 2013 by JosseyBass/Wiley.

P.K. Chathoth et al. / Tourism Management 42 (2014) 181e193 193

Levent Altinay is Professor of Strategy and Entrepreneur-ship at Oxford Brookes University Business Faculty. Hisresearch interests are in the areas of tourism and hospi-tality entrepreneurship, strategic alliances and interna-tional business. Using primarily qualitative methods aswell as mixed methods, he is particularly interested inhow entrepreneurs start up and develop their businessesand also how firms establish partnerships internationally.

Eric S.W. Chan is an Assistant Professor in the School ofHotel and Tourism Management at The Hong Kong Poly-technic University. His research interests include hotelenvironmental management and tourist behaviour. He hasconducted a range of training programmes for the industryand has served as a “Hotel Management Specialist”assisting the Hong Kong Quality Assurance Agency(HKQAA) audit team to assess the ISO 9000 quality man-agement system of hotels.

Robert J. Harrington is Professor and 21st CenturyEndowed Chair in Hospitality at the University of Arkansas,School of Human Environmental Sciences, Fayetteville,Arkansas USA. His research interests include strategicmanagement and innovation management in the hospi-tality field. As a former Certified Executive Chef, he alsohas a secondary research interest in sensory aspects offood and wine. He is the Editor-in-Chief for the Journal ofCulinary Science & Technology.

Fevzi Okumus is Professor and the Chair of the HospitalityServices Department at the Rosen College, University ofCentral Florida, Orlando, FL, USA. His research focuses onstrategy implementation, change management, competi-tive advantage, learning organisations, knowledge man-agement, crisis management, cross-cultural management,destination marketing and developing countries. He isthe editor of the International Journal of ContemporaryHospitality Management (IJCHM) and serves on the edito-rial board of 12 international journals.