This paper proposes a model to explain how ethics play a role to produce innovation in hospitality. Literature from social responsibility and ecological management was reviewed in order to state how ethical values induce advances by stimulating teams and breakthroughs. A survey was carried out based on structured questionnaires, filled in by 134 hotel managers in Gran Canaria (Spain). By means of path analysis, it was demonstrated the antecedent role played by ethical management to cause knowledge exchange in employees, as well as innovations in hotels. Nevertheless, breakthroughs cannot be induced if there is an extrinsically motivated environmental management. To be more specific, radical innovation was produced at a higher rate if managers highlighted the importance of ethics over profit, rather than if they placed profitability ahead of ethical considerations, notwithstanding that both approaches tend to provoke disruptive novelties. In addition, incremental innovations are a consequence of knowledge exchange between hotel employees. Finally, knowledge exchange is induced in the context of ethical leadership consisting of general social responsibility. The conclusions drawn from this work are that ethics is a causative part of innovation and that practical implications provide specific and differential measures that help to bring about incremental and radical innovation.
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