Theoretical Nexus of Knowledge Management and Tourism Business Enterprise Competitiveness: An Integrated Overview

Abstract

Most recently, there has been a growing interest in understanding the correlation concerning knowledge management and competitiveness more so in the area of tourism. Hence, this paper looks to provide a synthesis on theoretical nexus of knowledge management and tourism business enterprise competitiveness by giving an integrated overview of four micro economic related theories that influence competitiveness and knowledge management. These theories were examined to exhibit the extent of their applicability to tourism businesses as a way to alleviate challenges posed by susceptibility, complexity, ambiguity, uncertainty, and volatility brought about by market liberalization and globalization. Moreover, theories are, considered a set of systematic hunches, which have multiple parts, which play a role in the overall idea of what exactly a theory is proposing. During the review of literature various theories assert to explain knowledge management and competitiveness individually, but on some occasions in relation either to organizational learning or organizational (quality) culture. Thus, the need to supply an integrated overview of the theoretical nexus between these concepts by exploring the theoretical frameworks and related facets. Of the micro-economic theories: the institutional theory, the knowledge-based theory, the resource-based theory, and the (dynamic) capabilities theory were used to guide and try to explain the relationship of aforementioned facets. The knowledge-based theory posits that an organization’s competitive gain stems from the distinctive knowledge assets along with its ability to effectively utilize and share these assets within the organization. The resource-based theory, conversely, emphasizes the role of physical and intangible resources in determining an organization’s competitiveness. The (dynamic) capabilities theory underscores the importance of an enterprise’s ability to continuously learn, adapt, as well as innovate to sustain a competitiveness. Finally, institutional theory highlights the role of external factors, such as business standards, industrial policies and procedures such as quality approaches, in shaping an organization’s competitiveness. Overall, with the comprehensive perception of the given theories the paper attempts to feature the correlation between knowledge management and competitiveness within the tourism industry. Highlighting ways in which these theories can be integrated to supply a more holistic understanding of this relationship especially in the study areas of tourism managerial micro-economics, tourism competitiveness and organizational knowledge management aimed at impending application in particular to enhance the sustainability tourism business enterprises.

1. Introduction

The volume of business that tourism supplies, equals or surpasses that of exportation of automobiles, oil-gas and trade in food stuff, asserts, World Tourism Organization aiming to prove tourisms’ economic contributions to an economy [1]. However, due to the complexity in determining the causal relations that tourism has with other areas of the economy [2], tourism ventures and market growth could be attributed to a set of market segments that are operationally supplemented in a direct manner by certain segments of the economy but also, in an indirect manner, by the rest of the sectors. In addition, tourism business is nowadays facing challenges brought on by market liberalization and globalization of markets, posed by the new consciousness of informed tourists [2] consequently, the need for the tourism business to differentiate themselves in a strongly competitive environment in order to meet the objectives of sustainable competitiveness and improve the economic contribution to a nations income and revenue is on the rise. Characterised by its need for information [2], fragmented nature, an amalgamation of diverse sectors and structural complexity, tourism as an industry needs to continuously reinvent its itself to be competitive and contribute to world economies especially in the least and developing countries. As it is one of the main foreign exchange and revenue earner, contributing to the economy’s gross domestic product (GDP) and national domestic product (NDP). Furthermore, tourists currently sought after personalised and transformational experiences, therefore tourism businesses need to constantly be innovative and initiative-taking to attract more potential consumers as well as keep the current clients [1].

Equally, in the past, the idea emerged that the resources of a company are the basis of its competitive strategy [3], and that “knowledge” and competencies are one of the most important strategic resources [4]. Even so, in an age of a global modern economy based on knowledge, the effectiveness and efficiency of tourism enterprise resource sustainable management is paramount and influenced by various internal and external variables, such as knowledge, learning and culture as well as the business environment. Even so, in the current ever-changing business environment, boosting enterprise sustainability is an imperative emerging topic of research interest in organizational knowledge management and tourism micro-economics that underpins a tourism business enterprise’s ability to strategically compete effectively with efficiency, thus competitiveness’ [5]. The scholarly fields of micro-managerial economics, organizational knowledge management primarily anchors on and implements four main theoretical aspects: Capability-Based theoretical View (CBV) highlights the importance of an organization’s dynamic ability to continuously learn, adapt, and revolutionize in order to maintain a competitive advantage; Institution-Based theoretical View (IBV) highlights the role of external factors, such as industry standards and supervisory policies, in shaping an organization’s competitiveness; Knowledge-Based theoretical View (KBV) posits that an organization’s competitive advantage stems from its unique knowledge assets and its ability to effectively utilize and share these assets within the organization; and Resource-Based theoretical View (RBV) on the other hand, emphasizes the role of physical and intangible resources in determining an organization’s competitiveness [5,6].

Subsequently, there is a body of research on the application of the knowledge-based view, resource-based view, institutional-based view, and dynamic capabilities-based view in the tourism industry. While each theory provides valuable insights on its own, there is also the possibility that these theories may interact and influence each other in complex ways. Moreover, there are still several areas where further research is needed. One such potential research gap relates to the interaction and integration of these different theories in the context of tourism businesses. Creating the need to understand how these theories can be integrated, combined and applied in a holistic manner in a more comprehensive approach to strategy and management in tourism businesses. Moreso, there is the limited empirical evidence on the relative importance of these theories in explaining the performance and competitiveness of tourism businesses. Consequently, the paper sought to explore how these theories can be integrated and applied in a holistic manner to better understand the competitive dynamics of business enterprises in the tourism industry.

When the economy is weak, most enterprises adapt by focusing on large-scale economies of scale, intangible resources, and transferability. The premise is that an organization’s vests’ its cognitive investment and income on competitiveness by enhancing its capability for competition through knowledge management and spillovers. The capacity of a business entity to obtain and utilize commodities inside one given range can be used to define organizational efficiency. Becoming a broad definition, “resource,” according to [7], are material and capital resources that a tourism firm moderately control. As advocated by [7], a “resource” is a current resource, facilities, organizational processes, technology, and experience within the tourism sector’s jurisdiction. Together, these can be used to create and practice a structural strategy to increase efficiency and value within a business. Resources, according to Barney [8], have evolved into the cornerstone of businesses’ ability to gain and preserve a positive competitive impact. Additionally, [8] implies that resources are tourism’s tangible and intangible investments, while capabilities are a technique for implementing specific tasks regarding the resources at hand. On the contrary side, knowledge and expertise are the integration of organizational resources into concentric circles that include individuals and organizations to support special abilities [9].

As a result, the coefficient of performance and corporation key resources facilitated by gaining knowledge findings encourage commercial enterprise efficiency because the tourism business targets are theoretically constrained by the resources made available to it, regardless of whether the knowledge is public. Additionally, the structure businesses use to acquire or create new knowledge and skills is important, as are the forces that constrain the methodology’s speed and course [10]. Additionally, knowledge creation results in developing new skills, such as employing new knowledge to enhance the efficiency of both present and future operations. Similar to this, ideas about learning and knowledge management are incorporated into financial, monetary, and corporate argumentative frameworks under the pretext of “organizational effectiveness.” the correlation between skills and talents and corporate learning and knowledge management is therefore inferred in this article.

When doing a comprehensive root cause study of a failing tourist business enterprise (TBE), cultural issues are typically found to be at the center of the problem. Culture is the shared practices and values that characterize a community. Ref. [11] Argues that firms have their own distinct cultures tourism firms included. Every tourism firm has a unique (cultural) environment where workers may discuss and debate variables, tasks, ideas, and explanatory models [12]. Culture determines how the performance of recruits in the tourism firm adopts the firm’s environment. Through learning the culture, new staff can easily be effective in the company.

The organizational principles, culture, and philosophy guide a tourism firm’s decisions. So, reflecting the enterprise’s priorities, which may be traced back to its own rules and regulations, the production process, the supplier process, the supporting functions (audits, training, variation, quality control, validation, investigation of non-conformances, etc.), and the management processes are all interconnected in TBE operations (review and ownership of the quality system, etc.). The business’s ethos of quality, or its culture of quality, is essential to its survival and growth. When a business has a strong culture of quality, all of its employees operate by that culture [13]. The emphasis on quality in the company’s culture is not an independent entity but rather deeply ingrained. Subcultures and countercultures exist in theory within the confines of businesses. Taking a cultural stance might give companies an edge in the market [14].

As for the importance of the mentioned factors to a tourism firm’s success in the modern business world, this article will provide a summary of well-known microeconomic theories that seek to explain how organizational learning, organizational quality culture, and knowledge management affect competitiveness. The approach is a collection of well-organized hypotheses, each contributing to the whole. Literature reviews often include claims from several theories that explain the four variables: knowledge, organizational learning, quality culture, and competitiveness. However, this article zeros in on idea that, when combined, the variables would provide a hypothetical interconnectedness on important actions that impact tourism competitiveness, by incorporating internal and external assets such as organizational intelligence, infrastructure, quality standards, industry regulations and law, communication systems, conditions of the marketplace, risk and change expertise. This paper attempts to interlink the four theories as further explained in the following section, that when interlinked it would create a hypothetical interconnection that would warrant relevant practices presumed to have a considerable influence on the relationship between knowledge management and enterprise competitiveness in relation to tourism business and provoke further research in the area (s). The paper hypotheses were selected among those considered useful, in further studying the factors mentioned above.

2. Theoretical Overview

2.1. Resource Based View Theory

This is firm’s ability to remain competitive over the long term. According to Resource Based Theory (RBT), a firm is dependent on the value and scarcity of its many distinctive, important, and irreplaceable assets [6]. A tourism firm’s resources include everything from its physical plant and equipment to its intangible human and organizational capital and any other assets it may have [5]. Achieving and maintaining strategic and sustainable competitive advantage requires the acquisition and upkeep of rare, specialized, and distinctive resources, and these are the same characteristics that make some businesses successful and profitable [15]. Selecting resources with efficiency, effectiveness, and profitability in mind gives businesses a leap up in the marketplace, as explained by resource-based theory [6]. This study assumes that knowledge is a collection of resources, and that sharing knowledge and expertise is a strategy for increasing employee education and productivity. The purpose of this research is to evaluate resource-based theory by analyzing how knowledge management affect the competitiveness of tourism business organizations.

Unfortunately, the idea of resources needs more clarity since it is rarely operationally defined, and it is not often made clear how resources are transformed into a competitive strategy [16]. Although [17] perspective on how businesses might get a competitive advantage in the marketplace is influential. Critics of resource-based theory argue that it fails to account for the external variables in which various sorts of resources would be most competitive, even if doing so would be crucial to determining how those resources would be put to use inside a tourism business enterprise [18]. The researcher also contends that an inward focus on resources due to technological advancements, competition behavior patterns, or customer expectations may overestimate their competitive worth. This research aims to illuminate how human intellectual capital, learning capacities, and quality culture may enhance the competitiveness of organizations and businesses [19]. The resource-based theory or resource-based approach helps to identify the resources that are accessible within the organization and, in a quiet way, evaluates them with their capabilities, thus taking into account the gain and the value aspect associated with the tourism firms [20].

The Resource-Based View Underpinning

For a tourism firm to be competitive, it needs a management control structure like the resource-based view (RBV), which is used to build its resources strategically. The tourism business enterprise may utilize these assets to give itself a lasting advantage in the market. It is generally agreed by [21]. Resources and sustained competitive advantage were pivotal in forming the resource-based approach. According to some academics, evidence supporting a disjointed resource-based hypothesis date back to the 1930s. The tourism sector, according to RBV, exhibits heterogeneity since their knowledge resources are not homogeneous, allowing various strategies to be used by multiple businesses. The RBV focuses on the tourism firm’s top brass on its resources, helping them zero in on the assets, skills, and competencies that can transform its business’s performance and make it more competitive. Using a resource-based approach, strategists choose a course of action or competitive stance that makes the most of available resources and capabilities in light of the situation outside. As a result of having access to strategic resources, tourism businesses can adopt a wide range of competitive stances due to the interrelated nature of the knowledge management and resources that make up this network. Though academics dispute how to classify competitors, most believe the resource-based concept is more flexible than Porter’s prescriptive method for creating a winning strategy [22]. The following framework describes RBV and emphasizes its main points (Figure 1):

Proponents of RBV argue that rather than trying to acquire new skills for each opportunity, it is far more probable to leverage corporate strengths by reusing existing resources [5,6]. The RBV model prioritizes investments that help the tourism sector grow and develop sustainably. Capital in the form of physical objects and intangible assets are the two types of support at one’s disposal. Property, buildings, machines, and money are all examples of tangible assets. In the long term, the tourism sector only profits a little from investing in physical resources since their rivals may readily buy those identical assets on the market. Intangible assets (ii) lack a physical manifestation but are legally considered the business’s property. Examples of intangible assets include a tourism firm’s good name, trademarks, and original ideas. In contrast to tangible resources, image and reputation are developed gradually over time and are not something that competing tourism businesses can easily buy. The fundamental source of a tourism firm’s sustainable competitive advantage is its intangible assets, which are almost always kept in-house [5,6].

For RBV to work, two crucial assumptions must be met [5,6]: resources must be diverse and static. Under the first hypothesis, known as heterogeneity, it is believed that organizations vary in terms of their skills, talents, and other resources. Companies wouldn’t employ different strategies to compete with one another if they all had the same quantity and kind of help. In a situation of perfect competition, there is no way for one tourism firm to acquire an edge over another since each move it makes may be mimicked by its rival. While ideal markets do not exist in the real world, some businesses face the same external and competitive pressures (the same environment) and may be able to apply different strategies to outperform their rivals. Therefore, RBV indicates that tourism businesses get a competitive edge by using various techniques. The second premise of RBV is that resources are immobile and do not switch hands between tourism firms [6].

Furthermore, intangible assets like a tourism firm’s good name, methods, expertise, or personal knowledge are usually untouchable. This inflexibility makes it difficult for tourism business enterprises to match the assets and tactics of their competitors. Overall, the resource-based view suggests that a firm’s unique resources and capabilities are the key drivers of its competitive advantage and performance. Tourism businesses can apply this theory by identifying and leveraging their unique resources, such as location, brand, reputation, or customer relationships, and by building and maintaining capabilities such as efficient operations, strong customer service, or innovative marketing strategies.

2.2. Knowledge-Based Theory/View (KBV) in Enterprise Competitiveness

Knowledge-based valuation (KBV) is an approach to analyzing a tourism firm’s competitive advantage based on the accumulation and use of knowledge. For every business, the most valuable asset is the knowledge it has amassed and can use to differentiate itself in the marketplace [23]. So KBV is an integral part of RBV. Since knowledge is the most crucial strategic resource for enhancing the long-term performance of organizations and societies, KBV is an extension of RBV. In-company knowledge analysis relies heavily on this technique. The knowledge-based perspective (KBV) derives directly and primarily from RBV theory. As KBV sees it, a tourism firm’s competitive advantage stems from its ability to create, store, and use knowledge [24]. Knowledge was formerly seen as a unique asset, but it is now recognized as a vital corporate asset. When explaining organizational variation due to economies of scale, [25] argued that knowledge plays a crucial role due to its evolutionary nature. The academics assume that businesses not only produce new knowledge but also store it in a manner analogous to a water reservoir. Although, as stated by [23], knowledge makes a foundation of competitiveness, businesses need a method to transform different kinds of information.

The knowledge-based value (KBV) of tourism enterprise competitiveness analyzes the internal and external factors that contribute to the tourism organization’s level of knowledge, including knowledge management, absorption, and integration. The essential components of tourism knowledge production include learning complementary management skills from partners, developing a proper knowledge transfer channel, and accomplishing the knowledge creation aim [24]. Knowledge management integration within the tourism business enterprises results from a chain reaction that begins with the capacity to absorb knowledge, which is positively connected with learning [25]. Further, knowledge management integration is followed by discussions on skill development, application, and the best strategies for getting an edge in the tourism market [26]. Knowledge integration is a crucial technique for acquiring an edge in the tourism marketplace. It is through the processing and application of tourism business knowledge gained through experience that true wisdom is developed. It follows that tourism business enterprise wisdom encompasses not only books and databases but also the connections between them, the flow of tourism business knowledge amongst them, different points of view, past experiences, and the means through which such information and knowledge may be disseminated in the tourism business enterprise sphere [27,28].

The main determinants of sustained competitive advantage and superior corporate performance in tourism business enterprises are knowledge-based resources, typically challenging to imitate, and socially complex, varied knowledge bases and capacities among tourism business enterprises. The knowledge-based view emphasizes the importance of leveraging unique knowledge and expertise in order to create a competitive advantage [28]. Tourism businesses can apply this theory by identifying and leveraging their unique knowledge and expertise in areas such as customer service, destination management, or product development.

2.3. The Institutional Theory and Enterprise Competitiveness

Companies made assumptions about what constitutes moral or ethical choices in the marketplace from an institutional standpoint [29]. In addition to the aforementioned theoretical frameworks, this study is also informed by the Institutional Theory, which states that human and ecological elements play a crucial role in establishing an isomorphic impact, which influences the adoption of specific management techniques such as equal management systems [30]. When external factors drive a business such as government regulations, industrial sector dynamics, more informed and affluent tourists (consumers) as well as stake/shareholders, it will only comply on a superficial level. Consequently, internal factors such as its technology, information, human resource and organizational culture and policies for example quality policy and subsequent quality management will see less advancement [31]. Organizations such as tourism business enterprises with more intrinsic reasons for a quality (culture) may find that their efforts to gain a competitive edge via quality, positively impact the bottom line by creating valuable resources that contribute to the technological core [32]. Therefore, a successful system is more likely to emerge from a perspective in which service quality management is seen as raising output and earnings. Success may vary depending on whether the drivers are internal or external; thus, managers devoted to the former proactively foster a culture of quality excellence [33]. Through the perspective of institutional theory, this study suggests that individuals learn to adapt to a new work environment by utilizing a variety of social processes. Nonetheless, the seminal publications that addressed how business enterprise formation and evolution were controlled through instrumental purposes and more by symbolic actions and external pressures than the concept at the period presumed are where organizational performance started.

On the other hand, Tourism scholars concur that tourism business enterprises depend heavily on external feedback based on the customer’s positive assessment on the quality of service during the consumption of the products and services in order to remain competitive [34,35,36]. Throughout the various phases of travelling as well as the numerous connections and exchanges during the service encounter between visitors and members of a tourism business enterprise (e.g., tourist information, visitor centers, or regional marketing organizations, accommodation facilities, transport service providers among others), the customer’s perception of the quality of the received service is crucial for the existence and accomplishment for the tourism business [37,38]. The sense of balance between the technical and social structures is crucial for any organization, since it is essential to a all-inclusive quality culture methodology. This is not only substantial for the tourism business enterprise, but as well for the total tourist destination, irrespective of whether the service provider is established in the public or private sector [39]. The institutional-based view emphasizes the impact of the external environment on business strategies and practices. Tourism businesses can apply this theory by understanding the impact of institutional factors on their operations and performance, anticipating and adapting to changes in the institutional environment, and influencing the institutional environment to their advantage. That is by, support for improved local, regional or national governance [39]; promoting cooperation, collaboration, and alliances among tourism actors [40,41].

2.4. Dynamic Capabilities Theory and Enterprise Competitiveness

Dynamic capacity is “the entity’ sector’s ability to consolidate, establish, and adapt to change to grasp the phenomenon” [31]. As opposed to operational skills, which focus on the present, a company’s dynamic capabilities may help it adapt to new situations. By contrast, “an organization’s ability to purposefully develop, increase, or reconfigure its productive capacity” is what is meant by “dynamic capacities” [32]. The premise of the framework is that a tourism firm’s short-term core competitiveness should be tailored to its longer-term competitive position using the main dimensions provided. But if completely incorporated as a component of a more comprehensive strategy, it can support transaction cost/governance issues and broaden the spectrum of occurrences that can be described. Studies have shown that management of knowledge can deliberately improve and contribute to dynamic tourism operations and activities such as increasing the competitive advantage of tour firms [42,43]; the development of smart tourism destinations [44]; access to innovation possibilities [45]. The dynamic capabilities-based view emphasizes the importance of a firm’s ability to continuously acquire, develop, and deploy resources and capabilities in order to remain competitive. Tourism businesses can apply this theory by identifying and acquiring necessary resources and capabilities, developing and improving resources and capabilities, deploying resources and capabilities effectively, and continuously adapting and learning in order to stay competitive in the rapidly changing tourism business environment.

3. Summary

According to the resource-based theory (RBT), a tourism firm’s ability to remain competitive in the market is contingent on the availability of its many scarce, valued, distinctive, and irreplaceable resources. The Resource-Based View (RBV) is a management paradigm for identifying strategic assets that might give a tourism firm a place up in the marketplace. The tourism business enterprise may utilize these assets to acquire an edge in the market that will last. The institutional theory was also widely used as a framework for this purpose. The idea is grounded in a survey of the relevant literature and asks, “How can we use our tourism sector resources to provide us a competitive edge?” [42,43,46]. This finding has crucial implications for understanding the relationship between social and environmental elements and adopting certain management techniques, such as quality and management. Therefore, if quality management is seen as a way of increasing internal efficiency, a sustainable system for a quality culture is more likely to arise [47,48]. Success may vary greatly depending on whether the drives are extrinsic or intrinsic, so tourism managers devoted to internal driving need to develop a quality culture with a proactive attitude. In other words, ideas like learning and knowledge management are introduced to the conversation about and debate over business strategy and economics under the guise of “organizational learning” [42,49]. As a common response to economic hardship, many businesses now prioritize efficiency and flexibility in their operations. Since it is hypothesized that knowledge management provides a significant competitive advantage to a company via increased learning, sharing, and preparedness of the tourism firm’s quality culture [50], it is essential to test this theory. Knowledge management strategies in TBEs can increase competitiveness if they are properly understood. Human resource management, or “knowledge management,” entails guiding employees to use their expertise to address business challenges. Moreover, knowledge management is inextricably linked to a tourism organisations’ abilities to utilise and combine the various sources and types of organisational knowledge to develop specific skills and innovative capacity. This knowledge can then be translated into new tourist products, processes and market leadership thus competitiveness. Overall, the KBV, RBV, IBV, and DCBV can supply valuable insights and be useful frameworks for tourism businesses to understand to leverage their resources and capabilities in order to navigate the competitive landscape, to create and sustain a competitive advantage in the marketplace, [13,19,20,38,41,47,48].

4. Conclusions

Tourism businesses can vary significantly in terms of their size, location, and offerings, and more research is needed to understand how these factors may impact the effectiveness of these theories. A tourism firm’s competitive edge lies in its capacity to innovate continually based on established performance benchmarks and a diverse range of assets. Dynamic capacity is the ability to develop and reconfigure an organization’s capability pool and then utilize it to encourage productive and forward-thinking behavior inside the business. The goal of creating a tourism firm’s “dynamic capacity” is to provide it with an advantage in the market by optimizing several vital business processes, such as convergence, reconfiguration, acquisition, accumulation, and transfer of resources. The cognitive conflict between neoclassical economics and compliant rational thinking in the categorization and prioritization of establishing a sustainable competitive advantage to achieve competitiveness in the tourism marketplace, may be addressed or relieved by the integration of RBV, KBV, DCBV, and IBV. For example, if economic rivalry is a major performance indicator of a tourism firm, then resources, knowledge mastery, intellectual capital, and competence may be seen as instruments that stimulate the ideal solution to obtain a competitive advantage, perhaps offering an economic determination of Tourism Business Competitiveness as a function of RBV, KBV, DCBV, IBV that is TBE = f (RBV, KBV, DCBV, IBV). Therefore, the research suggests that the theories each play a role in determining a tourism business enterprise competitive advantage. Thereby suggesting a correlation linking the RBV, KBV, DCBV, and IBV to tourism business competitiveness. In general, there is a need for more research to further understand and refine the application of the knowledge-based view, resource-based view, institutional-based view, and dynamic capabilities-based view to tourism business enterprises operations. Furthermore, other potential research gaps may include the need to understand how these theories apply to different types of tourism businesses, including those operating in different regions or sectors of the industry. As tourism businesses can vary significantly in terms of their size, location, and offerings, hence, more research is needed to understand how these factors may impact the effectiveness of these theories. To this effect, this paper suggests hypothetical exploration on the influence of organizational learning and quality culture on the causal link between knowledge management and TBE competitiveness.