Knowledge Management and Tourism Business Enterprise Competitiveness: Comparison
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Please note this is a comparison between Version 2 by Sirius Huang and Version 1 by Hellen Ogutu.

There has been a growing interest in understanding the correlation concerning knowledge management and competitiveness more so in the area of tourism. A synthesis on theoretical nexus of knowledge management and tourism business enterprise competitiveness is provided by giving an integrated overview of four micro economic related theories that influence competitiveness and knowledge management. 

  • knowledge based theory
  • competitiveness
  • resource based theory
  • institutional theory
  • tourism business enterprises
  • (dynamic) capabilities theory
  • knowledge management

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][1]. 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][2]. 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][3]. Selecting resources with efficiency, effectiveness, and profitability in mind gives businesses a leap up in the marketplace, as explained by resource-based theory [6][1]. This discussion 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 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][4]. Although [17][5] 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][6]. 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][7]. 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][8].

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][9]. 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][10]. The following framework describes RBV and emphasizes its main points (Figure 1):
Figure 1.
Resource-Based View, Strategic Management Insight (2013).
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][1][2]. 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][1][2].
For RBV to work, two crucial assumptions must be met [5,6][1][2]: 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][1].
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. 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][11]. 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][12]. 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][13] 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][11], 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][12]. 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][13]. 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][14]. 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][15][16].
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][16]. 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.

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][17]. In addition to the aforementioned theoretical frameworks, there is 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][18]. 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][19]. 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][20]. 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][21]. Through the perspective of institutional theory, it 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][22][23][24]. 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][25][26]. 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][27]. 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][27]; promoting cooperation, collaboration, and alliances among tourism actors [40,41][28][29].

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][19]. 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][20]. 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][30][31]; the development of smart tourism destinations [44][32]; access to innovation possibilities [45][33]. 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.

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