International Journal of Hospitality Management 66 (2017) 13–23

Contents lists available at ScienceDirect

International Journal of Hospitality Management

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

Creating competitive advantage: Linking perspectives of organization

learning, innovation behavior and intellectual capital
Chih-Hsing Liu
Ming Chuan University, Department of Leisure & Recreation Management, School of Tourism, 5 De Ming Rd., Gui Shan District, Taoyuan County 333, Taiwan

a r t i c l e i n f o a b s t r a c t

Article history: Drawing on learning theories and the intellectual capital (IC) theory, organizational learning research has
Received 23 September 2016 discussed the benefits of searching for market opportunities and maintaining a competitive advantage
Received in revised form 4 May 2017 in dynamic environments. To explain organizational performance and survival, the previous literature
Accepted 22 June 2017
has focused mainly on what organizations do, but it has failed to address how and what they should do.
Available online 8 July 2017
This study argues that if hotel management is open-minded about exploratory and exploitative learning,
it can open the door to capturing opportunity and competitive advantage through increased innovation
Keywords:
behavior and human capital accumulation. Further, IC theory has also confirmed that social capital and
Learning orientation
Innovation behavior
relational capital will strengthen the relationship between innovation behavior and human capital. This
Intellectual capital study analyzes data from 595 hotel managers and finds strong support for the proposed hypotheses.
Opportunity capture © 2017 Elsevier Ltd. All rights reserved.
Competitive advantage

1. Introduction
Due to recent globalization and internationalization, hospi-
tality organizations have needed to continually update their
knowledge and acquire new information to satisfy changing cus-
tomer needs and capture market opportunity (Fraj et al., 2015;
Jogaratnam, 2017; Kasim, 2015). To do so, firms need to cultivate
an understanding of the intentions of customers, employees, sup-
pliers, stakeholders, competitors and the industrial environment
(Randhawa et al., 2015; Sigala, 2016). As proposed by Shamim et al.
(2017), in the rapidly changing hotel environment, becoming learn-
ing organizations not only affects hotels’ awareness of changes
in the industrial environment, but it also serves as a key factor
in creating organizational competitive advantage. Moreover, these
learning activities, which create internal and external connections,
must focus on elevating levels of innovativeness and intellectual
capital (IC) to sustain firms’ long-term profit and create value
(Albertini, 2016). However, the impact of organizational learning on
both new and established organizations, assuming positive, direct,
and indirect effects on innovation behavior, IC accumulation and
competitive advantage at the organizational levels, remains to be
verified (Fraj et al., 2015).
Chinese hotels have mostly been founded within their home
country and have been limited regarding international extension,
which requires strategic resources to improve market productiv-
E-mail address: phd20110909@gmail.com
ity and efficiency (Andreu et al., 2017). Viewed as the core concept
of strategic sources for firm’s competitive advantage, IC help firm
to capture opportunities and as fundamental attributes in the
value creation process to promote growth and to survive (Rossi
et al., 2016; Leonidou et al., 2013). Thus, managers should suc-
ceed comprehensive analysis of the influence of IC and characterize
their cause-effect dynamics (Seleim and Khalil, 2011). Furthermore,
because of IC may help firms to respond to changing customer
needs, to respond quickly to market opportunities and to achieve
better outcomes, thus managers are more likely to identify conse-
quences of the interrelations of IC and the investment assessment
of IC requirements (Rossi et al., 2016).However, until now tourism
and hospitality research on IC has often focused on specific case
studies from the perspective of end-customer-relationships (Rudež
and Mihalič, 2007). Limited empirical hospitality studies such as
Hallin and Marnburg (2008) demonstrated that in knowledge-
based economies, IC enables hotel enhancing efficiency through
integration and system analysis to manage the rapid growth of
information volume. Especially in China hotel industries, when face
increasing pressure from global competition, identifying potential
attributes under which interrelationships improve or constrain IC
and performance is particularly important for competition strat-
egy implement (Andreu et al., 2017). However, what about the
integration of internal and external factors such as exploitive and
exploratory learning with internal or external parties? Under con-
ditions of high uncertainty and the competitive environment of the
hospitality industry, IC changes frequently and market opportu-
nities may swiftly appear and disappear. Li et al. (2014, p. 272)

http://dx.doi.org/10.1016/j.ijhm.2017.06.013
0278-4319/© 2017 Elsevier Ltd. All rights reserved.
14 C.-H. Liu / International Journal of Hospitality Management 66 (2017) 13–23
stated that “opportunity only favors the prepared” and highlighted
the critical role of IC and the importance of organizations’ invis-
ible resources that can be accumulated to successfully maintain
competitive advantage. Distinct from previous studies linking orga-
nization learning and competitive advantage, this study proposes
organizational learning and enhancing IC configurations as indi-
rect contributing factors rather than exogenous to the creation and
improvement of competitive advantage.
Addressing previously important, underexplored and unre-
solved questions, this study provides several purposes as a primary
framework to develop an integrated model based on the behavioral
innovation and intellectual capital literature to explore the rela-
tionship among organizational learning, innovation behavior and
competitive advantage in the hospitality industry in China’s emerg-
ing economy. First, given China’s dynamic environment, changing
customer needs, and primitive regulatory constrictions, the hos-
pitality industry is experiencing difficult times in an emerging
economy and additional effort may be required to create compet-
itive advantage (Pine and Qi, 2004; Wong and Li, 2015). However,
because of regulations and the lack of appropriate training, most
hotels in China do not have the sufficient internal and external
resources to support improved capabilities (Strobl and Kronenberg,
2016; Wu et al., 2013). Accordingly, this study’s first research
purpose is to identify critical attributes that help hotels create
competitive advantage. Second, according to IC theory, a firm’s IC
(such as human capital and social capital) effectively transforms
external resources into internal capability development, poten-
tially contributing to maintaining the organization’s values (Dineen
and Allen, 2015). However, the existing tourism and hospitality lit-
erature focuses on how IC improves firm performance (Sainaghi
and Baggio, 2014; Zeglat and Zigan, 2014), and it has provided
little evidence to explain the interrelationships among the differ-
ent attributes of IC and how the IC of the hospitality industry in
an emerging economy affects competitive advantage. Accordingly,
this study’s second purpose is to investigate how different aspects
of IC such as human capital, social capital, and organizational capi-
tal form mutual relationships in creating the organization’s internal
capability in the context of China’s hotel competition. Third, unlike
the traditional organizational growth and development process, in
which tangible assets drive the performance of the hotel indus-
try, today IC and intangible assets are the core strategy resources
and driving force of hotel values (Sainaghi and Baggio, 2014). In
the hospitality industry, developing internalized and externalized
IC is an important method to improve innovation performance and
overcome market and competitive challenges (Orfila-Sintes et al.,
2005). Although the extant tourism and hospitality research has
noted that the different attributes of IC may affect firm perfor-
mance (Enz et al., 2006), little research has been conducted in this
stream to examine the role of IC in hotel competitive-advantage
creation from a mediation-moderation perspective. As a result,
the third purpose of this study is to extend the literature and fill
gaps by examining the critical roles of IC that may have differ-
ent mechanisms (e.g., mediation-moderation effects) to influence
opportunity capture and competitive advantage because of their
different features. Fourth, although organizational learning pro-
vides the sustainable improvement for a firm’s core competencies
(Gupta and Polonsky, 2014), specific learning mechanisms such
as exploratory and exploitative learning are necessary to facili-
tate hospitality firms’ ability to develop, upgrade, and modify their
innovative behavior, increasing their competitiveness (Fraj et al.,
2015). March’s (1991) seminal work indicates that the concepts
of exploration and exploitation are widely used to describe differ-
ent learning orientations and organizational innovation behavior
(Choi and Chandler, 2015; 140). These previously undocumented
efforts enrich the dynamic capability view of hotels (Hsu and Wang,
2012) and shed critical light on the organizational learning perspec-
tive of new market opportunity capture (Kasim, 2015; Kyriakidou
and Gore, 2005; Tsai et al., 2015). However, few scholars have paid
attention to the role of exploratory and exploitative learning in the
relationship between innovation behavior and IC, especially in the
transitional economies of the Chinese hotel industry. Therefore, this
study’s fourth and final purpose is to offer deeper insights into the
missing link between exploratory-exploitative learning, innovation
behavior and IC.
With the recent increases in tourism and the growth of leisure
in its emerging economy, China has become one of the best new
business models in tourism and hospitality studies (Li and Liu,
2016; Wong and Li, 2015). Therefore, the focus of this study is
to discover new phenomena in hospitality industry competition,
and it reveals the contingency values of organizational learning in
accumulating valuable intangible assets such as IC and innovation
behavior in an emerging economy. Fig. 1 presents the theoreti-
cal hypothesis model of this study. This study uses a regression
model and structural equation modeling (SEM) in its estimation
measurement, using variables with multiple indicators. Overall, the
evidence strongly supports the proposed model and thus enables
us to extend organizational learning research from a single per-
spective to a broader view by integrating the role of innovation
behavior and the different roles of IC that are related to desired
organizational outcomes.
2. Hypothesis development
2.1. Mediating role of innovation behavior
Innovation behavior refers to individual behaviors that intro-
duce new and useful ideas, problem solution processes or
procedures in the workplace, tasks or organizations (Orfila-Sintes
and Mattsson, 2009). Innovation in a hospitality organization is a
complex process that includes knowledge and information search-
ing, idea generation, and the selection and application of new ideas
to improve organizational performance (Ottenbacher and Gnoth,
2005). From the learning orientation perspective, a firm whose
employees have innovation behavior would help their organization
to achieve superior economic benefits relative to their competi-
tors (Scott and Bruce, 1994), which means that high quality human
resources such as human capital would be an organization’s invis-
ible asset. However, idea generation and application do not appear
on their own; they need to be learned in the internal and exter-
nal environment to facilitate awareness of changes and continuing
updates of the existing knowledge to develop new ideas to meet
customer needs and satisfaction. Hurley and Hult (1998) suggested
that market orientation essentially involves doing something new
in response to market changes, and organizational learning (e.g.,
exploratory learning and exploitative learning) is the first step to
introduce new concepts into an organizational culture. In other
words, organizational learning is the antecedent of innovation
behavior.
Human capital accumulation is a process that requires not
only appropriate training and education but also the devotion
of abundant resources as well as motivation mechanisms of
encouragement, and efforts to develop organizational innovation
capabilities (Subramaniam and Youndt, 2005). In human capital
accumulation, high creativity and skillful employees are needed to
learn from the internal environment of colleagues, supervisor, or
coworkers to improve familiar skills (Zhou and George, 2001) and
to learn from external connections, such as competitors, suppliers,
or customers, to update a hotel’s innovation capability (Chang et al.,
2011). The earlier discussion suggests that exploratory learning and
exploitative learning affect a hotel’s human capital accumulation
and improvement through the innovation behavior among employ-
 C.-H. Liu / International Journal of Hospitality Management 66 (2017) 13–23
Exploratory
learning
H1a
Innovation
behavior
H1 b
Exploitative
learning
Fig. 1. Conceptual model of hypothesized relationships.
ees. That is, the exploratory learning and exploitative learning of
the hotels acts as a foundation and a learning platform to pro-
mote innovation behavior and capability, which, in turn, increases
human capital accumulation opportunities and performance. Thus,
this study proposes that innovation behavior acts as a critical medi-
ating role in the relationships between the independent variables
of exploratory learning and exploitative learning and the depen-
dent variable of human capital. Following this line of reasoning,
the following hypotheses are proposed.
Hypothesis 1a. Innovation behavior mediates the positive rela-
tionships between exploratory learning and human capital.
Hypothesis 1b. Innovation behavior mediates the positive rela-
tionships between exploitative learning and human capital.
2.2. Mediating role of human capital
The aim of this empirical study is to analyze the correlation
between innovation behavior and expected performance. Innova-
tion behavior refers to the delivery of objectively new or improved
service quality to the consumer (Sundbo et al., 2007). In the
hotel industry, innovation behavior not only improves performance
characteristics such as new knowledge being developed internally
but also may involve changes in human resources (Orfila-Sintes and
Mattsson, 2009). The innovation literature suggests that innovation
behavior will enhance a firm’s ability to efficiently perform its role
and increase the speed of human resource accumulation (Sundbo
et al., 2007). Firms with well-developed innovation behavior among
organization members may help tourism and hospitality organiza-
tions to improve their dynamic capabilities to include awareness
of external environmental changes, and internalized learning capa-
bility would reduce uncertainty and achieve greater administrative
distinctiveness and competitive advantage (Camisón and Monfort-
Mir, 2012). Accordingly, this study argues that innovation behavior
has a positive link with competitive advantage through human
capital.
Opportunity capture in emerging market is due to uncertainty,
transiency and instability (Tsang and Hsu, 2011). The concept of
opportunity capture refers to an organization’s pursuit and swift
response to given opportunities and its utilization of the opportu-
nity to advance (Li et al., 2014: 281). Orfila-Sintes and Mattsson
(2009) suggested that innovation behavior may cultivate the level
of a hotel’s absorptive capacity for new information, knowledge
sharing, and the application of new ideas to practices, which, in
turn, promotes an organization’s human capital accumulation and
enhances the possibility of capturing new market opportunities to
achieve better performance. Thus, this study argues that human
capital plays a mediating role in the relationship between inno-
vation behavior and opportunity capture. The hypotheses are as
follows:
15
Social
capital Opportunity
capture
H3 H2a
Human
capital
H4
H2 b
Competitive
Organizational advantage
capital
Hypothesis 2a. Human capital mediates the positive relationship
between innovation behavior and opportunity capture.
Hypothesis 2b. Human capital mediates the positive relationship
between innovation behavior and competitive advantage.
2.3. Interrelationships among intellectual capital
Organizational capital is the sum of all of the assets that make
the creative ability of an organization possible, such as employees’
attitudes toward authority and responsibility and their aware-
ness an organization’s core cultures (Bozbura and Beskese, 2007).
Firms with organizational capital may inspire employees to ques-
tion the prevailing learning culture norms and initiate new ways
of thinking, but when they put their unique ideas into practice, it
often requires the experimental approach of trying one process or
another in order for incremental or radical breakthroughs to occur.
Using the Nigerian hospitality industry as an example, Adedipe and
Adeleke (2016) described the human capital development process
as a combination of previous organizational cultures extended to
combine new concepts to develop employee creative capability,
which can further lead to desired innovation outcomes. Moreover, a
number of empirical studies have shown that organizational capital
may help to convert employees’ creative ideas into organizational
knowledge (Li et al., 2014; Mention, 2012). Therefore, this study
proposes that organizational capital strengthens the relationships
between innovation behavior and human capital.
A variety of studies have highlighted how internal and exter-
nal social capital assist the increase of innovation performance
within tourism and hospitality industry settings (Dai et al., 2015;
Petrou and Daskalopoulou, 2013). Dai et al. (2015: 42) asserted that
social capital is an “over-arching concept,” which may not only
help employees to develop mutual understanding and trust but
also to improve hotel service quality and operational efficiency.
In other words, social capital may help organizations and employ-
ees in developing critical capabilities, such as finding new ways to
improve service quality and operational efficiency through “poten-
tial ties” among inter or intra firm units or employees (Adler and
Kwon, 2002). Similarly, Hu and Racherla (2008) emphasized the
importance of knowledge networking in the hospitality industry,
and they suggested that networks that develop across a firm’s
units or employees are critical to communication and the accep-
tance of the new standards that arise from creative ideas. Through
interaction and communication with other colleagues, hotels can
realize the benefits of these employees in terms of their creativity
(Dai et al., 2015). Moreover, through interaction and mutual trust
building, social capital also increases new possibilities for concept
application in practice and encourages collaboration both within
and across organizations (Yang, 2009). In doing so, social capi-
tal can help hotels to not only establish legitimacy to strengthen
16 C.-H. Liu / International Journal of Hospitality Management 66 (2017) 13–23

and encourage innovation behavior within organizations but also Table 1

Demographics of the respondents.
enable organizations to develop human capital that is superior to
that of other competitors. Items Number Percentage Accumulated
Percentage
Hypothesis 3. Social capital moderates the positive relationships
Gender
between innovation behavior and human capital.
Male 272 45.71% 45.71%
Hypothesis 4. Organizational capital moderates the positive rela- Female 323 54.29% 100.00%
tionships between innovation behavior and human capital. Age
Under 29 years old 364 61.18% 61.18%
30–39 years old 181 30.42% 91.60%
3. Method
40–49 years old 33 5.55% 97.14%
50–59 years old 11 1.85% 98.99%
3.1. Sampling Over 60 years old 6 1.01% 100.00%

Education
The highly competitive hospitality industry provides a good Under junior high school 58 9.75% 9.75%
example to test the proposed hypotheses of this study because Senior high school 204 34.29% 44.03%
it requires open minds to absorb internal and external resources Junior college/University 324 54.45% 98.83%
and enlarge its knowledge capability to enhance innovation (Hallin Graduate 9 2.51% 100.00%

and Marnburg, 2008; Hu et al., 2009). Innovation and competitive Position

advantage, which help to maintain competitiveness, are derived Department Manager 191 32.10% 32.10%
Vice CEO/President 283 47.56% 79.66%
largely from, and thus are highly dependent on, explorative and
CEO/President 108 18.15% 97.82%
exploitative learning (Fraj et al., 2015). This is perhaps most Others 13 2.18% 100.00%
vividly illustrated by the fact that hospitality organizations’ lead-
Salary structure
ers or managers are the hotels’ learning policy directors; they
Monthly 574 96.47% 96.47%
can influence the organizations’ learning orientation (Magnini Yearly 10 1.68% 98.15%
and Honeycutt, 2003; Tajeddini, 2011), learning style preferences Basic salary plus commission 6 1.01% 99.16%
(Lashley and Barron, 2006) and innovation performance (Fraj et al., Others 5 0.84% 100.00%
2015). It should be noted that, even though the hospitality industry
faces a dynamic international environment and changeable cus-
tomer needs, managers are, without question, the core spirit of tionnaires were sent out or personally delivered, a phone call
an organization, and they determine opportunity capture and sur- was placed to potential participants to increase the response rate
vival. Thus, this study collected the hotel manager’s perspective and and encourage participation. Third, two research assistants were
examined the process of how hospitality organizations use explo- hired to help in data collecting and categorization. Fourth, the
rative and exploitative learning to influence employees’ innovation data collection period was between July and August of 2015. Fifth,
behavior and accumulate human capital to generate competitive 920 questionnaires were distributed through CEOs or managers
advantage. of human resources departments. Those CEOs or managers helped
The issues that were critical for Chinas’ hotel industry to adapt collect the questionnaires from various levels of department man-
strategies to face the enormously competitive market environment agers, who fully expressed their opinions about HR, IC and hotel
were highlighted by Lam and Han (2005); to survive, hotels need to competitive advantage; after removing multiple missing values or
think and learn strategically in terms of raising efficiency, encour- otherwise unusable questionnaires, the usable sample size was 595
aging innovation behavior, and turning creative ideas into actual usable questionnaires, yielding a 64.67% response rate. Table 1 pro-
services to satisfy hotel guests. Xiao (1997) asserted that in stud- vides descriptive information about the participants.
ies of the tourism, leisure and hospitality industries, Fujian Province
(e.g., Xiamen and Quanzhou) provides good examples because they 3.2. Measures
are open to the outside world (e.g., near Hong Kong, Macau, Taiwan,
and the South East Asian Nations) and attract important invest- Multi-item scales were used to measure the constructs using
ments by foreign capital and private Chinese enterprises in the 7-point scales from strongly disagree to strongly agree. The specific
development of tourism and hospitality, leading to a 20% annual values of reliability and creditability of these variables are shown in
increase in tourists. Given the important position of Fujian’s hotel Table 2. Nunnally (1978) suggested that the reliability coefficients
sector for China’s hospitality and tourism industry, this study inves- for each constructs should be above 0.70; the values of Cronbach’s
tigated hotels in that province. alphas of this study ranged from 0.782 to 0.907, which indicates that
This study collected samples from star hotels, as Wu et al. (2013) the measures constructs are reliable. Next, Li et al. (2014) asserted
suggested that star-level hotels provide important insight for stud- that factor loading is an important indication of construct validity
ies of hotels’ human resource (HR) management and reflect the for each measured items, and the values should be greater than
phenomena of hospitality industry development in China. There- 0.6. As is shown in Table 2, all of the items are above this threshold
fore, the data for this study were collected from star-level hotels in within the range from 0.650 to 0.864. Conversely, average variance
Fujian Province, China. Before the data collection began, a pretested extracted (AVE) were used to measure the reliability of the indi-
procedure was performed with 68 middle and senior hotel man- vidual observations and composite unobservables compared with
agers who attended a training program in Quanzhou. The results of the error variance, and the values should be above 5 (Fornell and
the pretest provided preliminary evidence of the construct valid- Larcker, 1981). The values of the AVE analysis are also provided,
ity of all of the measures that were selected from previous studies. and all of the indicators surpass the recommended values.
After confirming the construct validity with pretests, the following
steps were conducted to collect high-quality surveys among the 3.2.1. Opportunity capture
samples. First, the CEOs or managers of human resources depart- This study measures opportunity capture based on Li et al.
ments of hotels in Xiamen and Quanzhou were enlisted to help (2014), with three items that are used to describe how hotels may
in the data collection using personal relations, which followed quickly respond to market requirements and capture opportunities
the suggestions of Xiao (1997). Second, one week after the ques- to achieve better performance. Sample items include: when faced
 C.-H. Liu / International Journal of Hospitality Management 66 (2017) 13–23 17

Social
capital
Exploratory Opportunity
.251** H1a H3 H2a capture
learning .204** .080** .635***
.781***
Innovation .813*** Human
behavior capital
H4 .800***
H1b H2b
Exploitative .446** .363*** .097*** .650***
Competitive
learning advantage
Organizational
capital

Fig. 2. Hypothesized model results.

Table 2
Analysis of measurement model.
d c a b
Constructs FL ME CR AVE Alpha

Exploratory Learning: Over the last few years, to what extent have your hotel:
• Acquired new technologies and skills to the hotel 0.741 0.365 0.642 0.877 0.881
• Learned service or product development skills and processes entirely new to the hotel. 0.806 0.267
• Take the lead to learn new service in certain domains. 0.831 0.242
• Acquired entirely new managerial and organizational skills that are important for hotel innovation. 0.824 0.241

Exploitative Learning: Over the last few years, to what extent have your hotel:
• Consolidated current knowledge and skills for familiar areas 0.769 0.308 0.603 0.820 0.820
• Improved knowledge and skills to enhance efficiency of existing innovation activities. 0.788 0.262
• Constructed capabilities in searching for existing solutions to customer problems gradually. 0.773 0.298

Innovation Behavior(IB)
• At work, our employees often seek new modes and methods of service. 0.650 0.471 0.552 0.881 0.893
• At work, our employees sometimes propose their creative ideas and try to convince others. 0.776 0.345
• At work, our employees sometimes come up with innovative and creative notions 0.756 0.375
• At work, our employees provide a suitable plan for developing new ideas. 0.792 0.380
• At work, our employees try to secure the funding and resources needed to implement innovations. 0.746 0.403
• Overall, our employees consider their self as a creator. 0.730 0.564

Human Capital(HC)
• Employees have suitable education to fulfill their jobs. 0.790 0.298 0.593 0.897 0.854
• Employees hold suitable work experience to accomplish their job successfully. 0.817 0.269
• Employees are well trained. 0.790 0.318
• No one knows this job better than our employees. 0.770 0.346
• If anyone here can find the answer, it is our employees. 0.684 0.542
• Mastering their jobs means a lot to our employees. 0.762 0.331

Opportunity Capture(OC)
• When faced with an opportunity, we focus on pursuing high-potential business prospects. 0.707 0.358 0.550 0.785 0.782
• Our hotels utilize the capability of discovering potential value to create competitive advantage. 0.784 0.286
• Our hotel highlight on alertness and speed in responding to opportunities. 0.732 0.360

Competitive Advantage(CA)
• Our hotel is of a superior quality than that of the competitors. 0.750 0.402 0.675 0.892 0.890
• Our services or products are differentiated from other hotels. 0.864 0.235
• Our hotel offer unique benefits than competitors. 0.858 0.235
• Our services or products are more advanced than those in the same market. 0.810 0.295

Social Capital (SC)

• Within my department, I know who has knowledge that is relevant to me at their disposal. 0.808 0.300 0.663 0.908 0.907
• Our employees know what knowledge is relevant to which colleague. 0.842 0.252
• When a customer client has a question, I know which colleague or department will be able to help. 0.845 0.258
• I am regularly in contact with our employees who have knowledge at their disposal that is relevant to me. 0.805 0.360
• Outside my department, I know who has knowledge that is relevant to me at their disposal. 0.770 0.370

Organizational Capital(OrC)
• Employees realize the relationships among authority, responsibility, and benefit. 0.770 0.323 0.633 0.896 0.895
• Employees have a good understanding of the contents of the company’s culture. 0.816 0.289
• Employees know well about the contents of hotel’s culture. 0.817 0.269
• Employees recognize clearly about the hotel’s perspective. 0.754 0.383
• Employees can contribute mutual support and cooperation. 0.819 0.285
a
CR: Composite reliability.
b
AVE: Average of variance extracted.
c
ME: Measurement error.
d
FL: Factor loading.
18 C.-H. Liu / International Journal of Hospitality Management 66 (2017) 13–23
with an opportunity, we focus on pursuing high-potential business
prospects; our hotels utilize the capability of discovering potential
value to create competitive advantage.
3.2.2. Competitive advantage
Hotel competitive advantage refers to a hotel that has superior
benefits or better performance compared to its competitors, which
was measured by the four items that were used by Wu and Chen
(2012). Sample items include: our hotel is of a superior quality than
that of the competitors; our services or products are differentiated
from other hotels.
3.2.3. Innovation behavior
The study measured innovation behavior with six items to
reflect a hotel employee’s behavior toward creative thinking and
the communication of new ideas with other colleagues. The items
of measurement were newly developed based on the work of Hu
et al. (2009). Items such as “At work, our employees often seek new
modes and methods of service” and “At work, our employees some-
times propose their creative ideas and try to convince others” were
proposed.
3.2.4. Organizational learning
Organizational learning was measured with two dimensions:
exploitative and exploratory learning, which were developed by
Yalcinkaya et al. (2007). Examples of exploratory learning were as
follows: “Take the lead to learn new skills in certain domains” or
“Learned service or product development skills and processes that
were entirely new to the hospitality industry.” Further, examples of
exploitative learning were as follows: “consolidated current knowl-
edge and skills for familiar products and service,” or “constructed
capabilities in a gradual search for solutions to customer problems.”
3.2.5. Intellectual capital
Intellectual capital was decomposed into three constructs
regarding hotel internal and external resources: (1) human capi-
tal, (2) organizational capital, and (3) social capital. The constructs
were developed based on the work of Subramaniam and Youndt
(2005). The items to measure human capital included the follow-
ing: “Employees have suitable education to fulfill their jobs” and
“Employees hold suitable work experience to accomplish their job
successfully.” In a similar vein, organizational capital was mea-
sured using the following: “Employees realize the relationships
among authority, responsibility, and benefit” and “Employees have
a good understanding of the contents of the company’s culture.”
To account for alternative explanations of social capital, the mea-
sure items were as follows: “Within my department, I know who
has knowledge that is relevant to me at their disposal” and “Our
employees know what knowledge is relevant to which colleague.”
4. Results
Table 3 summarizes the correlation results, variable variance,
skewness and kurtosis values among the main dimensions of the
organizational learning, innovation behavior, intellectual capital
and organizational outcomes categories. Observing the results cor-
relation, the study finds that the values are high; therefore, the
variance inflation factors (VIFs) were calculated to detect the effects
of multicollinearity. As Mansfield and Helms (1982; p.160) sug-
gested, if the VIFs are not unusually larger than 10, then the
multicollinearity is not a problem. The VIFs of this study were
between 2.24 to 3.21, which suggest that there was no serious
problem of multicollinearity in this study.
Hypotheses 1a and 1b predict that the both the exploratory and
exploitive organizational learning dimensions have indirect human
capital effects through innovation behavior. The study tested the
6
5
4
Low Social Capital
3
High Social Capital
2
1
Fig. 3. Interaction of social capital and innovation behavior in human capital.
proposed model (Fig. 1) by using the SEM method of AMOS 18.
As shown in the standardized path estimates in Fig. 2, the overall
model fit of the proposed model was acceptable (␹2 (289) = 3.866;
CFI = 0.920; AGFI = 0.843; GFI = 0.871; IFI = 0.920; RMSEA = 0.069).
The proposed indirect relationships among organizational learn-
ing and human capital were significant and consistent with the
predictions. Exploratory learning was positively related to human
capital through innovation behavior (ˇ = 0.204, p < 0.01). Similarly,
exploitive learning was positively related to human capital through
innovation behavior (ˇ = 0.363, p < 0.001).
In summary, these results thereby provide support for Hypothe-
ses 1a and 1b, suggesting that organizational learning in hospitality
industries can influence human capital accumulation through inno-
vation behavior and capability development, which also supports
Subramaniam and Youndt’s findings (2005). The results indicate
that while exploratory and exploitative learning provides hospi-
tality organizations with a platform for searching for diverse ideas
and creates reliability in experience, innovation behavior can help
integrate those ideas into unusual combinations to generate novel
service or products. Moreover, innovation behavior also encourages
employee collaboration both within and across different groups to
inspire new thoughts or solutions for tasks and problem-solving
(Kim and Lee, 2013). In doing so, the learning mechanism can help
hotels not only establish an open mindset for enhancing their inno-
vation capability within organizations but also enable hotels to
orchestrate widespread adoption of innovation in developing and
accumulating their own human capital.
With regard to Hypotheses 2a and 2b, it was predicted that the
innovation behavior of hotels is positively related to market oppor-
tunity capture and competitive advantage through human capital.
Hotels may actively identify market opportunity from employee
innovation behavior that can effectively capture and observe envi-
ronmental changes through human capital (ˇ = 0.635, p < 0.001).
With similar logic, development and encouraging employee inno-
vation may also benefit the individual creativity that enables
hotels to achieve and maintain competitive advantage (ˇ = 0.650,
p < 0.001). These results support Hypotheses 2a and 2b and sug-
gest that management focus on human capital and innovation
behavioral enhancement practices will do more to improve organi-
zational performance. In light of Chand and Katou’s (2007) findings,
although hotels are a labor-intensive industry with an accompany-
ing high turnover rate, investment in human resources and human
capital not only reduces turnover, it also affects employee and
customer satisfaction. Consequently, from a “configurational per-
spective” positing best fit for business strategy, human resources
support an innovation-oriented business strategy, implying that
human capital and innovation capability interacting lead to a “best
practice bundle” context in determining hotel performance.
Table 4 and Fig. 3 illustrates the results of Hypothesis 3, which
proposed the moderating effects of social capital and innovation
 C.-H. Liu / International Journal of Hospitality Management 66 (2017) 13–23 19

Table 3
Correlations and descriptive statistics.a

Variables Mean S.d. 1 2 3 4 5 6 7 Variance Skewness Kurtosis VIF1 VIF2

1. Exploration Learning 5.873 0.738 0.546 −0.245 2.441 2.24 2.34

2. Exploitative Learning 5.833 0.701 0.712 0.491 −0.343 3.070 2.55 2.91
3. Innovation Behavior 5.651 0.787 0.561 0.562 0.619 −0.400 2.739 2.74 2.42
4. Human Capital 5.658 0.717 0.515 0.598 0.682 0.514 −0.260 3.108 3.10 3.09
5. Opportunity Capture 5.808 0.720 0.666 0.738 0.581 0.620 0.519 −0.188 2.423 – 2.84
6. Competitive Advantage 5.678 0.822 0.505 0.553 0.722 0.667 0.571 0.676 −0.349 2.815 2.75 –
7. Social Capital 5.746 0.817 0.485 0.565 0.685 0.709 0.569 0.717 0.668 −0.439 3.207 2.91 2.67
8. Organizational Capital 5.719 0.771 0.565 0.639 0.613 0.760 0.681 0.645 0.708 0.594 −0.564 4.464 3.07 3.21
a
All coefficients above 0.485 are significant at 5% level.

Table 4
Interaction between social capital, organizational capital, and innovation behavior.

Variables Human Capital

Model 1 Model 2 Model 3 Model 4 Model 5 Model 6

Control variables
Gender 0.013 −0.004 0.001 0.036 0.010 0.006
(0.043) (0.039) (0.039) (0.039) (0.035) (0.035)
Age
30–39 years old 0.055 −0.077 −0.068 −0.225* −0.154 −0.149
(0.049) (0.103) (0.103) (0.103) (0.094) (0.093)
40–49 years old 0.010 0.048 0.051 0.039 0.039 0.047
(0.097) (0.045) (0.045) (0.045) (0.041) (0.040)
50–59 years old 0.145 0.010 0.017 −0.012 −0.009 −0.005
(0.159) (0.089) (0.089) (0.089) (0.081) (0.080)
Over 60 years old −0.001 0.229 0.229 −0.019 0.118 0.132
(0.216) (0.146) (0.145) (0.145) (0.132) (0.131)
Education
Senior high school 0.589 0.588 0.536 0.809+ 0.751+ 0.679
(0.512) (0.471) (0.469) (0.470) (0.427) (0.423)
Junior college/University 0.592 0.582 0.553 0.741 0.692 0.657
(0.508) (0.468) (0.465) (0.467) (0.424) (0.419)
Graduate 0.492 0.471 0.435 0.718 0.631 0.591
(0.508) (0.468) (0.465) (0.467) (0.424) (0.419)

Moderate Variable
Social Capital(SC) 0.629*** 0.407*** −0.034
(0.026) (0.032) (0.156)
Organizational Capital(OrC) 0.706*** 0.512*** −0.030
(0.024) (0.028) (0.147)

Independent Variable
Innovation Behavior(IB) 0.344*** −0.107 0.318*** −0.233
(0.033) (0.160) (0.028) (0.149)

Interaction Variable
IB*SC 0.080**
(0.027)
IB*RC 0.097***
(0.026)

Model statistics
R2 0.511 0.585 0.591 0.587 0.660 0.668
R2 adj 0.501 0.577 0.582 0.579 0.653 0.661
F 55.40*** 68.61*** 64.78*** 75.43*** 94.31*** 90.09***
Observations 595 595 595 595 595 595
+
P < 0.1.
*
P < 0.05.
**
P < 0.01.
***
P < 0.001.

effects on human capital accumulation. Model 1 only includes a
control variable, and Model 2 includes innovation behavior into a
regression model. Model 3 tests for the moderating influence of
social capital on the relationship of innovation behavior to oppor-
tunity capture. Specifically, Model 3 shows that the interaction
between social capital and innovation behavior is positive and sig-
nificant (ˇ = 0.080; p < 0.01), thus supporting H3. This interaction,
which is shown in Fig. 3, suggests that, for hotel managers who
score high on social capital and innovation behavior are more posi-
tively related to opportunity capture than managers who score low
on social capital.
The moderating effects of organizational capital-innovation
behavior with the competitive advantage variables are summarized
in Table 4 in Models 4 through 6. First, organizational capital mod-
erates the innovation behavior-competitive advantage relationship
(ˇ = 0.097; p < 0.001). The nature of this interaction is illustrated
in Fig. 4, which indicates that, for hotel managers who score high
on organizational capital, innovation behavior is more positively
related to human capital than for managers who score low on orga-
nizational capital. As such, Hypothesis 4 is fully supported.
In addition, the study conducted a post hoc analysis of several
alternative models to examine whether the original hypothesis
20 C.-H. Liu / International Journal of Hospitality Management 66 (2017) 13–23

alternative models provide useful evidence of the conceptual struc-

ture of the purpose of competitiveness (Nunkoo and So, 2016).
6 Further comparison of alternative Models 1 through 4 suggested
that the original hypothesized model was the best fitted model.
5
Furthermore, goodness-of-fit indexes, such as ␹2, CFI, AGFI, GFI, IFI
and RMSEA can also be used to measure whether equivalent mod-
4
els can be well-ordered in a nested sequence or not. On the basis
3 Low Organizational Capital of the suggested goodness-of-fit values, the study concluded that
hypothesized model represents the best fitted and parsimonious
High Organizational Capital model.
2

1 5. Conclusion and discussion

Fig. 4. Interaction of innovation behavior and organizational capital in human cap-
ital.
model (Fig. 1) fits the data better than other multidimensional
models. As shown in Fig. 5, alternative Model 1 added the path of
exploratory learning to human capital and showed that exploratory
learning a has direct impact on human capital accumulation,
and this fit the data well (␹2 /df = 3.878; CFI = 0.919; AGFI = 0.843;
GFI = 0.871; IFI = 0.919; RMSEA = 0.070). In addition, alternative
Model 2 added the path of exploitative learning to human
capital to examine the direct effects between exploitative learn-
ing and human capital (␹2 /df = 4.059; CFI = 0.913; AGFI = 0.830;
GFI = 0.859; IFI = 0.914; RMSEA = 0.072). Further, the alternative
Model 3 showed a linkage in the relationships between exploratory
learning and competitive advantage (␹2 /df =4.310; CFI = 0.906;
AGFI = 0.827; GFI = 0.857; IFI = 0.907; RMSEA = 0.075). Furthermore,
the alternative Model 4 added the path of innovation behavior
to opportunity capture, and it showed a linkage in the relation-
ships between innovation behavior and competitive advantage
(␹2 /df = =3.882; CFI = 0.919; AGFI = 0.835; GFI = 0.864; IFI = 0.919;
RMSEA = 0.070). In general, alternative models are considered as
a threat to substantive meaning compared to original models that
have shown other acceptable paths of fit for the data, which thus
may change the equivalent models’ direction and the hypoth-
esis of the study (Raykov and Marcoulides, 2001). Nunkoo and
So (2016) suggested that selecting the best model fit and the-
ory development from equivalent models should also consider
both theoretical grounds and quantitative criteria (Kline, 2011;
Hershberger, 2006). Therefore, in the stage of theory development,
This study advances the existing hospitality literature by the-
orizing organizational learning as a foundational attribute in the
transfer of innovation behavior and human capital and thus focuses
on the approaches that hotels can take to maintain competitive
advantage. Drawing on a new integrated framework of IC the-
ory, this study examined learning mechanisms as a door that
hotels can open to acquire information and knowledge that can
lead to positive organization outcomes and the buffering role
of social and organizational capital in the performance creation
process. In a sample of 595 hotel managers, the findings sug-
gest that exploratory and exploitative learning can yield desirable
hotel outcomes, such as encouraging creative employee innovation
behavior and by boosting organizations’ human capital accumu-
lation. The results also suggest that organizational learning can
simultaneously increase opportunity identification and competi-
tive advantage through innovation behavior and human capital.
Moreover, the results show that hotels’ social capital and organiza-
tion capital play an important moderating role in these complex
competitive advantage creation processes by as an enhancing
mechanism; social capital and organization capital increase the
effects of innovation behavior by connecting internal and exter-
nal resources such that innovation behavior is related to increased
human capital only when there are high levels of social and orga-
nization capital.
5.1. Theoretical implications
The findings of the present study make several critical contri-
butions to the hospitality literature. First, the study examines the

Exploratory Social
Exploratory Social learning Opportunity
learning Opportunity capital
capital capture
capture
Innovation Human
Innovation Human behavior capital
behavior capital
Competitive
Competitive Exploitative advantage
Exploitative advantage learning Organizational
learning Organizational capital
capital

χ2/df=3.878; CFI=.919; AGFI=.843; GFI=.871; IFI=.919;RMSEA=.070 χ2/df==4.059; CFI=.913 ; AGFI=.830; GFI=.859; IFI=.914 ;RMSEA=.072

Alternative model 3 Alternative model 4

Exploratory Social Exploratory Social

learning capital Opportunity learning capital Opportunity
capture capture

Innovation Human Innovation Human

behavior capital behavior capital
Competitive Competitive
Exploitative advantage Exploitative advantage
learning Organizational learning Organizational
capital capital

Fig. 5. Four alternative models compare hypothesized model.

 C.-H. Liu / International Journal of Hospitality Management 66 (2017) 13–23
competitive advantage creation processes that underlie organiza-
tional learning and thus extends the developmental IC literature,
which has focused mostly on a multiple mediation mechanism to
explain how hotels can identify market opportunity through learn-
ing (e.g., Hu et al., 2009; Teare and Rayner, 2002). In particular,
the study offers a human resources-based model in which innova-
tion behavior and human capital serve as two important mediating
mechanisms to link hotel organizational learning and its market
performance. Based on a human resources management perspec-
tive (Dhar, 2015; Tracey, 2014), the study argues that an emphasis
on organizational learning and a large organizational knowledge
pool can provide new market information and inspire employee
creativity, which is associated with employee innovation behavior
will subsequently increase overall organizational innovation capa-
bility – namely, the advancement of organizational human capital
development. As such, this study provides an enriched understand-
ing of learning processes that are presented in an empirical setting
to simultaneously explain a set of complex organization innovation
capability increase mechanisms in hotels, which present multiple
positive benefits.
Second, this study extends the existing studies to explain both
the influences of organizational learning and the learning-IC rela-
tionships among the highly competitive hotel industry in China.
In the last decades, organizational learning has been observed
as evidence of the influence of information interpretation and
integration, which may sequentially become embedded in orga-
nizational culture and enhance innovation capabilities (Chadwick
and Raver, 2015). Until now, few hospitality studies have formu-
lated integrated concepts of how hotels’ competitive advantages
and market performance are created. The present study examines
both moderated and mediated possibilities and combines the con-
cepts of learning and IC. From another perspective, the results show
that while organizational learning not only enhances advancement
potential by increasing employee innovation behavior, it also can
be observed as a foundational attribute for advancement potential
by simultaneously increasing an organization’s expected outcomes,
such as opportunity capture and competitive advantage. On the
other hand, the theoretical model that is built in this study explicitly
predicts human capital to be a desirable consequence of innova-
tion behavior, which is supported by the findings that different
combinations of IC, such as social capital and organization capi-
tal, strengthen the relationship between innovation behavior and
human capital. Taken together, the results of current study provide
a more balanced, realistic view of organizational learning; as an
organizational capability element that is intended to enhance an
organization’s expected outcomes, organizational learning should
be emphasized in the development of learning mechanisms and IC
accumulation.
Third, our study identifies critical organization-level affective
characteristics that may increase hotels’ cognitive abilities to suc-
cessfully exploit organizational opportunities, leading to more
productive and efficient potential activity – namely, social capital
and organizational capital. The results of this study demonstrate
that social capital can help hotels to adjust their social struc-
ture to access their resources and increase employees’ skills and
knowledge to enable new behaviors (Coleman, 1988). Specifically,
although innovation behavior is related to human capital regard-
less of the level of organizational capital, high organizational capital
enables people to share a common language and increases mutual
trust in information exchange and version sharing, and it keeps peo-
ple apart and restricts their access, which may not only strengthen
and unite an organization, but it could also improve the quality of
organizational human resources (Nahapiet and Ghoshal, 1998).
This study’s final theoretical contribution is to add the val-
ues to the hospitality literature on organizational learning and
intellectual property relationships among hotels in China. Bontis
21
et al. (2015) asserted that intellectual capital (IC) is a strategic
resource for a hotel to sustain a competitive advantage. Especially
in an uncertain environment, systems and various integrated con-
cepts of IC are meaningful for academics and practitioners’ better
understanding of the sources of tourism and hospitality orga-
nizations’ competitive advantage (Liu, 2017). To understand the
potential relationships between organizational learning and IC, the
study addressed different learning mechanisms in organizations by
identifying exploratory and exploitative learning as an important
predictor of the description and explanation of organization perfor-
mance. Specifically, organizational learning functions as a source
of organizational innovation, which may also provide an answer to
the question of how organizations accumulate intellectual property
and how organizational learning is particularly relevant to creating
organizational competitive advantage (Fraj et al., 2015). The study
also extends the innovation literature by identifying the potentially
critical role of IC in expanding organizational innovation abilities
and by recognizing the influence of IC formulation issues.
5.2. Managerial implications
The study also offers several critical implications for hotel
managerial practices. First, the findings indicate that the invest-
ment in two organizational learning dimensions (e.g., exploratory
and exploitive) is connected to organizational innovation behav-
ior. Specifically, the results show organizational learning not
only as a foundational attribute to enhance innovation outcomes
but also as a possible influence on market performance (e.g.,
opportunity capture and competitive advantage) through human
capital accumulation. Hu et al. (2009)’s study of the relationship
between knowledge sharing, organizational learning and inno-
vation performance showed that in hospitality organizations, all
managerial actions should focus on organizational learning activi-
ties to enhance knowledge sharing among employees, to change the
climate of organizational learning, and ultimately to increase ser-
vice innovation performance. When similar concepts are applied to
this study, competitive advantage is found to be the result of a series
of close linked organizational activities, beginning with organiza-
tional learning. This results suggest that hospitality organizations
can obtain a competitive advantage by investing in and encourag-
ing internal learning from other colleagues and external learning
from competitors, suppliers and customers.
Second, the results suggest that hotels with high organizational
and social capital are better able to strengthen the innovation
behaviors that can result from the development of organizational
human capital. Therefore, hospitality organizations and managers
may find it valuable to identify the critical attributes of social cap-
ital, such as building a hotel’s social networks, the interaction and
exchange of shared values, reciprocity, and the mutual trust that
strengthens the cooperation among partners to achieve common
ends (Jones, 2005). Additionally, by strengthening the effects of
innovation behavior on human capital, organizational capital can
be strategically developed in hotels by providing employees with
various training programs, by training them in alternative prob-
lems solving methods for their current tasks, and by encouraging
them to “think outside the box” to increase their awareness and
improve their creativity, as well as encouraging employees to man-
age their creative ideas, to think and work effectively and develop
new service or product concepts in the workplace (Horng et al.,
2016).
Third, to facilitate the connection between IC and a favorable
market position of competitive advantage, hotel managers first
must recognize the importance of organizational IC (i.e., the knowl-
edge, experience, capability and skills of professionals) because it
may help the hotels to monitor changes in the industrial environ-
ment. It is important to bear in mind that customers’ needs and
22 C.-H. Liu / International Journal of Hospitality Management 66 (2017) 13–23
hobbies may change over time, and IC may be a critical tool in the
creation of an organization’s dynamic capability to meet market
needs (Lun et al., 2016). In practice, hotels can strengthen their
IC by carefully hiring well-educated and experienced employees,
providing system training, providing employees with attractive
incentive mechanisms, and encouraging them to interact with
internal and external partners to improve their expertise. In other
words, improvements in employee capabilities may not only make
hotels more sensitive to environmental changes but may also make
the employees more willing to work with other colleagues and thus
improve hotel innovation performance and maintain competitive
advantage.
5.3. Limitations and future research directions
Although this study makes several critical contributions, it also
has limitations and provides some suggestions for future hos-
pitality research. First and foremost, the data collection of this
study occurred over only a short period of time, so longitudinal
observation cannot be ruled out. In the highly competitive hospi-
tality industry, it is necessary to ensure the causal nature of the
relationship between organizational learning and intellectual cap-
ital to maintain competitive advantage in the future (Rudež and
Mihalič, 2007). Thus, future research could examine the hypothe-
sized model with longitudinal and experimental designs to further
confirm whether learning and IC are helping leading hotels main-
tain competitive advantage. A second limitation is that managers
provided ratings of the measure constructs, and, thus, it is possible
that they may have ignored other attributes that may influence the
mutual relationships among this study. Bias may exist in explain-
ing a pattern of supporting mediation-moderation with common
source variance (Zhang et al., 2014). Regardless, future studies
that include various aspects of the intellectual capital pattern and
account for favorable organizational performance, such as inno-
vation, new service development and financial performance as
well as additional measurement sources such as the employee or
customer’s perspective, could help rule out this concern. A third
limitation is that this study did not consider the social exchange
process that presumably transmits the effects of the intellec-
tual capital, organizational learning and performance. Those social
exchange process attributes may include knowledge management
process, social networks, or information flows, which may be highly
connected to organizational competition capabilities (Hallin and
Marnburg, 2008). Nevertheless, future research may broaden and
extend the boundaries of the social exchange process concepts
and assess whether these mechanisms further improve our under-
standing. Finally, the IC mechanism for organizations is a broad
concept (Schaper et al., 2017), and, as a consequence, it may be
problematic to compare the current findings with results of prior
studies. Accordingly, future studies could test this theory regard-
ing the mediating role of specific IC dimensions. In addition, using
the similar logic of learning mechanisms, future research may also
explore boundary conditions from the organizational learning per-
spective, addressing the perspective of customers, employees or
competitors instead of only studying the opinions of hotel man-
agers.
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