[ricarda b bouncken, sungsoo pyo (editors)] knowle(bookzz.org)

Ricarda B. BounckenSungsoo PyoEditors

Knowledge Managementin Hospitality and Tourism

Knowledge Management in Hospitality and Tourism hasbeen co-published simultaneously as Journal of QualityAssurance in Hospitality & Tourism, Volume 3, Numbers 3/42002.

Pre-publicationREVIEWS,COMMENTARIES,EVALUATIONS. . .

I FIRST OF ITS KIND. . . . Athought-provoking perspec-

tive on ways to move hospitalityand tourism forward in this knowl-edge-driven world."

BiUy Bai, PhDAssistant ProfessorTourism & ConventionAdministration DepartmentWiltiam F. Harrah Collegeof Hotel AdministrationUniversity of Nevada at Las Vegas

BBwawe&fiBwwfligwBieekWigwgWwa«wgfe&sg«&fia^^

More pre-publicationREVIEWS, COMMENTARIES, EVALUATIONS

GREAT VALUE. . . . Intro-uces the concepLs associ-

ated wilh knowledge managementand provides examples of theseconcepts through case studies andunique real-world applicaiions. . . .A LOT OF GREAT INFOEtMATIONON A FASCINATING TOPIC.... Theauthors do a good job of explainingthe complex ideas and concepts ofknowledge management while ad-dressing such topics as knowledgenetworks, data mining, and infor-mation technology. As an informa-tion technology professor, I foundthe chaptei:s on the technology ap-plications and data mining particu-larly interesting."

Cary C. Countryman, PhD, CHECHTPDirector of tbe Technology Researchand Education CenterConrad N. Hitton College of Hoteland Restaurant Management

THHPThe Haworth Hospitality Press

The Journal of Quality Assurance in Hospitality & TourisnP^^ Monographic"Separates"Executive Edilor: Sungsoo Pyo

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Knowledge Management in Hospitality and Tourism, ediled by Ricarda B. Bouncken aiul SungsooPyo (Vol. }•. No. 3/4. 2(K)2). "Ofîrctil vahw. . . Inlroditce.s ihe concepts assiKtated wilhknowledge management and provides examples of llie.se concepl.s ihrougb case .studies andunique real-world application.^. . .. A lot off-reat informalloit on a fascinating topic. . . . " {CaryC. Countryman. PhD. CHF., CHTI'. Director. Technolofiy Research and Education Cenler.Cnnrad N. Hilton College of Hotel and Restaurant Management)

Henehmarks in Hospitality and Tourism, cd'ilcii by Simgsoo Pyo (Vol. 2. No. ,V4. 2(H)1). "A handy.••ingle volume that clearly e.\plains the principles and current thinking about benchmarking, plii.<ûseful insight.s on how the techniques can be converted into profitable bu.<îness operations.Include.s conceptual, practical, and operational (or 'how-it-is-done') chapters," (Chris Ryan.PhD. MEd, MPhil. BSc (Econ) Hons, Profe.ssor of Tourism. The University of Waikato.Hamilton. New Zealand)

Indexing, Abstracting &Website/Internet Coverage

This section provides you with a list of major indexing & ab-stracting services. That is to say, each service began covering thisperiodica! during the year noted in the right column. Most Web-sites which are hsted below have indicated that they will eitherpost, disseminate, compile, archive, cite or alert their own Websiteusers with research-based content from this work. (This list is ascurrent as the copyright date of Ihis publication.)

Ahslracling. Wehsitc/Indexing Coverage Year When Coverage Began

• CIRET (Centre Inteniatiotial de Recherches et d'EtudesTouristiqttes). Compttterized Toiiristique & GeneralBibliography <www.ciret-tourism.cotn> 2000

• Ci\PI EC Reference Guide: Chinese National Directory

of Foreign Periodicals 20<H)

• INSPEC <www.iee.org.tik/publish/> 2000

• Leisure, Recreation & Tourism Abstracts

(c/o CAB Intl/CAB ACCESS) <www.cabi.org> 200(»

• Management & Marketing Abstracts 2(MH>

• Sotith African Assnfor Eood Science & Technology

(SAAFOST) 2000

• TOURISM: an international interdisciplinary journal 200(1

(continued)

• ^'Travel Research Bookshelf "a current awareness serviceofthe Journal of Travel Research "Abstractsfrom other Journals Section"published by the Travel &Tourism Association 20(H(

• World Publishing Monitor 2(»00

Special Bibliographic Noie.s related to special journal issues(separates) ami inde.xing/ah.siracthig:

• intlexing/ahslracting services in this list will also cover material in any"separate" that is co-published simultaneously vt'ilh Haworth's specialthematic journal issue or DocuScrial. Indexing/abstracting usually coversnuiterial at the article/chapter level.

• monographic co-editions are intended for eilher non-subscribers or li-braries which intend to purchase a second copy lor their circulating collee-tions.

• monographic co-editions are reported to all jobbers/wholesalcrs/approvalplans. The source journal is listed as the "series" to assist the prevention ofduplicate purchasing in the same manner utilized for books-in-series.

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• this is intended to assist a library user of any reference tool (whether print,electronic, online, or CD-ROM) to locate the tnonographic version if thelibrary has purchased this version but not a subscription to the source jour-nal.

• individual articles/chapters in any Haworth publication are also availablethrough the Haworth Document Delivery Service (HDDS).

ABOUT THE EDITORS

Ricarda B. Bouncken, Prof., Dr., oec, habil, Guest Editor, is Chairfor Planning and Innovation Management, Brandenburg Universily ofTechnology Cottbus, Germany. Dr. Bouncken is the winner of eight re-search awards and author of over 38 publications, tnany of them in ref-ereed German and international journals. She is an active member of theStrategic ManagemetU Society, the Academy of Management, and theAcadetny of International Business. Dr. Bouncken's research interestsinclude organizational theory, strategic management, service manage-tnent, knowledge management, competeticies, innovation, and externalcollaboration.

Sungsoo Pyo, PhD, is Professor in the Department of Tourism Man-agement at Kyonggi University in Seoul, Korea, and the editor of theJournal of Quality Assurance in Hospitality <& Tourism (Haworth). Heis the author or co-author of five books and over 40 professional articlesand has presented numerous papers at seminars. Dr. Pyo is on the edito-rial boards of five journals, including the Journal of Travel & TourismMarketing and Tourism Analysis. He is President of Tourism Systetnsand Quality Management Research Association in Korea, and the editorof the Journal of Tourism Systems and Quality Management, publishedby the Association. In addition, he is the recipient ofthe Sosung Awardfor Academic Excellence, awarded by the President of Kyonggi Uni-versity (1997) and the Outstanding Service Award from the Interna-tional Management Development Association at the Sixth AnnualIMDA World Business Congress (1997). Dr. Pyo's current research in-terests include destination marketing engineering, quantitative analysisand TQM lor destination managetnent. Dr. Pyo is a member of AIEST-the Intemational Association of Scientific Experts in Tourism.

INTRODUCTION

Achieving CompetitivenessThrough Knowledge Management

Ricarda B. BounckenSungsoo Pyo

SUMMARY. Effective knowledge managemeni conlributes in estab-lishing competitive advantages over competitors in the hospitality andtourism industry. Reuse of already proven knowledge and readiness ofknowledge to use are the major benetits of knowledge management. Thispaper introduces views of editors about knowledge managemeni and dis-

Ricarda B. Bouncken is Chair tor Planning and Innovation Management,Brandenburg University of Technology Cottbus. Erich-We inert-Str. 1,03044 Cottbus,Germany (E-niail: [email protected]).

Sungsoo Pyo is Protessor, Kyonggi University, Republic of Korea, and VisitingScholar. Department of Leisure vStudies, University of Illinois, 1206 S. 4lh Street, 104Huff Hall. Champaign, IL 61820 USA {E-niail: [email protected]).

[Haworih co-inclcxing entry note]: ''Achieving ConipeiitivcnobS Through Knowledge Maiiagenient,"Bouncken, Ricarda B., ant! Sungsoo P>'o. Co-piiblished simullaneously in Juiinial uf Qiuiiity Assiirtmce inHospitality <6 Tourism (The Hawonh Hospilaliiy Press, jin imprini of The Haworih Press, Inc.) Vol. 3. No.3/4, 2Of)2. pp. 1 -4; and: Knowledge Mimagemcnt in Hospitality and Tourism (ed: Ricarda B. Bouncken andSungsoo Fyo) The Haworth Hospitality Press, an imprint ol'The Haworth Press. Inc., 2002, pp. I -4. Sitigle ormultiple copies of this article are available for a fee from The Haworth Doeunieni Delivery Service[ 1 -800-HAWORTH, 9:00 a.m. - 5:00 p.m. (EST). E-mail address: tiocdelivery@haworihpress,com].

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iO.13OO/JI62vO3nO3 01 , /

KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

cusses its possible applications, in addition to the papers included in thisvolume. I Article copies available for a fee from The Haworth Document Deliv-ery Service: ]-800-HAWORTH. E-mail address: <(}ocdelivei-y@ha\vorthpre.ss.com> Website: <http://www.HaworthPress.com> © 2002 by The HaworthPress, Inc. All rights resented.!

KEYWORDS, Knowledge management, tourism, hospitality, reuse ofknowledge

Core of knowledge management involves acquisition, explication, andcommunication of mission-specific professional expertise in a mannerthat is focused and relevant to an organizational participant who re-ceives the communication (King, 1999: 70). Research on knowledgemanagement has attracted increasing interest in the past years, which isindicated by a growing number of articles and management tools. Alarge number of articles have discussed the theoretical basis of knowl-edge or stressed the importance of knowledge in firms.

Knowledge management contributes to effective operations and es-tablishes competitive advantages over competitors in the hospitalityand tourism industry. When the proven knowledge during the field op-erations is re-used, knowledge developed during various formal and in-formal procedures can be incorporated in operations (Pyo, Uysal andChang, 2002). As a result, duplication of research can be avoided, thecost of research and developtiient is reduced, and effectiveness of oper-ations is increased. Recognizing this fact, reuse of already developedknowledge is awarded in six sigma practices.

Knowledge is ready to be used as a result of knowledge management.This is a drastic change from the traditional practice that searches and de-velops knowledge after recognizing its need. Knowledge managementprovides knowledge in hand in advance, in anticipation of the knowledgeuse (Pyo, Uysal and Chang, 2002). When the knowledge is in hand, thespeed of operations improves greatly by eliminating knowledge searchingtime. When the knowledge is based on internal team cooperation, copyingthe competitive advantage by the competitors can be very difficult.

Although tourism and hospitality, with their geographically dispersedunits, can profit from an enhanced knowledge management system, onlya small number of firms have implemented knowledge management uptill now. A recent empirical study shows that although managers inmany hotels consider knowledge tnanagement and information transfer

liilroduciion 3

to be relevant concepts, they report being confronted with too many andunclear knowledge management strategies, activities and implementa-tion techniques. As a result, they are not sufficiently familiar withktiowledge managetnent and reject implementing knowledge tnanage-tiient. This special issue will increase the understanding of the conceptsand will aid the implementation of knowledge management in hospital-ity and touristii.

In this special issue, six articles are included. The articles deepen spe-cific topics of knowledge management and show examples and cases ofknowledge tnanagement, and the theme is well reflected in the articles al-together. The first paper describes mostly mental and conceptual aspectsof knowledge management. The next two articles are theoretical and alsoinclude practical considerations in hospitality and airlines. The next pa-pers include software application developments in knowledge manage-ment in general, in hospitality and tourism and eross-border destinationmanagement. The final paper deals with database marketing with datamining and knowledge discovery.

Kahle introduces the concept of mental models into tourism. Mentaltnodels can be understood as landscape of a persons' concepts and theirinterrelations. They are strongly influenced by individual experiencesand the socialization process. Mental models are fundatnental for peo-ple's understanding of the world and their strategies to cope with the en-virontnent. In tourism, people are confronted with very dissimilarmental models. This helps to produce a high variety of ideas and con-cepts, but this variety can produce tnisunderstanding, mistrust and eanleadtoconfiicts. Kahle argues that if people involved in tourism under-stand and internalize the concept of different inental models, they willdevelop lower degrees of mistrust and can operate more efficiently.

Bouncken introduces an integrated concept of knowledge manage-tnent. This article describes knowledge management in hotels, presentscase-studies and gives strategie advice and structural recomtnendationsfor its implementation. While developing theoretical concepts whichunderpin the theory, the article provides reflections about knowledgeand analyzes different ditnensions of knowledge management in hotels.Further, it presents major infiuences on strategic and structural aspectsof knowledge tnanagement in hotels and suggests structures for the im-plementation of ktiowledge tnanagement.

Hattendorf develops a matrix that combines strategic operative as-pects of knowledge management. He illustrates his concept accorditigto requirements in the airline industry. The knowledge .supply chain ma-trix allows the balancing of various aspects within knowledge manage-

4 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

ment aspects. The knowledge supply chain matrix assesses four genericfactors (strategy, structure, process, resources) that are ahgned accord-ing to core processes wilhin knowledge management. Hattendorf de-rives the knowledge supply chain matrix from a generic business modeland shows the way to apply it within a knowledge management projectin the airline industry.

Gronau explains an IT-based knowledge management system, whichprimarily helps to manage explicit knowledge. Gronau develops theidea of a Knowledge Cafe and introduces it to hospitality and tourism.This knowledge management system contains layers of sources, reposi-tories, taxonomy, services, applications and user interfaces.

Pechlaner, Abfalter, and Raich explain issues in cross-border Destina-tion Management. Their example of the new project "AlpNet" demon-strates how important cooperation and member-specific requirements arefor tourism and other economic industries when establishing knowledgenetworks.

Finally, Cho and Leung discuss knowledge discovery techniques indatabase marketing for the tourism industry. Data mining deals with thecomplex task of extracting and managing any potential knowledge em-bedded inside databases. This paper introduces the common techniquesin data mining, including decision tree classifiers, regression analysis,induction programming logic, and probabilistic rules. Suggestions aremade about how these techniques can be used in order to Improve thedatabase marketing. By utilizing database marketing, a company canincrease its competitiveness and build entry barriers for others.

Most of the papers in this volume are theoretical or conceptual andpractical, rather than empirical. This tendency is due to the rather shorthistory of research about knowledge management in hospitality andtourism. This volume will contribute not only to the understanding ofknowledge management in hospitality and tourism, but also to the ad-vancement in research methods and research areas.

REFERENCES

King, William R, (1999). "Inlcgraling Knowledge Managemeni inio IS Slnilegy." In-fonmtiioti Sy.slems Matutganeni. Vol. 16. No. 4. pp. 70-72.

Pyo, Sungsoo. Uysal. MuzaiTer and Chang. Hyesook. (2002) "Knowledge Discoveryin Database lorTouri.si de.slinalions." Journal of Travel Research. Vol. 40. pp. 396-403.

ARTICLES

Implications of "New Economy" Traitsfor the Tourism Industry

Egbert Kahle

SUMMARY. The tourism induslry is a knowledge-based induslry. Thercccnl dcvelopmcnls in information processing and knowledge produc-tion and transfer have implications for the processes and relations in thetourism industry. The main aspects are the change of the structure oftransaction costs, the increasing importance of networks and the impactof the conditions of knowledge transfer on the inter-industrial relations.The concept of cognitive maps is used to explain the processes of infor-mation transfer. The overall result ofthe different aspects ofthe knowl-

Egbert Kahlc is Dean of Faculty. University of Lueneburg, Schamhoistslr. 1.21332Lueneburg, Germany (E-mail: [email protected]). His research is concentrated inplanning and organization. SMEs. change and risk management and decisions under un-certainty.

[Hawortli co-indexing emry ]KHO|: •"Iiiiplicaiidns of "New Economy' Trails for the Tourism IiKiusiiy,"Kahlc. ligbeil. Co-puiilishu-d iiiiiulumeoiisly in .lountal of Quality Assunmcc in Hospitality & Tourism (TlieHawonh Hospilaliiy Press, un inipiint of The Haworth Press, Inc.) Vol. 3, No. 3/4. 2002. pp, 5-23; and:Knowledge Mana^emmt in Hospitality and Tourism (ed: Ricarda B. Bouncken and Sungsoo Pyo) TheHiiworih Hospitality Press, lui imprint of The Haworih Press, Inc.. 2002, pp. .'i-23. Single or inuliiple copies ofthis article are aviiiliible lor a fee from The Haworth IXiciimcnt Delivery Service 11-800-HAWORTH. 9:00a.m. - ,'i:00 p.m. (hIST), E-miiil address: [email protected]].

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10.1300/JI62v03n03_02 5


edge orientation of the lourism industry is the importance of trust as thecore instrument in this industry. [Ariicte copies available for a fee frotn TheHawot-th Doctituetit Delivety Scti'ice: 1-800-HAWORTH. E-tmtil adchess:<docdeliver\@hawotihpfe.ss.cotn> Website: <hiip://\v\v\\.Ha\\onhPress. com>©2002 by fhe Haworth Ptess, Inc- AU tights resened.j

KEYWORDS. Asymmetric information, attributes of knowledge pro-duction, cognitive maps, knowledge transfer, networks, organizationalarrangements, transaction costs, trust

KNOWLEDGE MANAGEMENT AND KNOWLEDGEINTENSITY IN THE TOURISM INDUSTRY

Knowledge Intensity As a Core Attribute of Tourism

The travel itidustry or touristn itidustry is a very heterogeneous areaof service prodttctioti. The first denomination is used tnore for busitiesstravelers, whereas the second one is used for leisure traveling. Both willbe included iti the following discussions although the writer respects thegreat differences in the kitids of services required in each group. This isa cotnplex field with different areas of production distributed in differ-ent countries and regions. The products and the processes of operatioti.which are used for the achievetnent ofthe resulting services, are relatedto different types of industries, but they have one cointnon denotnina-tor: They are knowledge-based or knowledge-intensive service pro-cesses. The tourism system consists mainly of five areas, within whichdiffering elements compete and co-operate with each other. These areasare (Boiincketi, 2000: 91) the Agency, the Tour Operator, the Carrier,the In-Cotning-System and the Hotel. There may be additional areaslike Entertainmetit, Shopping and the like for the support of the travel-ers at Ihe destination. The special attributes of the travel industry as aservice process, the intangibility ofthe product atid the simultaneity ofproduction and consumption (Corsten, 1985: 173; Langeard, 1981:233), have been discussed widely elsewhere (Bouncken, 2000: 91-93).The focus of this paper lies in the touristn service as a knowledge-basedprocess, which is greatly influenced by the developtnetits of infonna-tion and cotntnutiication technologies.

Within each of the main areasof tourism, there are a large nutnberofparticipants as suppliers and purchasers of services, which partly coop-

Egbert Kahle 7

erate and partly compete with each other. These cooperative and com-petitive relations are embedded in flows of knowledge and information.The elements of these systems are contiected in various ways with oth-ers in the system, which results in quite different configurations of ele-ments. Hence, we find many different forms of organizational arrange-tnents for the coordination ofthe service process. These arrangementsare changing or have the opportunity to change due to developments ininformation processing methods. One of the more important aspectsconcet ning this development is the increasing use of networks as a formof organization, which tends to be an organizational form of its own be-yond tnarket and hierarchy (Fischer, 2001: 124-136; Gerutn, 2001: 10)and not between them (Williatiison, 1985: 751). In these tietworks, themain coordination mechanism is trust, whereas in markets it is contractsand in hierarchies the authority to issue instructions.

The Main Features of ''New Economy'* and Knowledge Economy

The intetisive use of knowledge in the process of service productionand the vast amounts of infonnation connected with the numerous andvarying cooperative and cotnpetitive relations handled with tnodernIT-equiptnent put the touristn industry close to the New Econotny, eventhough it is part ofthe Old Economy. The intensive use of ktiowledge orinfonnation is the main feature of all the New Economy industries (Kahle,2002a: 175), so we may subsutne the touristn industry here, because to-day this industry is in tnany ways knowledge-based. For these indus-tries have been argued (Kelley, 1997: 140) that economic laws like"diminishing marginal growth of returns" or the theory of transactioncosts are no longer valid. The actual development in the stock marketsindicates sotne doubts to that and for further discussion we will lookinto the special attributes of knowledge as an economic good, especiallyits cotiditions of production atid sale. These attributes are (Rode, 2001):

• The utility of knowledge in the process of knowledge transfer isdependent on the receiver (due to differences in the preferences,cotnpletnentarity, the reflexivity of knowledge and to the co-pro-duction-problem).

• The transfer of knowledge is-in contrast to the transfer of infor-tiiatioti-very time-expensive (due to the limited lingual, psycho-logical and pragmatic compatibility and to a limited speed oflearning).


• The owner of knowledge can only with difficulties be protectedagainst unlicensed proliferation and use ofthe knowledge (due tounlimited usefulness of the knowledge, minimal costs of repro-duction and transport, and the impossibility of returning the givenknowledge to the owner).

These attributes imply three different causal relations in the analysisof preparation and use of knowledge goods:

• The rapid increase, or more a jump, in the velocity of informationtransfer changes the structure of the transaction costs drastically.The consequences of "high velocity environments'" for strategicdecision processes have been discussed earlier (Bourgeois & Eisenhiudt,1988:816).

• The conditions of using knowledge induce a cost structure, wherethe variable costs arc nearly dispensable and only the fixed costsare relevant for the strategic decisions. This is combined with theintroduction of standards by the successful "First Mover."

• The "classic" framework of "simple" contracts in a market is nolonger existent and the hierarchical structure of organizations isaccording to changing limits of time and space in the informa-tional relations no longer relevant.

These three developments, which are discussed in detail in the nextthree sections, are accompanied by an increasing complexity of thestructure of service and management relations, where the high velocityof the reactions induces within a short time dynamic, i.e., "time-laggedcausal" effects. The great number of transactions per day, exchangingservices, information and money, makes it possible that within shortperiods of time, very small variations in the transactions processes ac-cumulate to big differences.

The Impact of Change in the Structure of Transactions Costs

The change in the structure ofthe transactions costs has two differentconsequences for the tourism industry. The reduction of transactioncosts in the pre-contract stage (preparation of contract) increases thenumber of possible partners. Instead of seeking scarce informationabout partners, we have today the situation of "information overload,"where huge masses of information can be scanned by intelligent agents(Hecker, 1999: 41 and 137). hiformation about the possible partners is

Egbert Kahle 9

available for each of the elements in the system, the travelers, the agen-cies, the carriers, the hotels. Private travelers, tourists, may not have theIT-technoiogy to scan all this information, but all professional travelers,the travel agencies, the carriers and most hotels will have access lo thisinformation. The result is that instead of a few selected market partners(Theisen, 1970) there are great numbers of them from which they canchoose. This increase of potential partners, which provides for morefreedom of choice and a wider variety of partners, is connected withgreater anonymity of these partners, with the consequence that experi-ence-based or trust-based goods and services are more difficult to eval-uate. The services in the tourism industry are mostly experience- ortrust-based (Bouncken, 2000: 89), and the problem of asymmetric in-formation exists in the supplier-customer relations of these goods,which will be addressed further below. When the quality of the serviceis only assessable after some time or experience, questions such as thefollowing are raised:

• What happens if the service doesn't meet the expectations or theconditions of the contract?

• Where and how are such problems dealt with?• Is the service assessable at all, either ex ante or ex post?

Normally, these questions are answered by the rules and customs ofthe industry. But with the numerous new partners, there is no "customof the industry," because they may come from different industries orcountries. Hence, intercultural differences (Hofstede, 1993) and barri-ers may exist which must be overcome (Kusters, 1998; Kahle, 2002c).This shall be carried out with the concept of cognitive maps. Such cul-tural differences will be found when the services in the different parts ofthe tourism process are given in different countries. Different culturalstandards are related to the four dimensions (Hofstede, 1982): "powerdistance," "uncertainty avoidance," "individualism" and "masculinity"which lead to different interpretations of given information. Even so,simple things like nodding the head means "Yes" in some cultures and"no" in others, and the traveler will have problems if he nods to a ques-tion and does not get correct answers. The same problems arise whenstaff members from different countries are working together in the sameservice production process, where the differences in contextuality oflanguage (high context vs. low context) induce misinterpretations of in-formation (Hall and Reed Hall, 1990).


As a result, we find that the reduction of transaction costs leads to anincrease in the amount of information and to an increase of cultural di-versity, which is to be expected in the increased number of possiblecontacts.

The Impact of Knowledge Production Conditions

The special condition of knowledge production and sales is the otherimportant aspect. Whereas the production and transfer of knowledge isquite expensive-due to the preference and complementarity differencesof the users, the co-production problem, the limited learning speed andthe limited compatibility of the knowledge transfer partners-the costsof transfer of information have decreased drastically. When knowledgeis easily externalized (Nonaka et al., 1994) the transfer process ofknowledge depends on the learning capacity of the information receiverand also on the matching of the relevant cognitive maps. The sender ofthe information can be a firm in one of the parts of the tourism industryor its employees that provide information about their services, prices,conditions and partners involved. The receivers are the potential travel-ers themselves or employees of the agencies, tour operators, carriers inthe foregoing phases of the process. If they have similar cognitive mapson the core information, then they can understand the information veryeasily. If the maps don't match well, then the embedding process of thereceived information will need time and will result in changes of the un-derlying knowledge. For example, "The climate at the destination inApril is quite fair and warm" will mean very different real temperaturesif one is speaking about Helsinki, Kairo or Rangoon. So the receiver ofthe information must have a pre-iiiformation, what "quite fair and warm"is in this case.

Today, the process of knowledge transfer has emancipated from theinformation transfer process. Whereas in the past the information trans-fer process was characterized by the activities "hearing" or "reading"and "writing," which are accompanied partly by understanding the in-formation and thereby creating knowledge in the receiving person, to-day by copying or by electronic exchange of data. These activities don'ttouch the receiver's cognitive map. Therefore, there is a great amount ofinformation available in the tourism industry, but without the necessarycultural and technical context, it doesn't create knowledge in the re-ceiver of the information.

Another aspect of the problem is the impression that the law of di-minishing returns is no longer valid. This may be induced by the follow-

Egbert Kahle II

ing argument: The information transfer processes themselves have verysmall variable cosls-tnarginal above zero-therefore it seetns that whenthe price is not zero, that there are increasing marginal returns since thesituation is changed on the cost side.

Most important is the irrevocability of the knowledge transfer. Oncethe knowledge has been acquired by another person, it cannot be takenback. Therefore the validity of the "quid pro quo" must be secured byother meastires than those applied to physical goods that can be returned.This implies that there is greater moral hazard in the knowledge transferprocess than in other services rendered. The knowledge acquired by per-sons is not only irrevocable, but it is changed in the process of adaptationand embedding in the cognitive map. For the acquirers it becotnes theirowti knowledge, which as their property gives them the right to use ac-cording to their own choice (Radetzki, 1999: 256).

These attributes of the knowledge transfer process imply that firmswhose competitive advantage relies on a knowledge advantage shouldnot externalize too much of their knowledge and share it with others,except if they are able to produce new knowledge as fast or faster thanthey give it away. This implies for the tourism industry that the knowl-edge about elements and relations in the five basic parts of tourismshould not be made accessible to everybody, because it could be copiedand allow competitors to match the offers of the firm.

Trust as a Main Factor in Tourism Industry Relations

The third important aspect ofthe knowledge intensity in the tourismprocesses-implied by the two first aspects-is the increasing importanceof trust in the relations between the acting elements (Bouncken, 2000).Trust as the expectation that the tnisted will be able and willing to fulfillthe positive expectation of the trustee is a social relationship. Thetrusted may be an individual, then we speak of personal trust, or an insti-tutioti, where we speak of institutional trust (Luhtnann, 1989). There isa third kind of trust, the ontological trust (Bohtne, 1998), which meansthe reliance on one's own cognitive maps, built up by experience. Theability to give and take trust-to be trusted and to be a trustee-is an indi-vidual attribute and is acquired in the process of socialization (in thegeneral meaning of Piaget, 1979: 88). The knowledge intensive ser-vices and relations in the tourism industry need trust, because the ex-changed goods underlie asymmetric information. These trustful relations-either personal or institutional-can only be established over titne. Thehigh speed of the infonnation transfer processes is compensated by the


low speed ofthe trust building processes. Only within existing trustfulrelations will the advantages of the high speed infonnation ptocessesproduce the economic gains expected from them.

Therefore the known and trusted partners will be the basis for theeconomic success in the tourism industry and trust as a part ofthe im-plicit knowledge (Polanyi, 1966) of persons and organizations will be acore competence in this industry. This is valid for the B2B relations inthe touristn industry and applies too for travelers who don'l want to besurprised by unexpected qualities of the services. For the travelers veryoften instead of personal experience the source of ttust is the reputationof agencies, operators or carriers or the persotial recotntnendation bytrusted friends. The latter case could be called a "second order" trust,which is quite necessary in the touristn industry, because the travelersnormally have no tegular and much repeated relations with the travelagencies or the other partners in the tourism system.

COGNITIVE MAPS IN THE APPREHENSIONOF PROCESSES IN THE TOURISM INDUSTRY

The Concept of Cognitive Maps

In the discussion of knowledge transfer the concept of cognitivemaps plays an itnportant role. We believe that the processes of construc-tion or re-construction of reality in the individual mind and withinorganizations-where we have difficulties to localize physically theplace of the tnind-<:an be described and represented with the concept ofcognitive maps or cause maps. Both words and concepts have been inuse for more than twenty years (Taylor & Lerner, 1996: 260). This con-cept is used in different relations and levels of analysis, so we have torefer to four different concepts or views of cognitive maps.

In the first view-and il was the only one in the beginning and it is thebasic view for all the other concepts-"cognitive map" is a metaphoricdescription of all the processes involved in obtaining, storing, retrievingand adapting knowledge and of the structure of knowledge, which isemerging and continuously varying. These processes and structurescontain models of description, models of explication and decision mod-els which initiate action (Kahle, 2001: 18). The analogy of "map" isquite limited, because the cognitive map contains much more than anornial map. Il contains rttles of observation, interpretation and action

Egbert Kahle !3

and often gives explanations. Tbese mental processes and structures arethe "real" or "original" cognitive map.

In the second meaning, cognitive maps are the pictures of these pro-cesses and structures the observer-the researcher, student or whoever-is drawing to visualize the items of knowledge and their relations,which have relevance for managers in certain situations. These picturesmay concern individuai managers or represent the view of a group ofmanagers in general (for an example see Calori & Lawrence, 1991:187). Such a picture or model ofa real phenomenon must necessarilycontain less than the real cognitive map, because a complete picture isnot possible-the complexity of reality must be reduced in a picture or amodel. The methods of recording and interpreting the underlying dataand relations vary widely up to now. One critical point is here that mostof these descriptions of knowledge items and their relations are given ina two-dimensional picture, which is quite insufficient to represent thecomplexity and dynamics of the underlying process. There are waysand possibilities to produce more complex and tnore realistic pictureseither by using computer-aided dynamic models like the GAMMA-tool(Hub, 1994) or by adaptation of the Helidem-concept (Kahle & Wilms,1998).

When the processes and structures of knowledge emergence and dis-tribution such depicted are no individual traits but organizational ones,which means that they describe the existence and distribution of knowl-edge within and between groups (of managers), we have the third conceptof cognitive maps, which is for enhancement of the difference attributed"organizational cognitive maps." They contain the systems of conceptsand relations produced (Laukkanen, 1996: 28) or used (Taylor & Lerner,1996: 260) by managers to understand their world and the strategies tocope with it. When these shared concepts of a group are visualized by anobserver-mostly by diagrams of items and relations-we have the fourthofthe levels of conceptualization of cognitive maps {for an example seeLaukkanen, 1996: 10 ff.). In the following context, we refer mostly tothe third and fourth level.

Implications ofthe Concept of Cognitive Maps for OrganizationalTheory

The most important consequence of the introduction of this conceptinto organizational theory is the change of view concerning communi-cation in organizations. Whereas up to this point it was accepted that or-ganizations exist and develop by communication, it is now to be seen


that organizations exist in communication (Taylor & Lerner, 1996:260). It is quite acceptable to believe that managers discuss organiza-tional topics and, in these discussions, find the rules and structures oforganizations that make sense and utilize them. They interpret and mod-ify those rules and structures, and produce organizational changes of theunplanned type in the continuous process (Staehle, 1994: 849).

The new view of organizational communication enhances this posi-tion and proceeds towards a concept in which the communication ofmanagers is the organization. In this view communication includes theunsaid, but obvious, which is the most important aspect. Those itemsand relations which are so obvious that nobody mentions them but ev-erybody is taking them for granted as necessary. Underlying assump-tions of own decisions and actions are the core assumptions and valuesof an organization. These basic values and assumptions have been ad-dressed as the basis of organizational culture (Schein. 1997: 16). Theshared values and views of a group (of managers) need not be expressedexplicitly, because they are known, believed and u.sed by everybody.They are only discussed if and when there are differences about the im-plications of a value or a rule in a specific situation. The values andnorms mostly are numerous and make a complex system. The explana-tions of the rules and values caused by such a doubt about implicationsand consequences of certain rules and values modify and re-interpretthe rules and values, sometimes even the basic assumptions. There isnormally no doubt in the validity of the values and rules, but a possibledifference about the point, which rule or value is concerned in a certainsituation and how conflicting prescriptions of different rules are solved.In a firm whieh is part of the tourism industry the managers will have anorganizational cognitive map of the industry and their field of action,but with the increasing amount of new and partially contradictive infor-mation there will be much discussion about the interpretation of theseinformation and the ways of action.

This concept of processes and structures of knowledge about organi-zation which emerge by speaking about them and implying some sharedassumptions and Values, which in themselves make sense to the organi-zational actions of the managers, is in some way similar to the conceptof organizational learningandtheroleof modeling within it (Morecroft& Sterman, 1994: XV and 6). In this concept of modeling, the develop-ment and use of models is not intended to provide the managers withtools for complicated optimization algorithms, whieh they do not reallyunderstand, but to create for them a model of the real world, a simplifiedpicture of future developments, which they can grasp and understand

Egbert Kahle 15

through the modeling and in which they can try and train useful meth-ods of analysis and ways of action. The models themselves are in thisview not seen as instruments of analysis or optimization, but as arenasof discourse or as training areas.

This view on modeling is here widened and applied to managerialcommunication. So whenever managers speak about their joint actionsand all that these actions involve, as for example the situation, the futuredevelopments including the invention of new products or techniques, theexisting and possible competitors, the qualities atid quantities of theirown human resources and so on, they describe their individual cognitivemaps (type I) to the other managers. By discussion and by explicit orimplicit acceptance they reach a shared cognitive map (type 3), whichdefines the stage at which each of them is acting their role. In militaryeducation very often the "sand table" is used as a tool for tactical prac-tice. In this sand table a piece of landscape is built in a miniature formand an offensive or defensive situation is constructed. This sand table isnow the cognitive map (type 4) for the group, which discusses andlearns tactical and strategic actions.

For this group, the model-the landscape represented on the table-will become reality, so far as development and evaluation of tactical orstrategic moves are concerned. The actors plan and conduct their ac-tions and the quality of their planning is judged along orthodox tacticsand strategies applicable in this model situation. Through this methodthe espoused theories ofthe group are not only shown in detail but theyare continuously evaluated and modified. Afterwards, which means af-ter having played numbers of such "war games," everybody knows theespoused tactics and strategies of his group and the managers will havethe confidence that the other members ofthe group will understand theiractions without much communication and they will accept the deci-sions, when they go along with the espoused theories, irrespective oftheoutcome of the actions. The information asymmetry between highermanagement or levels of command and the acting manager does not be-come more transparent, but easier to understand. In the tourism indus-try, where the planning process and the strategies are oriented at "cam-paigns" mostly consisting of a type of destination and a clearly definedtimetable, the evaluation of the last campaign and the comparison withformer campaigns is a widely used instrument and has the same resultsas the playing of "war-games."

16 KNOWLEDGE MANAGEMENT IN HOSP!TAUTY AND TOURISM

Further Aspects of Cognitive Mapping in the Totiristn Industry

Beyond these basic implications of cognitive mapping for organiza-tions there are three other aspects that should be considered. First,within the service rendering ftrms-the travel agencies, the carriers, thehotels-there are a great number of varying cognitive maps of type 3,which help to create the necessary variety (Ashby, 1958) to cope withcomplexity. This happens, because the individual cognitive maps (typeI) are not erased with the emergence of the type 3 maps, but stay alongwith the individual. The different groups in the organization, consistingof varying members, will create or allow different cognitive maps toemerge. The employees of the agencies, carriers or hotels have differentexperiences and often different cultural backgrounds. This induces di-versity of the cognitive maps. Diversity and doubt lead to more flexibil-ity of the strategic options of the tourism firms, but they threaten thestability of the organizational cognitive maps, which is needed for aclear understanding of each other. The organizational cognitive map isonly a general way of speaking but no real phenomenon. It is the ficti-tious fuzzy quantity of shared assutnptions and views.

The second and most important aspect of sense-making in the mana-gerial communication is the making similar ofthe respective views, thatis the adaptation of the individual views to the common view. Such atrivialization (von Foerster& Schmidt, 1996) is necessary for organiza-tional processes of learning and for the diffusion of organizational inno-vations, because a unified and definite interpretation is necessary. Thiscreates a contradiction to the point above, because flexibility requires acertain atiiount of diversity, whereas organizational acceptance needsclear-cut interpretations. With increasing numbers of participants in anorganization, the stability will increase and the possibility for flexibilitywill decrease. For the firms in the tourism industry it is important to de-velop an accepted and understandable concept of the firms" activitiesatid additionally for the employees and clietits.

A third point is that new information in these cognitive maps is al-ways contiected selectively with the existing knowledge in such a waythat the implications ofthe existing knowledge ate tiiaximized. This hasto be examined very cautiously because misinterpretations may tesult.So if some very innovating information is introduced, which cannot beconnected with the existing levels of information, it will not be consid-ered any further due to the fact that it cannot be conceptualized againstpre-learned experience or meaning.

Egbert Kahle 17

A further consequence of these interpretations of organizational cotii-munications is a possible explication for the emergence or existence ofstrategic narrow sightedness or the groupthink syndrome (Radetzki,1999: 68 f.). By the joint constaiction of their reality managers tend toexclude all information that does not stabilize this shared view. To cre-ate the model world or the sand table, problems have to be simplified,observations have to be unified and doubts are excluded. To solve aproblem jointly, one needs a joint problem view. This is in most casesthe simplest form ofthe problem, the minimum common denominator.When this is the accepted view in the group, other views and conceptsfor solving the problem are no longer accessible. The explicit use ofcognitive map type 4 may help to clarify this dilemma of problem solv-ing, because a meta-level of understanding is created (Kahle, 1995).

These general observations on cognitive maps can be applied to thetourism industry. We have the situation that in the five different stagesor areas ofthe industry there exist various different forms of organiza-tional arrangements and of knowledge transfer processes. The partici-pants are culturally quite diverse (Bouncken, 2000: 91), so it can beexpected that the cognitive maps of individuals and organizations fromdifferent countries will vary widely. By this greater variety the processof knowledge transfer will be impeded, because the implications of theinformation are less clear. On the other side this variety reduces the ten-dency towards group thinking, because the groups are confronted withan increase of contradicting information.

This problem of connectivity of one's own cognitive map with thoseof others in a field of many unknown and potentially different partnersenhance the use of tried partners. With these tried partners one sharesthe experience of joint activities and a common understanding of situa-tions and rules. This explains the possibility and the necessity of trust inthese inlerorganizational and intercultural relations in the tourism in-dustry (Bouncken, 2000: 92, 97).

ASYMMETRIC INFORMATIONIN THE PROCESSES OF TOURISM

Forms of Asymmetric Information

Asymmetric information implies information deficits on one side ofa transaction. This deficit may exist randomly or systematically in cer-tain situations. The partners of a transaction are usually called "princi-


pal" and "agent," where the principal gets a certain result and the agentdelivers (and produces) it. The ftve different parts of the tourism indus-try constitute together with the travelers a six-stage or six-level princi-pal-agent problem. In effect each component within the system can beprincipal or agent depending upon the context of the situation con-cerned.

The basic assumptions, problems and possible solutions of principal-agent problems have been discussed widely (Picot, Dietl & Franck, 1999:85-131; Jensen & Meckling, 1976; Pi-att & Zeckhauser, 1985; Spremann,1988, 1989, 1990), so we wili, after a brief description of the core prob-lems, focus on the industry-specific aspects.

There are four kinds of asymmetries related to the different attributesof the situation between the principal and the agent: "Hidden Character-istics," "Hidden Actions," "Hidden Information" and "Hidden Inten-tions." They are connected with each other and there are a number ofpossible actions to deal with these asymmetries, which shall be dis-cussed under the specific aspect of tourism industry.

Hidden characteristics imply that the agents or their products have at-tributes known to themselves, but not made known to tbe principals.Akerlof (1970) fu'st discussed this problem for the market of used cars,where the seller knows what is wrong (or not) with his car. The potentialbuyers aren't aware ofthe "real" condition ofthe vehicle and are there-fore only willing to pay the price for an "average" car. Therefore thegood cars will not be offered in the market which means that cars in av-erage condition will be of an increasingly lower standard. This "adverseselection" leads to "a market of letiions." In the tourism industry, thecarriers are possibly in a comparable situation in respect to their qualityand security standards and their price policy: The travelers cannot ktioworevaluate(this would be a case of hidden information) the good or badstandards ofthe various carriers, so they are only willing to pay the av-erage standard; therefore better standards will vanish from the marketand the average will deteriorate.

Hidden action is possible, if the agents deliver their product or ser-vice that can be evaluated by the principals but those cannot see how theagents have carried out the work. So the agents may make less effortthan they have promi.sed and the principals can do nothing to further theefforts. This is typical for the "back office" operations in the tourism in-dustry which are unseen and may cost much less than the fees that thetravelers have to pay. If the travelers ask for a special or personal (tai-lor-made) travel product, it can be easily produced since the agency hasaccumulated so much information about the products. But the travelers

19

are charged them more than Ihe standard fees. For the tour operators theproblem of hidden action lies with the carriers and hotels, whose perfor-mance is not directly observable. There are instruments such as moni-toring to make observations, and sometimes the open observation of anemployee by the principal is helpful, although it induces second orderagency problems.

Hidden information is much similar to hidden action, only that herethe principals may be able to observe the agents and their efforts, butthey have no means to evaluate the efforts. That is typically so withknowledge based operations, where the principals cannot evaluate thequality of the knowledge of the agents (that could be a hidden character-istic) and the effort of the knowledge retrieval and use. The risk lying inall both these kinds of asynunetric information is the "moral hazard,"the opportunity for the agent to "cheat."

In the case of hidden intentions it is assumed that there are conflictinggoals (at least partially) between principals and agents, and the agentsdo not state that fact before the agreement. At a later stage the agentscan-within the limits of the contract-further their own goals at the dis-advantage of the principals. In the tourism industry this may happen, forexample, when the traveler is at the destination and services, and haveto pay extra although the tour package is inclusive. This is called a"Hold Up" situation (Goldberg, 1980).

Forms of Reduction the Risks of Asymmetric Information

There is a great number of possible actions to reduce the moral haz-ard, either on the agent or principal side (Picot, Dietl & Franck, 1999: 91;Dixit & Nalebuff, 1993: 95; Kahle, 2002b: 26). Some of the actions canbe used on either side. Actions for the principal are screening and moni-toring. Actions for the agent only are signaling, guarantees, securities,building up reputation and destroying bridges to opportunistic behavior.Whereas contracts, developing tnist by teamwork, ceasing communica-tion, automatic responses, small steps and using "professional" interme-diates are possible instruments for either side.

The u.se of these activities to reduce the risks of asymmetric informa-tion is expensive which the travelers normally will not be willing to pay.To achieve a maximum of efficiency the costs of risk reduction shouldbe minimized. Monitoring activities to reduce risks that are known tothe agents are the most important. The next important instrument isbuilding up reputation as a quality brand. Then follows in importance


guarantees to the travelers as a token of commitment. The division ofactivities between principals and agents depends mostly on the marketposition. Who gains more from the process will take the risk reductionmeasure.

The least-cost-activity-in monetary terms-to reduce the risk is trustas a reciprocal relation. Trust needs no monitoring nor any other instru-ments and therefore does not cost money. Trust is a good "sui generis"(Schuize, 1997: 70) that losses and gains are counted in other than mon-etary dimensions. Therefore, trust is the important dimension in thetourism industry. The importance has grown with the increased amountof information and the increased velocity of information processing.Trust is the core criterion in defining a network with the least-cost lo re-duce the risk of asymmetric information.

CONCLUSION

The tourism industry has all the necessary features to be characterizedas a "new economy" industry. The abundance of available information,the high velocity of information transfer, the change of transaction coststructure and the impacts ofthe special attributes of knowledge assets inan intercultural area of action create a special situation for the people in-volved in the tourism industry. The advantages ofthe developing neweconomy will only be secured if they are matched with stable relationsto known and trusted partners. An important instrument for the betterunderstanding and functioning of trust between these partners is theconcept of cognitive maps. The use of this concept gives a cognitive ba-sis to the trusted relations and will enhance understanding between theinvolved partners. Such a cognition-based trust will be able to reducethe problems of asymmetric information in the relations within the tour-ism industry.

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Knowledge Managementfor Quality Improvements in Hotels

Ricarda B. Bouncken

SUMMARY. Holels can improve their service quaiily by enhancing em-ployees" knowledge abiiut customer's preferences and the correspondingservice prtKedurcs. Service qtiality depends strongly on the ability of holelsto acquire, lo develop, to accumiilule. and lo distribute knowledge assets.Despite the popukirity of knowledge management in other industries, ho-tel-s|)ecific concerns have been hugely neglected in the lileniturc andknowledge management has jusi rudimentarily been implemented in hotels.Especially hotel chains, which have to deliver an overall quality staiiditrd ingeographicully distributed htHels, can exploit, knowledge management'sbenefits. Nevertheless, the implementation of knowledge managemeiu rv-quii"cs considerations. Tliis article describes knowledge management inhotels, presents case-studies and gives strategic advice and ^.tmctural rec-ommendations for its implementation. An examination of hotels' knowl-edge management requires theoretical tinderpinning. Therefore, this articleprovides rvllections about knowledge and analyzes different dimensions ofknowledge management in hotels. Ftirther, it presents major inlluenccs on

Ricurda B. Buunckeii is Chair for Planning and Innovation Management. Branden-bure llni\orsity of Technology Coithus. Erieh-Wcinert-Slr. I 03044 Collbus. Gennaiiy(E-mail: ht)uncki.'n(fi!tu-coubus.i!e).

The aulhor w ould like to express gratitude to Accor Hotels (Mr. Ciseo. Human Re-souives: Mr. Sengcr. Human Resource Direelor: Mrs. Werner. Assistant General Man-agL-ment). to Besi Western Hotels (Mr. Smola. Manager Hotel Services), and toMaritim Hotels (Mrs. Lindemann. Marketing Manager) Ibr the interviews.

IHawonh co-indexing ejiiry mtic|: -Kiiowltilgf Managcmcni Un Quality Improve[ncnis in Holels."Bottrifki'ii. Kitaiilii B, Co-publishcil sniiiiliaiii'Duslj in Jminitil nf Quulitv Af-Mtmncv in ItnspiiolHx A Imr-liwiiThtHuwonhHospiialiiy ftess. an imprinutt The Hawnrih Press, liic.l Vol, .1. No, -V4.:(KT2. pp. 2fi-Sy;uiid; k'mmleiJiif Mimuiicmfiii in flo^piinlit}' and Tourism led: Ricaida B. Bounckcn and SuiigsiHi Pyo) TheHawonh Hospilalil> Pa-ss. an iniprinr ot The Haworth Press. IIIL,. 2(X)2. pp. 25-59. Singte or mullipte copit'>of Ihis iuncte an- >n liiluhle for a fee fmni The Hawonh t)ix:uim'iii Delivery' Service 11 -80()-H AWORTH. 9;(K)a,in, - flit) p.m. (KST). E-iiuiil address: diKdeliveii, C«'ha\vorthpre^^.l.onl|.

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slratcgic and sinictural aspccls of kno\vlcdj:c munaycnieni in holds andsuggests slnicluiics fur the implcnientauon of a kriowlolgc niiuiaycmcnl. lAnidccopies avaHahle for a fee from The Haworfh Document Delivery Senice:l-800-HAWORTH. E-nuiH aildre.ss: <clo(deliveiy^luiwniihpress.cont> Weh.site:<btti>:/A\n\v.Ha\\ortliPre.\\.com> 0 2002 hy Tlie Htiwonh Press. Inc. All rights re-served.!

KEYWORDS. Hotels, knowledge maniigcnicnt. inlcrrirm communica-tion, .service quality

INTRODUCTION

The major task of hotels is to promote customer satisfaction and loy-alty while establishing acotiipetitive advantage (Nightitigale. 1985). Amajor factor on customer satisfaction and loyalty is quality (Fallon &Schofield, 2000; 30). Hotel gucsfs quality perceplioti is mainly inllu-enced hy the service encounter that can range beiween secotids undtnonths and is determined by the type of hotels, and the type of hotelguests with dilferenl service experiences (Medlik. 1990: lOt.; Teare,Mazaiiec, Crawford-Welch, & Calver, 1994: 6: Powers, 1995: 19).Therefore, hotels requite staff which are able to cope with dilTerentguests and their preleretices. However, many quality problems occurbecause the staff does tiot fully utiderstand the consequences of serviceinteractions and guest's preferences. Consequently, itiiproving employ-ees' ktiowledge about custotiier's preferences and the correspondingservice procedures is becoming iticteasingly important in hotels. Thisrequires the retrieval and utilization of other staff members' experi-ences tbat sulTers from:

• a high rate of employee turnover (bearing risk of knowledge loss).• a high rate rotating employees between hotels (forcing to build up

new team knowledge).• a high percentage of unskilled workers or a low status employees

(Reiser, 1989: I I3f.) (necessity to build up standards, knowledgeand foster learning), and

• it regular and seasotial detnand and changing customer preferencesconfronting a stable capacity (problems of volatility and flexibil-ity) (Kciscr. 1989: 122).

Consequently, hotels have to save experiences, wbich should not belost, when employees leave the hotel or rotate between liotels. They also

Riciinla B. Botincken 27

need to suppon unskilled workers und new employees with other em-phiyces* e.xperiences. build up easily understandable standards and fosterlearning. Hotels can particularly benefit from u knowledge managementsystem, which helps to transfer and save knowledge within the hotel andsupports the staffs service interactions. Hence, knowledge manage-ment, wbich has recently emerged as a means of improving businessperformance (Spender, 1994; Grant, 1996; Teece, 1984), needs to beimplemented and improved regarding the specific requirements inhotels. Knowledge management must help to identify, generate, accu-mulate, save, retrieve, and distribute knowledge to contribute towardsimproving company-wide service qualily. Nevertheless, knowledgemanagement in holels can benefit from the service encounter thai offersthe possibility to achieve knowledge directly about existing and chang-ing customer expectations.

Despite the popularity of knowledge manageineiu in other indusuies, ho-tel-specific concerns have thus been neglecteti in tlie literature and knowl-edge management has just mdinicntarily been implemented in hotels. This isespecially valid for hotel chiiins, which have to deliver an overall qualitystandard in geographically distributed hotels (Medlik, 1990; 153).

To nil the identified gap the paper concentrates on hotel chains. First,the paper analyzes the theoretical background of knowledge, which af-fects a knowledge management strongly iti hotels. Here, matters of dis-cussion are diverse fonns of knowledge that require specific ways ofknowledge retrieval, transfer and accumulation. Second, strategy andstructure based recommendations on knowledge management in hotelswill he explained. This article provides a rellection on forms and criteria(hat determine the knowledge strategy in hotels. It also supplies thereader with insights about different instrtiments, which facilitate theidentification, generation, accumulation, and distribution of knowl-edge. A major impact on hotels* knowledge management has a hybridknowledge based strategy of personalization and codification (see Fig-ure 1). According to the envisaged form of knowledge a personal trans-fer, retrieval, and conservation or a codified transfer, retrieval, andconservation is suitable.

THEORETICAL BACKGROUNDOF KNOWLEDGE MANAGEMENT

Scientists, managers, and consultants provide us with differentperspectives of knowledge and an unequivocal definition of knowl-edge (Senge, 1990; Nonaka, 1991; von Krogh, Roos, & Slocum, 1994;e


FIGURE 1. Elements of Knowledge Management

Grant, 1996; Druckcr. Dyson, Handy, Saffo. & Senge, 1997; Drucker,1999; Lathi, 20()0). This paper follows the cognitive and constructivistunderstandingof knowledge (Spencer Brown. 1969; von Foerster, 1984:Luhmann, 1985; von Glasersfeld, 1997), which concentrates on socialprocesses of knowledge generation and understands knowledge as in-terpreted and interconnected information (von Foerster. 1998; 44; vonGlasersfeld. 1998; 19; Luhmann, 2000: 100-102; Mir & Watson, 2000:943).

While different fonns of knowledge are notable, and these have differ-ent implications on knowledge transfer and utilization, we need to selectand to distinguish between major fonns of knowledge. A popular differ-entiation exists since Polanyi distinguished explicit and tacit knowledge(Polanyi, 1967). Explicit knowledge is open to codification in docu-ments, books, databases, and reports (Lathi, 2()(X); 66). Formal processeslike a methodical language offer mechanisms to transfer explicit knowl-edge. Instead, tacit knowledge is very complex, involves viewpoints, in-tuition, deeply grounded statements, meaningful behavior, and values(hat people develop through experience (Nonaka, Byosiere, Bt)rucki, &Konno, 1994: Leonard & Sensij->cr, 1998: 113). The U-ansfer of tacit knowl-edge requires a process of understanding that is near to action, commit-ment, and involvement in a specific context (Nonaka & Tageuchi,

Ricarda B. Bouncken 29

1995). Tacit ktiowledge contains cognitive and ''technical" elements.Cognitive elements like paradigms, schemes, and beliefs help individu-als to understand the environment. Technical elements enclose skillsand emheddcd know-how for specific actions.

The transfer of knowledge always requires finding redundaney andconnections between (he items ofthe individual mind and the transfenedknowledge. Therefore, direct interrelations that are richer with informa-tion foster the transfer of identical or tacit knowledge (see: Chapter 5.1).

A second major categorization of knowledge differentiates itidivid-ual and collective knowledge, which contains commonly held knowl-edge. Individual knowledge can be perceived as sources individuals usefor their actions and cognitions (Boisot, 1998: 12). There is a great simi-larity between iticlividual knowledge and individual mental tnodelsfrom It cognitive point of view. The literature undetstands mental mod-els as internal symbolic representations of the world or aspects of theworld (Johnson-Laird, 1983). An individual's mental model coticerninga specific topic includes the individual's definitions, procedures, exam-ples, etc. (Carley, 1997: 535). Mental models employ tacit and implicitknowledge.

The literature often focuses on individual knowledge in organiza-tions, but a great amount of knowledge is produced and held collec-tively in firms (Seely Brown & Duguid, 1998: 91). Organizationalknowledge originally foutided in collectively held models compromisesknow-what and know-how, which several organization members share.While the firms" competencies to outperform the tnarketplacc lie in theongoing generation and synthesis of collective, organizational knowl-edge, lor firms to add valtie iVoni knowledge it is especially relevant tobuikl up organizational knowledge (Leonard, 1995; Seely Brown &Duguid, 1998). Nonaka thus concentrates on organizational knowledgecreation, which he understands as the "capability of a cotnpany as awhole to create new knowledge, disseminate it throughout the organiza-tion, and embody it in prcKlucts, services, and systetns" (Nonaka &Tageuchi, 1995:3).

The organizatiotial knowledge literature focuses either on sharedktiowiedge in the organization or on distributed knowledge that existswith referetice ofthe organization (Kim, 1993:4Iff.; Lyies, 1994:460).In the case of shated knowledge, otily redundant mental models act asorganizational models. This neglects the positive effects of combinedspecialized knowledge bases in firms. Therefore, organizational knowl-edge should contain shared knowledge (mental models) and distributed

JO KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

knowledge (mental model), which are pooled wilh reference of ihe or-gunization.

CATEGORIES OF KNOWLEDGE IN HOTELS

Offeritig services iti lodging, food, recreation, and sports hotels havecomplex work processes and guest interlaces that can be dilTerentialedin categories of ktiowledge:

" lask-specillc knowledge,• Uisk-related knowledge,• transactive memory, and• guest-related knowledge.

Task-specific knowledge coniains the specific procedures, sequences,actions and strategies to fulfill a task (Cannon-Bowers & Snlas. 2(.X)I:1961.). Task-specific ktiowledge is only open to generalization ol a sitni-lar task's other instances (Cannon-Bowers & Salas, 2(X)I: 197), Task-specific knowledge allows employees to act in a c(x>rdinated way. with-out the need to communicate extensi\ely (Cannon-Bowers, Salas. &Converse, 1993). Explicit and tacit components ot" task-specific knowl-edge secure goal fulfillment in fimis. Common task-specific knowledgein hotels fosters compatible expeciations of tasks and outcomes. Oftendetails of task-specific knowledge can be articulated and codified, buttieed to be Inlernali^ed by training. Task-specific knowledge contains,e.g., specified frotit- iuid back-office operaiiotis. which cati be codified indocuments or databases, but need to be trained and made into a routineaspect for the enhancement of service quality in hotels. Task-specificknow-how contains a high rate of tacit knowfedge and interiut!i/cd ser-vice routities in hotels, which allow continuous service quality in hotels.The transfer ol task-specific know-how required training, advisory, atidexetcise, Intetnalized and uained task-specific ktiowledge allows set-vice procedures wilh less cognitive attention and retiection to the spe-cific task. This enhances employees' tiicntal capacity to listen to theguest, fulfill specific preferences, act friendly, and develop new or alter-native service operations. The guests' service quality perception can beitnproved,

Task-reluled knowledge contains individuals' shared knowledge notof a single task, but of related tasks, e.g., the form of teamwork in thefirtii (Rentsch. Heffner, & Duffy, 1994). Task-related knowledge con-

Riiiinla B. Bouncken 31

tributes to the team's or group's ability to internalize similar workingvalues or tu fulfill a broader task and intertwined tasks. Task-relatedknowledge contributes to the shared values of teamwork, but also com-promises lhe ability to reach a distinct level of quality in different ser-vice operations. Shared quality standards in the different departments(lodging, food and recreation) where different tasks have to be fulfilledact as common task-related knowledge. Quality dimensions like empa-thy, reliability, and assurance in different service operations are exam-ples for task-related knowledge. Although task-related can be articulated,service personnel need to internalize the task-related quality standardsand behavioral rules. The broadest category of task-related knowledgeare .shared values, norms and beliefs, e.g., shared beliefs (Cannon &Edniondson. 2001) and cognitive consensus in the organization (Mo-hammed. Klimoski, & Rentsch, 2000). Shared attitudes and beliefs fos-ter compatible interpretations of the environment. Further commonattitudes, norms and beliefs support a mutual understanding i)f inteire-lating employees. Shared values, norms, and beliefs that lead the behav-ior and attitudes of employees can also guide task-specific knowledgeand the ciuality of service operations.

At Myatt. they believe that a great hotel should offer more than agood night's sleep. It should create an environment thai awakensguests' senses. This is one of the many intangible qualities a guestshould experience at every Hyatt hotel. These statements illustrate val-ues at Hyatt, which are task-related knowledge. Maritim hotels followfive cornerstones of cosmopolitan attitude, hospitality, individuality,open-mindedness, and professional congress and special-event facili-ties. Ritz Carlton hotels strive for indulgent luxury with sumptuous sur-roundings and legendary service and gracious elegance. Shared valuesand norms act as groundbreaking levels of customer service. Rilz Carltonemployees shared values collectively called The Gold Standards: TheCredo. The Three Steps of Service. The Motto and The Twenty Basics.All 22,000 employees of The Ritz-Carlton know, embrace and energizethis task-related knowledge, aided by their constant presence in thewritten form of a pocket-sized, laminated card. The Gold Standards areintroduced for new employees' orientation. Thereafier, the concepts arereinforced in daily departmental '"line-ups" attended by all employees.The Gold Standards provide the basis for all ongoing employee train-ing.

A transactive memory includes decentralized knowledge of the otherorganizational members'cognitive models ([Wegner, I985#174O; Wegner,1987; Wegner, 1995 #16811). Transactive memory's relevance lies in


the circumstance that working partners need to understand some of Iheothers' knowledge, preferences, weaknesses, and work values. How-ever, a transactive tnemory does not presume a high level of sharing; itconsists of intertwined distributed mental models. The shared elementsare concerning the common interrelations and connections between themembers. A transactive memory corresponds to know-who, to find theright person for a specific task. The time and intensity of interactingmembers promotes the generation of a transactive memory system. Atransactive memory assists goal fulfillment by helping members tocompensate for each othei, piedict each other's action, provide infor-mation before being asked, and support the connection of the members'expert knowledge (Cannon-Bowers & Salas. 2001: 197). While work-ing together for a longer period, members are better able to predict theothers' behavior in accordatice with what they expect from them. Hetice,each member of the transactive memory has a better understanding ofthe others' idiosyncratic knowledge and competencies. Knowledge inthe concept of transactive memory can be task-.specific, task-relaied. orusefiil across a variety of tasks. Hence, a transactive memory systemcontains team-specific knowledge. A transactive memory can be foundin all team structures and in hotels (e.g., in front and back-office teams).Moreover, a transactive memory exists when employees know aboutother colleagues' knowledge in the hotel chain. Various connectionsmay occur in regional dispersed hotels (e.g., between hotel directors indifferent regions or countries).

Guest-Related Knowledge

While staff and guest interrelate directly in the ser\'ice encounter guests'expectations and actions infiucnce many operations in hotels. Customers'requests have impacts on one or more employees, and can modifytask-specific or task-related knowledge in a hotel or more hotels and canrequire inter-hotel learning. Therefore, customer interactions are tangledwith task-specific knowledge, task-related knowledge, transactive mem-ory, and shared attitudes, norms, values and beliefs. Customer-relatedknowledge includes the knowledge of:

• What a specific customer actually wants.• what a specific cust(.)mer of tlie hotel chain wishes in ihe future,

and• what customers in a hotel's target group generally desire.

Ricarda B. Bouncken JJ

Cohen and Levinthal label the firm's ability to recognize the value ofnew. external knowledge, to assimilate it and apply it to its new prod-ucts and services as absorptive capacity (Cohen & Levinthal, 1990:128; Van den Bosch, Volberda, & de Boer. 1999). As hotels have directcustomer interactions, absorptive capacity concentrates on customer re-lationship and the acquisition of customer related knowledge. For ex-ample, a customer may initiate new meal patterns or recommend newservices. Absorptive capability depends on the firm's level of prior re-lated knowledge because prior accumulated knowledge enhances theacquisition of new knowledge and the ability to remember anil useknowledge (Cohen & Levinthal. 1990; Lane & Lubatkin. 1998: 464f.).The premise of the dependence on prior knowledge stresses the impor-tance of the personal service experience for knowledge generation. As-sociative learning develops the ability to generate new knowledge,which requires establishing links between different stocks of knowl-edge and connections between old and new knowledge. Consequently,individual and organizational knowledge limits the ability to absorbcustomer related knowledge and to exploit new opportunities (Leonard.1995: 189-2(X)). Atlditionally. a hotel's absorptive capacity refers notonly to the individual's capacity but also to the hotel's competence inaocunuilating and exploiting knowledge. This stresses the acquisition,transfer, and accuniuiation of customer-related knowledge betweenstaff and hotei and ihe transfer of knowledge between the subunits of ahotel chain.

KNOWLEDGE MANAGEMENT SYSTEM IN HOTELS

Overview

Knowledge management facilitates a continuous progress in learningand unlearning to ensure the renewal of organizational goals, as well topromote organizational awareness to better anticipate opportunities andthreats (Young & McCuiston, 20(K): 315). Therefore, hotels can en-hance their service quality. The implementation of knowledge manage-ment requires a systemic knowledge orientated atlaptation of hard andsoft factors in hotels. Soft factors generally include openness, trust, re-spect, frames of reference, values, beliefs, an orientation toward contin-uous development and expanded personal communication (Lyles. 1994:4611. Hard factors fostering the acquisition, retrieval and storing of in-ternal and external knowledge can contain databases, libraries, com-

34 KNOWLEDGE MANAGEMENT IN HOSPITALIT)' AND TOURISM

municiition technologies and seminars or orgiuiizationiil structures.Both factors infiuence service quality, while service includes "a pack-age of implicit and explicit benefits performed within a supportingfacility and using facilitating goods" (Fitzsimmons & Fitzsimmons,1994: 24). Knowledge management requires the combination of differ-ent activities in hotels. Although knowledge management combinesthese tightly intertwined activities and implementation possibilities, toolsand structures to foster the activities generally fulfill different puiposesand are applicable to different knowledge processes. Nevertheless, togive an understanding of the knowledge management as a continuousmanagement concept, the following explains the elements stepwise.

Knowledge Goals

To detemiine the field and the directions of knowledge acquisition,generation, distribution, retrieval and accumulation, hotels can set spe-cific goals concerning intcr-hotel and intra-hotel knowledge manage-ment (e.g.. an Internet-based information system mighl be installed).Knowledge goals can also be formulated to enhance the acquisition andutilization of customer-related knowledge. Therefore, guest cards, whichcontain all data of frequent clients can be implemented enabling front-and back-office to organize guests preferences immediately after book-ing. Moreover, guests' satisfaction will be improved when the guest re-ceives automatically her prefen'ed rooms or services. Knowledge goalsmight also concentrate on better communication with tourist offices togive the possibility of absorhing regional trends more easily.

Best Westell! hiternatiorial. Inc., is the world's largest hotel brand withmore than 4.(XX) independently owned and operated hotels throughoutAustralia, Asia and Southern Africa, Canada, the Caribbean. Europe, theMiddle East. Mexico, Central and South America and the United States.It is also the only non-profit membership association in the industry. Al-though Best Western accomplishes a franchise system with limited hi-erarchical power to the hotels, they explicitly follow the vision that allhotels should exploit every chance transferring or utilizing their em-ployees' knowledge. Best Western assumes that knowledge is the basislor superior service quality leading to competitive advantage. SinceBest Western aims to improve their hotels" knowledge base they pro-vide a range of infrastructure and programs to their franchise partners.A training institute offers seminars at a reduced rate for their partners.Besides, international and regional conferences explain Best Western'scorporate strategy and allow informal knowledge transfer between ho-

RUanhi 8. Binuicken 35

lel maniigemenl. Best Western installed iin intranet to provide infra-strLiciure lor the hotels" knowledge transfer. Employees are able toretrieve, accumulate and distribute specific topics in the Inlernet-basedintranet. Best Western strives for enhanced generation and employmentof organizational knowledge in the future.

Knowledge Strategy

On ihe foundation of knowledge goals, hotels can establi.sh differentknowledge-oriented strategies influencing many elements on a knowl-edge management system. Often knowledge strategies concentrate onenhanced knowledge transfer between different stakeholders. Knowl-edge transfer contains the exchange and utilization of knowledge w ithinthe firm, with other firms, and with the customer. It happens in the hotelbetween:

• staff in the hotel,• customer and staff in hotels,• top-management in the hotel and staff.• top-management of the different hotels in a hotel chain,• regional tourist offices/government and hotel staff, and• regional destination management/government and hotel's top man-

agement.

Moreover, knowledge strategies often determine the degree of sharingof employees" mental models (see Chapter 5.1 (Shared ox DistributedKnowledge in Hotels?)). Shared models allow better understanding, buthinder specialization. ConseqLiently, two dimensions of knowledge-based strategies exist:

• the degree of shared mental models (shared knowledge vs. distrib-uted knowledge) and

• the form of knowledge transfer (codification vs. personalization).

Finns can transfer explicit knowledge easily through media as Kxiks, data-bases, or libraries organization wide (see Chapter 5.2 (Personalized or Cod-itled Knowledge Transfer'*)). On the contriiry. the transfer of implicitknowledge requires personnel interaction and understanding. The codifica-tion strategy supports the codification of knowledge by extracting it fromthe iiersoii who generated the knowledge, and storing it into databases(Hansen, Nohria. & Tierney, 1999). Thereby, firms extract knowledge


from persons and achieve person-independent knowledge that everyone inthe firm can retrieve. Personalization strategy focuses on people asknowledge sources. Thus, an improved retrieval of internal experts andsocial operations strengthens knowledge management. A codificationstrategy with a technology-centered viewpoint often disheartens peo-ple-centered activities (Marchant. Kettinger. & Rollins. 2000: 69).Hotels striving for improved behavioral patterns, norms and valuesshould concentrate on personalization.

Knowledge Identification

The formulation and foundation of knowledge goals requires an iden-tification of strategic knowledge requiremcnls. These include evaluationcriteria, the determination ofthe knowledge gap. and the specific naiTow-ing ofthe knowledge gap (Post, 1999: 137). Hotels like other firms haveinsufficient knowledge about their internal knowledge. Because of alarge number of empkiyees and geographically dispersed hotels, hotelslose overview about their distributeti knowledge base. In order to draw upa specific knowledge strategy, the first step is often a survey of existingknowledge (Schreincmakers, 1999) and the determination of requiredknowledge, which entails the identification of relevant knowledge. Ho-tels have to consider the relevance of specific knowledge in order to pre-vent a simple accimuilation of irrelevant knowledge, which nobody in thehotel can deploy. Different techniques have been established in the litera-ture and in companies to identify knowledge in firms. Hotels with theirhigh amount of working routines and rotating employees in dispersed ho-tels have difficulties in identifying their high ratio of embedded tacitknowledge. The identification of all knowledge is impossible due to thedynamic character of knowledge and the embeddedness of know-howand tacit knowledge. However, interviewing employees, analyzing cus-tomer databases, starting knowledge circles, and organizing meetings be-tween different employees improves knowledge's identification in hotels.More than in other industries hotels can benefit from observation of ser-vice operations. In those service operations tacit knowledge becomes ap-parent and observable.

Knowledge Acquisition and Development

Knowledge acquisition and development follow differcnl foci, but areclosely related because they improve knowledge generation. Knowledgeacquisition concentrates on external knowledge retrieval from custom-ers, external experts, tourist office, etc., and often enhances the assimi-

Ricania B. Bouncken S7

lation of previously unnoticed trends. Knowledge development focuseson the internal processes to increase knowledge (Lathi. 2(XX): 67) andenclose activities that span from creating new insights and concepts tothe generation of new behavioral patterns and service operations.Knowledge develops via service research and development and via ser-vice practice in hotels. Research contains the exploration of databasesand experimentation with new service procedures. Observed new con-sutiier trends can guide new service operations as well. New operationsor concepts may be tested in specific hotels. Successful operations willbe implemented afterwards in different hotels. The internal develop-ment generally requires the distribution of knowledge and the coopera-tion of different employees in hotels. To come into action, firms needthe ability to integrate the knowledge into practice and to distributeknowledge throughout the hotels. Therefore, knowledge managementrequires the establishment of mechanisms ensuring the learning anddistribution of experiences and putting it into operations. Forexatnpie,the generation of linkages between the new knowledge and the itnple-meniation in business operations or strategy can support putting knowl-edge into action.

Hotels can also acquire knowledge via external knowledge links.Knowledge links offer companies access to the skills and capabilitiesof other organizations that allows them to create new knowledge andcapabilities (Badaracco. 1991: 107-128), Tourist offices and The re-gion's government also act as important external sources of knowl-edge and knowledge links because of their knowledge of newerregional challenges and visitors" preferences. Especially direct per-sonal interactions between hotel management and government/touristoffice work as powerful knowledge links, which support the transferof knowledge and facilitates shared knowledge between hotels and thetourist office encouraging successful integrative strategies of the desti-nation. I

Knowledge Accumulation, Retrieval, and Distribution

While the large nnmberof rotating staff and employee turnover lim-its the accumulation, retrieval and distribution of knowledge it is criticalfor hotels to foster staff loyally and to protect organizational knowledgewhen employees leave tlie company.

Knowledge accumulation is concerned with the collection and theretrieval of knowledge in databases (codification) or from people(personalization). While staff have to use more than individually held

3S KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

knowledge they must gain access to other people's private knowledgeor 10 codified knowledge. Activities which facilitate knowledge's dis-tribution are engaged to disperse knowledge in the hotel chain. Em-ployees must have the ability to access knowledge eompany-wide thatgives advisory and orientation for values, norms, specific projects, andservice operations. Personal knowledge can be retrieved by networks ofpeople who know the other's expertise (transactive memory) or by di-reetly interrelating people. Codified knowledge can be found in data-bases and via search tools. Knowledge retrieval and the characteristicsof the knowledge required have implications on the transfer of knowl-edge. The inler-hotel retrieval of knowledge is of great importance inhotel chains sinee lessons learned in one hotel, deparimenl, or team eanbe used to offer modified service operations, serviee extensions, and en-tire new service lines in other hotels. This allows quality improvementsin hotels.

For the enhancement of a hotel's knowledge accumulation, retrieval,and distribution, it is essential to transfer knowledge between top-man-ageinenl {horizontal) and between top management and staff (vertical).Supporting internal knowledge transmission and distribution also helpsaccumulating and conserving knowledge in hotels because of redundantknowledge, which is held by the different employees in hotels.

Knowledge Controlling

Hotels require the identification, development, and retrieval of rele-vant knowledge to establish an efficient knowledge management sys-tem. Implemeniing knowledge managemeni hotels have also installedcontrolling devices thai help to evaluate the fulliUnient of knowledgegoals. Knowledge controlling answers questions concerning:

• Is Ihe knowledge-strategy still suitable?• Does a changing environment imply adjustments?• Did the hotel-chain or the specific hotel fultill knowledge goals?• How did they fulfill the goals?• What department met the goals?• To what degree were goals targeted?• Which gaps still remain?• What does identified gaps mean for new knowledge goals, strate-

gies, and programs?

Ricarda fi. Bouncken 39

Controlling guides the adaptation of knowledge goals, strategies, andprograms to enhance knowledge acqui.sition, development, accumula-tion, retrieval, and distribution is possible in single hotels or the entirehotel chain.

KNOWLEDGE STRATEGY IN HOTELS

Shared or Distributed Knowledge in Hotels?

Hotels installing knowledge management have to consider the ad-vantages of shared or distributed mental models in the company. Thisquestions:

• what the benefit of shared models is.• what shall he shared, and• how imich sharing is necessary?

Different degrees of sharing are possible; the conlinuum ranges fromexactly the same mental model to completely different mental nuxlelsabout a specific topic in the hotel chain. Due to a constructivist stand|X)int,indivitiuals" coniplele sharing of all mental models is nearly imixissible.Following an economic perspective, coinplcte sharing contradicts special-ization iind is ineffective in firms. Nevertheless, shared (redundant) mentalmodels enhiince Ihe transfer of knowledge and employees" undei-standing.

Although the literature does not provide information about an opti-mal level of shared mental models in general, we have to analyze moredeeply the advantages and disadvantages of sharing in holels. Sharedrespectively overlapping individual models allow improved coordina-tion, communication, and result in superior performance, heeause theyfoster understanding and via redundancy the transfer of knowledge.Different empirical studies concerning sharing in teams show devel-oped team processes, which result in superior team performance (Banks &Millwaid, 2(X)0: 513: Heffner, Mathieu, & Cannon-Bowers, 1995: Heffner,Mathicu, & Goodwin, 1998). Stout et al. demonstrate that enlarged shar-ing across individual mental models permits better communication undera higher workload, which in turn offers a better coordinaied team pertbr-niance (Stout, Cannon-Bowers, Salas, & Milanovic, 1999). The underly-ing hypothesis for Ihe benefit of shared mental models in organizationsis that individual mental models build up matching and appropriate ex-pectations and explanations of their work task and the company's goals.

40 KNOWLEDGE MANAGEMENTIN HOSPITALITY AND TOURISM

Consequently, a high level of overlapping individual mental modelsguarantees employees' similar expectations of the task and team{Cannon-Bowers et al., 1993; Cannon-Bowers. Tannenbauni. Salas. &Volpe. 1995). Shared understanding supports the establishment of com-mon explanations and ex[X'Ctations. which end in a betler work coordi-nation. This leads lo improved goal fulfillment in hotels, in which thecoordination of employees is of great importance for service quality.

Despite their positive effects, completely shared mental models inhotels resemble labor allowing all team members to do the same job andservice operations. Inefficiency occurs, because the hotel cannot benefitfrom the specialization of its members. Service quality then suffersfrom the lack of synergies from expert knowledge and lrt)in reducedspeed of leam learning. Especially, if systems, tasks and actions arehighly complex and variable, members must have accurate modelsabout the task aiul the task lultillmcnt. This is especially valid for in-tense personal service operalions in the service encounter. According tocomplex, varying or various service operations (e.g., business traveler,leisure (lavelcr, recreation services, lodging services, fwid services, orevents) in the complex environment, it is impossible (or any single em-ployee lo hold all the required knowledge in hotels. Consequently, ho-tels require highly s[x*cialized knowledge and a distributed knowledgesy.stem. While nobody in the firm can oversee all knowledge ii the firmexists as a disli ibuled knowledge system (Tsoukas. 1996), the combina-tion and connection of different distributed knowledge requires someshared is.sues as well. Therefore, linkages and redundancy between themental models and of the employees involved in the same context(working together) arc necessary in hotels.

Moreover, holel chains comprise a number of differcnl regionallydispersed hotels. These hotels intend to fulfill globally standardizedquality standards, different customer needs, diverse tasks, and haveto be able to coj')e wiih staff from different countries. The questionwhether lo promote shared mental models or distributed models is alsoessential ii] hotel chains. Hotels need distributed and shared meiitalmodels. Distributed models are necessary because a high percentage ofunskilled workers and employees with lower learning capacities need tofulfill the worldwide dispersed organization's tasks and quality stan-dards. In the case of distributed organizational knowledge, eiiiployeesdo not have to learn the whole amount of knowledge in the syslem. Thisallows high quality services while attaining tasks inore easily. There-fore, hotels have to establish especially distributed models in case oflask-specillc knowledge.

Ricarda B. Boimcketi 41

However, a high turnoverof staff often hits the implication of a highrisk of knowledge drain. Therefore, hotels require shared models aswell. A knowledge drain occurs when employees leave the companyand take their individual lask-specific, tusk-related and transactive mem-ory with them. Hence, hotels benefit from encouraged communicationand comprehension, building up a slock of shared mental models. Theseprocesses are fostered by team stnictures.

Nevertheless, there is a tradeoff between shared knowledge and theacquisition of new knowledge concerning ihe hotel chain as a whole.The generation of new knowledge (learning) implies to find distinctions(Luhmann, 1985: Spencer Brown, l%9). High rales of shared mentalmodels hinder distinction making and therefore impede learning speedin holels. Different mental models (distributed knowledge) instead per-mit increased distinction making and diverse expert knowledge in ho-lels. These mechanisms work internally and externally. A high rate ofshared (background) knowledge limits the ability to acquire new exter-nal knowledge through less specialization. Consequently, distributedtask-specilie and distributed task-related knowledge needs to be com-bined with shared task-specific and task-related knowledge in a groupof employees. On the other hand, a high rate of shared (background)knowledge fosters the capability to communicate and transfer theknowledge in the hotels. This underlines the relevance of cognitive andbehavioral linkages between hotel staff and the existence of sharedbackground knowledge to ensure learning. Shared mental models con-tain values, norms, beliefs, quality standards, and other backgroundknowledge. Shared background knowledge allows successful commu-nication within hotels and between the single hotels of a hotel chain andwith shared quality awareness. A shared language and commonly un-derstood symbols encourage and incorporate shared background knowl-edge. Shared background knowledge incorporating internalized ho-tel-wide knowledge helps to interpret other information and knowledgesimilarity. Hotels in which employees from different countries workface limitations in case of a shared language. Even people who share thesame mother tongue can have communication problems due to the ambi-guity of language (the same word has different meanings and differenttopics are defined by dissimilar words). While commonly inteipretedwords help knowledge's comprehension and distribution, hotels require tobuild up pieces of shared language. That needs learning the phrases andtheir usage as they occur by the practice of an organization's languagein hotels.


Open and direct communication between employees helps to identifyand internalize the concepts and phrases in hotels (see Chapter 6.1.3(Team Structures)). Reciprocal interactions with care can prevent mis-understanding. Trust bearing relationships and the understanding thatlanguage ol'len includes misunderstanding lessens the negative effectsof concepts' unshared meanings. Shared values can also promote thedemocratization of knowledge in order to remove il from "the knowl-edge is power-and I am the owner" context.

Personalized or Codified Knowledge Transfer?

In personalization strategy, in which people ael as knowledgesourees. employees accumulate, distribute and transfer knowledgethrough personal interactions. Personalization's goal often tends to findthe most suited expert lor a problem in larger or locally distributed ho-tels. Personalization allows the transfer of tacit knowledge. Thereby,the main use of information technology is to facilitate communicationand to ease the retrieval of internal experts. Hence, social processes playa dominant role in personalization.

Knowledge transfer underlies two mechanisms. Firstly, direct inter-actions allow the perception otdiffercnt verbal and non-verbal inlorma-tion. Information transfer by telephone, e-mail, and post-mail insteadlimits knowledge transfer to explicit knowledge. The broader and me-dia richer infonnalion and knowledge transfer in personal interactionenables people to interpret the transferred information and knowledgemore precisely. So personal and direct communication assists the pro-duction of shared distinction making and assists identical knowledgetransfer in the case of a specific task. Secondly, the effects ofthe knowl-edge transfer become more visible at an earlier time in direct personalinteractions. Directly intenelating employees can evaluate gestures, mim-ics, and actions of each other. This is very important for service pro-cesses, in which embedded and tacit knowledge plays a major role. Theinteracting individuals transfer knowledge and information and inten-sify distinction making by recursive proeesses. Assoeiations and the dy-namic of speech aets (Searle. 1969; Searle. 1979) foster new insights,which can generate new individual or shared knowledge in hotels andIheir directly interacting service staff.

Personalization can aim to promote shared models or to enhance thecombination of distributed knowledge. To build up an enhanced combi-nation of distributed knowledge, hotels should focus on a better re-trieval of expert-knowledge (e.g., experience concerning speeific events.


conferences, quality programs, service innovations, etc.). Nevertheless,]xrrsonalization permit.s shared mental models that guide an identical in-terpretation of transferred knowledge or allow a direct personal transferof lacit knowledge. Direct communication, such as can be found in ap-prenticeships wilh direcl interaction between instructor and trainee, al-lows the transfer of implicit or process-orientated tacit knowledge(Lave & Wengcr. 2fXX); 169). Additionally practice trials on relatedproblems promote the transfer of tacit knowledge and of specific work-ing skills relevant to the hotel industry. While giving the trainees achance to observe, imitate and test skills, participative apprenticeshipswith direct involvement encourage the transfer of implicit knowledge.Imitation also gives opportunities to transfer routines that are relevantlacit knowledge for hotels. However, skill and routine learning Is al-ways slow because it needs practice, direct and reciprocal interaction,and a willingness to be temporarily incompetent (Nel.son & Winter,1982: 123: Schein, 1993:86).

Codification strategy extracts knowledge from the person who gen-erated il. and stores it in databases (Hansen et a!., 1999). This enablesfirms to extract knowledge from persons and to achieve person-inde-pendent knowledge that everyone in lhe firm can retrieve. Codificationstrategy permits the staff to search for and k> retrieve codified knowl-edge without having contact to the original owner of the knowledge indispersed hotels. This is very important for hotel chains, when theyneed to retrieve knowledge developed from experience with othersacross boundaries of time and space. Hence, information technologyplays a significant role in a codification strategy. Nevertheless, codifi-cation does not guarantee an identical transfer of knowledge becauseemployees will interpret the '"knowledge" (information or connectedand goal orientated knowledge) in databases differently due to the sub-jectivity of individual minds. To interpret and u.se the codified knowl-edge in an identical manner, staff has to share some of the other'smental models. Thus, hotel chains require similar or overlapping back-ground knowledge. Background knowledge consists mainly of com-monly shared beliefs, values, and language. A common language hasstrong effects on knowledge transfer, because unshared words causemisunderstandings. The ambiguity of language promotes misunder-standing. Further, the connection and accentuation of words leads todifierent understandings of a topic. Commonly held aspects of languagepromote understantling and the quality o\' knowledge transfer (vonKrogh & Roos, 1996: 424). Consequently, a common language im-proves the fulfillment of (codified) quality standards in hotel chains.

44 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOUR^S^f

Codification dt>cs not only imply puttiFig knowledge into databases.For the improvement of service quality, knowledge has to be used, diver-sified and distributed in hotels (leveraging of knowledge). The choice ofan adequate information technology and database facilitates knowledgetransfer. Distributed technologies or intranet sites can effectivelyspread specific forms of knowledge and infomiation. They also are ableto generate virtual forums for connecthig specialists (see personaliza-tion) and expert knowledge (Cross & Baird. 20(X): 71). For codificationpurposes ihe databases must contain more structured knowledge thanfor personalization. Databases concerning a codification strategy storeprhiiarily codified experiences (e.g., reports of specific events, bestpractices in dilTerent hotel, the iormulation of quality standards, servicequality programs, company-wide training courses, operation standardsfor various services, tourist trend news. etc.).

Organizational artifacts incorporating specific operations and actionscomplement a codification strategy. These artifacts bear a long-term in-fluence on employees' behavior and establish shared understanding ofspecific tasks. A prime example of artifacts embedding knowledge (foodand restaurant) and bringing it into practice is McDonald's. McDonald'sengaged primarily in knowledge by designing machines, which make itvirtually impossible to overcook hamburgers, underserve the amount i>ffries, or shortchange the customer (McGili & Slocum. 1993: 69). Suchknowledge structures store knowledge independently from individualsand allow the implementation of rotating staff while limiting failure anddetermining specific actions and operations. Thus, engineered knowl-edge is suitable for back-olTice operations like in restaurants, bookingprocedures, or cleaning in hotels. They allow the utilization of differentunskilled and rotating employees. Nevertheless, hotels' ability to engi-neer personal service operations wilh direct customer is limited. Thoughthis interface primarily inlluences hotel-guests' service evaluation andthe implementation ol" engineered knowledge limits further learning(Cross & Baird. 2(KK): 76). it is not suitable for non-repetitive ofieru-tions or more tiexible service operations.

Resuming hotels should follow a hybrid strategy of personalizationand codification. First, the high rate of implicit process orientatedknowledge and skills illustrates the relevance of personalization in ho-tels. Second, the possibility of intense communication with the cus-tomer forces the relevance of personalization strategy in hotels. Directpersonal communication facilitates the acquisition of customer-relatedknowledge and ihus enables the hotel to provide an individualized ser-


vice. Third, employees have to internalize shared values of customerorientation for the need of customer-oriented quality delivery.

ILLUSTRATIONS OF STRUCTURESFOR KNOWLEDGE MANAGEMENT IN HOTELS

Knowledge Information System

Hotels' employment of pet)ple in diverse countries occurs in particulareconomic, political and social environments, and in hotels with differentmarket conditions and practices (Medlik, 1990: 88). Although differentitems of a knowledge management system are meaningful, hotels canbcncllt from an information system and a hotel-wide access to the sys-tem. While hotels require personalization and codification, the knowl-edge information system should allow the retrieval of experts and ofcodified knowledge (e.g.. new meal patterns can be saved in a knowledgeinformation system allow ing food services to increase meal variety). Of-ten such systems arc defmed as groupware or computer-supported coop-erative work systems.

Experts, which are motivated communicating their knowledge, haveto be found in the intra- or Internet, or Lotus Notes system. The ex-pert-knowledge needs to be categorized and labeled. In order to managethe ambiguity of language and different languages, hotels should creatediverse labels for specitic topics in the information system. Afterwards,employees can make use ol search machines to retrieve the name, ad-dress, telephone number, and e-mail of the expert. Especially, e-mailassures a quick communication and the possibility of digital informa-tion exchange, but it hinders the transter of tacit knowledge. Thus, theknowledge information system can lead to personal communication.Knowledge's di.stribution should not concentrate on e-mail systems.E-mail systems contain specific recipients to whom the knowledge issent. Employees who are not on the mailing list do not receive poten-tially useful information. Additionally, the received information mightbe useless at a certain time, but valuable later. Knowledge distributedvia e-mail is decentralized, allowing informal information exchange,but often might be redundant, inconsistent or misleading, if opponentinlbrmation is distributed. Employees who do nol work with computersare excluded from the infonnation system.

Moreover, the Inter- and intranet based knowledge information sys-tem should contain codified knowledge about best practice, quality


standards, operation slaiulards. characteristics of the geographically dis-tributed hotels, the USP of the region and experts which can provideknowledge lor speciilc topics, and information about customers (pref-erences, target group membership, etc.). Additionally, the knowledgeabout customers accumulated in databases encourages increased levelsof customization. To provide opportunity to monitor and evaluate infor-mation and inteipretation of worldwide customers" preferences via theintranet, hotels have to accumulate and save internally and externallyacquired knowledge. Some of the customer-orientated knowledge canbe achieved via central information and reservation systems. The infor-mation systems form the basis for the transfer of the specific customers'preferences between employees in hotels. In addition, the technique ofdata mining offers hotels an instrument identifying new trends in tour-ism and hospitality faster and enhances customization. Instead, provid-ing guests with information and acquiring knowledge clients shouldhave a limited access to specific topics of the Internet (special offers,hotels ofthe chain, characteristics olthe destination, etc.) and should beable to communicate with the hotel directly.

The advantages in effectiveness and efficieney a knowledge infor-mation system offers depends on the hotel chain's competence to estab-lish knowledge retrieval, accumulation, and distribution in the differenthotels. The maintenance and utilization of a knowledge informationsystem requires constant knowledge input. Consequently, hotels needto motivate their staff generating and accumulating valuable knowledgeinto the database. Though not every bit of knowledge is valuable, holelsshould establish responsibilities for knowledge accumulation and main-tenance of the system (see knowledge executives). According lo thehigh ratio of unskilled workers in hotels who often have no access to theInter- and intranet, and operations that do not require the use ofa com-puter for their service operations, holels need to implement specificknowledge-centered positions and people who identify, distribute, andsave the knowledge in information systems. Knowledge officers accu-mulate and retrieve the knowledge into databases and have to comnui-nieate the knowledge to the staff. Moreover, globally acting hotelchains are especially confronted with different languages of customersand staff. The information in the knowledge information system re-quires hotel-wide comprehension and the seleetion of worldwide spo-ken language as a common medium-most probably English as aworldwide language. Although non-native English speakers can haveproblems with the foreign language and misinterprelations might fol-low, they can understand most ofthe content.


Further, some recommendations about a knowledge information sys-tem can be emphasized;

• Knowledge has to be structured. The structure of the doeumentsand files limits or allows the utilization of knowledge.

• Workers' task-specific knowledge and experienees should be inte-grated in databases and systems.

• Knowledge has lo be maintaiiied continuously to provide actualknowledge. |

' Search engines and intelligent agents should be ineUided for re-trieval of specific and often intertwined task-related knowledge.

• Information about the author and experts has to be integrated per-mitting direct communication and the transferof tacit knowledge.

Hotels, in which information systems and data mining techniques areimplemented, can also suffer from insufficient knowledge management.Employees do not use the knowledge that is acquired externally or in-ternally and aecuniulated in databanks because:

• they might not realize the benefits of the systems,• they might have no access to computers.• they might not be able to transfomi eodified knowledge into ser-

vice operations,• they might not internalize the gathered know-how or know-why, or• find experts that are not motivated to answer their questions, etc.

Hotels can implement a number of stnictures to enhance the utilizationand the motiv ation of the knowledge management, which are displayedin Chapters 6.1.2 (Knowledge Executives), 6.1.3 (Team Structures), and6.1.4 (Knowledge Circles).

The German Hotel group Maritim has more than 40 first-class hotelsin Germany, Teneriffa. and Mauritius. Maritim hotels concentrates onthe distribution of guest-related knowledge via information teehnolo-gies. With a recently introduced guest card that contains all accumu-lated information about clients the hotels are enabled to prepare forguests' preferences. Sinee Maritim hotels get information about theguests at the point of booking, they can plan guest specific service oper-ations in advance. Thereby, Maritim hotels can reduce the number ofservice operations in the front office and check-in is accelerated. Duringthe guests" hotel stay, serviee staff acquire and accumulate new infor-mation about the guests to provide superior service quality for future


trips. Besides, Marititn group and single hotels use the datii from guestscards for differentiated target group marketing, mailings, etc., and ben-efit from the comfortable and uncomplicated guest card system. Theguest card gives every guest a higher status without status differences,which can discriminate other clients. Guests collect discounts in Euroon all expenditures in (he hotels. Lacking block-oul dates, guests areable lo refund money any lime during their check-oul.

Knowledge Executives

Although the basis of knowledge management is provided by moti-vated employees, they have to be supported with structural aspects andleadership. Top management's commitment to knowledge managementand the organization of strategies, and programs can be underlined by theposition of a chief knowledge officer. As hotel chains have to generateknowledge incessantly, they require a knowledge vision, which harmo-nizes knowledge management throughout the different hotels. The chiefknowledge officer's role is to articulate the knowledge vision and goalsand communicate it throughout the whole hotel chain. Therefore, thechief knowledge olficer defines knowledge goals, knowledge strategies,knowledge controlling, and is responsible for the structure o\ the ho-tel-wide information system. A knowledge department is responsible forsome functions to be cenlralized. e.g., training programs and develops theinfrastructure for the information technology. Although knowledge man-agement requires decentralization and motivated employees, the depart-ment is necessary because a widespread hotel chain needs specializedknowledge services and the complexity of an information sysiem has tobe managed. The knowledge department ensures global consistency ofthe databases, and periodically reviews and updates knowledge assets(e.g.. best practices, trends in tourism, benchmarks). Content nianager(.s)or web gardener(s) maintain the design and data in the information sys-tem. The knowledge department assists the hotels to plan meetings be-tween experts and kntiwledge officers who work in the hotel.

Knowledge officers who work in the hotels but communicate withthe knowledge department provide the link between hotels and the cen-tralized information system. They serve as a bridge between the goalsand visions of the chief knowledge officer and the often chaotic andcomplex service operations in the hotels. Knowledge officers breakdown the visions, goals, and programs into concepts that diverse servicepersonnel can understand and implement in their operations. As knowl-edge officers communicate intensively vertical, horizontal, and with

Ricarda 8. Bouncken 49

gtiests they contribute to a bottom up approach in knowledge manage-ment. So they act as gatekeepei-s. Gatekeepers are organizations' members,who engage heavily in the accumulation, transmission, and absorptionof internal and external knowledge In a Urm (Leonard, 1995: 157). Associo-metric stars, they monitor the environment for new knowledgeand communicate the acquired knowledge in the organization (Allen.1977; Katz & Tushmann, 1981). The knowledge officer assists allworkers and normally co-ordinate the knowledge work ofthe specialistdepartments in a hotel. Via leadership they strengthen the motivationand ability of workers to contribute to the knowledge base and distrib-ute knowledge. They also plan meetings between employees (waiter ina hotel or different hotels) and organize knowledge circles or knowl-edge teams, in which tacit and explicit knowledge can be distributed. Inthese meetings or circles a decentralized knowledge system developsthat sustains informal communication.

The direct comnuinication, which knowledge officers promote ho-tel-wide, allows a last transfer and distribution of gained knowledge inthe hotel. The diverse cultural and functional backgrounds of hotels'employees additionally require diverse, culturally-skilled knowledgeofficers, which can build-up linkages between existent knowledge andnew knowledge during knowledge transfer.

Knowledge officers have the authority and responsibility to maintainknowledge and to modify the decentralized contents ofthe knowledgedatabase, e.g., the hotel's intra- and internet. Since the loss of a singleknowledge officer could cause a dramatic knowledge drain, a team ofknowledge officers is advisable. The knowledge officer is also engagedin meetings with other hotels' kntiwiedge officers to facilitate the iden-tification, development, and retrieval of knowledge. The hotels' knowl-edge officers' team has to communicate and interrelate intensively withemployees to absorb and/or to distribute knowledge.

Marilim htitels enhance knowledge distribution by face-to-face meet-ings between executives and with staff Thereby Maritim increases thetransfer of tacit and explicit knowledge improving a transactive mem-ory system and task-related or task-specific knowledge. Figure 2 illus-trates the different participants of the meetings.

Tciiiii Sfntrfitres

Although hotels have implemented different techniques like guestcards and have acquired customer related know-what the knowledge isnot distributed in different hotels nor internalized by hotel staff Conse-


FIGURE 2. Knowledge Transfer in Maritim Hotels

Manager ofHotel Deparlments

Manager ofHoiel Departments

quently, besides to marketing techniques (data mining) and informationsystems and knowledge officers, hotels should further implement teamstructures and intcr-tcam meetings, which allow knowledge transferand Ihe intemalization of knowledge. A hotel's ability to benefit fromexternal knowledge lies in the employees who embody the interface be-tween Ihe firm and ils external environment (e.g.. lourisl office, govern-ment, guests). Finally, they are responsible for the transfer of attainedknowledge between subunits and employees ofthe hotel. On the onehand, hotels require staff, which are able t<j absorb customer-orientedknowledge and distribute it throughout the organization. Such tasks de-mand Ihe ability to identify and develop new ideas. Generally, compa-


nies Ihat are successfiil at generating new ideas have porous organizationsdeveloped around structures like contact centers, permitling maximumknowledge transfer and avoiding endless approvaLs and communicationdelays (Quinn. 2000: 24). Moreover, flat organizations promote indi-vidual responsibility and flexibility, which are critical to last response,highly motivated to find new opportunities (Quinn, 2CX)0: 24). On theother hand, tacit and explicit knowledge from other hotels has to be im-plemented in operations, which often happen under direct customer in-terrelations through the service encounter. Some ofthe explicit and tacitknowledge needs to be shared; some of the knowledge is distribuled.Nevertheless, incremental reciprocal proces.ses foster the transferof tacitknowledge and improve shared knowledge. Information sharing, net-working, and information relationship building generally take place atsocial (unctions, and meetings of professional groups of dillerent hotelprofessionals (Rutherford & Umbreit. 1994: 33Of.). Consequently, ho-tels have to promote open structures and teani-hased operations to-gether with the establishment of Hat organization structures that are inthe minority in hotel business, today. On top of that, while work experi-ences can act as an extremely powerful mechanism to ensure effectiveknowledge generation and implementation, executives should promotethe learning ability and the knowledge transfer in hotels. Whereas lacitknowledge plays a dominant role in service operations, hotels shouldfocus on teams.

Hotels ought to arrange teams of staff concerned with similar tasks inorder to develop shared tusk-specific knowledge. Such teams act aspowerful wells of knowledge, generating, identifying, promoting, de-veloping and distributing knowledge through direct interrelations. Thisis especially valid for the transfer of tacit knowledge and the evolutionof shared mental models. First, teams allow a sense of reciprocity andtrust building up over time. This social relationship improves !>ettercognitive understanding, expectations, and mutual understanding per-mitting functional relationships lor future tasks. Second, the enrichedunderstanding of the others knowledge and skills improves the task tul-tillnicnt by the amplification of team related knowledge and evolvingshared norms, values, and beliefs. EspL'cialty hotel staff, which interactsconstantly with guests, cannot engage in knowledge transfer cotii-plelely: they have to prosecute operations. Prosecuting operations inteam structures promotes learning ihrough observation and imitation.Moreover, training the individual task-fulfillment allows through thedirect contact the transfer of explicit and tacit knowledge. Moreover,training the individual task-fulfillment allows the transfer of explicit

-52 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

and tacit knowledge through the direct contact and permit the transfer ofservice operations and routines.

Even knowledge transfer to lesser skilled employees in a specifictopic requires considerahle effort and time. This especially holds validibr training on the job while starting on trivial tasks before moving on totasks that are more complex. Therefore, teams are better capable of de-veloping and distributing new knowledge about customers by discourseand customer interrelation whilst cairying out operations. Additionallythe staffs closeness to guests fosters the absorption of customer-relatedknowledge. Taking time to reflect on experiences, and thus, to definewhat is learned encourages experience-based knowledge generation.Employees that are engaged in business operations often use and absorbimplicit knowledge, which limits the articulation of knowledge in ho-tels. Therefore, direct interaction with other employees is crucial.

Moreover, most staff with direct customer contact have limited ac-eess to information technology, experience with computers, and timefor data processing (e.g., restaurant staff) so that other knowledge work-ers {e.g., gatekeepers or knowledge officers) should be obliged to ab-sorb the staffs knowledge, integrate it into databases and funhermoreprovide the staff with new knowledge from the database.

Knowledge Circles

Hotels have to secure knowledge identification, generation, accumu-lation, and transfer. Personal communication between staff and be-tween executives and staff allows the exchange of tacit and explicitknowledge. Because the patriarchal and authoritarian leadership styleof hotel's executives sanctions open knowledge transfer, knowledgemanagement orientated leadership and empowerment has to be estab-lished and hierarchical boundaries minimized in hotels. Knowledgegeneration starts with empowered employees, who are able to identifyand solve problems and new ideas as well as to discuss them openly.Therefore, hotels implement knowledge circles that are under control ofthe hotels' knowledge officer. Knowledge circles are institutionalizedsessions between employees that enable members to discuss problems,challenges and new insights, similar to quality circles organization.

Knowledge circles also promote the transfer of knowledge allowinghorizontal aud open communication. For the improvement of commu-nication, hotels require common background knowledge. Knowledgecircles transfer knowledge through staffs discourse of new ideas and ofproblems with customers. Specific topics (e.g.. guests* complaints or

Ricarda B. Bomckcn 53

changing customer preferences) for each session promote the discourseand improve knowledge transfer. Input from Top Management intoknowledge circles ahout new challenges in the environment, in the hotelchain, and in the region can also promote learning in the hotel. Allowinghotel-wide retrieval ofthe generated knowledge, the knowledge officersor his assistants can also integrate the new knowledge into the knowledgemanagement information system.

CASE STUDY

The Accor hotel group (worldwide 3,5(X) hotels, 130,000 employees,brands like Formula One, Ihis, Novotel, Sofitcl) is considering and es-tablishing a wide-ranging knowledge management system in Germanywhere Accor has 6,000 employees. The knowledge management sys-tem is based on three stakes:

1. IT-based knowledge accumulation2. access to the IT-based knowledge system3. motivation for knowledge utilization and generation.

The Accor hotel group is engaged in the formulation of knowledgegoals. An Internet-ba.sed intranet will be improved, which contains dataabout best practice, service innovations, and training possihilities. Theintranet also contains tool-like fiight plans or train schedules to alloweasier fulfillmeni of guests' wishes and requirements. Business TVchannels in which Accorsupplies films and information allow the trans-fer of tacit and implicit knowledge. Generated knowledge is accumu-lated in databases and in persons. The German head office is looking fora knowledge manager, who is responsible tor the infrastructure of aknowledge management system. The different departments in the headoffice work on the decentralized knowledge management system, althoughthe specialized departments provide a high proportion o\' the knowledgemanagement's content. Besides, knowledge lor the knowledge basewill he acquired internally from the hotels and their service personnel.Search engines provide the retrieval of knowledge, which is codifiedand labeled. Knowledge can be retrievable according to the employees'status. Therefore, computers will be installed in lounges to provideInternet access to employees, who do not need computers for their oper-ations. For motivation purposes, idea contests, bonuses, benchmarks,etc., are installed and the knowledge management system is easy to han-


die. The implementation of knowledge management profits from theopen corporate eulture and deeentralization. Decentralization addition-ally supports different levels and applications of knowledge manage-ment in diverse countries. Besides, between service staff in differenthotels informal tietworks exists. New practices can be generated andtested by hotel direetors' prototyping. Successful practices can be im-plemented in more hotels.

Moreover, Accoi" improves knowledge by human resource trainingand knowledge circles to improve service quality in the service encoun-ter. Knowledge circles and projects concerning specific goals especiallyin the field of service operations, which concentrate on task-specificknowledge, are established throughout the hotel group. Training andknowledge circles are also eoncenicd with the implementation of theknowledge management system. Training programs and knowledgecircles increase the transactive memory and lead to meetings betweenexperts, who are able to exchange tacit and explicit knowledge.

CONCLUSION

This article stresses the role knowledge plays as a main sourcefor quality improvetiients and competitive advantages in hotels, urg-ing them to implement knowledge management. Especially, the directcustomer interface, the high ratio of low status employees, the highrate of staff fluctuation and rotation, the dispersed single hotels of ahotel ehain, which face different environmental effects, and the needfor global and hotel-wide quality standards require a specific knowl-edge management designed for hotels. The paper contributes to knowl-edge managemeni and hotel management literature. It presents reflec-tions about knowledge and knowledge management in hotels based ontheoretical considerations about individual and organizational knowl-edge that can incoiporate shared or distributed mental organizationalmodels.

Although some elements of a knowledge management system can bemore dominant than others, hotels should realize that knowledge manage-ment is a system ot" interacting pails. Although knowledge managementrepresents an integrated system, this paper lays a focus on knowledgestrategies and structural aspects, because they strongly differ from otherindustries" requirements.

A knowledge strategy concerns the type of organizational knowledge(shared or distributed) and the type of knowledge transfer (personaliza-

Ricarda B. Bouncken 55I

J

tion or codification). Shared mental models enhance work coordinationand minimize knowledge drain when single workers leave the hotel.Hotel chains henefit from shared mental models because these promotework coordination, understanding, and the effectiveness of communi-catit)n throughout the different hotels. Distributed mental models im-prove work specialization, which hotels also require when establishinghigh-quality standards. Shared mental models are especially advisablefor held norms, values, and beliefs hotel-wide and in working teams.Distributed models are mostly suited for the different task-specificknowledge of different working teams and for task-related knowledgein teams, because they allow for specialization and variety of knowl-edge. Diverse knowledge promotes distinction making, which in turnencourages the development of new knowledge. Thus, hotels shouldconcentrate more on their absorptive capacity, which contains the inte-gration of customer knowledge repre.senting a major source for knowl-edge development through the service encounter. Often codificationand personalization are seen as opposing knowledge strategies. For ho-tels, a hybrid strategy is advisable since some tacit knowledge and skillsfembetitied service routines) can only be transferred in direct personalrelationships, which are widespread in the hotel-business. Additionally,codified knowledge is required to retrieve and distribute knowledge inthe globally dispersed hotels ofa hotel chain.

The implementation of knowledge management benefits from knowl-edge executives, knowledge information system, and team structures. Aknowledge information system shapes the technical basis for the accu-mulation, retrieval, and distribution of explicit knowledge or facilitatesthe finding of experts company-wide. A system of knowledge execu-tives provides responsibility for knowledge management. Additionallyleadership helps to motivate knowledge workers and knowledge orien-tation in hotels. Team structures and knowledge circles that promote thepersonalized transfer of tacit and explicit .knowledge assist the imple-mentation of a knowledge managenicnt system. In the end, knowledgemanagement should promote some democratization of knowledge inorder to reniove it from the "knowledge is power-and I am the owner"context.

While the paper identifies mid discusses distinctive characteristics ofknowledge management in hotels and gives advice, it has certain limita-tions. Specific items of hotels' management systems, which couki not bediscussed here due to the complexity of the concept, can he examinedmore deeply. Especially, the interactions hetween various relationships(single hotel to head office, single hotel to single hotel, and hotels to cus-


toniers) and that the results should be closely scrutinized. The same hoidsfor the diverse cultural influences a specific hotel chain is subject to.Therefore, further sludies should concentrate on specific items on knowl-edge management in hotels by expanding the findings of this article.

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Knowledge Supply Chain Matrix Approachfor Balanced Knowledge Management:

An Airline Industry Finn Case

Marcel Hallendorf

SUMMARY. Knowledge managemenl projects suffer from conceptswhich ovcrcmphasi/e a single laclor. e.g., inrorniiitioii lechnology. Tliis sin-gle factor Irequently dominates other factors as processes, structures orsiratcgics. Tlie research questitin of ihe paper is how to develop and apply aknowledge management ux)l that balances different factors in knowledgemanagement pnijects. The intnxluccd UH>1, called knowledge supply chainmatrix, h derived IVom a generic business nuKlcl and four knowledge man-agement pnxesses. The paper describes how ihc tool is applied within aknowledge management projecl in ihc airline induslry. IAnule copies avail-able for a fee from The Haworth Document Deliveiy Senice: I SOO-HAWORTH.E-mail((ddtvss: <xliKxleli\viy@hawonhpa'.Vi.cotn> Website: <i\ttp:/A\•\\^v.HL[\\or^}\Press.com> © 2002 by Vie Hawonh Press. Inc. All rights

KEYWORDS. Balanced knowledge management, knowledge supplychain matrix, airline Industry

Marcel Hattemlorr is affiliated with ihc Arthur D. Little Inicnialiimal GmbH, PalaisTodcseo. Kiinilner Strasse 51. A-I0I5 Wicii. Austria (E-m;iil: hattendort.marecl@

IHaworthco-inttexiiigeniry noie); "Knowledge Supply Cliain Malrix Approach for Balanced Knowledgel: An Airline Induslr)' Firm Case." Hallendorf, Maael. Co-puhlished .simultaneously in Joumal

I'fifiiiiliiyAsMii.imc in tlospihiHiv & ToHrism (The Hawonh Huspiiatiiy Pross, an imprint of The HaworlhI'lcss, IIIL.) Vul, 3, No. .1/4. 2002. pp. 6[-73: and: Knuwtcd^c Stiimiin-iiwil in llns/uhilily mul Ttuihim (ett:Kii,arila B. Biiuncken and Suus.soii P>oi The Hyworih Hiispiialiiy Press, an imprint of The Hawiinti Press,Inf.. 2OU2, pp. 61-7.1. Sintik' or multiple copies of this article are available tor a lee from Ttie Hawonh Docu-men) ndivery Service 11-SW) HAWORTH. 9:00 a.m. - .StOO p.m. (EST). R-mail address: docdelivei>@h h . ci)ni|.

http://www.haworthpress.eom/siore/p rod uet.asp?sku=J 162© 2002 by The Haworlh Press, IIK. All rights reserved.

10. t300/J i62vO3aO3 JM 61


INTRODUCTION

Knowledge management initiatives sometime.s fail. The paper as-.siimes that the failure is due to inappropriate tools. There is wide varietyof knowledge management concepts in the literature. However, theconcepts and their tools balance business factors (strategy, core pro-cesses, organization and resources) insufficiently. The research ques-tion therefore is. liow to develop and apply a knowledge managemenitool that balances business factors.

The paper is divided into two parts. The first part develops the knowl-edge supply chain matrix as a knowledge management tool. It is due to abusiness model (high performance business model) and four genericknowledge processes (knowledge generation, knowledge storing, knowl-edge transfer/application and knowledge measurement) thai span a ma-trix. The matrix represents the knowledge supply chain matrix.

The second part describes the application of the knowledge supplychain matrix in a case study. The company offers services for airlinesconcerning revenue accounting. The question is how to link businessprocesses with knowledge supply chain matrix so as to structure knowl-edge management project.

THE THEORETICAL BACKGROUND

The theoretical background for the know ledge management model isdue to the "fit^'-idea (Ansoff. 1979: Chandler. 1962), which is still pop-ular in the strategic management field (Bea & Haas. 2(X)1: 9 f.). The"fit"-idea basically says that ditferent business factors as strategy, orga-nization or IT should be aligned in order to work efficiently. As thebusiness environment permatiently demands new requirements, it Is anongoing task to line up and adjust the interdependencies among busi-ness factors. A well-known business model that is built upon the"fit"-idea is the 7-S model ol" the consultants Waterman and Peters(Waterman & Peters & Phillips, 1980: Waterman & Peters, 1982) thatencompasses seven business factors. They are divided into three "hard"(structure, strategy, systems) and four "soft" (shard values, style, staff.skills) factors. "Hard" factors can be analyzed, designed and controlled,but the management of "soft" factors is relatively limited. Nonetheless,it is the goal to align and balance all of them.

An example for the "fit"-idea in knowledge management is Arthur D.Little's knowledge management concept which consists of four inte-

Marcel Hattendorf 63

grated faclors or dimensions: content/context, culture, process andinfriislructure (Arthur D. Litlle, 1999; Bergmann, 1999: 34 f.; Bock.1998: 5 f.). Conteni and coniext answer the question which knowledgeis relevant for the business. Strategically relevant knowledge has to beidentified and evaluated. Knowledge management projects frequentlyuiulerestiniale ihe meaning ol cultural dimensions, e.g.. employees arereluctant lo share their knowledge. Hence, to promote knowledge trans-fer in terms of benefit programs might be an appropriate instnniient tosupport change policies. The process dimension pursues to implementorganizalional processes in order to support the knowledge manage-ment activities, for instance hy designing an organizational structure interms of knowledge stewards, knowledge officers, etc. The infrastructuredimension provides the adequate technology so as to support jirocesses inthe knowledge management framework. Questions ahoul appropriate toolsfor capturing data or databases for storing knowledge need to be re-sponded.

THE HIGH PERFORMANCE BUSINESS MODELAS CONCEPTUAL STARTING POINT

The knowledge management approach in this paper is due to ArthurD. Little's high performance business model (Arthur D. Little. 1991,1995: p. 203 f.) (see Figure 1) with its "fit"'-idea. This model consists offour factors: strategy, core processes, organization and resources.

Strategy describes the relationship between external and internalstakeholders as customers, employees and shareholders. However, inthe context of knowledge management the factor strategy is used in aslightly different manner. Strategy serves in two directions: first, itmatches external requirements Irom the business environment againstthe prtxlucts and services provided by the enterprise (inter-""nt"-idea).Secondly, IT matches all internal faclors of the enterprise against eacholher {intra-*Tit"-idea) (Bca & Haas. 2()01: p. 15).

The factor organization in the high performance model describes theproces.ses and structures supporting critical core processes within theknowledge managemeni. From a process-centric viewpoint il is perti-nent to design the process framework as a separate process model withdifferent levels of detail for each core process at the beginning. Then, aknowledge management structure in terms of process owners should beassigned.


The third factor includes HR. IT and financial resources. This papersets priority on IT aspects. Information technology plays a more passiveparl within the trainowork as the technology is regarded as an "enabler"tor organizational requircmenls. This point of view presumes a perspec-tive from the market to the enterprise which can he named as an out-side-in or market-based view (Potter, 1980, 1985). Prixiuct-markel conceptsdefine the strategies for generating competitive advantages for whichinternal processes, structures and resources have to be aligned. On theother hand, the inside-out or resource-based view regards the marketfrom the enterprise and tries to exploit internal resources for generatingcompetitive advantages beyond market constraints. This perspectiveprovides several variations; the most popular is probably the concept ofcore competencies (Hamel & Prahalad, 1990, 1994).

The last factor illustrates the core processes which occupy a signifi-cant position within the entire knowledge management iVarnevvork. Thecore processes serve as the blueprim so as to structure all other factors.Strategy, organization and resources have to be aligned according to thestructure and arrangement of core proces.ses. The managetnent literaturesupplies a variety ot propositions for core processes in knowledge manage-ment (Mandl, 2001; Mandl & Reinmann-Rothnieier. 2{KX); Probst^&Romhardt. 1997; Romhardt, 1998; Giildenberg. 1998). A well-knownapproach is due to Davenport/Prusak (Davenport & Prusak, 1998) whorecommends three core processes; knowledge generation, knowledgecodification and knowledge transfer. However, the knowledge manage-ment concept for this paper suggests four slightly different core pro-cesses; knowledge generation, knowledge storing, knowledge transfer/application and knowledge measurement. These core processes do notbuild necessarily a consecutive chain (Rotiihardt, 1998). but they needto be addressed in order to sel-up a holistic knowledge managementfratiiework.

Knowledge generation describes the content that is relevant for theentire knowledge management concept. The core process pursues tomake inter nal knowledge assets explicit in order to plan and design con-tent. Knowledge storing illustrates which content needs to be hold andhow. For instance, the process has to respond questions about indexingand structuring knowledge assets. Knowledge transfer and applicationconcentrate on the distribution and usage of stored knowledge. Whichknowledge has to be provided, to whom and when is a typical subject inthis core process. Knowledge measurement assesses the previous coreprocesses with the purpose to draw inferences for the knowledge man-agement design.


FIGURE 1. The High Performance Business Model {Management derLernprozessee im Unternehmen. Wiesbaden. Arthur D. Little, 1995: p. 209)

mari<Bf-bas«l vim/

THE KNOWLEDGE SUPPLY CHAIN MATRIXAS GENERIC KNOWLEDGE MANAGEMENT MODEL

How 10 apply the High Perlormatice Business Model wilh its '*ru"-ideaand the introduced core processes in knowledge managenicnt?

The basic picture can be understood as a 2-dirnensional matrix that isspanned by both the factors of the High Performance Business Modeland the core processes (see also Hattendorf. 2002). That means the fac-tors strategy (content), organization and resources (IT) build the verti-cal axis and the four core processes describe for the horizontal axis inthe matrix. The matrix illustrates the model requirement that strategy,organization and resources are aligned by the core processes. The ma-trix, called the knowledge supply chain matrix (see Figure 2), creates apattern with sixteen fields that have to be addressed to knowledge tnan-agement projects. For instance, tor the core process knowledge genera-tion the following questions must be answered:

• Which knowledge must be generated (factor strategy)?• How to design the process in detail (factor process) and who is in

charge for this process (factor structure)?• Which resources or information technology can support the core

proces-s efficiently?

66 KNOWLEDGE MANAGEMENT IN HOSPITALIT) AND TOURISM

The "nt'*-idea demands to line up core processes, strategy, organiza-tion and resources in order to define a balanced concept of knowledgeniiinagcmcnt. This approach provides a remarkable benefit in compari-son to other concepts: knowledge management initiatives frequentlydeliver disappointing results as the meaning of one factor, often infor-tnation technology, is overestimated. The installation of dedicatedknowledge management databases with fancy access and reportingtools is insufficient for a holistic knowledge management. Conse-quently, these projects fail because subjects concerning content or pro-cesses are not fully addressed. Hence, a balanced approach, that takeinto account various factors, might promise a more beneficial method.

A KNOWLEDGE MANAGEMENT CASE STUDYIN THE AIRLINE INDUSTRY

Situation

The company is a successful player within the airline industry. Beingpart of an established airline formerly, the company acts today as an au-tonomous enterprise for airline revetiue accounting. Nonetheless, the

FIGURE 2. The Knowledge Supply Chain Matrix

cfxe pfocessas knowledge management

strategy/content

knowtedgeiranster/

appltcal'on

" 1 " " ^ "'"let mnleni moOet coniani modelkri'i-nMige Knowledge slixlnggcnefalwn

process model ptocess mode) process modal process motW

2 Q a O 2 P C 3 D 2 D D D 2

IT model

slnidute moiiet Mruaure rtiodel sinicl jre model sirucfure model

n a O 1 d e l P I ^ n O I flc]

"fif


relationship between the former parent company and the former subsid-iary are still intensive, .so that the main fraction of overall revenue is dueto the former parent company. At the end of the nineties the total in-come was about 50 Mill. US $ with 600 employees.

In sum the company's business model is about cleaning, matchingand assessing data streams from various .sources which are distributedamong different airlines afterwards (see Figure 3). Hence, three genericprocesses basically encompass the entire value chain: upstream, pro-duction and downstream. The upstream process is divided into tlireedata inllows. i

1. Tlie "Interline"' inflow delivers invoice data from other airlines; e.g.,when a passenger buys a Hight ticket in order to travel form Viennato New York via Frankfurt with Austrian Airlines. However,American Airlines transports the passengers froni Frankfurt lo NewYork instead of Austrian Airlines, then American Airlines sends aninvoice to Austrian Airlines concerning the transport service.

2. Flight tickets are sold by airline-owned or independent ticket agen-cies. The "Sales" intlow tninsfers information (rom ticket agenciesto the company either via IT-based channels or manually.

3. Before passengers get on the plane, they have to show their flightticket at the boarding counter. Parts of the flight ticket are col-lected by the airport staff and physically sent to the companywhere high-end scanners read and convert the information fromIhe flight tickets. This process called "Uplift" inflow.

The main task of the company is to manage the upstream processwith its three data inflows. However, the delivered information is fre-quently insufficient or incomplete, so that several processes in the pro-duction process check, clean and fix bits of inf'ormation. Accurateinformation is a prerequisite for successful flight coupon assessmentwhich is the major outcome ofthe production core process. The assess-ment, called "prorating," is due to both general setllement.s among air-lines or bilateral agreements so as to define a set of rules for calculatingIlight tariffs.

The downstream process is split into three data outflows similar tothe upstream process. The first data outflow sends invoice informationto oJher airlines. The second data outflow transports accounting infbr-mation to the parent company's ERP-systeni. The third data outflowprovides financial information for the internal management informationsystem.


FIGURE 3. The Business Model of the Company

m•••••••

rrwoicei toOthofA>rline«

Ae«ountngIniomuilian

FlnancW InfarnuBkmto MIS

Concerning IT-infnistructure a proprietary application system sup-ports the entire process model which has been designed and developedby the IT department of the company. Basically, the application systemis due to the SAP R/3 workbench that serves as the software environ-ment for all modules. This approach tries to combine the advantages ofstandard application packages and individual software solutions. On theone side the workbench provides access to widely accepted IT-stan-dards like ABAP/4 as a 4GL-]aiiguage for programming; on the otherside the individual solution allows to develop process-centric applica-tions that are not generally covered by application packages.

However, the company faces a delicate situation as husiness processesand IT environment are aligned insulficiently which inhibits effectiveprorating. Furthermore, existing knowledge managemenl initiatives con-centrate on technological or content aspects. Thus, knowledge manage-ment is grouped around questions like "whicii database technology fitsbest to our application landscape?" or "which information should bestored in our knowledge base.'" More and more the company becomesaware that essentially a consistent knowledge management frameworkcovering different characteristics beyond IT and questions of content isrequired. Although the framework should encompass a variety of as-pects, the company requires a pragmatic approach as too academicmethods has been deeply disappointing in the past. Additionally, thereis an upcoming alertness for cultural aspects within the knowledge


management subject. Employees are occasionally reluctant to share in-rbnnation. even ihought technological and procedural requirements arefully provided. In sum. how to cope with all these aspects?

ln order to address and answer key questions the company com-mences projects which are divided into several sub-projects. The mostimportant sub-projects, that pursue the alignment of business processesand IT. stand outside the spotlight of this paper, because the focus lieson the knowledge management sub-project.

The entire project and therefore for knowledge management as wellriuis six months with a permanent engagement of lour external consul-tants. However, the knowledge management sub-project merely requiresa temporaiy commitment of both internal employees and external consul-tants t)f about one tlay per week. The sub-project pursues different objec-tives for knowledge management:

• To introduce not only a pragmatic, hut also holistic frameworkwithin the project and later within the organization.

• To link business processes and knowledge management.• To initiate and coach a permanent knowledge management group

within the organization which is able to continue the process afterthe official project ends.

All results are regularly reported to the review board ofthe project bythe knowledge management task force.

Knowledge Management

The company has already started a lot of knowledge management ac-tivities in the past that have been uncoordinated to some extend andconcentrated often on pure technological aspects. Thus, a reserved atti-tude towards new knowledge management activities is regarded espe-cially concerning the relationship between the operating and the ITdepartment.

The objectives foi- the knowledge management project are formu-lated based on the previous experiences:

• Definition of a conceptual framework for the design of the entireknowledge management project that is able lo integrate and bal-ance different departmental views.

• Theoretical and practical capability to apply the conceptual frame-work by the members of the knowledge management task force, so


that these members can continue the knowledge management pro-cess without external coaching.

• Piactical application ofthe conceptual framework in terms of an ex-emplary business process as a "knowledge management showcase."

• Organizational implementation ot the show case that should serveas a knowledge management nucleus for subsequent activities.

The task force decides to choose the knowledge supply chain matrixas a conceptual model for the entire knowledge management project.Moreover, out of all business processes within airline revenue account-ing a special billing procedure in the interline stream is selected as anappropriate example for the show case. The interline stream is basicallydivided into two different types: non-sampling and sampling.

• Non-sampling is a generally accepted way to monetarily assessflight coupons based on negotiated agreements among airlines.

• Sampling in contrast is a siniplitied method to charge llight cou-pons based on a random sample.

The knowledge management task force focuses on the non-samplingprocedure and starts with a high-level analysis. The analysis pursues todescribe the sub-processes in the non-sampling procedure and to iden-tify interestitig knowledge content that may be served as input for theknowledge supply chain matrix.

In the non-satnpling show case five sub-processes are recognized.

1. Sort in-box invoices according to different types.2. Check sorted invoices based on international standards.3. Enter invoice data into the IT system.4. Technically re-check the data by system.5. Manually judge the airlines concerning the financial liability.

The operating department sees in the last sub-process an ideal applica-tion for knowledge management as an employee has to judge o\cr I .(XX)airline companies for their credit liability in order to schedule unsccurcreceivables first. This ability requires a broad experience in airline billingthat is frequently held as implicit knowledge by employees. The taskforce decides to choose thisqualityjudgement of airlines as an appropri-ate knowledge asset to span the knowledge supply chain matrix.

In order to unctiver implicit knowledge the task force interviews thenon-sampling specialists. The first results show that quantitative as wellas qualitative criteria describe the credit liability of airlines. Based on

Marct't Hattendorf 71

these criteria a rating model is developed for three types of airlines witha high, moderate or low credit liability (see Figure 4). The rating modelrepresents the first field in the knowledge management matrix as it de-scribes the content (factor strategy) for the knowledge generation. Ad-ditionally, not only detailed processes and responsible process ownersFor the knowledge generation (factor organization) has to he defmed,but also the appropriate information technology (factor resource) mustbo provided. So. the aim is to complete all fields within the knowledgesupply chain matrix that finally results in an operational concept as thesummary of all functional requirements.

CONCLUSION

The knowledge supply chain matrix is an appropriate tool to struc-ture and balance knowledge management initiatives. Especially the un-derlying "fit"-idea promises to integrate a variety of different interestsand viewpoints within knowledge management projects. Moreover, theknowledge supply chain matrix is simple enough to sell the basic ideas

FIGURE 4. The Quality Rating for Airlines In the Knowledge Supply ChainMatrix

I. <»•

. • • 1


in front of tiiffereni audiences as well as it is complex enough (at least tosome extend) to answer the most important questions in the context ofknowledge management. For this purpose the concept is successful.

However, the knowledge supply chain matrix follows a theoreticalbackground that has caused some discussions. Especially within theknowledge management community, this type of process model causedsome critical comments (Hilse, 2000: p. 218 f.: Willke, 1998. p. 78-79).because process models presume that knowledge can he managed interms of analysis, implementation and controlling.

Basically, this knowledge supply chain matrix supports the fiinctionalisticparadigm in contrast to the interpretative one. Burell and Morgan ex-plained the differences between both standpoints. Concerning thefunctionalistic approach they write: "It is a perspective which is highlypragmatic in orientation, concerned to understand society in a way whichgenerates knowledge which can be put to use. It is often problem-ori-ented in approach, concerned to provide practical solution lo practicalproblems (Burcll & Morgan, 1979: p. 26). And the interpretative para-digm: "The interpretative paradigtii is informed hy a concern to under-stand the world as it is. to understand the fundamental nature of tliesociat world al the level of subjective experience. It seeks explanationwithin the realm of individual consciousness and subjectivity within theframe of the participant as opposed to the ob.server of action" (Burell &Morgan, 1979: p. 28).

Functionalistic approaches as the knowledge supply ehain matrixhardly consider inteqiretative aspects. Therefore, beyond all technologi-cal or organizational problems that are addressed in knowledge tiianage-ment ptojects there is an spectrum of questions that is still not answeredand that is still the source for disappointing initiatives-not only in knowl-edge management. A careful enhancement of functionalistic conceptswith interpretative tools might promise a rewarding way to increase theprobability for successful knowledge management projects.

REFERENCES

Aiisolt, I. (1^79). Strategic Management. London.Bea. R X. B./Maas. J. (2[)0]). Strategisches Managemcnr. Stultgari.Bergmann. K. (1999). die Btiustcino des Wissensinanagcnicnis. tn: Antoni, C.l\./

.S(»inmcrlallc. T. (Hg.): Report Wi.ssen.smanagement: Wie deutsche Eirnten ihrWisaen profitahel machen, DUsseldorf. t999. 34-38.

Marcel Hattemhrf 73

B(Kk. F. (1998). The Inielligeiii Organization. In: Anhur D. Liille: Priam-KtwwledgeManagement: Reapin\> the henefit.s. 2, 5-15.

Burcll. G./Morgan G. (1979), Sociological Paradigm and Organizational Atialysls.London.

Chandler, A. D. (1962). Strategy and Stnuture. Cambridge.Davenporl. T.H./Pnisak. L. (1998). Working Knowledge: How Organizutions Manage

What They Kntw. Boston.GQIdcnbcrg, S. (1998), Wissen.sfnanageinent und WiK.ven.icfmtrolUng in Lernenden

Organisationen. Ein systemtheorefisclwr Ansatz. Wiesbaden.Humel. G./Prdhalu(J. C. (1990). The Core Competence oClhe Corporation. In: Hanard

Biisine.s.s Review. May-June. 79-9!.Haniel. G./Prahalad. C. (19^)4). Competing for the Ftiture. Boston.1 laitcndorf. M. (2(M)21. Wissensmanagement-Problemprozesse und Problem Pmzesse.

In: Molic. M./Heinecke. \l. i./PUkm.R. Consnltiiii--Pr<>htemldsungals Ge.srhafts-modclt. Theorie. Pni.xis. Markt. ISO-194,

Hilse, H, (2(X)()). Kognitive Wende in Management nnd Beratung: Wissensmanagementaiis Sozialnis.\en.%chaftlUher Perspekiive. Wiesbaden.

l.illle. Arthur D. (1991). (Ed.). ManagementderHochleisnmgiorganisation. Wiesbaden.Liuti.'. Arthur D. 119'>.')). (Ed.). Management der Lemprozcsse im Untemehnwn. Wieshaden.Litlle, Arthur D. (1999). Knowledge management-managing intellectual assets for

value creation, company brochure about know ledge managemeni.Mandl. H. (2(X)I). Wissensmanugemeni lernen. Vonnig aulder Konterenz Pnifessionelles

Wissensmanagement-Firtalirungen und Visionen, Baden-Baden.Mandl, H./Reinmann-RothnK-ier. G. (2000). Die Rolle des Wissensmanagements fUr

die Zukunft. In; Mandl. H./Reiiimann-Rothmeier. C : Wissensmanagement. MUnchen.1-17.

Poiier. M. E. (1980). Competitive Strategy. New York.Poncr. M. E. (1985). Competitive Advantage. New York.Waterman. R. Jr./Peters. T. J. (1982). In Search of Excellence. New York.Waterman. R. Jr./Peters. T. J./Phillips. J.R. (1980). Structure Is Not Organization. In:

Bii.'iincss Horizons., 2.1. }>, 14-26.Willke, H. (1998). Systemisches Wissensmanagement. Siultgart.

The Knowledge Cafe-A Knowledge Management System

and Its Applicationto Hospitality and Tourism

Norbert Gronau

SUMMARY. Knowledge niunugcment is idenlilled as a key successfactor in inosi iiuiu.siries today. While dala or iiilbmiatitin can be storedindependenlly tVoni people, knowledge is bound lo people who use il furIheir interactions. The main goal of knowledge man;igement is to im-prove ihe usage of know ledge in the enterprise- Knowledge managementsystems are nol only organi/ational memory inforniatii>n systems. Theyalsoconlaiii organi/ational standard prix;ediires and a certain cultural at-titude. A reference framework gives implementation hints mainly inllu-cnced by technical possibiliiies. The knowledge management system ref-erence architecture contains layers of sources, reposilories, taxonomy,services, applications and user interfaces. A software tool that largelycorresponds to this reference framework is the Knowledge Cafe. Possi-ble applications of this lool to ihe area of hospitality and tourism are de-scribed in this paper. I Article copies available for a fee from The HaworlhDocument Deliveiy Senice: I-SOO-HA WORTH. E-mail addres.s: <docileliveiy<if'

Norbert Gronau is Professor of Business Inlormation Systems. Lfniversity ofOldenburg, Department o) Computer Science. Escherweg 2. 26212 Oldenburg. Ger-many (E-Mail; gronaute'inlormatik.uni-oldcnburg.de).

(Haworth co-intlexirig emr>' notc|: "Tht Kimwlcilt!.: Cali;-A Knowlcdgi* Managcim-ni Sysietn and Us Ap-pticatioii IO Hospilalil) mid Tourism." Gronau. Norbcn. Cwpublishcd sinmllaiicously in Jimnuil of Qmliiy A.s-SHiwiif in Hospiuiiiiv & Touri.siii iThe Hawt)nh Hniipiuliiy Press, aii inipriniofThc Hawnnli Press. Im;.) Voi, .1.Nil. 3/4.2002. pp. 7.''-88; anil; Knowleil^e MuihiftfinfDt in llosiuutiiiy uml Tourism (wl: Ricurda B. Boiinckoniind Siingsmi Pyn) Tlio Huwonli Ho^pllaliiy Prir^s. iin iniprinl oi The Haworih Prcs.s. Inc.. :HH)2. pp. 7_ -S«-Singlt iir nmliiplf c»|iics <tl' lliis Linitle art avaibblo tor a fee trom The Hawonh TJocumcni Delivery Ser^ice11-W)U-H.AWORTH. VfiOO a.m, • 5:lK) p.m. (K.STl. bi-riiail adda-ss: dixde

http://www.hawonhpa'ss.coni/storc/prcxluct.asp.'sku=JI62© 2002 by The Hawonh Press. Inc. All rights reserved.

10.1300yjl62v0.^n03 05 75


howorthpress.com> Website: <http://www.HaworthPress.com> © 2(M)2 hy TheHaworth Pre.ss. Inc. All rights reserveil.}

KEYWORDS. Knowledge management, discovery, collaboration

KNOWLEDGE MANAGEMENT

Knowledge can be defined as tbe sutn of infortiiation and capabili-ties ibat individuals use in arrivitig at solutions lo problems. Thus itcan entail theoretical findings, praciica! every day rule.s or instructionsfor action. The availability of data and information is a prercquisile forknowledge. In contrast to this, however, knowledge is always tied tosome type of interaction by people (Probst, 1998).

Knowledge management is defined as an operational managementtask that encompasses a decision-oriented apptoach. It is the goal ofthis management task to establish learning processes across all levelsof the organization and to develop tbem consistently. An organizationalknowledge base is one possible lesult of know ledge management in anentrepreneurial context (Davenport, 1998).

Since the knowledge of an organization exists in an unstructured anddynamic fortii, the use of inlormation technology should ha\e the pur-pose of rediscovering internal and external data and tiiethods and refer-ring them to human experts. Support systems for this application can becalled OMIS (Organizational Memory Information Systems), compe-tency or know-how databases (Ackerman, 1994).

Components of a Knowledge Management System

In the following section, ihe necessary components for a knowledgemanagement system-fiom the viewpoint of the authors-will be dis-cussed.

The goal of knowledge management is to improve organizationalcapabilities and the efficiency of the implementation of the organiza-tional strategy while consistently using knowledge as a resource. Thebasic apptoach of knowledge management is to capture documents,pet sonal experience and all other categories of information and to pro-vide it in a manner that is useful to reach the goals of the organization(Lawton. 2001: 11). An important task in this context is to analyze thedemand of knowledge that is needed by the members of the organiza-

Norbert Gronait 77

tion to support the reaching of the goals ofthe organization in the bestpossible way.

Additionally internal and external sources of knowledge are toidentify which can satisfy the knowledge demand concerning processknowledge, knowledge of the members of the organization or of stake-holders. Knowledge that is not available in an explicit form, e.g., in doc-uments, databases, formulas or technical data should be explicated.Expenence, capabilities, unwritten rules (also named as tacit or quietknowledge) should be converted in a digital form (this is called exter-nalization) (Nonaka. 1994: 14) or trimsferred lo other members oftheorganization (socialization). So it is possible for the organization to ac-cess and share its knowledge. The so gained and externalized knowl-edge needs to be structured, presented, cultivated and administrated.

Knowledge manLigernent systems (KMS) support the channeling ofexisting sources of knowledge. An additional goal ofa knowledge man-agement system is to provide relevant information at any time and any-where to help members ofthe organization to solve problems related totheir tasks.

Therefore different sources of knowledge have to be integrated. Thecategorization and classification of knowledge should be possible auto-matically or manually. KMS deliver tools for easy input of informationin ciifferenl ways like adding new information by members of the orga-nization, automatic inspection of electronic docun>ents like e-mail or byindexation of external contents (data bases, CD-ROM). Prerequisitesfor the keeping of this kind of knowledge are the definition of knowl-edge goals, the creation of a uniform organizational structure and acompany culture which stimulates the exchange of information andknowledge. Information technology has to map stnictures and processesofthe organization. The biggest amount of collected information is onlyuseful if transparency and ease of use are available. Therefore, exten-sive information retrieval functions and knowledge distribution mecha-nisms are necessary.

The characteristics of a knowledge management system separatedfrom other business information systems can be described using an ar-chitecture that is divided into six layers (Figure I).

Information ami knowledge sources, which in light of the increasingdigitalization of contents make up the overwhelming portion of theavailable information in organizations, are dedicated to be the basis ofthe knowledge management system. In hospitality and tourism possibleknowledge sources can be the contents of files on a server, intranetpages, directory of business relevant persons, e-mail traffic that is guided


FIGURE 1. Architecture of a Knowledge Management System

Applicalions

Services

Taxonomy

InformationManagement

Sources

Taxonomy

ColiaborativeApplications

E-LearningApplicalions

CoJtaborationServices

DiscoveryServices

PublishingServices

TemplateServices

Knowledge ReposiloriesTemplate SIructure (mela dala) Conteni User Rights Management

lexis intile system

Iniemet/Inlianai

dlredoryof persons

email databases documeiilatcfilves

audiD'VlsijB<inodia(i>e& •

to specialists for certaiti situations (e.g.. for technical maintenance).Additional potential sources of knowledge are databases that probablycontain reports and relevant data for business cases. If a document man-agement system is available this is a potential knowledge source, too. Inthe near future it will be possible to analyze and segment audio andvideo Files so that they can be used in KMS in circumstances other thanwhat they were created for.

A knowlei/iic repository integrates the different sources and ensures auniform, logical view of the variety of sources. This is a condition forthe processing of knowledge sources by the higher levels ofthe systemarchitecture.

A structured presentation of the knowledge available in the systemthat can be used for navigation is made available by the taxonomy lajer.Some existing implementations also integrate knowledge repositoryand taxonomy into a single component. Glossaries, key word lists andthesauri are used to fot tn a taxonomy. This is a useful component espe-cially in the field of tourism and hospitality where employees have ahigher turnover rate than in other industries. The use of taxonotnymakes it easier to understand the special tertiis in this industry.

The seiA'ice layer provides sotiie service components based on thelower layers and is used by the application layer. The dilTercntiaiion inservices and application layers is an architectural decision which pointsout the possibility to distribute services in a network environment and

Norbert Gronau 79

which separates applications (with a user defined goal) from services(with a system defined function). At least four services are necessary tobe able to create knowledge management applications:

• A primary function is .searclu which is provided by the discoveryservices. A dilTetentiation between pull and push technologies (othersources refer to this as active and passive techniques) can be made.hi a pitU sitiutiion (or with an active search) the user searches theknowledge management system by inputting a search string. Thestimulus forgetierating the knowledge thus comes from the u.ser. [na pttsh sitttatum (or a passive search) based on a custoniizetl interestprofile, the user receives unsolicited and automatically generateddocuments that have been newly added to the knowledge manage-ment system based on his/her interest profile with every usage ofthe system. The advantage of the push technology is that no stimu-lus from the user is needed to generate the output of knowledge.With skillful utilization ofthe interest profile, other relevant docu-ments are also found, which would not have been retrieved usingthe traditional pull technology.

• CoUahoraUon services allow a distributed cooperation betweendifferent persons at different times. Examples for collaborativeservices are workfiows for document approval or the work on textsor graphical models by a group whose members are located at dif-ferent sites.

• Pithlicafion .serx'ices deliver functionality to publish a document inthe intranet.

• Tewplate services allow creation and ad tn in istration of templatesfor the storage of different kind of information in different docu-ment types.

The functionality of a knowledge management system on the appli-cation layer is constructed using the services ofthe service layer. Sotiieexamples for knowledge management applications in hospitality andtourism are described at the end of this paper.

The iLser interface layer provides a uniform interface for the opera-tion ofthe system, which may be custotnizable. Personal custotnizationis an important requirement for the success of knowledge managementsystems because different user types exist. A differentiation of usertypes is pos.sible regarding the user's experience (inexperienced, well-informed, expert) Additionally, the demand for information the userneeds is important for a typology. Every employee belongs to a certain

so KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

dcpiirttiient atid works iti certain processes. He will be interested at firstin inlomialion about his departmenl and processes atid then about oth-ers if this inlormalion is easily accessible forhitn. Cuslomization allowsthe creation of favorite links, u persotial start page with exteticied infor-tiiiition on his department and ptoces.'ies and introductory inlotinalionon others. The discovery set vices will help the user lo find out more ifnecessary.

THE KNOWLEDGE CAEE-A TYPICAL KNOWLEDGE MANAGEMENT SYSTEM

The Knowledge Cafe, developed in 1999 by Berlin University ofTechtiology (Krallniann, 2000: 205: Gronau. 2001: 77) and now dis-tributed by altavier (altavier. 2002). is a tiiodular knowledge manage-ment sysietii based oti the above-discussed arehiteetural framework. Itcontains a basic tnodule wilh glossary, tiewsletter, full text seatch atidhelp atid ean integrate dilTerL-ttl componetUs like yellow pages, knowl-edge base, virtual library, discussion and ptoject module.

The Knowledge Cafe cati be used either with a browser or with LotusNotes client software. The access to the conletits of the modules is real-ized by hyperlink structures and with user-ftiendly context-sensitivefull text search engines. All docutnents in the system are eharaeterizedby keywords from Ihe glossary. Figute 2 shows the architeeiute of theKtiowledge Cafe.

Yellow Pages

The access of existing knowledge in Ihe enterprise is often difHeultbecause corresponding compeieticies of employees ate ktiown only in-side the borders of work groups and departiiietits (Choo. 1998; Tutiik,2001).

Yellow pages are helpful if the right cotitact paittiers are searched ora project team has to be assetnbled which should correspond with the re-quitemetits ofthe problem to be solved.

Employees can be found corresponding to their qualification, experi-enee and competency. Persons also can be found under eriteria like po-sition in the organizalioti (localion. branch offices, departments, etc.),ptojeel patlicipation atui tuniie.

T'lie basis for these functions is a personal home page for eaeh em-ployee (cf. Figure 3). In this document actual and past work areas, project

Browser-Client

Norhert Groiuut

FIGURE 2. Architecture of the Knowledge Cafe

Browser-Client Browser-Client I

irMultitasking server

Access control, services, alternative interfaces

Retrieval

Integratedfunctions

Metadata

Component

1

\bllowPages

It

Knofriedge^asanil

Component

n

JData integration trom

IT infrastructureol ttie enterprise

ERP DMS etc.

Knowledge BaseVirtual LibraryPressPintxiardDiscussionProjects

FIGURE 3. Personal Homepage in the Yellow Pages Module of the KnowledgeCafe

82 KNOWLEDGE MANAGEMENT IN HOSPITAUn AND TOURISM

experience and competencies are stored. Every employee can take careof his own pet sonal home page because the entry and publication of in-formation in an intratiet is very easy with the Knowledge Cafe.

Knowledge Base-Topic Centered Pool of Information

Etnployees collect experience, create reports and contribute withtheir work to tiie success of the entetprise. The intranet can be veryhelpful to facilitate the access to experience, opinions and documents ofrelevant topics for tiiany etnployees. Figure 4 shows the cteation of anew entry in the ktiowledge base.

With this tnodulc knowledge can be provided either for all employ-ees or for special interest groups. So know ledge which was not knowntill now will be distributed and can be used extensively. Double work-ing is reduced atid the experience of other people helps to process tasksfaster and in better quality.

The knowledge base supports the generation, use and distributionof competencies in an enterprise. It forms the tcchtiological basis for atopic-oriented discussion.

The publication of documents and the access of different contents iscontrolled by an access control system. So it will be possible to give

FIGURE 4. Creation of a New Entry in the Knowledge Base

Norbert Gronait 83

only the members of a projecl group access to their documents. All doc-unient.s are categorized based on the entries of ihe glossary. Documentsin other file formals can be embedded easily (e.g., Lotus Smart Suite,Acrobat PDF files, MS Word, etc.). i

Virtual Library-Management and Publication of Documentsin the Intranet \

Although lots of documents exi.st in enterprises, employees often haveneither knowledge of the existence of these documents nor access tothese books, journals, papers and other relevant publications. In the vir-tual library employees can search efficiently lor documents and readthem either in a digital form or be informed about the source location.Contrary to the knowledge base only a few responsible persons with therole "librarian" publish documents in the virtual library that can be ac-cessed by either all employees or specified groups. The basis for accessis an access control system that prevents unauthorized access lo certaindocuments. The duration of a publication period in the intranet can bechosen so that after a certain period of time the document disappearsand will be archived. An archived document will be found using the dis-covery ser\lces but Is not seen in document catalogs sorted by keywords. An example for the creation of a new document in the virtual li-brary is shown in Figure 5.

FIGURE 5. Creation of a New Virtual Library Entry


Discnssion Groups-Expert Circles in the Intranet

Using this module, employees can discuss self-chosen topics. Topics,discussion contributions and responses to these contributions can bestored in this module up to a depth of 17 levels. With this module it ispossible to torni expert circles. Other employees who have questionsabout certain topics will also benefit IVoni these discussions.

The generation ot a dynamic discussion culture can be controlled andsupported actively by the enterprise. Electronic discussion groups areuseful in hospitality and tourism to give inexperienced employees hintsfor Iheir tasks. Online discussions allow participants from different lo-cations to join. This is a great advantage particularly in the internationalindustry of hospitality and tourism. AdditionaUy, it is possible to storeintermediate results from a discussion for some months until other par-ticipants are able to continue the topic.

Project Modnle-Knowledge-Hased Project Management

The module is separated into a public and an internal project area. Inthe public area the projects ai*e commonl>' described and selected docu-tiients are published for (nearly) all employees. In the internal area whereonly project members have access the project is organized, all pro-ject-related documents are stored, people, dates and resources of theproject are administrated and the communication within the project issupported.

Advantages of the project module are the publication of project re-sults and solution alternatives in the intranet. Therefore, employeeswith similar problems in other projects can use existing experience. Ad-ditionally, it is easier to llnd colleagues who are familiar with certainproblems and their solutions.

APPLICATION OE KNOWLEDGE MANAGEMENT SYSTEMSIN THE AREA OF HOSPITALITY AND TOURISM

Possible application areas of knowledge management systems inhospitality and tourism are business planning, service operations, quai-ity improvement and reaction on emergency cases. For each of theseapplieation areas a conFiguration example of the Knowledge Cafe' is de-scribed.

Norhert Gronau 85

Every scenario is based on a common glossary that contains the rele-vant vocabulary in this industry, synonyms and an explanation of eachter in.

Business Planning

Business planning involves the process of planning capacities, qual-ity standards and prices of airplanes, hotels and additional services.This is a collaborative task with participants in different roles like seller,buyer and middlemen. To make the business planning proeess easier itis useful to store relevant information about different people and theirroles in the process in tlie yellow page module, so it is possible to findout who has experience in certain countries or with foreign governmentprocedures. As the number of participants in the business planning pro-cess increases, it becomes more diificult to find the person able to an-swer one's questions. I

The virtual library is a possible storage location for standard operatingprocedures, e.g., for calculation of prices, capacities and reports. Docu-ments in the library are accessible for every authorized user of the sys-tem.

Service Operations

Applications in service operations are between hotel facilities plan-ning, event scheduling or lhe creation of restaurant menu selections. In-formation about vineyards, hotel characteristics or cooking constraintscan be stored and classified in the virtual library. Actual work in prog-ress can be accompanied either by the knowledge base or by the projectmodule. The news Hash function of the Knowledge Cafe keeps peopleinformed without an inquiry being made. An example from hospitalitymay expkiin this function. A food procurement manager is interested inthe region of California, in vineyards and in poultry. He chooses thesekeywords from the glossary of the Knowledge Cafe and stores theminio his personal interest profile. Now a hotel manager from the samecompany enters a new suggestion of menu selection containing Califor-nian Chardonnay (white wine) into the knowledge base. He classifiesthis new document with some keywords frotn the glossary, too.

The next time the procurement manager enters the system and cheekshis "MyNews" area, he will lie infonned about the new document tbat wasentered by the hotel manager. Now the prtKurement manager can generate

HO KNOWLEDGE MANAGEMENTIN HOSPITALITY AND TOURISM

the knowledge that in future more Charclonnay wiil he needed and thai itwould be a good idea lo look for some souree.s with high quality.

Quality Improvement

The proeess of quality improvement can be settled up on the samesystenithat is used lor business phmning. For managing customer com-plaints Ihe integration of web-based forms is necessary. Paper-basedqualily questionnaires can be entered into the system either by auto-matic character recognition or by helpers. Using the project module ofthe Knowledge Cafe, the definition of workliows based on customercomplaints, the investigation of their causes and their remedy are possi-ble. Experienee won in these processes can be used for future businessplanning processes.

Reaction on Emergency Cases

In emergeney eases an extremely fast reaction on operative, adminis-trative and strategic level is necessary. Standard procedures stored inthe virtual library ofthe Knowledge Cafe help to do the right thingseven in crisis situations. If plans of hotels, airports and streets are storedin the virtual library, the Knowledge Cafe should be accessible also forexternal parlicipants.

CONCLUSION AND FURTHER DEVELOPMENT

Knowledge management systems are a combination of differentservices basing on several sources connected with the system hy a re-pository layer. A realization ofthe knowledge managemenl frameworkarchitecture is the Knowledge Cafe. Some examples from the area ofhospitality and tourism show that there is a broad range of use possibili-ties for knowledge management systems.

To reach a return on investment after the installation of a knowledgemanagement system (Harvard, 2(H) I), it is neeessary to integrate knowl-edge management functions in existing intranets (Logan, 2001; Gronau/Kaliseh, 2002).

Actually the Knowledge Cafe' is an "all-in-one" system with compo-nents adjusted to work fine wilh another. Problems can occur if a thirdparty search engine like case based reasoning (Aha. 1999; Gronau/Laskowski, 2002) or an automatic text classification program should

Norberi Gronait 87

interact with the Knowledge Ci\\'<^. Therefore one development task wiltbe the partitioning ol the system in smaller components which can beused in heterogeneous software environments (Saha, 20()l) and to-gether with other knowledge management tools.

The other development task is the evolution from a company specificknowledge management tool lo a knowledge community tool. The mostimportant step on this way is the proper integration of customers andtheir representatives (e.g., travel agencies) and to open the possibility ofdiscussion with customers and to learn from their experience withoutsurrendering proprietary business information.

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Gronau. N.. Kalisch. A. (2(K)2). Knowledge Content Management Sysieni-A Frame-work integrating Content Management ami Knowledge Management. Accepted Pa-per. Proc. ol the 2(K)2 International Conference on Inforniatioii and KnowledgeEngineering. Las Vegas (NV).

Harvard Computing Group (2()()1). RepoH: Knowledge Management-Return on In-vestment. httiK//\\ww,knutdvantage.coni/docs/KM/KM_-_ROI.pdf, (last accessedNov. 15 2001).

Krallmann. H. et ul. (2(KK)), Knowledge Management in the Category Ctinsulting De-partcuent oi a Service Company. In; Kialliuann. H.. Gronau. N.: Competitive Ad-


vantages Tlmmgh Ktwwiedge Management. Siuilgiui: Schaefter-Poeschel. p. 2O3-23S

Lawtoii. G. (2001). Knowledge Management: Ready tor Prime Time? Computer I.p l l -13.

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Cross-Border DestinationManagement Systemsin the Alpine Region-

The Role of Knowledge Networkson the Example of AlpNet

Harald PechlanerDagniar Abfalter

Frieda Raich

SUMMARY. The Alps are tlic focus of a wide-ranging discussion. Re-searchers, scienlisls, polilicians. inhabilanls, and people who earn iheirliving in the Alpine region are all confronted with dirficuli challenges.The main topics aie ihe developmeni in ihe fields of nature, landscape,tourism and leisure, iraftlc and transport, and its consequences for theAlps as a living space and economic area. Ahoul 30 ye<irs ago. a ciiopera-lion of lourism and political aulhorilies in 11 countries, regions, prov-inees, and cantons of Switzerland, Germany. Italy, and Austria has heenestablished. Due to globalization and changing travelinj: patterns, people

Harald Peehlaner and Dagmar Ablalter are affiliated with lhe Universicy ofItiLisbiiick. DepLirtmeni of General and Tourism Managemenl, Uiiiversitiits-Str. 15,A-6020 Innsbruck. Austria.

I-rieda Raich is aftiliaicd wilh Eunic Research,. Department uf Tourism Manage-menl. Drusus-Str. I, l-.l'M(H) Bo/en. Italy.

(Haworth co-indexing enirj noie|: •"Cross-Burder tX-stinalion Managenwnl Systems in lhe Alpine Re-gion-Thc Role ol' Knowlcdjfc Networks on ihc Example of AlpNct," Pechlaner. HaraliJ. Dagmar Abfulier. undFrietta Raich. Co-publislicd siitiuliancousl^ in Jnunuit nf Qiuiliiy .^s^ul•am•l• in Uospihitity & Tourhm (TtieHiiwnrih Huspilality Press,, an inipnnl of t h e Hawonh Press. Inc.) Vol. "S. Nn 3/4. imi. pp 89-107; and:Kiii'wtfttnf Mtiiiiiftci'ifiil in Huspiitilily iimt ToiitiMii (ed: Ricarda B. Bouncktn mid Sungstxi Pyol TheHaworlh Huspimliiy Press, an imprint ufTlieHawonh Press. IIIL-..2()()2, pp. 84-107. Siiiglt; or multiple copiesoflliisJirlicle are uvuiliiNt: loru lee fromTk' Haworth [>»ctiriient Dflivcry St-rvice [ I-H(HI-HAWORTH.9:00a.m. - 5.(K) p.m. (EST), ti-mail aiidrtss: iU>tdeliver>(;"huworihpress.coni].

hiip://www.haworthpress.com/siorc/produei.asp?sku=JUi2© 2002 by The Haworlh Press, Inc. All rights reserved.

10.13(X)/J 162vO3n()3_06 59


have become more and more aware that i\ new international cooperationof (he Alpine tourism regions in the licld oldcstination managetnent andmarketing is required. This is necessary in order to read to marketchanges accordingly. This acknowledgment is instead ofsmall and moreor less independent and scll-sullicicnt organizations. It also includes thecollalxiration concerning iinc of the most impurtant resources of ourtimc-knowlcdgc-and the establishment of a network where it can beconsciously managed.

Tlic following pujicr shows the special qualities of networks, especiallyknowledge networks at the example of AlpNct. It consists of three pans.The Urst part deals with ihc change tif Alpine tourism management andmarketing, the second pan discusses ihc necessities and challenges oi across-border cooperation in tourism maiiceting with a special fcxrus on net-works and knowledge nclworks. and the third pan presents the results ofan empirical study explaining the prohlems and perspectives for develop-ing knowledge networks ol cross-border dcstinaliim management in (heAlpine region. As far as management and marketing o\' unirism destina-tions arc concemed, it is shown what possibiliiies-yct what limits-may rc-.sult ill launching cross-border coo]>cration projects in the future. Fordecades cross-border cooperation was used lor compensating existingcompetitive disadvantages on tourism markets. The example of the newproject AipNet shiiws how impoilanl cooperation and member-specificrcquircmcnts arc for tourism and other economic industiics when li comesto the establishment of knowledge networks. (Anicle copies availahle for afee from The Haworth Document Dcliveiy Senice: I-HOO HAWORTH. E-mailachlress: <docdelive}y<ii'hawoiihpress.coin> Wehsife: <http://www.HaworthPress.com> © 2002 hy The Haworth Pre.'i.s, Inc. Alt rights reserved.!

KEYWORDS. Alpine tourism, destination management and marketing,networks, knowledge management and networks, cross-border coopera-tion

THE CHANGE OF ALPINE TOURISM MANAGEMENTAND MARKETING

Providing a segment-spcciHc service bundle in a certain destinationcould become a difficult task. A gtcat number ot combined tourism ser-vice bundles would have lo be provided due to the inereasing individu-alizationof guest segments (see, e.g.. Gartner & Lime. 20(X)). as well as

Pechlaner. Ahfalter. ami Ruich 91

social circumstances in traditional tourism destinations. This meansthat centra! control would become impossible. Traditional destinationsof the Alpine area have continuously grown atid lead to a broad dis-persal of property. This development shows a coordiiialion problem thatmay not be solved by central authorities. Public goods and the decentral-ized innovation poterttial ol tourism entrepreneurs are further reasons lordiflicLiIties ofa central management and organization authority (Pechlatier &Tschurtschenthaler, 2002). Cooperative relationships can guarantee vitaltasks and functions of destination management through a high numberofservice carriers involved. They internalize positive external effects. Themore cooperation within a region, the higher the comi>etitiveness of theregion (Smeral, 1998). Numerous authors point out al the importance ofa centralized coordinating body for Ihe tourism of a destination (for anoverview see Bieger. 2002.69 pp.). Tourism organizations fulfill thoselasks and functions of tourism destinations that may be carried out in aeross-border and cooperative way. This includes the planning, strategyand development function (see, e.g., Inskeep, 1991,411), and the coor-dination function ofa tourism destination or region essential for provid-ing tourism activities and the marketing function.

General cooperation requirements have nol changed; their intensityhas changed. Detiiatid is decreasing for tourism services, particularly intradilional destinations of lhe Alpine region. Rigidity of organizationalstructures, itiereasing dependency of distribution partners, consumptionof entrepreneurial substance at small and medium-sized businesses, aswell as competitiveness ofthe whole sector in traditional tourism coun-tries are, together with the changes mentioned above, responsible forthe crisis of tourism organizations in Alpine destinations {Pechlaner &Satterwein. 20(!)2).

The most important limits of cooperative marketing and tnanage-meni of traditional destinations of the Alpine region may be summa-rized as follows (Pechlaner & Tschurtschenthaler, 2002):

• Insufficient investment in projects and innovation lead to a smallnumber of clearly defined coticepts;

• provider heterogeneity;• political abundance and minor use of resources in tourism organi-

zations make it impossible to clearly position destinations;• the benefit deficit of tourism organizations perceived by its metii-

bers leads to a high pressure lo react, this again results in an exten-sion of the lasks within a tourism organization, yel has only in

92 KNOWLEDGE MANAGEMENT IN HOSPIT.yUTY AND TOURISM

some cases really improved effectiveness and effieieticy of thetouristii organization;

• liltle optimized service chains result in unsatisfied guests as gapsbetween the single services of a destination sometimes have nega-tive impact on the quality assesstuent of tlie visiloi;

• product bundles need a high capability and willingness to cooper-ate, the high share of public financing (through direct investment,rates, and taxes) often requires a certain neutrality of touristii otga-nizations toward ils iiiemhers leading to expensive anatigements;

• according to tourism organizations, innovation is a public good, itis not their task to create innovative products, but to provide an in-novative climate;

• the fragtnetUation of tourism service ptoviders largely impedes theaccess to relevant tiiarkets. therefote market research studies car-ried out by the tourism organizations or commissioned to an insti-tute are mostly regarded as a public good; and

• from a holistic point of view, tourism organizations are moreinner-oriented than outer-oriented.

CROSS-BORDER COOPERAIION-THE ROLE OF KNOWLEDGE NETWORKS

Even though the Alpitie region tourism is confronted with a highnumber of changing paraineters atid a high paratiieter changing speedwithin the environment, these trends still exist (compare, e.g.. Gartner& Lime. 2000; Keller. 1996):

1. Deregulation tendencies of national economies;2. development in the field o\' information and communication tech-

nologies;3. internationalization and globalization of supply and demand pa-

rameters;4. network econotiiies accelerate the formation of cooperation net-

works of different industries (Laesser & Jaeger. 2(X)I). and5. clianged expectations and iiicreasitig disloyalty ofthe consumer.

These trends make it necessary to form cooperations in an economiccontext characterized by small- and medium-sized structures, such asthe Alpine region. These structures tnake it difficult for service provid-ers in the Alpine region to realize the eeotiotiiies of seope. Cooperations

Pechlaner. Abfatier. and Raich 93I

are a chance for small- and medium-sized organizaiions (o improve(heir own market position (together with cooperation partners), withoutlosing their independetice. Cooperations lead to positive effects, asproduct atttactiveness of cooperating companies may only be guaran-teed hy a network of relation exchanges. The integration of small- andmedium- sized companie.s among the local and regional networks isagain the basis for new networks on a transregional level. Increasingcost pressure, rationalization, and allocation difficulties are additionalreasons for reviewing a traditional organization policy focusing on per-sisting alone in predatory competition. The regional integration of eco-nomic areas (e.g., European Union) boosts efforts for internationalcooperation.

Networks: An Approach for Cross-Border Cooperation

Tn lhe framework of current trends in cooperation management, net-works are leading loward a new direction of the discussion. Networks(of companies) are polycentric systems. According to Sydow (1992,79) a business network is an organizational form of econotiiic activi-ties aiming at achieving competitive advantages. It is characterized bycomplex, reciprocal, rather cooperative than competitive, and rela-tively stable relationships between legally independent, yet economi-cally dependent companies. This interpretation unifies elements ofmarket, hierarchy, cooperation, and competitiveness. In doing so, thissettles the contlict between the dichotomy of market and hierarchy. Thedefinition of network used in the following paragraph is seen from aninter-organizational network perspective (Riggers. 1998). !t is not lini-itCLl to a single c<Mporation or network partner, but comprises networkpartners and their relationships to each other on a higher level.

Typically, networks show the following characteristics (Miles/Snow,1986,64):

• Vertical cUsaggregation: Various organizations within the networksystem take over tasks and functions of organizations defined asvalue creating activities along the value chain. For example, not ev-ery organization within a network fulfills all tasks, but concen-trates on those tasks and functions where it has a core competence.Other tasks and functions are left to other network partners or areout-sou reed.

• Broker: Network activities must be bundled by a broker in order tobe able to design market relationships.


" Market tnechanisttis: They are responsible for a competition-ori-ented nature of network relations. Within a network both cooper-ation and competition exist al a similar amount. Competitionwithin business networks is made possible due to redundancy,i.e., that sometimes the same activities are carried out by differ-ent network partners. This redundancy is responsible for security(despite dependency), flexibility (despite stability), competition(despite cooperation), and learning and innovation. Knowledgeand innovation can only emerge from competition among a net-work system.

• A'cir information and commttnication systems: They are respon-sible for improved communication between network membersand sometimes they are even prerequisites. Information and com-munication systems ease the building of confidence within net-works as bigger amounts o\' information are made accessible forall network members within a shorter period of time. Generally,confidence is the basis for the success of network systems (Parkhe,l99l;Niederkoner, 1991).

Stnitegic networks are a special form of networks. The term "strate-gic network" traces back to Jarillo (1988). Strategic networks are basedon long-term and stable relational patterns (Miles & Snow, 1995). Whilestrategic alliances usually concenttale on selected areas such as Re-search and Development and do not include a Joijil market appearance,strategic networks focus on a more efficient handling of operational co-operation with special respect to sales and marketing (Riggers. 1998).The strategy aspect is based on the joint goal of the network partners toenhance the competitive position of the network (HSkansson & Sharma,1996). In literature, strategic alliances are treated from different pointsof views. The main focus is put on the generiUion of capabilities andknowledge (Hamel, 1991), competition (Burgers et al., 1993), and theprocedural character of networks (Thomas & Trevino, 1993).

Essentiiil to this concept of strategic networks is that of hub Urm.which is the firm that sets up the network and takes a pro-active attitudein theciirc of it (.larillo. 1988. 32). Depending on the design of a strate-gic network, partners can be involved in strategy decisions. The net-work partners try to getierate a preferably large offer and guaranteeefficient processes through an individual concentration on singularcompetencies. In many cases this is associated with a mutual use of re-sources such as knowledge. The tnanagement of strategic networks putsits main focus on the relationship between network members. These re-

Pechlaner. Abfatier, and Raich 95I

lationships may be characterized as follows (Campbell & Wilsoti, 1996,139):

to inve.si: The willingness of network members, forexample, lo invest and increase the value of the whole network inorder to stretigthen their own position. Apart from ihe agreementsconcluded with the network, investment also concentrates on cre-ating joint values for a competition-oriented cooperalion withinthe network. The more a network partner is able to ereate these val-ues and. in doing so, granting siabilily to the neiwork, the more in-tense the position ofthe partner is within the system.

• Partner asymmetries: Strategic networks have a hierarchical elemenlstrengthening their competitiveness. These hierarchies are based oncontributiotis tnade by each network partner. The tnore a networkpartner contributes to enhance the value of the whole neiwork, themore important his position is within Ihe system. The position of apiirtner within a relationship btmdie may be put on a level with therole of the partner compared lo other partners with whom he is di-rectly or intiireclly linked. Partner asymmetries make hierarchies nec-essary in order to manage and/or control netwoik resources.

• Confiilence: This characteristic is a necessary resource in net-works and allows for decreases in negotiation costs arising amongcooperations. .\s long as network partners believe that they achieveadvantages thanks to their neiwork participation, they will supportthe joint goals and aims ot the network (Jarillo, 1993).

Cross-Border Knowledge NetH'orks of Tourism Destinations

Decisive for the success of an organization is knowledge relevant (ordecisions, as well as current and well-processed knowledge. This is theonly way to (brmulate strategies in time and to actively influence the tur-bulent environment (Nonaka & Takeuchi, 1995). This is the reason whyknowledge may not be lefl to chance, but must be managed. Knowledgemanagement goes into the question of what kind of knowledge activitiessuch as knowledge generation, knowledge use, or knowledge transferare inherent in organizations and should consciously be tnanaged (vonKtogli et al., 2{K)0). The process of knowledge generation is of particularimportance and may be compared with a spiral: The number of organiza-tions, petsons, and groups participating in the knowledge process and thaitheir mutual interaction lead lo an increase in knowledge (Nonaka &Takeuchi, 1995). Therefore, knowledge development must include as

y6 KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

many people concerned as possible-the more persons and organizationsare involved, the bigger the knowledge spiral (Malhotta, 2(XX)). This iscoherent with the finding that knowledge development in touiism re-gions depends on size (Bieger, 1998). Small tourism organizations maynot generate all the infortnation necessary and may not be able to pro-cess and interpret ail of the infoniialion gathered. Thetclbre, a smalllourism organization responsible for a limited area within the destina-tion is not able to deduce trends and tendencies from liinited informa-tion (Pechlatter & Tschuttsclienthaler, 2002). There is a risk that theytnay lag behind developments, provide less innovative products, or cre-ate a distorted view ofthe situation. Forms of coopetation must be found,weighed up, and realized in order to overcome such a phenomena andweaktiesses (Grant & Baden-Fuller. 20fX)).

For considering knowledge geneiation depending on size, for usingthe resource "knowledge" accordingly, destination organizations mustcreate a network and exchange their ktiowledge among each other. 1 hisleads to a non-distorted view and to the collection of piofbund informa-tion material that may then he processed. Moreover, networks make itpossible to provide comprcheitsive services for visitors (Hakansson &Ford. 2002). Cooperations are not only essential within a tourism des-tination, but also within other touristn destinations and their tourismorganizations (Augustyn & Knowles, 2000). Networks should not henaiTowed by seemingly rigid limits and regions determined by tourismpolicies, but should be cross-border systems. The visitor, due to increas-ing globalization, has a dif fetent perception of regions and is lookingfor spacious areas providing a wide range of experiences atid activities.The aim is to overcome parish*punip politics, to recognize the whole re-gion without distortions and to fulfill the needs and wishes ofthe tour-ist. Such cross-border knowledge networks enable intense ktiowledgegetieration in the following llelds.

LtHitl knowh'iliie di'veltypuwtu iti the fespective destinations: Eachdestination may and should identify and generate local knowledge thatmay later he put together, analyzed, and completed.

Cross-harder knowlediic dcveloptm-tit: For example. o\erall knowl-edge of the region of all destinations concerned. This kind of knowledgeis essetitial for the sustainable development of cross-border livingspaces and tourism regions like the Alps. Geticiating knowledge meansintense cooperation with other industries and heavy investment. Localand cross-border knowledge are interconnected, this means they inllu-ence each other.

Pechlaner. Ahfalter. and Raich 97

Mela kno\vU'd}ii': For example, knowing what you know or beingaware of knowledge allocation, strengths and weaknesses of local andregional knowledge pools, transparency of knowledge caniers, andawareness of interesting connections atuong different knowledge carri-ers. This kind of knowledge has strategic importance as it is the startingpoint for further knowledge activities.

Thanks to the inten-elation of local, cross-border, and meta knowl-edge a cross-border knowledge spiral comes up. integrating diversifiedand supplementary knowledge due to partners from fields other thantourism (non-tourism members). This results in knowledge influencingthe provision of activities, the overall network strategy, further destina-tion strategies, and, in doing so, destination knowledge again.

Altogether, a knowledge neiwork helps (Skyrme, 1999):

• To flexibly react to market requirements: Selective and cross-bor-der gathering of information and generation of knowledge givesinsights to developtiient tendencies and enables an innovative pro-vision of activities in time;

• to develop new core competencies: Knowledge is combined withother resources in order to be beneficial to Ihe client and to createcompetitive advantages;

• lo act despite limited resources without losing one's independence;• lo avoid undesirable trends: Brt>ader and deeper knowledge sup-

ports the assessment of market developments;• to achieve more customer satisfaction: Destinations know more

about their guests, their wishes, and their behavior patterns andmay therefore provide a comprehensive product; and

• to make use of synergies. i

Prerequisites for successful knowledge networks are forcing theprocess of knowledge generation and sharing as well as gaining confi-dence (Seufert et al., 1999). Each destination is integrated into variousfortnal and informal networks and must therefore manage a portfolioof alliances (Wilkinson & Young, 2002). Relationships established bya destination should contribute to knowledge atid resources which com-plete their knowledge and existing resources. Stteams of knowledgemust he thoroughly built up and cultivated. Again and again phenom-ena impeding an adequate and cross-border use of knowledge must beuncovered and removed. Values, thinking, and behavior patterns protiiot-ing knowledge have to be spread and supported. Seufert et al. (1999)talk about different stages of the life cycle of a knowledge network. De-


pending on the stage, certain tasks must be fulfilled and various priori-ties must be set.

CROSS-BORDER NETWORKS IN THE ALPINE REGIONON THE EXAMPLE OE ALPNET

The latest example of cross-border and iiilLMiiallonal cooperation inthe Alpine region is "AlpNet" (Alpine Economic Network), a networkcurrently consisting of 51 tourism organizations and industrial compa-nies (as at April 2(K)2) interested in newly positioning tbe Alps. Tbeiraim is to create a learning network as well as cross-border cooperationfor Alpine marketing by implementing an information and communica-tion platform, partly on the basis of lhe Internet (Fischer & Margreiter,1999). While AIpNet is a knowledge-based platform for its membersthat are currently concentrating on exchanging experiences on lhepublication of market research data and on projects as well as onguidelines for positioning the brand "Alps." a separate business unitcalled Alpine Products & Services will provide commercial servicessuch as marketing and distributing Alpine products in tbe future. Insummary, it may be said that the project described above is a knowl-edge network that is the basis for a marketing and distribution net-work. Depending on the stage ofthe knowledge network, certain lasksmust be fulfilled and different priorities must be set. Tbe AlpNet pro-ject is only in its founding and structuring stage characterized by thefollowing challenges: Search of appropriate partners, target agree-ment, establishment of streams of knowledge, achie\ing confidence,distribution of roles, definition of network regulation, and creation ofadequate structures. Figure I shows the current management and cor-poration structure of AlpNel.

AlpNet Member Survey 2001

ln summer 2(X)I, ICRET (International Center for Research and Educa-tion in Tourism) carried out a member suney of AlpNet at the Universityof Innsbruck (see Figure 2). ICRET is a network of scientists at differentuniversities and research institutions as well as some provincial market-ing organizations of the Alpine region aiming at applied and practicalresearch for tourism economy. The main target of the study was to as-sess benefit profiles for the members and to establish a profile of corecompeteticies for AlpNet. This is the reason why motives and needs are

Pechlaner. Abfalter. and Raich 99

FIGURE 1. Management and Corporate Structure of AlpNet (Fischer/Margreiter1999)

Shareholders

ALPNET Board

ALP NET adminiElraiive counal

Managementconirad

Operative ALP NET leadership

ALP NETManage'

Knowledgepool

ALPNETAlliances

ALP NETmarketing

ProductsPromotion

Advisory Board

Servwe Partnersana

Providers

tMembers Memteri Memtiers

decisive for participating in the AlpNet project. The competencies eon-tributed to the network, the signitlcance ofthe various fields of coopera-tion, and the desired strategic direction of AlpNet were the mainquestions. Finally, members were asked how satisfied they were and towhat extent their expectations were fulfilled in the first year.

Methodology

The member survey is based on a standardized written questionnairesent to ail 51 AlpNet members. Henee, the study carried out is a census.Altogether 36 questionnaires were retumed (70.59%). The evaluatedquestionnaires were spread across Austria {(y47c). Switzerland (229c), It-aly (8*^), and Germany {69c). The blocks of questions were codified in 4-or 5-point Likert scales. Mean values-if not indicated difterently-refer tothe arithmetic average of the characteristics of a 4-point Likert scale (1 =

100 KNOWLEDGE MANAGEMENT IN HOSPITALIT)' AND TOURISM

FIGtJRE 2. Implications for Further Development of AlpNet (AlpNet membersurvey 2001)

Cooperation. • 1 . 1

• Market research• Cfealing brarid "Alps"• Markeling• Product development

Network

• Knowledge transfer• Market data• "Alps-on-line"

• • • 1

Marketing

• Image campaign• Marketing• Positioning

Needs

• Database• Lobbying• Platform for joint market

entry• Network

not important at all: 4 = very important). The reliability ofthe questionblocks were confirmed by means of the Cronbach Alpha coefficient(values between a = 0.73 and 0.88).

A particularity of AlpNet is its heterogeneous metnber structureconsisting of both tourism service carriers (e.g., tourism organizationsand hotel cooperations) as well as other service carriers from fieldsother than tourism (e.g., industrial and service companies). The affin-ity of non-tourism organizations for local tourism was manifested inthe conviction of private products being important for holidays in theAlps (at 80^^) and in the wish to gain new customers as a result ofcooperations with tourism companies and organizations (at 70';^). Themajority of participants {129c) arc tourism organizations, mainly asso-ciations (527() and corporate bodies under public law (40%). Tourismorganizations are very heterogeneous themselves, as far as their num-ber of members is concerned-varying from 2 to 9,000 members-aswell as concerning their budget reaching from Euro 0.36 to Euto 43.6Mio. When it comes to the number of employees in tourism organiza-tions or to the number of overnight stays in the catchment area, figuresstrongly vary due to differences in organization size and structure. Theevaluation was ciirried out on the basis of all participants, but also sepa-rated by tourism and non-tourism organizations.

Pechlaner. Abfalter, and Raich iOl

Motives and Needs

The first part of the survey deals with the question of what (general)needs and motives were essential for becoming a member at the AlpNetproject. This question aimed at understanding people's motives, partic-ularly regarding future member admission and attracting the attentionof potential members.

Regarding general circumstances and developments, tourism orga-nizations saw the main reason for becoming an AlpNet member in in-sufficient image campaigns (mean value 3.35), the poor positioning ofthe Alpine tourism (3.04), and the stagnation of tourism growth in theAlpine regions (3.00). For non-tourism organizations, on the cotitrary,minor professionalism in marketing the Alpine tourism by tourism or-ganizations (3.70), insufficient product diversification, and the poor po-sitioning of the Alpine tourism (3.20 each) were responsible for becom-ing a member.

The most important motive tied to business activity was the generalexchange of experiences and knowledge with other AlpNet members(total mean value of 3.19). Moreover, tourism organizations considercooperations attractive, particularly with regard to a general strongerpresence on the tourism tiiarket (3.19). Non-tourism members rank thetargeted exchange of plans and instructions of other members high(3.40). While tourism members evaluated the basic willingness to coop-erate by other AlpNet members as rather modest (2.54), it is decisive fornon-tourism members (3.13). They additionally expect to get partnerstor special projects and for joint product development as well as for re-ceiving information on new target groups (3.20 each). The willingnessto invest is cleariy shown in these results. The focus is put on the ex-change of knowledge, but clear differences in purpose are show n due todifferences in the cliaracteristics of the members. These partner asym-metries require a tense hierarchic structure for the further enlargementof AlpNet.

Main needs that should be fulfilled by AlpNet are the establishmentofa database with access for AlpNet members, as well as lobbying inthe field of economy and politics (3.00 each). Tourism organizationsare especially interested in joint platforms for market entries in Europe(3.12). Non-tourism members, on the contrary, believe that the installa-tion of networks which facilitate mutual finding (3.11) and the planningof joint activities (3.(X)) is more interesting.

Altogether. 66.7'^ of the study participants prefer a strong joint mar-ket entry of ihe destination Alps to a functioning network. When taking


a closer look it is getting clear that mainly tourism tiiembers prefer a.strong miuket enlr>' (more than 80.07f), while non-totirism membei-s (60.0%)think that a functioning network is far more itnportant.

In summary, tourist oiganizations having joined the network seem toexpect support in their marketitig and positioning in otder to overcomeexisting weaknesses. Non-tourism members appear to he more interestedin enhancing their activities and learning. These diverging motives andexpectations for entering the AlpNel point at the necessity of providingidentifiable benefits forevery member in order to maintain the tietwork.

Competencies

The majority of the respondents believe that the competenciesthey tnay contribute to AlpNet are experiences in public relations forspecific target groups (3.06) and the planning and implementation ofevents (3.03). Sotne say that knowledge about the situation ofthe worldlouristn market is an essential competence (2.31). Tourism membersonly have a little experietice in cooperating wilh non-tourism partners(2.35), yet they are used to cooperating with tottristn partners (2.80) andwith matkct research in particular (3.8). Non-tourism members, on thecontrary, are characterized by their know-how in the field of targetgroups and their experience in marketing carried out for specific targetgroups (3.10 each).

Competencies considered essential for cooperation within the AlpNetare know-how on the general European tourism market and the experi-ence in marketing carried out for specific tatget groups (2.80 each), aswell as knowing the situation on the world tourism markets (2.77). Aninteresting difference between tourism and non-tourism members isthat tourism members indicate those fields for cooperation where theylack competencies, whereas non-tourism members want to bring theirfields of cotnpetence into the cooperation.

Eields of Cooperation

These questions concentrated on central fields of cooperation in mar-ket research, marketing, and product developmerU in the field of tour-ism. In general it can be said that all members show a high willingnessto invest, i.e., a high readiness to engage themselves in several networkactivities and cooperation fields.

Pechlaner. Abfalter, und Raich J03

Regarding tourism market research, tourism organizations think thatthe image of the Alps (mean value 3.42). the discovering of concrete mo-tives of a visitor spending his holidays in the Alps (3.38), and a soundknowledge of characteristics of currenl customer profiles in the Alps(3.23) to he important fields of cooperation. Non-tourism members, onthe contrary, think that explorations of potential weak spots of activities(3.50). the discovering of existing weak points regarding activities(3.50), as well us intense analysis of customer behavior patterns on (hespot (3.50) are important tlelds of cooperation for market research. Alsoill the framework of these potential fields of cooperation, the heteroge-neity of (he members is evident.

In the cooperation field of tourism marketing, tourism members be-lieve that it is vital to establish the brand "Alps" (3.54). and that jointfundraising for market activities is also of great significance. Non-tour-ism members evaluate this field of cooperation lower in general, butthey also rank the establishment of the brand "Alps" in the first place(2.70).

The analysis of tourism products in comparable destinations (total of2.94), followed by the analysis of tourism products in alternative desti-nations (competitive products) (total of 2.86) rank first and second as acooperation field for tourism product development. Initiating a workinggroup for gathering ideas is seen as an important field of cooperation bynon-tourism members (2.90). while tourism members rank it the leastimportant field of cooperation (2.58).

The desired general strategic direction of AlpNet is clear. On the firstplace, members indicate product development anti product innovationas the most important items for holidays in the Alps, followed by the es-tablishment of new European target groups. Developing new marketsand products outside of Europe are defined as less important. A strikingdifference may be seen in the processing of existing markets with exist-ing products regarded as less important by non-tourism members com-pared to tourism members.

Satisfaction with the AlpNet Project

The questionnaire pointed out tbat the AlpNet project is only in thestructuring stage. Nevertheless, participants were asked whether theyare satisfied with tlifferent fields in order to be better able to assess thecurrent mood. The majority of the respondents are highly satisfied withthe suggested AlpNet projects (3.32), as well as with the information on

104 KNOWLEDGE MANAGEMENT IN HOSPITAUTY AND TOURISM

further steps taken by AlpNet (Member News) (3.12). Members wereleast content wilh ihe intenelated flow of infonnation beiweeti ihe AlpNetmembers (2.35), as well as information on other AlpNet members(2.59). By comparing tourism and non-tourism members it can be statedthat non-tourism members are most satisfied with information providedon the extended steps taken by AlpNet (3.78), while tourism metnbersshow highest satisfaction at suggested AlpNel projects (3.28). Here, itbecomes obvious what items [)eed further work for achieving a func-tioning network and for guaranteeing member commitment atid con-tentment.

OUTLOOK

Ihc founding members of AlpNet are all from the tourism sector andare still those members with the highest willingness to invest. They rep-resent the majority of the AlpNet board, which fulfills the functions oithe hub firm in trying to move the network to the right strategic direc-tion to establish the lequired stability and climate of confidence. Thestrong partner asymmetries from the founding stage of AlpNet will soonbe regulated through a legal framework establishing a new hierarchicstructure ofthe board and clearly defined decision processes within thenetwoik. With regard to the member heterogeneity, it is clear that hier-archy is needed in order to make the whole network work.

During the first year of AlpNet, many network partners were admit-ted because they manifested their interest in participating. Confidenceand stability of a network ate not a matter of size, but depend on thenumber and quality of contacts and communication among partnersand on success. This can only be established over the years and is al-ready taken charge of in the founding stage. The next years will showwhether all partners will be able to guarantee stability and trust in thelong temi, if not there is also a possibility for the number of parttiers todecrease.

The AlpNet project is still is in its early stages. The member surveyshowed that the rtietnber heterogeneity-in particular regarding Ihe dif-ferent fields of competence-contains a big potential for the competi-tiveness of the (knowledge) network. But it also implies serious risksfor AlpNet, e.g., if diverging member interests [nay not be linked andused in a way that everyone benefits from special advantages and syner-gies and that the value of the whole network inay be increased. Particu-


larly among tourism companies, network thinking seems to be lessdeveloped compared to non-tourism companies. Hence, il will be of de-cisive strategic importance to maintain the general positive mood full ofexpectations, in order to .set specific action explicitly sbowing tbe indi-vidual benefits of eacb memher, to establisb a climate of confidence,and to enhance tbe exchange among members, as well as to increasetheir willingness to contribute their competencies into tbe network. Thiscould lie achieved by optimizing individual benefits of Ibe knowledgepool or by making ibem visible. Furtbermore, a focus should be put oninnovation services in tbe field of product and market development,marketing, as well as bigh quality standards. Tbis contribution showstbe importance of a gradual approach wben it comes to establisbing anetwork as the basis for an international product development and mar-keting platform. Analyzing needs, motives, competencies, and fields ofcooperation of current AlpNet members provides interesting facts onproblems and perspectives for tbe fulure of tbe network, as well as fortbe admission of new members.

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Towards Using Knowledge DiscoveryTechniques in Database Marketing

for the Tourism IndustryVincent ChoPaul Leung

SUMMARY. Given lhe trend ihal inlcmaiional corporations are utili?mg

various inlormaiion systems lor their daily activities, infbrmalion on sales

transactions together with corresponding customer profile is usually avail-

able in airlines and intemational hotel chains. This allows segments of

customers lo be drawn according to selected relevant demographic vari-

Viiieont Cho is Assisuint Professor. Hong Kong Polytechnic University, Depart-nicnl of Management (E-mail; msvcho^ ptilyu.edu.hk). His main areas of inleresi andresearch inLludc Data and Knowledije Management, Datahase Markehng. ArlilkialInlelligcnce. Ergonomics. Information Syslenis Managemenl. Fitreeasiing and Sched-uling. He has been recendy involved in sloek marketing prediclioii. It was done bydownloading electronic news from various well-known financial weh sources. Thedownloaded lexiual data were then used to generate probabilistic rules for stoek fore-cast ing.

Paul LcLinc is Assistant Professor. Hong Kong Polyteehnic University, Deparlnientof Hold and Tourism Managemenl (E-mail: hmpleung(s'polyu.edu.hk). His rcconi re-search interest is in the lourism development in Less Developed Countries and heri-tages tourism management and marketing, especially related lo eountries such as Cam-bodia and Egypt.

This research has heen funded by (Granl G-YD49) The Hong Kong PolyieehnieUniversity. HKSAR. China.

-iiiUvxiiig entry note]: 'Towards Using Knowledge Discovery Tectinitlues in Databa^jc Mar-kctiiii- lor lhe Tourism IiiduMr>'," Cho. Vrnfcni. and Paul Leung. Co-puhlished simuliane*iusl> in Joimuil ofijiiiititv AsMiituiif in tlospiiaHl\ & Toiirimi (The Haworlh tfospilalily Prcsv. an iniprini of The ftawurlhPress, hic 1 Vol.^. Nil .1/4. 2(NI2.pp. \W-l^t:ami: Knouliitin'AtiiminenunthiHii.y>iitiiit\umlTouri.Mn (ed:HiCiirda B Bnuiitkon iinil Suiigstxi PyoiThe Haworili llospiluliiy Pre.ss. an iniprini oTTlie Hawonli Press.Ilk-.. 2IK):. pp, KW- Li 1. Siii^lf or riiiili jpk- copies oflhi;. iirlicle are uvailahlc fur a fee from The Haworih [>>c-mill-Ill tX^livery Service (l-80n-HAWORTH. 9:(Hl a.m. - 5:(Kl p.m. lEST) E-mail aililress:

http://www.haworlhpress.eon\/slore/pro<Juct.asp?sku=J 162© 2002 by The Haworlh Press, Inc. All rights reserved.

IO.13OO/J162vO3nO3 07 ' 109

no KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

ables. This is referred to as Datiibase Marketing, a new trend in miirkct-ing tbat makes use (if inldrnmtion iivaihihle in a company's datiihasc.The extracted inlormation is also useful in planning marketing strate-gies, launching tiew produets/services and defining market segtnenta-lion.

As databases in large corporations nowadays are getting large,sparser, more free-formal ted and more dynamic, traditional statisticaltechniques may not be capable of extracting the encapsulated knowledgeinside the databases. A new technical stream, data mining has been de-veloped in Computer Science to deal with the complex taskofexiraciingand managing any potential knowledge embedded inside databases. Tliispaper introduces thecomtiion technicjues in dutu tnining. including deci-sion irce classifiers, regression analysis, induction programtning logic,and probabilistic titles. Suggestions are offered about how ihese tech-niques can be used in order to improve tbe engineering behind DatabaseMaiketitig, which can help to promote niche markets in lourism. By uti-lizing its know-how in Database Marketing, a company can sharpen itscompetitiveness and build entry barriers Ibr others. jArticle copies avail-ahle for a fee from The Haworth Dccumenr Delivery Senice: I-SOO-HAWORTH. E-mail address: <di>([email protected].\.coni> Web.\ite: <littp://www.HaworthPress.cotti> © 2002 by the Hawonh Press. Inc. All rights re-served.}

KEYWORDS. Database Marketing, data mining, tourism

INTRODUCTION

The touristii ititlustry, wbich iticludcs the ttansportution, accotnmo-dation, cateritig, etitertaitiment and tetailing sectors, has grown signift-canlly in recctit decades, driven by tbe gtovvth in (he economy arottndthe world. Tourism and the ecotiomy live iti symbiosis and should he awiti-win situalion in wbich they betietit from one another. Nowadays,customers arc getting mote experienced, mote sophisticated, are betterinformed and ate thus tnore detiianding. The ever-incteasing detiiandfor better customer serviee, the advatieetnent in infortiiation technol-ogy, the expansion of tiew tourist destinations, and new fortiis of ttavelsuch as eco-touristn and cultutal touristii. have changed the marketlandscape. For instance, new tour packages to Arctic or Antatctic desti-tiations are increasing in supply to provide more variety for travellers.

Vincent Cho and Paul Leung III

Tbis new trend will bave itiipacts, both good and bad, on tbe economics,social values atul culture, and infra.siritcture developtiicnt in tbe highlatitude regions such as New Zealand atid Northern Eutope. Tbis surelytneans jobs and business opportunities. Tbe growth rate, however, i.s farfrotn satisfactory. One of tbe reasotis for tbe low growth is tbat protno-tional materials are not targeted at the appropriate segment, so market-ing efforts are sitiiply wasted. This paper suggests a new technique forDatabase Marketing (DBM) to rectify tbe situation.

1Importance of Database Marketing

As suggested by Plog (1991), the simple rule of tbe game is to "knowyour tnarket very well." The rationale is ctystal clear and beyond aigu-ment. And perhaps it is just so simple atid so beyond question that tiiar-keling tnanagers have been caught unawares. Their pride in themselvesand their establisbment tiiay bave tnade thetii believe tbat tbey offeredtbe best option for their client, and thatdon't need to look into the needsand wants profile of tbeir customers. A database system, thus, can rectifythe situation by. first of all, ptoviding infomiation about the custorners,and secotidly by instillitig tbe itiipottatit attitude tbat the business unitsbave to update tbeir understanding about their targets.

In addition, the market is ever-changing. Customer bebavior, the mar-ket latidscape, people's preferences, and fads are all changing continu-ously. And tbe pace is so fast that any perception tbat business matiagersbold ahout their target tnarket(s) can become obsolete in tbe twinkling ofan eye. A consolidated database atid an effective data niinitig systetii,therefore, can be helpful in tracking tbis evolution.

Curtently companies ate utilizing tbe infonnation system for theirdaily activities; information on sales transactions and custotncr profilesis usually available in large corporations sucb as airline, hotel chain orlarge tour operator. This is especially true when some large tour opera-tor allows its travel agents to tiiake transactions directly thtough its dis-tributed tietwork and the transactions are stored up in the centralizeddatabase owned by the large tour operator. These databases can servethe business by dectcasing service titiie, minitnizing wastage, iticreas-ing efficieticy and saving money on tbe operational aspect. They also al-low tiiarketitig managers to draw custotner infortnation according towhatever vatiable they cboose. After atialyzing the tnost suitable atidpotentially profitable customer profile for a particular tourism product,such as arctic adventure, the tnarketercan pull out ofthe database a listof customers/prospects witb tbe required characteristics. Promotional


material can then be targeted specifically to the needs of the identifiedgroup of custotners. As a result, marketing eo.sts can he redueed whilerespon.se rates ean be improved. Moreover, the customer responses eanhe recorded and be taken into aceount in fttttne campaigns. A good da-lahase would thus increase the success rate by allowing service provid-ers to render the service directly and quickly to customers, without theneed of costly intermediaries.

Definition of Datahase Marketing

The emergence of the concept of Database Marketing has become in-creasingly important in service industries especially in niche marketssuch as expeditions to the poles. Stan Rapp (1989) defines Database Mar-keting as "the ability of a company to use the vast potential of today'scomputer and teiecotiimunications technology to drive customer-oti-ented programmes in a personalized, articulated and cost-effective man-ner." Fletcher atid Wright (1990). on the other hand, defines DatabaseMarketing from a more ptactical perspective as the mechanism thatstores responses atid adds other customer information, such as lifestyles,transaction history, etc.. on an electronic database memory and uses it asa basis for long term customer loyidty programmes, facilitates contactand enables marketing planning.

As contended by Verhoef et al. (2002). Custotner Rekitionship Mar-ketitig (CRM) is gaining its importance in modetn business arena andDatabase Marketing embedded with data mining is to provide essentialinformation for facilitating marketing decisions and CRM. DatabaseMarketing assists management hy grouping customeis into clusters,which are homogeneous internally and heterogeneous mutually, so thatmarketing managetnent can plan integrated eomnnmication strategies,design product ofterings, detemiine pt icing and utilize distribution net-working aecotdingly.

According to Batra et al. (1995), Database Marketing serves the fol-lowing logistic effects. First, it enables marketers to know more aboutthe market and the various types of customets and their stages of readi-ness. Second, Database Marketing enables tiiarketers to reach the rightcustomer at the right time with the right offering. Third, Database Mar-keting is a growing mechitnisni that allows itself to grow and mature viaits routine operations, and thus to develop into a even more poweifulmanagerial tool. Fourth, enterprises can join together to share a com-mon pool ofdata. Last but not least, the database mechanism serves cus-tomers by facilitating their decision with infortnation.

Vincent Cho and Paul Leung IIS

IVerhoef et al. (2()O2) argued that as a form of ditect marketing. Data-

base Marketittg should subscribe the basic priticiples for direct tnarket-ing. viz., predictability through understanding of customer behavior,concentration thtough tnarket segtnetitation, persotuilization throughcustotiiization and itnniediacy through timely tesponse.

Marketing Database ,

Marketitig database, which contains information about customersand markets, is one of the main assets of any marketing operation. Theinformation on a niarkeiitig database has to cotne from somewhere. Da-tabase marketing is "learning by doing" (Shaw and Stotie, 1988)-it pro-vides most of the tnarketing inlortnation for a marketer. Each databasetnarketing ttansaction/etiquiry uses infortnation. but it also getieratesnew information. This is because database marketing campaigns ask forresponses; atid each tesponse contains information. In this way. data-base marketing builds up a store of information about itidividual cus-tomers. The infonnation must be tnanaged in the most effective way. Acotnputer systetn is crucial for organizing the infonnation and tnaking itavailable. According to Shaw and Stotie (1988). there are two main ob-jectives of computerizing the data. Firstly, to provide latge volumes ofsegmented buyer and prospect data to help us develop ptofitable reve-ntte streatns through a data-driven dialogue wilh the target audience.Secondly, to enable the marketing tnanager to analyze and segtnent thetarget audience in order to determine sttategy. The niiuketitig informa-tion system requires mainly summary, aggregated or satnple daia, nolindividual customer daia. The database marketer, ott the other hand, needsinfonnation on the activity and characteristics of individual buyers andprospects.

If a database is to contribute fitlly to marketing operatiotis then, accotd-ing to Shaw and Stone (1988), it should have .the following characteristics:

1. Each actual or potential customer is identified as an individual re-cord on the tnarketing database.

2. Each customer's record contains nol only identification and ac-ce.ss information but also a ratige of marketing infotniation.

3. The infortnation is available lo the company during the process ofeach tratisaction wilh the custotiKT, to enable it to decide how torespond to the customer's tieeds.

4. The database is used to record responses of customers to companyinitiatives.

I]4 KNOWLEDGE MANAGEMENTIN HOSPITALITY AND TOURISM

5. The information is also available to marketing policy makers toenable them to make decisions about the product and marketingmix most suitable for each target market identified.

6. In large travel operators, selling many products to each customer,the database is used to enstire that the approach to the customer isco-ordinated and a consistent approach developed.

7. The infotniation built up, over time, on the database will gradu-ally reduce the need for tnarket reseaich. Marketing campaignsare derived sueh that the response of customers to the campaignprovides the information that the company is looking for.

8. Marketing management automation is developed to handle thevast volume of information generated by Database Marketing. Al-though no tourism-related corporation has yet achieved thi.s levelof sophistication, many are adopting it as their goal.

Furthermore, an effective database management system is not lim-ited to its logistic operation of building up a database but to enhancemanagement effectiveness and efficiency. That means it is part ofthemanagement/marketing information system. In general, a fully inte-grated database marketing system, as shown in Figure 1, consists offour components, namely (I) marketing database, (2) financial and op-erational systems, (3) marketing and sales systems, and (4) companyplanning. Marketing database stores customer-related records and in-formation. The financial and operational systems include order entry,billing, and inventory control. The marketing sales systems relate tocampaign planning, sales forecasting, sales support, direct mail, andsales force management. Lastly, company planning formulates the stra-tegic planning, product planning and research and development.

Although technology is a powerful element in this system, it shouldnot dictate the system. After all. it is nol the technology but its abilitiesto provide the necessary information that matters. Information manage-ment, however, is beyond the scope of this paper. The following discus-sion will still focus on the construction of Database Marketing and thecorresponding data mining technique.

Sources of Data

A database marketing system nonnally uses most of the customer in-formation available within a company, but organizes it differently fromthe operations databases from which much of this customer information

Vincent Cho and Paul Leung

FIGURE 1. Fully Integrated Database Marketing

115

Marketing andSales Systems

JBMarketingDatabase

Financial andOperalional Systems

^/////////////

is likely to be drawn. There are two types ofdata .sources, internal andexternal. Internal data sources include order records, service reports,complaints, application fomis, market research, etc. External data is got-ten from outside the company, including compiled lists and classifica-tory data such as census data. Extemal lists are often classifted into mailresponsive and compiled. Mail tesponsive lists consist of anyone whoases the post for transactions which could be carried out in sotne otherway. Compiled lists are those cotntnitted to cover particular kinds ofpeople. Lists ean be sotirced from lisi brokers who often act as agentsfor list owners. They also cim be sourced from directories and by re-search.

The quality of the data drawn from a database depends mainly on howup-to-date the source data are; und whether they contain the detail neededto access the right individuals. Databases get out-of-date quickly. Peoplechange addresses and jobs. Companies move, new cotiipanies are set-upand companies go out of existence. EiTors in fulfillment records occur,through commission and omission. This is why audits must be under-taken. The quality of the data is measured by results of the last audit car-ried out on them. It should be possible to carry out some quality checksvia testine.

y K) KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

Current Applications of Database Marketing

Database Marketing, an increasingly itnportant area in customer be-havior analysis, is being adopted by many inieniational corporations,such as American Airlines. American Express. Titiie Life, Austiti Rover,British Telecom. Bank o\' Atnerica, Derbyshite Buiiditig Society. Auto-mobile Association, De Vere Hotels, etc. (Fletcher et al., 1991; Rapp andCollins. 1987; Taylor and Oake, 1991). In Hong Kong, the Hong KotigTelecotn provides point-to-poitit on-line service toevery household start-ing ftotn late 1997. Tiitough a tele\ isioti at liotne, cusiomets can access arange of self-selected entertaintnent programmes, on-line shipping andbanking facilities. The company plans to make use ofthe database byrecotding the activities of individual custotners for marketitig. Simi-larly, Itiiet tiet service providers in Hong Kong also keep track ofthe ac-liviiies of iheir customers atid are moving towards this new trend onDatabase Marketing.

Obstacles and Harriers to Implementation of DBM

According to Fletcher et al. (1990), and Slone and Shaw (1987;1988). Dalabase Marketing can be used to develop tiew and uniqueproducts or services, change the basis of cotnpetition, build barriers toentry by cotnpetitors, atid strengthen cuslotner telationships. The im-pletnentalion of database tnarketing systems has become a pt iority intnany industries. However, success is not guaranteed. Fletcher et al.(1991) conducted a study which revealed the major obstacles to the iin-pletnentation of DBM. Their satnple consisted of the largest 180 lifeatid general insurance companies (by gross ptemiutn income), the larg-est 44 buiiditig societies (by total assets) and the latgesl 28 banks (by tietinterest income and other operating iticotne) in UK. The results, asshown in Figure 2. revealed that the high cosl of developtnent, the highfragmetited systems and lhe data quality ate the lop thtee tnost ptotni-netu barriers with mean scores of 4.99, 4.92 and 4.82 on a 7-pointLikert-type scale ranging frotn most itnportatit barrier (poinl 7) to leastiniporlattt barrier (point 1) tespectively. Although lhe study is tiot aboutthe touristn industry, thete are at least two comnionaiiues between fi-nancial tnarket atid louristn tnarket DBM: their complexity and the largeamount of itiformation to process.

Vincent Cho ami Paul Leung

FIGURE 2. Barriers to Implementing DBM

117

Poot te t ^kx« between martteling and IT

Agency relalions

Lack of board levet backrng

Fragmented sales and markeling organization

Lack of direct marketing spedalisis

Lack of company-wide m3rkelir>g orientalion

No clear DBM strategy

Account-based customer records

Data quality

Hign fragmented systems

High cost ol development

Average Value

A New Approach for Database Marketing

Verhoef et al. (2002), however, argued that most ofthe recent workon Database Marketing tociises on data mining. Data mining, which be-gan in the 1990s, is generally defined in Cho (1998), Smyth et al.(1996), and Wiithrich (1995) as "the nontrivial extraction of implicit,previously unknown, and potentially useful information from data. Thisimplicit information which we call knowledge is hidden in the data-bases and is usually in the form of relationships among data items. Theserelationships may be in the form of functional, or partial functional de-ix'iulencies. Their discovery analysis and characterization may involvethe use of various techniques." This new technology is particularlyhelpful to Database Marketing as there should be some unknown, usu-ally non-linear, patterns in data that cannot be easily found by conven-tional statistical methods.

Data mining differs from machine learning, as the nature of datatends to be dynamic, incomplete, redundant, noisy, sparse and verylarge (Chen etal., 1996). Some commonly-used techniques in data min-ing include decision trees, regression analysis, inductive logic rules andneural nets. However, each technique has its own strength and weak-


ness, making it applicable in only certain problem domiiins (Wiilhrich.1995). Furibermore, there is a growing need for data mining tools to en-ter for probabilistie and lemporat data, as real-world problems are usu-ally fuzzy (not strictly black and while) and closely related to time(Wmbricli, 1995).

DATA MINING TECHNIQUES

In order to provide a fundamental overview, a hypotbetical databaseis illustrated to assist our elaboration of tho.se data mining techniques(see Figure 3). Tbe corresponding data can be collected through somesurvey on travellers or sales transactions of liight tickets.

This paper outlines major principles of some major classificationteehniques sueh as decision tree, statistical analysis, nearest neighborlearning, inductive logic programming, probabilistic rules ami neuralnetwork. Their strengths, limitations, applications, and references aresummarized in Table 1.

Nearest Neighbor

One way to classify a case is to recall a similar case whose class isknown and to predict that the new case will have the same class. This isthe philosophy underlying nearest neighbor systems which classify un-seen cases by referring to similar and remembered cases. It is an exam-ple of the lazy learning paradigm. Although many variants of nearestneighbor learning algorithms exist, these algorithms, generally speak-ing, store all (or selected) training examples, and utilize a similarity (ordistance) function to measure the similarity (or distance) of a testing ex-

FIGURE 3. Hypothetical Database

Age

Income

Sportive

Education Level

Marital Status

Classilicaiion Requent Traveller

Vincent Cho and Paul Leung

TABLE 1. Strength and Limitations of Data Mining Techniques

H9

Data Mininc] Technique

Nearest Neighbour (Adaetal.. 1991: Oasaraihy,1991)

Decision Trees andInductive LogicProgramming (Bfetman eta(., 1984; Kass, 1980;Ouinlan. 1987a: Quintan.1993)

Statistical Discriminalof(Hunt, 1975; Shepherd etal.. 1988)

Neural Networks(Aieksander and Morion,1990: Beale and Jac*son,1990: Wasserman, 1989)

Probabilistic Rules(Wuthridi. 1993; 1995;1997)

Strengths

Easy implementation.FasI Iraining,

Relatively easy loinierpret.

Model building ts veryfast.Almost optimal for linearmodel.

Lmle assumptKMi (ormodelling. EHective inleaming cases thatcorilain noisy, incompleteor coniradictory data.

Comprehensible,

Limitations

Hard to inlerpret (ornon-ordinal altnbutes.May be influenced byunimpofianl attributes.

Weak in handlingcontinuous attributes.Dilficiitl lo handle missingdata

Nol suitable to modelnon-linear relationships.

Lack explanationcapabilities. Trainingprocess is slow.

Training time isexponential to the numberof luies to be qeneialed.

Applications

Spatial analysis o(occupation (loors(Whalbn. 1974). Clusteringof loufisl attractions(Vasiliadis arKJ Kobotis.1999).

Paltenl image pre-fetchtng(Weielal.,2001).Holiday choice behavior(Bargeman el al,. 1999).

Biological application(Sheiperd el al., 1988).Hotel cuslomers behaviot(Morrison el al.. 2000)

Engineering application(Cofcoran and Lowery,1995). Assessment otbusiness panners (Lau eta l . 2001). Predictingmarket responses (vanWezel and Baeis, 1995).Travel MarketSegmentation (Mazanec,1993).

Web-mining (Cho. 1998).

ample with lhe stored training examples when predicting the class ofthetesting exatnple. That is, they do not induce a coticept description dur-ing the training process, as there is no training process. Instead, theypredict the testing period by relying on lhe trainitig exatnples. A popularexample is /.-nearest neighbor (/;-NN) algorithm (Dasarathy, 1991). Itdetemiines the classification of a testing exatnple by selecting a set of A:closest traitiing exatnples-nortnally the tnajority class ofthe k selectedIraining examples. The distance function of nearest tieighbor (NN) al-gorithms may take the following form:

(1)

where x is the testing exatnple, .v' is the training example, and x, and x)are the tionnalized values of the /th attribute.


For example, .v, may represent the normalized values of essentialcharacteristics of travellers, such as marital status, age, income andlevel of education. The distance definition can be used to estimate thecluster center of a set of objects. Using the entropy concept, several pre-viously unknown classes in classifying travellers can he identified.

Decision Tree

A decision tree classifies objects hierarchically. It may be either aleaf identified by a class name, or a structure of the form:

C,,D.,

where the C, s are mutually exclusive and exhaustive logical conditionsand the D,s are themselves decision trees as shown in Figure 4.

FIGURE 4. Decision Tree

D ; D,'

Vincent Cho and Paul Leung 12!

The set of conditions involves only one of the attributes, eaeh condi-tion being;

A < T or A > T

for a continuous attribute A, where T is a threshold, or:

A = VorA m fVJ

for a discrete attribute A, where Vh one of its possible values and (VJ isa subset of them. Such a decision tree is used to classify a ease as fol-lows, lithe tree is a leaf, we simply determine the ease's class to be theone nominated by ihe leaf. If the tree is u structure, we find the singlecondition C, that holds for this ea.se and continue with the associated de-cision tree.

The following is a decision tree generated from a database in a travelagent (see Figure 5). The attributes, travel frequency and age, are thetwo most relevant attributes that would be extracted from numerous at-tributes existing in the database for the purpose of characterizing the po-

FIGURE 5. Decision Tree on the Potential of a Traveller Joining a Tour to thePoles

Potenial


tential of a person joining a package tour to the poles. Here a person isclassified as either potential or not potential.

Statistical Discriminator

Statistics has given rise to a multitude of classification methods,many of which are presented concisely in Hunt (1975). As a generalaile, however, statistical techniques tend to locus on tasks in which allthe attributes have continuous or numeric values. Many of the tech-niques are parametric that assume a particular model and then find ap-propriate values for the model's parameters from the data. For instance,a linear classifier assumes that a class can be expressed as a hnear com-bination of the attribute values. Based on that assumption, it finds theparticular linear combination that gives the best fit over Ihe trainingcases. Maximum likelihood classifiers often assume that attribute val-ues are normally distributed and use the training data to determine thedistribution means, variances, and co-variances (Shepherd et al., 1988).The most popular technique is regression analysis, especially linear re-gression analysis.

Suppose a discriminant function is generated as follows:

travel_freqitencyiX) = 0.05 ageiX) -Ir0.0001 income{X) (2)

and the threshold to determine a frequent traveller is 2.8 inumber oftravel per annum). Now suppose Mary is a 24 year old girl with annualincome of ten thousand. According to equation (2), the predicted travelfrequency of Mary is 0.05 x 24 + 0.0001 x 10,0{M) = 2.2; thus she will beclassified as an infrequent traveller.

Indnctive Ixtgic Programming

Inductive Logic Programming is a technique that induces logical re-lationships based on lact data and background knowledge. All the factdata, background knowledge and induced concepts are represented byrestricted program clauses. A programme clause has the following form:

P(X, K)*^^, K. (3)

where/L,,/= 1.2 /»,thebody of a clause, is a conjunction of positiveliterals (/,(y/,..., V ) and/or negative literals m>/(/,(>'/ K ) such that

Vincent Cho and Paul Leung 123

cjiJ= ! , 2 ,m, is the name ofthe/ th literal and Yj,j- 1,2 A', is itsyth argument./jis the name of the goal predicate and X, , /= 1,2 /i, isits /th argument.

This representation allows learning to be considered as logic pro-gram synthesis (De Raedt et al., 1993; Quinlan, 1990). For illustration,given the demographic data from a customer database, they are as fol-lows:

younf>{peter), yottng(sieven), y(mtiii(vt'twenr), yoi4ng(mary),,..

high^itu'omeimary), lugh_iticome{ vincent)

sportivei peter), sporii\e( viticent),...

frequent _traveller{vincenl).,....

They indicate whether a person is young, rieh, sporty, or a frequenttraveller. Based on the above facts, with the Inductive Logic Pro-gramming, kntiwledge sueh n^freqiietiijtmrllerfX} <- hiiihJncomeiX)ami frequent jravelletiX) <- sportive(X) would be induced automati-cally. This means that a person would be a frequent traveller if he or sheis hii^hjucome or sportive. These rules represent the dependence be-tween the fourattrihutes//Y'i:/HCH/_//Y/iv//f'r, hi^lijtuottte. sportive, andyoim\> in a customer database. The definition oi young, hi^hjmotue,sportive or frequentjraveller may affect the induced result and the cor-responding interpretation. This simplified example is only for illustra-tion purposes. The actual application of Indtictive Logic Programmingis more complicated.

Neural Network i

Neural networks (Aleksander and Morton, 1990; Beale and Jack-son, 1990) are computing devices inspired by the function of nerveeells in the brain. They are composed of many parallel, interconnectedcomputing units. Each of these performs a few simple operations andcommunicates results to its neighboring units. In contrast to conven-tional eomputer programs where step-by-step instructions are providedto perform a particular task, neural networks can learn to perform tasksby a process of training on many ditTerent examples.


Typically, the nodes of a neural network are organized into layerswith each node in one layer having a connection to each node in the nextlayer as shown in Figure 6. Associated with each connection is a weightand each node has an activation value. During pattern recognition, eachnode operates as a simple threshold device. A node sums all the weightedinputs (multiplying the connection weight by the stale ofthe previouslayer node) and then applies a (typically non-linear) activation functionas shown in Figure 7.

It is the values of the weights and the topology that determine thetypes of patterns a neural network can recognize. Figure 8 shows a neu-ral network example model of predicting travel frequency of travellersbased on their age, income and sportiveness.

Probabilistic Rule

Probabilistie rule (Wuthrich, 1996) is an extension of first-order rulewith the ability to handle uncertain or weighted facts. It is developed onthe natural class of disjunctive probabilistic concepts and satisfies thelaws of axiomatic probability theory. Probabilistic rule (Wuthrich. 1995)assumes a set of facts, each associated with a sirengtli/probability in tbeclosed real interval between zero and one. The domain knowledge andthe induced knowledge are in the form of rules with certain strengths orprobabilities. This technique ean be further modified to handle the cate-gorical data (Clio and Wuthrich, 1996). and has been proved to be quitesuccessful in this aspect. The following example gives a basic outline ofthis technique.

Assume that Peter and Mary are friends. The strength of their friendshipis 0.88. The conesponding sportiveness can be scaled as O.S and 0.7 re-

FIGURE 6. Neural Network

Input HicWen Layers Output

Vim ent Cho and Paul Leung

FIGURE 7. Neuron Mechanism

125

p.p.

p.

p..

• • •

yb

FIGURE 8. Neural Network Example Model

HiddenLayer

speetively. Ttiese facts can be coded to be {friemlship(Peter.Mary) = O.SH,sportivene.ss(Peter) = 0.8. sportiveuessiMary) = 0.7}, assuming thatthe following ailes. with a nunilier attached indicating the corresjxindingstrength, are induced from the Probabilistic Datalog Technique.

freqiumt_travelk'r{.\) <— friemi.sltiiy{.x. v), frequent_traveller{y) .0.65 (4)

frequent_traveller{.x) <—sportiveness(-x) :0.42 (5)

The Icvm frequent_trtt\'cller(X) will indicate the strength of a personto be a frequent traveller. According to the rules (4) and (5), the

126 KNOWLEDGE MANAGEMENT IN HOSPITALITY .AND TOURISM

Strength of freqiientjravellerfPeter) is 0.8 x 0.42 = 0.336 and thestrength offrequent_tra\eUer{Mary) is 0.7 x 0.42 + {0.8 x 0.42j x O.^«X 0,65 - (0.7 X a42) X (0,8 x a^2 x 0.88 x ^ 6 5 ; = O.- .

POSSIBLE APPUCA TIONS OE DA TABASE MARKETINGIN TOURISM INDUSTRY

Tourism is a huge but young industry. The customer base is big andtheir behaviors are rapidly revolving. This ever-changing nature of themarket presented the greatest challenge to marketers of touristic prod-ucts and that is to access the desire and demand changes. Consolidateddatabase provides a mean to the problem. The archive of behavioralpattern in terms of choices and consumption decision stores resourcesthat can monitor and predict market changes. Currently, however, cus-tomer databases in large tourism related corporations are usuallylarge, incomprehensible and spare, and a lot of unknown patternsabout customers are simply ignored. It can be seen that ail techniquesused in data mining would be applicable to Database Marketing. Anappropriate delinition of distance in measuring customer characteris-tics and the class identification techniqtie could be applied to identifyingunknown clusters. These discovered clusters might represent certaininteresting classes representing different segments in the market. Forexample, the enquiry for information regarding new destination mightpresent new market opportunities. The past purchases decisions couldbe useful input for clustering different groups of travellers into seg-ments for more effective market communications. Travel agents andorganizations, therefore, can be more target oriented and effective incultivating businesses for niche markets, such as tours to the poles,high latitude or altitude regions.

Moreover, the details of individual clusters can be studied using thedata mining techniques such as regression analysis, decision tree, proba-bilistic rules, or neural network. Once the relevant attributes for eachcluster are located, new marketing strategies can be planned to enhancea company's competitive edge. Forexatnpie, if potential correlation be-tween information search mode and destination choices can be identi-fied, a more effective communication program can be in place.

Database marketing embedded with data mining techniques i.s of crit-ical value to the tourism industry owing to its fragmented nature, thewidely dispersed customers, the heterogeneous behaviors of tourists.

Vincent Cho and Paul Leung 127

the rapidly changing market landscape and the cotnptex contextual en-virontnent of lhe industry. In other wotds, daia mining enables tnanag-ers to know what is unknown atid unable to investigate in the past.

Any importance performance indicator such as profit margin, salesvolutne or stock price can be analyzed using probabilistic rules or re-gression analysis. The findings cati ptovide a greater understanding ofrelevant factors affecting these key performance indicators, and willcertainly help managetnent in their decision-making about marketingissues such as sales force control, forecasting/monitoring sales and costsavings.

Furthermore, a database tnarketing strategy to be effective requiresinputs of itifonnation. An effective database logistic enables critical in-fonnation to be disseminated to the users at the right time, in lhe rightfortnat and with the least troubles. A database, ht)wever, cannot servethe putpose. Ati effective system, which requires a holistic approach toinfortnation tnanagemenl, is critical. It could be a nuisance to the man-agetnent in the process of development but it is a critical step towardsmore effective tnanagement. The exercise, therefore, can be regarded asa means to upgtade the tnanagerial tnentality ofthe company and to for-tnalize the infonniuion logistic fratnework.

Data tnining also initiates more creative and powerful use of dataand information. The use of integrated information system/database isgaining its popularity. This huge database, however, has not been fullyfunctional. The reports being generated becatne the barrier or bound-ary to the use of these invaluable infortnation. Data mining, on theother hand, allows individual managers to tnanoeuvre the database toassist his/her decisions and the cultivation of competitive tnerits. Toachieve this tequires a study ofthe existing infortnation base of a com-pany, and its capability to support existing marketing activities. It alsotequires tnanagers' ability to spot opportunity and take actions ac-cordingly.

For more concrete illusltations, the Los Angeles-based AustralianTourist Conitnission (ATC) has successfully achieved an integrated da-tabase tnarketitig approach (Robinson, 1997). It maintains a single datawarehouse for all customer data. By facilitatitigdata tninitig techniques,it can quickly atid accurately detennine which travel agents and con-sumers are responding to its advertising effort and from which sources,such as television, cable, direct tnail, etc. This ability helps ATC to pro-duce a suite of tailored reports atid choose better in its media huying. Italso enables the otganization to tailor ttavel packages and marketitig

/2« KNOWLEDGE MANAGEMENT IN HOSPITALITY AND TOURISM

campaigns to meet respoiulents' itntiiediale and long-range needs andinterests (Robinson, 1997).

Aruba, an island with a windward coast on the Caribbean, has beensuccessfully using a tnarketing daiabase system for years to convert ap-proximately twice as many o\' its inquirers into actual visitors. With theprogram. Hug-and-Hold liKjuiterCon\ersion and Repeal System. Aruhahas doubled its 12 percent inquirer conversion rate to 26 percent (Bono,1995).

CONCLUSION

These days, corporate organizations, governtnents and scientific com-tntmitics are ovcrwhehiied with an inlittx of data that is routinely storedin on-line databases. A new techtiology in the 1990s, data mining, hasbeen developed to analyze and extract meaningru! pattertis in a timelyway. This reseiireh area promises handsome payoffs in many businessesand scietitiftc organizations. Besides providing a preliminary understand-ing of data mining, this paper suggests pcxssible discoveries using datamining and how it can be applied to Database Marketing developmentin the tourism industry.

In order to be successful in the tourism industry, or in any other in-dustry, one must be a master of the concept of marketing. The needs.wants and deitiands of potential and existing customers must be wellunderstood by the marketers (Berry. 1994). Proper planning and execu-tion of marketing programmes can help to build a long-term competi-tive advantage for a company. These tasks consist of the determinationof specitic target markets and manipulating the marketing-mix ele-tiients to best satisfy the needs of the individual target market. To pro-ceed with these tasks, guest history data can be extracted frotn theexisting customer database, which stores huge atnounts of sales transac-tion data with correspctnding customer profiles. Advanced (echniqtiesin data mining are used to manipulate the extracted daia and to givemanagement an edge in learning more about their customers. This cus-tomer database can also be used lo build customer loyalty (Robinsonand Kearney, 1994). As data collection systems become more acceptedand as databases contain more integrative information, data mining, apossible tool for Database Marketing, will be more important in pro-moting niche marketing.

Vincent Cho atid Paul Leung 129

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Index

Accor hotel group. 53-54Accumulation, knowledge. 37-38Acquisition, knowledge, 36-37Airline industry. 66-72

knowledge management, 69-71situation. 66-69

Alpine tourism. See AlpNetAlpNet, 89-107. See also AlpNet

member survey: Cross-borderknowledge networks

alpine tourism changes, 90-92as cross-border knowledge network.

98-104non-tourism organizations in,

100-101outlook for, 104-105vs. cooperative marketing, 91-92

AlpNet member survey 2001,98-104competencies. 102Helds of cooperation. 102-103methodology. 99-100motives and needs. 101 -102satistaction with project. 103-104

American Airlines, 116American Express. 116Application layer, 79Arthur D. Little High Performance

Model. 61-66Artifacts, organizational. 44Asymmetric information. 17-20

forms of. 17-19reducing risks ot, 19-20

Asymmetries, partner, 95Austin Rover. 116

Back otTice operations, 18-19Bank of America, 116

Berlin University of TechnologyKnowledge Cafe system.80-84

Best Western International, Inc., 34-35Brandenburg University of Technology

Coltbus, 1-4.25-39British Telecom. 116Brokers, network, 93

Circles, knowledge, 52-53Codification, 28,43-44Codified vs. personalized knowledge

transfer. 42-45Cognitive mapping, 12-17

asymmetric information, 17-20concept of, 12-13organizational theory and, 13-15tourism-specific aspects, 16-17

Cognitive understanding ofknowledge. 28

Collaboration services, 79Collective vs. individual knowledge.

29Confidence, as network requirement,

95Constructivist understanding of

knowledge, 28Controlling knowledge, 38-39Cooperative/competitive relationships.

6-7Cooperative marketing, 91-92Core processes, 64-66Cross-bordercooperation. .ict'o/.voAlpNel

networks as tools for, 93-95trends in, 92-93

Cross-border knowledge networks. Seealso AlpNet

© 2002 by The Haworth Press. Inc. All rights reserved. 133


advantages. 97knowledge development for. 95-96prerequisites. 97-98size and, 96of tourism destinations, 95-98

Cuslom, industry, 9-10Customer i-elationship marketing (CRM).

112

Distribution, knowledge, 38Downstream proces.ses. 67-68

E-mail, 45Employee turnover. 26,41.55Explicit vs. tacii knowledge, 28-29External dala sources. 115

Database marketing, 109-131. See alsoData mining

applications. 126-128Aruba example. 128Australian Tourist Commission

example. 127-128eonclusion, 128current applications, 116data mining approach. 117-126dala sources, 114-115delniilionof, 112-113implementation obstacles and

barriers, 116importance of, 11 l-l 12marketing database for, 113-114

Data mining. 117-126advantages to tourism industry.

126-127decision tree technique, 120-122definition of, 117inductive logic programming,

122-123nearest neighbor technique.

118-120neural networks, 123-124probabilislic rule, 124-126statistical discriminator, 122vs. machine learning, 117-118

Data soureesexlernal. 115internal, 115

Decision tree technique, 120-122Development, knowledge, 37De Vcre Hotels. 116Distinction making, 41

Factor organization, in high perfoniiance

business model. 63-64First Mover. 8"Fit" idea, 62-63Formula One hotels. 53-54

Gold Standard, Rit/. Carlton hotels. 31Guest-related knowledge, in hotels.

32-33

Hidden actions, ISHidden charaeierislies. 18Hidden infonnation. 18Hidden intentions, 18Hong Kong Polytechnic University,

109-131Hotels. 25-59

case study: Accor hoiel group.53-54

categories of knowledge in. 30-33employee turnover, 26.41.55guest-related knowledge. 32-33knowledge circles. 52-53knowledge information systems.

45-48knowledge officers. 48-49knowledge strategy. 39-45personalized vs. codilled knowledge

transfer. 42-45qualily percepiion, 26shared vs. distributed knowledge,

39-42

Index 135

structures for knowledgemanagemenl. 45-53

team stmctures. 49-52Hub firms. 94-95Hug-and-Hold Conversion and Repeat

System. 128Hyatl hotels, 31

Ibis hotels. 53-54Identification, knowledge. 36(University oO Illinois. 1-4Individual vs. collective knowledge.

29Inductive logic programming. 122-123Industry custom, disappearance of.

9-10Information

asymmetric. 17-20cost of. 10

Information systems. 45-48Information technology. 64Information technology infrasti'ucture.

68(University of) Innsbiuck. 89-107Internal data sources. 115

Knowledgeexplicit vs. lacit. 28-29implicil/process-orienled. 43individual vs. collective, 29major forms of. 28-29mcta, 97organizational. 29-30.54-55ownership of, 8task-related. 30-31task-specific 30,51-52

Knowledge acquisition, 36-37Knowledge Cafe system. 80-84

applications, 84-86discussion groups-expert circles, 84knowledge base, 82-83project module. 84

virtual library, 83yellow pages, 80-82

Knowledge circles, 52-53Knowledge controlling, 38-39Knowledge development, 37Knowledge gaps, 36Knowledge generation, 64Knowledge identitieation, 36Knowledge management

airline industry, 3-4,66-72competitiveness through, 1-4components of, 2,76-80cross-border, 4elements of, 28-fit" idea, 62-53goal of, 76-77hotel industry, 3.25-59. See aiso

Hotelsin individual hotels, 33-39IT-based, 4knowledge accumulation, 37-38knowledge acquisition, 36-37Knowledge Cafe system. 80-84knowledge development, 37knowledge distribution, 38knowledge goals. 34-35knowledge identification, .36knowledge retrieval, 37-38knowledge strategy, 35-36New Economy and, 5-23personalization strategy. 36sofi vs. hard factors, 33-34supply chain matrix approach,

61-66theorelical background, 26-30Waterman and Pelers 7-S model, 62

Knowledge management systems. Seealso Knowledge Cafe system

applications. 84-86Knowledge officers. 48-49Knowledge production, 10

attributes of, 5-23Knowledge repository, 78-79Knowledge retrieval, 37-38Knowledge sources


information and, 77-78for integration, 77

Knowledge strategy. 35-36Knowledge supply chain matrix. 65-66Knowledge transfer. 5-23

mechanisms of, 42personalized vs. codified. 42-45

Knowledge utility, 7Kyonggi University (Republic of

Korea), 1-4

Language, for information systems. 46Logistics, database marketing and. 112(University oO Lueneburg (Germany).

5-23

Machine leaming. vs. data mining.117-118

Maritim hotel group, 31.47-48Market mechanisms, of networks, 94McDonald's. 44Memory, transactive, 31-32Mental models. 3. See also Cognitive

mappingdistinction making, 41shared vs. distributed, 40-41

Meta knowledge. 97Modeling, 14-15. See al.so Cognitive

mappingMotivation, staff. 46

Neural networks, 123-124New Economy. 7-8Novotel. 53-54

Officers, knowledge, 48-49(University of) Oldenburg (Germany),

75-87Organizational arrangements. 5-23Organizational artifacts. 44Organizational cognitive mapping. 13-15Orgatiizational knowledge. 29-30.54-55Ownership, of knowledge. 8

Partner asymmetries. 95Personalization. 28.36,42-43Personalized vs. codified knowledge

transfer, 42-45Principal-agent problems, 17-19. See

also Asymmetric informationProbabilistic rule, 124-126Publication services, 79Push vs. pull situations. 79

Repository, knowledge, 78-79Retrieval, knowledge, 37-38Risk reductioti, in principal-agent

relations. 18-19Ritz Carlton hotels. 31

Nearest neighbor technique. 118-120Networks. 5-23

brokers for, 93characteristics of. 93-94in cross-border cooperation. 93-95hub firms of, 94-95market mechanisms of, 94neural, 123-124strategic, 94vertical disaggregalion of. 93

SAP R/3 sofiware. 68Shareti/distributed knowledge. 28Sofitel, 53-54Strategic networks, 94Strategy, knowledge. 35-36Supply chain matrix approach. 6i-66

Tacit vs. explicit knowledge. 28-29Task-related knowledge, 30-31Task-specific knowledge. 30.51-52

Index 137

Team structures, for hoiels. 49-52Template services. 79Time Life. 116Tourism, imst in industry I'clations. 11-12Tourism system, 6-7Transactions costs, 8-11Tmst

in industry relations. 11-12in principal-agent relations, 19

Turnover, employee, 26,41,55

University of Illinois, 1-4University of Innsbruck, 89-107

University of Luenehurg (Gemiany),5-23

University of Oldenburg (Germany),75-87

Upstream processes. 67User interface, 79-80

Vertical disaggregation, 93Virtual library, 83

Waterman and Peters 7-S model, 62

[ricarda b bouncken, sungsoo pyo (editors)] knowle(bookzz.org)

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