Examining the Mediating Role of Innovativeness on the Relationship between Innovation Strategy, Atmosphere, Culture and Performance of Hotel Industry in Thailand: A Pilot Study

Thienchai Phankhong, Lily Julienti Abu Bakar and Donny Abdul Latief Poespowidjojo, "Examining the Mediating Role of Innovativeness on the Relationship between Innovation Strategy, Atmosphere, Culture and Performance of Hotel Industry in Thailand: A Pilot Study”, Annals of Contemporary Developments in Management & HR (ACDMHR), Print ISSN: 2632-7686, Online ISSN: 2632-7694, pp. 29-39, Vol. 2, No. 2, 1st May 2020, Published by International Association of Educators and Researchers (IAER), DOI: 10.33166/ACDMHR.2020.02.004, Available: http://acdmhr.theiaer.org/archive/v2/v2n2/p4.html. Research Article


Introduction
The Travel and Tourism Competitiveness Index or TTCI showed that Thailand was ranked at number 34 in the world and number 3 in the Southeast and Southern Asia in term of attractive hotel accommodation (World Economic Forum, 2017). Thailand had a total 9,489 hotels in 2018 (Tourism Authority of Thailand, 2019). Instead, there are a several of the challenges effecting the hotels in Thailand such as the complaints on quality of service and other standards to the lower and middle level of the hotel (Departments of Trade Negotiations of Thailand, 2017). Moreover, the performance of hotels in Thailand affected by its high operating cost, sale and marketing issues, management issues, employee low skill and lack of information technology and a number of hotel management have a traditional service and not emphasized by using technology and skill labor (Suriyathanin, 2017).
The ability of the organization to reformation to change and innovate new things is essential in growing all the time. In the business environment is constantly changing as innovation and organizational innovativeness have a significant effect on competitiveness (Oke, 2007) and are considered a major source of economic growth (Porter & Ketels, 2003;Pivcevic & Pranicevic, 2012). According to Eveleens (2010) and Kamaruddeen et al. (2012), key factors purported to influence organizational performance can be identified. They are innovation strategy, organizational culture, and organizational atmosphere. However, in the current study argues that the effect of these factors on organizational performance could be understood by considering innovativeness for the following reasons. In filling the gap, the integrated model of innovativeness will be tested in the hotel industry for the following reasons. Firstly, the hotel industry, as mentioned earlier, is one of the key contributors to the Thailand economy. Secondly, in studying intangible resources based on main theoretical the resource-based view (RBV) and dynamic capabilities (DC) related to firm performance, several researchers have emphasized the manufacturing industry (e.g., Leonidou et al., 2012;Lin & Wu, 2014;Nieves et al., 2015). The hotel industry seems to have been neglected (Omerzel, 2015).
Due to the facts that the increasing number of tourists, the accommodation investment has accelerated so much so that the price of the rooms is declining. The impact from the sharing economy and the arrival of competitive renewable products, for instance, apartment, condominiums, homestays as well as a budget hotel, have further contributed to the lower prices (Lunkam, 2017). Due to the increasing competition in the accommodation sector, Thailand hoteliers should consider changing their strategy and capability to sustain a competitive advantage to survive in a rapidly changing external environment.
Pilot test is an essential initial step of a survey, which generally is conducted before implementing a full-fledged study (Hazzi & Maldaon, 2015). The objective of a pilot test is to identify flaws in the variables' operationalization, avoid problems during actual data collection, reduce measurement error as well as ensure the instrument is not ambiguous and easily understood (Sekaran, 2005;Lavrakas, 2008;Hazzi & Maldaon, 2015). A pilot study methodological including validity and reliability (Hazzi & Maldaon, 2015). The important reason for evaluating the reliability of a measurement tool because an unreliable tool will adversely affect the results of the study. Reliability is the degree of stability and consistency of an instrument when used repeatedly (Bhattacherjee, 2012). Kumar (2011) defined validity as the degree or the ability of a measurement instrument to measure the things it is supposed to measure. According to Pasunon (2015), ascertaining the validity of a questionnaire consists two main considerations, namely (a) the suitability of the questionnaire in terms of data collection, and (b) checking if the questionnaire is based on concepts and theories.
The assessment of content validity is done through the opinions of expert panels (Crano & Brewer, 2002). In this study, the researcher will use the content validity index (CVI) measured on a four-point scale for content validity assessment (Polit & Beck, 2006). A CVI that is more than 0.75 suggests acceptable content validity. To ascertain the reliability of the instruments, this study will use Cronbach's alpha coefficient (Sekaran, 2005) and composite reliability (CR). George & Mallery (2003) and Hair et al. (2014) suggested that Cronbach's alpha values greater than 0.70 indicate acceptable internal consistency and CR should be greater than 0.70. Therefore, to confirm the validity and reliability of the instrument, this paper presents the result of pilot test about determinants of organizational performance of three to five hotel industry in Thailand.

Organizational Performance
Organizational performance refers to an overall concept used to display the overall outcome of the operational activities of an organization (Wu & Lu, 2012). Organizational performance gauged by financial indicators and non-financial indicators to measure whether the organization to perform the right thing with www.acdmhr.theiaer.org the right approach (Hilman & Kaliappen, 2014). Kaplan and Norton (1992) developed and proposed the Balanced Scorecard (BSC) for measure organizational performance. The BSC emphasizes four perspectives which are financial perspective, customer perspective, process perspective, and learning and growth. Avci et al. (2011) suggested that BSC could be a forefront measurement appropriated for the service sector, because in this sector most performance measures focus on non-financial, such as customer satisfaction, employee satisfaction, and internal process efficiency.

Innovation Strategy (IS)
Innovation in general has a deeper explanation towards organizational performance (c.f., Ahmed, Shah, Qureshi, Shah & Khuwaja, 2018). Innovation strategy as a sum of strategic choices regarding its innovation activity for developing new service, process, creation approaches, finding new markets, the source of supply and managerial structure to improve its performance (Wang & Ahmed, 2004;Strecker, 2009 andGilbert, 1994). It is generally acknowledged that IS essential to the effectiveness and affect to sustain competitive advantage of the hotel industry (Jenssen & Randoy, 2006;Crespell &Hensen, 2008 andIplik et al., 2014). Likewise, IS can help the hotel to improve service quality, customer satisfaction and increases the level of innovation within the hotel (Lendel &Varmus, 2011). Numerous scholars found that IS had a positive effect on organizational performance (Nybakk & Jenssen, 2012;Chunnapiya, 2012;Altuntas et al., 2013;Kitsios &Sindakis, 2014 andHilman &Kaliappen, 2015).

Organizational Atmosphere (OA)
The organizational atmosphere motivates the employees in order to achieve both individual and organizational performance objectives (Bharthvajan, 2014;Adeoye, 2014 andAkbaba, 2016). According to Amabile (1997), personal level of motivation depends on OA and an appropriate OA for innovation encourages and support to employee creative idea and innovative efforts are valued (Shanker et al., 2017). Furthermore, OA can improve implementation of ideas for greater organizational innovation and more general benefits such as employee and consumer satisfaction and perceived service effectiveness (Aarons & Sommerfeld, 2012). Similarly, Subramaniam (2005) suggested that if the hotel industry wants to employees to be creative and innovative, the organization needs to improve atmosphere that fosters creativity and innovation. Therefore, executives or supervisors should know the art of managing OA. Most studies found a positive relationship between OA and organizational performance (Akbaba, 2016;Alharbi, 2017 andShanker et al., 2017).

Organizational Culture
Many definitions of organizational culture which from different researchers. However, we can define common definitions of OC as a sum of beliefs, norms, attitudes, shared values, practices and behavior patterns that influence virtually of working life (Denison, 1984). OC as an affected from the organizational relationship history and evolved context of the organization in the way that lead employee to do things (Yesil & Kaya, 2012). In addition, OC also significantly for the organizational performance and plays a role in the morale, employee's productivity, motivate and maintaining a sustainable competitive advantage for the organization (Abdi & Senin, 2014;Puri & Bharti, 2015;Nuansate, 2016;Matinaro &Liu, 2016 andWarrick, 2017). Hence, the leaders need to know about an effort to develop the culture that aligns organization strategies (Valencia et al., 2010 andWarrick, 2017). Most of the researcher also found that OC positive relationship with hotel industry performance (Wang, 2012;Rahimi &Gunlu, 2015 andNuansate, 2016). www.acdmhr.theiaer.org

Innovativeness
Innovativeness is an organization's overall innovative capability, receptivity and tendency to change, newness, new ideas, experiment, and innovation to develop a firm's competitive advantage and display innovative behavior constantly over time (Nybakk et al., 2009;Lumpkin, 1996;Wang & Ahmed, 2004;Hult et al., 2004 andGrawe et al., 2009). Furthermore, innovativeness reflects the degree of an organizational propensity for doing innovation. Consequently, innovativeness can enhance organization competitiveness and reflects a firm's tendency to engage and support new ideas, novelty, experimentation and creative processes (Lumpkin &Dess, 1996 andDereli, 2015). Despite there are many method driving the organizational performance, innovativeness has become one of the most widely used methods (Kalmuk & Acar, 2015). Several past studies also revealed that innovativeness had a positive relationship with organizational performance (Sok et al., 2013;Scholastica & Maurice, 2013;Leekpai, 2013;Ashraf et al., 2014;Tutar et al., 2015 andGiniuniene &Jurksiene, 2015).

Sample
A pilot test is a crucial part of a survey, which generally is conducted before implementing a fullfledged study (Hazzi & Maldaon, 2015). The objective of a pilot test is to identify flaws in the variables' operationalization, avoid problems during actual data collection, reduce measurement error as well as ensure the instrument is not ambiguous and easily understood (Sekaran, 2005;Lavrakas, 2008 andHazzi &Maldaon, 2015). According to Baker (1994), the recommended sample size for a pilot study is between 10 and 20% of the entire sample size to ensure the adequacy of the instrument used. Likewise, Treece and Treece (1982) suggested that the sample size for the pilot study should be 10% of the sample size. Whereas, Hertzog (2008) suggested that 20 -25 participants would be efficient and preferable.
Therefore, in this study the sample size consists of 60 three to five-star hotels in Thailand and select the sample used cluster random sampling technique. Firstly, the hotels were grouped into six clusters follow the region zone. Secondly, in determining the number of hotels each cluster use proportionate of each region. Thirdly, was selecting the participants in this survey used simple random sampling. Out of the 60 questionnaires mailed and 42 questionnaires were returned, the response rate was 70 percent and all of them properly filled.

Measurement
The study adapted instruments from previous studies, all the variables used in the study on 5-point Likert scale ranging from strongly disagree to strongly agree. The questionnaire is divided into five sections. The first section is personal background of the respondents. The second section is hotel information. The third section measures the innovation strategy. The fourth section related organizational atmosphere. The fifth section measure the organizational culture. The sixth section measure the innovativeness. The seventh section measure hotel performance. Therefore, table 1 shows the calculation of the instrument's variables in the study (The table 2).

Validity Results of the Pilot Study
For suit the target participants, the original items of instrument were back-translation process from English to Thai language and translated back to English by an experienced professional translator. Content validity measures that the appropriateness of the contents or elements of an instrument of a study (Sekaran, 2005). The assessment of content validity is done through the opinions of expert panels (Crano & Brewer, 2002). Content validity index (CVI) of the instruments was evaluated by three experts in the field of entrepreneurship and hotel management, one expert from the Universiti Utara Malaysia, one expert from Universiti Sains Malaysia and one expert from Thai hotel executive. Table 2 illustrated that the questions 2 items from 51 items were re-phrased for the respondents appropriately and understandable, thereby no item was deleted. The result of content validity that the CVI values of the instrument were greater than 0.90 and to this end, The CVI can evaluate for item-level (I-CVI) and scale-level (S-CVI), I-CVI should be greater than 0.75 and S-CVI should higher 0.90 (Polit & Beck, 2006). The SmartPLS software version 3.2.8 was employed for testing Cronbach's alpha reliability and composite reliability test of the instrument. Note. I-CVI = item-level content validity index, S-CVI/Ave = scale-level content validity index, averaging calculation method, S-CVI/UA = scale-level content validity index, universal agreement calculation method.

Reliability Results of the Pilot Study
The result from table 3 and figure 1 using PLS 3.2.8, the reliability from table 2 indicated that Cronbach's alpha coefficient value of all the five constructs was ranged from 0.747 to 0.928. Specifically, hotel performance has a value of 0.928, innovation strategy 0.899, organizational atmosphere 0.795, organizational culture 0.887 and innovativeness 0.885. Furthermore, the results of the composite reliability were tested indicated that hotel performance has a value of 0.938, innovation strategy 0.919, organizational atmosphere 0.855, organizational culture 0.908 and innovativeness 0.906. According to Hair et al. (2017) the composite reliability criterion, higher values indicate higher levels of reliability. For instance, we can consider values between 0.60 and 0.70 as "acceptable in exploratory research," whereas results between 0.70 and 0.95 represent "satisfactory to good" reliability levels. Therefore, a measure of internal consistency reliability follows the result of the reliability and composite reliability above 0.70, which is acceptable confirmed that the instruments have a good reliability.  Figure 1: The composite reliability of the pilot study

Conclusion
As stated earlier, the aims of the pilot study that explored the validity and reliability of the instrument in the smaller scale before implementing large scale study. The results of the pilot test summarized that content validity greater than 0.90, the cronbach's alpha coefficient value of all the five constructs was ranged from 0.747 to 0.928. Furthermore, the results of the composite reliability were above 0.70 which is acceptable confirmed that the instruments have a good reliability (Hair et al., 2017). Additionally, according to earlier results confirmed that the instruments were fit to be used for the actual study.

Contribution
The contributions of the study offers clarity to ensure that the validity and reliability of the instrument will be appropriate to the further actual research. Furthermore, the main aims of this study it will expand the knowledge and the complexity of innovativeness in the hotel industry in various aspects. Based on the RBV, IS, OA and OC which are crucial intangible resources to firm's competitive advantage. This study will consider seeking the new approach for enhancing the value add for all resources for gaining competitive advantage, especially innovativeness. Thus, this study will investigate the mediating role of innovativeness between the three variables and performance in the hotel industry in Thailand.
www.acdmhr.theiaer.org Practically, the finding of this study will support to the government and the relevant organizations in proposing policies related to improving and developing hotel industry performance in Thailand. In addition, the finding will help the top management of the three to five-star hotels to better understanding the key factors that should be encouraged in order to improve firm performance.