1. Wernerfelt 1984). Corporate reputation is a socially shared

1.
Introduction

 

Hospitality
and tourism market is facing high pressure to survive due to fast-pace changes
and competitive business environment. One of the most important tenets of a
service organization is to perform a service, manufacture a product, or offer a
bundle of benefits that competitors cannot match, which is gaining competitive
advantage (Porter 1996).
While it is extremely difficult to gain and sustain a competitive advantage,
especially in the hotel or restaurant industry (ENZ,
2008), firms work to create advantages through differential development
of resources and capabilities; the firm’s reputation is a superior resource (Barney and Arikan 2001; Barney 1991; Barney 1997; ENZ, 2008; Harrison
et al. 1991; Mahoney and Pandian 1992;
Wernerfelt 1984).

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Corporate
reputation is a socially shared impression because it relies on an individual’s
perception of how other people view the firm (Helm,
2005, 2007). Employees’ contributions to a specific corporate asset and
are helpful in gauging employees’ influence on corporate reputation. How
employees regard the firm will determine how other stakeholders perceive it.
Employees actively shape other stakeholders’ perceptions of the firm (George, 1990; Harris
and de Chernatony, 2001). Especially in services industries, employees
contribute to the formation of corporate reputation through the quality of
their interactions with customers (Davies et al.,
2003; Helm, 2007). The more employees demonstrated supportive behaviors
during hotel service delivery, the more customer trust in it. When the service
was delivered by employees as promised, customers’ confidence towards the hotel
increased, which in turn helped build a positive customer perception toward the
hotel in terms of trust and commitment (Khairy and
Lee, 2018) and hence, improve the hotel reputation.

 

How
employees and customers perceive the reputation of an organization will
influence their behavior towards it (Feldman et al.,
2014). Particularly in a service business, the perspectives of employee and
customer are seen as interdependent (Davies et al.,
2004). Thus, the key problematic aspect of interpretation corporate
reputation is that it is perceived heterogeneous among different stakeholders.
(Matuleviciene and Stravinskiene, 2016).

 

Because
a generalized corporate reputation, stemming from a global positive assessment,
can generate positive consequences to a firm, it is particularly important in
an uncertain context. For instance, Milgrom and
Roberts (1986) argue that in an incomplete information setting,
reputation works in attracting customers, because of the uncertainties on a
firm’s product quality. Therefore, the quality of a firm, signaled by the level
of generalized reputation, and hence, affects firm’s competitive advantage. Although
hotel executives believe that reputation is a very important immaterial
corporate resource, still, the attention paid to reputation does not match its
importance (Stavrinoudis and Chrysanthopoulou, 2017).

 

Within
this context, the general aim of this study is to determine the influence of
hotel reputation on competitive advantage and to come out with information that
will further enhance the use of corporate reputation as a competitive tool. This
paper will assess the internally perceived level of hotel reputation and
competitive advantage; identify how hotel reputation relates to competitive
advantage; and identify is there a difference between employees’ perception of
hotel reputation and hotel competitive advantage with regard to their job
classification.