Collaboration for Innovation in Tourism Organizations

Abstract

Collaboration for innovation is a key contributor to successful innovations in the tourism industry. Research, however, has not fully understood how tourism organizations with less than 10 employees (also known as micro organizations) can foster collaboration for innovation. This study contributes to tourism research by successfully testing the effect of innovation formality, interorganizational communication, and leadership support on collaboration for innovation at destination marketing organizations with less than 10 employees. It was found that leadership support for both innovation and collaboration is the most important driver to collaborate with partners in the innovation process. Interorganizational communication and innovation formality were driven by leadership support but did not have a strong direct effect on collaboration for innovation. This suggests that micro destination marketing organizations need to identify and invest in leadership rather than develop or rely on organizational processes that are useful in large organizations.

Keywords

innovation leadership interorganizational relationships micro organizations destination marketing organizations

Innovation is a consistent topic in tourism and hospitality literature (Novelli, Schmitz, & Spencer, 2006; Ottenbacher, 2007; Tajeddini, 2011). Through the development of new or adjusted service offerings or by reducing production costs, tourism organizations create value for visitors and stakeholders. Traditional resource-based-view research typically argues that successful innovations are mainly driven by internal organizational resources (Hjalager, 2010). Today, however, it is argued that resources available beyond organizational boundaries must be used in concert with internal resources to achieve success in tourism (Denicolai, Cioccarelli, & Zucchella, 2010). Indeed, several studies identified that collaboration and innovation are major drivers of organizational performance and success of tourism and hospitality businesses (Ku, Yang, & Huang, 2012; Novelli et al., 2006; Tajeddini, 2011; Tinsley & Lynch, 2001). Most of this work is related to knowledge management and transfer in and between tourism organizations. Shaw and Williams (2009) not only argue that this is an emerging area of research in tourism and hospitality literature, but also that more research needs to be done to better understand small tourism organizations.

Although there is no classification for organizations with less than 10 employees in the United States, Eurostat (2008) and the World Bank (2007) distinguish these micro organizations from small- (10-49 employees) and medium-sized (50-249 employees) organizations. Better understanding innovation and collaboration in micro organizations is critical for three reasons: first, research found that micro organizations behave differently than larger ones (e.g., Eurostat, 2008; Russo & Tencati, 2009). Second, collaborative innovation efforts are particularly useful for small-sized operations, as they are often locked out of the innovation process because of small budgets and a limited understanding of technology (Novelli et al., 2006). Third, the vast majority of tourism and hospitality firms in the United States have less than 10 employees, including 61.4% of accommodation and food service businesses and 76.1% of arts, recreation, and entertainment businesses (U.S. Census Bureau, 2008). Recent studies addressing collaboration and information exchange in tourism and hospitality industries identified various approaches taken to collaborate, reaching from arm-length relationships to networks and clusters (Alonso & Liu, 2012; Beritelli, 2011; Tinsley & Lynch, 2001). Furthermore, collaboration for innovation was found to be a driver of innovation success (Alonso & Liu, 2012; Novelli et al., 2006). While the importance of collaboration for innovation development is also argued for tourism (Hjalager, 2010) and other service providers (de Brentani & Kleinschmidt, 2004), research in tourism and hospitality management has yet to identify organizational characteristics that facilitate a collaborative innovation process (e.g., Zach, 2012).

The goal of this study is to address this gap by analyzing the role and effect of key drivers of organizational settings for innovation (leadership support, innovation formality) and interorganizational relationships (leadership support, communication) on collaboration for innovation. The value added by this study is twofold: First, it evaluates the organizational settings simultaneously and accounts for their interdependencies; and second, it investigates the largest group of tourism organizations (i.e., those with less than 10 employees). A theoretical model was developed and tested using a Structural Equation Model. Data for this study were collected from American destination marketing organizations (DMOs) with less than 10 employees.

Literature Review

Understanding and Defining Innovation

Innovation plays a critical role for our economies by enabling business growth, building competitive advantages, and ultimately, improving the quality of life (Christensen, 1998). As a result of its importance, research has sought to identify the factors that can be used to encourage and manage innovation. Definitions for innovation range from radically new (disruptive) to incremental improvements (continuous) to the adoption of something new (Robertson, 1967) that either builds on existing capabilities or forces the creation of new ones (Abernathy & Clark, 1985). Hjalager (2002, 2010) first adopted the Abernathy and Clark model and later provided categories of tourism innovation: first, new tourism products/services developed for tourists; second, new approaches to manage interaction with tourists; and third, innovations developed for organizational advances. The latter includes the development of new and improved business processes, updated ways to navigate internal resources (such as human resources), and new institutional settings to govern tourism destinations (Hjalager, 2010).

To accommodate the fact that tourism innovation comes in different forms and sizes, tourism scholars often refer to tourism innovation systems. In such systems, organizations at various levels of aggregation work together to develop tourism products, services, and processes (Malerba, 2002). These collaboration activities are particularly important, given the frequent changes in consumer behavior and the market environment that tourism and hospitality organizations must navigate to achieve success (Selin & Myers, 1998). Tourism organizations typically do not create breakthrough innovations, but rather combine offerings or adopt innovations from elsewhere to offer new services or to improve existing ones (Hjalager, 2002). This study defines innovation as services, products, or processes that cater to visitors or destination stakeholders, and are new to the organization or drastically improved in that they require new competencies.

Interorganizational Relationships and Innovation

Innovation and the management of processes that lead to successful innovations (e.g., idea generation, service design) are critical for success in tourism and hospitality organizations (Ottenbacher, 2007; Tajeddini, 2011). A recent study of service innovation by Eisingerich, Rubera, and Seifert (2009) identified that commitment to interorganizational relationships has a positive effect on keeping the organization focused on innovations relevant for their partners and also on success as measured by net income. Drawing knowledge and ideas from a network of partners enables organizations to identify potential innovations, develop solutions, and drive innovative firm behavior (Chen & Paulraj, 2004). With relevant information increasingly residing with other organizations, it was found that collaboration with external partners is particularly important for small organizations (Atuahene-Gima, 1995) and for tourism organizations (von Friedrichs Grangsjö, 2003). The traditional creation of superior organizational performance based on internal resources (resource-based view) can be enhanced if tourism organizations are able to source knowledge through collaborative efforts (Denicolai et al., 2010). Tourism organizations engaging in collaboration were found to be more successful, adopt innovations, and ultimately develop successful tourism destinations (Alonso & Liu, 2012; Novelli et al., 2006). Denicolai et al. (2010) argued that tourism organizations build their network competence by working with individual organizations and thus contribute to a collaborative advantage that benefits all parties involved in the collaboration efforts. Research in supply chain management, focusing on the most optimal combination of sources for organizational success, provides a framework for collaboration in which interorganizational relationships increase optimization, effectiveness of production processes, and firm innovation (Chen & Paulraj, 2004). Such a framework integrates partners in internal processes and provides a holistic approach. This approach is essential for tourism and hospitality businesses, as travelers typically use products and services of various providers (Novelli et al., 2006). Hence, coordination of activities enables destination management organizations to incorporate not only prominent stakeholders (e.g., city hall, major hotels and attractions) but also peripheral ones (Denicolai et al., 2010; von Friedrichs Grangsjö, 2003).

Recent hospitality literature identifies the importance of strategic collaboration with both customers and organizations for new service development to gain a competitive advantage (Tajeddini, 2011). Similarly, research in tourism identified that collaboration and innovation among destination businesses can be beneficial for both the individual organizations as well as the overall destination (Denicolai et al., 2010; Novelli et al., 2006). Indeed, collaborative innovation efforts enable tourism service providers to create value-adding relationships that allow access to resources to extend their offerings through new or improved services, reduce the cost of existing service delivery, and better cater to the needs of tourism stakeholders (Denicolai et al., 2010; Novelli et al., 2006). Tinsley and Lynch (2001) and von Friedrichs Grangsjö (2003) argue that networks are particularly important for small tourism businesses, given their constrained resources. Whereas these studies identify that management of innovation processes as well as interorganizational collaboration drive innovation, the present study focuses on the drivers that enable collaboration for innovation in the first place. The model developed in this article (see Figure 1) captures these drivers and their interdependencies.

Figure 1

Hypothesized Model

Model Development

Several organizational preconditions have been identified as critical for successful innovation behavior by tourism organizations: organizational leadership, innovation formality (Ottenbacher, 2007; Pechlaner, Fischer, & Hammann, 2005), collaboration with partners (Alonso & Liu, 2012; Novelli et al., 2006), and organizational size (Denicolai et al., 2010). Thakur (1999) found that leadership enabling an exploitation of opportunities matters more for organizational growth than knowledge of the managers themselves. Furthermore, Thrope, Holt, Macphearson, and Pittaway (2005) emphasize that small- and medium-sized organizations’ resources and entrepreneurial orientation are strongly influenced by organizations’ capacity to build and exploit interorganizational relationships. In organizations with only a few employees, entrepreneurial skills most often rest with leadership, making the people in charge the key agents of innovation and other forward-looking activities (Getz & Petersen, 2005). Hence, leadership support of innovation processes as well as building and maintaining partnerships to exploit knowledge, signals a strong support for innovation and interorganizational collaboration behavior (Enz & Siguaw, 2003; Thakur, 1999). In both cases, leaders act as role models for employees to mimic and to similarly engage in innovation and collaboration activities (Hu, Horng, & Sun, 2009).

Leadership in Micro Tourism and Hospitality Organizations

Following Chathoth and Olsen (2002), this study understands leadership as the sum of activities that govern an organization “as a whole in terms of its posture with respect to the environment” (p. 6). They further argue that leadership activities that respond to the environment result in an effective management of human and other resources to keep the organization strategically oriented (Chathoth & Olsen, 2002). Indeed, leadership plays a critical role for the establishment of an organizational culture that enables knowledge exchange and the development of new service offerings (Hu et al., 2009; Yang, 2007). de Brentani and Kleinschmidt (2004) provide examples of leadership support for new service development: leader interaction with key clients, becoming innovation”champions” for projects with high uncertainty, and direct involvement in the innovation process. Small organizations depend heavily on leadership (Morrison, 2003), especially as most decision making at small organizations is left with the leaders, rather than with a complex organizational structure (Lefebvre, Mason, & Lefebvre, 1997).

Leadership Support and Interorganizational Relationships

Organizational leadership is at the forefront of developing and maintaining interorganizational relationships at tourism destinations (Beritelli, 2011). Leadership communicates with partners to build long-lasting relationships (Enz & Siguaw, 2003). Leaderships’ time invested in these activities is critical as it builds the foundation of key relationships. Over time, trust in such relationships increases, and organizations begin to exchange more than just simply information; they also start to collaborate on riskier projects, such as developing something new or improved (Medina-Muñoz & García-Falcón, 2000). Open and frequent communication between collaboration partners develops in both directions because of partner interdependence in tourism destinations (Selin & Myers, 1998). Beritelli (2011) identified that successful collaboration between prominent destination actors builds on frequent communication that nurtures trust and a mutual understanding. Leadership, thus, enables an organizational setting for communication and collaboration, leading to the following hypotheses:

Hypothesis 1: Leadership support for interorganizational relationships has a positive effect on collaboration for innovation.

Hypothesis 2: Leadership support for interorganizational relationships has a positive effect on interorganizational communication.

It was found that tourism leadership plays a critical role in creating a collaborative culture that enables the much needed exchange of knowledge for the development of innovations (Yang, 2007).

Leadership Support and Innovation

Leadership creates, through support and commitment to innovation, an organizational setting for innovation by providing necessary resources and getting involved in the new service development process (de Brentani & Kleinschmidt, 2004). Indeed, leadership and employee commitments contribute to the development of successful tourism innovations (Hu et al., 2009; Ottenbacher, 2007) and also contribute to a better fit of service innovations with the market and the organization’s structure (Atuahene-Gima, 1995; Zach, 2012). This is particularly the case for small tourism organizations, which have most responsibility residing with leadership (Paget, Dimanche, & Mounet, 2010). For example, Yuan, Gretzel, and Fesenmaier (2003) identified the importance of leadership for the adoption of new information technologies at DMOs.

Leadership in tourism furthermore creates the setting to collaborate for innovation and also creates an innovation supporting organizational structure (Pechlaner et al., 2005). A key element of that structure is innovation formality, which represents processes that have been developed over time and proved successful to develop innovations (Kleinschmidt, de Brentani, & Salomo, 2007). Tajeddini (2011) found that leadership’s support for change significantly contributes to success of new hospitality innovations. Leadership in tourism organizations, thus, has the capability to create an environment that nurtures innovation processes and interorganizational collaboration, leading to the following hypotheses:

Hypothesis 3: Leadership support for innovation has a positive effect on collaboration for innovation.

Hypothesis 4: Leadership support for innovation has a positive effect on innovation formality.

Hypothesis 5: Leadership support for innovation and leadership support for inter-organizational relationships are significantly correlated.

Interorganizational Communication

Sharing information includes a wide range of data and is especially important within a tourism destination network as knowledge exchange ensures commitment to mutual goals (Shaw & Williams, 2009). Tourism organizations typically interact with multiple organizations to gather useful information to develop innovations (Denicolai et al., 2010). All three of Mohr and Spekman’s (1994) key aspects of information sharing for successful collaboration were also found to be relevant to tourism: First, timely, accurate, and relevant information (i.e., communication quality) is communicated in good collaborations (Ku et al., 2012; Yang, 2007). Second, information sharing with key partners takes place more often, and more relevant information is exchanged. It was found that increased communication between tourism organizations increases trust and mutual commitment to the collaboration relationship (Medina-Muñoz & García-Falcón, 2000). Also, open and frequent communication leads to a higher quality performance of the partner (Selin & Myers, 1998), indicating that better knowledge about each other’s business enables partners to work together better (Beritelli, 2011). Finally, active participation in decision and goal formulation contributes to successful partnerships (Alonso & Liu, 2012). Interorganizational communication, thus, enables organizations to include partners in their activities, such as innovation development.

Hypothesis 6: Interorganizational communication has a positive effect on collaboration for innovation.

Innovation Formality

Innovation formality enables tourism organizations to structure activities and tasks in the most effective and cost-efficient manner while maintaining freedom for creativity to ultimately develop new service (Ottenbacher, 2007; Ottenbacher & Gnoth, 2005). Frehse (2005) identified that innovation formality can help hospitality firms to successfully develop new service offerings. Indeed, tourism service providers thrive on innovation formality integrated into day-to-day activities (Edgett, 1994; Ottenbacher, 2007; Tajeddini, 2011). Small businesses benefit from innovation formality as it assists in overcoming a diversion from goals posed by close interpersonal ties within and between organizations (Humphreys, McAdam, & Leckey, 2005). Formality enables collaboration among organizations (Nylén, 2007), while innovation formality more specifically enables collaboration between innovation projects within an organization (Salomo, Talke, & Strecker, 2008). Hence, it is argued that innovation formality can be extended to collaboration for innovation:

Hypothesis 7: Innovation formality has a positive effect on collaboration for innovation.

Study Methodology

Research Design

The empirical setting for this study was American DMOs. These organizations are responsible for marketing a certain geographic area and developing new experiences for destination visitors (Ritchie & Crouch, 2003). American DMOs are particularly adequate to investigate the proposed model for micro tourism organization (less than 10 employees): First, in the U.S. destination, marketing activities are typically conducted by convention and visitor bureaus and to some extend by chambers of commerce or economic development commissions. The 2008 Business Census reports that 75.4% of American convention and visitor bureaus have less than 10 employees (U.S. Census Bureau, 2008). Second, DMOs are typically organized as nonprofit organizations in order to provide tourism information and collaboration on holistic experiences with destination service providers. Third, destination visitors combine various services, which requires providers to seamlessly coordinate the value chain to provide and to create new tourism products and services (Denicolai et al., 2010). Fourth, DMOs are central agents within tourism destinations and often drive innovation development projects (Denicolai et al., 2010; Hjalager, 2010). Last, DMOs are under constant pressure to update and expand their service offerings for destinations visitors (Wang & Fesenmaier, 2007).

E-mail invitations to an online survey were distributed to Directors/CEOs of 2,031 American DMOs at city and county levels as they are typically the most knowledgeable on DMO innovation. However, if appropriate, it was suggested to forward the survey to the most knowledgeable employee. Thirty DMOs were randomly selected and invited to participate in a pilot study. The pilot delivered acceptable scores for construct reliability and provided helpful information to adjust the survey language to the tourism innovation context. The remaining DMOs were contacted in early July 2009 with reminders following a week after the first invitation and three additional reminders 4 days apart.

To qualify for the study, respondent DMOs had to develop, in the past 3 years, at least one innovation with a partner. To that end, innovation that was defined as a service (a) new to the DMO or a substantial improvement of an existing service in that it required new competencies; (b) that was developed with a partner, whereby the DMO had to play a major role in innovation development; and (c) was a service for visitors or destination stakeholders. A total of 247 qualifying responses were collected. Of these, 196 were DMOs with less than 10 employees, corresponding to a response rate of 9.8%.

Measures

Construct items, coefficient alpha scores of previous studies (if available), as well as coefficient alphas and factor loadings for this study are presented in Table 1. All scales were 7-point Likert-type scales with anchors of 1 = strongly disagree to 7 = strongly agree. Adopted items were reviewed for face validity by two academics and two DMO directors, tested in the pilot study, and, if necessary, adjusted thereafter.

Table 1

Study Items, Item Source

Items and Item Source	Coefficient α	Factor Loadings
Leadership support for innovation (de Brentani & Kleinschmidt, 2004, α = .79; Kleinschmidt, de Brentani, & Salomo, 2007, α = .78)	.888
Organizational leadership is involved personally in new service development . . .
1. by playing a central role in project review—i.e., make key go/no-go and spending decisions		.773
2. as visionaries and/or champions of new services		.844
3. to enhance the reputation of our tourism office and new services		.784
4. by encouraging strategic partners to adopt our new services		.843
Top managers do not play an active role in the day-to-day activities of new tourism service tasks (i.e., usually leave things up to project leader and team)		(.273)
Leadership support for interorganizational relationships (Chen & Paulraj, 2004, α = .92)	.910
1. Organizational leadership is supportive of our efforts to improve interorganizational relationships		.902
2. Organizational leadership considers inter-organizational relationships to be a vital part of our corporate strategy		.893
3. Interorganizational relationships are important to most organizational leaders of our organization		.764
4. Organizational leaders emphasize the partnership function’s strategic role		.777
Interorganizational communication (Chen & Paulraj, 2004, α = .86)	.764
1. We share sensitive information (financial, market research, and/or competition) with our partners		(.391)
2. Partners are provided with any information that might help them in doing business		(.308)
3. Exchange of information with our partners takes place frequently, informally and/or in a timely manner		.912
4. Our partners and we keep each other informed about events or changes that may affect the other party		.854
5. We have frequent face-to-face planning/communication with our partners		.646
Innovation formality (Kleinschmidt et al., 2007, α = .92)	.852
1. Our organization uses a formal process (standardized set of stages and go/no go decisions) to develop a new tourism service/product		(.368)
2. Our process to develop a new tourism service/product lists and defines specific activities for each stage of the process		.840
3. Our process to develop a new tourism service/product has clearly defined go/no go decision points for each stage of the process		.901
4. Our process to develop a new tourism service/product has defined gatekeepers—that is, projects are reviewed at each decision point		.803
Collaboration for innovation (McGinnis & Mele Vallopra, 1999, 2001, α = .69 and .72, respectively)	.870
For the development of new tourism services key partners . . .
1. are frequently used		.835
2. play an important role in the development process		.933
3. usually become involved in the concept stage of the development process		.849

Note: Italicized text represents construct source(s) and source coefficient alpha values. Values in parentheses did not meet cutoff values and the item was dropped from further analysis.

Leadership Support for Interorganizational Relationships

Four items of Chen and Paulraj’s (2004) six-item construct for top management support for purchasing relationships were adopted and modified for this study to measure the importance of interorganizational relationships to leadership and their understanding of the value of these relationships. The modification included adjusting the purchasing context to the innovation context of this study. However, these modifications were not possible for two of the original items. Leadership support for innovation: A five-item construct from de Brentani and Kleinschmidt (2004) and Kleinschmidt, de Brentani, and Salomo (2007) was used to measure leadership involvement in the innovation process. Interorganizational communication: This construct refers to the frequency of communication, the type of information exchanged, and the continuous mutual update following critical events. A five-item construct from Chen and Paulraj (2004) was modified for language to better fit for this study and used to measure this construct. Innovation formality: Four items were adopted from Kleinschmidt et al. (2007) to evaluate internal processes that assist innovation development. Collaboration for innovation: A three-item construct, successfully applied in studies by McGinnis and Mele Vallopra (1999, 2001), was used in this study to measure the frequency of use of partners, the importance of their role, and their early involvement in the innovation process.

Data Analysis

Sample Characteristics

It was found that the responding organizations were true micro organizations. Most (53.6%) had one or two full-time employees, and about a third (27.0%) had three to four employees. Annual budget was not a deciding factor for size; however, it is reported here to demonstrate the limited financial resources of micro tourism organizations. About two thirds of the respondents had a budget of $500,000 or less, with about 15.0% working on a budget of up to $100,000 (Table 2). These organizational characteristics are in line with other studies on American DMOs (e.g., Kim, 2009; Yuan et al., 2003).

Table 2

Characteristics of American Destination Marketing Organizations

	Percentage
Full-time employees
1-2	53.6
3-4	27.0
5-6	10.2
7-9	9.2
Annual budget ($)
≤100,000	14.8
100,001-250,000	25.0
250,001-500,000	26.0
500,001-750,000	8.2
750,001-1,000,000	11.7
1,000,001-2,000,000	8.7
2,000,001-3,000,000	2.0
3,000,001-5,000,000	2.6
≥5,000,001	1.0

To identify the innovative and collaborative behavior of the study, respondents provided information about how many new services they developed and co-developed with partners in the past 3 years and which role partners played. Out of a total of 905 newly developed services, 242 (26.7%) were developed with and initiated by a partner, 315 (34.8%) were developed with a partner but initiated by the focal organization, whereas 348 (38.5%) were developed by the focal organization alone without any partner involvement. On average, each organization developed 4.3 new services in the past 3 years, or about one new service a year.

Statistical Analysis

The hypotheses were evaluated using structural equation modeling for two reasons: First, the simultaneous modeling and estimation of latent variables is useful for behavioral sciences and second, it is widely used in organizational studies on interorganizational relationships as well as innovation and new service development (e.g., Chen & Paulraj, 2004). SPSS AMOS 17 was used for the analysis.

In the first step, the measurement model was evaluated. Factor loadings and Cronbach’s alpha for all constructs are shown in Table 1. Four items from three constructs (leadership support for innovation, interorganizational communication, and innovation formality) had factor loadings of less than .4 and were excluded from further analysis (Carmines & Zeller, 1979). Values for Cronbach’s alphas ranged from .646 to .933 and were thus above the lowest boundary of .6 to .8 as suggested by Nunnally (1978). Convergent and discriminant validity were evaluated by a commonly used combination of techniques: average variance extracted (Fornell & Larcker, 1981) for convergent and construct correlation for discriminant validity. The results of these analyses indicate that all constructs achieve satisfactory measures for convergent and discriminant validity, with average variance extracted values higher than .5 and higher than their correlation with any other construct (Table 3).

Table 3

Average Variance Extracted, Correlations, Means, and Reliabilities

Construct	1	2	3	4	5
1. Leadership support for interorganizational relationships	.718
2. Interorganizational communication	.581	.593
3. Leadership support for innovation	.393	.214	.664
4. Innovation formality	.066	.071	.284	.565
5. Collaboration for innovation	.620	.525	.321	.211	.691
Mean	6.06	5.73	5.59	4.49	5.57
Standard deviation	.808	.812	.809	1.192	1.056
Coefficient α	.910	.764	.888	.852	.870
Composite reliability	.906	.787	.688	.897	.869

Note: Numbers on the diagonal are average variance extracted scores.

Evaluation of the structural model was the next step. Model fit measures (χ²/df = 1.870, standardized root mean square residual [SRMR] = .077, root mean square error of approximation [RMSEA] = .067, Tucker–Lewis index [TLI] = .947, comparative fit index [CFI] = .956, nonnormed fit index [NNFI] = .911) are well within the suggested boundaries for acceptable model fit (Hair, Anderson, Tatham, & Black, 1995; Kline, 1998). Furthermore, the model explains 39.3% of variance in interorganizational communication, 8.5% of variance in innovation formality, and 49.4% of variance in collaboration for innovation. All hypothesized relationships are supported (Figure 2). Leadership support for interorganizational relationships and for innovation are positively correlated (Hypothesis 5). Both types of leadership support have a positive effect on collaboration for innovation whereby support for innovation (Hypothesis 3) has a stronger positive effect than support for interorganizational relationships (Hypothesis 1). Similarly, leadership support for innovation has a stronger positive effect on the subsequent variable (innovation formality, Hypothesis 4) than leadership support for interorganizational relationships has on interorganizational communication (Hypothesis 2). Last, innovation formality has a stronger positive effect on collaboration for innovation (Hypothesis 7) than interorganizational communication (Hypothesis 6). These results suggest that an organizational orientation toward innovation is the driving force for collaboration for innovation.

Figure 2

Final Model of Collaboration for Innovation Among American Destination Marketing Organizations With Less Than 10 Employees

Following Podsakoff, MacKenzie, and Podsakoff (2012), a single unmeasured latent factor was introduced to test for common method bias. In this test, all items of the study constructs were also regressed on the single factor. The results indicated that the single factor increased model fit; however, the factor accounted for only 7% of the total variance, which is less than the suggested 25% cutoff (Williams, Ronald Buckley, & Cote, 1989). Based on these results, common method variance was not a problem.

Discussion and Conclusion

It was found that American DMOs with less than 10 employees do engage in innovation and developed about four service innovations each in the past 3 years. More important, however, was identifying that collaboration plays an important role in innovation development at micro DMOs. About 60% of all new services were developed collaboratively, whereby most developments were initiated by the focal DMO. This suggests that micro DMOs take advantage of resources provided by partner organizations to successfully develop new services.

The goal of this study was to identify the role and effect of organizational settings for innovation and leadership support to integrate partners into the innovation process; in particular, to better understand which of these two key drivers has a stronger effect. It appears from the study findings that the effect of leadership is by far more important than internal organizational settings for innovation. Furthermore, when looking at the effects of organizational settings for interorganizational relationships compared with innovation, it was found that the latter have a stronger effect. The next paragraphs take a closer look at the findings.

Leadership Versus Organizational Settings for Innovation

The study results show that leadership support is a critical driver for micro DMOs to collaborate with partners for innovation development. The stronger direct effect of leadership support on collaboration for innovation compared with the subsequent constructs (interorganizational communication and innovation formality) suggests that leadership is a dominant driver for collaboration for innovation. This finding adds another layer to our understanding of leadership being important for innovation development (Hjalager, 2002, 2010; Ottenbacher, 2007; Zach, 2012), as leadership not only has to pay attention to the innovation itself, but also has to coordinate collaboration for innovation. Leaderships’ responsibility for collaboration for innovation is even more important for micro DMOs, as it was found that organizational settings for interorganizational communication and innovation formality underperform compared with their effect in large service providers (de Brentani & Kleinschmidt, 2004).

Innovation Formality

The low R² value of innovation formality indicates that leadership hardly influences innovation formality, suggesting that it is bypassed by DMO leadership when it comes to collaboration for innovation. While this finding contrasts with earlier findings for micro manufacturing businesses (Humphreys et al., 2005), it can be explained as leadership taking direct control of the innovation process in micro DMOs. It can happen informally and simultaneously, rather than through structured processes.

Interorganizational Communication

Unlike innovation formality, it was found that leadership support influences micro DMOs’ communication agenda. Interorganizational communication is important as DMOs, in their effort to provide information on tourism services, identify, add, and delete partners from their business network to create visitor experiences (Denicolai et al., 2010). However, the weak effect of inter-organizational communication on collaboration for innovation indicates that established communication channels are used to learn about existing tourism offerings, but not necessarily to create new ones (Alonso & Liu, 2012). In other words, interorganizational relationships are mainly used to co-create visitors’ experiences by working with other destination businesses rather than for the purpose of innovation (Paget et al., 2010). However, this does not discredit the importance of interorganizational relationships for noninnovation specific benefits. Indeed, overall business performance for micro businesses is driven by newly formed social capital that stems from collaboration and networking (von Friedrichs Grangsjö, 2003).

Innovation versus Interorganizational Relationships

This study revealed that leadership support drives both innovation formality and interorganizational communication. The twice as strong effect of leadership support for innovation formality compared with support for interorganizational relationships on the subsequent constructs makes sense for DMOs. They do not provide services directly, and thus, regularly collaborate with destination service providers (Selin & Myers, 1998). This constant exchange with other organizations makes interorganizational relationships ubiquitous, whereas the development of innovations imposes an organizational challenge that needs to be overcome.

Implications

This study is important for tourism research for several reasons: First, this study found that leadership in micro DMOs is more important for collaboration for innovation than organizational settings that drive collaboration for innovation in large service providers or small manufacturing firms. It appears that flat hierarchies and a small number of employees impose organizational challenges on DMOs. For one, interorganizational communication, which is critical for DMOs to learn about existing offerings, needs to be developed into a future-oriented task to better assist innovation development by including partners into the innovation process. On the other hand, innovation formality has a strong effect on collaboration for innovation; however, it appears that it exists outside the influence of DMO leadership. This suggests that past innovation experiences at micro DMOs lead to a codified body of activities and tasks that are useful for innovation development. Second, by building on prior service research on the cross-section of innovation and interorganizational relationships in services (Eisingerich et al., 2009), this study extends tourism research by shedding light on this increasingly important issue within the realm of tourism research. Last, by focusing on micro DMOs, this study enables us to better understand one of the largest groups of tourism businesses, which is also one of the least researched groups. Prior tourism and hospitality research often does not distinguish between organizational size (e.g., Kim, 2009; Yuan et al., 2003) or include micro organizations in the broader definition for small- and medium-sized organization with less than 250 employees (e.g., Wanhill, 2000) and thus does not provide a clear understanding of very small tourism organizations.

This study provides several implications for destination decision makers: First, leadership of micro DMOs has to understand the value of innovation to guide the organization to engage in innovation activities. This suggests that leadership must create an atmosphere that enables both innovation and inter-organizational relationship that result in collaboration for innovation. Second, of particular value is the development of innovation guidelines or a handbook based on previous successful innovation experiences. These guidelines can be accessed for future use to collaborate with partners and to recreate innovation success. Third, interorganizational relationships play a prominent role for the development of new DMO services. Working with partners can leverage resources and contribute to the development of new services. Micro DMOs, thus, need to better understand their partners’ needs and resources to successfully co-develop new services. To do so, DMO staff should be encouraged to actively communicate with existing partners and to pursue new interorganizational relationships that have the capacity to add value to innovation processes. Furthermore, DMOs should develop a catalogue of innovation partners, which is especially useful when DMOs go the extra mile to not only to include prominent partners, but also organizations that sit at the periphery of the DMOs business network.

Limitations and Future Research

This study also has some limitations that provide opportunities for future research: The effects of other innovation drivers on collaboration for innovation, such as entrepreneurship, innovation strategy, information technology, or the long-term view of interorganizational relationships (Ottenbacher, 2007) need to be investigated. Next, this study focused on the factors affecting the collaboration for innovation but not on the performance of the innovation. Future research ought to take the next step and essentially measure the value of collaboration for innovation on innovation performance. The current study investigates only cross-sectional data of individual organizations. A longitudinal study would allow identifying trends in DMO innovation behavior. Furthermore, paired data from innovation partners would enable a better understanding of the internal mechanisms that guide the synergistic relationship. Last, organizational characteristics such as the history of the destination, were not collected in this study, but could be helpful to interpret data in future studies. Notwithstanding these limitations, this study provides insights on how micro DMOs can address the constant need to develop new services while simultaneously working with limited resources.

Footnotes

Author’s Note:

The author would like to acknowledge the critical questions and suggestions from the reviewers and the associate editor to improve the quality of this publication.

Florian Zach (e-mail: florian.zach@vancouver.wsu.edu) is an assistant professor in the Hospitality Business Management program, College of Business, Washington State University (Vancouver, WA 98686).

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