Competitive Advantage and Performance: Empirical Investigation on Demographic Factors of Malaysian Hotel Entrepreneurs

Transcription

1 Competitive and Performance: Empirical Investigation on Demographic Factors of Malaysian Hotel Entrepreneurs Rossidi Usop, Fakhrul Anwar Zainol, Zamri Chik, Wan Norhayate Wan Daud, Norfadzilah Rashid, Asyraf Afthanorhan To Link this Article: DOI: /IJARBSS/v8-i12/5067 Received: 21 Nov 2018, Revised: 23 Dec 2018, Accepted: 26 Dec 2018 Published Online: 30 Dec 2018 In-Text Citation: (Usop et al., 2018) To Cite this Article: Usop, R., Zainol, F. A., Chik, Z., Daud, W. N. W., Rashid, N., & Afthanorhan, A. (2018). Competitive and Performance: Empirical Investigation on Demographic Factors of Malaysian Hotel Entrepreneurs. International Journal of Academic Research in Business and Social Sciences, 8(12), Copyright: 2018 The Author(s) Published by Human Resource Management Academic Research Society ( This article is published under the Creative Commons Attribution (CC BY 4.0) license. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this license may be seen at: Vol. 8, No. 12, 2018, Pg JOURNAL HOMEPAGE Full Terms & Conditions of access and use can be found at 810

2 Competitive and Performance: Empirical Investigation on Demographic Factors of Malaysian Hotel Entrepreneurs 1 Rossidi Usop, 2 Fakhrul Anwar Zainol, 3 Zamri Chik, 4 Wan Norhayate Wan Daud, 5 Norfadzilah Rashid, 6 Asyraf Afthanorhan 1,2,3,4,5,6 Faculty of Economics and Management Sciences, Universiti Sultan Zainal Abidin, Kuala Nerus, Terengganu, Malaysia *Corresponding Author: fakhrulanwar@unisza.edu.my Abstract Economic of Malaysia is growing rapidly in this few years with tourism industry plays an important role for Malaysia.Tourism industry effects positively on the economy can be a key foreign exchange earner, contributing to growth, investment and employment. The resilience of the industry was largely attributed to the active participation in undertaking vigorous promotion and marketing, diversifying target markets, as well as improving competitiveness of tourism products and services to sustain interest among tourists to visit Malaysia. Due to the widely accepted nation that the managerial competencies give significant impact to the performance of the firm, and different personal characteristics of owner or manager and structure of organizations give different impact, thus this research is related. Future more, there has been little research, which had been done in the area of managerial competencies and competitive advantage for small businesses, especially hotel entrepreneurs in Malaysia. Persisting problems of Malaysian entrepreneurs include inadequacy of development, planning, market and marketing infrastructure, managerial expertise, and research and development. Research in the firm performance shows that personal and organization structure significantly affect firm performance as an outcome. Thus, this study tried to look the role of demographic factors in relationship between competitive advantage in hospitality management industry on the business performance of Malaysian hotel entrepreneurs. Data were analyzed using version 21.0 from IBM-SPSS-AMOS (Package Statistics for Social Sciences - Moments Structure Analysis). The findings show that Experience, Ownership, Education and Longevity give an impression of 50% variation in the Competitive of the company in this study, when competitive advantage also explains as much as 68% of variation in the company's business performance in this study. 811

3 Keywords: Competitive, Business Performance, Hotel Entrepreneurs, Structural Equation Modeling (SEM), Confirmatory Factor Analysis (CFA) Introduction Tourism industry plays an important role for Malaysia; Malaysia has a lot of natural resources, such as tropical forest, rivers, lakes, island and animals life. Therefore, the natural resources can be the largest sources of income in Malaysia;The industry continued to be a key foreign exchange earner, contributing to growth, investment as well as strengthening the employment. The resilience of the industry was largely attributed to the active participation in undertaking vigorous promotion and marketing, diversifying target markets, as well as improving competitiveness of tourism products and services to sustain interest among tourists to visit Malaysia. (9th Malaysian Plan, ). Most of the research on entrepreneurship is conducted in the western countries and it is timely for a similar study to be conducted in Malaysia. The importance of entrepreneurship and tourism industry prove to be true since their activities have been cited as making major contributions to the economic growth and job creations (Steiner & Solem, 1998). Proper consideration has been given to policies that assist firm structurally, technological and educationally, and in fact, a particular large number of business enterprise founded by the government are involved in businesses such as retail, services, manufacturing and so the others. The characteristics of the entrepreneur or business founders have given a great impact on the organization s performance. Their abilities include management skills, market sensitivity, resources creation and technical skills. Current research reveals that entrepreneur management concepts and skills is extremely important to the organizational success (Yun Lin, 1998). Malaysian Small and Medium Enterprises (SME), prevalent in service sectors (Smidec, 2001) play a crucial, multifaceted economic role. The extensive demand on the tourism industry has stimulated the emergence of many small and medium hotels in Malaysia. Characterized by simple organizational structures, rapid decision making, innovation, efficient, production, independent and flexibility, SME plays as a catalytic role in future development of the country, particularly when compared to the potential role of longer firms. Malaysian entrepreneurship lacks the basis and general management skills needed to manage their business successfully and this is also one of the major problems facing SME in Malaysia (Clapham, 1985; Wasilczuk, 2000). According to a research done by Aliah & Rahimah (1996), persisting problems in Malaysian SME policies included the lack of leadership in programmed delivering, inadequate of development plan and weak coordination of policies between national, state and local government. Other problems faced by SME s were financial resources, technical support and affordable industrial land, market and marketing information, managerial expertise, research and development linkages. Entrepreneur for the study s purposes is defined as a person who manage and has ownership (including part-ownership) over the business he or she operates. As a whole, Malaysian entrepreneur continually lobbied the government for privilege treatment, compensate for poor organizational structure, management techniques and planning. Now entrepreneurs are forced to upgrade operations and improve profitability through adaptation of better management techniques to improve their use of resources. Schroeder, Gopinath & Congden (1989) and Maggina (1992) revealed that in order to succeed, the managers or owners must devote attention to managerial issues and competencies to enhance to the performance of firms. 812

4 The World Tourism Organization forecasts that international arrivals worldwide are expected to reach 1.0 billion by Tourist arrivals to Malaysia are poised to grow at an average rate of 8.4 per cent per annum and estimated to reach 24.6 million by Correspondingly, tourist receipts are set to rise at an average annual rate of 13.9 per cent to RM59.4 billion in 2010, and are expected to contribute substantially to the total earnings in the services account of balance of payments. Modeling the Framework The research framework of the study is shown in Figure 1. The model consists of four variables are Experience, Ownership, Longevity and Education, while the two constructs are Competitive and Business Performance. Figure 1: The Research Framework Of The Study Figure 1 presents the path of interest in the study where several hypotheses were deveoped based on supports from theory and literature. The study intend to test the stated hypotheses using the empirical data from the field. Table 1 present the statement for hypothesis of interest in the study. H1 H2 H3 H4 H5 Table 1:The hypothesis of interest in the study Hypothesis Statement The Experience of Malaysian Hotel Entrepreneurs has significant effects on Competitive in the hospitality management industry. The Ownership of Malaysian Hotel Entrepreneurs has significant effects on Competitive in the hospitality management industry. The Education of Malaysian Hotel Entrepreneurs has significant effects on Competitive in the hospitality management industry. The Longevity of Malaysian Hotel Entrepreneurs has significant effects on Competitive in the hospitality management industry. The Competitive in hospitality management industry has significant effects on the Business Performance of Malaysian Hotel Entrepreneurs 813

5 Table 1a:The hypothesis of interest in the study and the method of statistical analysis to employ Hypothesis Statement Method H 1 Experience has significant effects on Competitive Path Analysis in SEM H 2 Ownership has significant effects on Competitive Path Analysis in SEM H 3 Education has significant effects on Competitive Path Analysis in SEM H 4 Longevity has significant effects on Competitive Path Analysis in SEM H 5 Competitive has significant effects on Business Performance Path Analysis in SEM Table 2 presents the constructs and their respective measuring items in the questionnaire. The item statement in the questionnaire are measuren using the five point interval scale. Table 2: The constructs in the model and their measuring items: Constructs Type of Construct Measuring Items Competitive Exogenous Measured using six items in a questionnaire Business Performance Endogenous Measured using four items in a questionnaire The full structural model with the variables and constrcts together with their measuring items is presented in Figure 2. The double headed arrow indicate the correlational estimate while the single headed arrow indicate the causal estimate. Figure 2: The Research Framework of the study in IBM-SPSS-Amos Graphic The study adopted two steps approach of Structural Equation Modeling (SEM) namely measurement model and structural model. In the first step, the study will validate the meausrement model of the constructs using the Confirmatory Factor Analysis (CFA) procedure, and in the second step the study 814

6 will assemble the structural model and execute the Structural Equation Modeling (SEM) procedure in order to test the stated hypotheses. The Confirmatory Factor Analysis (CFA) The Confirmatory Factor Analysis (CFA) procedure will validate the measurement model of two latent constructs for Unidimensionality, Validity, and Reliability (Awang, 2011; 2012; 2014; 2015: Awang et al., 2015; Kashif et al., 2016; Bakar & Afthanorhan, 2016; and Hoque & Awang, 2016). According to Awang (2011, 2012, 2014, & 2015), Bakar & Afthanorhan (2016), and Hoque & Awang (2016), for the confirmatory sudy, the measurement model of latent constructs needs to pass three types of validity measures namely Construct Validity, Convergent Validity, and Discriminat Validity. The Construct Validity is assessed through the Fitness Indexes of the Measurement Model, the Convergent Validity is assessed through computing the Average Variance Extracted (AVE), and Discriminant Validity is assessed through developing the Discriminant Validity Index Summary. As for the reliability, it is adequate for the study to assess the Composite Reliability (CR) since it replaced the traditional method of computing the Cronbach Alpha for analysis using Structural Equation Modeling (SEM) (Kashif et al., 2015; 2016; Noor et al., 2015). The particular latent construct is considered valid if its fitness indexes achieved the three Model Fit categories namely Absolute Fit, Incremental Fit and Parsimonious Fit (Awang, 2011; 2012; 2014; 2015; Kashif et al., 2015; 2016; Noor et al., 2015). The threshold and its respective index are given in Table 3. Table 3: The three categories of model fit and their level of acceptance Name of category Name of index Level of acceptance Absolute Fit Index RMSEA RMSEA < 0.08 GFI GFI > 0.90 Incremental Fit Index AGFI AGFI > 0.90 CFI CFI > 0.90 TLI TLI > 0.90 NFI NFI > 0.90 Parsimonious Fit Index Chisq/df Chi-Square/ df < 5.0 ***The indexes in bold are recommended since they are frequently reported in literatures Source: Awang (2015) The Structural Equation Modeling (SEM) Once the CFA report is completed and all values meet the required thresholds for validity and reliability, the researcher can conclude that the measurement models for all latent constructs involved in the model have been validated (Awang, 2012; 2014; 2015; Mohamad et al., 2016; Mohamad et al., 2016a; Yusuf et al., 2017). Then, the next step for the researcher is to assemble these constructs into the structural model in order to execute Structural Equation Modeling (SEM). The constructs should be arranged from left to right, beginning with the exogenous constructs (far left) followed by the mediator constructs in the middle and the endogenous construct (far right) (Awang, 2015; Mohamad et al., 2016; Mohamad et al., 2016a; Yusuf et al., 2017). Then, based on the 815

7 direction of hypothesis, the researcher links the exogenous construct to its respective endogenous construct using the single headed arrow to estimate the causal effects. The causal effects estimate is important for testing hypothesis. Lastly, all exogenous constructs are linked using the double headed arrow in order to estimate the correlation among them. The correlation among exogenous constructs are important for multi-collinearity assessment. Figure 3: The Standardized Regression Path Coefficients between Constructs IBM-SPSS-Amos will produce two types of output from the SEM procudure namely Standardized Regression Path Coefficients and Regression Path Coefficients between constructs in the model. The Standardized Regression Path Coefficients output is presented in Figure 3 while the Regression Path Coefficients output is presented in Figure 4 respectively. Table 4: The Coefficient of Multiple Determination for Competitive Endogenous Construct Variables R 2 = 0.50 Competitive Experience Experience, Ownership, Education and Longevity Ownership Education Longevity explain 50% of the variation in Competitive of the firms in the study Table 5: The Coefficient of Multiple Determination for Business Performance Endogenous Exogenous R 2 = 0.68 Construct Constructs Business Performance Competitive Competitive explain 68% of the variation in Business Performance of the firms in the study 816

8 Figure 4: The Regression Path Coefficients between Constructs and Component in the study Table 6: The Regression Path Coeffficient and Its Significance Estimate S.E. C.R. P Result Competitive_ <--- Experience Significant Competitive_ <--- Ownership Significant Competitive_ <--- Education Significant Competitive_ <--- Longevity Not Significant Business_Performance <--- Competitive_ Significant Furthermore, the researcher will test every hypothesis proposed in this research. Table 6 shows estimates of the direct effects of the effects of each independent construction on the constructs in the model as shown in Figure 4 above. Table 7 shows Longevity has not significant effects on Competitive and Not Supported. H 1 H 2 H 3 H 4 H 5 Table 7: The Hypothesis Testing for Direct Effect Hypotheses Hypothesis Statement Result Experience has significant effects on Competitive Supported Ownership has significant effects on Competitive Supported Education has significant effects on Competitive Supported Longevity has significant effects on Competitive Not Supported Competitive has significant effects on Supported Performance 817

9 Conclusion The results of this study have proven empirically that demographic factors namely experience, ownership, and education has significant positive impacts on the competitive advantage and performances of the Malaysian Hotel Entrepreneurs. While, the longevity factor show has no significant impact to the competitive advantage and business performance. Overall, the findings in this study indicate that demographic factors accounted for 50% of the company's competitive advantage in this study. Meanwhile, competitive advantage explained 68% of variation in business performance of companies in this study. This result consolidates demografic factor brings about positive impact on the local economy in general and Malaysian hotel entrepreneurs in particular. Based on the above study, it provides a clear signal that any efforts by governments in promoting and developing the tourism industry would bring about positive impact on the competitive advantage and business performance of small and medium hotel businesses in Malaysia. References Aliah Hanim, M.S. & Nik Rahimah, N.Y. (1996). The marketing orientation and practices of small and medium scale Malay entrepreneurs: lessons learnt and implication. Malaysian Journal of Small And medium Enterprises, 7, Awang, Z. (2011). A handbook on SEM: Structural equation modelling. Kelantan: Universiti Teknologi MARA. Awang, Z. (2012). Structural equation modeling using AMOS graphic. Penerbit Universiti Teknologi MARA. Awang, Z. (2014). A handbook on SEM for academicians and practitioners: the step by step practical guides for the beginners. Bandar Baru Bangi, MPWS Rich Resources. Awang, Z. (2015). SEM Made Simple: A Gentle Approach to Learning Structural Equation Modeling. Awang, Z., Afthanorhan, A., Mohamad, M., & Asri, M. A. M. (2015). An evaluation of measurement model for medical tourism research: the confirmatory factor analysis approach. International Journal of Tourism Policy, 6(1), Bakar, A.A., & Afthanorhan, A. (2016). Confirmatory Factor Analysis on Family Communication Patterns Measurement. Procedia-Social and Behavioral Sciences, 219, Chik, Z., Abdullah, A.H., & Muda, H. (2018). The role of demographic factors in relationship between motivation, learning styles, learning discipline and student academic achievement. PhD Paper, UniSZA, Terengganu. Hoque, A. S. M. M., & Awang, Z. (2016). The Exploratory Factor Analysis (EFA) of Entrepreneurial Marketing Scale - Development and Validation. Tourism Conference APRIL 2016 (p. 22). Kashif, M., Awang, Z., Walsh, J., & Altaf, U. (2015). I m loving it but hating US: understanding consumer emotions and perceived service quality of US fast food brands. British Food Journal, 117(9), Kashif, M., Samsi, S. Z. M., Awang, Z., & Mohamad, M. (2016). EXQ: measurement of healthcare experience quality in Malaysian settings: A contextualist perspective. International Journal of Pharmaceutical and Healthcare Marketing, 10(1),

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