THE INFLUENCE OF KNOWLEDGE SHARING ON SERVICE INNOVATION PERFORMANCE: AN EMPIRICAL STUDY ON HOTEL IN NORTH BORNEO, INDONESIA

Abstract

This research is conducted on tourism industry especially hotel in North Borneo Indonesia. To improve the performance of service innovation, companies need knowledge gained from knowledge sharing activities (knowledge donating and knowledge collecting). The study was tested with 182 employees working at the hotel company in North Borneo Indonesia. The data were collected using survey method with questionnaire. The survey responses submitted by respondents in this study indicate that the influence of knowledge sharing on the performance of service innovation shows significant results.

Headnote

Abstract

This research is conducted on tourism industry especially hotel in North Borneo Indonesia. To improve the performance of service innovation, companies need knowledge gained from knowledge sharing activities (knowledge donating and knowledge collecting). The study was tested with 182 employees working at the hotel company in North Borneo Indonesia. The data were collected using survey method with questionnaire. The survey responses submitted by respondents in this study indicate that the influence of knowledge sharing on the performance of service innovation shows significant results.

Keywords: Knowledge Sharing, Knowledge Collecting, Knowledge Donating, Service Innovation Performance

1.Introduction

The era of globalization has now opened the door of a very high competition. Strong global competition and rapid technological changes encourage organizations to always look for special formulas to maintain competitive advantage so they can survive in the face of competition. Today innovation is considered an important mechanism to become more competitive while surviving in the global business world (Indarti, 2010; Yesil et al. 2013; Chernetska, 2017; Fernando and Dasanayaka, 2018).

The company's innovation capability is highly dependent on knowledge (Wuryaningrat, 2013), so that the knowledge in the organization needs to be well managed and rewarded to ensure the success of innovation (Du Plessis, 2007). According to Darroch (2005), a company capable of effectively managing knowledge will be able to become a more innovative company. Management of good and effective knowledge can be interpreted as a form of corporate efforts to increase knowledge resources. Knowledge resources are resources that will continue to grow along with their utilization (Davenport and Prusak, 1998).

In the context of knowledge management, management of knowledge sharing activities within the organization is very important. Srivastava et al. (2006) explain that knowledge sharing activities are part of knowledge management which is very important because it is related to the optimization of knowledge resources. Through knowledge sharing, the company's knowledge resources can continue to be enriched (Lin, 2007). Knowledge sharing has the ability to generate new knowledge. This new knowledge can hopefully be utilized to improve the ability of innovation. The study conducted by Yesil et al. (2013) provide empirical evidence that through knowledge sharing among divisions within the company is very helpful in generating innovation. This applies also to the tourism industry, especially in the hospitality sector.

The growth of the tourism industry in Indonesia is very rapid, indicated by the increasing number of new restaurants that are present by offering various service options to customers The phenomenon is also present in North Borneo. Bank Indonesia (2017) showed that that economic growth in the province of North Borneo increased by an average of over 6%. Based on these data, economic growth in North Borneo reached 6.6% compared to 2016 with an average growth rate of only 3.75%. The increasing economic growth in North Borneo is supported by the growth and development of the tourism in industry sector. The liveliness of the hospitality industry in North Borneo is now causing a very tight competition, which in turn requires hotel owners to maintain and innovate constantly in order to survive in the competition.

This form of service requires close relationships between employees and consumers. In this case, the services provided by employees to customers will be part of the products offered by the company. Hu et al. (2009) say that those working in the service industry must be able to keep and attract new customers by meeting the demands of customer needs. Because the customer will assess the quality of the services that have been given by the company. Satisfied customers of the services they receive make it a loyal customer (Kotler, 2006; Fejza et al. 2017).

Developing knowledge sharing aspects of management and employees is quite important, because effective knowledge sharing practices enable the reuse and regeneration of knowledge at the individual and corporate level (Chaudhry, 2005). Furthermore, Matzler et al. (2008) said that knowledge sharing will contribute positively to the company's performance, especially on improving service quality and innovation.

Based on the above explanation, the ability of organizational innovation should be supported by important factors of knowledge sharing. This study aims to examine the effect of knowledge sharing on service innovation performance in the hospitality industry in North Borneo Indonesia. This research is feasible to be re-examined because there is still a lack of research on knowledge management in the tourism industry sector, especially in hospitality rather than in the production or manufacturing sectors (Hallin and Marnburg, 2008; Hu et al. 2009).

2.Methodology

2.1. Theoritical Background

2.1.1. Knowledge as an Organizational Resource

Davenport and Prusak (1998) define knowledge as non-permanent, formed by the experience, value, contextual information, and supportive skill side of a person in the frame of mind to evaluate and incorporate new experiences and information. Knowledge is the result of information processing so that it becomes more useful. In the organization, knowledge is not only in the form of documents or data storage but also in the form of organizational routines, processes, applications, and norms.

Further knowledge is a valuable asset for individuals and companies (Nonaka and Takeuchi, 1995; Davenport and Prusak, 1998). Therefore, the knowledge held must be shared to all elements of the company to keep knowledge awake and continue to provide benefits for individuals and companies (Nonaka and Takeuchi, 1995). The company's ability to share knowledge among individuals and groups of individuals within the company is an important source of competitive advantage (Kogut and Zander, 1992).

2.1.2. Definition of Knowledge Sharing

Knowledge sharing is considered one of the most important aspects of knowledge management (Gupta et al. 2000; Wang and Noe, 2010). There are various definitions of knowledge sharing in the literature. Davenport and Prusak (1998) define knowledge sharing as a process of distributing the skills and experience voluntarily required throughout the organization. Bartol and Srivastava (2002) define knowledge sharing as a form of sharing information, ideas, support and expertise between one individual and another within a company. Cummings (2003) describes the sharing of knowledge as a means by which an organization gains access that is considered as a necessary way to gain knowledge for an individual and to innovate new knowledge for an organization. Hendriks (1999) describes the sharing of knowledge as a communication process that includes two parts: knowledge owner externalizing knowledge; and demanding knowledge internalizing knowledge. Significantly with it, Van den Hooff and Ridder (2004) combine the sharing of knowledge into two perspectives, namely as knowledge collection and knowledge donation.

Based on an explanation of the sharing of knowledge above, the sharing of knowledge in the context of this study provides empirical evidence that the knowledge sharing dimension of collecting knowledge and donating knowledge can enhance the innovation capabilities of the company (Lin, 2007; Kamasak and Bulutlar, 2009). Further improves service innovation through the creation of (new) knowledge within the company (Indarti, 2010; Hu et al. 2009).

2.1.3. Definition of Service Innovation Performance

Hu et al. (2009) defines the performance of service innovation as something new or something enhanced and done by the company to create significant added value either directly to the company or directly to customers. Similar sentiment Gloet and Terziovski (2004) say that innovation will improve performance, solve problems, add value and create competitive advantage for the company. Therefore a more understanding of the nature of innovation is needed. Enterprise management must ensure that innovation can be assembled into a corporate culture (Gloet and Terziovski, 2004). Furthermore, the process of innovation is very dependent on knowledge (Nonaka and Takeuchi, 1995).

Scott and Bruce (1994) say that the central issue in management innovation is management attention. Managing attention is believed to be more difficult, as it concerns the adaptation of individuals to their environment. Based on the development of innovation, there are important things to note the existence of innovative behavior. Furthermore, Scott and Bruce (1994) concluded that individuals with innovative behavior sought support for the ideas they created and sought to build cooperation on the new idea.

Companies that are said to be successful are companies that have a greater difference in terms of products, services and reputation of the company as a whole (Doyle and Wong, 1998). Matear et al. (2004) in his research explain that the development of new services is the process of managing new or adopted ideas in order to be efficient for the creation of sustainable competitive advantage for the company. In an innovation management company it is needed to create and develop fresh ideas that must continue to flow as quickly as possible and at all times in anticipation of the dynamic development of the world (Indarti, 2010).

Chan et al. (1998) found that hotel services, restaurants and tourism businesses still tend to focus on improving the quality of innovation. Furthermore, Hu et al. (2009) propose the need for a new service quality approach by replacing the old ways of service. The service sector at this time has grown rapidly, with such developments, it is necessary to develop studies on the performance of service innovation in this sector (Hallin and Marnburg, 2008; Hu et al. 2009).

2.2. Hypotesis Development

2.2.1. The Influence of Knowledge Sharing on Service Innovation Performance

As explained earlier, knowledge is an important asset in creating sustainable growth and corporate competitive advantage (Kogut and Zander, 1992; Nonaka and Takeuchi, 1995; Grant, 1996). The process of identifying, capturing and utilizing knowledge within the company contributes substantially in creating competitive advantage (Yucelen and Yigitbas, 2010). Knowledge management has been found to have a positive effect on service innovation performance (Hu et al. 2009; Yucelen and Yigitbas, 2010). This means managing knowledge is also an important process of change to connect between individuals, teams, departments and companies through sharing knowledge as a learning company. Learning is a perfect part of innovation, as it provides the knowledge through the skills and competencies needed to build innovation and innovation is highly dependent on knowledge, where the company's knowledge provides new opportunities for the company to continue to develop (Nonaka and Takeuchi, 1995).

Previous research has focused more on the impact of knowledge management in supporting, enhancing innovation and innovating processes in different business functions (Hallin and Marnburg, 2008). Sveiby (2001) explains that knowledge sharing can be done within the company's internal environment as well as on the company's external environment. Therefore, the interaction between internal knowledge and external knowledge can influence the level of knowledge in innovating (Liao et al. 2007). The existence of such interaction can influence the improvement of internal capability and openness to knowledge-sharing activities which in turn will improve the company's innovation performance. The company's ability to manage knowledge resources can be utilized by the company as a faster source of problem solving. This can happen because knowledge can provide a reactive ability to respond to new information which in turn shape the improvement of innovation ability (Lin, 2007).

Some previous studies provide empirical evidence that the ability to share knowledge, if it can be absorbed well, can help the birth of company innovation. Research carried out by Lin (2007) and Kamasak and Bulutlar (2009) provides empirical evidence that knowledge sharing dimensions of knowledge gathering and donating knowledge can enhance the company's innovation capability.

Dimensions of knowledge sharing, which are donate knowledge and gather knowledge, are expected to increase the wealth of corporate knowledge through interaction with other individuals. Increasing the wealth of knowledge is what is expected to improve the ability of corporate innovation. The company's innovation capabilities born from knowledge-sharing activities are marked by the birth of new creative ideas. It is this new idea that facilitates innovation and new business opportunities (Darroch, 2005).

As previously described, knowledge sharing activities aim to gain knowledge from internal sources or external sources. Thus to achieve the goal of sharing knowledge, exploiting and exploring knowledge is important (March, 1991). Based on the description, the hypotheses can be as follows:

Hi: Knowledge collecting positively effects on service innovation performance.

H2: Knowledge donating positively effects on service innovation performance.

2.3 Sample and Sampling Methods

The population in this study are employees who work on hotel company in North Borneo, Indonesia. The sample size in this study was 150 employees. This number has met the needs of the minimum sample size in multiple regression analysis (Hair et al. 2010). The sample was taken by using non probability sampling method with purposive sampling technique. The criteria used are hotel employees who have worked at hotel companies and have experience at least 1 year in their field. These criteria are chosen because it is assumed that the employee with minimum 1 year working experience in his / her field has experience in sharing knowledge and familiar with the culture in the company where he / she works.

2.4. The Research Instrument

This research uses survey method. The data were collected using questionnaires that have been developed by previous researchers. The construct shared the knowledge and performance of its measurement service innovation using a questionnaire developed by Van den Hoof and Ridder (2004) and Hu et al. (2009). To support a good response rate in data collection, then the questionnaire will be distributed directly to all respondents. Each of these variables is measured using a 5 Likert scale (1 strongly disagree, 5 strongly agree). Knowledge sharing variables are two dimensions of knowledge donating and knowledge collecting (Van den Hoof and Ridder, 2004). Knowledge sharing variables are operationalized with 10 items of statement. The focus of this measurement is to know knowledge sharing activity is done within the company based on the perception of hotel employees. Furthermore, service innovation performance variables have two dimensions: innovative behavior and new service development (Scott and Bruce, 1994; Matear et al. 2004). Variable performance of service innovation was measured using 14 statement items developed by Hu et al. (2009). This measurement is intended to show the level of innovation in hotels in North Borneo Indonesia.

2.5. Data Analysis

The author uses descriptive statistic analysis to see the central tendency. Furthermore, regression analysis is used to show the relationship between the dependent variable (Y) and the independent variable (X). Testing of statistical analysis is done by using SPSS software.

3.Results and Analysis 3.1. Data Collection Results

The data collection in this study was conducted for twenty-eight days starting from February 1st to February 28th, 2018. Total questionnaires distributed directly to 200 respondents in five star hotels in North Borneo Indonesia. Data returned or collected as many as 193 units (response rate 96.5%). Of the 193 questionnaires, only 182 questionnaires were collected. In other words, 230 respondents who fill the questionnaire in this study has met the criteria of the sample that has been determined, the remaining 18 questionnaires that have been collected cannot be used in data processing, because it does not meet the criteria of the sample set by the researcher. More details about the results of data collection, can be seen in Table 1.

Table 1 shows that the respondents' participation rate is very good by looking at the data of the questionnaire that has returned to reach 96.5% and 91% of the questionnaire data that has met the specified sample criteria. In other words, the data can be further processed.

3.2. Respondent Profile

Based on data derived from 182 employees working on restaurants who have participated in this study, all have been in accordance with the selection criteria of the respondents who have been determined by the researchers.

Based on Table 2, most (119) of respondents in this study were men. Most are in the mature age range of 30-35 years (61%). Respondents who worked at the hotel in North Borneo Indonesia who participated in the study mostly had working experience ranging from 16-18 years (22.5%). It can be interpreted that the work experience owned by respondents at the hotel in North Borneo Indonesia is a worker who has a fairly good working period and classified as a productive age.

The education level of the majority of respondents in this study is 84 vocational school (46.2%). These data indicate that the level of education of most employees in hotels in North Borneo Indonesia is a diploma. Furthermore, in terms of marital status, 100 respondents involved in filling in the questionnaire data in this study are mainly unmarried people (54.9%). Table 2 also shows that the largest number of respondents in the study was in the food and beverage department of 44 people (24.2%). The most dominant position of respondent in this research is position as first-line staff as much as 131 (72%).

4.Hypothesis Testing Results and Discussion

The first hypothesis suggests that there is a positive influence of knowledge collecting on the performance of service innovation. The result of hypothesis test 1 in Table 3 shows that knowledge collecting has a significant positive impact on innovation performance of hotel in North Borneo. It can be seen from the value (ß = 0.552, p <0.01). Based on these statistical results, the hypothesis proposed in this study is supported.

It is shown that knowledge collecting positively and significantly influences on the performance of hotel service innovation in North Borneo Indonesia. A significance level of 1% indicates that knowledge collecting is a good variable to use to predict service innovation performance. The confidence level of these variables in predicting service innovation performance is very high. This is indicated by the error rate of knowledge collecting variable in explaining the service innovation performance, which is very small, equal to 1%.

The second hypothesis suggests that there is a positive influence of knowledge donating on the performance of service innovation. The result of hypothesis 2 test in Table 3 shows that knowledge donating has a significant positive impact on the performance of hotel service innovation in North Borneo Indonesia. It can be seen from the value (ß = 0.641, p <0.01). Based on these statistical results, the hypothesis proposed in this study is supported.

The results of statistical analysis that has been done show that knowledge donating have a positive and significant impact on service innovation performance hotel in North Borneo Indonesia. A significance level of 1% indicates that knowledge collecting is a good variable to use to predict service innovation performance. The confidence level of these variables in predicting service innovation performance is very high. This is indicated by the level of knowledge donating variable error in explaining the service innovation performance is very small at 1%.

In the context of hotels in North Borneo Indonesia, knowledge sharing with service innovation performance has a one-way relationship. This means that when the business of the hotel in North Borneo Indonesia has a high level of knowledge sharing, it will make it easier for the hotel business in North Borneo Indonesia to innovate in the services provided to the customers. Implementing knowledge sharing will provide the creation of new knowledge within the company (Nonaka and Takeuchi, 1995). Thus, support for the hypothesis in this study, in line with the theories referred to Nonaka and Takeuchi (1995); Davenport and Prusak (1998) and the results of previous studies such as Van den Hooff and Ridder (2004); Lin (2007); Kamasak and Bulutlar (2009); Hu et al. (2009) and Wuryaningrat (2013).

5.Conclusions and Sugestions 5.1 Conclusions

This study is aimed at obtaining empirical evidence of the influence of knowledge sharing on service innovation performance in North Borneo Indonesia. The conclusion of the research results can be explained in the description as follows:

1. This research can prove that knowledge sharing (knowledge collecting) influences positively on service innovation performance hotel in North Borneo Indonesia.

2. This research can prove that knowledge sharing (knowledge donating) influences positively on service innovation performance hotel in North Borneo Indonesia.

5.2 Limitations and Suggestions Research

During the implementation of this research, there are some limitations that are expected to be an ingredient in providing improvement suggestions for further research on relevant topics. Limitations and suggestions in this study are:

1. This study uses cross sectional study to able to explain a phenomenon at one time only, the consequence cannot know the influence of time change. Service innovation is a diffusion process that can change over time, so future research can test service innovation with longitudinal studies.

2. Future research can be done in the context of different organizational cultures so that there can be differences in the influence of organizational culture on the performance of hotel service innovation (e.g. by comparing international hotel management with local hotel management).

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