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Hospitality Management 23 (2004) 411424 www.elsevier.com/locate/ijhosman

2003 Review Papers

Literature in strategic management in the hospitality industry

Michael D. Olsen
Department of Hospitality and Tourism Management, Pamplin College of Business, Virginia Polytechnic Institute and State University, Blacksburg, VA24061-0429, USA

Abstract This literature review of the research in strategic management in the hospitality industry covers the 2 year period of 20022003. Using a contingency model framework for the analysis the research reported in refereed journals in the eld of hospitality is reported. Additionally, research that considered the context of the hospitality industry but published in nonhospitality refereed journals was also included. Key issues and needs in the area are provided at the conclusion. r 2004 Elsevier Ltd. All rights reserved.
Keywords: Strategic management; Hospitality industry; Environmental scanning; Strategy choice; Strategy implementation; Resource-based view; Core competencies; Resource allocation

1. Introduction The purpose of this article is to provide an overview of research in strategic management in the hospitality industry for the years 20022003. The review includes both refereed hospitality and scholarly business publications, which reported contextual research in hospitality. While every effort has been made to capture empirical research, the review will also consist of those contributions that are prescriptive and conceptual.
Tel.: +1 540 231 5515; fax: +1 540 231 7826.

E-mail address: olsenmd@vt.edu (M.D. Olsen). 0278-4319/$ - see front matter r 2004 Elsevier Ltd. All rights reserved. doi:10.1016/j.ijhm.2004.10.003

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In organizing the review process this author utilized a contingency model. The model suggests that organizations exist in a contingent relationship with their environments and executives seek to align their organizations, both internally and externally, in order to seek opportunity and avoid threats posed by the environment. The constructs used in this approach include environmental scanning, strategy choice and strategy implementation. The implementation construct incorporated the resource-based view, implementation and evaluation dimensions.

2. Environmental scanningthe environment construct The strategy literature in general has approached the construct of the environment from many different perspectives. In some cases strategy is viewed as managerial response to environmental forces driving change. In other instances it is approached from the perspective of managerial anticipation or to be out front of changes in order to seize opportunity before others. The main theme underlying this construct is the causal relationship the environment has with rm performance. Historically, the literature in hospitality has focused primarily upon the conceptual nature of the environment with prescriptive efforts aimed at how to scan or gather business intelligence to achieve competitive advantage. The conceptual theme has focused upon the dynamic and complex dimensions of the environment and the importance of the rms management aligning the decisionmaking and investment processes with events taking place in the environment. The bulk of the work methodologically has been case study with some empirical work appearing from time to time. The more recent work reviewed here has not differed in terms of the balance between conceptual and empirical. In terms of empirical work, Sharma (2002) in a specic look at how contextual factors inuence variables inuencing budgeting systems used the construct of perceived environmental uncertainty (PEU) to investigate the relationships. PEU is utilized in this study as a multidimensional construct. The study focused on the service industry with the specic context being the hotel industry. Based upon a sample of 106 hotels the authors ndings suggest that different dimensions of perceived environmental uncertainty do have effects upon budget system characteristics. The author employed path analysis to investigate this relationship. This is further evidence that a causal relationship exists between the environments, as perceived by executives, and rm activity. The environment construct was addressed in terms of risk by Chathoth and Olsen (2003a). In this study the authors used three major categories of risk, i.e. economic risk, business risk, and market risk to assess risk effects upon rms in the restaurant industry by assessing their corporate strategies, capital structures and performance. Using metrics from the corporate nance literature they dened economic risk as the covariance of the rms sales growth with that of the overall growth of the Gross Domestic Product of the US. This was designed to capture the uncertainties of the macroeconomic environment. Business risk was measured as the covariance of the rms cash ows with that of the S&P 500 average. Market risk was dened by

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the covariance of the rms share price with the S&P 500 average share price. The hypotheses tested related to the relationships that exist between corporate strategy and environmental risk, risk and capital structure, and risk and rm performance. Secondary data retrieved from the COMPUSTAT database via Wharton Research Data Service were analyzed using regression analysis. Findings suggest a signicant relationship between corporate strategies and the environment. Growth potential (a major strategy of the restaurant industry) decreases with an increase in economic and business risk and increases with an increase in market risk. Findings are in agreement with the general literature on this subject. With respect to conceptual work, Crook et al. (2003) introduced a strategy model that suggests that a rms strategic position is determined by the managers ability to collect and interpret data regarding the rm itself, its competitors, stakeholders and industry. The model is referred to as a competitive edge model and is based upon a series of questions to guide the manager in decision making. The work offers a prescriptive orientation and has practical implications for managers. This work is built upon the basic concepts in the eld of strategy including the works of Michael Porter and his ve forces industry model. Another conceptual piece was offered by Harrison (2003). Building again upon basic strategy literature Harrison points out the importance of the analysis of external factors and internal resources. To illustrate the need for a systematic investigation of a rm and its environment the author works through an example of Jack in the Box restaurants and their expansion decision. The primary objective of the article was to raise the awareness of various aspects of strategic analysis. Case study applications reecting the construct of the environment were used in three tourism-related studies. Bunja (2003) looked at the characteristics of the Croatian tourism industry environment. In a critical assessment of the operating environment of the industry the author offers a prescriptive look at what must be done to improve the destination to enhance its performance. Similarly, Bissell and Bedsole (2003) offer challenges within the Mexican environment related to investing in the country. Risks associated with the investment are reviewed along with challenges in obtaining government permits and licenses. In the last example of case analysis Lu and Chiang (2003) attempted to survey Ontario, Canada hoteliers to identify strategic issues facing the industry. The results suggested that a lacking of nancial and government support, changing customer needs, human resource scarcity and the increasing power of the customer in the context of the Internet are the key issues of concern. In a contextual analysis, Atkins et al. (2003) reported on an online debate with industry experts on the impact of the events of September 11, 2001. Essentially, the article presented anecdotal evidence from hospitality industry leaders on the negative impacts of 9/11 and probable scenarios for the future. This approach to environmental scanning in a web-based context appears to be gaining popularity. Based upon the most recent published work in this area it can be seen that little in the way of advancing knowledge has occurred. The work remains primarily conceptual with prescriptive and descriptive overtones. In other words, it is representative of what may be called knowledge transfer and adoption. Established

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works in strategy are reworked in a hospitality context or case study. While authors are using conceptual works that have been reported in non-hospitality literature, few have actually tested the application in the hospitality industry. Only recent works attempted to establish measurable and signicant relationships between the environment construct and strategic decisions and performance (Chathoth and Olsen, 2003a,b). Perhaps one of the primary reasons for the lack of knowledge building is the difculty of isolating the causal relationships between the environment construct and strategic success. The contextual nature of strategy research is complicated and idiosyncratic thus challenging researchers in their efforts to study this phenomenon.

3. Making strategic choicesthe strategy choice construct The strategy literature has reected constructs regarding the choice executives make with regard to competing in the future. While the construct is interpreted widely, it generally refers to the investments executives must make to properly allocate resources to the future of the organization. Typically, such choices include mergers and acquisitions, growth plans (which includes franchising or not franchising), investments in new products and services, selling assets, determining methods of nancing, restructuring the organization and/or exiting the industry. Typologies of strategies have also been developed to try to understand generic strategy choices made by rms. While the general literature on strategy is robust with articles covering the choice construct, the hospitality literature follows a very narrow band focusing on nancing arrangements, franchising alternatives, repositioning and growth. Financing choices become strategic choice alternatives of rms. In this context Elgonemy (2002) provides a look at debt nancing alternatives and suggests that business risk, the need for nancial exibility, the degree of ownerships risk aversion and tax considerations become important considerations while making strategic choice decisions regarding type of nancing. While this article is not based on any specic research project, it does offer a prescriptive look at how this strategic choice should be made. Following a similar theme, Singh (2002) traced the convergence of real estate and capital markets. The authors contention is that the emergence of the securitization of real estate debt and equity markets has resulted in new instruments for use in the strategic nancing choices of hospitality executives. In another prescriptive work Bartl and DeBenedetto (2003) established a framework for the timing of investors to look into the hotel market. They assess what they dene as the hotel real estate cycle which they suggest is driven by several issues including supply and demand timing imbalance, and events such as the September 11, 2001 attack on the World Trade Center. They track historical supply and demand patterns. They offer suggestions for the nancing deal and how risks must be shared among owners, operators and other stakeholders. They close with a look at trends in the nancing area.

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Some empirical work on the strategic nancing issue was presented by Altinay and Altinay (2003). This case study of Bass Hotels and Resorts (now InterContinental) looked at conditions in a host country market and how they affect the expansion plans of a multinational hotel company with specic emphasis on how this will be nanced. Secondary data were utilized by looking at company publications and archival information to determine the factors inuencing expansion and nancing. One of the strategic decisions executives must make is to look at nancing options. While much of the work cited above was focused on debt nancing, Canina and Gibson (2003) looked at equity nancing in the context of initial public offerings (IPO). Once the strategic decision is made to take a company into the public equity markets, managers must work with investment banks in setting the initial offering price. The authors contend that underpricing of the offering while helping to reveal the investors demand curve for the new issue may actually be a disservice to the issuing company. They looked at 102 restaurant rms and 35 hotel rms to prove their point. They compared the mid-point of the ling range offered in the prospectus with the nal offer price that is set after the so-called road show to sell the shares. Their hypothesis was that the difference between the two should be zero based on the assumption that the investment bank underwriting the offer got the valuation correct. The results suggest no difference supporting contemporary theory in this case. No evidence suggested that underpricing was occurring by investment banks thus providing some degree of assurance to hospitality executives regarding their trust in investment banks to get the valuation correct. The nancing decision also entered into the franchising choice of executives. In a study of 91 large restaurant rms Hoover et al. (2003) looked at the need for capital and the desire to lower outlet monitoring costs as reasons for going into franchising. This view was as an alternative to rms opening up company owned units. They base their argument upon theoretical propositions that franchising permits greater access to scarce capital either through traditional channels or because franchisees themselves serve as sources of investment. Supervising and monitoring outlet performance is said to require signicant costs, which can be lowered through franchising. The authors contend that both outlet monitoring and access to capital are two important strategic reasons why rms choose to franchise. Results support the contention that these two issues do affect the strategic decision to franchise with outlet monitoring costs appearing to have stronger inuence. In another study involving the strategic choice of franchising vs. ownership, Dant and Kaufmann (2003) investigated the ownership patterns of franchise systems as they mature. They attempted to predict the movement of ownership using three alternative theories within the context of the fast food industry. They employed signaling theory, which suggests that as franchise systems mature they grow to rely more on franchising than maintaining ownership. They examined resource acquisition theory, which predicts that franchising actually is the opposite of signaling theory. Lastly, they looked at tapered integration or plural forms which suggests a mixed portfolio or steady state approach between franchised and company owned. The authors surveyed 625 franchisors and received 156 responses. Data were rst analyzed using factor analysis to assess the strategic advantages

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associated with the three theories, which were then used to formulate hypotheses. Two factors resulted, which were labeled insight and control. Insight was dened as insights gained about new approaches to operational efciency, cost reductions and the viability of new products. The control factor refers to franchisors ability to combat franchisee opportunism and to develop enhanced negotiation capability from direct business involvement. Multiple discriminant analysis was used for follow-up inquiry. Results indicated that although franchisors value the benets of mixed ownership types and do maintain that mix over time there is also some evidence of a greater tendency to permanently convert existing franchised outlets to companyowned outlets as fast food systems mature and gain greater access to resources. The combination of using publicprivate partnerships to fund hotel project development was looked at by Tress (2003). The author explores the motivation and criteria for participating in such projects and the methods of nancing. As a strategic choice this method of nancing adds to the discussions in this subsection by bringing forth the idea of public and private nancing in the same project. While examining the data on 36 publicprivate hotel projects across the USA in order to highlight trends in hotel nancing structures the author found support for the argument that large, rst class hotels in urban locations require some form of public and private participation in order to attract the necessary private nancing and equity investment. This nding is consistent with the need for investors to shelter against risk, which is often associated with such investments. In a work that seeks to evaluate specic market valuation techniques as applied to the hotel industry, Mitchell and Ingram (2002) investigated a number of valuation frameworks from the retail industry that assesses space and benchmarks performance to determine property market value. The theoretical models included: (1) spatial interaction theory; (2) land value theory; (3) the principle of minimum differentiation; (4) valuing retail property investments; and (5) retail shelf space allocation. The retail models were analyzed in comparison to three models used consistently in the hotel industry and include: (1) replacement cost; (2) sales comparison; and (3) income capitalization. The authors, relying upon deductive reasoning conclude that the retailing techniques have application to the hotel industry. While valuation is an important component of strategy choice, the methods offered in this analysis reect prevailing thought but fail to consider the more intangible elements of service in the valuation process. The strategic choice construct also explores the role of investing in specic products and/or services. In this context, Lee et al. (2003) examined the perceptions of international hotel managers regarding their desire to adopt and invest in technology as a strategy choice decision. Results indicate the technology investment is driven in part by the growing demand for it by customers. The positive effects of technology investment were highlighted and include enhancing service quality, improvement in overall efciency, achieving customer advantage, maintaining relationships with customers and increasing protability. Customer choice modeling as a strategic choice was presented in an essay by Verma and Plaschka (2003). These authors combined the choice modeling work of McFadden and Louvieres choice analysis models to suggest that managers can optimize the

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return on capital investment decisions designed to meet customer needs. They suggest that this combination of theoretical frameworks can reduce the typical managerial ambiguity-risk-conformity challenges for customer focused product and service solutions and innovation. This essay is another example of the application of theory developed in other disciplines and then applied to the hospitality industry without any apparent testing in the industry context. It is both a descriptive and prescriptive study. In further looking at investment choices, Hassanien and Baum (2002) offer a prescriptive analysis of executive choice decisions with respect to hotel renovation. The authors dene renovation as those activities associated with the development and modication of the hotels tangible assets used to produce services in order to extend the useful life of the property, to stay competitive and to build up a better image for the property within its marketplace. In addition to making these prescriptive arguments, the authors surveyed general managers of ve, four, and three star hotels in Cairo, Egypt. While the authors contend that they had a 65% response rate, they do not indicate the absolute number of respondents. The ndings are therefore suspect but do offer a ranking of what managers considered most important in terms of the obstacles to, and reasons for, renovation. DeBurgos-Jimenez et al. (2002), focusing on the strategic choice of environmental responsibility of the hotel industry, point out in a prescriptive manner how hotels can obtain competitive advantage through policies that reect the preservation of the environment. The authors suggest ways of measuring and evaluating this strategic choice investment. In another investigation of choice decision making Buick (2003) looked at the small hotel sector in the Scottish hospitality industry to try to understand how they have utilized information technology. He sampled 160 hotels with under 15 bedrooms and received a response of 51. Findings indicated that while the computer was an investment made by hotel operators few used this technology to the fullest advantage. Strategic alliances represent managements strategic choices in terms of relationships with other organizations. These choices have become an increasing phenomenon in the global hospitality industry. In a theoretical article Chathoth and Olsen (2003c) offer several propositions designed to reect the general body of literature in strategic alliances. This article reviewed the theoretical underpinnings of strategic alliances from the generic literature on the subject. The overall goal was to bring together the concepts researched and proposed by numerous management researchers. The objective was to provide insight into the theory to highlight the sources of advantage that can be drawn from this strategic concept in order to address the challenges faced by rms in the hospitality industry. Based on the authors analysis of the development of alliances in the hospitality industry, propositions are proposed and the implications of alliances are discussed.

4. Core competencies, resource-based view and implementationthe structure construct The third major construct reecting strategy is being grouped under the general heading of the rms core competencies, the resource-based view of the rm and

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strategy implementation. This construct, often referred to as the structure construct in an organizational theory literature, has been synthesized in this way by this author based upon the proposition that core competencies require an allocation of resources that will insure the effective execution of strategy over time. Implementation, as part of this construct, helps to realize intended strategy by making sure that resources are consistently allocated to those strategic choices that add signicant value to the rm. While authors have often treated these dimensions as separate for research purposes this approach fails to capture the complexity of this important construct. In examining implementation within the pub sector in the UK, Lashley and Rowson (2003) examined the relationship between franchisee and franchisor. They revealed a number of what they refer to as dynamic tensions that are clearly displayed in the relationships between pub operating companies and their tenants and lessees. Specically, the differences in business objectives, control and support along with variations in power are most common to these relationships. Further tensions were observed in the pub sector with respect to the legal and economic pressures on operating companies. Poor selection and recruitment of tenants and lessees, often driven by the need to secure a rent-paying one, is cited as one of the major problems. This results in a high turnover and subsequent poor unit-level performance. Lastly, the issue that operating companies were not providing the level of resources or expertise was considered to be a major strategic mistake. Leadership is often viewed as a core competency in most businesses. In this vein two articles addressed the issue in the context of the hospitality industry. ChungHerrera et al. (2003) focused upon competency models of leadership for the hospitality industry. Suggesting the industry has no such model these authors created a list of 99 competencies from other industries, which they grouped into 28 dimensions that may be considered as contributing to leadership success. The competencies were rated on a ve-point scale of importance by 137 industry professionals. The primary competencies identied included self-management (which included ethics, integrity, time management, exibility, and adaptability), and competency in strategic positioning (which included awareness of customer needs, commitment to quality, managing stakeholders, and concern for the community). While important, industry knowledge, leadership, and interpersonal skills did not rank as high. Contrary to the above ndings, Watson and McCracken (2002) found in their exploratory study into managerial skill requirements in the Scottish visitor attraction sector that operational skills and soft people skills were most important. Using a questionnaire sent to a purposive sample of 49 attractions based in Scotland, respondents were asked to rank in importance 45 skills/competencies. A response rate of 51% was achieved. They also found that strategic skills, either in the present or future, where not viewed as important. In a more conceptual look at leadership Chathoth and Olsen (2003d) focused on the study of the relationship between the micro and macro perspectives of the leadership construct. The macro perspective was dened as the overall orientation of the organization in terms of its position in the context of local and/or global markets. The micro perspective was dened as in the two previously reviewed works

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cited in the paragraphs above. The authors intention was to show a relationship between the macro and micro perspectives of the rms leadership through a case study approach, and hence providing evidence to the proposition that overall organizational leadership is a function of how rms strategically manage change. The context of the study was the hotel industry in India. The authors provided an overview of the industry in order to dene the leadership environment required. The authors conducted a case study of the Pan Pacic Hotels and Resorts Corporation, a Singapore subsidiary of a Japanese rm. The authors conclude after extensive indepth interviews of top management of the rm that they exemplify the need to blend micro and macro leadership perspectives in order to successfully achieve execution of strategy in a global marketplace. Moving from the competencies needed and leadership constructs as just reported, the scholarly work under this subhead shifted towards conceptual work on strategy implementation. Pechlaner (2002) looked at implementation in the tourism sector. The author contends that it is difcult to implement strategic management concepts in tourist regions given the conicting policy and decision-making issues present in regional settings. Using the Alpine region of Tyrol in Austria the author attempts to assess the errors made in formulating and implementing strategic concepts. The author identied the barriers and sources of resistance to change in the tourism domain. Okumus (2003), in a conceptual article suggests a holistic approach is necessary when analyzing and evaluating complex issues of implementation. Citing that research is limited in this area the author proposes an implementation framework by identifying elements of implementation and grouping them based upon their role and importance. The author recognizes the complexity of the strategy process in the model proposed and suggests its application is universal.

5. Theoretical challenges or enhancementsmoving the literature forward In terms of pure theoretical contributions to the literature on strategy in the hospitality industry three articles have appeared to challenge or add to contemporary thought. In an invited presentation to a special meeting of the Strategic Management Society focusing on developing countries, Olsen et al. (2003) present arguments that contemporary strategic thought is built upon research based in western society. They further argue that the context of most of this research has been large, publicly traded companies, many being multinational. While no fault is found with how this body of knowledge has progressed the arguments put forth by the authors suggest that it does not apply to small and medium-sized enterprises, especially in developing countries. The authors present arguments using existing literature to support their contentions and offer propositions to guide further research and action. Okumus (2002) provides in a discussion paper the suggestion that research in hospitality strategy is still in its embryonic stages and that researchers in the eld should seek to publish in mainstream strategy journals. While providing an

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abbreviated view of the strategic management literature in both business and hospitality the author makes some sweeping generalizations regarding the quality of the research and the difculties in accomplishing research in this area. Since the paper is classied as a discussion document by the editors of the journal in which it is published the authors intention to provoke thought is well intended. It would be better if the generalizations proposed were backed up by more objective measures and research, which would then add greater credibility to the arguments put forth. In an attempt to bring about greater convergence between strategy and nance, Madanoglu and Olsen (2003) present conceptual arguments that risk is fundamental to strategic investments in all enterprises. Risk is important in terms of considering rm value as it affects the overall cost of capital of the rm. Risk is tied to environmental scanning, as strategists would argue that events in the environment present risk factors to every hospitality enterprise. The paper seeks to advocate a greater synthesis of strategy and nance literature rather than the divergent treatment that presently exists in the elds of nance and strategy. The authors conclude their arguments by suggesting that greater synthesis will enable more effective estimates of cost of capital, in particular cost of equity.

6. Observations and reections on research over the period 20022003 In reecting upon the above-referenced literature some general observations seem warranted. First, the bulk of this literature falls into what may be called conceptual and descriptive. Beginning with the rst construct reviewed, the environment, efforts have been made to present models or insights into the environmental scanning or analysis process. While these perspectives are useful, the authors of the conceptual offerings have in most cases provided only limited evidence of the validity of the model in a hospitality context or none at all. This work was published primarily in the Cornell Hotel and Restaurant Administration Quarterly, which has an excellent practitioner readership. The danger in publishing work that has not been scientically validated in an industry context is that the non-scholar reader is likely to adapt all or part of the models assuming that if it is published it must be acceptable for use. This can be a problem in some instances as was learned when industry practitioners rushed into quick x programs like total quality management and other such fads. Millions of dollars have been estimated as being spent by organizations seeking to x complex problems related to quality. When such wholesale adoption of results from other industries to the hospitality industry occurs without validation, rms often spend scarce resources chasing solutions to complex problems. When such solutions fail, they move on to other approaches in the hope of nding the next possible solution. With respect to the case study efforts reported, they are primarily tourism-related examples. In this research key issues have been identied and suggestions for solutions offered by authors. While case study research is often used in exploratory research to establish causal relationships, these studies tended to be descriptive as opposed to exploratory. The contributions can be added to the long list of similar

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types of work generated in the tourism literature with respect to what authors describe as unique features and attributes related to specic destinations. The generalizability of this type of effort is very limited. Publishers and researchers, alike in these types of studies, often suggest that because efforts are made to apply normative thinking to the so-called new contexts, the research is making a contribution. This argument is to be seriously challenged if hospitality-related research in strategy is to progress. Little addition to theory has resulted out this current review or in much of the prior work on this subject in hospitality. This is no doubt a reection of the difculty of trying to rst capture and measure key variables that represent the environment and secondly, the lack of available data to do so. A third reason is perhaps the lack of researchers in the area of strategy who either want or have the capabilities to tackle the key challenges of research in this eld. The causal nature of environmental inuences upon organizations is relatively easy to conceptualize and has intuitive appeal. However, when researchers seek to actually identify the independent and dependent variables that may lend themselves to theory building, the complexities of these relationships are almost impossible to model. The existence of too many possible moderating variables in any simple causal relationship tend to be overwhelming in terms of research design. Thus, it becomes one of the researchers most signicant challenges to try to model all the possibilities, including contingent relationships, and produce valid results. In an attempt to try to resolve this issue Chathoth and Olsen (2003a) used surrogates for dimensions of the environment construct that make use of secondary data available through key nancial databases. While the attempt resulted in some positive statistical ndings caution must be suggested as the relationships were simplied and straightforward. Additionally, the use of surrogates always raises problems with respect to their overall validity in the context of the research setting. So while this attempt was to help test a theoretical model with respect to hospitality strategy and was successful in doing so it left the reader with the realization that much more must be done to be able to try to capture the measures and data to move the theory forward. While reviewing the research on the strategy choice construct this author cast a wide net on literature that also considered research and publications that looked at investments made in strategic choices. As suggested earlier, the tendency is for strategy and nance to be treated separately within the boundaries of each of these respective disciplines. Yet, in terms of actual decision-making corporate strategic planning committees will evaluate the return on invested capital or share price impact of strategic decisions. This corresponds with basic concepts in corporate nance, which suggest that all investment decisions undergo a thorough cash ow analysis resulting in a targeted internal rate of return or net present value. Thus, it is natural that strategy and nance nd their common ground in the strategic choice decision. In the context of this understanding of strategic choice the literature in this section of the paper can be characterized primarily as descriptive with ways of nancing or obtaining nancing discussed. While debt capital nancing seems to be the strategic

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decision most often covered, some mention of equity nancing occurred. Little in the way of blending equity nancing and strategic choice has occurred in this analysis, which leaves a rather large hole in the literature on this subject. While heads of major companies spend large quantities of time responding to shareholder imperatives, little has been investigated in this arena. Since many risk factors are associated with equity nancing choices and strategies are often executed only after the proper amount of equity nancing has been obtained, it must be questioned as to why this lack of research in such an important area. Since investments in strategic choices require both short- and long-term forecasts in future revenue streams generated by new products and services it would seem that more research in environmental scanning would occur in order to improve the forecasting process. However, little exists here with the exception of yield management program applications. The ability to identify key value drivers in the environment that in turn impact investments would seem to be a fertile area for research and would go a long way in bringing greater synthesis and understanding to the relationship between scanning and strategy choice. Another theme that presented itself in the choice literature was that of franchising. This focus supports the implicit growth strategy that most hospitality enterprises that are publicly traded must follow. Franchising is a strategic choice because it presents another nancing alternative and one that is viewed as lower in risk than growing company owned stores. Thus, there has been an inquiry into this choice decision not only in hospitality but also in the franchising literature in general. While theoretical and conceptual arguments seem to dominate the hospitality literature, some work utilized survey research methodology building upon general theories developed in mainstream franchising literature. The results are, however, mostly descriptive. Some of the literature looked at actual investment decisions relative to products and services. Technology and customer-related investments were focused upon but for the most part theoretical views were simply transferred to the hospitality domain without any research to support the arguments behind the transfer application. Little in the way of theoretical propositions has been proposed in this work. Core competencies were the third construct considered in this review. The primary focus here was on leadership or managerial capabilities desired. In search of what competencies are necessary researchers focused upon surveying industry leaders using various forms of variables developed in other industries. No attempt was made to develop probable dimensions that were industry oriented thus conclusions offered suffer from the question of how relevant and construct valid are they to this industry. Some authors have been encouraging more and better research in this area. However, when looking at the research reviewed herein, they are not really what one would call basic research. Descriptive, survey-oriented efforts seem to abound and be the norm. Case studies with descriptive results are also favored. This suggests that more ambitious efforts to really contribute to the understanding of how hospitality rms engage in strategy and the key relationships inherent in this context are still needed. If this is how the body of literature is going to continue to develop one must not be too optimistic that the body of literature will grow signicantly. There are

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indeed many complex relationships that have been reported or gone unnoticed in the literature cited here that would lend themselves to rigorous inquiry and theory building. It would be incorrect to assume that because hospitality is a eld of study that applies theory from other disciplines that no theory can be developed. Theory reects relationships that have been observed or revealed in exploratory efforts. The eld of strategy in hospitality is rich with relationships yet to be investigated.

References
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