The relationship between generic theory and hospitality applied research: the case of...

This article explores the issue of how hospitality knowledge is created in the context of generic theory. Specifically, it demonstrates how the evolution of concepts and underpinning theory may not be matched by empirical studies in the hospitality field. The limited scale of hospitality research

may mean that only some elements of theory a re selected or applied in this field. It is proposed that this creates what we might term a "research discontinuity" in the hospitality literature. This phenomenon is demonstrated and illustrated by considering the theory of entry-mode choice, developed to understand market entry and internationalisation, of which four schools of thought have evolved over time. This theory has been applied to international hotel development, but haphazardly--thereby leading to "discontinuity". The implications of this are then explored.

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The theme of the Council for Australian University Tourism and Hospitality Education 2004 is "Creating tourism knowledge", including issues such as the utility of knowledge created and illustrations of how knowledge is created through research projects. This article has been designed specifically in that context. Hence, rather than simply report the outcomes of a major study into international hotel development, it explores a major issue of concern--the link (or lack of it) between "generic theory" (i.e., the mainstream literature on a topic) and hospitality research. Thus the hotel development study is used as an in-depth case study to draw out conclusions about this link that may have relevance across a range of hospitality-related research topics.

General Theories of Internationalisation and Entry Mode Choice

Having decided to go international, firms then have a choice as to how they achieve their strategic goal. There is a range of modes of entry. According to Root (1994), a company's choice of entry mode for a given product or target country is the net result of several, often conflicting, forces. These forces are difficult to measure and make the entry-mode decision a complex process, so that managers need an analytical model to facilitate systematic comparisons among the modes. Overall, past research, whether empirical or theoretical, has highlighted the relevance of external and internal factors to entry modes. External factors identified by past research relate to the conditions of the host country's environment. Internal factors represented in previous studies examine the nature and number of the specific assets. Table 1 summarises this past research. It can be categorised into four distinctive streams: transaction-cost theory, Dunning's eclectic paradigm, the organizational capability perspective (resource-based theory), and unified theory.

Transaction-cost Theory

Williamson (1975) uses the concept of transaction-cost market imperfection in his analytical framework. Transaction-cost economics focuses on the most efficient governance structure for a given type of transaction. A transaction is defined as "the transfer of a good or service across a technologically separable interface" (Williamson, 1975). A "most efficient" governance structure means that the total cost of production and transaction is, in the long run, less than those of any other governance structure. Production costs include the direct and indirect costs of making the products, such as the costs of labour, energy, raw materials, semi-manufactured products, components, depreciation of the machinery, and maintenance. Transaction costs are the costs connected with finding a contractual partner, specifying a contract, and securing that the ex ante-defined goals will be met ex post.

The transaction-cost approach prescribes cross-border activities according to the economic rationale that firms will minimise all costs associated with the entire value-added chain. This approach stresses the importance of firm-specific variables and has been used to explain that any business transaction bears the costs of negotiating, monitoring, and enforcing contracts with external parties and the cost of that coordination (Williamson, 1975). In the last decade, applications of transaction-cost analysis (TCA) have become fairly common in investigations of entry mode (Anderson & Gatignon, 1986; Gatignon & Anderson, 1988; Erramilli & Rao, 1993).

Dunning's Eclectic Paradigm

Previous studies in the areas of international trade, industrial organisation, and market imperfections have identified a number of factors that influence the choice of an entry mode for a selected target market. Integrating perspectives from these areas, Dunning (1980, 1988) proposed a comprehensive framework which stipulated that the choice of an entry mode for a target market is influenced by three types of determinant factors: ownership advantages of a firm, location advantages of a market, and internalisation advantages of integrating transactions within the firm. Several empirical studies have attempted to directly or indirectly use the Dunning framework in explaining choice of entry modes.

Several factors that determine the choice of a specific foreign market entry mode have been identified in previous research under the eclectic framework. While these studies have made substantial contributions to our understanding of the entry-mode behaviour of firms, an important gap in the empirical literature is the issue of how the interrelationships of the determinant factors influence the entry choices of firms. The importance of examining the effects of these interrelationships is that they may explain behaviours of firms that cannot be explained by the effects of independent factors. A critical theme that the Agarwal and Ramaswami (1992) study pursued was the examination of a number of such behaviours of firms by evaluating the joint impact of a set of determinants. A novel feature of this study is the use of managerial perceptions for measuring the explanatory factors. The study showed that this method of operationalisation was particularly useful for quantifying hitherto unquantifiable constructs. An important research direction is the development of better survey measures for those constructs that had relatively low inter-item consistency.

The Organisational Capability Perspective Mode (Resource-based Theory)

Resource-based theory suggests that firms have different types of resources and capabilities which are used to achieve various strategic goals. Recently, the organisational capability (OC) perspective has been introduced to explain choices of entry mode. While Madhok (1997) has presented the OC perspectives as an alternative to the TCA, it is perceived to be complementary by Aulakh and Kotabe (1997). The OC perspective is rooted in the resource-based theory, and shares its emphasis on experiential knowledge, as noted by Johanson and Vahlne (1977, 1990). The elaboration of the OC framework is closely connected to Madhok (1997), and in the following we will briefly present some of main ideas and propositions from this article.

According to Aulakh and Kotabe (1997), such a model "more closely captures the complex managerial decision framework in making entry-mode decisions, for managers have to balance firm objectives in individual foreign markets with those of overall corporate strategic goals". By focusing on the balance between exploitation and development of capabilities, the OC perspectives introduce a dynamic view of the entry mode. This perspective has not yet, however, provided suggestions about how entry mode may change; Madhok's (1997) discussion is restricted to those circumstances when collaboration modes of entry are more likely than predicted by TCA. Table 2 illustrates key differences between this approach and TCA.

Unified Theory

Recently, a few studies (Hill, Hwang, & Kim, 1990; Kim and Hwang, 1992) have suggested that concern is growing over the focus on efficiency aspects of entry mode. This has led to a new model being proposed. It incorporates strategic issues along with efficiency considerations into the entry-mode framework. The overt emphasis on cost minimisation as the driving force behind firms' decisions about entry mode has been questioned. It is suggested that global strategic issues have an important role to play.

Hill et al. (1990) developed a framework to combine the different and seemingly unrelated considerations and explanations discussed in the existing literature. They contended that transaction-cost economics alone is unable to explain foreign entry-mode choices. For example, strategic management issues, such as the role of global competition and global strategy, are completely ignored in studies using transaction-cost frameworks. Hence, they stressed the need to incorporate strategic variables in an unified theory of the choice of international entry modes. Furthermore, they distinguished three broad groups of variables that influence the entry-mode decision: strategic variables, environmental variables, and transaction-specific variables.

Entry Mode and the International Lodging Business

In carrying out its foreign direct investment, a multinational corporation has a variety of ownership choices, ranging from 100% ownership to a minority interest. International competition is intense and the risks of market entry are unpredictable, so it is important to understand all forms of foreign involvement. When analysing the entry-mode choices of firms, it is useful to think about the degree to which a firm participates, or is involved, in a given foreign market using a particular entry mode. Entry modes differ from each other on several dimensions, one of which is the degree of control they allow the foreign market entrant (Root, 1994). Traditionally, control has been perceived by researchers as flowing from ownership. Thus, the greater the firm's level of ownership, the greater the control it enjoys over its international transactions (Anderson & Gatignon, 1986). For this reason, company-owned channels, wholly-owned foreign subsidiaries and branches are designated as full-control modes. On the other hand, exports through outside intermediaries, contractual transfers and joint ventures are termed shared-control modes.

There can be many entry modes. Erramini and Rao (1990) ranked nine different entry modes ranging from wholly owned to license and franchising, based on resource commitment and market-specificity commitment. Contractor and Lorange (1988) identified eight categories of cooperative arrangement in conjunction with the extent of interorganisational dependence. These cooperative arrangements range from technical training/startup (with no interorganisation dependence) to equity joint venture (with high interorganisation dependence). Among the many types of business formats practised in the hotel industry, the most commonly used are full ownership, leasing, joint venture, management contract and franchising. These are not discussed in detail here due to space constraints.

Hotel Chain Entry Mode Research

Dunning and McQueen (1981) analysed international lodging chains. They used ownership, location and internalisation advantages to explain the foreign involvement of the lodging industry. Of all multinational-associated hotels studied by Dunning and McQueen (1982), one-third were associated with multinational corporations (MNCs) through equity participation, and the other two-thirds had some form of contractual arrangement. Management contracts accounted for at least two fifths of all cases of contractual arrangements. However, there are considerable differences between developed and developing countries in the form of involvement. While 47.8% of the hotel rooms in developed countries are owned or partially owned by MNCs, only 17.6% of those in developing countries are. Furthermore, in 63.1% of the hotels in developing countries, the form of involvement is the management contract, with franchising agreements less prevalent than in developed countries.

In the international hotel industry, ownership and control may be exerted in slightly different ways than in the manufacturing sector. Go and Christensen (1989) discussed "going global" with franchising, based on Walker's (1989) comprehensive study of the U.S. franchise system, and Olsen, Crawford-Welch, and Tse (1990) conceptually discussed all the possible entry modes. Crawford-Welch and Tse (1990) studied mergers and acquisitions in the European hospitality industry and Kim and Olsen (1993) elaborated a political framework of international lodging chains. Bell (1993) discussed the management contract and franchise issues from a historical point of view. This study also pointed out that the contents of both management contracts and franchise agreements are changing because of the depressed lodging business climate, heavy turnover of lodging ownership, increasing involvement in decision-making by the owners, and intensified competition in negotiating a contract or agreement among the companies.

Dunning and Kundu (1995) have used the eclectic paradigm as a basic framework to seek the three important questions pertaining to the foreign value-added activities of multinational hotels, that is the "what", the "where" and the "how" of internalisation. This study has identified the main variables of ownership, location and internalisation advantages affecting the extent and pattern of foreign involvement by some of the leading hotel chains in the developing and developed countries. Moreover, it has tried to pinpoint the main country- and firm-specific characteristics influencing these variables. Although the small sample made it difficult to arrive at any hard and fast conclusion, the suggested variables are likely to affect the international profile of hotel companies.

This review suggests that TCA may be an appropriate approach for choice of entry-mode decisions by multinational firms. In considering the research into hotel development and entry-mode choice, two studies have used Dunning's eclectic framework as the basis of analysis (Dunning & McQueen, 1981; Dunning & Kundu, 1995) and one has used unified theory (Zhao & Olsen, 1997). The focus of this framework is to identify the main ownership, location and internalisation advantages and to verify the extent and pattern of foreign entry by international hotel chains. Only one study (Contractor & Kundu, 1998a) has adopted a TCA approach.

The study reported on briefly below therefore set out to test the validity of TCA in the context of the hotel industry. The theoretical framework it adopted in shown in Figure 1.

[FIGURE 1 OMITTED]

The Case Study of Hotel Entry-mode Choice

The details of this research provide an insight into the nature of empirical studies in this field. Detailed findings and analysis (1) are not provided here, as the case is presented to illustrate concerns about the nature of hospitality research.

In this study, there were 591 observations for each of the variables: 85 wholly-owned subsidiaries (WOS), 13 leased properties, 24 joint ventures 0V), 391 management contracts (MC) and 78 franchises. Details of distribution by each company are illustrated in Table 4. Because some companies only expand via management contract (e.g., Hyatt International, Shangri-La, Ritz-Carlton, and Tokyu), management-contract mode accounts for 66.16% of total sample. Moreover, management-contract is the most popular choice of entry mode of other companies, even if they used different forms. Other entry modes were 14.38% in wholly-owned, 2.20% in leased, 4.06% in joint ventured, and 13.20 % in franchised.

A number of hypotheses concerning entry mode were tested in relation to those chains that had adopted a variety of modes. Table 5 identifies these hypotheses and the results.

Comparision of Generic Theory With Hotel Specific Research

The development of entry-mode choice theory has followed a common pattern, as explained more fully by Veal (2002). A theory (let us call this "A') is proposed and tested. Conceptual debate and empirical results lead to a modification of the original theory (A1), leading to two slightly different schools of thought. Then an alternative approach and theory is proposed (B), leading to an attempt to unify all three theories into a "unified theory" (C). The sequence of theory development is therefore clear:

A [right arrow] A1 [right arrow] B [right arrow] C

When hospitality research is placed in this general context (as both generalists and hospitality researchers have engaged in it), this sequence is not followed. In fact, we propose that studies of hotel entry-mode choice have completely reversed the sequence, as below (i.e., Dunning & Kundu, 1995; Zhao & Olsen, 1997; Contractor & Kundu, 1998a; and the study reported here):

C [right arrow] B [right arrow] Al [right arrow] A

Discussion

It is clear from this analysis that, in this instance, hospitality research is out of step with generic theory development. We shall call this a research "discontinuity". A number of issues arise from this:

* How unique is this field of study in terms of "discontinuities" between general theory and hospitality research?

* Are these discontinuities to be expected?

* Does this affect the quality of hospitality research?

* If so, what can be done about it?

Prevalence of Discontinuities

This case is interesting because the researchers deliberately set out to apply the "classic" TCA approach to the hotel industry because no one had, at the time the research was begun, used this technique (the work of Contractor and Kundu, 1998, was unknown at that time). It seemed that the potential for TCA to explain hotel entry-mode choice had been ignored. And it was felt to be important that this method should at least be tested to see what could be learned from it. After all, TCA uses regression analysis to establish what proportion each of the variables plays in determining the choice of entry mode. It was possible that entry-mode choice by hotels could be completely explained by this method. It was therefore a deliberate attempt to fill in a gap in the hospitality stream of entry-mode research.

The extent to which discontinuity of this kind is widespread is difficult to gauge. One potential way of evaluating this could be to examine the citations of published hospitality research to identify the extent to which generic versus hospitality sources were used.

Reasons for Discontinuity

Assuming that hospitality research, in some cases, takes place only partially in the context of mainstream schools of thought, or not at all, what are the reasons for this?

Broadly speaking, there may be three groups of researchers who investigate topics in the hospitality industry, each giving rise to slightly different forms of discontinuity. Firstly, there are mainstream researchers who occasionally conduct their empirical studies in the hospitality field. This gives rise to discontinuity because as theory develops, hospitality may sometimes be in the field of enquiry and sometimes not. We shall call this "mainstream discontinuity".

Secondly, there are mainstream researchers who conduct their research almost exclusively in the hospitality field. At first sight this may appear to be an oxymoron. However, if it is accepted that the attitudes of a researcher will determine their orientation towards one school of thought or another, then this becomes understandable. Such researchers regard themselves as sociologists or marketers (for example) first, and devote themselves out of choice to this one industry. Discontinuity is extremely unlikely in this case, as these researchers will be up-to-date with developments in the mainstream literature and their empirical work will reflect it.

Finally, there are hospitality researchers who conduct research only in the hospitality field. By definition, these are researchers who choose to ignore mainstream theory or use it only when it appears to be relevant. This approach is often based on the view that somehow "hospitality is different". This view is understandable if the researcher's background and research training has been exclusively in the field of hospitality. And the existence of this view is implicitly supported by the academic journals devoted to this field of enquiry. In this instance, the link between general theory and empirical studies of hospitality is, not surprisingly, weak. We shall term this "selective discontinuity".

Implications of Discontinuity

Resolving discontinuities in the hospitality literature is not simply a question of filling in gaps and "tidying things up". There are key questions of efficiency and effectiveness. In terms of efficiency, the number of hospitality researchers around the world is relatively small. The total is less than 1000 academics, research officers and PhD candidates. Given the small scale of this activity, it is important that these limited resources are deployed efficiently.

This can only be done if researchers are engaged in research that is valid and reliable, that is, effective. The great danger with discontinuity, especially selective discontinuity, is that research may be conducted based on theory and/or methods that in the mainstream have already proved to be invalid or unreliable. For instance, research into entry-mode choice could have followed a very different path to that described above. An alternative would be for TCA research to have been conducted in the late 1980s and then be continued to the present day without knowledge of, or reference to, general theory development, that is, eclectic theory, organisational capability and unified theory. Potentially more and more detailed TCA studies might have been conducted, which in the context of general theory would have been less and less valid.

Eliminating Discontinuity

Depending on one's school of thought, there may be no need to eliminate either mainstream or selective discontinuity. However, if this were deemed desirable, each would need to be resolved in a different way. In the case of mainstream discontinuity, it would seem that the role of the hospitality researcher is to identify gaps in the application of general theory to hospitality and to fill these gaps. This was the approach adopted in the case example described here regarding research into international hotel development. Selective discontinuity is much less straightforward because it probably requires hospitality researchers to change their Weltanschauung, or world view.

Conclusions

It is clearly dangerous to make general assertions on the basis of a single case study. However, in addition to this presenting this case, the authors have routinely been engaged in the common research practices of PhD supervision and examination, and paper and article refereeing over a number of years. Evidence has accumulated over this time that a number of areas of hospitality research may display discontinuity. Some examples in the hospitality literature might include research into hotel choice, quality management and yield management.

This article has suggested that hospitality research may not always be "in step" with the generic research conducted in a topic area, nor always aware of the different schools of thought that may exist. It further suggests that this leads to "discontinuities" in the hospitality field, which may be "mainstream" or "selective". These arise for different reasons and may be resolved in different ways. It is hoped that this article will provoke some discussion of the concept of discontinuity, and the extent to which it is prevalent within the hospitality and tourism field. If discussion shows it to be widespread, debate might then consider the extent to which it is a serious problem to be addressed by the research community.

Table 1
Entry-mode Decisions: Summary of Past Research Approaches

Author(s)           Main contribution

Agarwal &           Examine the independent and joint influences of
Ramaswami           different factors on the entry mode choice
(1992)

Anderson &          Use transaction cost analysis to understand entry
Gatignon (1986)     decisions

Contractor (1990)   Framework of international business modal choice

Contractor &        Eclectic framework to analyse the organisational
Kundu (1998a)       forms in international hotel sectors

Davidson &          Analyse the impact of some external factors on
McFetridge (1985)   technology transfer mode

Dunning (1980)      Comprehensive framework explaining modes of entry

Erramilli & Rao     Using market knowledge as a determinant of entry
(1990)              mode choice

Erramilli (1991)    Focuses on the antecedents of entry modes in
                    service firms

Hill, Hwang, &      Framework of entry-mode decisions
Kim (1990)

Kim & Hwang         Effect of the global strategy of the firm on the
(1992)              entry choice

Kogut & Singh       Effect of national culture on choice of entry mode
(1988)

Shane (1993)        Effect of national culture on entry mode

Tse et al. (1997)   Analyse mode of entry and formation of alliances

Zhao & Olsen        Focuses on the antecedents of entry modes in
(1997)              multinational lodging firms

Author(s)           External factors considered

Agarwal &           Market potential, investment risk
Ramaswami
(1992)

Anderson &          Market uncertainty, free-riding
Gatignon (1986)

Contractor (1990)   Foreign market characteristics, transaction
                    characteristics, technology transfer norms,
                    investment risk

Contractor &        Country risk, level of development, penetration
Kundu (1998a)       by foreign business

Davidson &          Technology level, host country characteristics,
McFetridge (1985)   market characteristics

Dunning (1980)      Location advantages (market potential and risk)

Erramilli & Rao     None
(1990)

Erramilli (1991)    Market size, availability of suitable partners,
                    restriction on foreign ownership, risk and
                    uncertainty

Hill, Hwang, &      Risk and demand certainty, competition
Kim (1990)

Kim & Hwang         Global concentration, country risk, demand
(1992)              uncertainty, competitive intensity

Kogut & Singh       Cultural distance, attitudes toward
(1988)              uncertainty avoidance

Shane (1993)        National differences in levels of trust

Tse et al. (1997)   Diplomatic ties, cultural dimensions, host
                    country's experience in attracting foreign
                    investments, level of government

Zhao & Olsen        Political, economic, sociocultural, technological
(1997)              and ecological dimensions

Author(s)           Internal factors considered

Agarwal &           Size, multinational experience, capacity
Ramaswami           to differentiate products
(1992)

Anderson &          Transaction-specific assets, internal uncertainty
Gatignon (1986)

Contractor (1990)   Cultural distance, interunit coordination costs

Contractor &        Size, cultural distance, international experience,
Kundu (1998a)       extent of foreign business, perceived
                    importance of strategy

Davidson &          Technology level, parent characteristics
McFetridge (1985)

Dunning (1980)      Ownership advantages (size, international
                    experience, etc. ), internalisation advantage
                    (contractual risk)
Erramilli & Rao     Market knowledge
(1990)

Erramilli (1991)    Personnel and capital resources

Hill, Hwang, &      Transaction variables, strategic variables,
Kim (1990)          know-how

Kim & Hwang         Nature and value of the firm-specific know-how,
(1992)              global synergy, global strategic motivations

Kogut & Singh       None
(1988)

Shane (1993)        None

Tse et al. (1997)   Scale and location of operation

Zhao & Olsen        International strategy, internal environment
(1997)              (e.g., competitors, customers, strengths
                    and weaknesses, etc.)

Author(s)           Conceptual
                    or empirical

Agarwal &           Conceptual
Ramaswami           and empirical
(1992)

Anderson &          Conceptual
Gatignon (1986)

Contractor (1990)   Conceptual

Contractor &        Conceptual
Kundu (1998a)       and empirical

Davidson &          Conceptual
McFetridge (1985)   and empirical

Dunning (1980)      Conceptual
                    and empirical

Erramilli & Rao     Conceptual
(1990)              and empirical

Erramilli (1991)    Conceptual
                    and empirical

Hill, Hwang, &      Conceptual
Kim (1990)

Kim & Hwang         Conceptual
(1992)              and empirical

Kogut & Singh       Conceptual
(1988)              and empirical

Shane (1993)        Conceptual
                    and empirical

Tse et al. (1997)   Conceptual
                    and empirical

Zhao & Olsen        Conceptual
(1997)              and empirical

Table 2
Comparison of TCA and Organisational Capability Perspectives

                               The TCA perspective

Unit of analysis               Transaction

Primary area of focus          Transaction characteristics

Key assumption                 Opportunism

Source of competitiveness      Efficient management of transactions

Primary orientation in the     Cost minimisation
management of know-how

Key consideration to choice    TC minimization; fit between transaction
of ownership form              characteristics and form of governance

Temporal orientation           Essentially static and
                               equilibrium-oriented

                               The organisational capability
                               perspective

Unit of analysis               Firm

Primary area of focus          Firm capabilities

Key assumption                 Bounded rationality

Source of competitiveness      Development and exploitation of
                               capabilities

Primary orientation in the     Management of value
management of know-how

Key consideration to choice    Contributions towards and demands
of ownership form              placed on firm's capabilities

Temporal orientation           Essentially dynamic; learning and
                               capability building as
                               developmental processes

Source: Madhok. A., (1997). Cost, value and foreign market entry mode.
The transaction and the firm. Strategic Management Journal, 18, p. 41.

Table 3
Comparison of Different Frameworks for Studying Foreign Entry Mode

                   Transaction Cost           Dunning's Eclectic
                   Approach                   Framework

Basic theory       Transaction cost theory    Eclectic theory

Explanatory        Asset specificity,         Ownership, locational
variables          uncertainty                and internalisational
                                              advantages

Decision criteria  Transaction cost           Trade-offs between
                   minimisation               return risk, control
                                              and resources

Modes of entry     Several classifications,   Several classifications,
                   e.g., contractual          e.g., independent
                   transfer, joint venture,   mode, cooperative
                   wholly owned               mode, integrated
                   subsidiary                 mode

Past research      Williamson, (1975);        Dunning, (1980);
                   Anderson & Gatignon,       Dunning & Kundu,
                   (1986); Erramilli & Rao,   (1995); Agarwal &
                   (1993)                     Ramaswami, (1992)

                   Organisational             Unified Theory
                   Capability                 (Eclectic Theory *)
                   Perspective

Basic theory       Resource-based theory      Transaction cost theory,
                                              eclectic theory, strategy

Explanatory        Firm's capabilities        Strategic, environmental
variables          (in particular,            and transaction specific
                   know-how)                  variables

Decision criteria  Trade-offs between         Corporation of level of
                   value and cost             control, resource
                                              commitment and risk
                                              of dissemination

Modes of entry     Internalisation vs         Several classifications,
                   collaboration              (e.g., WOS, JV,
                                              licensing)

Past research      Aulakh & Kotabe,           Hill et al., (1990);
                   (1997), Madhok,            HT & Kim, (1988);
                   (1997; 1998)               Kim & Hwang, (1992)

Note: * Hill et al., (1990) named this eclectic theory in their article
but in order to avoid the confusion with Dunning a eclectic paradigm,
it will be referred to as unified theory in this article.

Table 4
Proportion of Entry Modes in Sample, Percentage

Hotel Chains                WOS   Leased  JV     MC    Franchised

Accor                      45.38    --    --    50.00     4.62
Marriott                    0.95    --    --    52.38    46.67
Hilton International       11.83  12.90   --    64.52     1.08
Inter-Continental           9.09   1.82   --    41.82    20.00
Hyatt International         --      --    --   100.0       --
Renaissance & New World     --      --    --    75.56    24.44
Four Seasons                9.09    --    --    90.91      --
Shangri-La                  --      --    --   100.0       --
Ritz-Carlton                --      --    --   100.0       --
Swissotel                  35.71    --    --    64.29      --
Tokyu                       --      --    --   100.0      --
Nikko                       8.33    --    --    91.67      --
Total                      14.38   2.20   --    66.16    13.20

Table 5
Summary of the Hypotheses and Results for Individual Chains

    Hypotheses                                Accor  Hilton  Marriott

1   The higher the risk of the host country,
    the lower the degree of control favoured
    by international hotel firms.               S      S        S

3   The level of control is negatively
    associated with the level of economic
    development.                                R      R        R

4   International hotel firms' propensity
    for higher degrees of control modes will
    be stronger with increasing market size
    of host country.                            S      R        R

5   International hotels opt for entry modes
    with lower degree of integration as
    distances between host and home
    countries lessen.                           S      S        S

6   Firms' propensity for low control modes
    will become stronger with increasing
    sociocultural dissimilarity between home
    and host country.                           S      S        S

8   Firms' degree of control of foreign
    business should be positively related to
    their international experience.             R      R        S

10  Firms' propensity for full control modes
    will become stronger as their size
    increases.                                  S      R        R

12  Firms opt for entry modes with lower
    degrees of integration as the operations
    of foreign business entities increase
    in scale.                                   S      S        R

Note: S--supported: R--rejected.

Endnote

(1) The authors will be publishing these in journal articles.

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Correspondence

Prof. Peter Jones, IFCA Chair of Production and Operations Management, School of Management, University of Surrey, United Kingdom. Email: p.jones@surrey.ac.uk

Peter Jones

University of Surrey, United Kingdom

Haiyan Song

University of Surrey, United Kingdom

Jung Hwa Hong

Dongseo University, Korea