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The Impacts of Globalisation on service quality and innovation

Chapter 1: Introduction

The Impacts of Globalisation on service quality and innovation:Over the past twenty years, due to socio-economic and technological growth, the world’s preferences and needs have turned into such commodities and standardised preferences leading to the product and services standardisation.  However, in order to remain competitive, businesses must capture economies in a global-scale. The businesses can stay in the competition if they are considering the global implications, reinventing the culture in some way, crowdsourcing and hiring knowledgeable workers. Furthermore, the innovations and technologies have allowed firms to develop products and services that also bring changes in the processes on the global level. By rationalising their operations, companies started to attempt and achieve globalisation. In the world economy, in recent years, tourism, as well as its related economic effects, has developed within a broader perspective of globalisation. Policymakers of the micro economy have been alarmed to decline obstacles which obstruct global services, financial capital, flows of goods and to safeguard exchange rate flexibility, wages and interest rate with the purpose of hosting markets’ functions more competently (Sugiyarto, Blake and Sinclair, 2003: 683). The growth of tourism sector may help the United Kingdom to maintain its competitive advantage, with the increasing trend towards globalisation. The circulation of individuals between the nations has increased due to globalisation. A lot of people are travelling to different countries and choose to stay permanently. Because of this reason, the variety and amount of customers’ demands have risen in most of the countries. In addition to this, interaction occurs between cultures. By increasing their technology level, firms reply to these demands (Reddy, 1997:1821). It is widely accepted that travel and tourism will continue to develop an economy that is globalised, despite their current economic situation around the globe (Jolly and Dimanche, 2009: 579).  Businesses can get cheap and can freely have easy technology due to the movement of technology (Gomory and Baumol, 2004: 426-428). Due to these developments, the questions arises to whether innovativeness and service quality are affected in the tourism sector? If so, how and to what extent? This research explores the connection between service quality, innovativeness and globalisation in the UK’s hotel industry.

Chapter 2: Literature Review

2:1 Globalisation

Globalisation is the restructuring process that affects all aspects of human life and works across units; to the flow of ideas, through political collaboration, and from capital flows. As one of the most current and controversial issues, it can be described as the civilisation of the societies and the integration of the economies. It involves, as well as goes beyond, more than simply internationalisation defined as relations within and among nations (Hjalager, 2006:437). The real driving force behind globalisation is transportation and technological development, communication and information processing. Globalisation is conceptualised as a process that erodes integrated economies nationally, technologically. As stated by (Schulze and Ursprung, 1999: 302) it procedures complex relations of mutual interdependence and national boundaries. Contemporary globalisation is described as the cross-national cultural intensification, technological and social interactions, political and economic that contribute to the global integration and transnational structures of economic, political, social and processes on the global, cultural, national, regional and local level and supranational (Martens and Zywietz, 2006, 332).

2:2 Globalisation Effects

Globalisation suggests the importance of growing magnitude, or intensification of flows of trade and interconnectedness, migration, culture, finance, investment, etc. The growth of global interconnectedness intensity and extensity could be connected to the processes and global interactions, the evolution of worldwide transport system and the systems of communication raises the ideas disseminations, information, goods, people and capital (Macerinskas and Pipinyte, 2003: 72).  

The enhancement of innovation capabilities in the firms may be affected by globalisation. The diffusion of knowledge related to other intellectual property rights and patent are other effects on the innovation capabilities of firms. Firms’ technology investments are in an increase due to transnational corporations. Tourism firms have trained their staff due to the location of activities related to international corporate technology. Excellent communication and other infrastructural facilities are required by firms to dispersed technological activities. On a prior basis, the countries are looking to attract investments in technology that must build such facilities of infrastructure (Sundbo, Sintes and Sorensen, 2007:88). New opportunities and strong growth in the trade have been consequently provided for service firms in the tourism industry due to globalisation.

Simultaneously, globalisation has also contributed and has made a tremendous impact on how firms operate currently and also on their strengthening of global competition. The global markets structure changes as well as consumer demands, and consequently, have also enabled hotels to reconsider the processes of their businesses in order to satisfy their customer needs better. (Yang, Marlow and Lu, 2009: 6)………………………………