Innovativeness as a determinant of entrepreneurial orientation: analysis of the hotel sector

Abstract This paper analyses entrepreneurial orientation as a composite formed of innovation, proactiveness and risk-taking. The empirical data for this study were gathered from a survey sent to hotel managers. The fieldwork was carried out between January and June 2018. The process provided 102 valid questionnaires. Two methods were used: structural equation modelling (PLS-SEM) and fuzzy-set qualitative comparative analysis (fsQCA). This study makes six key contributions and findings. First, the use of these two methods provides robust and reliable results. Second, reliability and validity values for innovativeness, proactiveness and risk-taking are satisfactory. Third, the operationalisation of entrepreneurial orientation using the latent variables of innovativeness, proactiveness and risk-taking is satisfactory in terms of reliability and validity. Fourth, these three dimensions have a positive and significant influence on entrepreneurial orientation. Fifth, innovativeness is the most important dimension of entrepreneurial orientation. Sixth, innovativeness is a necessary and sufficient condition for entrepreneurial orientation.


Introduction
Growing competition is forcing companies to seek new ways to be more aggressive (Anjani & Yasa, 2019). Entrepreneurship can offer a way to compete in an increasingly fierce market through innovativeness, proactiveness and risk-taking (Ryiadi & Yasa, 2016).
The link between entrepreneurial orientation and company performance has led to an increase in the number of studies that explore how they relate to one another (Basso, Fayolle, & Bouchard, 2009;Hern andez-Perlines, 2018;Rauch, Wiklund, Lumpkin, & Frese, 2009). Most studies have focused on the industrial sector, a few on services and only a handful on the hotel sector (Tajeddini, 2010). This study fills this gap by examining the dimensions of entrepreneurial orientation in the hotel Rauch et al., 2009;Rigtering, Eggers, Kraus, & Chang, 2017). This great interest partly stems from the fact that both entrepreneurial orientation and one of its dimensionsnamely, innovativenessare fundamental factors that determine the competitive behaviour of companies in an increasingly globalised market subject to fierce competition (Gomezelj Omerzel & Smol ci c Jurdana, 2016).
After a review of the literature on entrepreneurship, Miller (1983) defined entrepreneurial orientation as company behaviour that is characterised by innovativeness, proactiveness and risk-taking. Entrepreneurial orientation reflects how a company works (Lumpkin & Dess, 1996) because it is an expression of the company's willingness to adopt a certain behaviour (Wiklund, 1999). However, the definition of entrepreneurial orientation has undergone multiple reformulations. Some authors have extended the earlier definition, stressing that entrepreneurial orientation depends on the degree to which change, innovativeness, risk-taking and aggressive competition are promoted (Covin & Slevin, 1991;Wiklund & Shepherd, 2005). Entrepreneurial orientation can also be defined as companies' ability to carry out activities related to innovativeness, risk-taking and pioneering new actions (Contreras & dos Santos, 2018;George & Marino, 2011). Therefore, entrepreneurial orientation refers to a decision-making process that affects companies' willingness to innovate, be more proactive and aggressive than competitors, and take risks (Engelen, Gupta, Strenger, & Brettel, 2015;Hern andez-Perlines, 2016). Rauch et al. (2009) found that most studies use innovativeness, proactiveness and risk-taking to define entrepreneurial orientation. In this research, we embrace this definition by conceptualising entrepreneurial orientation as the continuous search for innovativeness, a sense of proactiveness and the willingness to take moderate risks (Caseiro & Coelho, 2019;Miller, 1983;Queir os, Braga, & Correia, 2019). Innovativeness refers to companies' ability to support new ideas, experiment, introduce new products and use creative processes (Chandra, Styles, & Wilkinson, 2009;Kropp, Lindsay, & Shoham, 2006;Miller & Friesen, 1983). Proactiveness can be defined as companies' ability to engage resources in introducing new products and services before competitors (Covin & Slevin, 1991;Rauch et al., 2009). Finally, risktaking involves the creation of bold actions using substantial resources (Lumpkin & Dess, 1996) that are most appropriate (Madison, Runyan, & Swinney, 2014).
Entrepreneurial orientation can be measured at the individual level or the firm level (Peake et al., 2019;Rigtering et al., 2017). This study considers entrepreneurial orientation at the hotel level (i.e. the company level) as a reflection of the behaviour that affects the whole company (Irwin et al., 2018). This approach is consistent with that adopted in most studies of entrepreneurial orientation in the hotel sector (Hern andez-Perlines, 2016). Based on these considerations, the following hypothesis (and proposition) is formulated: Proposition 1; H 1 : Entrepreneurial orientation is defined by the dimensions of innovativeness, proactiveness and risk-taking.
Another consideration is whether entrepreneurial orientation is unidimensional or multidimensional (Rauch et al., 2009). In this study, entrepreneurial orientation is measured using the dimensions of innovativeness, proactiveness and risk-taking, which can be considered different dimensions of entrepreneurial orientation (Madison et al., 2014;Peake et al., 2019). Therefore, the first hypothesis (and proposition) can be divided into three sub-hypotheses (or sub-propositions): Proposition 1a; H 1a : Innovativeness is a dimension of entrepreneurial orientation. Proposition 1b; H 1b : Proactiveness is a dimension of entrepreneurial orientation. Proposition 1c; H 1c : Risk-taking is a dimension of entrepreneurial orientation.
As discussed earlier, entrepreneurial orientation can be conceived as a multidimensional construct with different perspectives (Covin & Lumpkin, 2011;Wang, Lo, & Weng, 2019. Accordingly, several studies have shown that for a company to have entrepreneurial orientation, these three dimensions must co-vary positively (Covin and Slevin, 1989;Covin & Wales, 2012;Miller, 1983). By contrast, other studies have shown that every dimension of entrepreneurial orientation plays a different role. This study follows the latter approach, so every dimension of entrepreneurial orientation is assumed to play a different role (Dai et al., 2014;Lumpkin & Dess, 1996).
Innovation has a special place in the literature and is usually present in all business processes (Alshanty & Emeagwali, 2019;Sharma & Chrisman, 1999). Innovation is an important research topic when analysing the sustainable competitive advantage of firms (McDowell, Peake, Coder, & Harris, 2018). Nevertheless, the role of innovation as a key factor in business performance has changed in recent years as a result of globalisation and greater international competition (Leal-Rodr ıguez & Albort-Morant, 2016; Pustovrh, Jakli c, Martin, & Ra skovi c, 2017). Innovativeness is the firm's ability to exploit knowledge to generate new products, services and processes . Innovation always entails a certain degree of risk, and satisfactory results are not always guaranteed, although it is widely accepted that companies that innovate perform better and are more likely to survive (Leal-Rodr ıguez & Albort-Morant, 2016). In all conceptualisations of entrepreneurial orientation, innovativeness is a common dimension (Covin & Miller, 2014;Sozuer, Altuntas, & Semercioz, 2017). In addition, entrepreneurial orientation and innovativeness are highly correlated because both are positively related to the success of the business (Peake et al., 2019).
Innovativeness is the tendency of firms to participate in and support new ideas that may lead to new technological products, services or processes (Anjani & Yasa, 2019;Lumpkin & Dess, 1996). This trend allows companies to create a broad set of skills, which are valuable tools for competitiveness (Gomezelj Omerzel & Smol ci c Jurdana, 2016) in an ever-changing business environment (Ahimbisibwe & Abaho, 2013;Teixeira & Ferreira, 2019). Innovative capacity is linked to the success of the company as a result of the adoption and implementation of new ideas, processes and/or products (Prifti & Alimehmeti, 2017).
Innovation requires the deployment of resources to offset the initial investment to make it profitable (Kreiser, Marino, Kuratko, & Weaver, 2013). In other words, the higher the level of innovativeness, the better the expected outcome of the company should be (Mirjana, Aleksic, & Merkac-Skok, 2018)  . Innovativeness in the service sector, which includes the hotel sector, cannot be conceived in the same way as innovativeness in the industrial sector. Innovativeness in the hotel sector is based on a set of skills that can be combined in different ways to enhance competitiveness (Mattson, Sundbo, & Fussing-Jensen, 2005;Otterbacher & Gnoth, 2005). In the tourism sector, the response to customer needs is a key source of innovativeness, which is a key factor to be competitive (Gomezelj Omerzel & Smol ci c Jurdana, 2016). Currently, competition in the hotel sector requires firms to adapt to changes in the environment through innovation (Mart ınez-Ros & Orfila-Sintes, 2009), particularly technological innovation (Buhalis, 1998; Camis on-Haba, Clemente-Almendros, & Gonzalez-Cruz, 2019). These considerations lead to the formulation of the following hypothesis (or proposition): Proposition 2; H 2 : Innovativeness is the dimension of entrepreneurial orientation with the greatest positive impact on entrepreneurial orientation in the hotel sector. The proposed conceptual model appears in Figure 1.

Sample and data collection
Given the nature of this research and the lack of secondary data, a questionnaire was designed for data collection. The research targeted 2-to 5-star Spanish hotels listed in the Turespaña Official Hotel Guide. First, the questionnaire was validated using a pre-test, in which experts in entrepreneurial orientation and four hotel managers participated. The contents of the questionnaire were thus validated. The questionnaire was then distributed via the LimeSurvey v2.5 online survey tool. This open-code online application for survey management was used to send participants (hotel managers) an e-mail together with a cover letter introducing the study. The fieldwork was conducted between January and June 2018. The fieldwork provided 124 valid surveys (Tables 1 and 2). According to the G Ã Power 3.1.9.2 program (Faul, Erdfelder, Lang, & Buchner, 2007), the statistical power of the sample is 0.966 (greater than the minimum of 0.8). Therefore, the statistical power of the sample of 124 cases is acceptable, assuming a standard error of 0.05 and an effect size of 0.3, using the weighting as per Cohen (1988Cohen ( , 1992 (Figure 2).

Variable measurement
To measure each of the dimensions of entrepreneurial orientation, this study used the scale proposed by Miller (1983) and Covin and Slevin (1989), which was later reformulated by Covin and Miller (2014). The three dimensions of entrepreneurial orientation (i.e. innovativeness, proactiveness and risk-taking) were measured using three items each. A 7-point Likert scale was used to record managers' responses. Size, age, chain and location were used as control variables. These variables enabled analysis of the common variance between predictors and helped avoid overestimated parameters. However, a comparison of the results of three statistical analyses (one including all control variables, one including only control variables significantly related to the dependent variable and one excluding control variables) revealed almost identical parameters, with no change in significance levels or confidence intervals. Therefore, following the recommendations of Bernerth and Aguinis (2016), we did not include any control variables in our analysis.

Results
The results are presented in two sections, one for each analysis technique. First, the results of the PLS-SEM are presented, followed by the results of the fsQCA.

Results for PLS
A two-stage process was used to operationalise entrepreneurial orientation using PLS-SEM. In the first stage, entrepreneurial orientation was constructed by repeating the items of the three dimensions. To avoid problems of collinearity, the values of the latent variables were considered in the second stage.
First, we ensured that the variables were reliable and had adequate levels of convergent and discriminant validity. Barclay, Higgins, and Thompson (1995), Rold an and S anchez-Franco (2012) and Hair et al. (2019) propose evaluation of the measurement model using five indicators. The first is composite reliability. Fornell and Larcker (1981) recommend values higher than 0.7 for composite reliability. The values in this study can be described as 'good' according to Hair et al. (2019) because they lie between 0.7 and 0.9. The values do not present redundancy problems because no value is greater than 0.95 (Drolet & Morrison, 2001, Diamantopoulos, Sarstedt, Fuchs, Wilczynski, & Kaiser, 2012. The variables have acceptable composite reliability values (Table 3).
The second indicator is Cronbach's alpha. Fornell and Larcker (1981) recommend Cronbach's alpha values to be greater than 0.7. As Table 3 shows, the Cronbach's alpha values exceed this threshold.
The third indicator is rho A, which enables calculation of a reliability value that lies between the two previous extreme values (composite reliability and Cronbach's alpha). The rho A, which was proposed by Dijkstra and Henseler (2015), should be greater than 0.7 (Dijkstra & Henseler, 2015) and should lie between the composite reliability values and the Cronbach's alpha values (Hair et al., 2019). These conditions hold for our data ( Table 3).
The fourth indicator is the average variance extracted (AVE). The AVE enables evaluation of the convergent validity of the composites. Fornell and Larcker (1981) recommend a value greater than 0.5 for the AVE. This criterion holds in our study ( Table 3).
The fifth indicator is the discriminant validity, which is evaluated by confirming that the correlations between each pair of constructs does not exceed the value of the square root of the AVE of each construct. The heterotrait-monotrait ratio (HTMT) is also used. For discriminant validity to hold, the values of the HTMT must be less than 0.85 (Henseler, Ringle, & Sarstedt, 2015). As Table 3 shows, discriminant validity holds because these criteria are met. The structural analysis model confirms that innovativeness, proactiveness and risktaking are dimensions that positively and significantly influence entrepreneurial orientation. As Table 4 shows, the three dimensions have a positive path (> 0.1), which is the limit established for determining the effect of one variable on another (Hair et al., 2019). Furthermore, by applying the bootstrapping method on 5,000 one-tailed subsamples, the t-values are significant at 0.001. In addition, the three selected dimensions already explain 99.6% of the variance, so no further dimension of entrepreneurial orientation needs to be included. Therefore, the first hypothesis is confirmed. In addition, the three dimensions have a positive influence on entrepreneurial orientation, which confirms the three sub-hypotheses of H1.
Comparing the path coefficients of the three dimensions shows that the innovativeness coefficient is the highest. Therefore, the second hypothesis is supported (see Figure 3).
We also calculated the goodness of fit for the structural model using the standardised root mean square residual (SRMR). A model can be considered to have a good fit if the SRMR is less than 0.08 (Hair, Sarstedt, Hopkins, & Kuppelwierser, 2014). In this study, the SRMR was 0.07, which indicates that the model has a good fit.  The correlations are for the second-order CFA output.
( Ã ) The elements on the diagonal show the square root of the AVE. AVE ¼ average variance extracted; I -Innovativeness; P -Proactiveness; R-K -Risk-Taking; EO -Entrepreneurial orientation.
Source: own research.

Results for fsQCA
For the fsQCA, the 7-point Likert scale responses were transformed into fuzzy-set responses. First, the data set was checked to eliminate missing values. There were no missing values for our sample. Second, all composites were calculated by multiplying the scores of their constituent items. Subsequently, the answers were recalibrated using three thresholds (Woodside, 2013): the 10 th percentile (low agreement or fully outside the set), 50 th percentile (moderate agreement or neither inside nor outside the set) and 90 th percentile (high agreement or fully inside the set). Finally, necessity and sufficiency analyses were performed to evaluate the effect of the different composites. This procedure has been used in previous studies (e.g. Ruiz-Palomino, Hern andez-Perlines, Jim enez-Est evez, & Guti errez-Broncano, 2019). FsQCA models yield three possible solutions: complex, parsimonious and intermediate. This paper focuses on the intermediate solution, as per Ragin's (2008) recommendations. The results (Table 5) reveal two necessary conditions for hotels to have entrepreneurial orientation. The first is innovativeness, which has a consistency score of 0.94. This value is higher than 0.90 (Ragin, 2008), which is the threshold used to indicate necessity. The second necessary condition is for innovativeness, proactiveness and risk-taking to be present at the same time. This combination has a consistency score of 0.95.
According to Eng and Woodside (2012), when consistency is greater than 0.75, the fsQCA model is informative. Our analysis reveals two paths that lead to entrepreneurial orientation ( Table 6). The first is innovativeness, which is capable of explaining 92.15% of cases for which entrepreneurial orientation is present. The second is the combination of innovativeness, proactiveness and risk-taking, which is capable of explaining 95.75% of cases for which entrepreneurial orientation is present. Innovativeness is present in both paths, which implies that innovativeness must be present for hotels to have entrepreneurial orientation.

Conclusions
This study explored the dimensions of entrepreneurial orientation in the hotel industry. To test our hypotheses (or propositions), two data analysis methods were used. The use of these two methods provides robust and rigorous conclusions (Hern andez-Perlines, Moreno-Garc ıa, & Y añez-Araque, 2016; Ruiz-Palomino et al., 2019). The composites in this study (innovativeness, proactiveness and risk-taking) have adequate reliability and validity values . In addition, the construction of entrepreneurial orientation in two stages using latent values is a suitable approach because this composite has adequate reliability and validity values based on the thresholds given by Henseler et al. (2015). The proposed model also has adequate goodness-offit values (Hair et al., 2019), indicating that this model is suitable for the hotel sector.
The findings of this study show that, like in other sectors, entrepreneurial orientation in the hotel sector results from the combination of innovativeness, proactiveness and risk-taking (Caseiro & Coelho, 2019;Miller, 1983). This finding supports previous studies (Boonchoo et al., 2011;Hern andez-Perlines, 2016;Tajeddini, 2010). The second conclusion is that these three dimensions influence entrepreneurship differently. This result is also consistent with the findings of previous studies (Dai et al., 2014;Lumpkin & Dess, 1996). The third conclusion is that innovativeness is the most relevant of these three dimensions, with the results showing that hotels cannot have entrepreneurial orientation without innovativeness. This finding is consistent with those of previous studies (Peake et al., 2019). Moreover, innovativeness is the basic dimension of entrepreneurial orientation for competitiveness in the hotel sector. This finding concurs with the findings of previous studies that have shown that innovativeness is a key element of the competitiveness of companies in general   This research has a series of limitations whose resolution may present opportunities for future research. The data were obtained from a questionnaire of Likert-type items, which was completed by one informant per hotel. To overcome this limitation, we followed the recommendations of Rong and Wilkinson (2011), Woodside (2013) and Woodside, Prentice, and Larsen (2015) to select the most suitable questionnaire recipient in the company (senior management, based on the recommendations of Dal Zotto & Van Kranenburg, 2008). In addition, questionnaires were sent via email, as per the recommendations of Torchiano, Tomassetti, Ricca, Tiso, and Reggio (2013). In this email, participation was requested, the research aims were explained, and a contact email address was provided to address any concerns by respondents. Participants later received emails reminding them to complete the questionnaire if they had not already done so. Another limitation relates to the type of research. This is a cross-sectional study, which prevents drawing definitive conclusions regarding causality. We thus recommend experiments or longitudinal studies to help reinforce the findings of causality. Another limitation is that the data refer only to Spain. Because results were based on a sample of respondents from Spain, additional studies should explore entrepreneurial orientation in the hotel sector in other countries. Finally, studies could be carried out to compare the results in different sectors such as the industrial sector and the hotel sector.

Disclosure statement
No potential conflict of interest was reported by the authors.