Strategic thinking and innovation as panaceas for hotel performance in turbulent business environments

Ledi, Klenam Korbla; Dumeda, Rebecca Bridget; Bandoma, Stephen; Ameza- Xemalordzo, Enya Article Strategic thinking and innovation as panaceas for hotel performance in turbulent business environments Cogent Business & Management Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Ledi, Klenam Korbla; Dumeda, Rebecca Bridget; Bandoma, Stephen; Ameza- Xemalordzo, Enya (2024) : Strategic thinking and innovation as panaceas for hotel performance in turbulent business environments, Cogent Business & Management, ISSN 2331-1975, Taylor & Francis, Abingdon, Vol. 11, Iss. 1, pp. 1-17, https://doi.org/10.1080/23311975.2024.2328330 This Version is available at: https://hdl.handle.net/10419/326153 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may be saved and copied for your personal and scholarly purposes. You are not to copy documents for public or commercial purposes, to exhibit the documents publicly, to make them publicly available on the internet, or to distribute or otherwise use the documents in public. If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Business & Management ISSN: 2331-1975 (Online) Journal homepage: www.tandfonline.com/journals/oabm20 Strategic thinking and innovation as panaceas for hotel performance in turbulent business environments Klenam Korbla Ledi, Rebecca Bridget Dumeda, Stephen Bandoma & Enya Ameza-Xemalordzo To cite this article: Klenam Korbla Ledi, Rebecca Bridget Dumeda, Stephen Bandoma & Enya Ameza-Xemalordzo (2024) Strategic thinking and innovation as panaceas for hotel performance in turbulent business environments, Cogent Business & Management, 11:1, 2328330, DOI: 10.1080/23311975.2024.2328330 To link to this article: https://doi.org/10.1080/23311975.2024.2328330 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group Published online: 18 Mar 2024. Submit your article to this journal Article views: 2457 View related articles View Crossmark data Citing articles: 4 View citing articles Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oabm20 Cogent Business & ManageMent 2024, VoL. 11, no. 1, 2328330 Strategic thinking and innovation as panaceas for hotel performance in turbulent business environments Klenam Korbla Ledia , Rebecca Bridget Dumedab , Stephen Bandomac and Enya Ameza-Xemalordzoa aDepartment of Marketing and Corporate strategy, Kwame nkrumah university of science technology, Business school, Kumasi, ghana; bDepartment of Vocational and technical education (VoteC), Rebecca Bridget Dumeda, university of Cape Coast, Cape Coast, ghana; cDepartment of teacher education, Kwame nkrumah university of science technology, Kumasi, ghana ABSTRACT As the hospitality industry grapples with unprecedented crises, the relationship between innovation, strategic thinking and hotel performance during crises emerges as a critical area of exploration. The study investigates the mediating role of innovation in the relationship between strategic thinking and hotel performance during times of crisis. The study employs a quantitative approach and uses a questionnaire to solicit responses from 291 hospitality firms. Partial least squares (PLS) have been used to conduct confirmatory factor analysis (CFA) and subsequently structural equation modeling (SEM) to test the hypothesis paths of the study. The study establishes strategic thinking as a catalyst for enhanced organizational performance in the hospitality sector. The study found a positive synergy between strategic thinking and innovation, as strategic thinking catalyzes innovation, which in turn influences overall hotel performance. This synergistic relationship is essential for organizations seeking to survive and thrive in a rapidly changing business environment. The study offers practical insights for practitioners on leveraging strategic thinking and innovation synergy as a strategic tool for enhanced performance in dynamic business environments, as well as positioning themselves for long-term success and resilience. 1. Introduction Hotels in the dynamic business environment frequently face various crises, including economic volatility and global pandemics (Lai & Wong, 2020; Liu et al., 2021; Ritchie, 2004; Rossello et al., 2020). As crises become more frequent and unpredictable, the hospitality sector is compelled to reassess its strategies for sustained success (Allahveisi et al., 2019; Ansell & Boin, 2019; Breier et al., 2021; Furr & Eisenhardt, 2021; Marco-Lajara et al., 2022). Success in navigating crises and recovering from them requires the implementation of a strategic approach that goes beyond traditional perspectives. Strategic thinking has thus risen as a prominent dynamic capability that can be construed to achieve organizational resilience in the hospitality industry. The dynamic capability theory (DCT) posits that an organization’s ability to adapt and reconfigure its resources is central to its success in changing environments (Alcalde-Calonge et al., 2022; Teece et al., © 2024 the author(s). Published by informa uK Limited, trading as taylor & Francis group CONTACT Klenam Korbla Ledi [email protected] Department of Marketing and Corporate strategy, Kwame nkrumah university of science technology, Business school, Kumasi, ghana https://doi.org/10.1080/23311975.2024.2328330 this is an open access article distributed under the terms of the Creative Commons attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. the terms on which this article has been published allow the posting of the accepted Manuscript in a repository by the author(s) or with their consent. ARTICLE HISTORY Received 13 December 2023 Revised 3 March 2024 Accepted 4 March 2024 KEYWORDS Strategic thinking; strategic innovation; hospitality; firm performance; crises REVIEWING EDITOR Diego Corrales-Garay, Universidad Rey Juan Carlos, Spain SUBJECTS Strategic Management; Management of Technology & Innovation; Hospitality Management; Management of Technology & Innovation; Hotel Management; The Hospitality Industry; Hospitality MANAGEMENT | RESEARCH ARTICLE 2 K. K. LEDI ETAL. 1997; Teece, 2007; Yalcinkaya et al., 2007). As dynamic capabilities are an organization’s ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments (Ferreira etal., 2020; Teece et al., 1997), strategic thinking can be viewed as a crucial component of dynamic capabilities, influencing how hotels sense, seize and transform their resources to enhance overall performance. The study therefore conceptualizes strategic thinking as a unique dynamic capability that is significant for enhancing hotel competitiveness and overall performance in a turbulent business environment. Strategic thinking is a catalyst for superior firm performance (Benito-Ostolaza & Sanchis-Llopis, 2014; Dixit et al., 2021). Firms that engage in strategic thinking are better positioned to identify emerging market trends, technological advancements and competitive forces (Alatailat et al., 2019; Dixit et al., 2021). This is because strategic thinking enables organizations to anticipate opportunities and threats in the external environment (Acar & Özşahin, 2018; Bouhali etal., 2015). Anticipating these changes allows organizations to proactively capitalize on opportunities and mitigate potential threats, thereby influencing overall performance (Olaniyi & Elumah, 2016; Shaik & Dhir, 2021). Furthermore, the importance of innovations for a firm’s survival and success has been emphasized in the literature (Ashton & Stacey, 1995; Ferreira et al., 2021; Yalcinkaya et al., 2007). Consequently, firms must possess the capability to make market decisions that facilitate and promote innovation in order to prosper in an environment characterized by market uncertainty. In line with this, innovation has widely been recognized as a key driver of firm performance (Bouhali et al., 2015; Calabrese & Costa, 2015; Ferreira etal., 2021; García-Sánchez etal., 2019; Olaleye etal., 2020). The study contends that the relationship between strategic thinking and innovation is fundamental to an organization’s capacity to flourish in a dynamic and competitive environment. Strategic thinking and innovation are interconnected processes that mutually fuel one another, producing organizations characterized by adaptability and creativity (Calabrese & Costa, 2015; Moghadam et al., 2018). Strategic thinking therefore provides the platform where innovation can be strategically utilized to achieve a competitive advantage. First, while there is a growing body of literature acknowledging the importance of strategic thinking (Acar & Özşahin, 2018; Dixit et al., 2021; Olaniyi & Elumah, 2016; Shaik & Dhir, 2021), the relationship between strategic thinking and hotel performance during crises remains inadequately explored. As the hotel industry navigates through dynamic market conditions, the role of strategic thinking in shaping the performance of hotels emerges as a pivotal yet underexplored area. Second, while the literature recognizes the significance of strategic thinking in driving firm performance, a noteworthy gap exists in understanding the mechanisms through which strategic thinking translates into firm performance in the hotel sector. Therefore, there is a notable gap in understanding how strategic thinking and innovation interact, particularly in the context of the hotel industry, despite the available literature recognizing the importance of both strategic thinking and innovation in navigating crises (Ardito etal., 2021; Alzoubi & Jaaffar, 2020; Breier et al., 2021; Leta & Chan, 2021). Against this background, the purpose of this study is to address the research question: ‘To what extent does strategic thinking anchor hotel performance during crises via an indirect mechanism of strategic innovation?’ The findings offer practical implications for hotel practitioners and management. The study highlights the pivotal role of strategic thinking in initiating and guiding sustainable responses to crises and offers a roadmap for hotels to navigate turbulent environments. This contributes to a strategic decision-making framework tailored to crisis management, ultimately promoting hotel resilience and sustainability. Additionally, the study demonstrates how hotels can build dynamic capabilities that contribute to the development of a sustainable competitive advantage. Grounded in DCT, the study unpacks the mechanism through which strategic thinking influences the strategic deployment of innovation, particularly in times of crisis. The study illuminates that strategic thinking serves as the catalyst for innovative responses that are strategically aligned with organizational goals. The study therefore offers a strategic roadmap for leveraging innovation as a transformative force during crises in the hospitality sector, ultimately enhancing hotel performance as well as positioning themselves for long-term success and resilience. Lastly, the findings have implications for industry policies and regulations. Governments and industry associations should consider promoting a supportive environment for strategic thinking and innovation within the hospitality sector. This could involve creating incentives, offering grants, or providing resources to encourage hotels, especially small-scale hotels COGENT BUSINESS & MANAGEMENT 3 that may have suffered as a result of the crisis, to invest in strategic initiatives and innovative practices. The rest of the sections are as follows: theoretical background, empirical review and hypothesis development, material and method, results, discussion and conclusion of the study. 2.Theoretical review and hypothesis development 2.1. Theoretical background According to dynamic capabilities theory, firms must develop specific capabilities and engage in continuous learning in order to remain competitive in a changing marketplace (Teece et al., 1997). In a typical changing environment, the absence of dynamic capabilities will possibly make it difficult for a firm to achieve sustainable competitive advantage, as the process of maintaining competitive advantage is dynamic and infinite (Alcalde-Calonge etal., 2022; Ferreira etal., 2020; Teece, 2007). The study suggested that in a crisis-ridden era, organizations with dynamic capabilities may respond to changes in the business environment more effectively by exploiting and applying knowledge, as well as resolving difficulties related to capability inflexibility. In line with this, firms with strong dynamic capabilities will be able to develop and redeploy internal and external skills in order to respond to a crisis or a changing environment, particularly in the hospitality industry sector, which is vulnerable to crises. The COVID pandemic has had a significant impact on the hospitality industry, thereby multiplying the importance of strategic thinking. In such circumstances, strategic thinking and innovation may be viewed as key mechanisms to respond appropriately, flexibly and promptly to unexpected events, particularly during crisis recovery. Strategic thinking coupled with innovation will better handle the complexities and uncertainties of crises and respond to crises effectively and quickly, allowing firms to prosper competitively in the crisis era. Absorptive capacity theory elucidates the process by which organizations obtain, integrate and leverage external knowledge in order to foster innovation and enhance their overall performance (Cohen & Levinthal, 1990). The theory highlights the significance of an organization’s capacity to proficiently identify, assimilate and use novel knowledge from other entities, such as suppliers, consumers and competitors (Cohen & Levinthal, 1990). The ability to absorb new knowledge and skills is essential for organizations, especially in dynamic and competitive contexts, such as the hospitality sector, as it enables them to proactively adjust and generate novel ideas. In line with this, hotels that possess greater absorptive capacity have a better probability of engaging in innovation and capitalizing on market opportunities. Hotels that possess a strong ability to absorb and utilize new knowledge may effectively and promptly adjust to dynamic market conditions and emerging opportunities. 2.2. Relationship between strategic thinking and firm performance Strategic thinking is defined in various capabilities that include: (1) strategy formulation –cognitive activity that involves the identification, interpretation, and formulation of strategies to enhance organizational performance and achieve competitive advantage (Racelis, 2006; Dixit etal., 2021); (2) strategic sensitivity – the capability to synthesize information, anticipate future trends and create adaptive strategies that align organizational actions with the changing environment (Alatailat et al., 2019; Benito-Ostolaza & Sanchis-Llopis, 2014); (3) capability – encompasses the ability to connect internal capabilities with external opportunities, resulting in the development and execution of successful business strategies (Racelis, 2006; Shaik & Dhir, 2021), and involves the continuous process of sensing and seizing opportunities, anticipating challenges and adapting to the evolving business landscape for sustained organizational success. Taking these definitions of strategic thinking into consideration, the study conceptualizes strategic thinking as a dynamic capability that is unique or difficult to imitate and can potentially be a source of competitive advantage for hospitality firms. Firm performance has become a significant concept in strategic management research and is frequently used as a dependent variable (Bhat & Sharma, 2022; Elbanna et al., 2015). Firm performance 4 K. K. LEDI ETAL. refers to a business’s capacity to effectively use its existing resources in order to meet its goals as outlined in the company’s objectives (Bhat & Sharma, 2022). As a strategy formulation mechanism, strategic thinking helps companies identify and understand their competitive environment by identifying their strengths, weaknesses, opportunities and threats (Bonn, 2005; Calabrese & Costa, 2015; Navid Adham & Shafizadeh, 2019). This information can then be used to develop strategies and align their actions with the strategic goals of the organization, which will help the company compete effectively. Further, strategic thinking plays a pivotal role in resource allocation and operational efficiency (Bouhali et al., 2015; Racelis, 2006). Organizations that engage in strategic thinking are adept at allocating resources – financial, human and technological – in a manner that aligns with their strategic objectives (Acar & Özşahin, 2018; Shaik & Dhir, 2021). This efficient use of resources contributes to improved operational performance and the achievement of organizational goals. Furthermore, strategic sensitivity and strategic thinking assess risks and uncertainties within the business environment. It aids in proactively identifying potential risks and developing strategies to mitigate them, which can contribute to better firm performance (Bouhali et al., 2015; Alatailat et al., 2019; Racelis, 2006). Strategic thinking thus minimizes the negative impact of uncertainties and enhances the organization’s ability to navigate crises. Lastly, dynamic capabilities are an organization’s ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments (Alcalde-Calonge et al., 2022; Teece et al., 1997). Strategic thinking as a dynamic capability enables firms to anticipate changes in the competitive landscape, market trends and customer preferences (Acar & Özşahin, 2018; Alatailat et al., 2019; Bouhali etal., 2015; Olaniyi & Elumah, 2016; Shaik & Dhir, 2021; Racelis, 2006), aligning with the sensing aspect of dynamic capabilities. In line with this, hotels can identify emerging opportunities and threats, allowing them to adapt swiftly to evolving conditions. Further, as dynamic capabilities involve the ability to make strategic decisions effectively (Teece et al., 1997; Teece, 2007), strategic thinking provides the foundation for decision-making, allowing hotels to capitalize on opportunities identified during the sensing phase. Thus, strategic thinking informs the seizing of opportunities. Hotels that consistently engage in strategic thinking are more likely to adapt their strategies over time, building enduring value, ensuring resilience and sustainable competitiveness in the long run. The first hypothesis is: H1: Strategic thinking has a significant and positive relationship with hotel performance 2.3. Relationship between strategic thinking and innovation Innovation is the process of introducing new products or services, creating new production methods, exploring new markets or implementing new organizational and managerial structures (Ferreira et al., 2020; Tidd & Bessant, 2018). Innovation requires the implementation of a new or significantly improved product (good or service), process, a new marketing method or a new organizational method in business organization (Bhat & Sharma, 2022; Mansury & Love, 2008; Moghadam et al., 2018). One of the fundamental factors that spur innovation is radical strategic thinking. Strategic thinking plays an integral role in organizational innovation (Bonn, 2005; AlQershi, 2021; Moghadam etal., 2018). Strategic thinking has a significant impact on innovation, and companies that engage in strategic thinking are more likely to be innovative and successful. First, strategic thinking helps companies identify and understand their competitive environment, leading to the development of innovative strategies that will help the company compete effectively (Bonn, 2005; Calabrese & Costa, 2015; Kazmi etal., 2016). DCT admonishes organizations to develop and adapt their capabilities to achieve a competitive advantage in a rapidly changing environment (Ferreira etal., 2020; Teece, 2007). As dynamic capabilities involve the ability to sense changes in the external environment and seize opportunities effectively, strategic thinking serves as the foundation for sensing opportunities that are potential areas for innovation. Strategic thinking provides a visionary direction for the organization (Bonn, 2005; Bouhali etal., 2015; Kazmi etal., 2015; Olaleye etal., 2020), which often involves anticipating future trends, opportunities and challenges. This guides innovation efforts toward areas that align with the long-term goals and aspirations of the organization. Moreover, dynamic capabilities also emphasize strategic flexibility and adaptability in response to changes in the business environment (Teece, 2007). Strategic thinking encourages organizations to be flexible and adaptable in their approach to achieving strategic objectives (Acar & Özşahin, 2018; Calabrese & Costa, 2015; Kazmi et al., 2015; Navid Adham & Shafizadeh, 2019; Olaleye et al., 2020). This supports COGENT BUSINESS & MANAGEMENT 5 the development of dynamic capabilities that enable organizations, especially hotels, to adjust their innovation strategies based on evolving market conditions, especially during crises. Hotels that strategically align their innovation efforts with their overall objectives are better positioned to differentiate themselves in the market, stay ahead of competitors and adapt to industry changes. This ability to innovate and adapt to changing circumstances is often reflected in improved firm performance, especially in dynamic and competitive markets. The second hypothesis is: H2: Strategic thinking has a significant and positive relationship with innovation 2.4. Relationship between innovation and firm performance In a highly competitive business environment, firms need to embrace innovation in order to survive and for value creation (Ashton & Stacey, 1995; Ferreira et al., 2020). Moreover, in a fast-changing business environment and a crisis-prone environment such as the hospitality sector, it is therefore necessary to realize the need to explore, exploit, and deploy innovative strategies in order to manage crises and stay competitive during crises (Ardito et al., 2021; Breier et al., 2021; Leta & Chan, 2021; Moghadam et al., 2018). The ability to form strategic innovation is thus vital in order to provide effective and efficient hotel performance. Hotels with higher absorptive capacity are more likely to engage in innovation and take advantage of market opportunities. Thus, hotels with a high capacity to assimilate and use new knowledge can quickly and efficiently adapt to changing market conditions and developing opportunities. Research has widely shown a positive relationship between innovation and firm performance, such as sales growth, profitability and market share (Ashton & Stacey, 1995; Bhat & Sharma, 2022; Calabrese & Costa, 2015; Ferreira et al., 2021; García-Sánchez et al., 2019; Mansury & Love, 2008; Kazmi et al., 2016; Olaleye etal., 2020; Yalcinkaya et al., 2007). For example, innovation enables firms to differentiate themselves in the market. Products, services or processes that result from innovation can provide a competitive advantage, contributing to enhanced business performance through increased market share and customer loyalty (Kazmi et al., 2016; Yalcinkaya et al., 2007; Navid Adham & Shafizadeh, 2019; Olaleye et al., 2020). Further, innovations that address market needs or create new opportunities often lead to revenue growth for firms. Successful introduction of innovative products or services can open new revenue streams, positively impacting the overall financial performance of the business (Ashton & Stacey, 1995; Mansury & Love, 2008; Moghadam etal., 2018). Moreover, innovations in operational efficiency can result in cost savings, improved productivity and streamlined workflows, directly influencing the operational performance of firms. Innovations that focus on cost-effective solutions or resource optimization contribute to efficient cost management. Effective cost control positively influences the financial performance of firms, impacting their overall business performance (Olaleye etal., 2020; Tidd & Bessant, 2018). As dynamic capabilities are an organization’s ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments (Alcalde-Calonge et al., 2022; Ferreira etal., 2020; Teece etal., 1997), innovation is a dynamic capability that allows firms to adapt, evolve and stay competitive in changing markets. Firms that prioritize innovation are better positioned to introduce new products, services or processes that set them apart from competitors, leading to enhanced performance (Bhat & Sharma, 2022; García-Sánchez etal., 2019). Firms with strong innovation performance are better equipped to adapt to changing market conditions. The ability to respond to technological advancements, shifts in consumer preferences and emerging trends enhances the resilience of the business, impacting its overall performance (Ferreira etal., 2021). Thus, innovative firms tend to outperform their competitors and achieve higher levels of success, as supported by the DCT. The third hypothesis is: H3: Strategic Innovation has a significant and positive relationship with hotel performance 2.5. The mediating role of strategic innovation in strategic thinking and hotel performance nexus The hospitality industry is highly competitive and constantly evolving; therefore, staying ahead of trends and changes in the market is crucial for success in the industry. As crises disrupt traditional business models, strategic thinking becomes crucial for adapting to rapidly changing circumstances 6 K. K. LEDI ETAL. (Ansell & Boin, 2019; Furr & Eisenhardt, 2021; Marco-Lajara et al., 2022). Strategic thinking creatively assists in the development of strategies that will help the organization achieve its goals (Calabrese & Costa, 2015; AlQershi, 2021; Navid Adham & Shafizadeh, 2019). Therefore, there is a strong relationship between strategic thinking and business performance (Acar & Özşahin, 2018; Alatailat etal., 2019; Shaik & Dhir, 2021). Companies that engage in strategic thinking are more likely to be successful; they are more likely to generate higher revenue growth and profitability. This is because strategic thinking helps companies identify and understand their competitive environment, ultimately helping them to make better decisions about resource allocation, product development, and marketing (AlQershi, 2021; Bonn, 2005; Calabrese & Costa, 2015; Moghadam et al., 2018). This is important because the hospitality business environment is constantly changing, and companies need to be able to adapt in order to survive and thrive. More specifically, in the face of unprecedented challenges and uncertainties, the hotel industry is compelled to reassess its strategies to not only survive but also thrive during times of crisis. The DCT posits that an organization’s ability to adapt and reconfigure its resources is central to its success in changing environments (Teece et al., 1997; Teece, 2007). Organizations need to possess the ability to integrate, build and reconfigure internal and external competencies to address rapidly changing environments (Ferreira etal., 2020; Teece etal., 1997). Thus, hospitality firms need specialized competencies to cope with complex and dynamic business environments through the exploration of creative knowledge assets adapted to the local market. This points to the importance of strategic innovation as a missing link between strategic thinking and firm performance. Strategic innovation represents a core and distinctive mechanism through which strategic thinking translates to stellar hotel performance. This is consistent with the primary tenets of the DCT, whereby hotels need dynamic capabilities to design and implement mechanisms that can possibly anchor their competitive advantage in a turbulent business environment (Teece, 2007). Therefore, the study argued that the relationship between strategic thinking and innovation is foundational to an organization’s ability to thrive in a dynamic and competitive environment. Both strategic thinking and innovation are interlinked processes that fuel each other, fostering a culture of agility and creativity (AlQershi, 2021; Calabrese & Costa, 2015; Kazmi et al., 2016; Navid Adham & Shafizadeh, 2019; Moghadam et al., 2018; Olaleye et al., 2020). Strategic thinking provides the overarching vision, guiding principles and a structured approach to aligning innovation efforts with organizational goals, while innovation complements strategic thinking by serving as the mechanism through which organizations bring strategic visions to life (AlQershi, 2021; Moghadam et al., 2018). Therefore, strategic thinking guides the identification of opportunities for innovation and helps identify areas where innovation can lead to a positive impact on the organization. For example, strategic thinking drives innovation within hotels; this innovation, in terms of operational processes, guest experiences or service delivery, represents a transformative process that enhances a hotel’s capabilities to perform effectively. Therefore, in the context of a crisis, innovation serves as a vehicle that translates strategic thinking into organizational outcomes. Hotels that employ strategic thinking and innovation will enhance their ability to not only survive but thrive during crises, ultimately influencing and optimizing their overall performance. The fourth hypothesis is: H4: Strategic innovation mediates the relationship between strategic thinking and hotel performance The study draws insight from DCT to establish a framework and the hypothesis of the study, as demonstrated in Figure 1. The H1 and H3 depict the direct relationship strategic thinking and strategic Figure 1. Conceptual model. COGENT BUSINESS & MANAGEMENT 7 innovation have with firm performance, respectively. The H2 depicts the direct relationship between strategic thinking and strategic innovation. The H4 depicts the indirect relationship of strategic thinking to firm performance channeled through strategic innovation. 3. Material and methods 3.1. Research philosophy The study adopts a positivist philosophy. Positivism holds that knowledge should be derived from observable facts and phenomena. This means that theories and hypotheses should be based on empirical evidence gathered through sensory experience or experimentation (Saunders etal., 2003). The study adopts positivist philosophy because it prioritizes empirical evidence and scientific methods, which can provide a rigorous and systematic approach to understanding phenomena. 3.2. Research design Explanatory research aims to explain why and how certain phenomena occur. It goes beyond merely describing or correlating variables to establish causal relationships and understand underlying mechanisms (Saunders et al., 2003). Explanatory research design was adopted because it allows researchers to go beyond mere description or correlation to investigate causal relationships between variables. 3.3. Target population The study’s target population is the hospitality industry, specifically focusing on hotels with mostly three- to five-star ratings. The sampling frame consisted of hotels having a rating of 3 stars or higher, which were selected from the Ghana Hoteliers Association (GHA). 3.4. Sampling and sampling method A total of 291 valid responses were ultimately utilized for the purpose of data analysis, employing Cochran’s (1977) sampling procedure. The study employs a key informant approach to purposefully select the hospitality industry’s top executives, who are presumed to possess extensive knowledge and a deep awareness of their organizations’ operations, as well as the ability to make strategic decisions on behalf of the company. Verbal consent was obtained from each respondent before their participation in this study. The respondents were provided with comprehensive information regarding the research purpose of the study and emphasized that participation was voluntary. The respondents therefore provided verbal affirmation of their consent to participate before proceeding with the study. 3.5. Instrumentation and scaling The study employs questionnaire to solicit responses from Ghanaian hospitality firms. The development of the measurement instrument was undertaken subsequent to an extensive examination of the relevant scholarly literature. The constructs were assessed on Likert scales ranging from 1 to 7, with 1 representing significant disagreement and 7 indicating strong agreement. 3.5.1. Independent variable In this study, strategic thinking involves the continuous process of sensing and seizing opportunities, anticipating challenges and adapting to the evolving business landscape for sustained organizational success, as well as understanding the competitive landscape and envisioning the direction in which the business needs to move to remain successful (Alatailat etal., 2019; Dixit etal., 2021). The study measures strategic thinking using six (6) items adopted from AlQershi (2021). These items or scales are relevant for hotels in Ghana as they comprehensively capture the ability of firms to formulate strategies to capture value for the firm. 14 K. K. LEDI ETAL. The study advances theoretical discussions on the interconnectedness of strategic elements within the hospitality context. It emphasizes that strategic thinking and strategic innovation should not be viewed in isolation but as integral components of a synergistic system. This interconnected view enriches theoretical perspectives on organizational strategies, providing a more holistic lens for researchers and practitioners alike. The study unveils a nuanced understanding of the causal pathways between strategic thinking and hotel performance. The study bridges the gap between cognitive capabilities, exemplified by strategic thinking, and dynamic capabilities, exemplified by strategic innovation. This integration contributes to theoretical discussions surrounding the intersection of cognitive and dynamic capabilities, showcasing how cognitive processes influence the development and deployment of dynamic capabilities in the pursuit of organizational goals and offering theoretical insights that can inform and enrich discussions within the broader field of organizational strategy and management. 7. Conclusion As crises become more frequent and unpredictable, the hospitality sector is compelled to reassess its strategies for sustained success. Strategic thinking emerges as a pivotal force in influencing firm performance. While existing literature acknowledges the individual significance of both strategic thinking and innovation in navigating challenges, the understanding of how these elements synergize, especially during crises, remains a critical gap. The study assesses the mediating role of strategic innovation in the relationship between strategic thinking and hotel performance. Our research confirms that strategic thinking is crucial for achieving effective organizational performance. Strategically aligning organizational goals with market dynamics is considered a crucial requirement for gaining and sustaining a competitive advantage. Strategic thinking plays a crucial role in shaping decision-making processes, which in turn impact the entire performance of hotels and contribute to gaining a competitive advantage. Moreover, innovation has become a crucial factor in gaining a competitive edge in the hospitality industry. The study has shown a strong correlation between innovation and hotel performance, indicating that hotels that effectively innovate are more are better positioned to meet the evolving demands of the market. The study provides additional evidence of the impact of strategic thinking on innovation processes in hotels, and how these innovations ultimately improve the performance of hotels. Strategic thinking determines the essential strategies for maintaining competitiveness, whereas innovation offers the methods to attain and maintain that competitiveness. Essentially, the relationship between strategic thinking and innovation is symbiotic; strategic thinking lays the foundation for innovation, by recognizing opportunities and innovation exploit and the opportunities resulting into better firm performance. This synergistic relationship is essential for organization to survive and thrive in a turbulent business environment. Strategic thinking plays a critical role in developing dynamic capabilities that allow organizations to innovate and achieve sustained competitive advantage in a dynamic environment. Therefore, organizations that successfully integrate strategic thinking and innovation are better positioned to achieve a sustainable competitive advantage. While the sample size in this study was sufficient for our analyses, it is important to acknowledge that the study’s sample may not fully represent the diversity of the hotel industry in Ghana. Future research could benefit from larger and more diverse samples to enhance the generalizability of findings across different hotel contexts and especially geographic regions. Further, this study focused on the context of the hospitality industry and may not fully capture the influence of broader contextual factors, such as economic conditions or regulatory environments, on the relationships examined. Future research could explore these contextual factors in more depth to better understand their impact on strategic thinking and strategic innovation. Future studies should also consider potential internal boundary conditions, such as organizational culture or leadership styles, which could enhance our understanding of the conditions under which strategic thinking and strategic innovation are most beneficial for hotel performance. Author contribution Conception and design: Klenam K. Ledi; Analysis and interpretation of the data: Bandoma Stephen and Klenam K. Ledi; Drafting of the article: Klenam K. Ledi and Rebecca B. Dumeda; Revising for intellectual content: Enya Ameza COGENT BUSINESS & MANAGEMENT 15 –Xemalordzo; Final approval for publication: Klenam K. Ledi & Enya Ameza –Xemalordzo. All authors are accountable for all aspects of the work. Funding No funding. Disclosure statement No conflict of interest. About the authors Klenam Korbla Ledi is a researcher at the department of marketing and corporate strategy at Kwame Nkrumah University of Science (KNUST) Business School. His main research areas are sustainability, marketing, corporate strategy, entrepreneurship, and innovation. Rebecca Bridget Dumeda is an MPhil student at the Department of Vocational and Technical Education (VOTEC), University of Cape Coast. Her main research fields are nutrition among children, home economics, tourism, and hospitality. Stephen Bandoma is a research assistant at the Department of Teacher Education, Faculty of Educational Studies, Kwame Nkrumah University of Science (KNUST). His main research fields are educational technology, inclusive education, innovation, digital transformation, and entrepreneurship. Enya Ameza-Xemalordzo is a lecturer at the department of marketing and corporate strategy at KNUST Business School and a Chartered Management and Administration consultant. His research areas are corporate governance, corporate social responsibility, marketing, and entrepreneurship. ORCID Klenam Korbla Ledi http://orcid.org/0000-0002-7759-3604 Rebecca Bridget Dumeda http://orcid.org/0009-0000-2346-8536 Stephen Bandoma http://orcid.org/0000-0003-1791-2674 Enya Ameza-Xemalordzo http://orcid.org/0000-0003-1329-4952 Data availability statement Data that support the findings of this study are available from the corresponding author, KKL, upon reasonable request. References Acar, A. Z., & Özşahin, M. (2018). The relationship among strategic orientations, organizational innovativeness, and business performance. International Journal of Innovation Management, 22(01), 1. https://doi.org/10.1142/ S1363919618500093 Alatailat, M., Elrehail, H., & Emeagwali, O. L. (2019). High performance work practices, organizational performance and strategic thinking: A moderation perspective. International Journal of Organizational Analysis, 27(3), 370–18. https:// doi.org/10.1108/IJOA-10-2017-1260 Alcalde-Calonge, A., Ruiz-Palomino, P., & Sáez-Martínez, F. J. (2022). The circularity of the business model and the performance of bioeconomy firms: An interactionist business-environment model. Cogent Business & Management, 9(1), 2140745. https://doi.org/10.1080/23311975.2022.2140745 Allahveisi, F., Ahmadi, K., & Mohammadi, M. (2019). The role of strategic thinking in the quality of crisis management operations. International Journal of Business Management, 4(2), 113–121. ISSN: 2520-5943. Available online at www. sciarena.com AlQershi, N. (2021). Strategic thinking, strategic planning, strategic innovation and the performance of SMEs: The mediating role of human capital. Management Science Letters, 11(3), 1003–1012. https://doi.org/10.5267/j.msl.2020.9.042 Alzoubi, R. H. M., & Jaaffar, A. H. (2020). Leadership styles, crisis management, and hotel performance: A conceptual perspective of the Jordanian hotel industry. Journal of Critical Reviews, 7(10), 556–562. 16 K. K. LEDI ETAL. Ansell, C., & Boin, A. (2019). Taming deep uncertainty: The potential of pragmatist principles for understanding and improving strategic crisis management. Administration & Society, 51(7), 1079–1112. https://doi.org/10.1177/0095399717747655 Ardito, L., Coccia, M., & Messeni Petruzzelli, A. (2021). Technological exaptation to support innovation for COVID-19 Pandemic crisis. R&D Management, 51, 381–392. https://doi.org/10.1111/radm.12455 Ashton, W. B., & Stacey, G. S. (1995). Technical intelligence in business: Understanding technology threats and opportunities. International Journal of Technology Management, 10(1), 79–104. https://doi.org/10.1504/IJTM.1995.025615 Benito-Ostolaza, J. M., & Sanchis-Llopis, J. A. (2014). Training strategic thinking: Experimental evidence. Journal of Business Research, 67(5), 785–789. https://doi.org/10.1016/j.jbusres.2013.11.045 Bhat, D. A. R., & Sharma, V. (2022). Enabling service innovation and firm performance: The role of co-creation and technological innovation in the hospitality industry. Technology Analysis & Strategic Management, 34(7), 774–786. https://doi.org/10.1080/09537325.2021.1919614 Bonn, I. (2005). Improving strategic thinking: A multilevel approach. Leadership & Organization Development Journal, 26(5), 336–354. https://doi.org/10.1108/01437730510607844 Bouhali, R., Mekdad, Y., Lebsir, H., & Ferkha, L. (2015). Leader roles for innovation: Strategic thinking and planning. Procedia - Social and Behavioral Sciences, 181, 72–78. https://doi.org/10.1016/j.sbspro.2015.04.867 Breier, M., Kallmuenzer, A., Clauss, T., Gast, J., Kraus, S., & Tiberius, V. (2021). The role of business model innovation in the hospitality industry during the COVID-19 crisis. International Journal of Hospitality Management, 92, 102723. https://doi.org/10.1016/j.ijhm.2020.102723 Calabrese, A., & Costa, R. (2015). Strategic thinking and business innovation: Abduction as cognitive element of leaders’ strategizing. Journal of Engineering and Technology Management, 38, 24–36. https://doi.org/10.1016/j.jengtecman.2015.06.001 Cochran, W. G. (1977). Sampling Techniques (3rd ed.). New York: John Wiley & Sons. Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative Science Quarterly, 35(1), 128–152. https://doi.org/10.2307/2393553 Dixit, S., Singh, S., Dhir, S., & Dhir, S. (2021). Antecedents of strategic thinking and its impact on competitive advantage. Journal of Indian Business Research, 13(4), 437–458. https://doi.org/10.1108/JIBR-08-2020-0262 Elbanna, S., Eid, R., & Kamel, H. (2015). Measuring hotel performance using the balanced scorecard: A theoretical construct development and its empirical validation. International Journal of Hospitality Management, 51, 105–114. https://doi.org/10.1016/j.ijhm.2015.09.004 Ferreira, J., Cardim, S., & Coelho, A. (2021). Dynamic capabilities and mediating effects of innovation on the competitive advantage and firm’s performance: The moderating role of organizational learning capability. Journal of the Knowledge Economy, 12(2), 620–644. https://doi.org/10.1007/s13132-020-00655-z Ferreira, J., Coelho, A., & Moutinho, L. (2020). Dynamic capabilities, creativity and innovation capability and their impact on competitive advantage and firm performance: The moderating role of entrepreneurial orientation. Technovation, 92–93, 102061. https://doi.org/10.1016/j.technovation.2018.11.004 Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with unobservable variables and measurement error. Journal of Marketing Research, 18(1), 39–50. https://doi.org/10.1177/002224378101800104 Furr, N. R., & Eisenhardt, K. M. (2021). Strategy and uncertainty: Resource-based view, strategy-creation view, and the hybrid between them. Journal of Management, 47(7), 1915–1935. https://doi.org/10.1177/01492063211011760 García-Sánchez, A., Siles, D., & Vázquez-Méndez, M. D. M. (2019). Competitiveness and innovation: Effects on prosperity. Anatolia, 30(2), 200–213. https://doi.org/10.1080/13032917.2018.1519179 Hair, J. F., Jr, Howard, M. C., & Nitzl, C. (2020). Assessing measurement model quality in PLS-SEM using confirmatory composite analysis. Journal of Business Research, 109, 101–110. https://doi.org/10.1016/j.jbusres.2019.11.069 Henseler, J., Ringle, C. M., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135. https://doi.org/10.1007/ s11747-014-0403-8 Jansen, J. J., Vera, D., & Crossan, M. (2009). Strategic leadership for exploration and exploitation: The moderating role of environmental dynamism. The Leadership Quarterly, 20(1), 5–18. https://doi.org/10.1016/j.leaqua.2008.11.008 Kazmi, S. A. Z., Naarananoja, M., & Kytola, J. (2015). Harnessing new product development processes through strategic thinking initiatives. International Journal of Strategic Decision Sciences, 6(3), 28–48. https://doi.org/10.4018/ ijsds.2015070103 Kazmi, S. A. Z., Naaranoja, M., Kytola, J., & Kantola, J. (2016). Connecting strategic thinking with product innovativeness to reinforce NPD support process. Procedia - Social and Behavioral Sciences, 235, 672–684. https://doi. org/10.1016/j.sbspro.2016.11.068 Kline, R. B. (2011). Principles and practice of structural equation modeling. Guilford Press. Lai, I. K. W., & Wong, J. W. C. (2020). Comparing crisis management practices in the hotel industry between initial and pandemic stages of COVID-19. International Journal of Contemporary Hospitality Management, 32(10), 3135– 3156. https://doi.org/10.1108/IJCHM-04-2020-0325 Leta, S. D., & Chan, I. C. C. (2021). Learn from the past and prepare for the future: A critical assessment of crisis management research in hospitality. International Journal of Hospitality Management, 95, 102915. https://doi. org/10.1016/j.ijhm.2021.102915 COGENT BUSINESS & MANAGEMENT 17 Liu, M. T., Wang, S., McCartney, G., & Wong, I. A. (2021). Taking a break is for accomplishing a longer journey: Hospitality industry in Macao under the COVID-19 pandemic. International Journal of Contemporary Hospitality Management, 33(4), 1249–1275. https://doi.org/10.1108/IJCHM-07-2020-0678 Mansury, M. A., & Love, J. H. (2008). Innovation, productivity and growth in US business services: A firm-level analysis. Technovation, 28(1–2), 52–62. https://doi.org/10.1016/j.technovation.2007.06.002 Marco-Lajara, B., Ruiz-Fernández, L., Seva-Larrosa, P., & Sánchez-García, E. (2022). Hotel strategies in times of COVID-19: A dynamic capabilities approach. Anatolia, 33(4), 525–536. https://doi.org/10.1080/13032917.2021.1969960 Moghadam, H., Haddadi, E., & Kikha, A. (2018). Studying the effect of strategic thinking on innovation performance (case study: Sistan and Baluchestan customs administration). Revista Publicando, 5(2), 1123–1135. Available at: https://revistapublicando.org/revista/index.php/crv/article/view/1425 Navid Adham, M., & Shafizadeh, H. (2019). Investigating the relationship between strategic thinking and intellectual capital with an attitude toward organizational innovation among managers and experts in Tehran education areas. Technology of Education Journal, 13(4), 881–890. https://doi.org/10.22061/jte.2019.5065.2163 Olaleye, B. R., Akkaya, M., Emeagwali, O. L., Awwadd, R. I., & Hamdane, S. (2020). Strategic thinking and innovation performance; the mediating role of absorptive capabilities. Revista Argentina de Clínica Psicológica, 29(5), 2030– 2043. https://doi.org/10.24205/03276716.2020.1198 Olaniyi, I. M., & Elumah, L. O. (2016). Strategic thinking and organization performance: Study of Nigeria firms. Journal of Business Administration Research, 5(1), 23–28. https://doi.org/10.5430/jbar.v5n1p23 Racelis, A. D. (2006). Relationship between strategic orientation and organizational performance: An exploratory study of Philippine companies. Philippine Management Review, 13, 70–80. https://pmr.upd.edu.ph/index.php/pmr/ article/view/143 Ritchie, B. W. (2004). Chaos, crises and disasters: A strategic approach to crisis management in the tourism industry. Tourism Management, 25(6), 669–683. https://doi.org/10.1016/j.tourman.2003.09.004 Rosselló, J., Becken, S., & Santana-Gallego, M. (2020). The effects of natural disasters on international tourism: A global analysis. Tourism Management, 79, 104080. https://doi.org/10.1016/j.tourman.2020.104080 Saunders, M., Lewis, P., & Thornhill, A. (2003). Research methods forbusiness students. Prentice Hall: Financial Times. Shaik, A. S., & Dhir, S. (2021). Dynamic modeling of strategic thinking for top management teams and its impact on firm performance: A system dynamics approach. Journal of Management Development, 40(6), 453–485. https://doi. org/10.1108/JMD-09-2020-0298 Teece, D. J., Pisano, G., & Shuen, A. (1997). Dynamic capabilities and strategic management. Strategic Management Journal, 18(7), 509–533. https://doi.org/10.1002/(SICI)1097-0266(199708)18:7<509::AID-SMJ882>3.0.CO;2-Z Teece, D. J. (2007). Explicating dynamic capabilities: The nature and microfoundations of (sustainable) enterprise performance. Strategic Management Journal, 28(13), 1319–1350. https://doi.org/10.1002/smj.640 Tidd, J., & Bessant, J. (2018). Innovation management challenges: From fads to fundamentals. International Journal of Innovation Management, 22(05), 1840007. https://doi.org/10.1142/S1363919618400078 Yalcinkaya, G., Calantone, R. J., & Griffith, D. A. (2007). An examination of exploration and exploitation capabilities: Implications for product innovation and market performance. Journal of International Marketing, 15(4), 63–93. https://doi.org/10.1509/jimk.15.4.63