The Balanced Scorecard System in the Hotel Industry: Application of Contingency Theory Perspective

This study based on the contingency theory examines the influence of perceived environmental uncertainty (PEU) on hotel performance (HP) by examining the mediating role of balanced scorecard (BSC) adoption. The study also examines the moderating role of organizational structure in the direct relationship between the extent of BSC adoption and HP and the indirect relationship between PEU and HP. Structured surveys were collected through research team. A total of 400 top- and middle-level managers from 44 five-star-hotels in Antalya responded to surveys. Hayes’s process-macro models was used for analysis. According to the findings of this study: HP was influenced by PEU and BSC dimensions’ adoption, including financial, customer, and internal business processes, as well as innovation and learning. Financial, customer, and internal business processes mediated the relations between PEU and HP. Besides, the effects of financial, customer, and internal business processes on HP were strengthened by high decentralization. The results highlight the importance of BSC dimensions’ adoption and flexible decision making that could help in alleviating the effects of PEU and the resulting high HP in five-star hotels. In the presence of unpredictable environment, hotel managers should attempt to improve the offerings to their customers in order to delight and retain them and closely follow their competitors and other developments to react in a more effective and timely manner. They should also utilize the BSC for being informed and keeping themselves updated about current internal and external environmental conditions. Additionally, in a decentralized organizational structure, the BSC adoption helps authorized managers to make better decisions, especially in uncertain environments. In conclusion, this study demonstrates how and when PEU, BSC dimensions’ adoption and decentralized structure might shape HP outcomes in a five star hotel setting.