Translating sustainability into competitive advantage: the case of Mexico’s hospitality industry

• DOI: https://doi.org/10.1108/CG-01-2019-0031
• Pages: 1324-1343
• Published date: 27 August 2019
• Date: 27 August 2019
• Author: Isis Gutiérrez-Martínez,Francois Duhamel
• Subject Matter: Corporate governance,Strategy

Translating sustainability into competitive

advantage: the case of Mexico’s

hospitality industry

Isis Gutiérrez-Martínez and Francois Duhamel

Abstract

Purpose –The purpose of this paper is to explore howbusiness organizations design and implement

sustainabilitypractices to foster competitiveadvantage.

Design/methodology/approach –This qualitativestudy is based on an exploratory multiple case study

involving 11 Mexican hotelsrecognized as ‘‘champions’’ in sustainability. Datagathering took place via

in-depthinterviews with hotel managers.

Findings –The key internal resources and capabilities must be supported by integrated

microfoundations. The interactionbetween attributes of key resourcesand microfoundations revealsfour

transversaldimensions, namely,leadership orientation,organizational culture,team-based organizational

structures and human resources and control management systems to build a sustainability-based

competitiveadvantage in thehospitality industry.

Practical implications –The implementation of sustainability processes in the hospitality industry

depends on the ability of leaders to craft systems, build commitment and align interests and goals

consistent with sustainability. Business managers may find some guidance for implementing

sustainability-relatedinitiatives fromthe results of this paper.

Originality/value –This work presents both theoretical and practical contributions, integrating and

operationalizing a set of key resources (using the VRIO framework) and microfoundations approach to

create and maintain a sustainability-based competitive advantage, in contrast to existing studies where

those resourcesand conditions are examined in a piecemealfashion.

Keywords Competitive strategy, Mexico, Hospitality industry, Resource-basedview, Sustainability,

Microfoundations approach, Competitive advantage

Paper type Research paper

Introduction

This article examines how sustainability contributes to competitive advantage in business

organizations, based on an empirical study of sustainability initiatives in hotels in Mexico.

This is an important issue, as environmental and social pressures push firms to involve

themselves more and more in sustainability (Høgevold and Svensson, 2016;

Jhunjhunwala, 2014;Mowforth et al.,2008;Quinn and Dalton, 2009;White, 2009).

Sustainability increasingly has become a source of differentiation, allowing business

organizations to derive corresponding competitive advantages (Høgevold an d

Svensson, 2016;McWilliams and Siegel, 2010;Vitolla et al., 2017). Communicating

commitment to sustainability can bring several positive outcomes for organizations, some

of which may foster competitive advantage, in terms of “more sustainable profits and

growth, new market opportunities and long-term value for shareholders” (European

Commission, 2019, p. 26), especially in the hospitality industry (Jones et al., 2014;

Martı

´nez et al., 2014;Sajjad et al., 2018).

Isis Gutie

´rrez-Martı

´nez and

Francois Duhamel are both

based at Universidad de

las Americas Puebla,

Puebla, Mexico.

Received 18 January 2019

Revised 12 June 2019

Accepted 25 June 2019

PAGE 1324 jCORPORATE GOVERNANCE jVOL. 19 NO. 6 2019, pp. 1324-1343, ©EmeraldPublishing Limited, ISSN 1472-0701 DOI 10.1108/CG-01-2019-0031

The literature dealing with the determinants of the integration of sustainability into strategic

management has revealed the importanceof factors, such as organizational culture (Galpin

et al.,2015

), leadership (Quinn and Dalton, 2009), control systems (Hosoda, 2018)and

human resources (Pinta

˜oet al.,2018). This integration may be further enhanced by an

adequate selection and socialization of personnel (Davies and Crane, 2010) and

organizational justice affecting the distribution of rewards (Collier and Esteban, 2007)

encouraging employees’buy-in.

In spite of those contributions, significant gaps remain in this literature, i.e. studies dealing

with the way sustainability leads to a competitive advantage in business organizations do

not propose a single, integrated conceptual framework (Aguinis and Glavas, 2012;Lenssen

et al., 2009;Rake and Grayson, 2009). As Vitolla et al. (2017, p. 90) expressed: “There is a

lack of contributions, which analyze in a systematic way the theme of the integration of CSR

in the processes of strategic management related to the development of a strategy.” Thus,

such a conceptual frameworkremains to be formulated.

Additionally, the relationship between sustainability and competitive advantage has not

been sufficiently studied in the literature on hospitality management (Aragon-Correa et al.,

2015;Sajjad et al.,2018).

Finally, this relation also deserves a closerexamination in the context of emerging countries

(Sajjad et al.,2018). This is an important issue, as sustainability issues correspond to

different realities in emerging countries (Baba Abugre, 2014;Chaudhary, 2019;Jamali and

Karam, 2018;Orazalin, 2019) where companies have strong opportunities to differentiate

themselves through sustainability.

Analyzing the situation of the hospitality business in Mexico is both relevant and instructive

for that matter, due to the country’s institutional background and the significant social and

environmental challenges (Ibarra-Michel, 2014;Mowforth et al.,2008;Semarnat, 2017)

affecting the link betweensustainability and competitive advantage in this sector.

In Mexico, the application of environmental legislation has remained limited in the hospitality

sector (Ibarra-Michel, 2014). Thus, the Ministry of Environment and Natural Resources in

Mexico recently recommended the hotel sector to adopt a strategy-oriented toward

sustainability to increase its competitiveness and gain a competitive advantage (Semarnat,

2017). Still, only 200 hotels out of the 21,967 hotels in Mexico have some kind of

sustainability-related certification nowadays (Sectur,2017, 2018), and successful cases of

sustainable tourism projects are rare (Ibarra-Michel, 2014;Semarnat, 2017).

To address those concerns, this study formulates the following research question: how do

firms design and implementsustainability practices to foster competitive advantage?

Following a recent trend in strategic management literature (Barney and Felin, 2013;Felin

et al.,2012

), scholars have called for the incorporation of a microfoundations approach to

study the underlying mechanisms linking CSR and sustainability with outcomes such as

competitive advantage in particular (Aguinis and Glavas, 2012;Jamali and Karam, 2018).

Thus, this article analyzes the resources and related microfoundations to establish the link

between sustainability and competitive advantage, to contribute to the sustainability

management literature in a conceptualway.

The empirical contribution here consists in a qualitative study, comprising 11 cases of

Mexican hotels, developed in a proactive way in regard to sustainability-related efforts,

thus, revealing the nature of key resources and associated microfoundations to support

sustainability-based management to build a competitive advantage in the hospitality

industry in Mexico.

This paper is organized as follows. First, the current literature on sustainability and

competitive advantage is reviewed, and then, the main gaps in the study ofsustainability in

the hospitality sector are revealed, along with a proposal for the conceptual framework for

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