Organizational value and participatory leadership for sustaining the competitive advantages of hospitality and tourism companies

The COVID-19 pandemic exposed the hospitality and tourism sector to major disruptions due to social distancing and mobility restrictions, triggering travel bans, cancellations, and heightened infection fears among tourists. As one of the most labor-intensive industries, hospitality and tourism experienced extensive job impacts and a need to reorient business practices. COVID-19 disrupted management and required the sector to adapt, including leadership style changes. Identifying both economic and social costs of tourism during COVID-19 is necessary to minimize future negative effects and guide innovations to meet new health requirements. Participative leadership can catalyze organizational innovations to adapt to market needs, and the crisis offers an opportunity to rethink and restore tourism for the better. Although recovery is underway, profound impacts persist and hospitality firms are expected to introduce substantial operational changes post-COVID-19; thus, research is needed across countries on innovation, sustainable competitive advantage, market orientation, and participatory leadership. The main objective is to determine the source of competitive advantage of tourism companies in a COVID-19-marked environment through market orientation, organizational innovative intensity, and participative leadership. Secondary objectives are: (1) to test whether market orientation and organizational innovative intensity mediate between participative leadership and sustainable competitive advantage, and their direct effects; (2) to assess whether organizational value construction determines the implementation of participative leadership, and whether environmental uncertainty constrains this relationship; (3) to compare samples from Spain and South Korea for cross-country differences; and (4) to establish whether management during COVID-19 was a determining factor in the development of organizational values and participative leadership.

The theoretical framework recognizes the rapidly changing environments in hospitality and tourism and the need to achieve sustainable competitive advantage by responding to opportunities and threats. Organizational values: Leadership based on solid values is essential in competitive sectors like hospitality. Person-organization fit fosters satisfaction, commitment, and loyalty; leadership is shaped by cultural and organizational contexts. Organizational values can enhance employees’ understanding of organizational purpose, foster innovation, support diverse perspectives, and are endorsed in participatory leadership through psychological mechanisms. Hypothesis H1 posits that organizational values positively and directly influence participative leadership. Participatory leadership: Defined as supervisors encouraging subordinates’ responsibility and input in decisions, it is important in hospitality and tourism and fosters involvement, satisfaction, empowerment, creativity, and innovation. Participative leadership is related to market orientation and innovation support. Innovation in tourism: Encompasses product/service, process, management, marketing, and institutional changes; innovative intensity is the pace of implementing new ideas into processes and management. Participative leadership is a catalyst for innovation and sustainable performance. Market uncertainty has been used as a moderator in leadership and innovation research; COVID-19 highlights its relevance in tourism. The study proposes H2: participatory leadership positively influences market orientation; H3: participatory leadership positively influences innovative intensity; H4: participatory leadership positively influences sustainable competitive advantage; Moderator: market uncertainty moderates the relationship between organizational values and participative leadership. Market orientation to innovation intensity: Defined as organization-wide generation, dissemination, and response to market intelligence, MO supports value creation and is crucial in hospitality for proactively meeting customer needs. MO and innovation jointly enhance loyalty and performance; MO supports successful innovation. H5: market orientation provides greater intensity in the company’s innovation. Market orientation to sustainable competitive advantage: MO entails continuous, superior responses to market needs and can create sustainable competitive advantage and superior performance, especially in hospitality. H6: market orientation provides the greatest potential for sustainable competitive advantage. Innovation intensity to sustainable competitive advantage: Innovation capacity is a key driver of competitive advantage and performance in hospitality, including through radical product and process changes and eco-innovation. H7: innovation intensity facilitates achievement of sustainable competitive advantage. The proposed model includes six research variables and the moderator market uncertainty, with hypothesized paths H1–H7.

Design and setting: The unit of analysis is the company in the tourism sector, with two international samples from Spain and South Korea selected to reflect different cultural parameters (Hofstede dimensions) and industry development stages. Sampling and data collection: Spain: Sampling frame from Andalusian Agency for Foreign Promotion (EXTENDA) and Basque Catalog of Exporters (CIVEX), selecting CENAE-coded tourism firms. Population contacted: 1,595 companies; online survey to managers/CEOs conducted Nov–Dec 2021. Valid questionnaires: 139; after handling missing data per Leguina (2015), 21 cases removed, yielding 118 usable responses (7.4% response rate). Non-response bias assessed via t-tests (first 15 vs last 15 respondents) showed no significant differences on perceived competitive advantage items. South Korea: Population contacted: 1,096 companies; email survey Oct–Dec 2021. Valid questionnaires: 126; after removing 26 per missing data criteria, final N=100 (9.12% response rate). Sampling was non-probabilistic convenience to achieve representation across each nation’s tourism business fabric. Power analysis: Based on Green (1991) and G*Power (power=0.80, medium effect f2=0.15, alpha=0.05), minimum sample size ~43, thus both samples (Spain 118; Korea 100) exceed requirements. Measures: Constructs measured on 7-point Likert scales (1=strongly disagree, 7=strongly agree). Organizational Values (OV) modeled as a composite (design construct) comprising eight first-order dimensions from Tamayo et al. (2000): realization (RE), compliance (COM), domain (DOM), employee welfare (EW), tradition (TR), prestige (PR), autonomy (AUT), and collective concern (CORNCOL). Behavioral constructs modeled reflectively. Analytical approach: Mixed-method multi-analytical strategy combining variance-based structural equation modeling (PLS-SEM) and fuzzy-set Qualitative Comparative Analysis (fsQCA). PLS-SEM: Conducted with ADANCO 2.3. Global model fit assessed via SRMR, dULS, and dG; all tests below bootstrap-based HI99, supporting fit. Estimation Mode A used for composites; item loadings >0.70; construct reliability (Cronbach’s alpha, rho_A, composite reliability) >0.70; AVE >0.50; discriminant validity via HTMT satisfied. Bootstrapping with 5,000 subsamples for significance tests and confidence intervals; effect sizes f2 reported. Moderation: Market uncertainty (UNC) tested as a moderator on OV→PL. fsQCA: Constructs calibrated from 7-point scales by computing construct means weighted by factor loadings, then calibrating using 10th, 50th, 90th percentiles as qualitative anchors. Necessary condition analysis examined presence/absence of SCAc (sustained competitive advantage) using consistency and coverage thresholds. Truth tables constructed with frequency and consistency cutoffs per Ragin (2006) and Schneider & Wagemann (2010); logical minimization produced sufficient configurations for presence and absence of SCAc. Descriptive calibrated means (Korea vs Spain): OVc 0.698 vs 0.809; PLc 0.617 vs 0.868; MUc 0.492 vs 0.647; OIc 0.571 vs 0.685; MOc 0.764 vs 0.869; SCAc 0.664 vs 0.732.

PLS-SEM measurement quality: Reliability and validity supported across both samples (Cronbach’s alpha 0.831–0.985; composite reliability 0.885–0.986; AVE 0.620–0.874 Spain, 0.705–0.797 Korea; HTMT satisfied). Model fit statistics (SRMR, dULS, dG) below HI99. Structural results (Korea): Endogenous SCA R2=0.713. OI→SCA supported: β=0.691, t=5.362, p<0.001, f2=0.391 (large). MO→SCA not supported: β=0.174, t=1.578, p=0.115, f2=0.055. PL→SCA not supported: β=0.032, t=0.280, p=0.779, f2=0.001. OI endogenous R2=0.768; MO→OI supported: β=0.307, t=4.702, p<0.001, f2=0.265; PL→OI supported: β=0.661, t=10.854, p<0.001, f2=1.233. MO endogenous R2=0.351; PL→MO supported: β=0.598, t=8.513, p<0.001, f2=0.557. PL endogenous R2=0.677; OV→PL supported: β=0.682, t=10.002, p<0.001, f2=1.189. Moderation of UNC on OV→PL not supported (β=0.042, t=0.591, p=0.555, f2=0.006). Structural results (Spain): Endogenous SCA R2=0.551. OI→SCA supported: β=0.563, t=8.474, p<0.001, f2=0.481; MO→SCA supported: β=0.260, t=2.560, p=0.011, f2=0.117 (small); PL→SCA not supported: β=0.052, t=0.641, p=0.522, f2=0.004. OI endogenous R2=0.326; MO→OI supported: β=0.310, t=3.573, p<0.001, f2=0.124; PL→OI supported: β=0.385, t=4.424, p<0.001, f2=0.191. MO endogenous R2=0.143; PL→MO supported: β=0.388, t=2.610, p=0.009, f2=0.177. PL endogenous R2=0.540; OV→PL supported: β=0.729, t=8.234, p<0.001, f2=1.072. Moderation of UNC on OV→PL not supported (β=−0.044, t=0.467, p=0.640, f2=0.005). Indirect effects: OV→PL→OI→SCA supported in both samples (Spain: β=0.158, t=3.002, p=0.003; Korea: β=0.311, t=4.388, p<0.001). OV→PL→MO→OI→SCA supported in Korea (β=0.086, t=2.899, p=0.004) but not in Spain (β=0.049, t=1.864, p=0.062). OV→PL→SCA and OV→PL→MO→SCA not supported in either sample. fsQCA necessary conditions for presence of SCAc: Korea: OVc and MOc necessary (consistency >0.90, coverage >0.80). Spain: OVc, PLc, and MOc necessary (consistency >0.97, coverage >0.81). Sufficient configurations (high overall solution consistency and coverage) reveal multiple combinatorial paths to SCAc in both countries, with solutions frequently including OVc, PLc, MOc, and OIc; market uncertainty (MUc) appears in some configurations as present or absent. Overarching findings: Participative leadership, grounded in organizational values, does not directly predict sustainable competitive advantage but exerts influence indirectly through innovation intensity and market orientation. Innovation intensity is a strong driver of sustainable competitive advantage in both countries (stronger effect in Korea), while market orientation directly supports SCA in Spain but not in Korea. Market uncertainty did not moderate OV→PL in either context.

The study addressed the research objective of identifying sources of sustainable competitive advantage in hospitality and tourism during COVID-19 by testing the roles of organizational values, participative leadership, market orientation, and innovation intensity, and by examining market uncertainty as a moderator. The results show that participative leadership, while important for activating market orientation and innovation, does not directly translate into competitive advantage; instead, it works indirectly by enhancing innovation and market responsiveness. Organizational values strongly underpin the development of participative leadership across both samples, reinforcing the view that values and leadership are mutually reinforcing in shaping organizational behavior during turbulent periods. Cross-country comparisons highlight differential mechanisms: in Spain’s mature tourism market, both innovation intensity and market orientation directly bolster sustainable competitive advantage, whereas in Korea’s less mature but technologically advanced context, innovation intensity is the primary direct driver. fsQCA complements the symmetric analysis by revealing multiple sufficient configurations that combine organizational values, participative leadership, market orientation, and innovation to achieve competitive advantage, and by identifying necessary conditions: OV and MO in Korea, and OV, PL, and MO in Spain. Notably, market uncertainty did not moderate the OV→PL relationship in either country, suggesting that organizations maintained their participative leadership principles despite the pandemic’s disruptions. These findings emphasize leveraging organizational values to sustain participative leadership and channeling that leadership into innovation and market-oriented strategies to achieve and maintain competitive advantage.

In periods of economic uncertainty, hospitality and tourism companies can secure sustainable competitive advantage by fostering participative leadership anchored in organizational values and channeling it toward market-oriented strategies and innovation. Across distinct contexts—Spain’s labor-intensive, mature tourism powerhouse and South Korea’s technology- and innovation-intensive environment—market orientation emerges as a key strategic element and innovation intensity as a potent driver of competitive advantage. Market uncertainty during COVID-19 did not alter the development of participative leadership in either context; nonetheless, when uncertainty intensifies, firms can rely on organizational values, market orientation, and innovation as strategic levers. Managers should prioritize clarifying and strengthening organizational values, developing participative leadership, and directing these capabilities into concrete innovations and market-oriented initiatives. Future research should extend the analysis to additional countries and sectors, re-evaluate the proposed relationships in more stable post-pandemic contexts, further explore the interplay between values and leadership, and examine how eco-innovation and technology adoption contribute to sustained advantage in dynamic environments.

The study used non-probabilistic convenience samples from two countries, which may limit generalizability. COVID-19 substantially conditioned the environment; results should be revalidated in more stable contexts or under different crises. Additional countries with strong tourism orientations should be examined. Although market uncertainty did not show a moderating effect here, its long-term implications warrant caution and further investigation.