The Role of Knowledge Transference in the Process of Internationalisation
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The role of knowledge transference in the process of internationalisation. The case of the London Hilton. Barbara Czyżewska A thesis submitted in partial fulfillment of the requirements of The University of West London for the degree of Doctor of Philosophy July 2016 Abstract The Twentieth Century’s hotel industry saw a shift from independently managed grand hotels to the increasing influence of multinational hotel companies whilst processes of globalisation contributed to the international movement of people, ideas and practices. The London Hilton was the first subsidiary of this American branded chain to open in Britain undergoing, at the time, cultural and social changes associated with the ‘Swinging Sixties’. The history of grand hotels has been thoroughly documented however there is lack of business history research into the expansion process of modern multinational hotel companies. The aim of this study is to explore the process of internationalisation of Hilton Hotels through the transference of knowledge between the parent company and the London subsidiary. International business theory is investigated in pursuit of establishing relationships between the concepts of transference of knowledge, multiple-embeddedness and negotiation of legitimacy, collectively forming a conceptual framework driving this research. A single embedded case study is adopted to comprehend the nuanced relationships and pressures resulting from the multiple-embeddedness of the case. An extensive range of archival material is collected to construct an in-depth case study of the London Hilton embedded in the contexts of its parent company as well as home and host countries. The case is synthesised with the theory using interpretive research methods and employing a three-stage coding process. The London Hilton appears to be representative of a case of effective knowledge transference which avoided the pressure for homogenisation from the host environment. It is an example of an organisation whose foreignness served as a differentiating, rather than restraining factor. These findings contradict the traditional institutional assertion of the necessity for adaptation to local settings and confirm the notion that legitimacy can be negotiated. The appearance of the Hilton hotel on the 1960’s London hotel market can be perceived as an emblem of the wider historical changes in the globalising world. The main contribution of this research is adding a new dimension to the paradigms of institutionalism and the resource-based view by illuminating the complex associations between these concepts underpinning international business theories. The study also extends the existing theory of foreignness and contributes to the body of business history research in the field of hotel management. It recommends the application of oral history and network analysis for further exploration of these concepts. Key words: Internationalisation, Knowledge Transference, Foreignness, Multinational Hotel Company 1 Dedication For my Parents Rodzicom 2 Acknowledgements I would like to thank my Supervisors, Professor Angela Roper and Dr Andy Gatley. You have been the best tutors and mentors that I could ever hope for. Thank you. I would like to extend my gratitude to many individuals without whom completion of this work would not have been possible: My Family, Professor David Foskett, Dr Mark Young, Ben Bengougam, Michael Shepherd, Professor Alexandros Paraskevas, Professor Anthony Olden, Piotr Olczak, Maria Pennells, Angela Rossodivita, Professor Carl A. Boger Jr., Joe Palmieri, Dottie Muller and Trustees of the Gilchrist Educational Trust. Finally, I am grateful to my Examiners for evaluating this thesis and offering a most valuable critique. 3 CONTENTS: PART 1 – BACKGROUND TO AND NEED FOR THE STUDY 11 1. INTRODUCTION 11 1.1. Background to the study 11 1.2. Positioning of the study 15 1.3. Aim and objectives 17 1.4. Structure of the thesis 18 2. A REVIEW OF KEY INTERNATIONAL BUSINESS CONCEPTS 22 2.1. Introduction 22 2.2. The Institutional paradigm 22 2.2.1. Development of the institutional paradigm within management studies 25 2.2.2. The Institutional perspective on strategy 27 2.3. Multinational companies and their internationalisation 29 2.3.1. Globalisation 31 2.3.2. Multinational companies 32 2.4. Knowledge 38 2.4.1. Knowledge transference 40 2.5. The Multiple - embeddedness 43 2.6. Legitimacy 45 2.6.1. The role of learning in internationalisation and negotiation of legitimacy 48 2.7. Foreignness as an asset 50 2.8. Legitimacy spillover in multiple-embeddedness 51 2.9. Conclusions 52 3. METHODOLOGY 56 3.1. Introduction 56 3.2. Business History 56 3.3. Nature of this research and its philosophical underpinning 60 3.4. The case study method 66 4 3.5. Case study selection 68 3.6. Data collection 70 3.7. Referencing style 77 3.8. Data analysis 77 3.8.1. Descriptive codes 78 3.8.2. Interpretive codes 79 3.8.3. Pattern codes 80 3.9. Evaluation of research 81 3.10. Ethical considerations 86 3.11. Note on limitations of this study 88 3.12. Summary 89 PART 2 - THE EMBEDDED CASE 90 4. THE ENGLISH AND AMERICAN CONTEXTS 90 4.1. Introduction 90 4.2. English context 91 4.2.1. Early development of grand hotels in London 91 4.2.2. Developments in the British hotel industry after the Second World War 97 4.2.3. Socio-cultural situation of the 1960’s Britain 100 4.3. Americanisation 109 4.3.1. Historical outline 110 4.3.2. Americanisation as a two-way transaction 112 4.4. American context 115 4.4.1. The development of hotels in America 115 4.4.2. Comparison of the early grand hotels in London and America 120 4.5. Conclusion 128 5. HILTON HOTELS CORPORATION AND HILTON INTERNATIONAL 130 5.1. Introduction 130 5.2. Conrad Hilton 131 5 5.2.1. The entrepreneur from San Antonio 131 5.2.2. The hotelman with a mission 132 5.2.3. The businessman 136 5.2.4. The celebrity 138 5.3. Development of Hilton Hotels Corporation and Hilton International 143 5.3.1. Early development in the US 143 5.3.2. Early developments abroad 150 5.3.3. Creation of Hilton International 157 5.3.4. American hotels with local flavour 167 5.3.5. Hilton’s people 171 5.4. Conclusions 175 6. THE LONDON HILTON 177 6.1. Introduction 177 6.2. Controversies surrounding the development project 178 6.3. Development of the London Hilton 182 6.4. Construction and design 187 6.5. Guest rooms 190 6.6. Food and beverage facilities 194 6.7. Technological and operational solutions 204 6.8. Human Resources 210 6.9. Marketing and public relations 220 6.10. Business travel advertising 227 6.11. The state of the London hotel scene in the 1960s 232 6.12. London hotels’ reactions to the London Hilton opening 236 6.13. Conclusions 238 7. EPILOGUE 240 6 PART 3 - CONTRIBUTIONS OF THE RESEARCH TO INTERNATIONAL BUSINESS 244 8. INTERNATIONALISATION THROUGH KNOWLEDGE TRANSFERENCE 244 8.1. Introduction 244 8.2. The process of internationalisation 245 8.3. Knowledge transference 249 8.4. The role of multiple-embeddedness 257 8.5. The liability of foreignness 261 8.6. Summary of key findings 267 9. CONCLUSIONS 269 9.1. Introduction 269 9.2. Contributions to knowledge through the achievement of objectives 269 9.3. Limitations of the research 275 9.4. Recommendations for further research 278 LIST OF REFERENCES 281 APPENDICES 302 List of Tables: Table 1-1. Historical studies of luxury/grand hotel industry between 1968 and 2015 ........................................ 14 Table 1-2. Selection of studies concerned with international business adopted in this research ....................... 16 Table 3-1. Nature of qualitative research underpinned by constructionism and interpretivism. ........................ 64 Table 3-2. Extent of data collected for each level of multiple-embeddedness .................................................... 72 Table 3-3. Extent of the analysed archival material ............................................................................................. 73 Table 3-4. Three-stage coding process ................................................................................................................. 78 Table 3-5. Terminology applied in the evaluation of research ............................................................................. 82 Table 3-6. Timeline of events at which progress of this research was presented ................................................ 85 Table 4-1. Major hotel acquisitions in the 1960s London .................................................................................... 99 Table 5-1. Timeline of key events in Conrad's professional life .......................................................................... 138 Table 5-2. Timeline of key events in the history of Hilton Hotels Corporation .................................................. 150 Table 5-3. Portfolio of eight hotels opened in 1963 ........................................................................................... 152 Table 5-4. Comparison of numbers of rooms worldwide in 1963 and 1966 ...................................................... 153 Table 6-1. The London Hilton floor guide as of 1963 ......................................................................................... 188 Table 6-2. The London Hilton's General Managers ............................................................................................ 213 Table 6-3. The senior management of the London Hilton in 1963 and their backgrounds ................................ 213 Table 7-1. Timeline of key changes in Hilton International's ownership (Hilton