Effect of online hotel reviews on the relationship between defender and prospector strategies and management controls

Abstract

Purpose This study aims to analyze the effect of online hotel reviews on the relationship between defender and prospector strategies and management control system (MCS) design. Design/methodology/approach To conduct the study, this paper administered a questionnaire to large Brazilian hotels and analyzed data from 204 hotels using structural equation modeling and fuzzy logic. Findings The main results show that online hotel reviews have a positive and significant effect on the relationship between prospector strategy and personnel and action control. In contrast, online reviews have a negative effect on the relationship between defender strategy and personnel, action and results controls. Thus, it is confirmed that online reviews change the relationship between strategy and MCS design. Practical implications The results show that online reviews play an important role in the decisions of hotel managers regarding MCS design. Customer demand evaluations, which are regularly available online on analysis websites, help managers adapt the MCS design, ensuring that their actions are aligned with the adopted strategy. This study adds to previous studies by showing that hotel managers use the information from customer evaluations to improve their performance. Originality/value The management literature based on the contingency theory indicates that strategy is a variable that affects MCS design. This study extends this discussion by indicating that online reviews, specifically in the hotel industry, can also be a determining factor in defining management controls. In addition, this paper points out that OHR impacts differently, depending on the strategy used and the type of management control.