Absorptive capacity and cultural diversity in the restaurant industry

Introduction

An important way to develop innovation is through organizations’ absorptive capacity (ACAP). ACAP can be understood as the ability of companies to innovate through the application of external knowledge (Cohen & Levinthal, 1990). One hospitality industry that could potentially leverage ACAP is restaurants. Innovation is still scarcely applied in restaurant companies despite the relevance of competitive advantage stemming from innovation (Blöcher & Alt, 2021).

According to Gao et al. (2017), one of the most relevant ACAP models in the literature was developed by Zahra and George in 2002. It considers the following dimensions: antecedents (knowledge sources); activation triggers (aspects that encourage companies to search for external knowledge, e.g. crises); components (acquisition, assimilation, transformation, and exploitation of knowledge); (in)formal social integration mechanisms (which promote the sharing of knowledge among employees); regimes of appropriability (e.g. patents); and outcomes (e.g. innovation).

Recent studies have highlighted the relevance of employees to ACAP dimensions in the tourism sector (Moraes et al., 2021). In fact, the workforce of this sectors has high levels of cultural diversity. Cultural diversity has been considered a key aspect for management innovation in these companies (Manoharan et al., 2019).

The number of publications about ACAP in tourism has increased in the last years; however, the relationship between ACAP and aspects such as cultural diversity is still an understudied subject. The present study researched how cultural diversity in the workforce is associated with restaurants’ ACAP in order to contribute to a better understanding about these dynamics.

Methodology

The data was collected through seven semi-structured interviews with managers of SME restaurants in Lisbon in November-December 2020. A priori thematic saturation was reached. A priori thematic saturation is related to the degree to which pre-determined theoretical categories are exemplified in the data (Saunders et al., 2018). The research question was: “How does cultural diversity in the workforce promote innovation in restaurants?” The interviews were translated into English. A theoretical thematic analysis was performed (Braun & Clarke, 2006). Deductive coding was carried out following the most cited and impactful model on absorptive capacity – Zahra and George (2002). The software used for analysis was NVivo 12.

Results

According to the interviewed managers, cultural diversity is generally perceived as positive to innovation in restaurants. There is the idea that “new cultures bring us new ideas and new ideas can be good for the business itself” (M7).

• In terms of ACAP antecedents (Figure 1), the external knowledge from employees’ different cultures emerges as a relevant dimension: “we can explore the knowledge that these people bring from their countries (…) The first thing I ask them is what they like to eat the most in their countries, if they know how to do it, and if they can share this knowledge with us. I have had pleasant surprises” (M4).

  Figure 1. Absorptive capacity in a context of employees’ cultural diversity.

  Source: Own adaptation of Zahra and George’s (2002) model

  

• ACAP components: information from cultural diversity has been acquired, assimilated, and exploited through menu innovation. However, one of the managers highlighted that cultural difference can also negatively influence the exploitation of knowledge: “imagine that your restaurant has to innovate with pork, and you have a Muslim in the kitchen, it won’t work for sure (…)” (M2). It is relevant to highlight that managers did not mention the transformation phase. According to Zahra and George’s (2002, p. 190), the transformation phase is related to “interpreting the same knowledge in a different manner”. Nevertheless, previous studies have evidenced that the transformation step is an alternative ACAP path (Todorova & Durisin, 2007).

Culturally diverse backgrounds often come along with linguistic diversity. According to Cohen and Levinthal (1990), a shared language is an ACAP manifestation at its elemental level. Language was confirmed as an important aspect of restaurants’ ACAP during the interviews. Language is related to all ACAP components, influencing restaurants’ capability to create and utilize knowledge that enhances their ability to innovate. One of the managers indicated that “language can be a barrier as it is essential for employees to understand what I am saying and what I want” (M2). This answer corroborates Bouncken et al.’s (2016) findings about communication being a barrier in culturally diverse contexts.

• Activation triggers: the interviewees pointed out that the Covid-19 pandemic has influenced external knowledge acquisition. Due to these circumstances, restaurants became more actively involved throughout the customer’s decision process: “nowadays, my employees participate in many WhatsApp groups, they keep in touch with all these groups. In the past, there was no pre and post contact with customers. We had to innovate, and it is also a consequence of the pandemic” (M4).

• ACAP integration mechanisms: according to the managers interviewed, companies should “treat everyone equally and respect the culture” (M1) and “know the cultures well to identify how far you can go” (M2). One of the managers specified that “to extract the best from the different cultures, we need to give them the opportunity to present ideas. Regular and frequent meetings are so important in this process” (M5).

• Innovation outputs: these mainly consisted of new dishes: “if we have people from different countries, we can offer more dishes that we are not used to eat” (M3). Cultural diversity influences not only product innovation but also service innovation: “the employees have different cultural backgrounds and I think this is important for interaction with customers” (M1). Having a culturally diverse workforce also seems to be related to a greater availability of language skills, with positive consequences for service provision: “in the front-office, there were employees from France, Brazil, Austria, Angola and Saint Thomas and Prince, so they could speak many languages with customers”. Managers did not refer to regimes of appropriability in their answers. This might be explained by such regimes being more common in high-tech innovations (Thomas & Wood, 2015).

Conclusion

The present study suggests that workforce cultural diversity is relevant to companies’ absorptive capacity dynamics. This article contributes to theory by proposing the absorptive capacity model as a framework for analysing how employees’ cultural diversity contributes to innovation. In terms of practical contributions, our study highlights the role of cultural diversity for restaurant innovation.

The main limitation of this study concerns the generalization of results due to its exploratory nature and low number of participants. Nevertheless, it provides important insights into an underexplored topic.

Disclosure statement

No potential conflict of interest was reported by the author(s).