Abstract

This research used strategy implementation perspective and strategic alignment of organizational strategies to investigate the link of cost leadership strategy, process innovation and organizational performance in context of Malaysia hotel industry. The purpose is to show that cost leadership strategy and process innovation have a significant impact on organizational performance. The paper designed a mail and email survey that was sent to top and middle level managers in three stars and above rated hotels, which resulted in 54 usable surveys. The results show that cost leadership significantly affects the process innovation and process innovation also significantly affects the organizational performance. Furthermore, the results show that process innovation mediates the cost leadership strategy and organizational performance link. Consequently, the hotel managers, perhaps make strategic decisions by simultaneously develop cost leadership and process innovation to obtain superior organizational performance and competitive advantage.

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