THE IMPORTANCE OF INNOVATIVENESS AND KNOWLEDGE

MANAGEMENT FOR DEVELOPMENT OF RURAL TOURISM IN

VOJVODINA


Dunja Vujii
1

Ana Jovii
2



Abstract

The objective of the paper is to highlight the importance of knowledge
management and innovativeness for the development of rural tourism in
Vojvodina. Farmsteads in Vojvodina are representative facilities of rural
tourism and innovative business ventures which have exceptional, though
under-utilized tourism potential. Research methods used in the study include
desk research, as well as an interview with the representative sample of
farmstead managers. The results show that the majority of farms are
planning to innovate the business in the future, where most ideas are
acquired from guests, competition, and / or employees. According to the
research results, farmsteads in Vojvodina still do not recognize the
importance of knowledge management, due to the fact that a surprisingly
large percentage of the respondents had never participated in educational
activities that are important for business growth.


Key words

Knowledge management, innovativeness, rural tourism, Vojvodina.








1
Dunja Vujii; MA in Engineering Management; Faculty of Technical Sciences; Trg
Dositeja Obradovia 6, 21000 Novi Sad, Srbija; dunja.vujicic@fondmt.rs; 00381 65
5206928;

2
Ana Jovii, MA in Economics, Geographical Institute Jovan Cviji SASA, ure Jakia 9,
11000 Belgrade, Srbija; ana.jovicic@fondmt.rs; 00381 64 1478824
2

Introduction

Dynamic social, economic, political and ecological changes and processes
have caused the unsustainable growth and development of urban areas. Rural
tourism has emerged as a response to a high level of urbanisation, mass
tourism and unsustainable growth and it is becoming increasingly attractive
to modern tourist.

Due to its remarkable tourist and geographic location, natural and
anthropogenic potentials, Vojvodina is an excellent resource for the
development of various types of tourism. Considering the authentic
architecture of Vojvodina, its numerous farmsteads and ethno houses,
recognisable cuisine, manifestations and other predispositions, Vojvodina
could become an important destination for rural tourism.

Innovation of organisation is the basis for success as it ensures for the
organisations to be efficient, improve their product quality, cut the expenses,
satisfy their clients needs, increase their sales and profits, ensure a bigger
market share and distinguish themselves from the competition. Knowledge
and knowledge management occur as significant catalysts in this process.
This paper deals with farmsteads in Vojvodina which have a special role in
the development of rural tourism in Vojvodina.

The objective of the study is to point out to the importance of knowledge
management in rural tourism, in order to increase the innovation and ensure
rural tourist products which can respond to tourists needs in a better way.

The task of this study is to determine whether farms, as representative
hospitality objects in the function of rural tourism, respond to changes in the
environment; what their attitude on changes is, whether they introduce
innovation in their business management, from where they get ideas to
improve their business management, which are the basic sources of
knowledge and whether acquisition of new knowledge contributes to the
improvement of business management.

The methods used in the research are desk research and interviews. The
interviews were conducted with the owners or managers on farmsteads in
Vojvodina. There were 30 farmstead involved in the study. The study will
answer to the following research questions:

Do farmsteads have plans to innovate the business in the future?
3

How do farmsteads come up with new ideas for improvement of
business?
What is the attitude on the farmstead toward the changes?
Do farmsteads analyze the market and follow the competition?
Do employees on the farmsteads participate in seminars, training
courses and conferences that are relevant to the business?
Do the farmstead owners recognize the importance of educational
activities for business improvement?

Research questions will provide an insight into farmsteads readiness to
change. The basis for the development of rural tourism is the implementation
of new knowledge, where innovation and knowledge management emerge as
an important factors of rural tourism development.

The paper consists of several parts. The first part explains the notion of rural
tourism and gives a short review of rural tourism in Vojvodina, with special
focus on farms. The second and the third part give a reference review and
point out to the significance of knowledge management and innovation of the
organisational management. The fourth part explains the methodology used.
The fifth part gives a review of the most important research results. The last
part discusses the acquired results and gives a conclusion.

Rural tourism in Vojvodina

Tourism is one of the fastest-growing global activities which records growth
of 25% in the last ten years, while the international tourist arrivals have
increased over 4% in 2011 (UNWTO, 2012). In the following period, it is
predicted that tourism will develop in all regions of the world, with the most
intense relative growth in the developing countries. Tourism is a very
complex and heterogeneous phenomenon which combines multiple activities
such as hospitality, transport and other numerous indirect activities. The role
of tourism is significant in the transition period. It is important to emphasise
that tourism affects numerous economic sectors to a great extent, offers high
value added to the balance of payment in a country but also is an important
generator of employment, especially for the employment development in
rural areas.

Rural tourism is a type of tourism which involves the complexity of all
activities and aspects of the whole tourist product (recreation in a rural area,
enjoying leisure time and peace of the rural area, enjoying nature and diverse
landscapes, national parks, nature parks, cultural tourism, rural households
tourism) (Jafari 2000). The notion of rural tourism has been recognized by
4

the European Union, and as such it is related to all tourist activities in rural
areas. Special types of rural tourism are: rural households tourism, hunting,
fishing, ecotourism, medical tourism, sports and recreational, residential,
educational, adventurous, transit, camping, continental nautical tourism,
culinary and ethno culinary, tourism of protected areas, cultural tourism,
religious tourism and other special types (Koi, 2009).

The role of government is highly important in supporting and encouraging
the development of sustainable rural tourism (Mac Nulty, 2002). For many
years Europe records excellent results in this field and further growth based
on domestic market but also the support of the sustainable development
concept is expected (Horwath Consulting Zagreb and The Faculty of
Economics, Belgrade, 2005). On the other hand, Serbia does not fully exploit
its rural tourism possibilities, such as rural tourism in the villages of
umadija, farming tourism in Vojvodina, religious tourism, wine and ethno
tourism, etc. (omi, 2002). Also, Vojvodina is specific for its remarkable
ethnic diversity, which is a significant potential for creating numerous tourist
products which should focus on folklore, culinary specialties and happenings
which show the diversity and the richness of the cultural and historical
heritage. Rural tourism is a real asset to the revitalisation of a large part of
Vojvodina and Serbia as well, and their numerous smaller and bigger rural
areas, at least those who are currently forgotten. The development of tourism
in this area can seriously threaten or even stop young people from moving to
cities, as today it creates elementary conditions for a general, much greater
comfort of rural villages (Vratua, Anastasijevi, 2002).

Farmsteads
3
in Vojvodina are the monuments of culture and tradition of the
people who live in this area and are incredibly significant for the rural
tourism of Vojvodina. Unfortunately, farmsteads are not fully exploited as a
tourist concept, although they are characterised as the trademark of
Vojvodina and cultural specificity of the Pannonian region (Dragievi,
2007). Most farmsteads were built in the middle of the last century, while
some farms are over 200 years old and have become ethno museums with a
multitude of old tools, agricultural tools, brick stoves and antique guest
rooms with large beds and down comforters (Anelkovi, 2006). Although
the value of farms is reflected in retaining and presenting a classic lifestyle in
Vojvodina, many of them have been redecorated and adjusted to modern

3
Farmstead is a translation of the Serbian word sala, which is loanword from the Hungarian
szlls. It is a rural estate surrounded by outbuildings mainly used for agricultural activities.
It is characteristic for the Panonian area. Although it does not have the exact same
connotation as szallas, there is no equivalent for this word in English, so the translation
farmstead will be used in the text.
5

needs, and thus there are swimming pools, courts, ponds and other
recreational facilities. Some of the most famous and the largest farmsteads
own stables, small zoos and ethno museums. Thus, farms in Vojvodina are
ideal for a peaceful vacation with numerous recreational activities but also for
enjoying great cuisine of Vojvodina, top local wines and rakija along with the
merry sounds of the tamburica.

From the aspect of business management, farmsteads in Vojvodina are an
innovative and entrepreneurial business venture. In order to be seen as such,
farms which are used for the needs of rural tourism should retain their
original look and the authenticity of the surroundings, as this is the only way
they can form a differentiated tourist value compared to regular restaurants
and farms. Farmsteads are supposed to be conceived in such way to enable
their owners to live there and do their agricultural activities, but also to
provide accommodation, food and other services to their tourists
(Anelkovi, 2006). In the last several years there has been recorded a raise
of awareness on the significance of farmsteads for the culture and tradition of
Vojvodina (Tomi, 2002).

Knowledge management

It is globally accepted that knowledge is one of the most important sources of
competitive advantage in the increasingly turbulent global business
environment. Although many different models can be found in different
studies (Kim, 1993; Choo, 1998; Jakubik, 2011; Nonaka et all, 2000; Melkas,
Harmaakorpi, 2008), the existing models poorly answer the question of how
knowledge is actually created and shared among the actors of different
organisational environments. Some studies (Rutten, 2004; Nonaka et all,
2000; Cappellin, 2007; Gertler, Wolfe, 2004) suggest that the practice and
investigating knowledge management should focus not only on individual
organisations but also larger units (cities, regions). There are numerous
approaches in different studies. Patriotta (2003) described the evolution of
different paradigms on knowledge management, naming approaches in the
following way: the approach based on resources, the cognitive approach, the
approach based on knowledge, situational approach and the technological and
scientific approach. He considered epistemological assumptions on which the
existing theories of the organisational knowledge are based, emphasising that
the nature of knowledge has been much discussed, and that knowledge has
proved to be a multiple phenomenon. During the last decade, there were
several attempts to integrate different approaches of knowledge management
into a common framework (Jashapara, 2005; Patriotta, 2003; Koenig, 2008).
These studies recognised the perspectives of human resources and strategic
6

perspectives of management, as well as the perspective aspects of the
informational systems (Jashapara, 2005).

In papers which deals with knowledge management, knowledge is becoming
to be viewed as situational and contextual (Koenig, 2008). Apart from that,
(Orlikowski, 2002) claims that knowledge is related to objects (things,
elements and facts), and that cognition is related to action (practice). She
emphasised that cognition is the ability to change and that it occurs in active
social interaction. Apart from that, Orlikowski (2002) claims that sharing
knowledge occurs only when it is possible to learn the practice from others.
Thus, cognition and abilities can be examined only by examining practice i.e.
by learning how something is being done in practice. Knowledge base of a
company cannot consist of multiple sources. Kerssens-Van Drongelen (1996)
classified these sources into four categories:

brainware: knowlegde which is inside a persons mind, such as
intuition, experience, a specialised knowhow;
hardware: tangible things such as material prototypes, products,
research and hardware development, the production process;
groupware: undocumented knowledge shared among people, such as
heuristic, procedures, stories, myths;
documentware: knowledge documented on paper or in data
base/information systems, such as intranet, parts of data base, patents,
manuals, laboratory reports, etc. (Davis et al., 2006).

Swan, Scarbrough and Preston (1999) define knowledge management as
any process or practice of creating, earning, sharing and using knowledge,
in order to improve learning and performance in a company. Johannessen,
Olsen and Olaisen (1999) have given a more complete definition, taking into
account different types of knowledge: systemic, explicit, tacit, as well as
hidden knowledge. Systemic knowledge is acquired by examining models
such as those from computer simulations exercise. Explicit knowledge is
relatively easy to acquire by listening and reading. The knowledge relation is
being learned in interaction and is relatively difficult to communicate. The
most difficult types are tacit and hidden knowledge, as they are difficult to
comprehend and communicate. Hidden knowledge is the way of organising
ideas and mental models and it is usually acquired through socialising.
However, the most valuable type of knowledge is tacit knowledge.
Johannessen, Olsen and Olaisen (1999) describe it as a "know how"
knowledge, which is acquired by using, working and experimenting. Tacit
knowledge is usually highly subjective and it is inside a persons mind,
therefore it is hard to communicate, comprehend and quantify. This is why
7

companies struggle to discover how to motivate their employees to share tacit
knowledge, which is recognised as a significant strategic tool. Many
companies attempt to achieve this by training their employees (internships) or
developing their employees competence.

Education of employees is essential for faster accepting and adapting to
changes in the business environment, as well as for the improvement of the
business and achieving a competitive advantage.

The importance of innovation for the business

The companys ability to innovate and use the advantages of innovation is a
deciding factor of its survival in todays turbulent and unstable environment
(Doyle, 1998; Quinn, 2000).

Innovation is defined as creation and successful apllication of a new product,
process (Cumming, 1998), new idea (McAdam et al., 1998; Urabe, et al.,
1988), new knowledge form (Chaharbaghi, Newman, 1996); new way of
delivering quality or value for the client (Knox, 2002) or their combination.
According to Freeman and Perez (1994) innovation is possible to classify to:
incremental innovation, radical innovation, changes in the technological
system and changes in the technological and economic paradigm.

Incremental innovations include a series of small improvements or changes in
the way some things are done in a longer time period. They affect the
improvement of product and service quality. Radical innovations are
fundamental and revolutionary changes which demand clear departure from
the existing practice, processes and technology (OReilly, Tushman, 2004).
Most commonly they are the result of research activities in companies,
universities and institutes. This type of innovation brings big changes, marks
a new usage, property, design or components of the product compared to the
existing ones (Konti, 2008).

However, due to its low density and relatively small number of human and
financial resources, rural area has weak connections with research and
development centers, so it may encounter difficulties when it is necessary to
make radical innovations. Innovations in rural areas may take over and adjust
methods which have been created in other areas or finding new solutions for
extremely persistent problems (Rollinger, 2012).

The innovation process is the process of learning, where companies create
new knowledge, competence and abilities. Innovation value chain is the
8

process of transforming innovation into new products, services, processes,
etc. and then to exploit them in order to create new value. Innovation ability
of a company depends on the ability to create new knowledge and the
interaction between the individual and groups in a company (Konti, 2008).

Ngo and O'Cass (2009) see innovative ability as an integrative process of
applying collective knowledge, skills and resources in order to provide
technological (product/service and production innovations) and non-
technological innovations (management, marketing, market). In tourism and
hospitality papers often focus on certain aspects of product quality, such as
gastronomy, animation, wellness facilities (Jacob et al. 2003; Pikkemaat,
2008). Process innovations are analised in papers which focus on the effect of
technology in order to achieve different benefits such as higher productivity,
higher profit etc. (Siguaw et al., 2000; Sundbo et al., 2007). Innovations
related to employees involve finding new ways to organise, direct and keep
the staff, increase the satisfaction on the workplace and nurture knowledge
and competence. Walsh et al. (2013) examine the application of instruments
for managing human resources in hotel management. Hu et al. (2009), point
out to the significance of team work and sharing knowledge for innovations.
Innovation is the basis of companys success in all areas, tourism as well, as
it helps companies be more efficient, improve their product quality, cut the
expenses, satisfy their clients needs, increase sales and profits, ensure larger
market share and distinguish themselves from the competition (Jones, 1996).
Knowledge and knowledge management are significant part of this process.

Methodology

This study used a questionnaire created by the author of the paper. The
questionnaire consists of a six-item list, divided into two groups. The first
group of items explores the presence of innovation management dimensions
(four questions), while the second group of items is focused on examining the
knowledge management dimension (two questions). Table 1 shows the
questionnaire used in the study.









9

Table 1 The questionnaire used in the study


Questions


Answers
1. Do you have plans to innovate the
business in the future?
There are no plans
We recognize the need for a plan,
but we have not created an
innovative plan yet and we are
currently in a poor financial
situation
We have plans and we are
constantly implementing and
improving them
2. How do you come up with new ideas to
improve your business?
From the employees
From the guests
From the competition
All mentioned above
3. What is the attitude toward the changes
on the salash?
Changes are hard to accept
We are aware that something needs
to change, but we are not sure what
and how
We are actively working on
adapting changes. Moreover, we are
involved in a constant process of
change, because without it there is
no progress
4. Do you analyze the market and follow
the competition?
We do not analyze the market and
its opportunities
We rely on clients feedback
We analyze the market
opportunities, monitor the
competition and act accordingly
5. Do employees on the farmsteads
participate in seminars, training courses
and conferences that are relevant to the
business?

Never
Less than once a year
Once a year
More than once a year
6. Do you recognize the importance of
educational activities for business
improvement?
Yes
No


The authors surveyed 30 out of 39 respondents who are the owners or the
managers of farmsteads in the municipalities of Vojvodina, using the random
sampling method by direct surveying. Direct surveying by telephone as well
10

as face to face interviewing were used (five of the most famous farms were
visited) in order to ensure the quality of the questionnaire.

There are 45 municipalities in the Autonomous Province of Vojvodina.
According to official records, there are 39 farmsteads in 15 municipalities.
Today there are 39 farmsteads in active business, which are located in 15
municipalities out of a total of 45 municipalities in Vojvodina: (Sala Goji
Sala uzdaha, Sala Gnjezdo), Baka Topola (Capriolo, Sala udvardi), Bela
Crkva (Zeleni dvor), Inija (Sala od srca, Sala Stoji, Zekin sala),
Kanjia (Kucora sala), Kula (Vinska kua Aanski), Mali Io (Sala Katai),
Novi Beej (Sala Slano Kopovo), Novi Sad (Brkin sala, Cvejin sala, Kizin
sala, Mitin sala, Mlain sala, Na sala, Pejiev sala, Sala 137, Sala
Prodanov, Sala Voli), Odaci (Katiev sala), Sombor (Art sala Viinka,
Dida Hornjakov sala, Sala Bonjak), Srbobran (Beljanski raj, Sala uze
Svorcana, Sala Toe Zeremskog), Subotica (Jelen sala, Majkin sala and
Cvetni sala, Rokin sala, Sala orevi, Sala-majur roa, Vinski sala
uvardi), abalj (Babin sala, Monikin sala, Vila Diva). The most famous
farms are Sala 137, Majkin sala, Cvetni sala, Rokin sala and Perkov
sala (Tourist organization of Vojvodina, 2013).

Results

The first question was aimed to determine whether farms have plans for the
business improvement.The results show that 46.7% of respondents have
some business innovation plans for the future. A smaller percentage of
respondents recognise the need for the innovation plan but do not have one
yet or they currently do not have finances to make one (27.7%). It should be
mentioned that a negligible percentage of respondents have no innovation
plans at this moment (26.7%).

The responses related to the source of new ideas for the improvement of
business point out to the fact that most ideas are collected from various
sources: guests, competition and employees (40.0%). A significant
percentage states that most ideas are the result of immediate communication
with their guests (33.3%) or that the employees came up with the ideas
(23.3%). A small percentage (3.3%) stated that competition is their source of
new ideas for the improvement of business.

As far as respondents relation to changes is concerned, opinions are divided.
A significant percentage (36.0%) states that changes are hard to deal with it ,
while a similar percentage stated (33.3%) that they actively work on
implementing changes. The smallest but not negligible percentage (30.0%)
11

admits that they are aware of the significance of following and adjusting to
changes, but that their farmstead does not yet have a clear plan and the way
in which it can be changed.

When asked if the management of farmsteads analyze the market and follow
the competition, answers were following: 16.7% of respondents stated that
they rely solely on their guests feedback. From this it can be concluded that
less than half of respondents (40%) analyse market opportunities, keep track
of their competition and act in accordance with what seems to be poor results.

The responses to the question whether and how frequently employees on
farmsteads participate in educational activities, the results showed that a large
percentage was never involved in seminars, trainings and conferences
relevant to business (69.9%). A significantly smaller percentage (16.7%)
stated that they attend these type of educational activities less than once a
year, while the smallest percentage (6.7%) regularly attend educational
activities once a year or more (6.7%).

Despite the previous response which points out that insufficient evaluation of
educational activities by respondents, as well as insufficient attending of
those activities, a good result is the fact that 77.7% of respondents considers
the attending of educational activities to be useful for them and their
company.

Discussion and conclusion

The paper focuses on exploring the dimensions of knowledge and innovation
management on the farmsteads of Vojvodina. Farmsteads are especially
valuable as tourist attractions for the development of rural tourism of
Vojvodina, considering that apart from accommodation, they offer an
authentic experience to their guests, in the environment which reflects the
spirit of times gone by and the lifestyle of this region, as well as rich
gastronomic offer (Jovii et al, 2013).

In order to explore the dimensions of knowledge and innovation management
on the farmsteads in Vojvodina, a survey was conducted. It is positive that
almost half of the managers and owners of the farmsteads have some
business innovation plans for the future, while a smaller percentage is limited
by a lack of finances or are not interested in innovation. According to the
responses most innovation ideas were acquired from various sources guests,
competition and/or employees, which is affirmative, as constant feedback
from various sources is significant for business development. Accepting and
12

adjusting is business aspect which needs to be worked on because
respondents attitudes are divided. Although more than one third of
respondents have trouble in accepting changes, not a negligible percentage
claim that they analyse the market possibilities, keep track of the competition
and act in accordance with it.

It can be concluded that the innovation dimension is present in management
of farmsteads to a certain extent. However, improvements can be made,
primarily in the business aspect which is related to managing changes. Thus it
is necessary to anticipate the changes and act proactively. Also, constant
market tracking and quick assimilation and reaction to emerging
opportunities and threats is significant.

As far as the knowledge management dimension is concerned, it is
concerning that a surprisingly large percent of respondents did not attend any
seminars, trainings and conferences which are relevant to business, although
most of respondents consider attending educational activities to be beneficial
to them and their company.

A conclusion can be drawn that it is necessary to work on the improvement
of the knowledge management dimension, as different training programs are
the essential component of business. Government and private companies
which train human resources should initiate such development efforts, as well
as the owners and the managers of the farmsteads. The education of the
employees, their involvement in various trainings, workshops, seminars,
conferences and gatherings may result in the increase of the knowledge
quantum. In the following period these efforts may result in the improvement
of the quality of offer on the farmsteads which can contribute the promotion
of increasing the quality of tourist product of rural tourism of Vojvodina.

Radical innovations in the farmstead tourism cannot be expected, however
smaller improvements by the employees which are involved in the process of
giving services can significantly contribute to the overall guests satisfaction.
Innovations can relate to standards related to accommodating guests, hygiene,
the amount and the quality of food, treatment of guests, etc. Also farmsteads
should strive for the enrichment of their offer through innovative programs
which would extend and complement tourists stay, such as active
involvement of guests in traditional work on farms, short, informative and
entertaining trainings on old crafts, making and selling souvenirs, involving
guests in making local gastronomic specialties, active spending time in nature
which could be conceived as familiarising tourists with flora and fauna of the
area, going hunting and fishing, sports and recreation tourism, etc.
13


The prerequisite for successful planning and managing the development of
rural tourism is reflected in active involvement of the rural community as
well as partnership between numerous participants of rural tourism. Also,
directing the visitors behaviour is one of the factors for the successful
development of rural tourism in Vojvodina.

The basis for the development of rural tourism is the implementation of new
knowledge which will help in developing new tourist offer. With various
seminars and trainings, formal and informal educational organisations,
government and non-government and other organisations should be involved
in the process of the development of rural tourism, in order for the rural
community to acquire new knowledge and skills. Forming rural centers
should be the leading structures of sustainable rural development, and the
activities of those centers would be (Stamenkovi, 1999): forming a
development work group; the analysis and critical evaluation of the current
state; examining different attitudes and opinions by surveying; suggesting
possible solutions; organising meetings in rural centers; cooperating with
other participants in the development on all levels (local, regional and
international) and ensuring that there is constant presence in public (creating
a web page, cooperation with the media and the local community).

In order to confirm the conclusions drawn from this paper, the research
should be viewed from the international point of view, which means that the
development of rural tourism in Serbia should be compared to the
development of rural tourism in the European countries. It is also necessary
to create a development program of rural tourism in the Republic of Serbia,
including the Autonomous Province of Vojvodina.

Acknowledgements: This paper is the result of the project 47007 funded by
the Ministry of Education, Science and Technological Development of the
Republic of Serbia.

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