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ability in coordinating and roles and developing
trust and loyalty among employees as well as in
obtaining financial capital and resources (Dunne &
Hughes, 1994). However, Fritsch, Brixy, and Falck
(2006) proved that the age and success of a business
does not necessarily show a direct relationship. Older
businesses may display strictness and difficulty to
adapt. Ateljevic and Doorne (2000) and Hall, Rusher
& Thomas (2004) reported that in general, the ability
of business react to crises and change is absolutely
important. A lack of experience in dealing with cri-
ses has found to be a causal factor in most business
failures (Kalleberg & Leicht, 1991).
community members tend to prefer stable and
orderly patterns, yet function best when a balance
is achieved between moderate amounts of struc-
ture and flexibility. A moderately structured rela-
tionship has a democratic, egalitarian leadership,
with negotiations from all members.
It is common for most community members to
resist change or loss, yet resilient communities do
not view the change with helplessness; rather, roles
are reorganized and changes are viewed optimisti-
cally as venues to build a new equilibrium (Upham,
2006). Rigid community, on the other hand, tend
to operate at the extremes of being either overly
inflexible or chaotically unstructured. Members of
disengaged community tend to drift off on their
own and are unable to find mutual support from
the community associate.
2.4.3
The level of social and human capital
Next, it is fundamental to note the importance
of human and social capital for homestay busi-
ness survival and success. Human capital denotes
the expertise and human capacity of an enterprise
(Bosma et al., 2004). To provide a valuable services
and an unforgettable experience which is adapted
and altered according to tourists needs, high level
of human capital are necessary. To make sure that
the community based tourism truly benefits every-
one, it is vital for the community capacity building
to be addressed by the stakeholder (Rashid, Hadi
Mustafa, Hamzah & Khalifah, 2010). Involvement
from the community is one of the important things
to look at in building community capacity. It is one
of the tools to develop the community by empow-
ering people to get involved.
According to Murphy (1988), getting public par-
ticipation in tourism planning and management is
important. This is because resistance and conflict
increase the business cost or abolish the industries
prospective when development and planning do
not go in line with local objectives and capacities.
In enhancing productivity and aiding economic
growth and development, social capital is crucial
(Uphoff & Wijayaratna, 2000). According to Pretty
(2003), social capital refers to the social bonds and
customs of mutuality and trust that allows groups
and community to function. The ability of indi-
viduals and groups to deal with uncertainty and
shocks are supported through the bonds and pro-
vision enabled by higher levels of social capital
(Folke, Hahn, Olsson & Norberg, 2005).
2.4.6
The relationship with authorities
The relationship between communities and
local, state, and national government bodies are
included in the extensive outset of social capital.
In response to pressures or change, these relation-
ships are an important element of business ability
to be adapted and innovated (Hall & Allan, 2008;
Hjalager, 2010). Although government bodies can
nurture innovation and upkeep ongoing adaptation
by business owners, it can also suppress efforts by
owners to adapt and change due to the challenges
to good governance that include power struggles,
corruption, overregulation and institutional iner-
tia (Hall & Allan, 2008).
In Malaysia, through the Ministry of Tourism
and Culture (MOTAC), the Government supports
the development and growth of homestay pro-
grams by granting a specific fund (MOTAC, 2012).
The Malaysian Government's increased focus on
the development of homestay is significant because
it is regarded as a potentially good product in pro-
moting the country as well as getting the commu-
nity involved in the tourism industry through rural
tourism. By taking advantage of the existing natu-
ral resources, cultural and heritage assets within the
community, communities have been able to develop
the homestay product without spending so much
on changing the existing infrastructure. Not only
is homestay seen as a way to help generate income
for the community, it also assists in fulfilling the
Government's agenda to eradicate poverty and cre-
ate job opportunities for the communities involved
(Ibrahim & Rashid, 2010).
Much popularity and high reputation had been
gained by the homestay program since 1995 and it
is considered as a great tool to promote rural tour-
ism. Through the homestay program, the MOTAC
is serious in enhancing the economic welfares and
incomes to assist the rural communities. Conse-
quently, under the Ninth Malaysia Plan (2006-2010)
2.4.5
The flexibility of homestay community
Flexibility refers to a community's ability to
rebound and reorganize in the event of challenges
while maintaining a sense of continuity (Mimms,
2010). Mutuality is best achieved when community
members possess a clear sense of themselves, both
within and outside the context of community. In
other words, members identify a connection with
the community as well as differentiation from the
community. According to MacNeice et. al (2000),
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