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Strategy for Tourism ¡ Unit 11 ¡ Managing and Monitoring ¡
Reading Book Ch Tribe, J, (2010) Strategy for Tourism, Goodfellow Publishers, Oxford. 11 Capon, C. (2008) Understanding Strategic Management, Prentice Hall: Hemel Hempstead. 11 Tribe, J. (2005) The Economics of Recreation, Leisure and Tourism, Butterworth Heinemann, Oxford. - Johnson, G. , Scholes, K. , and Whittington, R. (2008) Exploring Corporate Strategy, Prentice Hall: Hemel Hempstead. 14
Learning Outcomes ¡After studying this chapter and related materials you should be able to understand: l management of change l methods of monitoring l methods of control l identification of key factors for effective strategic management ¡and critically evaluate, explain and apply the above concepts.
Case Study 11: Australia’s framework for action on ¡ The Australian Government identified tourism and climate change tourism as a key sector that is vulnerable to climate change concluding that: l "the impact of climate change on infrastructure and the natural environment has the potential to affect the tourism industry. In some cases this could result in social and economic impacts in regions with a high dependency on tourism as a source of income and employment. " (Department of Resources Energy and Tourism, 2008, p. 2) ¡ In response the Tourism Ministers established the Tourism and Climate Change Taskforce to develop a Framework for Action.
Management of Change ¡ A key challenge for many tourism organisations is that their structures were generally designed to solve yesterday's problems. ¡ Challenges to management of change include l Degree of change l Organisational adaptivity
Management of Change ¡To compound this problem organisations may become "frozen" in a particular state (Lewin, 1952), not least because once a particular organisational structure and culture has evolved there is a strong tendency for structural and cultural reproduction. An organisation will tend to recruit, induct and reward its staff in line with its established culture, and the organisation will stay the same.
Unfreezing and Refreezing ¡ Lewin's model for creating successful organisational change identified three important stages. l First the unfreezing of current organisational behaviour patterns is necessary in order to make the organisation more receptive change. l Second, Lewin identified the importance of movement, which involves the carrying out of change or the reconceptualisation of the organisation. l Finally, Lewin noted the importance of refreezing the organisation so as to institutionalise the change.
The Four Cs of Change ¡The management of strategic change must pay attention to: l calculation l communication l culture and, l compliance
Calculation ¡Calculation involves the identification of the likely impacts of a strategy both internally and externally to the organisation with a view to discovering where critical blockages may occur. l These may inhibit the implementation of change and are known as resisting forces. l At the same time it is important to record those factors (driving forces) which may help promote the desired strategy.
Force Field Analysis ¡Force field analysis (Lewin, 1935) is a method of examining this. Its aim is to enhance the management of change by generating a tactical approach (Nutt, 1989). ¡The steps in force field analysis are: l Identification of planned change l Identification of resisting forces l Identification of driving forces l Formulation of tactics to reduce or eliminate resisting forces l Formulation of tactics to encourage driving forces
Communication ¡ Effective communication is at the heart of successful strategic implementation. ¡ Even organisations which engage in a systematic process of strategic planning may overlook this vital aspect so that the strategy may remain the property of senior management and its circulation may be intentionally or unintentionally restricted. ¡ Different models of communication of strategy may be located on a continuum which includes: l democratic l educative, and l autocratic
Culture ¡Some of the key factors in promoting cultural change can be summarised: l induction programmes for new staff l change of symbols l use of language l training programmes l appointment of key personnel l promotion and dismissal policies l incentive schemes
Compliance ¡ Compliance addresses the question of how strategic change can be achieved, perhaps in the face of opposition. Change may involve deploying political processes, identifying and utilising sources of power (Mintzberg, 1983), and constructing a power base from which to operate. Key issues for achieving compliance include: l l l control of resources alliances rewards and punishments charisma, and, managing of change skills
Skills and methods for managing change ¡Beer & Nohria (2000) distinguish between two distinct approaches to strategic change. They label these “theory E” and “theory O”. l Theory E, the hard approach, is change based on the pursuit of economic value l Theory O, a soft approach, is change based on the development of organisational capability.
Theory E and Theory O Dimensions of change Goals Theory E Theory O Economic value Organisational Capability Leadership Top down, hierarchical Bottom up and participative Focus Systems and structures Culture, behaviour and attitudes Process Planning and implementation Experimentation and evolution Reward systems Financial Intrinsic and Financial Use of consultants Lead change processes Support and advise
Skills for Managing Change ¡ Buchanan and Boddy's (1992) study of the perceived effectiveness of managers of change included the following as crucial competences: l l l l l Sensitivity to internal and external environment Clear expression of goals Team building skills Networking skills Ability to cope with uncertainty surrounding change Communication skills Inspirational skills Negotiation skills Political skills Strategic perspective
Activity: Climate Change and Aviation ¡ Air travel is a uniquely greenhouse-gas-intensive mode of transport. Over a single journey of 1, 500 km, aircraft emit roughly twice as much greenhouse gas per passenger kilometre as cars or high speed rail. Shorter journeys produce even higher emissions per passenger kilometre. Over a distance of 500 km aircraft emit six times more greenhouse gas than high speed rail or cars, and 12 times more than a coach. ¡ The cross-party House of Commons Environmental Audit Committee (EAC) reports that under Department for Transport’s (Df. T’s) ‘best case’ scenario, aviation will grow from around 5% of the UK’s carbon emissions today to 24% in 2050, a figure the committee considers a “substantial understatement” ¡ The Tyndall Centre has estimated that with unconstrained growth, and taking account of its full environmental impact, aviation could account for more than 100% of the UK’s carbon budget (65 Mt. C) by 2050. ¡ (Source Conservative Party Consultation Document, March 2007) ¡ Your task: The radical reduction of C 02 emissions from UK air transport. Provide advice on a. strategic objectives to achieve this aim b. how to manage and monitor change to achieve you aims
Control Mechanisms ¡Control mechanisms to monitor outcomes include l Performance targets l Control systems l Measurement of performance l Corrective feedback
Corrective feedback ¡The system of management control should follow up the cycle of performance measurement with any corrective measures that are to be taken in the case that actual performance does not match up to the performance targets of the strategy. This will involve the following steps: l Identify performance gaps l Identify causes of performance gaps l Identify corrective action l Instigate corrective action plan
Obstacles to effective strategy implementation ¡ Hrebiniak identified six top obstacles to strategy implementation that resulted from two surveys of 443 managers. These were: l An inability to manage change l Poor or vague strategy l Not having guidelines or a model to guide implementation efforts l Poor or inadequate information sharing l Unclear responsibility and accountability l Working against the organizational power structure.
Effective Implementation ¡ Critical Success Factors ¡ Pettigrew and Whipp's (1992) study of the management of change concluded that there were five critical success factors common in organisations where change had been successfully implemented. These were: l l l sensitivity to the external environment. formulation of a strategy for change. translation of strategic plans to operational outcomes. effective human resource management. consistency and coherence of strategic planning.
Effective Implementation ¡ The 7 -s Framework ¡ Waterman et al. (1980) claimed that effective organisational change resulted from a successful relationship between several factors: l l l l structure strategy systems style skills staff, and, superordinate goals
Review of Key Terms ¡ Management of change: The process by which strategic change is identified and implemented. ¡ A frozen organisation: One which has become rigidly routinised. ¡ Four Cs of change: Calculation, communication, culture and compliance. . ¡ Force field analysis: Investigates forces that are either driving movement toward an objective (driving forces) or blocking such movement (resisting forces). ¡ Theory E: Strategic change based on the pursuit of economic value. ¡ Theory O: Strategic change based on the development of organisational capability. ¡ Performance Target: An outcome that is set for an organization or employee to reach within a specified period of time. ¡ Control system: The process for monitoring progress against strategic objectives. ¡ Performance measures: These include quality indicators, financial indicators and other indicators. ¡ Corrective feedback: Identify performance gaps, identify the causes of performance gaps, identify corrective action, instigate corrective action plan. ¡ Strategic implementation: Putting a strategy into action
Discussion Questions 1. Many airlines are resorting to strategic alliances or horizontal mergers in moves towards more globalization. Choose an airline and conduct a force field analysis for such a strategy. 2. Explain how success could be encouraged in implementing a tourism destination strategy using Pettigrew and Whipp's (1992) five critical success factors and Hrebiniak’s (2006) discussion of obstacles. 3. Using examples from the tourism sector discuss the importance of control systems in strategy implementation. 4. Discuss the significance of the 4 Cs in the management of change in a tourism organisation. 5. Explain what Lewin (1952) meant by the freezing and unfreezing process in achieving strategic change
Strategy for Tourism ¡ Unit 11 ¡ Managing and Monitoring ¡ The End