A Typology of Strategic Relationships in Religious Tourism Business Networks

A Typology of Strategic Relationships in Religious Tourism Business Networks

Ali Heidari*

Assistant Prof., Production and Operation Management, Faculty of Management, University of Tehran, Tehran, Iran

Hamid Reza Yazdani

Assistant Prof., Human Resource Management, University of Tehran, Farabi Campus, Tehran, Iran

Mohammad Reza Jalilvand

Futures Studies, Faculty of Management, University of Tehran, Iran

PP: 559-572

Abstract

The importance of networking in the area of inter-organizational network theory has become more and more evident to tourism scholars. However, prior literature has paid little attention to the application of networking in a religious setting, particularly the processes which occur inside, i.e. competition, coopetition and cooperation. Drawing on an extended literature review and a resource-based view, this paper presents a typology of strategic relationships in the context of religious tourism networking. This research contributes to the network theory by proposing the applicability of the networking processes in a new setting; namely, religious tourism.

Keywords: Business Networks, Religious Tourism, Strategic Relationship.

Introduction

Understanding the strategic relationships among tourism businesses in a certain destination is an inevitable issue for success in the tourism industry. Tourism involves the development of informal and formal partnerships, collaboration and networks. Such inter-organizational networks contain independent suppliers (in private or public sector) linked to deliver an overall product (Scott, Cooper and Baggio, 2008). According to Industrial Network Approach (INA), tourism organizations should not be seen as independent entities acting on their own interest in the market and in order to develop their activities, they need to interact with other organizations. This system of independent organizations then forms an industrial network which in turn, creates value as a network. Destination management organizations (DMOs) can be considered as coordinating mechanisms in tourism business networks, including agents performing activities in collaboration with other agents and controlling resources (Lemmetyinen, 2010). A recent trend in tourism industry is the loosely formed alliance of tourism organizations, such as local or regional tourism associations and other alliances initiated and organized by local destination management organizations. A typological description of the relationships among organizations in the tourism industry helps to understand how tourism businesses perceive their relationships with their peers and how they shift from one existing relationship mode to another (Watkins and Bell, 2002). Identifying the driving factors that form the dynamic configuration of the business relationships provides theoretical contribution and offers practical directions to the successful operation of destination alliances. Furthermore, the fragmented nature of tourism industry and the complexity of destination management require a collective approach to destination management. How DMOs in a destination keep a balance between competition and cooperation, determines the effectiveness of their destination management efforts as well as the competitiveness and destination success in the long term. Although previous research has paid attention to the importance of working relationships in tourism business networks, a review of the related literature indicates that answers to the above issues are too indefinite in the context of religious tourism to provide theoretical contributions or practical guidelines. Identifying the importance of the issue in the new setting of religious tourism, this paper aims to achieve the following two objectives:

• introduce the types of business relationships (competition, cooperation, coopetition) among stakeholders of tourism industry in a religious destination;
• identify a configuration of cooperative business relationship in a religious destination.

Religious tourism

Religious tourism is a type of tourism in which visitors are motivated, either in part or exclusively, for religious reasons. Rinschede (1992) proposed two different forms of religious tourism including short-term without an overnight stay and long-term with overnight stay of at least one day. Short-term religious tourism is characterized by spatially limited travel over short distances. The goal of this tourism is to go to a religious center with local, regional, or pilgrimage sites or to participate in a religious celebration, a religious conference, or a church meeting. Long-term religious tourism includes visits to religious centers for several days or weeks. It does not limit itself to the visitation of national and international pilgrimage sites; rather, it includes the visitation of other national and international religious centers. Compared to other types of tourism, religious tourism has several distinct characteristics, including the number of participants, means of transportation, seasonal pattern, and social structure. Firstly, in terms of the number of participants, the person traveling alone in religious tourism (individual tourism) represents a minority. In fact, the majority of visitors travel with family members (family tourism) or with organized groups (group tourism) to a religious destination. Secondly, until the middle of the nineteenth century, pilgrims traveled on foot. Today, foot pilgrimage still exists in all regions and cultures. Thirdly, religious tourism is bound to a certain season, even when some religious sites can be visited throughout the year. Finally, the stream of religious tourism can be differentiated by aspects of its social structure. The distribution of the sexes among pilgrims in various world religions differs widely. For example, in Mecca, the predominance of men is more pronounced. In contrast, in Lourdes, there is a strong stream of women visitors. Similar differences can be observed in the age of the pilgrims (Rinschede, 1992). Religious tourism sites such as mosques, cathedrals, and temples are recently attracting an increasing number of visitors worldwide, not only because of their spiritual significance but also because of the educational, recreational, and cultural purposes they fulfill (Francis, Williams, Annis, and Robbins, 2008). Not all religious sites are conceived as religious-tourism sites but may evolve as tourism attractions. As a result, religious-tourism is considered as visits to the sites of current and/or past religious significance (Hughes, Bond, and Ballantyne, 2013) and as the visitation of religious settings considered relevant to one’s own faith or the faith of others (Raj and Morpeth, 2007).

Religious tourism business networks (RTBN)

A network is a composite of a large number of agents and the pattern of relationships that link them together. A business network has been defined as a set of two or more interconnected relationships, in which each exchange relationship is between firms that are conceptualized as collective agents. Business networks are regarded as sets of connected firms or alternatively as sets of connected relationships between firms (Aureli and Forlani, 2016). In tourism industry, innovations are promoted through network relationships and alliances for multiple reasons but mainly in order to improve communications among firms. Hence, an RTBN can be defined as a value-creating, intentional or strategic network of firms, organizations, and facilities set up to serve the specific needs and desires of religious tourists which consists of actors engaged in activities as well as controls resources in relation to other actors (Lemmetyinen, 2010). The major businesses operating under tourism industry include hotels and accommodation, airlines, ferry and cruise operators, restaurants, travel agencies and tour operators, tourist attractions and car rental agencies (Seaton and Bennett, 2004: 4). Business networks provide religious destinations with four competitive advantages including (1) adaptation (refers to the act of modifying the strategy, stance, posture, or resources in order to enhance complementarity with partners); (2) knowledge (collaboration helps firms to utilize alliances better as vehicles for learning new technologies and skills from alliance partners); (3) control (leads to greater access over information and resources); and (4) resources (networks lead to access to resources, more than what a firm could access individually) (Pillai, 2006). The influence of DMO in the structure of collaboration in RTBN is inevitable given its role as a catalyst linking all the other networks involved in tourism, such as transport, accommodation and attractions. Firms in an RTBN develop a network of relationships through connected activities, linked resources and related actors, all of which are interconnected and interdependent. Efficiency will be achieved through the interlinking of activities, creative leveraging of resource heterogeneity and mutuality based on self-interest of actors. Through exchange relationship processes with other firms’ activities and resources, bonds are created and developed (Osarenkhoe, 2010).

Resource Based View (RBV) and RTBN

According to RBV, the inter-organizational networks are strategic assets generating a longitudinal competitive advantage for business firms. RBV theory supposes that economic interest and competitive advantage or the survival of a firm highly depends on the strategic resources (such as tangible assets, financial resources, human resources and information resources) it owns, it controls or to which it has access (Lakshman, 2012). Interestingly, in today’s business environment more and more firms suffer from resource gaps. The growing resource scarcities turn firms’ attention to the creation of inter-organizational relationships and becoming actors of inter-organizational networks. Furthermore, the inter-organizational networks are considered as a source of substantial added value providing key competencies. In the context of religious tourism, in order to gain access to the resources and competencies available inside the network held by other actors, the tourism firms should be able to develop and use inter-organizational relationships. An RTBN is established by at least three relatively independent and self-contained firms involved in long-term, non-incidental relationships aimed at achieving common goals. Therefore, an RTBN is a form of organized activity taking the form of a complex system of nodes connected by different types of relationships (Gulati, 2007). The number and configuration of these two network components (i.e. ties and nodes) determines its structure. Nodes (labeled as actors or partners) are different firms making the network. Nodes are diversified in terms of size, maturity, and type or profile of business. Actors of the network are both commercial and non-commercial organizations such as religious attractions, hotels and restaurants, tour operators, travel agencies, and airlines. Additionally, nodes are diversified in terms of the location they reside in (periphery or centre) within the network and the roles they play. A set of inter-organizational ties (labeled as relationships or links) is the other component of networks. Nodes are interconnected by long-term inter-organizational relationships that facilitate the exchange of assets, human resources, energy and information. Ties are unsolicited and established to achieve common objectives; however, they do not necessarily improve business competitive advantage. The collocation of ties is determined by the number of nodes (network size) and the strength of the nodes’ involvement (network density). The number of nodes and ties as well as their location relative to each other is important for communication processes, transfer of ideas, information, knowledge and technology, and flow of goods and capital within the network (Gargiulo and Benassi, 2000).

Relationships in an RTBN

Watkins and Bell (2002) proposed three different categories reflecting tourism managers’ experiences of business relationships that can be true in the context of religious tourism. These were labeled as competition, cooperation, and coopetition. In Figure 1, three different types of business relationships are identified.

Figure 1. Different types of relationships between businesses

(Adapted from Bengtson and Kock, 2000)

Competition

Competition is a process of rivalry between interacting agents. It can be defined as a dynamic state that happens when several actors in a specific area (market) struggle for scarce resources, and/or produce and market similar products or services that meet the same tourist need. Competitive approach implies on firms’ interdependence both horizontally and vertically. Competition is described as the exchange relationships between existing and unchanging economic agents. However, Schumpeter relates competition to internal industrial efficiency and to the development of new sources of supply, new technology, and new types of organization. In the long term, competition may lead to a monopolistic position of a firm within a particular industry, instead of ‘perfect competition’ (Bengtsson and Kock, 2000). Referring to horizontal interdependence, the competitive approach emphasizes the search for above-normal profits realized through gaining an advantageous position in an industry or by developing resources and distinctive competences that enable a firm to offer superior products in relation to its competitors. In vertical interdependence, the competitive approach implies on the search for value in economic exchange. Interaction within a network is simple and direct, and power and dependence are equally distributed among competitors based on their positions in the network (Hunt, 2007). Hence, the business’s structural position within the network becomes important. A business with a superior position in a certain network would learn about competitive opportunities sooner and use that knowledge in planning and executing competitive actions.

Cooperation

Cooperation has been defined as a relationship in which individuals, groups and organizations interact through the sharing of complementary capabilities and resources, or leveraging these for the purpose of mutual benefit. From a supply chain perspective, cooperation is considered as similar, complementary, coordinated activities performed by firms in a business relationship to produce superior mutual outcomes (Canegallo, Ortona, Ottone, Ponzano, and Scacciati, 2008). Successful cooperation is built on trust, commitment, and voluntary and mutual agreement that can be established in a formal and documented contract or an informal contract aimed at achieving common objectives. Thorgren, Wincent, and Öttqvist (2009) examined the cause-effect relationships between inter-organizational trust, relationship diversity and knowledge transfer, and corporate entrepreneurship among networking firms. They showed a causal influence of knowledge transfer and relational diversity on corporate entrepreneurship. The main stimulus for cooperation is to adopt collective strategies for value creation. Firms cooperate for achieving a common objective, sharing resources with other competing actors, and learning or sharing organizational expertise (Tanghe, Wisse, and vander Flier, 2010).

Coopetition

Coopetition implies the simultaneous presence of both competition and cooperation. Coopetition is the most mutually advantageous relationship for competitors. Coopetition goes beyond the conventional rules of competition and cooperation, in order to achieve the advantages of both. Literature suggested that the majority of all new cooperative arrangements are between competitors (Luo, 2007). For example, multinational firms involve in complex and simultaneous competitive cooperative relationships with global rivals. Through cooperative relationships, global rivals work together to collectively enhance performance by sharing resources and committing to common goals in value chain activities, at the same time as they compete in other domains to improve their performance (Chin, Chan, and Lam, 2008). Resource asymmetry among competitors contributes more to cooperation. Coopetition creates value through cooperation between competing organizations, aligning different interests toward a common objective and helping to create opportunities for competitive advantage by removing external obstacles and neutralizing threats. Coopetition strategy is a multidimensional and multifaceted concept that supposes a number of different forms and requires multiple levels of analysis. Coopetition encompasses both social and economic issues related to inter-organizational interdependence. It implies that firms can interact in rivalry owing to conflicting interests and at the same time cooperate due to common interests (Tsai, 2002).

To better compare such relationships, we provided a snapshot of attitudes to cooperation, competition and coopetition. The attitudes are illustrated in Figure 2.

Figure 2. A snapshot of attitudes towards cooperation, competition and competition in

 (Adopted from Liu, 2013)

In the context of religious tourism industry, the competitive behavior is observed when individual tourism businesses try to maximize their own interests and do not participate in collective action. The different self-interests are usually in conflict with each other, and as a result, tourism businesses compete against each other to best fulfill their own self-interests. The cooperative behavior is based on an opposite rationale, that is, individual tourism businesses participate in collective actions to achieve common goals. The coopetition relationships are complex as they consist of two different logics of interaction. Tourism businesses involved in coopetition are involved in a relationship that, on the one hand, consists of competition due to conflicting interests and on the other hand, consists of cooperation due to common interests. Compared to competition or coopetition, cooperation is considered as the central stage for managing a religious tourism destination. The cooperative relationships among the tourism organizations in destination management exist at different levels with different forms. These alternatives can be ranged from loosely connected relationships to those that are very formal and integrated. Many times tourism organizations find no need for them to enter into a formal and complex relationship if they intend to exchange information about a particular issue or client. According to Wang and Krakover (2008), the configurations of relationships can be manifested in four forms in a continuum defined by various degrees of formalization, integration, and structural complexity. These four forms of business relationships can be termed as: affiliation, collaboration, coordination, and strategic networks (Figure 3). The four forms of relationships follow a logical order of low to high formalization, integration and structural complexity.

1. Affiliation is the most informal linkage among the tourism organizations, and can be used most easily. It indicates an initial level of trust and commitment among the tourism organizations and is better maintained when linkages between tourism organizations are made person-to-person rather than organization-to-organization. In other words, tourism organizations affiliated with each other continue to operate independently while supporting one another through the exchange of information, endorsements, and making referrals, usually on an informal and ad-hoc basis.
2. Coordination allows otherwise autonomous tourism organizations to align their activities to support events or services by implementing common tasks. The integration of staffs or activities is minimal and tied to the accomplishment of certain tasks. Policies and procedures are relatively informal. Coordination focuses on the ability of stakeholders to pursue their individual organizational objectives better by arranging their activities with the activities of other compatible organizations and by aligning self-interest with others’ interests. An example of coordination relationships in a destination is events at which tourism businesses coordinate their activities and contribute to the common activities in different forms such as ideas, manpower, and even financial contributions. Such coordination may include two tourism organizations sharing information about the activities of a program, deciding to change their program content in order to better serve their common customers. Hotels may provide meeting space and accommodation services; attractions may provide sightseeing opportunities; restaurants may provide complementary dining experiences; and transportation companies may offer easy access to various locations in the destination for the tour group. Hence, all the stakeholders coordinate with each other to achieve the common goal: selling the destination.
3. In collaboration, tourism organizations need to go beyond coordinating their operations around a certain event or practical goal. They want to develop a joint strategy or common set of strategies for working collectively toward a shared purpose. They develop a formal plan for working together. These relationships are defined through contracts or other formal agreements. In fact, collaboration is considered as a formalized arrangement between two or more complementary entities for the purpose of securing a longer-term business advantage. Collaboration is more formalized and requires a longer-term commitment. In a collaborative relationship, each organization wants to help not only themselves but also their partners to become better at what they do.
4. Strategic networks are more formal structures that integrate the shared vision of all tourism organizations involved and take a system orientation in destination management. There are two kinds of networks in a certain destination, and they vary based on the types of participating organizations in the network. Horizontal networks involve organizations that provide similar services such as the local hotels and motel associations, and vertical networks involve organizations offering different services such as the marketing campaigns. Strategic networks are integrated management systems that seek to improve service delivery by broadening or deepening the scope of services available in the destination to the tourists. Strategic networks emphasize the importance of the network itself in successfully managing the destination.

In sum, affiliation, coordination, collaboration and strategic networks are considered as the cooperative processes that happen in tourism destination management. These different forms of cooperative relationships are built upon each other along a continuum, that is, when the continuum of the cooperative relationship moves from affiliation to strategic networks, it also moves from a low level to a high level of organizational integration which requires a more formal and complex relationship with each other.

Figure 3. Relationships among businesses in tourism industry

 (Adopted from Wang and Krakover, 2008)

Discussion

This paper has emphasized the importance of effective networking in the religious tourism businesses. A competitive advantage is achieved by merging the overlapping products and services of local businesses. It is necessary to develop business networks in the religious tourism in order to create a coherent experience, accommodation and restaurant services around religious tourist attractions. The literature review suggested that three types of business relationships may be found in an RTBN, namely, cooperation, competition, and coopetition. A tourism business may involve in these different relationships at the same time in order to defend its position in a business network. However, literature asserted that cooperation generates more business efficiency in using a destination’s limited resources, while coopetition is efficient in handling both cooperation and competition between businesses. In this framework, four cooperative processes can be observed. These processes are affiliation, coordination, collaboration and strategic networks which differ from each other in terms of formality, complexity and integration. On a continuum starting from affiliation, the level of formality, complexity and integration is low. On the other side of the continuum, there are strategic networks with high level of formality, complexity and integration. In affiliation, two or more tourism businesses are loosely connected with each other, usually informally, because of their similar interests. In coordination, autonomous tourism businesses align activities, sponsor certain events, or deliver tourism services in pursuit of compatible goals. In collaboration, businesses work collectively through common strategies. In strategic networks, all the tourism businesses engaged in the network have a shared vision and take a system orientation to achieving group objectives through consistent strategy and concerted efforts. These processes reflect the extent to which tourism businesses work together to achieve their objectives and explain much of the inter-organizational activities taking place in a religious tourism destination.

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*E-mail: aheidary@ut.ac.ir                                                                           Corresponding Author: Ali Heidary