ISSN 1822-6515 EKONOMIKA IR VADYBA: 2007.

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ISSN 1822-6515 ECONOMICS AND MANAGEMENT: 2007. 12

THE REASONS AND CONSEQUENCES OF CHANGES IN ORGANIZATIONAL STRUCTURES OF TOURISM COMPANIES
Valentinas Navickas, Akvil 6ibinskien
Kaunas University of Technology, Lithuania valentinas.navickas@ktu.lt, akvile.cibinskiene@ktu.lt

Abstract
Changes and alterations in organizational structures of tourism companies have a vital influence on their competitive position in tourism market. Only those companies and industries (tourism industry is no exception) that continuously look for new business opportunities and skilfully apply them are capable of maintaining their competitiveness in the global economy. All the more, companies must react to changes in economic environment and evaluate tendencies of tourism representation forms. Thus, the purpose of this study is to investigate changes in organizational structures of tourism companies, defining their reasons and consequences. In order to achieve the purpose, the following scientific methods are applied in the study: analysis of economic literature, logical and comparative analysis of economic phenomena, graphic methods and their generalization. It can be deduced that new types of organizational business structures are to be considered one of important innovations, helpful in gaining and maintaining competitiveness in the global tourism markets. Global unions of businesses (networks), strategic alliances (unions) integrate various business activities that are dispersed in the global economic space. These activities make a united precisely functioning complex, which is one of the most important consequences of changes in organizational structures of tourism companies. Keywords: tourism companies, development of organizational structures.

Introduction
Competition in global tourism market tends to intensify. As a result of global economy conditions, customers become more informed and sophisticated, and it enables them to put pressure on tourism industry companies. Competition becomes strong not only among tourism agencies, but also amid participants of other leisure market industries. Therefore companies and industries must look for new business opportunities and go through structural changes to increase their competitiveness in the global markets. Object of the study - structural changes of tourism companies in the global economy. Purpose of the study – to investigate structural changes of tourism companies in the global economy, defining their reasons and consequences. Objectives of the study: 1. To describe competitive conditions in global tourism markets. 2. To investigate changes in representation forms of tourism service in the global economy. 3. To analyze positive and negative consequences of structural changes of tourism companies. Problem statement. Competitive conditions of nowadays’ economy result in structural changes of tourism markets and their participants. Reasons, challenges and consequences of these processes are investigated by numerous foreign scientists (Michall, 2004; Holloway, 2003; Pompl, Lavery, 2004; Williams, 2002; Wickens, 2002; Snepenger, 2003). Scientific researches dedicated to the analysis of the problems mentioned above are not carried out in Lithuania, however. Methods. The following scientific methods are applied in the study: analysis of economic literature, logical and comparative analysis of economic phenomena, graphic methods and their generalization.

Tourism representation: a factor that globalizes tourism markets
Global tourism is an increasingly competitive and changeable market. According to Scotland‘s national tourist board Visit Scotland (2005), more than 193 countries are fighting for market share with many of them providing similar product offerings aimed at similar target markets. East Asia and the Pacific, South Asia, the Middle East and Africa are forecasted to record growth at rates of over 5 % per year, compared to the world average of 4.1 % per year. The more mature regions Europe and Americas - are anticipated to show lower than average growth rates. Europe will maintain the highest share of world arrivals, although there will be a decline from 60 % in 1995 to 46 % in 2020 (The World Tourism Organization, 2006).

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particularly in the expanding short break market. For example. where potential customers can actually explore the culture and cuisine of the country that is being promoted by a travel agency). Thus event-based marketing should be included in a set of strategic tourism stimulation tools. In order to use these opportunities. . based in Bolton (Great Britain). The growing prominence and accessibility of new destinations is intensifying and fortifying competitive pressures. The newspaper results in both . Wickens. 1994. Williams. and thus more powerful. St Andrews Travel Agency. family offers in August long-haul deals.Worldchoice Travel. Therefore European countries (including Lithuania) must increase their attractiveness. produces a 36-page annual newspaper. One of them – an increasing use of digital technologies that enable customers to control the flows of information they receive.First Choice has turned brochure launches into a marketing opportunity for its agencies. and the Pacific region. . while tourism is vulnerable. The reason of these turns and shifts lies in two interrelated forces. print). The cases analyzed above show that event-based marketing has become an important form of tourism service representation. as well as being available in the shop year-round. such as free child places for families. These forces have a great influence on marketing communication business. The travel agency provided wine. offers for couples wishing to get married in exotic destinations (Gunn. ‚ Specialized events: brochure parties and community events. based in Winchester (Great Britain). dependent on discretionary spending. It is necessary to create infrastructure of tourism representation and create an image. 2002. and get company noticed by potential customers. 2002). which would appeal to both – potential inbound tourists and foreign travel agencies that intend to broaden the scope of tourist destinations (Echtner. 2000). Competitive and dynamic conditions of global tourism market prevent regions and countries from relying solely on representative activities of tourism agencies. 810 . hobbies and shopping (Shermach.. Giving customers a real taste of holiday destinations encouraged them to make a booking. Whilst using unique ways to present their service. The company typically organizes the event in March or April. black and yellow. Event marketing is one of the most effective ways to turn a country or region name to a brand name. airlines and operators. including service representation forms. making customers aware the summer brochures are coming out soon. There is also competition for consumer disposable income from other leisure activities such as entertainment. Changes of vital importance have occurred in marketing strategy during the last years. The new brochures offer some special deals. countries and regions must seek for unique ways to represent their tourism service. such as Asia. These changes are particularly obvious in mass media industry (television. Gnoth. music and dancing from the region outside the agency on the day of the carnival (Yuan et al.The forecast shows that customers are inclined to choose exotic tourism destinations. 1999. Goossens. but also at regional and national levels. is the evolution of customers. so that the new brochures can be showed off. strategy of creating promotional messages and evaluation tools (Buchwalter. Rickshaws come in corporate colours. holidays requiring low deposits. characteristic of global tourism.enhancing their brands and creating awareness by adding a human element getting people to talk about their holidays so their neighbours could read it and want to do the same.The greatest tourism potential in European tourism system is concentrated in Central and Eastern Europe. Snepenger et al. personal invitations to the night are sent out. According to Franks and Mills (2005).driving round in an Indian rickshaw. 2005. The second force is fragmentation of audiences that receive information. radio. It is distributed at agency event evenings. They are becoming more knowledgeable and sophisticated. and enabling customers to try and taste it (for instance. more than a year before the start of the summer season. 2005). uses a unique way to promote trips to East Asia . If they are interested. sponsored by hotels. companies are able to compete more effectively. Competitive conditions of today’s economy result in necessity to modify and update tourism representation strategy not only at company (industry) level. Roger Walker Travel Agency.. Preparation starts early.. Tourism representation is one of the factors that globalize tourism markets. Ryan et al. based in New Maiden (Great Britain) held a Chilean wine evening in order to promote trips to Latin America. For example. 2005). 1997. during community events. 2003. Africa. 1998). ‚ Unique service representation. there are several trends in marketing of tourism agencies: ‚ Joint communication. Another tendency.

they are soon replaced by new contrahents. The reorganization of TUI group is to be completed soon. 2. At the moment TUI group is oriented towards tourism industry . It enables other companies to copy the effect of synergy very fast. The present market structure tends to turn into more competitive market structures. Tourism industry products are usually intangible. There are three possible variations of competitive life cycle model in tourism industry: 1. Holloway. and therefore might become less flexible in dynamic business environment. When copying becomes obvious tourism companies are forced to initiate the revision of their product portfolio. The first Europe-based global alliances in tourism industry appeared in the end of the 20th century in Germany („Preussag“. The model of competitive life cycle in tourism industry when the present market structure remains the same. 2006). even if those contrahents do not have a particular competitive advantage. Revenue from heavy industry related activities accounted for 93 percent of all revenue of the group in 1997. The strategy of synergy is fairly acceptable for the processes of planning and managing in tourism industry. costs. Lavery. infrastructure. concentrating on entrywithdrawal stages. Zeithaml et al. Woodside et al. as well as diversification of products and search for new market segments (Pompl. Preussag group – the largest of mentioned above .fortified its positions in European tourism industry with the acquisition of British Thomson Travel Group in 2000. Number of companies Entry Withdra wal Time Figure 1. etc. 2003). 3.revenue from tourism and logistics accounted for 72 percent and 19 percent (accordingly) of all revenue of the group in 2005 (TUI AG. Preussag group acquired a stake in Nouvelles Frontieres (a French travel group) in 2000. The analysis of the life cycle of tourism industry indicates that the development of organizational structures in tourism industry is an objective process. because the peculiarities of national borders and national consumers seem to be ignored. 811 . 2006 The results of this study show that the inclination of entry-withdrawal way indicates changes in market structure and the necessity of new organizational structures. One of their results is the effect of synergy. The cycle shows that market cannot be “empty” – when some companies leave. which increases competitive advantage of each participant and structural unit as a whole (Michall. 2004. Created by the authors. 2002. The present market structure tends to turn into monopolistic market structures.. The study performed by the authors indicates that intentional development of global alliances in tourism industry can result in negative effects as well. „First Choice“). France („Nouvelles Frontieres“).New organizational structures in tourism industry New specific structures tend to form in the global economy. 2002).. and Great Britain („Thomson Travel Group“. which is particularly obvious in the global economy. 2004. in order to solve the problems related to technologies. The authors of this study identify the importance of competitors’ entry and withdrawal and analyze the life cycle of tourism industry. The present market structure remains the same. “C&N Touristic“). Nouvelles Frontieres has been part of TUI (former Preussag) group since 2002. In the process of formation of these global networks companies and industries lose their national character.

(1999). http://www. Tyrimo metodai – ekonomin s literat ros analiz . Tourism in Europe: Univ. 89. J. Dubelaar C. is one of the most effective ways to turn a country or region name to a brand name. A (1994). Jan. customers become more informed and sophisticated. Naujos verslo organizacin s strukt ros 812 . Marketing tools: it pays to be creative with marketing: Travel Trade Gazette UK & Ireland. such as Asia. 4. (9/2004). B to B. (2003). (1/2005) 17. Valentinas Navickas. Haague. 34. Tourism Information and Pleasure Motivation. 9.. New York. G. Michall H. (2005).org/. Gunn C. Shermach K. 10. Yuan. (2005). TUI AG (2006).. (1997). (2003).. A. 567. 351. 15302369. travel and special events: Journal of Vacation Marketing. (2/1997). (2004). C. (4/2002). Event marketing. 47. 2d ed.. Annals of Tourism Research. World Tourism Organization (2006). (2005). Application of Leisure Motivation Scale to Tourism. Akvil 6ibinskien TURIZMO BENDROVI ORGANIZACINI STRUKT R KAITOS PRIEŽASTYS BEI PASEKM S Santrauka Straipsnio tikslas – ištirti turizmo bendrovi organizacini strukt r pl tros procesus. 24. customers are inclined to choose exotic tourism destinations. O’Connel R. 6. 15. 301.. 2. Cases: Taylor and Francis. September 23. Events endure. 8. 16. Africa and the Pacific region. (2002) Services Marketing. How to promote your agency. grafiniai metodai ir j apibendrinimas. Boston. http://www. Holloway J. Mills B. Tourists and Residents Use of a Shopping Space. et al. (2002). 12. (2/2000). Thus European countries (including Lithuania) must increase their attractiveness. 5. Thus event-based marketing should become an integral part of any tourism strategy. 2. Annals of Tourism Research. J. Tourism Motivation and Expectation Formation. Wickens E. Interactive marketing is aimed at establishing dialogues with individual customers. 3. The Sacred and the Profane: A Tourist Typology: Annals of Tourism Research... A. The changes of organizational structures in tourism industry in the global economy result in the effect of synergy. Williams D. (3/2002). Gnoth J. (2/2002). Leisure Identities. M. 27. 11. (1/1998). Tod l globalioje ekonomikoje konkurencingos išlieka tik tos bendrov s ar ištisos pramon s šakos (turizmo industrija ne išimtis). 13. Integrating Interactive Marketing: Quantifying the Evolution of Online Engagement: Nielsen Net Ratings White Paper. (3/2003). Gregg E. The effect of synergy increases competitiveness and affects alterations in market structure. 283. 120. Annals of Tourism Research. login bei lyginamoji ekonomikos reiškini analiz . Lavery P. 19. R.. 25. Franks C. 30. Philadelphia. London. C. Bitner M. The members of world tourism system tend to invest in interactive marketing tools. J. 169. (2004).com/. Buchwalter C. 3.tui-group. 20. Liping. (1998). Goossens C. nustatant j kaitos priežastis bei pasekmes. Journal of Leisure Research.: Irwin McGraw-Hill. Annals of Tourism Research.. of Amsterdam. (2004). 7. Snepenger D. http://www. Ekonominio gyvenimo poky7iai vienoje pasaulio dalyje be žymesnio laiko atotr kio prasiskverbia kitas pasaulio vietas. Visit Scotland (2005).visitscotland. (2002). Zeithaml V. kurios verslo tikslams realizuoti nuolat ieško nauj galimybi ir nedelsdamos jas naudoja. Ryan C. Woodside A. References 1. The negative effects of this process are these: industries lose their national character and they might become less flexible in dynamic business environment. (2000).com/2005 20. C. Glendon I. Echtner C. Tourism Planning Basics. The Business of Tourism: Longman. Pompl W. 29. A General Theory of Tourism Consumption Systems: A Conceptual Framework and an Empirical Exploration: Journal of Travel Research. Murphy L. 834. 41. Globalization.Conclusions 1. 18. as an interactive promotional tool. An analysis of wine festival attendees‘ motivations: A synergy of wine. (2002). ABI/INFORM Global 41. Tourism & Public Policy: Prentice Hall.. As a result of global economy conditions and intensifying competition among tourism agencies and amid participants of other leisure market industries. and the Politics of Place.world-tourism. 14. The Semiotic Paradigm: Implications for Tourism Research: Tourism Management. It enables them to put pressure on tourism industry companies. Furthermore. Concepts.

Nustatyta. pabaigoje Vokietijoje („Preussag“.y. “C&N Touristic“). Rezultatai. kad turizmo bendrovi organizacini strukt r kaita globalioje ekonomikoje duoda sinergin efekt> ir tuo b du padidina konkurencingum> bei daro tak> rinkos strukt ros poky7iams. kuriame ištirtas (išskirtas) at jimo-iš jimo takas. kad jo nuolydis parodo poky7ius rinkos strukt roje ir nauj organizacini strukt r poreik . kad turizmo bendrovi organizacini strukt r pl tra yra objektyvus procesas. vertindami konkurent at jim> ir iš jim> turizmo industrijoje straipsnio autoriai analizuoja jos gyvavimo konkurencinio ciklo model . Turizmo versle produktas dažnai n ra materialus ir tod l gauti sinergijos efektai gali b ti labai greitai nukopijuojami. Sinergijos strategija taikoma turizmo bendrovi planavime bei valdyme. t. „First Choise“). ypa7 išryšk jantis globalioje ekonomikoje. Straipsnio autoriai tiria turizmo industrijos gyvavimo konkurencinio ciklo model . Ciklas parodo.y. Formuojantis tokiems globaliems tinklams bendrov ir/ar šaka praranda savo išskirtinai nacionalin pob d (nacionalin s sienos bei nacionalini vartotoj ypatumai kaip ir ignoruojami). turizmo industrijos gyvavimo konkurencinio ciklo analiz rodo. Autoriai išskiria ir negatyvias šio proceso pasekmes: prarandamas išskirtinai nacionalinis šakos pob dis. kad rinka negali b ti „tuš7ia“. Raktiniai žodžiai – turizmo bendrov s. nors ypatingu konkurenciniu pranašumu pastarieji gali ir nepasižym ti. 813 . kuri dalyviai gauna sinergin efekt> ir tuo b du padidina naujo strukt rinio darinio (vieneto) bei jo dalyvi konkurencin pranašum>. iš jusi iš jos viet> žaibiškai užima kiti kontrahentai. maž ja jos lankstumas besikei7ian7ioje verslo aplinkoje. kašt .traktuotinos kaip viena iš toki naujovi . Globalioje ekonomikoje formuojasi specifin s organizacin s strukt ros. organizacini strukt r pl tra. t. Atlikti tyrimai rodo. sprendžiant technologij . infrastrukt ros bei kitas problemas. maž ja organizacini strukt r lankstumas nuolat kintan7ioje verslo aplinkoje. Kai kopijavimas tampa akivaizdus turizmo bendrov s priverstos inicijuoti savo produkto portfelio perži r> bei diversifikacij> ir ieškoti nauj rinkos segment . suriša jas viening> racionaliai funkcionuojant kompleks>. bei Didžiojoje Britanijoje („Thomson Travel Group“. Global s verslo susivienijimai (tinklai). Pranc zijoje („Nouvelles Frontieres“). Straipsnio autori atlikti tyrimai rodo. Taigi. Pirmieji global s susivienijimai turizmo versle atsirado XX a. kad turizmo versle vystant globalius susivienijimus gali atsirasti ir negatyv s reiškiniai. strateginiai aljansai (s>jungos) funkcionaliai integruoja tarptautin je ekonomin je erdv je išskaidytas veiklas.

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