актуальные зарубежные исследования
в сфере туризма
УДК 379.85 DOI: 10.1273712532
I РОЛЬ СОВЕТОВ ДИРЕКТОРОВ В ТУРИСТСКИХ ОРГАНИЗАЦИЯХ
Солвег Гарнес, Университет Ставангера, Ставангер, Норвегия, [email protected],
Кхелль Гронхауг, Норвежская Школа Экономики и Делового Администрирования, Берген, Норвегия
Туристские организации являются важными институтами для дестинаций, и они объединяют множество стейкхолдеров, у которых имеются интересы в сфере туризма. Наше нынешнее знание корпоративного руководства таких организаций очень ограничено. Целью данного исследования является изучение ролей и полномочий членов советов директоров туристских организаций и определение того, как они сами видят область своей ответственности, включая такой важный аспект, как то, на кого и для кого они работают. В рамках исследования были проведены интервью с фокусной группой, состоящей из 37 членов советов директоров норвежских организаций, в ходе которых было определено, что советы директоров имеют довольно широкий круг обязанностей. В ходе подробного анализа данного перечня обязанностей выяснено, что стейкхолдерская парадигма (пускай и в ограниченной степени) достаточно характерна для туристских организаций, и она может частично объяснить их поведение, поскольку советы директоров туристских организаций стремятся соблюдать интересы различных групп стейкхолдеров, совсем не ограничиваясь интересами акционеров. А это в свою очередь имеет большое значение для теории и практики управления. Центральным результатом исследования является идентификация множественности представлений относительно ролей, круга обязанностей и лояльности советов директоров туристских организаций Норвегии, что приводит к несостоятельности парадигмы, основанной только на интересах акционеров, поскольку расхождение между формальными и реальными полномочиями членов советов директоров оказывается слишком значительным. В частности, многие директора подтверждают, что фактически они работают на разные группы стейкхолдеров, не ограничиваясь только собственниками. Что делает стейкхолдерский подход гораздо более реалистичным. Интерес представляет и целый спектр агентских проблем, когда некоторые директора имеют слишком узкое представление относительно того, чьи интересы они должны представлять, и тяготеют к отдельным, более узким группам акционеров, географическим регионам, подотраслям, и т.п. Еще одной интересной проблематикой является соотношение между представлениями относительно важности тех или иных обязанностей советов директоров и тем уровнем внимания, который им в действительности уделяется. Согласно результатам исследования, стратегическое планирование рассматривается как ключевая задача, но в то же время реальное вовлечение советов директоров в процесс планирования оказывается сравнительно низким. В то же время в реальной практике советов директоров отмечается особо высокое внимание к контролю бюджетов и отчетности, а также долгосрочных финансовых условий организаций. Повышенное внимание к текущим и потребляющим много времени видам деятельности со стороны советов директоров может подорвать их способность заниматься более долгосрочными и стратегическими вопросами. Отельного исследования заслуживают аспекты оптимального определения приоритетов в обязанностях советов директоров. Исследование также подтверждает, что советы директоров в туристских организациях являются гетерогенными по составу группами. Помимо различий в образовательном, профессиональном и карьерном бэкграунде, у членов советов директоров разнятся мнения, точки зрения, идеи относительно даже самых базовых аспектов туристского бизнеса. С одной стороны, это, безусловно, повышает творческий и инноваторский потенциал советов директоров, и у них появляется более широкий диапазон решений, что особенно важно в нестандартных ситуациях. С другой стороны, разнообразный состав советов директоров может мешать скоординированной работе данных органов и эффективному принятию решений. Авторы отмечают, что долгосрочное финансирование и стабильность ресурсов являются важными факторами устойчивости работы туристских организаций. Если директора слишком
заняты распределением ресурсов, то это ограничивает их возможности заниматься долгосрочным планированием. Вопросы финансирования туристских организаций и их деятельности являются предметом особой дискуссии в Норвегии. Авторы полагают, что туристские организации не должны быть слишком малыми, им необходимо достигнуть определенного критического размера, чтобы быть достаточно эффективными, а также заручиться поддержкой местных деловых сообществ и определить приоритетные направления своей деятельности. У более крупных туристских организаций отмечается более стабильный и гарантированный доступ к ресурсам. А это в свою очередь означает, что их советы директоров могут больше времени уделить вопросам именно стратегического планирования. По этой причине Министерство Торговли и Промышленности Норвегии рекомендует туристским организациям достигать оптимальных параметров с точки зрения их размеров, бюджетов и персонала. Как подчеркивают авторы, необходимы дополнительные исследования поведения и принятия решения советами директоров, разнообразия их обязанностей и полномочий. Интерес представляет изучение того, сколько времени советы директоров туристских организаций затрачивают на те или иные задачи, чтобы выяснить, чем в действительности они занимаются в сравнении с декларируемыми целями и какими обязанностями вынуждены жертвовать в условиях нехватки ресурсов. Кроме того, множественность стейкхолдеров, формально и неформально представленных членами советов директоров, порождает разнообразные агентские проблемы, что в свою очередь влияет на процесс принятия решений. Этот аспект представляет огромный интерес для дальнейших исследований.
Ключевые слова: туристская организация, корпоративное руководство, акционер, стейкхолдер, Норвегия
THE ROLE OF BOARDS OF DIRECTORS IN TOURIST ORGANIZATIONS
Solveig Garnes & Kjell Gronhaug
University of Stavanger, Stavanger, and Norwegian School of Economics and Business Administration, Bergen Norway, [email protected]
Tourist organizations are destination-based institutions that draw together stakeholders with interests in tourism. Our present knowledge of the governance of such organizations is limited. The aim of this research was to explore directors' roles and responsibilities, and determine whom they see themselves working for. Focus group interviews with 37 directors in Norwegian organizations revealed that boards undertake several responsibilities. There seemed to be a gap between what they considered important and the level of attention given to specific responsibilities. The study further revealed that a shareholder
perspective was present, yet limited in the context of tourist organizations. A stakeholder perspective could partly explain their behavior. Boards of directors in tourist organizations care for many interests, not merely the organization's owners. Theoretical and managerial implications based on the study results are highlighted.
Keywords: Tourist organization, governance, shareholder, stakeholder, Norway
Introduction
This paper addresses the role of boards of directors in tourist organizations, more precisely what they do and for whom they work. These questions are important for several reasons. The boards of directors possess high authority in organizations.
There is reason to believe that an organization's success is dependent on its board of directors. Moreover, board performance contributes to organizational performance (Forbes & Milliken, 1999). Extant research on boards of directors exists; however, there
is little knowledge regarding boards of directors in tourist organizations. Regarding the actual research purpose, i.e. to investigate what boards do and whom they serve, little is known about boards in tourist organizations.
The need for elucidating how directors view the role of the board is indicated in the literature (Huse, 2007; Stiles & Taylor, 2001; Zahra & Pearce, 1989). When exploring the role of boards of directors in tourist organizations, classic governance theory provides a good starting point. Zahra and Pearce's (1989) review
and integrative model of board attributes and roles has been significant for much governance research and later discussions about directors' responsibilities. Zahra and Pearce (1989) explicitly recognize external contingencies, such as industry type, in their model. Possible effects of contextual factors should be taken into account when studying board roles.
Board roles will depend on the situation and the environment in which the board is embedded. The nature of the tourist organizations' environment influences the domain over which they have authority (Palmer & Bejou, 1995). Boards of directors in tourist organizations can be influenced by a number of possible challenges caused by key characteristics of such organizations and their environment. These characteristics may affect their roles and responsibilities, who they consider themselves working for, and how they perform as decision-making groups.
First, tourist organizations are destination-based institutions that draw together a number of stakeholders with interests in tourism in a specific geographical area (Pearce, 1992). The multiple stakeholders involved in tourism and organizations at destinations may have various interests. Public authorities generally join the local tourist collaboration, motivated by possible foreign exchange earnings, revenues, employment and economic growth resulting from tourism (Hall, 2000; Pearce, 1992). Even though central actors are interested in increasing visitors and income, some stakeholders may also hold other interests (Sautter & Leisen, 1999). For example, public institutions such as museums are not there primarily for the sake of tourists. They have been established to collect and care for objects of specific importance for the common public. However, museums can be a vital part of tourists' experiences at a destination. Tourist organizations gather establishments of different sizes from various lines of businesses, e.g. hotels, camping and other accommodations, transport companies, restaurants, museums, tour operators and stores. Multiple stakeholders with various interests introduce a very high level of complexity and may cause challenges (Sautter & Leisen, 1999).
Second, the tension of both collaboration and competition influences tourist organizations. The actors involved are mutually dependent and need to collaborate to offer adequate services to visitors (Gunn & Var, 2002). On the other hand, they have individual goals, which may easily cause problems. Individualism, autonomy and a strong need for independence are common traits among collaborators in tourism (Jacobsen, Dybedal, & Skalpe, 1996).
Third, free riding is also a widespread challenge in this context (Farstad, Skalpe, &
Troye, 2001; Jakobsen, 1998; Wang, 2007). When businesses join a tourist organization, and contribute with money and time, they expect to benefit. Moreover, they expect to gain more than any next-door business. If that expectation is not met, they may start to question their participation. Other businesses may benefit from the tourist organizations activities as well, which can cause frustration among the joint parties conducting the collaboration.
The remaining parts of this paper are structured as follows. The next section describes the structure of tourism and governance in Norway, to familiarize readers with the Norwegian context. This is followed by a brief review of theoretical perspectives chosen for this study: agency theory, a shareholder perspective and a stakeholder perspective. The next section reports the research underlying the empirical findings. An explorative and discovery-oriented approach was chosen to gain insight into the research questions. More precisely, in-depth focus group interviews were performed with boards of directors in selected tourist organizations. In the following section, results from those focus groups are presented. We conclude the article with a discussion, including remarks on some limitations of the study, implications for management, and future research.
Theoretical Background
Tourist organizations are set up based on the presumption that a destination will become stronger and more competitive through collaboration among the actors at the destination (Pearce, 1992). Certain functions, such as marketing, planning and development, visitor servicing, policymaking, and co-ordination, can be strengthened through a high degree of collaborative interaction (Goeldner & Ritchie, 2006; Gunn & Var, 2002; Jamal & Getz, 1995; Palmer & Bejou, 1995). Present knowledge of internal affairs in tourist organizations is limited. Studies of governance style by Palmer (1998, 2002) and Palmer, Barrett, and Pon-sonby (2000) give support to a relationship between a "tight" governance style and the effectiveness of tourism marketing associations. Moreover, the Destination Marketing Association International presents a practical guide to best practices for convention and visitors bureaus (Harrill, 2005), which includes structural and functional dimensions of board governance (Lathrop, 2005). Beritelli, Bieger, and Laesser (2007) analyzed the contribution of corporate governance theories to the explanation of destination governance structures, and called for studies of board member's
perceptions of their work and working environment to reveal the operational reality of governance.
This research was carried out in Norway, where organizations place a high priority on profiling, marketing, and visitor services (Jakobsen, 1998). The ability to finance such activities has been, and still is, a challenge for many Norwegian organizations (Farstad et al., 2001; Jakobsen, 1998). Present empirical knowledge about tourist organizations in Norway is limited. Previous evaluations have called special attention to clarification of strategy, division of tasks between organizations at different geographical levels, problems with free riders, and lack of market orientation (Nesheim & Mj0r, 1994). Jacobsen et al. (1996) found that successful tourist organizations in Norway are not too small, are highly regarded with support from local businesses, and are associated with a distinct and definable tourism industry in the area. This is in line with findings by Pearce, who considers a successful tourist organization to be "one that is soundly established, well resourced, highly regarded and one that is meeting its goals" (Pearce, 1992, p. 198).
There are approximately 150 tourist organizations in Norway (Ministry of Trade and Industry, 2007). Each region has a choice whether or not to establish any tourist organization.
Hence, one can find a mixture of different organizational structures, goals, and functions. Tourist organizations in Norway can be based on memberships. Moreover, limited companies have become increasingly important since the Norwegian Government encouraged the tourism industry to structure their collaborations as such in the 1990s (Ministry of Trade and Industry, 1989). Many tourist organizations are publicprivate partnerships, where public authorities have a formal role, such as owning shares or being members, and occasionally being represented among the directors.
Most organizations regard the public sector as the main provider of funding (Jakobsen, 1998), and, hence, as a stakeholder with great expectations (Sautter & Leisen, 1999).
Corporate governance systems vary between countries and in various settings (Morck & Steier, 2005), though company law on boards of directors within Scandinavia is very consistent (Huse, 2007). Legally-mandated responsibilities of boards of directors in limited companies were established by the Norwegian Company Legislation (Aksjeloven) of 1997. In Norway, management of daily operations can be delegated to an executive management, but representatives of the executive management are not
elected to the board of directors. Under Norwegian law, shareholders exercise their supreme power in a general assembly (§ 5). The manager executes day-to-day management of the organization based on instructions and orders given by the board (§ 6). The board of directors employs a manager, has the ultimate responsibility for the management of the company, and supervises day-to-day management and activities in general (§ 6). The Norwegian Code of Practice for Corporate Governance by the Norwegian Corporate Governance Board (2010) elaborates on managerial duties for boards:
The board's responsibility for the management of the company includes responsibility for ensuring that the activities are soundly organised, drawing up plans and budgets for the activities of the company, keeping itself informed of the company's financial position and ensuring that its activities, accounts and asset management are subject to adequate control. The board of directors should lead the company's strategic planning, and make decisions that form the basis for the executive management to prepare for and implement investments and structural measures. The company's strategy should be reviewed on a regular basis.
(The Norwegian Code of Practice for Corporate Governance, 2010, p. 35)
Even if not stated explicitly in law, strategic planning is considered an important responsibility for boards, in The Norwegian Code of Practice, in common understanding, and in practice.
A legalistic perspective on boards of directors emphasizes the responsibilities established by law, as briefly outlined above. However, the legal view takes us only a small way toward understanding governance in tourist organizations. To address our research questions stated above, we draw on elements from agency theory, shareholder theory, and stakeholder theory. Agency theory is supplemented by shareholder theory, to draw attention to the relationship between directors and shareholders or members. Due to the characteristics of tourism and tourist organizations, stakeholder theory has been chosen as a complement.
Agency Perspective
Agency theory has been among the most recognized perspectives in research on boards (Zahra & Pearce, 1989). The unit of analysis within agency theory is the relationship between one party (one or more principals) that delegates work to another (an agent), that performs that work (Jensen & Meck-ling, 1976). An organization contains a set of agency relationships, and agency theorists try to optimize the relationships between principals and agents (Fama &
Jensen, 1983). The board of directors may face two agency problems: An external agency problem concerning the relationship between the shareholders and the board, and an internal agency problem concerning the relationship between the board of directors and the manager. In research on boards of directors, it is generally argued that boards should monitor the actions of agents (managers) on behalf of their principals (shareholders) (Eisenhardt, 1989; Fama & Jensen, 1983). Thus, agency theory highlights the role of the board in monitoring management activities in order to minimize agency costs and thereby protect shareholder interests.
Individuals often act not only in their personal interest, but also in the interests of the institution they own or work for (Beritelli et al., 2007). Hence, the directors' external relationships were interesting. They had potential relationships to their parent organization, to specific groups, to their geographical region, and so forth. In collaborative organizations such as tourist organizations, directors may act as agents for a few, while they can be considered as principals for owners or members. This dual role causes possible tension in the boardroom, and affects how boards act as decisionmaking groups.
Shareholder Perspective
The shareholder perspective is closely related to a legal view on boards. The traditional shareholder perspective regards corporations as legal instruments for shareholders to maximize their interests, and protection of shareholders' interests is in focus. It is common to consider the formal control of an organization as divided between three bodies: shareholders, boards of directors, and management, which constitute the governance structure given in law (Monks & Minow, 2004). Shareholders exercise their supreme power in a general assembly. The manager executes day-to-day management of the organization based on instructions and orders given by the board. The directors' primary role is to monitor management on behalf of shareholders. In a shareholder perspective, the board of directors will emphasize the tourist organizations owners, shareholders, or members, and solely work for their interests.
Stakeholder Perspective
The stakeholder perspective, on the other hand, sees the organization in relation to its stakeholders, i.e. with responsibilities over and above their legal responsibility to shareholders (Letza, Sun, & Kirkbride, 2004). This theory is generally credited to Freeman and his book Strategic Management: A
Stakeholder Approach, where a stakeholder is defined as ". . .any group or individual who can affect or is affected by the achievement of the organization's objective" (Freeman, 1984, p. 46). Shareholders, customers, suppliers and distributors, employees, and local communities are all examples of groups and individuals that may have long-term relationships with the organization and affect its long-term success. The stakeholder concept has been applied in a variety of contexts, often with somewhat different definitions of stakeholders. A distinction has often been made between a broad and a narrow definition of stakeholders (Friedman & Miles, 2006). The broad version opens the idea that individuals or groups outside an organization may consider themselves stakeholders of the organization, without the organization considering them to be. A narrow definition limits stakeholders to those making their stakes known and who actually influence the organization (Starik, 1994). Friedman and Miles consider ". . .groups of people with distinguishable relationship" as stakeholders (Friedman & Miles, 2006, p. 13).
At destinations, there are groups and individuals, both public and private, with distinguishable relationships to the local tourist organization, which can affect, or are affected by, the achievement of the organization's objectives. The strategies developed by tourist organizations often set the direction and focus effort not just for the organization, but also for the destination in general. Additionally, many aspects concern and influence other stakeholders at the destinations besides owners in an organization.
Many plans are indicative of these broader stakeholders, outlining desirable goals for the organization and the appropriate actions to attain these. The organizations have to communicate their plans externally and generate willingness among others to participate in and implement chosen strategies, to be able to achieve the organization's objectives.
The achievement of goals, e.g. an increase in visitors to an area, may have an impact on local resources and local communities. Hence, stakeholder theory apparently reflects tourism (Bramwell & Lane, 2000; Bramwell & Sharman, 1999; Buhalis, 2000; Palmer & Bejou, 1995; Sautter & Leisen, 1999).
Categorization of Board Roles
To guide and direct, though not dictate this research, Zahra and Pearce's (1989) categorization of board roles underpins the analysis. Through their review and integrative model, Zahra and Pearce (1989) identified three sets of interrelated board roles: control, service, and strategy. Control includes
monitoring and rewarding the manager's actions and performance. Service includes representing the organization's interests in the society, linking the organization with its external environment, and securing critical resources. The strategic role, understood as the level of attention given by directors to the various elements of the strategic process, affects formulation and dissemination of policies as well as the allocation of resources necessary to implement the chosen strategies.
Methodology
This part describes the methods chosen for this study. Due to the discovery-oriented nature of our research questions, we chose an explorative research to enlighten what boards do and for whom they are working. Explorative research can be conducted in many ways. In the present study, we decided to primarily collect data by conducting focus group interviews. Focus groups can be seen as group discussions organized to explore a specific set of issues (Kitzinger, 1994). This approach gives flexibility, and the possibility for considering unexpected information, and offers the opportunity to observe a large amount of interaction, in a limited period, concentrated on specific topics (Morgan & Spanish, 1984). The use of key informants from a selection of organizations would have provided less information, given that individual directors primarily respond from their point of view. The possibility to probe into participant's views, in open and free conversation with each other, was part of the reason for choosing this method. Boards as a collective were the focus of attention in this study.
Sample
Boards of directors are pre-existing groups, clusters of people who already know each other through working and socializing together. We chose to use board groups as they were, instead of composing groups with a mixture of directors from different organizations.
A sample of ten organizations was invited to participate in the study. Judgment was used to try to get a sample that was representative of Norwegian tourist organizations.
Organizations were also chosen due to their ability to contribute to the study and secure variation within the sample (Miles & Huberman, 1994). In that respect, the final sample is not representative for all tourist organizations, but covers several important dimensions: geographic location, scale, and
various forms of organization, ownerships and management, as presented in Table 1. Secondary data, like annual reports and strategy documents provided by the organizations, gave additional background information about the organizations and guided the selection.
Three organizations, which were part of the sample at an early stage, were later excluded due to a sudden change of management, i.e. the directors were busy replacing management, and could not spare time to participate in the study. In total 37 directors participated in seven focus groups. For the discovery-oriented purpose of this study, this was considered a sufficient number of directors and boards to increase our insight. The final sample consisted of three limited companies, three other companies with limited liability, and one association based on memberships. Table 2 reports the number of directors each board had at the time the interviews took place, and the number present during the interviews. In four groups, one or two deputies were attending.
Most organizations in this study have local politicians or government employees appointed to their board. Table 2 states whether they were present.
Data Collection Procedure
Two test-interviews gave valuable information about how the interviews ought to be structured. Minor changes were made regarding the wording and order of questions, based on the directors' responses. The two test-interviews are part of the final sample, organization A and B.
Interviews were conducted when, and where, the boards had regular board meetings.
Placing the interview as the first item on the agenda ensured the presence of most directors, who focused on the discussions. It also reduced possible influence from other issues on the agendas. Interviews were carried out without the presence of the managers, with one exception, where the manager also was the chairperson of the board. Managers were excluded because of the risk of directors answering in a way they thought their manager expected, or the interviews were dominated by the managers' opinions.
A semi-structured interview guide served as an information-gathering tool. The interview guide consisted of ten open-ended questions. Interviews started with background information about the study, followed by a brief presentation of each of the directors:
актуальные зарубежные исследования в сфере туризма
Table 1.
The sample
Organization Geography Level Form of organization* Ownership Management
A West Regional Other company with limited liability Partnership, private majority New manager in 2007 Administrative staff
B South Local Other company with limited liability Partnership, public majority New manager in 2007 (50%)
C East Local Limited company Partnership, private majority New manager in 2007
D East Local Foundation, organization or other association Partnership, private majority 20% help with administration
E North Regional Limited company Partnership, public majority Manager Administrative staff
F Mid-Norway Regional Limited company Private Manager! chairperson! principal shareholder Administrative staff
G West Regional Other company with limited liability Partnership, public majority New manager in 2007
H South Local Foundation, organization or other association Partnership, public majority Change of management
I North Regional Limited company Partnership, private majority Change of management
J West Regional Limited company Partnership, private majority Change of management
* Form of organization according to the Norwegian Register of Business Enterprises, ownership, and management. Other companies with limited liability are companies other than limited companies where none of the partners has personal liability for the obligations of the company (registered in Norwegian as: samvirkeforetak og andre foretak med begrenset ansvar).
Table 2.
Composition of focus groups
Members of Directors present during Politicians or government Organization the board interviews (Deputies) employees appointed to the board
A 8 10(2) 3
B 7 7 2
C 5 5 1
D 5 3(1) 1
E 5 4(1) 1
F 2 2 0
G 7 6(1) 3
Total 39 37 11
name, current position, and tenure as director. The first five questions were general, and the following five were specific to the particular board. Although the guide was followed more or less in the same order in each group, the interviews took new directions due to interactions between participants. The interviews were conducted from September to December 2007. Each interview lasted for about one hour.
Analysis Procedure
The nature of raw data, clear recording instructions, and special skills such as familiarity is critical to produce reliable results from focus groups (Stewart & Shamdasani, 1990). Interviews were recorded and transcribed before analysis. The possibility to complement transcripts with observations of group dynamics and the structure of turn-taking during interviews was ensured by the author's moderation of the groups.
The unit of analysis was both the groups and the individual directors — and the interaction between these. Statements about responsibilities were identified and categorized based on Zahra and Pearce's (1989) categorization of board roles to ensure that elements in the transcripts were coded reliably (Stewart & Shamdasani, 1990). In the analysis, we followed principles proposed by Morgan (1997) and registered all mentions of a specific task, whether each group interview contained a task, and whether each individual mentioned a task. The same was done when analyzing for whom directors see themselves working.
Results
This section reports the findings from our investigation, starting with findings regarding roles and responsibilities, followed by an analysis of whom the directors saw themselves working for.
Board Roles and Responsibilities
On general questions about responsibilities, we found great unanimity among directors in each board. Few phrases or expressions that revealed divergence or discontent were used by the directors. In general, it seemed as though directors were rather complementing each other rather than expressing differences of opinion. This rather general pattern is illustrated by the following quotations from the interview with six directors in organization G:
It is to plot out a line of action for our work, or the administration's, to ensure that we have a horizon and a strategy for our work (Organization G, Director 1). We are also there to follow up on resolutions made by the annual meeting. The annual meeting plots the line of action for the year, for the board of directors is the governing body between annual meetings; those with the responsibility for the company between annual meetings, and must at least follow laws and regulations for the company, and pursue the resolutions made (Organization G, Director 2).
Yes, it has already been said. I can only agree with what has been said. In addition, it has also been to promote tourism in the region. That is my basis (Organization G, director 3). [. . .] Economy is part of the board's responsibility. To pass a budget, or present a budget for the general meeting, pursue budgets and audit accounts. Follow up on the company's financial estate. After all, this company has had its ups and downs. Yes, there have been challenges (Organization G, Director 4). [. . .] Obviously, it is the board's responsibility to employ, in addition to keep the organization running. After all, it is the board's responsibility to employ a manager and the co-workers necessary to run the company (Organization G,
Director 5). [. . .] There are by-laws for this organization, which deal with tasks for both the board and the general manager. So that, that is what. . . well, what we act according to (Organization G, Director 6).
An extensive list of responsibilities emerged from the directors answers. Analysis and thorough categorizing showed that categories derived from Zahra and Pearce (1989) were adequate and appropriate for this study. Table 3 groups responsibilities into three roles: strategy, service, and control, with frequencies for different boards. Wordings reflect both Zahra and Pearce's (1989) work and directors' expressions during interviews.
A to G represents the seven tourist organizations participating in the study.
Table 3 shows that boards stated several responsibilities. Moreover, some responsibilities were emphasized by most boards. First, all boards participating in this study reported that boards in tourist organizations should play a role in strategic planning.
Tasks related to strategy were mentioned at the beginning of most interviews and highly emphasized. Expressions from interviews included: "Set up long-term strategies" (Organization A), "create long-range plans" (Organization B), "plot out lines of action for
the work we do, to have a horizon and a strategy for our activities" (Organization G), "set goals and plans for the future, both short-term and long-term" (Organization C) and, "create plans of action" (Organization D). Subsequently, securing critical resources was a major concern. A number of tasks mentioned during interviews were related to activities that secure financial resources and strengthen the long-term relationship to stakeholders who contribute financially. Furthermore, control of budgets, accounts, and finances was mentioned by most boards as an ongoing and important task. The use of words such as "ensure", "see to", "make sure", "supervise", and "attend to" points towards the board's control role. This is, as shown in Table 3, closely related to economic conditions. "An issue in every board meeting will be the present financial situation, so one can monitor the development" (Organization G).
Boards in this study tell about organizations with limited means, and they were trying to keep economic conditions under strict control. Large shares of tourist organizations' budgets are public grants and financial contributions from members or shareholders.
Relations with public authorities, and ability to keep and get shareholders and members, are essential
Table 3.
board roles and responsibilities
A B C D E F G
Strategy
Service
Control
Strategic planning Choose areas of commitment Decision-making Securing critical resources
- Making major benefits visual
- Taking care of the interests of shareholders/members
- Increasing number of shareholders /members Representing the organization's interests in the society Linking the organization with its external environment Giving advice to management and administration Daily running of operations .
.. .in times of crises
Monitoring managerial activities, performance and decisions
Monitoring activities, performance and decisions Controlling budgets, accounts and present financial conditions
Ensuring that activities are in accordance with laws and
regulations Finding and hiring a manager
for the financial long-term situation. Consequently, boards were preoccupied with finding means, and call attention to the benefits of supporting the organization. It is difficult to show how promotion, marketing, visitor services, and other such activities are linked to an increase in visitors, guest nights, and value creation.
Many activities described can be classified as lobbying. Directors attend to the interests of current shareholders or members to ensure they stay in the organization. In addition, they try to increase the number of members. Some boards actively took part in recruitment. Two boards, A and B, had arranged separate committees for this purpose.
Relations with important external stakeholders, such as public authorities, were highlighted.
"We hold different competences and diverse networks which imply that we shall contribute and establish contacts on behalf of the company. . ." (Organization A). Boards in this study have directors who represent the organization's interests when dealing with third parties, and they link the organization with its external environment.
Some examples: A director from organization E was appointed to the board in a tourist organization at a higher geographical level. The board in Organization G consists of public representatives from each municipality in the area, and chairpersons from four local tourism associations, a structure that ensures a network between organizations at different geographical levels and links to important external stakeholders.
Control of managerial actions and performance were given little attention in the interviews, although agency theory highlights the internal agency problem, and considers monitoring management activities as the boards' main task. Control of previous decisions and the organization's performance were mentioned. Additionally, some directors pointed to boards' responsibility for controlling whether activities were done in accordance with laws and regulations, bylaws and statutes. Even so, only one director from a limited company referred to directors' responsibilities as set forth in the Companies Act.
Large turnover seems to be common in tourist organizations. Finding — and keeping — the right manager was a chief concern for boards in this study. The fact that three of the invited boards had to cancel underlines this. Directors had to hire managers, and meanwhile do the extra work required to keep the organization running. Four of the remaining boards had also recently changed management. As illustrated in the following quotes, selecting and hiring a manager
is challenging. "The appointment of a new tourism manager. It was a long and time-consuming process and a very important decision. And during that process we did not have a manager" (Organization A). "It becomes more work in detail than necessary. Much more work for the board than required" (Organization B). Directors, and particularly the chairperson, had to attend to the extra work lack of management entailed. "Different boards are needed in different periods" (Organization A).
The level of attention given to tasks varies among the seven boards participating. In order to capture the board's actual involvement, boards were asked to elaborate on how they pursued specific responsibilities. Thorough questions revealed that in reality limited time was spent on responsibilities first emphasized as significant. In addition, all boards were asked about the most important and the most difficult issues on the agenda the present year. Moreover, they were asked why these issues were important and difficult. Answers to these questions reflected largely what tasks the directors had been focusing on, and how much emphasis was given to certain responsibilities.
The issue most boards highlighted as important, difficult, and time-consuming was the organization's financial state.
There is a divergence between what directors first state as important responsibilities, and the tasks they actually give time and attention to. This was particularly true for strategic planning. In general, boards did not participate in the actual development of policies, but merely approved and ratified suggestions presented by management.
Organization A stands out on the topic of strategy. Directors considered strategy and long-term planning as key tasks. Strategies were set in annual seminars where they also drew attention to allocation of resources necessary to implement chosen strategies.
"It may be opportune to discuss the company's economy and income strategically in the long term" (Organization A). The directors expressed great awareness of governance, referred directly to the Companies Act, and made clear distinctions between managerial responsibilities and their own role. "Implementation is her [manager's] responsibility" and ". . .a board should not be in charge of the daily running" (Organization A). Organization A is the largest in the sample with regard to budget, shares, staff, and number of directors.
In our presentation of findings in Table 3, two other organizations stand out, with fewer responsi-
bilities. Organization D is a small, local association run without a hired management. The directors, and especially the chairperson, have an executive function. ". . .We are a small organization. In this organization, the directors also execute plans. We do have the traditional tasks, such as budget and accounts and so forth, but we also have a much more executive function" (Organization D). Included in their responsibilities are daily running of operations and planning and organizing social events, such as kick-offs and meetings. Organization D has limited means.
However, the directors give less emphasis to financial resources and seem to be satisfied with their budget. "If we take stock of the situation, I think this is a reasonable level to operate at" (Organization D).
In organization F the chairperson, manager, and main shareholder was the same person. The board had one additional director, also a shareholder and member of staff. This is an uncommon structure among tourist organizations in Norway. This structure linked the board's internal and external agents, but led to fewer formal governance processes. The board of organization F may be characterized as a "paper board" or "rubber stamp board" (Fiegener, Brown, Dreux, & Dennis, 2000), merely established to meet legal requirements when registered as a limited company. Nevertheless, the two persons who constituted this board were the main decision-makers for the organization, though decisions were seldom made in formal board meetings. Decisionmaking was done as they work:
We hold a short meeting, take the decision and are up and running in a couple of days instead of waiting for the next board meeting to be held in five weeks, and going through aimless discussions that may well not lead to anything. So, we run a business that can jump on possibilities — for better or worse. If boards are not up to date, they can have a restrictive effect on the organization. [. . .] We are effective and not bureaucratic. We can put things into effect very fast, and that is a major advantage. (Organization F, chairperson)
By choosing to hold a minimum board primarily to meet legal requirements, they lost a potential knowledge network of directors with competence, knowledge, and skills they and the organization might have benefitted from. Even so, the directors emphasize their informal governance style and ability to make flexible decisions as key factors for their success.
For Whom Boards of Directors Work
This section reported findings on how different directors perceived whom they work for. Directors from all boards promptly said they work for their members, shareholders, or owners. However, a key finding in this study was the prevailing view many directors expressed: they do not work solely for the organization's owners. The interviews revealed that a traditional shareholder perspective, which regards the organization as an instrument for shareholders, was present, yet too limited in the context of tourist organizations. Relations to other stakeholders and a broader stakeholder perspective occur simultaneously. Based on the analysis of the interview transcripts, we identified several additional stakeholder groups: the community, municipality or region, inhabitants, tourists or guests visiting the area, the local tourism industry or industry in general, a specific line of business or groups directors frequently interact with, managers and administration, their own business, or themselves. This is shown in Table 4 with a selection of quotes from the organizations.
Most boards in this study had at least one publicly employed or elected director.
When considering background, a particular tendency for public directors was the tendency to bring up local community or people living in the region. ". . .to create activity
Discussion and Conclusion
Central findings from our study reported above reveal that boards in tourist organizations have to deal with a spectrum of views regarding roles and responsibilities, and different perceptions of who directors work for are present simultaneously. A shareholder perspective is too limited in this context, since roles and responsibilities mentioned by directors in this study go beyond legally mandated responsibilities, and many directors expressed that they consider themselves working for others besides solely the organization's owners. A stakeholder perspective captures these aspects of tourist organizations. In addition, a potential agency problem can occur due to the prevailing view some directors have of representing specific groups, a limited geographical area, a special line of business, and so forth. Directors can act as agents for a few, although their formal role as directors is supposed to be on behalf of owners or members. This study borrows from three theoretical perspectives: agency, shareholder, and stakeholder theory. The use of multiple perspectives has contributed to the study and helped us identify these important aspects of our findings.
Table 4
For whom directors see themselves working
Quotes For whom directors work
(B) Our primary concern is to serve our members.
(C) We do work for our shareholders. (E) We work for the owners.
(G) Owners, of the company the board is working for.
(B) For the members, and for the whole region.
(C) So we work to create activity in our municipality. (G) It is also to promote tourism in this region. That is my point of departure.
Shareholders, members or owners
Community, municipality or region
Inhabitants
Tourists or guests
Tourism industry/local industry
A specific line of businesses/groups directors frequently interact with
(A) We ought to create a fundament for giving people good experiences. And people are of course those living in the region, and, not at least, visitors.
(B) We are here to organize the best possible offer for tourists and guests.
(C) However, obviously we work for others besides shareholders, hoping they can become shareholders or members.
(E) But we, we work for everybody. So, we work for everything in this region, in the tourist industry.
(A) One does think about it, to think hotels and plea the hotels' case in the board. I must say. (A) My colleagues wanted a person among the directors.
(G) As long as I am the local leader, it is set that I should represent our industry here.
(C)You cannot give, give, and get nothing in return Manager/administration as a manager. You must get help, and feedback, and support in every way [..] That is why our manager is so good, you know. She has such a good board.
(A) One works for oneself, but one also works for the fellowship.
(C) It is interesting to learn, yes, and develop, and maybe participate and contribute. And take some of that experience back into work, and what one is doing there.
Own business/themselves
The responsibilities found in this study are in line with Zahra and Pearce's categorization of board roles (1989). There appears to be a gap between what were considered important responsibilities, and the level of attention given to specific tasks. Strategic planning was considered a key task, though the actual board involvement in planning was rather low Control of budgets and accounts, and long-term financial conditions, on the other hand, were points on every agenda. Such current and time-consuming activities might weaken the directors' ability to attend to other
responsibilities. Boards have limited capacity, and this brings up the issue of how to prioritize. It is reasonable to believe that directors will have to pursue some responsibilities at the expense of others, and thus, the balance between roles has considerable importance.
As confirmed by this study, boards of directors in tourist organizations are diverse groups. Besides diversity in educational, functional, and occupational background, different judgments, viewpoints, ideas and opinions were present. Diversity in organizational groups, such as boards, may have multiple effects
on groups' performance and may affect outcomes (Milliken & Martins, 1996). On the one hand, diverse groups increase the opportunity for creativity, and such groups have the potential to consider a greater range of perspectives. On the other hand, diversity appears to be a double-edged sword, because the greater the amount of diversity in a group, the less integrated the group is likely to be. The compositions of board groups in this study reflect the importance of linking the organization with various parts of the external environment, particularly those that affect finances, such as public authorities. Board composition becomes a way of managing stakeholders (Sautter & Leisen, 1999), and coordinating groups or individuals who can affect, or are affected by the organization (Freeman, 1984). Multiple stakeholders with various perceptions can easily cause tension and influence how boards function as decision-making groups. It can be challenging to manage a group of directors, each of whom experience a contractual relationship with, or represent the interests of, different stakeholders groups. This fracturing of interests also raises concern about the interests of those groups not represented. Hence, the nomination of candidates who have the required experience and knowledge, networks and ability to govern plays a decisive role, and board composition and diversity are important when studying the governance of tourist organizations. Free riders are well known in the context of tourist organizations (Farstad et al., 2001; Jakobsen, 1998; Wang, 2007). When talking about responsibilities, an important task for many boards was to demonstrate specific benefits for shareholders or members.
On the other hand, a number of directors stated that the board and organization work for the region, municipality, or community in general. This dual view creates a certain risk of divergence in the organization's perspective, between a shareholder and stakeholder perspective. Boards were challenged on this during interviews, and they seemed to be aware of the dilemma. "When a prominent person is honored, his subordinate will also benefit" (Organization A, and Organization B). Even so, in general, they had difficulties explaining in exact terms how they differentiated between these competing interests.
The ongoing challenges many organizations face regarding funding and resources can lead to the risk that directors adjust objectives and activities in line with important stakeholders' interests, possibly at the expense of activities beneficial for the majority.
"The municipalities have their interests, the special interest organizations have their interests, and the hotels, who count for 35% of our income, have their
interests. To look after the interests of each group is very important" (Organization A).
Our findings also have other managerial implications. To create a proper balance between different roles and responsibilities, formal instructions regarding the structure and behavior of boards can guide directors in their performance of duties, and make directors more conscious of who they work for — a question the whole organization ought to agree on. A formal governance style, with reliance on a prescribed system of rules or some form of legal intervention, is assumed to increase the effectiveness of collaborations (Palmer, 1998). A formal code of conduct adopted by the board and agreed to by all directors decreases the likelihood that interpersonal issues and individual performance deficits will interfere (Lath-rop, 2005). Current general codes can be adapted by boards in tourist organizations. However, codes are devised for many purposes and by various actors, and the content varies. The nature of tourist organization's environment and possible effects of contextual factors should be taken into account (Palmer &Be-jou, 1995; Zahra & Pearce, 1989). Hence, alteration or formulation of particular guidelines for boards in this specific setting is wiser. Sample Codes of Conduct from the Destination Marketing Association International (Lathrop, 2005) can be a suitable starting point. Despite adding an extra task to the already comprehensive list of responsibilities, tourist organizations will benefit from taking time to develop clear board instructions, evaluate board work, and clarify board roles.
Long-term funding and stable resources are critical for tourist organizations' sustainability.
Continuous resource allocation can influence directors' capacity to pursue other important tasks, and limit the possibility for long-term planning. Scarce financial resources can cause difficult working conditions for both directors and executive managers, with a large turnover as a possible consequence. How to finance tourist organizations and their activities has been an ongoing discussion in Norway. A number of different models have been tested in different areas, without reaching an optimal general solution (Jakobsen, 1998). Pearce (1992) and Jacobsen et al. (1996) found that successful tourist organizations are not too small, get support from local businesses, and serve a distinct and definable tourism industry in its operating area.
These criteria for success are closely related to economic and stable resources, though whether they are possible to influence varies with the circumstances. Larger organizations seem to have more stable
access to resources, e.g. organization A in this study It is possible, and advisable, to influence the size of tourist organizations, regarding owners, budget, and staff. This is a policy in line with the national strategies for tourism in Norway (Ministry of Trade and Industry, 2007), and should be supported by local tourist organizations. A distinct and definable tourism industry in an area with support from local businesses may entail strong commitment among collaborators; yet, an area's industrial structure is harder to change.
Conducting group interviews with boards in tourist organizations proved useful for this explorative study. It provided the actual social context where ideas are formed and decisions made. However, such qualitative research has its shortcomings, which limits the extent to which it can be generalized. For example, there may be great divergence between what directors express during interviews and the actions boards of directors actually undertake. The level of agreement among the directors during the interviews indicated to a certain degree this phenomenon. They reacted and built upon responses from other board members, related each other's comments to actual incidents in their shared history, and challenged each other on contradictions regarding how they earlier actually behaved in similar situations. Another risk present in focus group interviews is possible group thinking (Byers &Wilcox, 1991; Janis, 1982; Kitzinger, 1994), where participants adapt their answers and expressions in accordance with what they experience as the generally accepted views in the group. The fact that boards of directors are pre-existing groups consisting of acquaintances, who are accustomed to
challenging each other's opinions, reduced the risk of group thinking. Directors have an obligation to discuss and challenge proposed decisions independently and contribute to the success of board meetings (Epstein & Roy, 2004). During the interviews, directors justified proposals, and met counter-arguments from others, and discussions were open and unbounded.
There is a need for validation of focus group results, just as there is a need for validation of other types of research findings. No doubt more research is needed. Future research should address boardroom behavior, diversity and commitment in tourist organizations. We call for further studies of focus and time spent on different tasks, to reveal what boards actually do, and whether some tasks are attended to at the expense of others. Diversity includes differences in underlying attributes such as skills and knowledge, occupational backgrounds and industry experience (Milliken & Martins, 1996), and, as found in this study, differences in perceptions of roles and responsibilities, and divergences in organizational perspectives. Commitment can be understood as a construct with multiple foci (Reichers, 1985). The most significant question the multiple commitment perspective raises deals with the potential for conflict that may exist among commitments. Multiple stakeholders represented among directors can entail a potential agency problem if their actions as agents for specific groups interfere with their commitments as directors. To be specific, we call for further studies that focus on how boardroom diversity and multiple stakeholders with multiple commitments can influence boards as decision-making groups.
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