Review of Management Innovation and Creativity

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ISSN 1934-6743

Review of Management Innovation and Creativity

Innovation

Research

Creativity

Excellence

Volume 3, Issue 5 Published and Sponsored by: Intellectbase International Consortium

Volume 3, Issue 5

Editor-In-Chief Dr. Denise de la Rosa, Grand Valley State University, USA

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Innovation

Research

Creativity

Excellence

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ISSN: 1934-6735 Online

ISSN: 1934-6743 CD-ROM

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Editor’s Message My sincere gratitude goes to all of the Executive Editorial Board Members, Reviewers‟ Task Panel, Contributing Editors and the Senior Advisory Board for their efforts to make RMIC a great academic Journal. They work hard to review the many papers submitted and provide a level of consistency for RMIC reviews. We continue to look for individuals interested in becoming a reviewer for Intellectbase conference proceedings and Journals. Potential reviewers should send a self-nomination to the editor at [email protected] Reviewers may also be asked to be part of the Executive Editorial Board (EEB) after they have established a positive record of reviewing articles in their discipline. Also, I want to thank the Intellectbase International Consortium (IIC) Team for their hard work in producing this Issue. The papers offer great intellectual contributions and continue our focus on broadening intellectual resources, understanding, development and exchange of ideas among global education professionals. The review presents detailed theoretical explanations of original developments of managerial perspectives. The content is based on creative thinking, illustrated with real case studies and applied research. The manuscript involves innovative contributions, creative developments and descriptions, in a well-defined format with rich conceptual structures. The topography of management innovation is about the creative development of individual researchers engaged in creative endeavors, across a wide range of disciplines including but not limited to: the Social Sciences, Economics & Finance, Public Policy & Administration, Human Resources, Engineering, Business & Entrepreneurship, Supply Chain Management, Education, Science & Technology and the Arts. RMIC is intended for scholars who are interested in exploring and developing complex compositions that link incongruent elements to knowledge, and integrating them conceptually on a creative scale RMIC seeks research innovation & creativity and presents original topics. The goal of the Review of Management Innovation & Creativity (RMIC) is to provide innovative research to the business, government, and academic communities by helping to promote the interdisciplinary exchange of ideas on a global scale. RMIC seeks international input in all aspects of the Journal, including content, authorship of papers, readership, paper reviews, and Executive Editorial Board Membership.

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Reviewers Task Panel and Executive Editorial Board Dr. David White Roosevelt University, USA

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Reviewers Task Panel and Executive Editorial Board (Continued) Dr. Virgil Freeman Northwest Missouri State University, USA

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TABLE OF CONTENT

THE EFFICACY OF UTILISING NVIVO FOR INTERVIEW DATA FROM THE ELECTRONIC GAMING INDUSTRY IN TWO JURISDICTIONS June Buchanan and Michael Jones ..................................................................................... 1 MANAGING DIVERSITY FROM A STRATEGIC PERSPECTIVE: A COMPETING VALUES APPROACH Francis Daniel and Kenneth Zantow .................................................................................. 16 PUBLIC AND PRIVATE PARTNERSHIP APPROACH FOR APPLYING THE TOURISM MARKETING MIX TO SPIRITUAL TOURISM Farooq Haq, Anita Medhekar and Phil Bretherton ............................................................. 25 I DON’T WANT TO READ ABOUT YOU IN THE PAPER Ronald M. Mano ................................................................................................................ 43 LOCAL FOOD UTILIZATION: A WINNER FOR THE ENVIRONMENT AND THE RESTAURANT Jeffrey Campbell, Carl Pfaffenberg and Carol Costello ..................................................... 54 THE HOSPITAL LEADERSHIP DILEMMA: YOU CAN’T LOOK AT A FROG AND TELL HOW HIGH IT WILL HOP Joel E. Rodgers, Maria Toledo and Thomas E. Griffin....................................................... 68 SOCIAL INVESTMENT FUNDS FOR DEVELOPMENT AS AN APPLICATION OF ELINOR OSTROM’S THEORY “MANAGEMENT OF COMMON RESOURCE POOL”: A FUNCTIONAL ANALYSIS AND SUSTAINABILITY POTENTIAL Samir T. IsHak ................................................................................................................... 74

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THE EFFICACY OF UTILISING NVIVO FOR INTERVIEW DATA FROM THE ELECTRONIC GAMING INDUSTRY IN TWO JURISDICTIONS June Buchanan1 and Michael Jones2 Macquarie University1, Australia and University of Wollongong2, Australia ABSTRACT Quantitative methodologies have long utilised computer assisted software for data analysis. In more recent times, increasingly sophisticated computer assisted software has been developed to aid in the analysis of qualitative data. This paper discusses the use of one such computer assisted software analysis package – NVivo – in the analysis of interview data obtained from respondents in the Electronic Gaming Machine Industry across two jurisdictions, namely New South Wales, Australia and Nevada, USA . The efficacy of utilising qualitative methods for generating empirical data in social and societal marketing is acknowledged, particularly when very little, if any, primary data exists in the area being studied. Analysis of interview data from the Electronic Gaming Machine industry and the subsequent emergence of concepts and themes are discussed. Given the sensitive and confidential nature of primary data generated from respondents within industries that market legal, but potentially harmful products, as for example the Electronic Gaming Machine industry, the use of computer assisted software packages such as NVivo is a valuable aid in reducing the complexity of this type of research. Grounded theory and case study methodologies guided this research and in keeping with the principles of grounded theory, the extant literature relating to the concepts and themes that emerged during NVivo analysis was utilised throughout all stages of this study. The conceptual model developed in the final stages of NVivo analysis is also discussed and presented. Keywords: Qualitative Analysis, Computer Assisted Analysis, NVivo, Societal Marketing & CSR, Gambling and Stakeholders, Legitimacy

INTRODUCTION Marketers of legal but potentially harmful products often attract criticism from various stakeholders. A major stakeholder in the jurisdiction of New South Wales (NSW), Australia, namely the media, has highlighted the particularly controversial nature of gambling generally and electronic gaming machines (EGMs) more specifically over the past decade or so. An extensive literature review revealed a dearth of research on the marketing of EGMs, although a plethora of research on other aspects of gambling, most particularly relating to problem gambling, exists. Consequently, it was necessary to generate primary data due to the total absence of available empirical data in this area (in addition to the aim of generating insights into the gaming industry in terms of marketing). Although research is needed in this area, data collection is difficult due to the widespread negative perception of the EGM industry by many stakeholders – in addition to the media, other stakeholders such as non-governmental organisations (NGOs) and many in the community. As a result, information

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The Efficacy of Utilising NVivo for Interview Data from the Electronic Gaming Industry in Two Jurisdictions

generated from within the gaming industry is considered to be highly sensitive. Respondents were cautious and required assurances of total confidentiality. Qualitative methodology is known for its ability to generate in-depth knowledge in an area that has no existing research. Consequently, it was considered to be most appropriate for the purposes of this study. Theorists such as Patton (2002) refer to the “power of qualitative data” (p. 17) in its ability to go beyond mere numbers and yield rich insights. A hallmark of qualitative analysis is its “thick description”, which in turn is “balanced by analysis and interpretation” (Patton 2002, p. 503). A qualitative approach also ensures that high quality data are acquired from a relatively small sample, thus managing the issues of sensitivity and participant confidence. The benefit of using computer assisted software for qualitative data analysis, particularly NVivo, is discussed. The appeal of its applicability is further enhanced in the fields of social and societal marketing, especially when data are sensitive, limited or confidential. A discussion of the literature on grounded theory, case study methods, computer assisted software such as NVivo, gambling, societal marketing, corporate social responsibility (CSR) and legitimacy follows.

LITERATURE REVIEW Analysis of qualitative data can be described as a task which is demanding, repetitive and arduous. Although predominately a mechanical exercise, it requires an ability of the researcher to be dynamic, intuitive and creative, to be able to think, reason and theorise. The object of qualitative analysis is to deconstruct blocks of data through fragmentation and then have them coalesce into collections of categories which relate conceptually and theoretically, and which make assumptions about the phenomenon being studied (Jones 2005). Richards calls this process “decontextualizing and recontextualizing” (2002, 200). He regards this process as a fundamental component in the analysis of qualitative data. Typically, qualitative research is a one researcher domain. Data are acquired through firsthand experience as a result of subjective interpretation. Understandings of phenomena are tempered through experience, bias and knowledge (Ely, Anzul et al. 1991). It is argued that qualitative analysis is among the most demanding and least examined areas of social research (Miles 1979; Basit 2003). This could be due to the larger investments of time and effort that qualitative inquiry requires. This is especially relevant since the researcher needs to spend time becoming familiar with the data and the subjects of the research – this process being far more peculiar to qualitative research rather than quantitative. Qualitative research does not permit short-cuts (Delamont 1992). It is a continuous process which dominates the research activity, beginning with data collection through to conceptualisation and beyond (Ely, Anzul et al. 1991). The analytical approach requires a process of reduction and accumulation to manage and classify data. This process requires context specific textual segments to be removed from their source and accumulated into context independent repositories. A textual segment is defined by Tesch as “a segment of text that is comprehensible by itself and contains one idea, episode, or piece of information” (1990, 116). This activity constitutes the decontextualizing and recontextualizing” that Richards (2002, 200) discusses. The researcher‟s ability to code is an essential part of analysis (DeNardo and Levers 2002; Basit 2003). Coding requires the researcher to firstly identify the meaningful segments of text among the less valued data, and secondly, to tag or label these data so that they can be located along-side equally salient data. In doing so, tags must be descriptive and sufficiently abstract to encompass other similar, yet unique, datum (Glaser 1978). Miles and Huberman (1994) discuss two methods of code creation. The 2

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first method, which is preferred by inductive researchers, involves coding the data without a priori knowledge and labelling the data, at least initially, using the data itself as the tag (Glaser and Strauss 1967). This is often called in vivo coding. The second method uses an established list of codes (or tags). These usually come from the data collection instrument. Up until recently, qualitative analysis has been kept mainly in the domain of manual, hand wrought techniques. Applications range from pen and paper methods through to computer assistance with programs like Microsoft Word and Excel. In recent years however, dedicated software have been designed to assist researchers with the processes of qualitative analysis. One of the first computer programs to provide real assistance to qualitative researchers was NUD*IST™ 1.0 1 (Richards 2002). NUD*IST – standing for: Non-Numerical Unstructured Data by Indexing Searching, and Theorising – was developed to provide to qualitative researchers a program like SPSS but as a non-Statistical Package for Social Scientists. The fundamental purpose of NUD*IST was to provide functions which would assist researchers in the retrieval of text from data, allow users to code that data, and to develop a system of relating codes to each other using a tree structure (Jones 2007). Computerised packages for qualitative analysis have become far more sophisticated than these early systems. Software, like QSR-NVivo, provide many tools for analysis, reliability, management and reporting. However, the uptake of these products has not been without controversy. The research community is divided in regard to the deficits and benefits of digital intervention in what is fundamentally a human endeavour (Crowley, Harré et al. 2002; Basit 2003). Opponents argue that methodological impurities may result as data are transferred into a digital – ones and zeros – environment. The abstraction that results from this transfer may misrepresent or simplify the multi-dimensional qualities of the original data. This can certainly be the case with simple, plain text programs, where expression and emphasis can be lost, but the latest generation of augmented, rich text programs tend to mitigate this deficiency (Bourdon 2002; Crowley, Harré et al. 2002). Another argument emphasises the utility of computers for counting and producing numbers. It is seen by some, that this may force researchers into the trap of turning qualitative accounts into semi-quantitative arrays of analysis by enumerating the facts rather than interpreting them. While qualitative analysis software will often provide these facilities, it is not their strength and it detracts from their purpose (Crowley, Harré et al. 2002; Welsh 2002). Software can also be seen to distance the researcher from their research by providing a buffer between the person and their data (Bourdon 2002; Welsh 2002). Proponents see qualitative analysis software as the genesis of the new age in qualitative research. Software can assist researchers by providing better data management, reducing time consuming repetition and offering greater flexibility. Computer supported analysis can provide higher accuracy and greater transparency (Welsh 2002). In addition, software can provide faster and more comprehensive methods of inquiring into the data, and much more versatile and efficient systems of collecting, storing and reporting (DeNardo and Levers 2002; Basit 2003). It is often misconstrued by critics that software does the analysis for the researcher – this is not the case. The researcher must still collect the data, decide what to code and how to conceptualise. However, the software does increase the ease at which analysis is undertaken, by minimising repetitive, mechanical tasks (Bourdon 2002). Computer assistance is merely a tool which facilitates more effective and efficient analysis (Coffey and Atkinson 1996). “Researchers who use the packages are often amazed that this kind of work, with its thousands of pages of data, could ever have been conducted by hand” (Basit 2003, 145). 1

QSR International Pty Ltd

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Despite these debates, the use of computer assisted analysis is on the increase (DeNardo and Levers 2002; Basit 2003, 145; Bringer, Johnston et al. 2006; Bazeley 2007; Wong 2008). A number of notable qualitative theorists have encouraged the use of qualitative data analysis software within their research: (Miles and Huberman 1994; Denzin and Lincoln 1998; Krueger 1998; Berg 2001; Merriam 2001; Silverman 2001; Morse and Richards 2002; Patton 2002). In this research – using NVivo™ 8.0 (QSR International Pty Ltd, 2008) – the software approach has been an invaluable tool. Large amounts of data were managed relatively easily. Data were coded more generously than would have been achieved with „paper and pen‟ methods, and while this most probably led to over-coding (this is a problem reported by Blismas and Dainty (2003, 460), it allowed ideas and issues to emerge more freely without the compulsion to force data into already established categories. The software also permitted easier reporting and reflection Initially, a literature review was conducted on gambling (particularly relating to „harm minimisation‟), a list of nine topics was developed and arrangements made for interviewing respondents in the gaming industry. During the process of analysing the interviews using NVivo, distinct patterns began to emerge, largely driven by the nine topic areas developed for the interviews. Following this analysis a further review of the extant research ensued covering three substantive areas – societal marketing, stakeholder theory and corporate social responsibility (CSR). This led to theoretical development. The next section will review the literature associated with gambling.

Societal Marketing, CSR, Gambling and Stakeholders Kotler et al.‟s (2001) societal marketing concept recognises that marketers need to consider the longrun interests of society in addition to economic and other considerations such as customers and employees. This concept however does not elaborate on the social aspect in terms of who the various stakeholders are and how companies can become more socially responsible. Accordingly, the societal marketing concept needs to be elaborated on, and strengthened by, a robust explanation and inclusion of stakeholder and CSR theories. Many authors stress the imperative of including stakeholders in an organisation‟s social responsibility (see for example Aguilera et al. 2007; Black and Hartel 2004; Breen 2005; Carroll 1991; Maignan et al. 2005; Miles et al. 2006; Mitchell et al. 1997; Polonsky et al. 2003). Branco and Rodriques (2007) state that any “useful notion of CSR should be based on a stakeholder view” (p. 5). Accordingly, any societal marketing and CSR concept needs to include identification and inclusion of key stakeholders. The most prominent in the gaming industry in New South Wales, Australia being the Government and the media, in addition to the gaming industry‟s target market. The influence of key stakeholders cannot be under-emphasised. For example, the media and NGOs in Australia appear to have exerted a certain amount of pressure resulting in increased regulation of EGMs. In practice, organisations have a long way to go in terms of being socially responsible. For instance Rundle-Thiele et al.‟s (2007) study into consumers‟ knowledge of safe consumption levels of alcohol showed that, whilst alcohol marketers communicate the „drink responsibly‟ message throughout their policies and programs and can therefore arguably be considered socially responsible, the majority of respondents (adults aged 18 years and over) were not aware of safe levels of alcohol consumption. Accordingly, the authors call for a focus on corporate social performance (CSP) in order to address the gap between stakeholder knowledge, and company policies and practices. Hing (2000) also found significant gaps between NSW Registered Clubs‟ views, policies and practices in terms of dealing with problem gambling, against an array of expectations from their key stakeholders. This highlights the 4

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importance of organisations identifying and responding to key stakeholder expectations in a manner that is also beneficial to the organisation (i.e. in a strategic manner). Other authors focus on different aspects of CSR. For example, Polonsky et al. (2003) build on Porter‟s value chain to develop a „harm chain‟ whereby the creation of harm occurring within marketing exchange networks can be examined and dealt with by policy makers and firms. The Reno model developed by Blaszczynski et al. (2004) also incorporates policy makers in the provision of responsible gaming, further emphasising the importance of including key stakeholders in any socially responsible program. The importance of ethical programs throughout all levels of the organisation is endorsed by Moore (1999), who emphasises the salience of having a code of ethics by which business people can make ethical decisions, as governments “can‟t legislate moral behavior” (p. 305). Hemingway and Maclagan (2004) recognise the importance of personal values on corporate values and hence CSR. They endorse the role of individual managers as champions of “social responsibility, as opposed to simply acting as agents of corporate policy, [who] may inspire or remind employees that they can make the difference in an organization without a formally adopted CSR culture” (p. 41). This should not be seen as negating the need for an on-going code of ethics training program throughout all levels of an organisation, however. Given that the vast majority of EGM operators in NSW are SMEs, their role in developing a socially responsible culture throughout their business is paramount. Accordingly, all staff throughout the organisation need to adhere to ethical and CSR practices, for example by having staff who seriously look out for, and, where appropriate, are willing and empowered to intervene to protect problem gamblers from themselves.

Legitimacy Institutional theory postulates that organisations influence, and are influenced by, society and that a „social contract‟ between the two entities exists. Organisations therefore, in order to develop or protect their legitimacy, try to ensure they have policies, processes and practices that meet societal expectations (Hoque 2005). As a result of the centrality of this concept, legitimacy theory has emerged as an important area of scholarly research. According to Brinkerhoff (2005), three types of organisational legitimacy exist: normative; pragmatic; and cognitive, with Patten (1991) stating that the “concept of economic legitimacy was, until recent years, largely the only constraint placed on business by society: (p. 298). Dowling and Pfeffer (1975) state that when the social values of an organisation are congruent with the “the norms of acceptable behaviour in the larger social system of which they are a part”, organisations achieve legitimacy (p. 122). Suchman (1995) found that many researchers refer to the term „legitimacy‟ but very few define it. Accordingly, he develops a definition of organisational legitimacy: “Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs, and definitions” (p. 574).

THE STUDY This study entails a multi-case, multi-site, case study to understand the motives (or lack thereof) of electronic gaming providers to act in a socially responsible manner. Our research question was: To what extent do operators in the gaming industry consider that they are socially responsible in terms of their marketing of EGMs?

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The Efficacy of Utilising NVivo for Interview Data from the Electronic Gaming Industry in Two Jurisdictions

Staff of electronic gaming facilities, gaming consultants and government regulators, were interviewed in two jurisdictions, namely Nevada (USA) and New South Wales (Australia). A nine-item, open-ended questionnaire was developed to focus discussion on the salient issues during the interviews, whilst at the same time encouraging the respondents to talk freely and include other aspects they felt were important. Table 1 indicates the location, category and number of respondents interviewed at each jurisdiction. Table 1: Respondent Classification Location

Category

Number of Respondents

Size

Reno (Nevada)

Gaming consultant and gaming conference organiser

1

SME

Las Vegas (Nevada)

Gaming consultant

1

Individual

Las Vegas (Nevada)

Gaming Machine Manufacturers

4

Large

Las Vegas (Nevada)

International Casinos

7

Large

Las Vegas (Nevada)

„Locals‟ Casinos

2

Large

Lake Tahoe (Nevada)

Gaming Machine Manufacturer

1

Large

Lake Tahoe (Nevada)

Problem-Gambling Consultant

1

Individual

New South Wales

Gaming Legislators

3

Large - government

New South Wales

Gaming consultants

6

Individual

New South Wales

Gaming Machine Manufacturers

2

Large

New South Wales

Casino

1

Large

New South Wales

Hotels (Pubs)

5

SME

4

SME

New South Wales Registered Clubs Source: Adapted from Buchanan et al. (2009), p.86

METHOD The research method adopted in this paper synthesises two accepted methods of analysis: Grounded Theory (Glaser and Strauss 1967) and Case Study (Yin 2009). Grounded theory “is an inductive, theory discovery methodology that allows the researcher to develop a theoretical account of the general features of a topic while simultaneously grounding the account in empirical observations or data” (Martin and Turner 1986, 141). Grounded theory provides a detailed, rigorous and systematic method of analysis, which has the advantage of reserving the need for the researcher to conceive preliminary hypotheses, thus providing greater freedom to explore the research area and allow issues to emerge (Glaser 1978; Glaser 1992; Glaser 1998; Glaser 2001; Bryant 2002). As a consequence, grounded theory is useful in providing rigorous insight into areas which are relatively unknown by the researcher. The benefits offered by grounded theory include the method‟s capacity to interpret complex phenomena, its accommodation of social issues, its appropriateness for socially constructed 6

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experiences, its imperative for emergence, its absence from the constraints of a priori knowledge, and finally, the method‟s ability to fit with different types of researchers. Although grounded theorists emphasise the importance of an inductive approach (see for example the seminal work of Glaser and Strauss 1967), it is generally accepted that no researcher goes into the field totally devoid of a priori experiences (Goulding 2005). This paper does not purport to adopt grounded theory as it is proposed by Glaser and Strauss, rather, for reasons of necessity, purposive sampling has been adopted, in place of the grounded theory approach to select participants progressively through „theoretical sampling‟ (Glaser 1978; Suddaby 2006). The middle ground approach taken by Glaser and Strauss (1967) between the extremes of rigid positivism and the post-modern approach of constructivism, best describes the ontological and epistemological philosophies of this study. Postpositivism is a term that also appears to amalgamate the belief that an external reality exists which can be discovered (“valid belief”) and the belief that “knowledge is inherently embedded in historically specific paradigms and is therefore relative rather than absolute” (Patton 2002, pp. 92-93, italics in original). The inescapable influence of hermeneutics is also acknowledged, in that all analysis and meaning generated from, for example, interviews, is interpretive in the sense that different people from different backgrounds, and/or using different methods but using the same texts, would arrive at different meanings. This influence occurs even when following the more positivistic stance of case study researchers such as Yin (2009). A case study is “an empirical enquiry that investigates a contemporary phenomenon within its real-life context; when the boundaries between phenomenon and context are not clearly evident; and in which multiple sources of evidence are used” (Yin 1989, 23). Case studies allow the researcher an opportunity of explaining the causal links in real-life interventions that would be too complex for surveys or experimental strategies (Yin 1989, 25). The method is most appropriate when there is a desire to find broad definition, rather than narrow discovery (Yin 1993). Case study research is primarily about particularisation. When responses or issues link across multiple cases, as opposed to a single case, generalisations can be drawn: “valid modification of generalization can occur in case study” (Stake 1995, 8). In terms of interpretation of data, Stake (1995) asks whether it is the researcher‟s or the respondents‟ interpretation that is being reported, although it is accepted that it is the qualitative researcher‟s interpretation that takes precedence, with the importance of maintaining „multiple realities‟ being emphasised. Continual and “progressive focusing” is recognised in that “initial research questions may be modified or even replaced in mid-study by the case researcher”, as initial observations lead to renewed inquiry and further explanation (Stake 1995, p. 9). Researchers draw their own conclusions from observations and other data. These in turn lead to assertions, which lead to speculation or theory. The process of case study research can be intrinsic (we need to learn about a particular case), and/or instrumental (when we have a research question and we need to gain a general understanding). When several cases are studied, each case might be instrumental in terms of learning about, for example, the effects of regulations on the gaming industry and therefore the coordination between the different cases. This research might therefore be referred to as a “collective case study‟. Data were collected through these combined methods, and while analysis was undertaken using NVivo, the analysis was guided by these methods. Thirty-eight in-depth interviews were undertaken with gaming operators and gaming machine manufacturers in both the Nevada (USA) and NSW (Australian) jurisdictions during 2005-2006. Interview data were augmented through observation, resulting in a rich 7

The Efficacy of Utilising NVivo for Interview Data from the Electronic Gaming Industry in Two Jurisdictions

collection of data. The data were coded and initially entered into „nodes‟ within the NVivo program. A pre-defined set of themes was derived from topic areas of the interviews. Each theme then became a node. As each interview was read, additional themes were identified and nodes created for each theme. The nodes were fleshed out as data were extracted from each interview referring to the same theme. Thus a range of themes was created as a result of going through the data and coding according to themes within each transcript. Once all data had been placed into various nodes, themes were checked through the matrix function within NVivo to ensure that the various themes were distinct from each other and that there was no redundancy. Further analysis of emerging themes resulted in a conceptual model. This is discussed in the next section.

ANALYSIS AND FINDINGS A conceptual model which integrates analysed data from the interviews and observations with related literature is exhibited in Figure 1. This model postulates the theoretical finding that in order to be viewed as legitimate, EGM operators need to ensure that: a) socially responsible programs are implemented throughout their businesses, (b) they adhere to the law, and (c) they satisfy a range of stakeholder expectations (or at least come to some mutually acceptable compromises). Further, in order to be considered socially responsible, firms are expected to act beyond economic imperatives and legal requirements, by adopting ethical programs and voluntarily donating a percentage of their profits to charitable causes (refer to Carroll‟s 1991 CSR Pyramid). As can be seen in Figure 1 below, a number of stakeholders have been identified, with media influence on government policies being one example of their importance. Gambling issues in turn influence community, media and government perceptions of social responsibility, such as whether technological advances of EGMs with their flashing lights and seductive sounds leads to increased enticement/inducement for the player. A number of respondents stated that their patrons preferred EGMs with higher volatility and many stated that a higher return to player (RTP) certainly adds to the appeal. Controversy exists as to whether EGM expenditure should be viewed as part of the larger social issue of problem gambling, or whether it can be legitimately viewed as entertainment for the majority of people who enjoy EGM play without any associated addiction or resultant problems. Certainly the vast majority of academic literature and media stories (the latter at least in NSW) focus on issues of problem gambling. Observation in Las Vegas however highlighted to one of the researchers that a number of EGM players appeared to be enjoying the process as a form of entertainment, with one patron in a wheel chair who otherwise might be socially isolated or at least perhaps have less opportunities to go out and be involved in a wider socially constructed environment. Although evidence points to the majority of EGM profits being derived from at risk and/or problem gamblers (Livingstone and Woolley 2007, Symond 2007), as an overall indication showing perhaps the predominance of adults who enjoy EGM play without any reported problems is the Productivity Commission report (1999), stating that approximately 2% of the adult population in Australia exhibit symptoms of at risk or problem gambling. One could argue therefore, based on these statistics, that the majority of adults (98%) can enjoy EGM play as a form of entertainment, similar to other forms of entertainment expenditure such as going to a concert, show, nightclubbing etc. Because of a higher risk of addiction to EGM play than to many other forms of entertainment, however, EGM operators need to ensure socially responsible policies, processes and practices are an integral part of their organisation.

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A number of factors were also conceptualised which highlighted the importance of legitimacy in the gaming industry. One such concept is the influence of historical roots: New South Wales, like Nevada, owes its gambling origins to criminal involvement (for example, Mafia chiefs such as Meyer Lansky and Bugsy Siegel were major investors in Las Vegas casinos and hotels). The 1973 Moffitt Royal Commission of Inquiry into Organised Crime in Licensed Clubs in New South Wales found a significant risk from criminal elements (Kirby 2007). Part of the evidence put forward during this Royal Commission stated that Bally Australia was “alleged to have used intimidation and bribery to convince registered clubs in NSW to buy Bally poker machines” (Kretschmar 2004). In 1966 Nevada gained its respectability largely due to Howard Hughes, with his buying of casinos and large tracts of land in Nevada (Kilby et al. 2005) and also to the corporatisation of casinos. Unlike their counterparts in NSW, the press in Nevada rarely focuses on the negative aspects of gaming activities, with one respondent attributing this to the fact that there are many more murders to report on than there are in NSW! The NSW gaming industry is considered to operate in the most heavily regulated jurisdiction in the world. Certainly, the introduction of the Registered Clubs Act in 1976, the Casino Control Act in 1992, the Responsible Gambling Act of 1999 and the Gaming Machines Act of 2001 has meant that NSW EGM operators have far less opportunity to practice voluntary socially responsible activities than their largely self-regulated counterparts in Nevada. That being said, however, our analysis of the interviews, along with official published government documents and the media, found that, overall, gaming operators in Nevada appear to be much more aware of, and to implement, socially responsible activities than do many operators in NSW. Regardless of the current situation, it could be argued that organisations that have their genesis in criminal associations, such as the gambling industry, have a substantially more difficult time in terms of gaining legitimacy in the eyes of its stakeholders, than do organisations without such illegal connections.

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The Efficacy of Utilising NVivo for Interview Data from the Electronic Gaming Industry in Two Jurisdictions

Figure 1: Conceptual Model

In spite of identified differences between the Nevada and New South Wales jurisdictions, the conceptual model (Figure 1) can be applied to both. The main issues, which were then developed into the nodes that collectively form the conceptual model, were gleaned from interviews, observations and the literature from both jurisdictions. Although the nodes/issues apply to both markets and possibly to other jurisdictions, it is postulated that the degree to which they are an important influence varies from market to market.

DISCUSSION Using NVivo to facilitate organisation of the data has been extremely beneficial in this study. Patterns and themes were more easily identified and different categories and nodes were developed as part of the process of analysing the data. Memo links proved a valuable aid in recording insights gained from the data. To illustrate, the following excerpt from the „CSR – ethical‟ node (based on Carroll‟s (1991) four components of the CSR Pyramid, namely economic, legal, ethical and discretionary/philanthropic – see Figure 1) notes under the „Memo Links‟ feature is provided: 1) Hotels focus a lot on being popular with the NSW Government. They throw lots of money at the Government (political donations). 10

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This statement indicates what could be considered an unethical approach. Political donations are very much driven by 'self-interest'. This perhaps satisfies the 'economic' component of CSR (see Figure 1) in the sense that pubs (and clubs), through political donations and lobbying, are seeking to 'protect their turf' - i.e. profits. Given that political donations and political lobbying are not illegal, the 'legal' component of CSR (see Figure 1) is also met. But it would appear that, in spite of both components being met, these actions (political donations and lobbying) are a long way from being ethical. Another memo excerpt that describes the researcher‟s impression of one of the luxury casinos on the Las Vegas Strip: Wynn had just been opened a few weeks prior to this interview. Its decor is sumptuous - top label retail shops, a number of 5 star restaurants, fine art throughout the casino, impressive gardens and a small lake, and extravagant yet tasteful decor. The gaming and other staff wore 'tasteful' uniforms, with none of the short dresses, low necklines and high heels associated with many of the other casinos. Wynn also has a helipad and separate entrances for its exclusive bedroom suites in order to offer discretion and anonymity for those guests so requiring it. It is the latest casino developed by Steve Wynn. His other casino, Bellagio, is also opulent. This memo extract illustrates the „Inducement‟ component of our conceptual model. Patrons may be enticed to stay and gamble longer in premises that: (i) have alluring staff, (ii) offer complimentary beverages and/or (iii) have luxurious surroundings Electronic storage of the interview transcripts allows ready access to anecdotal statements which provide empirical support for theoretical emergence and conceptualisation. For example, a number of respondents, in relating to the NSW context, expressed their strong opinion that EGMs should only be allowed in registered clubs, not pubs or bars. A probable explanation for this is that, ostensibly at least, NSW Registered Clubs operate on a „community‟, not-for-profit mandate, whereas many bars in NSW are privately owned, with much media reporting of publicans being made „overnight‟ millionaires as a result of the legal introduction of EGMs into pubs in 1997.

POSSIBLE LIMITATIONS AND BIASES Many quantitative methods in marketing adopt convenience sampling. Authors such as Patton (2002) argue that, unlike qualitative methods such as case study research which are purposeful, strategic and “can yield crucial information about critical cases…., [c]onvenience sampling is neither purposeful nor strategic” (p. 242). It is recognised however that “[q]ualitative inquiry is rife with ambiguities” (ibid, p. 242) and one of the challenges for qualitative researchers to is to have a high degree of tolerance with this aspect. Whilst it is acknowledged that triangulation ideally uses a combination of qualitative and quantitative data, the interview data for our study was supplemented by observational data, thus satisfying one form of triangulation. It is considered highly unlikely that one of the limitations of observational data, being that of the observer affecting the observed‟s behaviour, occurred due to the fact that the researcher did not intrude into people‟s „space‟. A further limitation cannot be overlooked however, in that “the selective perception of the observer may distort the data” (ibid, p. 306). In order to minimise this limitation, interview data were also examined by the other researcher. Patton (2002) lists a number of “[i]nterview data limitations [which] include possibly distorted responses due to personal bias, anger, anxiety, politics, and simple lack of awareness since interviews can be greatly affected by the emotional state of the interviewee at the time of the interview. Interview data are also subject to 11

The Efficacy of Utilising NVivo for Interview Data from the Electronic Gaming Industry in Two Jurisdictions

recall error, reactivity of the interviewee to the interviewer, and self-serving responses” (p. 306). Two important factors serve to minimise these limitations, in that the interviewer used the same list of nine topics for each interviewee and, as an „outsider‟, was not aware of any organisational politics at play. Furthermore, the researcher can emphatically emphasise that no „anger‟ or „anxiety‟ was present before, during or after the interviews. Recall error was minimised through the use of detailed and rigorous note-taking. Further, the researcher does not consider any biases existed prior to, or during the interviews, in relation to a preference for a „pro‟ or „anti‟ gambling stance.

CONCLUSION This paper has developed an empirical exploration of the ethical issues of EGMs in two ways. Firstly, we have developed a grounded theoretical model which addresses the concerns of gambling operators and other stakeholders such as the government, media, NGOs and community groups with regard to the ethical and societal issues surrounding electronic gambling. Legitimacy theory relates to the fact that organisations affect and are in turn affected by, the societies within which they operate, whereby a „social contract‟ is developed. This social contract is largely non-controversial when the values of the organisation are aligned with the values of society. This would appear not to be the case with gaming operators and the societies within they operate, perhaps particularly so in NSW. Further, we have postulated that industries which have their genesis in organised crime have a substantially more difficult time gaining legitimacy in the eyes of their stakeholders. Secondly, and most importantly, we provide insight into the use of NVivo for analysing social and societal marketing. It is hoped that this paper may lead researchers who are involved in this field of research to adopt similar practices with computer assisted analysis.

REFERENCES Aguilera, R., D. Rupp, C. Williams and J. Ganapathi: 2007, “Putting the S Back in Corporate Social Responsibility: A Multilevel Theory of Social Change in Organizations”, Academy of Management Review 32(3), 836-863 Basit, T. N. (2003). "Manual or Electronic? The role of coding in qualitative data analysis." Educational Research 45(2): 143-154. Bazeley, P. (2007). Qualitative data analysis with NVivo. Los Angeles Sage Publications. Berg, B. L. (2001). Qualitative Research Methods for the Social Sciences. Boston, Allyn and Bacon. Black, L. and C. Hartel: 2004, “The Five Capabilities of Socially Responsible Companies”, Journal of Public Affairs 4(2), 125-144 Blaszczynski, A., R. Ladouceur and H. Shaffer: 2004, “A Science-Based Framework for Responsible Gambling: The Reno Model”, Journal of Gambling Studies 20(3), 301-317 Blismas, N. G. and A. R. J. Dainty (2003). "Computer-aided qualitative data analysis:Panacea or paradox?" Building Research & Information 31(6): 455-463. Bourdon, S. (2002). "The Integration of Qualitative Data Analysis Software in Research Strategies: Resistances and Possibilities." Forum: Qualitative Social Research 3(2): 1-10. Branco, M. and L. Rodrigues: 2007, “Positioning Stakeholder Theory within the Debate on Corporate Social Responsibility”, Electronic Journal of Business Ethics and Organization Studies 12(1), 5-15 Breen, H: 2005, “Assessing the Information Needs of Australian Gaming Managers”, UNLV Gaming Research & Review Journal 9(2), 29-43 Brinkerhoff, D. (2005). Organisational Legitimacy, Capacity and Capacity Development, Discussion Paper No. 58A RTI Internal U.S.A.

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Bringer, J. D., L. H. Johnston, C. Brackenridge. (2006). "Using Computer-Assisted Qualitative Data Analysis Software to Develop a Grounded Theory Project." Field Methods 18(3): 245-266. Bryant, A. (2002). "Re-grounding grounded theory." JITTA : Journal of Information Technology Theory and Application 4(1): 25. Buchanan, J., Elliott, G. and Johnson, L. (2009) "The Marketing of Legal but Potentially Harmful Products and Corporate Social Responsibility: The Gaming Industry View", The International Journal of Interdisciplinary Social Sciences 4(2) : 81-97 Carroll, A.: 1991, “The Pyramid of Corporate Social Responsibility: Toward the Moral Management of Organizational Stakeholders (balancing economic, legal and social responsibilities)”, Business Horizons, July-August 34(4), 39-49 Coffey, A. and P. Atkinson (1996). Making Sense of Qualitative Data. London, Sage. Crowley, C., R. Harré , C. Tagg. (2002). "Qualitative Research and Computing: Methodological issues and practices in using NVivo and NUD*IST." International Journal of Social Research Methodology 5(3): 193-197. Delamont, S. (1992). Fieldwork in Educational Settings: Methods, Pitfalls and Perspectives. London, Falmer Press. DeNardo, A. M. and L. L. Levers. (19th November, 2002). "Using NVivo to Analyze Qualitative Data." Retrieved 15th August, 2005 from http://www.education.duq.edu/institutes/PDF/papers2002/De Nardo&Levers.pdf. Denzin, N. K. and Y. S. Lincoln (1998). Strategies of Qualitative Inquiry. Thousand Oaks, CA, Sage. Dowling, J. and Pfeffer, J. (1975). “Organizational Legitimacy: Social Values and Organizational Behavior”. The Pacific Sociological Review 18(1): 122-136 Ely, M., M. Anzul, T. Friedman, D. Garner, A. Steinmetz (1991). Doing Qualitative Research: Circles within Circles. London, Falmer Press. Glaser, B. G. (1978). Theoretical Sensitivity: Advances in the Methodology of Grounded Theory. Mill Valley, CA, Sociology Press. Glaser, B. G. (1992). Basics of Grounded Theory Analysis. Mill Valley, CA, Sociology Press. Glaser, B. G. (1998). Doing Grounded Theory. Issues and Discussions. Mill Valley, CA, Sociology Press. Glaser, B. G. (2001). The Grounded Theory Perspective: Conceptualization Contrasted with Description. Mill Valley, CA, Sociology Press. Glaser, B. G. and A. Strauss (1967). The Discovery of Grounded Theory: Strategies for Qualitative Research. New York, Aldine. Goulding, C. (2005). “Grounded Theory, Ethnography and Phenomenology: A Comparative Analysis of Three Qualitative Strategies for Marketing Research” European Journal of Marketing 39 (3/4): 294308 Hemmingway, C. and P. Maclagan: 2004, “Managers‟ Personal Values as Drivers of Corporate Social Responsibility”, Journal of Business Ethics 50(1), 33-44 Hoque, Z. (2005), “Securing Institutional Legitmacy or Organizational Effectiveness?” International Journal of Public Sector Management 18(4): 367-382 Jones, M. (2005). The Use of Qualitative Analysis Software with Grounded Theory. QRC05, Johor Bharu, Malaysia. Jones, M. (2007). "Using Software to Analyse Qualitative Data." Malaysian Journal of Qualitative Research 1(1): 64-76. Kilby, J. Fox, J. and Lucas. A. (2005). Casino Operations Management. 2nd edition, John Wiley and Sons, Inc. U.S.A.

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Kirby, M. (2007). “OBITUARY - The Hon Athol Randolph Moffitt, CMG, OAM, QC” Australian Law Journal: http://www.hcourt.gov.au/speeches/kirbyj/kirbyj_jun07.pdf Kotler, P., S. Adam, L. Brown, G. Armstrong: 2001, Principles of Marketing, Prentice Hall, Pearson Education Australia Kretschmar, K. (2004) “Poker machine, 'Ballyhoo', Bally Manufacturing Company” http://www.powerhousemuseum.com/collection/database/?irn=348738 Krueger, R. A. (1998). Analyzing and Reporting Focus Group Results. Thousand Oaks, CA, Sage. Livingstone, C. and R. Woolley (2007), “Risky business: A Few Provocations on the Regulation of Electronic Gaming Machines”, International Gambling Studies 7(3): 361-376 Maignan, I., O.C. Ferrell and L. Ferrell: 2005, “A Stakeholder Model for Implementing Social Responsibility in Marketing”, European Journal of Marketing 39(9/10), 956-977 Martin, P. Y. and B. A. Turner (1986). "Grounded Theory and Organizational Research." The Journal of Applied Behavioral Science 22(2): 141-157. Merriam, S. B. (2001). Qualitative Research and Case Study Applications in Education. San Francisco, Jossey-Bass. Miles, M. B. (1979). "Qualitative data as an attractive nuisance: the problem of analysis." Administrative Science Quarterly 24: 590–601. Miles, M. B. and A. M. Huberman (1994). Qualitative Data Analysis: An Expanded Sourcebook. Thousand Oaks, Sage. Miles, M., L. Munilla and J. Darroch: 2006, “The Role of Strategic Conversations with Stakeholders in the Formation of Corporate Social Responsibility Strategy”, Journal of Business Ethics 69(2), 195205 Mitchell, R., B. Agle and D. Wood: 1997, “Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts”, Academy of Management Review 22(4), 853-886 Moore, N.G.: 1999, “Ethics: The Way to Do Business - The Sears Lectureship in Business Ethics at Bentley College”, Business and Society Review 104(3), 305-309 Morse, J. M. and L. Richards (2002). Readme First. Thousand Oaks, CA, Sage. Patten, D. (1991). “Exposure, Legitimacy, and Social Disclosure”, Journal of Accounting and Public Policy, 10: 297-308 Patton, M. Q. (2002). Qualitative Research and Evaluation Methods. Thousand Oaks, CA, Sage. Polonsky, M., L. Carlson and M. Fry: 2003, “The Harm Chain: A Public Policy Development and Stakeholder Perspective”, Marketing Theory 3(3), 345-364 Productivity Commission (1999), "Australia's Gambling Industries," Peter Costello, Federal Treasurer. Richards, T. (2002). "An intellectual history of NUD*IST and NVivo." International Journal of Social Research Methodology 5(3): 199-214. Rundle-Thiele, S. R., K. Ball and M. Gillespie: 2008, “Raising the Bar: From Corporate Social Responsibility to Corporate Social Performance”, Journal of Consumer Marketing 25(4), 245-253 Silverman, D. (2001). Doing Qualitative Research: A practical handbook. Thousand Oaks, CA, Sage. Stake, R. E. (1995). The Art of Case Study Research, Sage Publications, USA Suddaby, R. (2006). "From the Editors: What Grounded Theory is Not." Academy of Management Journal 49(4): 633-642. Suchman, M. (1995), “Managing Legitimacy: Strategic and Institutional Approaches”, Academy of Management Review 20(3): 571-610 Symond, P. (2007), Principal of Betsafe www.betsafe.com.au and author of „How to Stop Gambling‟ (2003), Bantam Books. Information obtained through personal communication (email on 16 November 2007) 14

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Tesch, R. (1990). Qualitative Research: Analysis types and software tools. New York, Falmer Press. Welsh, E. (2002). "Dealing with Data: Using NVivo in the Qualitative Data Analysis Process." Forum: Qualitative Social Research 3(2): 1-7. Wong, L. P. (2008). "Data Analysis in Qualitative Research: a Brief Guide to Using Nvivo." Malaysian Family Physician 3(1). Yin, R. K. (1989). Case Study Research - Design and Methods. Newbury Park, CA, Sage. Yin, R. K. (1993). Applications of Case Study Research. Newbury Park, CA, Sage. Yin, R. K. (2009). Case Study Research: Design and Methods, Fourth Edition, Sage Publications Applied Social Research Methods Series Vol. 5, USA

15

Managing Diversity from a Strategic Perspective: A Competing Values Approach

MANAGING DIVERSITY FROM A STRATEGIC PERSPECTIVE: A COMPETING VALUES APPROACH

Francis Daniel1 and Kenneth Zantow2 Tennessee State University1, USA and University of Southern Mississippi2, USA ABSTRACT The present study argues that the failure to realize gains from managing diversity stem from a basic misunderstanding of the nature of diversity itself, primarily the view that it is both inevitable and inherently good. Once freed of these assumptions, managers can begin to truly manage diversity from a strategic perspective, insuring that their diversity strategy is consistent with other aspects of their competitive strategy, culture, and structure. The Competing Values Approach (CVA) is suggested as a model that ties this new perspective to other organizational imperatives. The resulting model identifies four strategic approaches to managing diversity, Valuing, Exploiting, Reducing, and Rejecting. This model encourages management to answer the crucial question of why diversity is being introduced or increased in the organization. Different reasons reflect different goals, which should in turn lead to different managerial expectations. Realistically matching expectations to diversity strategies will go a long way in reducing the frustrations and disappointments with Managing Diversity programs in use today. Keywords: Managing Diversity, Strategic Management, Competing Values Approach

INTRODUCTION It has long been thought that diversity is both inevitable and inherently good (Knouse and Stewart, 2003). Considered inevitable because of the predicted demographic shift toward gender and ethnic heterogeneity in the makeup of the United States workforce predicted in the Workforce 2000 report (Johnston, 1987), and good because of both social and economic benefits (Cox, 1994; Gudmundson and Hartenian, 2000; Hansen, 2003; Robinson and Dechant, 1997), the dual assumptions have resulted in a relatively homogeneous approach to diversity management that seeks to value (accentuate, celebrate, and accommodate) differences in an effort to free the “whole person” to contribute to the organization. At the same time, traditional workers (in this case, white American men) have to be acclimated to the sometimes drastic change in organizational culture. Johnston‟s Workforce 2000 (1987) was accurate on trajectory, but a little ambitious on the speed of demographic changes in the American workforce. The number of non-traditional workers has in fact increased over the past 20 years, but white males still make up 45% of the country‟s workforce (white females represent an additional 37%) and almost twice that percentage of top management (Bureau of Labor Statistics, 2009). In many geographic areas of the U.S., the population is decidedly homogeneous, a situation exacerbated by white flight from America‟s urban areas. While the social value of diversity is not disputed here, the economic value, its contribution to the organization‟s bottom line certainly can be. Most of the evidence for diversity‟s economic good has been artificial (laboratory studies) (Cunningham, 2006) or anecdotal, as most organizations have been unable or unwilling to measure the actual impact 16

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of diversity programs. The few studies that have been done in real companies on the diversityperformance relationship have found very mixed (positive, negative, and no) results (Kochan et al., 2002; Pitts, 2009; Richard, 2000). If the assumptions are not always true, then examining when diversity will occur and when it has value may be helpful in creating multiple responses for addressing these particular situations. In this paper, we construct a Competing Values Approach (CVA) framework to examine issues related to the inevitability and the value of diversity, specifically individuality (flexibility) versus uniformity (control), internal versus external focus, and long term versus short term perspective. The use of CVA provides a common frame of reference within which the degree of fit between the organization‟s approach to diversity and its strategy, structure, and culture can be investigated. We then suggest a model for the strategic management of diversity and make suggestions for future research. Lastly, we will discuss the practical implications of our model. It is important to note that while the main impetus for and predominant subject of diversity programs and studies has been race and gender diversity, “diversity” in the present discussion is not limited to these demographic attributes. Indeed, diversity like beauty is in the eye of the beholder and will be defined differently by each organization. As discussed later, this definition will also evolve over time. For the purposes of this paper, we adopt Friday and Friday‟s (2003) definition of diversity as, “any attribute that happens to be salient to an individual that makes him/her perceive that he/she is different from another individual” and more generally, “any type of organizational diversity salient to members” (p. 863). As such, diversity is defined simultaneously by the organization and its individual members. Ethnicity, age, education, sexual preference, religion, political affiliation, and nationality have all been used as differentiating factors by individuals, organizations and academics, alike (Jackson, Joshi, and Erhardt, 2003). Likewise, the challenges and opportunities represented by organizational diversity are not limited to the United States. The globalization of business, along with shifts of populations and politics around the world have long since made managing diversity an international imperative (Aoun, 2007; Johns and Green, 2009: Schwabenland and Tomlinson, 2008

THE COMPETING VALUES APPROACH The diversity strategy chosen, the determination of types and levels of diversity desirable/acceptable to the organization and how best to achieve and maintain those (types and levels), must also be consistent with other strategic considerations (Ng, 2008; Panayotopoulou, Bourantas, and Papalexandris, 2003; Richard, 2000; Richard et. al, 2003). The strategy chosen will be determined to no small degree by the resources available to an organization and the systems in place to best utilize those resources. The internal characteristics of an organization, its structure and culture, will help to determine, and indeed must be consistent with, the overall competitive strategy of the organization. They must be managed strategically to insure that the different aspects work in concert towards the achievement of organizational goals and objectives. Human resources must be strategically managed, as well. Given the interdependent nature of the strategy, culture, and diversity aspects of an organization, it would be helpful to be able to conceptualize these constructs simply and simultaneously. This would provide top management with some guidance in determining which diversity strategies are feasible given the other aspects. The Competing Values Approach (Quinn, 1988) captures important dimensions common to strategy, structure, culture, and diversity.

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Managing Diversity from a Strategic Perspective: A Competing Values Approach

Competing Values Approach Matrix The Competing Values Approach distinguishes three important and conflicting dimensions of organizations. One dimension reflects the differing collective preferences, or organizational orientation toward control. In Quinn‟s (1988) model, the vertical axis represents the continuum between desire for flexibility at one end and desire for control at the other. The second dimension (horizontal axis) is organizational focus, whether a company has an external, market-oriented focus or internal, companyoriented focus. The final dimension involves the organization‟s long- versus short-term view of time. This dimension is also interpreted as preference for ends (ultimate goals) versus means (process) (Reagan & Rohrbaugh, 1990). All three of these dimensions are present in every organization. The combination of the first two dimensions (control and focus) results in the creation of four generic quadrants: 1) flexible, externally oriented, 2) controlled, externally oriented, 3) controlled, internally oriented, and 4) flexible, internally oriented. The means-ends dimension is reflected in each quadrant, since each is concerned with both process and outcome effectiveness (Reagan and Rohrbaugh, 1990). Because of the universality of the control-flexibility and internal-external dimensions, the resultant fourquadrant model is used to investigate a wide variety of questions. Reagan and Rohrbaugh (1990) utilize the CVA approach to develop a multi-criteria instrument to evaluate the effectiveness of group decision making processes. Each of the four quadrants represents a unique model, or set of criteria for organizational analysis (open system, rational goal, internal process, and human relations). The oftcited Hooijberg and Petrock (1993) used CVA to explore organizational culture, identifying four unique value sets (Adhocracy, Market, Hierarchy, and Clan) and developing instruments to map an organization‟s position within the matrix. More recently, the competing values framework was used to identify and investigate various strategic human resource management approaches and their relationship to firm performance (Panayotopoulou, Bourantas, and Papalexandris, 2003), the spatial relationships of managerial roles (Vilkinas and Cartan, 2006), leadership roles (Belasen and Frank, 2008), and service strategies for senior care (Page, Beatty, and Pavlik, 2008).

Competing Values Approach for Determining Diversity Strategy In Figure 1 we have adapted the CVA to the issue of diversity. If individuality is substituted for flexibility and conformity for control, the (vertical) dimension seems to capture the crux of the diversity question. Most discussions in the literature of strategies for managing diversity would fit quite comfortably in this single dimension, using only a two-quadrant model that begs the question, “Diversity, or not diversity?” In fact, given the assumptions discussed earlier – that diversity is inevitable and inherently good – a rational manager is left with but one strategic choice. This might explain the homogeneity of prescriptions traditionally offered to businesses by consultants and academics (Naff and Kellough, 2003). It is the competing values framework‟s two additional dimensions, internal-external focus and endsmeans (time) that offer important conceptual contributions to the modeling of the strategic management of diversity. In Hooijberg and Petrock‟s (1993) CVA-driven process for cultural change, a crucial step involves assessing the expectations of the organization‟s leaders or leadership team regarding what benefits they expect to gain in transforming their organization‟s existing culture. In a world where diversity is inevitable and good, the internal/external focus dimension speaks to the question, “Good for what?” For an organization with an internal focus, recognizing and valuing uniqueness is good for the morale and satisfaction of the employees. With the internal focus, consideration of the potential competitive advantage offered by increased diversity is not an imperative. For an organization with an 18

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external focus, competitive advantage is the first consideration. Diversity, unique skills and perspectives, is good when it contributes to winning in the marketplace. The introduction of the focus dimension identifies two different sets of assumption about the benefits of diversity, two different sets of goals, and two different sets of action steps needed to realize those goals. In other words, two unique strategies for managing diversity are identified. Part of the lack of efficacy in the ability of some “Managing Diversity” and “Valuing Diversity” programs to improve a company‟s bottom line may be due to their decidedly internal focus (creating a comfortable, open working environment). This contrasts and often conflicts with management‟s externally focused (competitive) expectations. Indeed, research suggests that it is the failure of these diversity programs to consider market conditions and resultant organizational strategies that rob these programs of their effectiveness (defined as the ability to positively impact company performance) (Richard, 2000; Richard et. al, 2003). INDIVIDUALITY

VALUE DIVERSITY

EXPLOIT DIVERSITY

Decentralized Structure

Short Term: Outsource Long Term: Develop

Short Term: Modify Behavior

INTERNAL FOCUS

Value And Development Of Human Resources

Growth Resource Acquisition External Support

Stability

Productivity

Equilibrium

Efficiency

Short Term: Ignore Long Term: Remove

Competitiveness

Harmony

Long Term: Modify Attitude

EXTERNAL FOCUS

Short Term: Segregate Long Term: Assimilate Centralized Structure REJECT DIVERSITY

REDUCE DIVERSITY

CONFORMITY

Figure 1: Competing Value Approach to Diversity If diversity is assumed to be inevitable, but NOT inherently or necessarily good (beneficial) as Williams and O‟Reilly (1998) suggests, it is incumbent upon management to determine what diversity (type and level) is useful, or at least acceptable to an organization, and what diversity is not. Diversity (or at least, its effects) deemed inappropriate or unhelpful must be minimized, or brought within acceptable tolerances. For example, an organization that sees conformity as an important part of its competitive strategy must have a diversity strategy that emphasizes the promotion of conformity and reduction of individuality in those areas critical to its external market. Service franchises like McDonald‟s or Disney theme parks understand that customers expect consistency in product, service (and characters) across time and distance. Additionally, companies competing on efficiency would be inclined to eliminate unnecessary diversity and its costs altogether.

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Managing Diversity from a Strategic Perspective: A Competing Values Approach

The assumptive situation described to this point (diversity inevitable, but not necessarily good) suggests a three quadrant, three strategy model for responding to diversity. The upper left quadrant represents organizations that choose to embrace diversity as a means of increasing internal harmony and employee satisfaction by celebrating uniqueness (Value Diversity). Companies in the upper right quadrant embrace those aspects of diversity that lead to competitive advantage (Exploit Diversity). Companies that populate the lower right quadrant seek to reduce the impact of externally-generated diversity by either eliminating or assimilating it. If freed from the inevitability assumption, however, these responses become choices and correspond to the reasons for choosing diversity discussed earlier. A company that values conformity would choose to increase diversity only in situation where its supply of more traditional workers is insufficient. A company that sees diversity as a competitive tool will aggressively seek out only that diversity that enhances its competitive position. For a company concerned with worker enrichment, the choice to increase or embrace diversity is a statement of values. This company chooses to recognize and/or encourage certain types of differences consistent with the organization‟s vision of what it is or what it hopes to be. Disavowing the inevitability of increased diversity suggests a fourth quadrant and strategy for the management of diversity. If diversity is a choice, an organization with an internal focus and a preference for conformity (lower left quadrant) could choose to simply ignore or reject it. Like the “Value Diversity” organizations, the focus of these organizations is primarily their inner workings and climate. They differ in that they view conformity, not understanding as the path to peace and stability. In these organizations, any potentially divisive differences – political, religious, cultural, etc. – are either rejected outright or “checked at the door.” The avoidance of diversity to maintain organizational morale and stability is also a statement of values. Unlike those in the “Value Diversity” quadrant, these companies value the perceived needs of the group over the needs of the individual. Isolated by an internal focus and lack of external imperative, these organizations view increased diversity as an unnecessary evil and strategically choose to “Reject Diversity.” At first blush, the idea that an organization would (or could) reject diversity sounds almost ridiculous in today‟s socio-political climate. However, the U.S. military‟s “don‟t ask, don‟t tell” policies, as well as the Boy Scouts of America‟s successful fight to exclude homosexual leaders, are just two of many examples of organizations doing just that. Whether or not you agree with their positions, this clearly represents a strategic choice for managing diversity. There is no room for such choices in the current paradigm of managing diversity. We suggest that this paradigm needs to be broadened; that managers need strategic alternatives to the one size fits all approach that dominates current thinking of managing diversity programs. The resulting four-quadrant model of the strategic management of diversity (See Figure 1) identifies four strategies for managing diversity, Valuing, Exploiting, Reducing, and Rejecting. The model highlights the importance of assumptions, reasons and expectations in dealing with the diversity issue. An organization‟s assumptions about diversity will define its available strategic options. The model also forces management to answer crucial questions of why diversity is being introduced or increased in the organization. Different reasons reflect different goals, which should in turn lead to different managerial expectations. Realistically matching expectations to strategies will go a long way in reducing the frustrations and disappointments with managing diversity programs in use today. The time dimension, present in all quadrants, will affect the manner in which an organization implements its chosen diversity strategy. An organization with a short term or “ends” focus may, in 20

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choosing an Exploit strategy, see outsourcing as a legitimate approach to meeting an immediate competitive requirement. Corporations that utilize minority marketing firms to reach corresponding minority markets are an example of this type of outsourcing. An Exploiting strategy with a long-term or process focus, might lead to the actual acquisition or development of diverse human resources as a hedge against possible or recognized future needs. The time dimension is particularly crucial to the Value strategy. Developing an appreciation for diversity where it does not already exist, attempting to convince employees of its „rightness‟ is a very long undertaking. Companies utilizing this strategy should concentrate on developing systems and processes that encourage short term behavioral compliance while they work on changing attitudes (or personnel) in the long term (Liff, 1997). For organizations looking for immediate results, economic or otherwise, from a two-day diversity intervention, the Value strategy will prove a decided disappointment.

Diversity Strategies in Action The goal of this article is to provide a CVA framework that illustrates how different organizations might appropriately approach diversity depending on their focus (internal/external) and value preferences (individuality/conformity). Implicit in this argument is that the diversity strategy a company pursues should „fit‟ the quadrant that a company rightly exists in, from a strategic, cultural and structural standpoint. Failure to maintain this fit could lead to suboptimal performance (as defined by the company) of its diversity management initiatives. One of the main benefits of the CVA framework is that it allows companies to “map” their competitive strategy, culture, structure, and diversity strategy simultaneously inasmuch as all have been described using variations of the same competing values. Lack of considerable overlap, therefore, should raise serious concerns about the efficacy and viability of all four. It is rare that the boundaries of an organization‟s cultural or structural map fall completely within one quadrant, representing a pure form. Organizational culture and structure encompass numerous, simultaneous compromises of competing values (flexibility/control, internal/external) manifesting ragged edges that spill to various degrees over quadrant boundaries. One should expect similar approaches to managing diversity strategies. It is possible that organizations use hybrid strategies, encouraging some types of diversity while at the same time rejecting others. The military, whose policy towards homosexuals (Reject Diversity) was mentioned earlier, has for the last three decades sought to integrate women more fully into all aspects of service – including combat support units. This move to increase gender diversity was more a values statement (Value Diversity) than an attempt to gain access to some unique competitive advantage that only women offer (Exploit Diversity). It is also important to note that an organization‟s diversity map is not static, but evolves over time in response to external and internal impetuses. Even their definitions of diversity change as extended experience with certain differences make them seem not so different, after all. For instance, the same argument used today by the military to reject diversity in sexual orientation, that it is “detrimental to good order discipline of the service,” was made against gender diversity 25 years ago and racial diversity 50 years ago. Finally, the ability to successfully Exploit or Reduce diversity over the long term may require some internal changes in organizational culture and individual attitudes towards the differences being incorporated that a Valuing Diversity program is best suited to foster.

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Managing Diversity from a Strategic Perspective: A Competing Values Approach

SUGGESTIONS FOR RESEARCH The suggested model offers numerous avenues for future research. First, scales need to be developed to measure the type and degree of diversity strategy used by a particular company. These scales will need to capture the classic CVA measures regarding organizational focus (internal/external), tolerance for individuality versus conformity, and time orientation. Consistent with prior CVA research on culture change, the scale should measure where the organization is with its diversity preferences as well as what it considers ideal. In addition, organization‟s reasons for introducing each type of diversity (voluntary or involuntary) and expectations of diversity‟s impact should also be measured. The next step in investigating the efficacy of the CVA approach to diversity management will be to classify organizations by diversity strategy, compare the fit of that strategy to the organization‟s competitive strategy, culture, and/or structure, and look for positive and negative outcomes. These outcomes could include financial performance, market performance, employee satisfaction and turnover, and the level of managerial satisfaction/frustration with the company‟s diversity management approach. To date, evidence on the impact of diversity management initiatives has been inconclusive. The lack of clear findings on the fit question suggests that other factors might be at play that might moderate the proposed relationship. These factors will need to be identified. As discussed earlier, there is some limited researched suggesting a positive relationship between diversity-strategy fit and financial performance (Richard, 2000; Richard et al., 2003). Those studies also found interactive effects associated with environmental factors, with diversity having a more positive impact on performance in dynamic environments, and less so in stable environments. Anecdotal evidence exists supporting the need to match organizational diversity to market diversity, a primary argument in the business case for diversity. Obviously, insuring a proper fit between diversity strategy and competitive strategy will do little to improve performance if the latter is out of synch with the market. Looking at the strategic management of diversity through the CVA lens raises other questions that warrant investigation. The impact of time orientation on how various diversity strategies might be implemented and evaluated is critical to the actual and perceived effectiveness of diversity management programs. As mentioned, some strategies – particularly those that involve adjusting employee attitudes and values, appear to be more time sensitive than others. What, then, would be the impact of a lack of fit between a short term orientation and long term strategy? Beyond organizational orientation, time could play a more objective role in determining diversity strategy. It was discussed that one of the reasons for introducing diversity into an organization was to satisfy a need for more people than can be supplied with traditional workers. If the need is short-lived rather than more permanent, would this impact how a company using the Reduce Diversity strategy would go about implementing this strategy? Using the U.S. military for one final example, the Union army found itself running short on soldiers during the Civil War. Their response was to enlist African-American, both free-born and former slaves, to provide the much needed manpower. Rather than fully integrate these troops into the regular units for what the leadership saw as a relatively short period, they chose instead to keep them segregated by forming all black units (with white officers, of course). It would be another 90 years before full integration of the armed forces took place. Segregation as a short term response might not be feasible in most settings, although you see some examples on the divisional level (General Motors‟ Saturn Division, for instance). What then, would be the proper strategy at the individual level?

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PRACTICAL IMPLICATIONS The Competing Values framework offers managers a new way of looking at an old, often frustrating problem of how to get the expected results out of their diversity management efforts. Keeping in mind that CVA is new to the diversity management discussion, it still highlights some important considerations for how managers approach this important challenge. Most important is the fact that there is no “one-size fits all” strategy for managing diversity. The model offers between two and four strategies for managing diversity, dependent on the organization‟s situation and the degree to which it can relax/reject the inevitability and goodness assumptions generally associated with diversity. Diversity management is, therefore a strategic choice, the strategy for, and implementation of which must be consistent („fit‟) with other strategic aspects of your organization. Managers must also be aware of why diversity is being introduced into their company and what they expect to gain (or lose) from it. The strategy chosen must be consistent with managerial expectations. The Value Diversity approach used by the vast majority of diversity management consultants is internally, rather than market focused. For diversity to impact the bottom line, it must be positioned in the right place and focused in the right direction. It is likely that the disconnect between strategy and expectations is one of the main causes of perceived failure of diversity management efforts. Finally, what diversity „is‟ evolves over time as old differences are assimilated or accepted and new differences are introduced or recognized. Diversity management, like other strategic planning imperatives, needs to be regularly revisited.

REFERENCES Aoun, G. (2007). Report on an international forum on managing diversity. Equal Opportunities International: Equality, Diversity and Inclusion, 26(1), 67-70. Belasen, A. and Frank, N. (2008). Competing values leadership: Quadrant roles and personality traits. Leadership & Organization Development Journal, 29(2), 127-143. Bureau of Labor Statistics (2009). Labor force characteristics by race and ethnicity, 2008. Retrieved online January 6, 2010 from: http://www.bls.gov/cps/cpsrace2008.pdf . Cox, T. (1994). Diversity in Organizations: Theory, Research, Practice. San Francisco Beffet-Koehler. Cunningham, G. B. (2006). The influence of group diversity on intergroup bias following recategorization. The Journal of Social Psychology, 146(5), 533-547. Friday, E. and Friday, S. S. (2003). Managing diversity using a strategic planed change approach. The Journal of Management Development, 22(10), 863-880. Gudmundson, D. and Hartenian, L. S. (2000). Workforce diversity in small business: An empirical investigation. Journal of Small Business Management, July, 27-36. Hansen, F. (2003). Diversity‟s business case doesn‟t add up. Workforce. April: 28-32. Hooijberg, R. and Petrock, F. (1993). On cultural change: Using the competing values framework to help leaders execute a transformational strategy. Human Resource Management, 32 (1), 29-50. Jackson, S. E., Joshi, A. and Erhardt, N. L. (2003). Recent research on team and organizational diversity: SWOT analysis and implications. Journal of Management, 29(6), 801-830. Johns, N. R. and Green, A. J. (2009). Equality, equal opportunities and diversity: Obfuscation as social justice. Equal Opportunities International, 28(4), 289-303. Johnston, W. B. (1987). Workforce 2000: Work and workers for the 21st century. Hudson Institute: Indianapolis. Knouse, S. B. and Stewart, J. B. (2003). “Hard” measures that support the business case for diversity: A balanced scorecard approach. The Diversity Factor, 11 (4), 5-10. 23

Managing Diversity from a Strategic Perspective: A Competing Values Approach

Kochan, T., Bezrukova, K., Ely, R., Jackson, S., Aparna, J., Jehn, K., Leonard, J., Levine, D., and Thomas, D. (2002). The effects of diversity on business performance: Report of the Diversity Research Network. Liff, S. (1997). Two routes to managing diversity: Individual differences or social group characteristics. Employee Relations, 19 (1), 11-26. Naff, K. C. and Kellough, J. E. (2003). Ensuring employment equity: Are federal diversity programs making a difference? International Journal of Public Administration, 26 (12), 1307-1336. Ng, E.S.W. (2008). Why organizations choose to manage diversity? Toward a leadership-based theoretical framework. Human Resources Development Review, 7(1), 58-78. Page, R.A., Beatty, E., and Pavlik, M. (2008). Service strategies for senior care: A competing values approach. Competition Forum, 6(1), 153-158. Panayotopoulou, L., Bourantas, D., and Papalexandris, N. (2003). Strategic human resource management and its effect on firm performance: an implementation of the competing values framework. International Journal of Human Resources Management. 14 (4), 680-699. Pitts, D. (2009). Diversity management, job satisfaction, and performance: Evidence from U.S. federal agencies. Public Administration Review, 69(2), 328-338. Quinn, R. E. (1988). Beyond rational management: Mastering the paradoxes and competing demands of high performance. San Francisco: Jossey-Bass. Reagan, P. and Rohrbaugh, J. (1990). Decision process effectiveness. Group & Organizational Studies, 15 (1), 20-43. Richard, O., McMillan, A., Chadwick, K., and Dwyer, S. 2003. Employing an innovation strategy in racially diverse workforces. Group & Organization Management, 28 (1), 107-126. Richard, O. C. 2000. Racial diversity, business strategy, and firm performance: A resource-based view. Academy of Management Journal, 43 (2), 164-177. Robinson, G. and Dechant, K. 1997. Building a business case for diversity. Academy of Management Executive, 11 (3), 21-31. Schwabenland, C. and Tomlinson, F. (2008). Managing diversity or diversifying management? Critical Perspectives on International Business, 4(23), 320-333. Vilkinas, T. and Cartan, G. 2006. The integrated competing values framework: Its spatial configuration. Journal of Management Development, 25, (6), 505-521. Williams, K. Y. and O‟Reilly, C. A. 1998. Demography and diversity in organizations: A review of 40 years of research. Research in Organizational Behavior, 20, 77-140.

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PUBLIC AND PRIVATE PARTNERSHIP APPROACH FOR APPLYING THE TOURISM MARKETING MIX TO SPIRITUAL TOURISM

Farooq Haq1, Anita Medhekar2 and Phil Bretherton3 Charles Darwin University1, 3 and CQ University2, Australia ABSTRACT This conceptual paper discusses the growing importance of spiritual tourism in particular as a separate niche market segment in the world economy. This paper presents the view that considerable potential exists for spiritual tourism product if marketed effectively. The paper proposes the application of the public and private partnership approach (PPP) from economic theory to design effective marketing strategies for spiritual tourism. In this paper, the PPP framework is presented as to effectively apply the tourism marketing mix for marketing spiritual tourism. Further, all elements of the tourism marketing mix are separately analysed and their application for spiritual tourism is discussed, which critically suggests their usefulness to create and apply a new PPP framework-model for marketing strategy for spiritual tourism. The important role of PPP as a critical element of the marketing mix for spiritual tourism is an outstanding contribution of this research paper. This study suggests that PPP will enhance the competitive advantage of the spiritual tourism product through collaboration, and partnerships between the various stake holders. The research offers a unique combination of economics and marketing theories to illustrate the significance, growth and economic sustainability of spiritual tourism in the 21st century and beyond. Keywords: Spiritual Tourism, Marketing Mix, Strategy, Public and Private Partnerships

INTRODUCTION The significance of tourism in the world economy has grown stronger over the years and people are still indulging in various types of tourism even during the current global economic recession (Rosentraub & Joo 2009; Smith 2009; Vu & Turner 2009; Cohen 2008). Tourism expenditure is also growing and contributing to monetary circulation in the world economy. Tourism expenditure was observed to be US$533 billion in 2003 and it has been increasing by 4% annually since 1995 (Fleischer & Rivlin 2009; Kulendran & Dwyer 2009). Tourism has consistently been ranked as one of the fastest growing industries in the world and the largest industry in terms of employment (Vu & Turner 2009). Despite the 2008 slowdown in tourism growth, global tourist arrivals grew by 2% and reached 924 million, an increase of 16 million over 2007 (WTO 2009). Tourism has become one of the world‟s largest service sector industries with enormous potential for further growth; however, it is sensitive to external factors, like terrorism, natural disasters and infectious diseases which can cripple the local economy at destinations in the poor developing countries. Therefore it is important to have a diverse basket of tourism destinations and types such as 25

Public and Private Partnership Approach for Applying the Tourism Marketing Mix to Spiritual Tourism

recreational, historical, cultural and spiritual –religious, supporting the tourism industry in general. Religious tourism according to Timothy and Olsen, (2006) is one of the ancient forms of non economic travel. According to World Tourism Organisation WTO (2004), 689 million people travelled to foreign countries in 2000, out of which nearly 40 million people travelled for spiritual purposes from Christian, Muslim and Hindu families and there is a growing trend in the spiritual tourism market segment (mosques, churches, synagogues, temples, cultural and historical sites linked with spirituality) along with cultural and heritage tourism, spending US $ 478 billion. Factors such as globalisation, education, high disposable income, industrialisation, opening up of foreign markets, better advertising and strategic marketing policies and techniques have contributed to the growth of tourism as an important service sector for the economy. Throughout history, oral, archaeological and written records document peoples‟ involvement with spiritual experiences and their journeys to engage in spiritual activities (Blomfield 2009; Timothy & Olsen 2006; Sharpley & Sundaram 2005; Rountree 2002; Shackley 2002; Rinschede 1992; Burton 1855). The term „spiritual tourism‟ is largely unheard of in both the academic literature and the tourism trade press, yet more people visit Mecca, the Vatican and/or Bethlehem/Jerusalem per year than attend the World Cup, for example. Currently there are no industry recognised standard marketing strategies that could be applied to this growing spiritual tourism product. The research study in this paper suggests that the tourism marketing mix could be applied by adopting the PPP framework derived from economic theory as an important business framework for effective marketing of spiritual tourism (Montanheiro, Kuznik & Ochojski 2003). This paper is structured as follows. The first section of the paper provides a background introduction to the growing importance of the spiritual tourism industry in general as a separate niche market segment in the world economy. Section two puts forward a literature review specific to the spiritual tourism, tourism marketing mix strategies and the public and private partnership theory. Section three explores the tourism marketing mix proposed by Morrison (2002) based on product, price, place, partnership, promotion, people, packaging and programming and analyses its application for spiritual tourism . Section four applies the public and private partnership approach as an important business framework for effective marketing of spiritual tourism with examples. Section five provides some conclusions and directions for future research.

LITERATURE REVIEW Spiritual Tourism It has been observed by various authors that spirituality in general has recently become an important subject of research in social and business areas (Cochrane 2009 ; Simpson, Cloud, Newman & Fuqua 2008; Pesut 2003; Delbecq 2000; Konz & Ryan 1999). The mounting interest in spirituality has influenced a number of industries around the world (Brownstein 2008; Fernando & Jackson 2006; Heintzman 2003; Mitroff & Denton 1999). The tourism industry is one of the industries which have been affected by this growing interest in spirituality (Andriotis 2009; Cochrane 2009; Finney, Orwig & Spake 2009; Geary 2008; Tilson 2005; Cohen 1972). Spiritual tourism is growing and is an important segment of a massive tourism industry catering to needs of spiritual tourists in particular and facing competition as well as problems of survivability with other segments of the tourism industry. Spiritual tourism is a new concept but it is certainly not a new phenomenon. Based on the review of the literature, the interviews with spiritual tourists in Australia, Pakistan and the UK, this research defined a spiritual tourist as „someone who visits a specific place out of his/her usual environment, with the intention of 26

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spiritual meaning and/or growth, without overt religious compulsion, which could be religious, nonreligious, sacred or experiential in nature, but within a Divine context, regardless of the main reason for travelling‟ (Haq & Jackson 2009, p. 145).Therefore, this study considers spiritual tourism as a type of travel taken by people from any religious background, with the goal of achieving spiritual development by realising a better connection with God, the High Spirit or the Supreme Being.

Marketing Mix Strategies for Spiritual Tourism The marketing mix based on 4Ps has been reviewed and analysed repeatedly over the years by various marketing scholars (Constantinides 2006; Moller 2006; Hakansson & Waluszewski 2005; Rafiq & Ahmed 1995; Gronroos 1989, 1997). Booms & Bitner (1981) who acknowledged the gap left in the marketing mix for services, they added 3 more Ps for services marketing that included process, physical evidence and participants. In marketing tourism products and services, Morrison (2002) is recognized as the authority to derive the 8Ps of the marketing mix, the application of this marketing mix to spiritual tourism will be discussed in this paper. Gronroos (1997) has criticised the adoption of the marketing mix in marketing strategy theory and suggested the paradigm shift towards relationship marketing. In his study he completely relied on relationship marketing as the only solution and failed to realise the virtues of the marketing mix. Moreover, relationship marketing has been criticised for being too conceptual and failing to provide any testable theory (Palmer & Wilson 2009). The social marketing concept has also been observed to be missing in the marketing mix (Dann 2009). However, Rafiq and Ahmed (1995) and Borden (1964) illustrated the usefulness of the marketing mix as a generic marketing strategy. Constantinides (2006) also analysed the potential application of the marketing mix and its value to real world marketing. Various authors have analysed the potential application of the marketing mix and its value to real world marketing (Constantinides 2006; Moller 2006; Rafiq & Ahmed 1995). There is a significant gap in the literature on tourism marketing strategy as little research has been conducted on the marketing strategy applicable to tourism products and this area warrents considerable attention (Das & DiRienzo 2009; Hassan & Craft 2005; Riege & Perry 2000; March 1994; Chon & Olsen 1990). A number of public and private tourism organisations have been aggressively marketing tourism products and services at national and international levels. Thus, marketing tourism products is of great interest to a range of stakeholders involved with the business of tourism (Tribe 2008). However, it should be noted that regardless of the potential, there is a lack of empirical research into tourism marketing (Li & Petrick 2008; Buhalis 2000; Riege & Perry 2000; Chon & Olson 1990). The research on tourism marketing has been limited by being conducted within specific settings or about specific products and this applied research has prevented generic concepts being derived from the research. Spiritual tourists are special interest tourists undertaking travel to achieve specific objectives and they have very specific needs. It has been suggested that since services inherently have an intangible nature and they have intensive customer interaction, customer orientation plays a critical role in terms of commercial success for service organisations (Dann 2009; Wagner, Hennig-Thurau & Rudolph 2009; Daniel & Darby 1997).

Public and Private Partnership From a traditional Keynesian policy approach of totally publicly funded projects, to a Monetarist approach of totally privately funded projects, along with Porter‟s idea which is based on the premise that each group will look after itself almost in competition on the notion of being strategically desirable 27

Public and Private Partnership Approach for Applying the Tourism Marketing Mix to Spiritual Tourism

cannot be totally suitable today. PPP is justified on the basis that the gains from bringing together the key players improves quality and availability of goods and services without requiring additional tax to fund new projects. Various forms of the Public-Private Partnership (PPP) instrument are now widely used to deliver infrastructure and other public good type services (Montanheiro, Kuznik & Ochojski 2003, Medhekar 2003 and 2005; Barczyk & Montanheiro 2001). It accounts for a very diverse range of cooperative or collaborative efforts that, “implies a commonality among them which does not exist” (Schaeffer and Loveridge 2002).The term PPP has at least six distinctive meanings. PPP as management reform, problem conversion, moral regeneration, risk shifting, restructuring the public service and as power sharing (Linder 2000). The Ministry of Public Affairs in British Columbia (1999) defines PPP in the following terms: Public-Private Partnerships (PPPs) are arrangements between government and private sector entities for the purpose of providing public infrastructure, community facilities and related services. Such partnerships are characterised by the sharing of investment, risk, responsibility and reward between the partners. (cited in Schaeffer and Loveridge 2002, p.170). Public-Private Partnership defines cooperation between the public sector or government and the private sector, non profit organisations and international groups and institutions. Partnerships are essential for planning and implementing federal, state and local government tourism related infrastructure initiatives necessary for supporting sustainable tourism development. Initially, it was the government sector that played a major role in infrastructure provision in general. Since the privatisation initiatives begun in the 1980s by the Reagan and Thatcher governments, which were then adopted widely, the public sector was keen to shift the provision of health, education, telecommunications and transport services etc, to the private sector and non-profit organisations to keep expenditure under control and reduce debt. Now after the mass privatisations of the 1980s and 1990s, there is a move towards partnerships between the private and public sectors on a large scale in the UK, European Union, Canada, Australia and more recently in many developing countries. Provision of Infrastructure has been opened up to competition in many countries developed and developing, encouraging the private sector participation due to high deficit in the public sector to finance all infrastructure facilities. Thus high congestion cost, budgetary and fiscal deficits, inadequate provision, poor quality and maintenance of transport infrastructure facilities can be avoided by encouraging Public Private Partnership (PPP) or Private Finance Initiatives (PFI) similarly adopted by other developed countries(Montanheiro, et al. 2003; Mbone-Enie 2003, Markell 2009). The public sector was also criticised for inefficiency, bureaucratic delays and red tape, high costs and budget deficits. It was a general belief that government had failed in the provision of public goods and services and that the private sector would provide similar goods of better quality at a lower cost. This led to privatisation initiatives around the world in major developed countries. But in many cases, privatisation without proper regulation and corporate governance resulted in private sector failure and the collapse of many large firms. Given these failures, a new form of governance PPP of a cooperative nature is often necessary for the provision of public goods and services including spiritual tourism destination related infrastructure to achieve common goals and objectives of sustainable growth of this market segment. Sustainable partnership in spiritual tourism involves sharing of responsibilities, planning, developing objectives, product innovation, promotion, packaging, and marketing, undertaking financial risks, accountability and implementing programs. 28

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DISCUSSION Application of the Marketing 8Ps, to Spiritual Tourism To ensure that there was a first-order fit between the proposed marketing strategies and the marketing activities selected to implement each strategy, the discussion of spiritual tourism marketing strategies for specific groups in this paper adopted the tourism marketing mix classified by Morrison (2002). It has been suggested that despite its simplicity and applicability, the marketing mix requires modification but it has not been suggested how this modification should take place or how it would improve the existing concept (Constantinides 2006; Moller 2006; Hakansson & Waluszewski 2005). The elements of the tourism marketing mix and their application for spiritual tourism is discussed below. The product consists of what is being offered to the spiritual tourists and its features and benefits (Yuan, Cai, Morrison & Linton 2005; Lee, Morrison, Lheto, Webb & Reid 2005; Feng, Morrison & Ismail 2003). Although the spiritual tourism product has long been in existence, with the recent increase in interest in spirituality it seems likely that spiritual tourism is on the move towards the growth phase (Piedmont & Leach 2002). Adopting the perspective of McKercher (2002), spiritual tourism could be viewed as a broad concept that involves tangible and intangible products. The tangible items include churches, mosques, temples, shrines and other centres with a spiritual focus. The intangible products and services include organized spiritual events, seminars, festivals and gatherings with spiritual motives. Moreover, the spiritual tourism product consists of uni-religious, multi-religious and nonreligious brands linked to the attitudes and understanding of the spiritual tourists. These products offer different value to different spiritual tourists, for example, religious fulfilment, understanding various spiritual traditions, religious or non-religious spiritual growth in a sense of knowing better or getting closer to God, the High Spirit or the Supreme Being. Product differentiation plays an important role in a competitive advantage strategy although differentiation by itself is not sufficient to engineer a competitive advantage (Tollin & Jones 2009). Spiritual tourism being part of the broader industry of tourism, it has to be differentiated from other tourism products. Spending money on product innovation, development, improvement, promotion and distribution to achieve a dominant position in the market is a critical strategy for spiritual tourism (Read, Dew, Sarasvathy, Song & Wiltbank 2009). People play an important role in a marketing strategy for a service product (Dev, Zhou, Brown, & Agarwal 2009, Lee et al. 2005). In spiritual tourism many people interact with the tourists at various places during the experience. These people range from the travel agents to the destination guides who have the opportunity to transform transaction to relationships (Palmer & Wilson 2009). These people need to be selected and trained so that they meet tourists‟ expectations. The spiritual destination guides should be well trained, educated and informed about the religious traditions, history and culture connected to the place and the visitors. The training programs should also focus on English or any other relevant language skills. Well trained people during the spiritual tourism process will be able to build good communication channels to facilitate the delivery of messages between service providers and buyers of spiritual tourism products (Farrell & Oczkowski 2009; Hunt, Arnett & Madhavaram 2006; Lindgreen 2001; Gronroos 1997). An effective interaction of the people with the spiritual tourists will lead to strong relationship marketing that will result in long term marketing of spiritual tourism of the particular destination (Li & Petrick 2008; Moliner, Sánchez, Rodríguex & Callarisa 2007). Packaging and programming has become an established element of the marketing mix for services (Alzua et al. 1998; Morrison, Hsieh & O'Leary 1994). Packaging combines all types of relevant services presented as a single-price offering (Moliner et al. 2007; Nishimura, King & Waryszak 2007; Morrison 29

Public and Private Partnership Approach for Applying the Tourism Marketing Mix to Spiritual Tourism

2002). Programming presents the design and delivery of special activities, events, or programs to motivate customers to spend more and provide more value in a package (Mowlana, & Smith 1993; Morrison 2002). The spiritual tourism programs should offer spiritual education and knowledge about various traditions leading to global spiritual unity and growth by seeking God, the High Spirit or the Supreme Being. Packaging for spiritual tourists should be designed for two issues, the religious and non-religious segments and the individual and group segments. The group segments need to be further divided into familiar groups such as family or friends, and the unfamiliar groups where strangers meet and travel together for spiritual growth. Place refers to the distribution of spiritual tourism products and services to spiritual tourists (Yuan, Cai, Morrison, & Linton 2005; Feng, Morrison & Ismail 2003). Several authors in tourism marketing agree that the distribution of any type of tourism product is critical for the success of marketing the product (Huang, Chen & Wu 2009; Pearce, Reid & Schott 2009; Smith 2007; Pearce & Schott 2005). A recent study revealed that tourism distribution intermediaries generally consist of third party websites, control reservation offices, global distribution systems, travel agents, wholesalers, switch companies, direct sellers and inbound operators (Pearce, Tan & Schott 2007). The tourism literature suggests that the distribution system is becoming more and more complex due to the evolution of many new intermediaries (Kavaratzis & Ashworth 2008; Pearce & Schott 2005). The rise of the internet as a distribution channel has been accepted, though it is still more appreciated as an information channel (Huang et al. 2009). These latest trends have created two major practices in tourism distribution, intermediation and disintermediation. Intermediation stresses on the expansion of distribution channels, while disintermediation emphasises upon the contraction of distribution channels (Clerides, Nearchou & Pashardes 2008). In spiritual tourism, the operators need to carefully select only one option depending upon the destination. For example, for spiritual tourism to Mecca or the Vatican, intermediation should be used. While, for spiritual tourism to the shrine of a specific Catholic Saint or a Shiite Muslim, disintermediation would be preferred. Promotion of tourism products involves communication between tourists, tourism operators and other stakeholders (Feng, Morrison & Ismail 2003; Yuan, Cai, Morrison & Linton 2005). Effective communication develops product awareness and persuades tourists to purchase specific products (Scott 2008; Iyer, Soberman & Villas-Boas 2005; Buhalis 2000; Mahajan & Muller 1999). Advertising, personal selling, sales promotion, merchandising, public relations and publicity are tools of promotion and should be selected thoughtfully by the tourism operators. Various types of promotional techniques; above the line (television, radio, the internet and print media) and below the line (participation in tourism fairs, festivals and conferences) could be used for marketing tourism (Buhalis 2000). The adoption of both above and below the line promotional techniques has been suggested for reaching particular spiritual tourism market segments. Above the line techniques would include participation in travel programs on television, advertisements in religious and spiritual magazines and on relevant websites. Below the line techniques would involve participation in multi-faith/religious/cultural festivals and seminars to attract the spiritual tourism coming from different back grounds. Pricing is critical as it underpins the profit element in a marketing strategy (Sousa & Bradley 2009; Cassidy & Guilding 2007; Jiang 2007; Lee et al. 2005; Pellinen 2003; Morrison, Hsieh & O'Leary 1994). The literature suggests that, in general, pilgrims or religious tourists are not price conscious (Timothy & Olsen 2006; Sharpley & Sundaram 2005; Shackley 2002; Eade 1992; Rinschede 1992). Many authors have proposed various types of pricing techniques that could be applied for tourism products but it has been recognised as a complex process (Sousa & Bradley 2009; Cassidy & Guilding 2007; Pellinen 30

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2003; Buhalis 2000). This paper recommends using the price bundling strategy in order to cater for all spiritual tourists visiting for various reasons. It is further suggested to select from the two options of discriminatory pricing techniques to attract the regular spiritual tourists, and target pricing to attract the specific tourist segments interested in spirituality and related affairs (Sousa & Bradley 2009; Cassidy & Guilding 2007; Buhalis 2000). Partnership brings about operating efficiencies among various stakeholders involved in the spiritual tourism industry; the partnership strategy must benefit all partners (Tilson 2005; Feng, Morrison & Ismail 2003; Augustyn & Knowles 2000; Alzua, O‟Leary & Morrison 1998; Selin & Chavez 1995). A means of ensuring that all the significant partnership elements have been incorporated in the partnership strategy is to work through the five stage partnership model checklist (Selin & Chavez 1995). The first stage requires the development of a shared common vision, an examination of existing networks, determining leadership and setting incentives. The second stage advocates problem setting based upon recognition of interdependence and common problems. The third, direction setting stage consists of setting ground rules for goal achievement, searching for information on options and organising of sub-groups. The fourth stage of partnership structure establishes the relationship between the partners, linking them specifically to a monitoring system. The outcome stage delineates the programs, results and rewards desired from the partnership strategy. While presenting partnerships as part of marketing strategies for spiritual tourism, the public and private partnerships between the tourism operators, government agencies, destination manager‟s local community and religious organisations are very significant and their applications are discussed in the next section. The important role of PPP as a critical element of the marketing mix for spiritual tourism is an outstanding contribution of this research paper.

PPP Approach as a Strategy for Marketing of Spiritual Tourism The application of public and private partnership approach for tourism in general (McKercher 2002; Tilson 2005; Markell 2009; APEC 2002; Montanheiro, et al. 2003; WTO 2009; GOI 2008) and spiritual tourism in particular, is critical for planning, product and destination development, infrastructure provision, pricing, determining demand, promotion, packaging and programming. The growing demand for tourism and need for spirituality at a time of war, economic instability, natural disasters and global financial crisis, which is healing to the human soul as well as the increasingly high cost of provision of meeting infrastructure needs by the public sector, requires PPP strategy for marketing and long term sustainability of spiritual tourism. Public and private sector partnership application to the tourism industry in general is very recent since 2002, mainly due to the competitive nature of the tourism industry, as it is assumed that it may escalate the cost (OECD 1997 & 2006). Moreover, the application of PPP to spiritual tourism marketing is a unique aspect of this research study. Proper application of PPP brings the stakeholder resources together in terms of expert knowledge, capital and innovative ideas. The tourism industry benefits from PPP particularly in terms of coordination, organising, planning, management, quality delivery of the product and problem solving by identifying common goals, problems, partnership programs to achieve these goals and evaluation of partnership programs, outcomes and incentives. This study suggests that PPP enhances the competitive advantage of the spiritual tourism product through collaboration, and partnerships between the various stake holders: public( government and its departments and Government Business Enterprises) , private, local community, business organisations and international bodies such as (World Tourism Organisation (WTO), World Travel and Tourism Council (WTTC) , Asia Pacific Economic Cooperation (APEC) , Asia Pacific Tourism Association (PATA) NGO and industry (UNESCAP 2004; Bramwell and Lane, 2000).

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Spiritual tourist destinations such as Mecca, Vatican in Rome, Lady of Fatima in Portugal, Jerusalem and other religious places around the world, require private finance initiatives (PFI) and public and private partnerships (PPP) (Augustyn & Knowles 2000). These will support the provision of tourist infrastructure to underpin the economy‟s growth, international competitiveness, environmental and sustainable development of spiritual tourism destinations as a niche market. According to Tilson (2005), a partnership approach that is church-state collaboration where the community organisations, companies, government representatives, government organisations, come together to form a collective and consensual approach to investment into the community‟s future is essential for the success of spiritual destinations. The main function of the public sector is to provide key infrastructure and supporting services, innovation, training, education, employment and destination management, pricing, promotion and marketing of the (Elliott 1997; Mbone-Enie 2003) spiritual tourist destination for its longterm sustainability and economic viability. Support from the private sector in the development and management of, and provision of essential spiritual tourism products such as hotel accommodation, travel-airlines, tours, retail shops meals and handicrafts, restaurant, safety and security etc to the spiritual tourist is critical. For example, South Asia foot-step of Lord Buddha circuit integrated with eco-tourism has been identified by the ADB (2008) report, which will appeal to spiritual tourist and Buddhist pilgrimage, representing 376 million Buddhists, which is approximately 6% of world population. The governments of South Asian countries along with the private sector are working in partnership in developing and promoting this new product. This paper also suggests that spiritual tourism is going to treble in the next 20 years and PPP and PFI for infrastructure investment is necessary. Wide range of stake holders (see Table-1 ) from the demand side and from the supply side can be categorised (APEC 2002, p.2) to provide investment in infrastructure, through the development of budget hotels as well as other tourist facilities and amenities required for spiritual tourist. Table -1: Stakeholders in the tourism industry Supply Side (SS)

Demand Side

Category

Examples

Resource owners

Traditional landholders

Resource managers

National park managers

Providers of infrastructure

Construction, design, power, gas, water, waste treatment, roads

Planners & development control

Local govt authorities

Deliverers of product

Enterprise operators-hotels, airlines, hire cars, attractions, tour operators, travel agents, farm stays, convention centres, restaurants, museums, sporting ( world cups) and religious events e.g. Hajj, youth catholic congress

Destination developers & marketers

Tourism commissions; local government

Employees

Managers, hospitality, planning , communication, ICT, Finance , construction

Tourist

Domestic and international- e.g. package holidays, eco-tourist, business travellers, backpackers visiting friends and relatives, conferences, cultural, spiritual and medical tourists.

Source: Adapted from (APEC, 2002, p. 2)

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Long term sustainability of any tourism project and particularly spiritual tourism cannot be achieved without PPP between the various stake holders. Zamani-Farahani & Henderson (2009) in their paper discuss the effects of Iran and Saudi Arabia‟s state religion-Islam on tourism development, policies, management, marketing where PPP is essential for its success along with community involvement in Muslim countries. In 2008, nearly 1.73 million foreign pilgrims performed Haj along with approximately 750,000 Saudi pilgrims. Increase in demand for religious tourism from world‟s 1.8 billion Muslims continues to drive Saudi Arabia real estate growth in Jeddah for Pilgrims visiting the holy cities of Mecca and Medina to perform Umrah and Haj are expected to reach 8 million by 2010 according to Saudi Government. Given the high, risk free and guaranteed return on investment according to a study carried out by Proleads research house for Cityscape Saudi Arabia, throughout the Kingdom of Saudi Arabia, there are 812 active projects in real estate, leisure and entertainment and infrastructure sectors with a total budget of $543 billion, supporting spiritual tourism market. Saudi Arabia's real estate sector now contributes an estimated 5.1%, or SAR 55 billion, to the kingdom's GDP, with forecasts for further growth of 5.8% by the end of this year. Land that surrounds the holy sites is being developed and the property market is now attracting residential, commercial infrastructure and real estate such as roads, railways, ports, hospitals clinics retail etc given that in 2008, 1.5 million pilgrims arrived by air, 131,000 by land, and nearly 23,000 by sea. Therefore PPP has promising opportunities for developing spiritual tourism related infrastructure (Cityscape 2009). Across the Mena region there is an increasing realisation that spiritual tourist infrastructure needs cannot be met by the public sector alone and (PFI) in infrastructure as well as PPP is necessary. Most countries‟ preferred model of private involvement goes beyond mere subcontracting, but stops short of full privatisation. PPP strategy with the public and private partners sharing project risks and, in many cases, asset ownership, is increasingly applied. This process should be strengthened by ongoing reforms in public sector transparency, sound fiscal practices, regulatory reform and a commitment to open markets for the success of PPP – PFI in the countries participating in the MENA-OECD Initiative (OECD 2006). In case of India, there are many examples of successful PPP for spiritual tourism initiatives. From the Himalayan spiritual destinations of Buddhist monasteries and Hindu temples such as Vaishnu-Dewi in Kashmir to the temples, mosques, sikh temples and colonial churches in India, is seen as having great potential for the growth and development of spiritual tourism destinations by the government at the state and central level for employment generation and earning foreign exchange revenue. World Tourism Organisation (WTO) prepared a holistic infrastructure plan for PPP, with the Government of India, State Government of Uttarakhand, Tourism Board of Uttarakhand to promote eco tourism, adventure tourism, and spiritual tourism,…” as three mantras to be followed up by the state”, so that adventure, nature and spiritual experience all can be enjoyed by the Indian and international tourist (Sagar 2007; GOI 2008). Further, states of Kerala, Rajasthan and Goa, have also capitalised on marketing eco-tourism, medical and spiritual tourism and recognised the benefits PPP can bring to the state through mutually beneficial partnerships (Varkey 2006; Chandran 2007; GOI 2008). The state Government of Rajasthan is also actively involved in organizing new festivals to promote Rajasthan as a 'Year Round Tourism Destination', by implementing the PPP model in key tourism projects in the state, offering historical monuments and temples for adoption to private sector etc (GOI 2008; GOR 2009). Similarly in the State of Uttar Pradesh places like Varanasi-Sarnath, Bodhgaya, Rajgir and the Nalanda triangle is developed to be promoted on a PPP model for spiritual tourism besides yoga, spiritual and meditation ashrams which form part of spiritual experience to present India as a symbol of religious destinations with a spiritual trial (Varkey 2006; GOI 2008). 33

Public and Private Partnership Approach for Applying the Tourism Marketing Mix to Spiritual Tourism

The State Government of Jharkhand has given priority to the development, promotion and marketing of

its eco, spiritual and rural tourism segments through PPP, to put it on the global tourist destination map by 2010.On average 1.25 million domestic tourists from the states of West Bengal, Orissa, Bihar and Madhya Pradesh visit Jharkhand, of which one million are spiritual tourist visiting the temples of Deoghar or Baidyanath Dham. The state government along with the private sector is constructing star category budget accommodation, as well as improving and investing in road-rail infrastructure network, electricity and tele-com connectivity to the state capital under the PPP model. To attract foreign tourists into Jharkhand region, the state government along with the private sector has not only embarked on an aggressive marketing and tourism promotion exercise by participating at major travel and tourism conferences such as World Tourism Market London in 2008 and ITB Berlin event in 2009, but also identified the famous Ranchi-Netarhat-Betla circuit for developing an inter-religious circuit in Parasnath temple situated at 4431 ft above sea level about 190 Km from its capital Ranchi , the most sacred place for the believers of Jain religion and attracts Jain tourists throughout the year (Chavan 2008). Application of PPP approach to 8 P‟s of marketing mix should be applied and integrated in such a way that the objective of planning, developing, promoting and marketing spiritual tourist destinations is achieved in a sustainable manner. To innovate and develop this new product (spiritual tourism and the goods and services that complement spiritual tourism) it is important to have a PPP marketing strategy by involving all public and private stake holders (see Table-2). Market research along with PPP is required to identify the key customers, people who are going to generate demand for the spiritualreligious tourist product locally, nationally and internationally as well as the suppliers of the various spiritual tourist products. PPP is necessary to get the support of the local people as well to open their religious places of worship of historical importance to the tourist from all over the world and capitalise on their spiritual significance. Further educational institutions also play a key role in providing training and education to travel agents, tour guides and operators about the spiritual destination, its geography, history and culture in partnership with the religious organisations and scholars. Table-2: Applying PPP to 8Ps of Marketing 8 Ps of Morrison: Tourism marketing mix

Examples of 8 ps

Applying Public & Private Partnership Approach

Product

Tangible and intangibles, Development of product Spiritual destinations, Church, Mosques, souvenirs (pictures, religious beads statues), multi faith/ religious/cultural annual festivals, events, fairs and conventions.

PPP is essential (collaboration, coordinated marketing, cooperation & consensus) to develop product, innovate, restore, preserve and market, cultural, historical and spiritual monuments and destinations for tourism. Investment in Infrastructure, human and capital (tangible and intangible).Improve and enhance product quality.

Price

Entry ticket, air-road travel cost, accommodation, Price Discrimination, costplus pricing, average cost &, marginal cost pricing, competitive pricing, bundling pricing.

PPP for determining the price for domestic and international tourists, discriminatory pricing for spiritual tourists and target pricing for specific tourist groups & related affairs. Government and the private tourism product operators and providers to have consensus on pricing – price discrimination for different groups ( so everyone can visit)

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Table-2: Applying PPP to 8Ps of Marketing (Continued) Place

Distribution of products and services, third party websites, control reservation office, global distribution systems, travel agents, wholesale and retailers, switch companies, direct sellers and inbound-outbound tourism operators of spiritual tourist destinations.

Selection of disintermediation or intermediation for distribution of spiritual tourism product. PPP to develop infrastructure facilities (physical, building transport, roads as well as website, brochures etc) needed to support the Spiritual tourism business at the point of destination as well as at the source of tourist to provide necessary travel services for planning the trip.

People

Local, national and international tourists. Spiritual tourism operators involved in spiritual tourism processes; travel agents, religious leaders, family and peer groups & tour guides at the source as well as destination.

Govt to provide infrastructure investment such as road, rail airways (easy access) for the private sector providers of accommodation restaurants, retail business to function well. Training of the tourism operators, guides etc-HRM

Promotion

Advertising religious destinations, places of worship, annual religious festivals and conventions, conferences, promotion objectives, message, media and budget. Usages of TV, radio programs, relevant magazines, travel news and internet websites.

PPP required at all levels by participating in trades conventions and world tourism fairs and conferences. Marketing strategy off and on-line involving all stake holders involved in spiritual tourism business. Coordinated marketing by web-sites, posters, print, TV& radio-above the line and fair, festivals & conferences below the line.

Packaging

Packaging spiritual destinations along with air fare, overnight in transit stop over visits to spiritual places, accommodation, business travel and conferences, adopting product differentiation (religious and combined with non-religious segments, price discrimination (individual, pensioners, adults, children, families, strangers and groups on a spiritual journey).

PPP for packaging and branding spiritual tourist destinations and tours for example to Mecca, Kerala as destination for medical and spiritual Tourism, Rajasthan as „year around tourism destination‟, state of Punjab and Uttar Pradesh have been developed and marketed as spiritual tourist triangles, „Banding Greece‟, through PPP measures.

Programming

Information about spiritual programs to attract people to specific destinations and events to understand global spirituality, for global peace and spiritual culture and traditions. Preparing special travel itinerary by travel agents (brochures) similar to other types for skiing, cruising etc available in detail. Program for Hajj, Hindu religious festival in India, carnivals of various catholic saints, world religious conventions etc.

Education and training in spiritual tourism education, religious studies, history and culture for the tourism operators, web site designers and tour guides.

Partnership

Government departments & agencies (tourism, religious affairs, cultural heritage, travel and communication, infrastructure railroad, airways) Private sector (businesses, wholesale and retailers of tourism service providers, religious organisations, destination managers. Partnership essential for identifying common goals, problems, partnership programs to achieve these goals and evaluation of partnership programs, outcomes and incentives.

Enabling partnership with private sector, NGO‟s and international organisations. PPP between Governments at all levels, Government departments, Government business enterprises, WTO, private sector businesses, NGO, local business communities, local population, police, defence force, Religious organisations and institutions, community organisations, educational institutions, travel agents, key religious leaders, private business philanthropy and support for planning, development, implementation, pricing, maintaining, preserving and marketing cultural heritage and spiritual destinations to the world.

Source: (Designed for this paper)

Price determines the value and quality of the spiritual tourist destination that the consumers are willing to pay compared to other substitute type of tourist activities available. People may be willing to pay 35

Public and Private Partnership Approach for Applying the Tourism Marketing Mix to Spiritual Tourism

$5000 or more for a specialist tour to holy place of Jerusalem, Mecca, Lady of Fatima or Vatican, because the perceived value, benefit and spiritual experience gained will be more than the cost of the tour to the spiritual tourist. PPP is essential to determine the price in case of spiritual destinationsplace, so that all people (low or high income) have ability to pay to consume these spiritual tourist products and have tangible and intangible spiritual experience. Thus resorting to price discrimination in case of spiritual tourism is essential as it will provide access to all income groups based on their ability to pay, otherwise people belonging to low income groups can be excluded from such spiritual experience. Generally, a unique destination does command a high value; however, in case of spiritual destinations, in spite of being unique, like a visit to Mecca, or Vatican, PPP is essential to set different prices so that people from different groups (age, income) can have spiritual experience and are motivated to visit. PPP can be used as a distribution channel (direct to the tourist-consumers and indirectly through intermediaries like tourism service and providers and operators and travel agents, online advertising for package tours etc) to market the spiritual destination in the local, domestic and international market to the spiritual-religious oriented tourist. Promotion, packaging and programming the spiritual tourism segment as a new product by itself and bundling with either cultural, heritage, historical or eco-tourism destinations to the niche market, requires public and private partnership at all levels to get the spiritual message across to all potential spiritual oriented consumers as well as tour operators nationally and internationally. The aim is to target these consumers and inform and educate them about the spiritual tourism destinations and tours, complementary goods (product and services available) price etc so that they finally make their spiritual journey.

CONCLUSION Spiritual tourism is a fast growing global phenomenon. The tourism market has been observed to be growing world wide and it‟s the fifth largest in case of Australia after iron-ore, coal, education and gold (ABS 2007); a slowdown in tourism requires tourism operators to apply different marketing strategies for business success. Due to the lack of any literature on spiritual tourism marketing, the literature from the parent marketing discipline was adapted to assist in the development of appropriate spiritual tourism marketing theory. The spiritual tourism product, as a type of special interest tourism, has the potential for growth since interest in spirituality related matters is on the rise. New pilgrimage routes are developed and old pilgrimage routes upgraded, revived and marketed through PPP in South Asia to promote the sustainability of spiritual tourism (ADB 2008). In agreement with the OECD (1997) conference on partnerships in tourism, it was concluded that the establishment of public and private sector partnerships is instrumental as it is closely linked with the improvement of the effectiveness of national tourism administrations (NTAs) and national tourism organisations (NTOs). PPP further is useful for implementing tourism policies more effectively in the areas of employment, education and marketing and other areas of tourism policy. Governments have to play an important role in new ways of organising this co-operation, notably by defining a clear national strategy for tourism policy which will stimulate and guide innovative partnerships, develop new products and give incentives to all individual partners to participate in the development. Partnerships should seek to establish a balance between competition and co-operation, focusing on the advantages of economies of scale and the creation of synergies between the partners in marketing of spiritual tourism products. European Union Commission (2007) also concluded in its report that in the field of cultural heritage management, Public-Private Partnerships (PPP) is a promising new governance mechanism to balance increasing pressure of market forces on the one hand and government‟s responsibilities in protecting public cultural values on the other hand. 36

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Moreover, spiritual tourists tend to travel to satisfy their specific needs even when the economic, financial and political situation is not favourable. This paper presents the view that considerable potential exists for spiritual tourism product if marketed effectively. In this research, the PPP framework is presented as one approach to effectively apply the tourism marketing mix for marketing spiritual tourism. Future research would involve an attempt to empirically test the application of the PPP and tourism marketing mix for spiritual tourism by adopting a quantitative as well as qualitative methodology. In the next stage a research survey instrument will be designed and distributed to selected public and private tourism operators in India, Pakistan, Italy and Thailand to test the application of the PPP to tourism marketing mix for the product of spiritual tourism as suggested in this paper.

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Chandran, S. (2007), 'We intend to convert the coastal belt into waterways' http://www.expresstravelworld.com/200711/market05.shtml (cited on 14-9-09) Chavan, S. (2008), Jain tours-Jharkhand Tourism:Moving ahead through PPP http://jaintours.blogspot.com/2008/03/jharkhand-tourism-moving-ahead-through.html(cited on 14-909). Chon, K.S. & Olsen, M.D. (1990), 'Applying the strategic management process in the management of tourism organisations', Tourism Management, vol. 11, no. 3, pp. 206-13. Cityscape (2009), Saudi Arabia expects 8 million pilgrims by 2010. June 13, 2009. http://www.eyeofdubai.com/v1/news/newsdetail-31940.htm (cited on 5-9-09). Clerides, S. R., Nearchou, P. & Pashardes, P. (2008), 'Intermediaries as quality assessors: Tour operators in the travel industry', International Journal of Industrial Organization, vol. 26, no. 1, pp. 372-392. Cochrane, J. (2009), 'Spirits, nature and pilgrimage: The other' dimension in Javanese domestic tourism', Journal of Management, Spirituality & Religion, vol. 6, no. 2, pp. 107-120. Cohen, E. (1972), 'Towards a sociology of international tourism', Social Research, vol. 39, no.1, pp.16482. Cohen, E. (2008), 'The changing faces of contemporary tourism', Society, vol. 45, no. 4, pp. 330-333. Constantinides, E. (2006), 'The marketing mix revisited: towards the 21st century marketing', Journal of Marketing Management, vol. 22, no.1, pp. 407-438. Daniel, K. & Darby, D. N. (1997), 'A dual perspective of customer orientation: a modification, extension and application of the SOCO scale', International Journal of Service Industry Management, vol. 8, no.2, pp.131-147. Dann, S. (2009), 'Redefining social marketing with contemporary commercial marketing definitions', Journal of Business Research, doi:10.1016/j.jbusres.2009.02.013. Das, J. & DiRienzo, C. E. (2009), 'Global tourism competitiveness and freedom of the press: A nonlinear relationship', Journal of Travel Research, vol. 47, no. 4, pp. 470-479. Delbecq, A. L. (2000), 'Spirituality for business leadership: Reporting on a pilot course for MBAs and CEOs', Journal of Management Inquiry, vol. 9, no.1, pp. 117-128. Dev, C., Zhou, K. Z., Brown, J. & Agarwal, S. (2009), 'Customer orientation or competitor orientation', Cornell Hospitality Quarterly, vol. 50, no. 1, pp. 19-28. Eade, J. (1992), 'Pilgrimage and tourism at Lourdes, France', Annals of Tourism Research, vol. 19, no. 1, pp. 18-32. Elliott, J. (1997), Tourism: politics and public sector management, Routledge, New York. European Union Commission ( EUC 2007), Public-Private Partnership in the Management of Cultural Heritage Assets – a European Challenge, European Union Commission (EUC) http,://www.smb.spk-berlin.de/smb/news/details.php?objID=13957, International Seminar on the occasion of the German Presidency of the EU Council 2007, Berlin. Farrell, M. A. & Oczkowski, E. (2009), „Service worker customer orientation, organisation/job fit and perceived organisational support‟, Journal of Strategic Marketing, vol. 17, no. 2, pp. 149-167. Feng, R., Morrison, A. M. & Ismail, J. A. (2003), 'East versus West: A comparison of online destination marketing in China and the USA', Journal of Vacation Marketing, vol. 10, no. 1, pp. 43-56. Fernando, M. & Jackson, B. (2006), 'The influence of religion-based workplace spirituality on business leaders' decision-making: An inter-faith study', Journal of Management & Organization, vol. 12, no. 1, pp. 23-39. Finney, R. Z., Orwig, R. A., Spake, D. F. (2009), 'Lotus-eaters, pilgrims, seekers, and accidental tourists: How different travellers consume the sacred and the profane', Services Marketing Quarterly, vol. 30, no. 2, pp. 148-173. 38

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Fleischer, A. & Rivlin, J. (2009), 'More or better?: Quantity and quality issues in tourism consumption', Journal of Travel Research, vol. 47, no. 3, pp. 285-294. Geary, G. (2008), 'Destination enlightenment: Branding Buddhism and spiritual tourism in Bodhgaya, Bihar', Anthropology Today, vol. 24, no. 3, pp. 11-14. Government of India. (GOI 2008), Public and Private Partnerships In India, Ministry of Finance, http://www.pppinindia.com/state-policy-andhra-pradesh.asp (cited on 14-9-09). Government of Rajasthan. (GOR 2009), Rajasthan Foundation, http://www.rajasthanfoundation.org/todays_rajasthan/tourism.htm (cited on 14-9-09). Gronroos, C. (1989), 'Defining marketing: a market-oriented approach', European Journal of Marketing, vol. 23, no. 1, pp. 52-60. Gronroos, C. (1997), 'From marketing mix to relationship marketing - towards a paradigm shift in marketing', Management Decision, vol. 35, no. 4, pp. 322-339. Hakansson, H, & Waluszewski, A. (2005), 'Developing a new understanding of markets: reinterpreting the 4Ps', The Journal of Business & Industrial Marketing, vol. 20, no. 2/3, pp. 110-117. Haq, F. & Jackson, J. (2009), „Spiritual journey to Hajj: Australian and Pakistani experience and expectations‟, Journal of Management, Spirituality & Religion, vol. 6, no. 2, pp. 141-156. Hassan, S. & Craft, S. (2005), 'Linking global market segmentation decisions with strategic positioning options', Journal of Consumer Marketing, vol. 22, no. 2, pp. 81-89. Heintzman, P. (2003), 'The wilderness experience and spirituality: What recent research tells us', Journal of Physical Education, Recreation & Dance, vol. 74, no. 6, pp. 27-31. Huang, L., Chen, K-H., Wu, Y-W. (2009), „What kind of marketing distribution mix can maximize revenues: The wholesaler travel agencies‟ perspective‟? Tourism Management, vol. 30, no. 5, pp. 733-739. Hunt, S. D., Arnett, D. B. & Madhavaram, S. (2006), 'The explanatory foundations of relationship marketing theory', Journal of Business & Industrial Marketing, vol. 21, no.2, pp. 72-87. Iyer, G., Soberman, D. & Villas-Boas, J. M. (2005), 'The targeting of advertising', Marketing Science, vol. 24, no. 3; pp. 461-476. Jiang, Y. (2007), 'Price discrimination with opaque products', Journal of Revenue and Pricing Management, vol. 6, no. 2; pp. 118-135. Kavaratzis, M. & Ashworth, G. J. (2008), 'Place marketing: how did we get here and where are we going'? Journal of Place Management and Development, vol. 1, no. 2, pp. 150-159. Konz, G. N. P. & Ryan, F. X. (1999), 'Maintaining an organizational spirituality: no easy task', Journal of Organizational Change Management, vol. 12, no. 3, pp. 200-210. Kulendran, N. & Dwyer, L. (2009), 'Measuring the return from Australian tourism marketing expenditure', Journal of Travel Research, vol. 47, no. 3, pp. 275-284. Lee, G., Morrison, A. A., Lheto, X. Y., Webb, J. & Reid, J. (2005), 'VFR: Is it really marginal? A financial consideration of French overseas travelers', Journal of Vacation Marketing, vol. 11, no. 4, pp. 340356. Li, X. & Petrick, J. F. (2008), 'Tourism marketing in an era of paradigm shift', Journal of Travel Research, vol. 46, no. 3, pp. 235-248. Linder, S. H. (2000), “Coming to Terms with the Public-Private Partnership: A Grammar of Multiple Meanings”, in P. Vaillancourt Rosenau (ed) Public-Private Policy Partnerships, The MIT Press, Cambridge MA., Chapter 2. Lindgreen, A. (2001), 'A framework for studying relationship marketing dyads', Qualitative Market Research: An International Journal, vol. 4, no. 2, pp. 75-88. Mahajan, V. & Muller, E. (1999), 'When is it worthwhile targeting the majority instead of the innovators in a new product launch?' Journal of Marketing Research, vol. 35, no. 4, pp. 488-495. 39

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March, R. (1994), 'Tourism marketing myopia', Tourism Management, vol. 15, no. 6, pp. 411-415. Markell, J. (2009), Public-Private Partnership to Build Church Enhances State‟s „Spiritual Wealth‟ (July, 26, 2009) http://governor.delaware.gov/news/2009/07july/20090726-spritualwealth.html (cited on 14-9-09). Mbone-Enie, R.O. (2003), International Public-Private Partnership for Sustainable Tourism Development in Cameroon, in Public and Private Sector Partnerships: Sustainable Success edited by L. Montanheiro, F. Kuznik, and Ochojski, A. (2003), England, Sheffield Hallam University Press, UK. McCarthy, E. J. (1964), Basic Marketing: A Managerial Approach, Richard D. Irwin, Inc., Homewood. McKercher, B. (2002), 'Towards a classification of cultural tourists', The International Journal of Tourism Research, vol. 4, no. 1, pp. 29-38. Medhekar, A. (2003), „Public Private Partnership Initiatives in Queensland‟, in L. Montanheiro, F. Kuznik & A. Ochoski (eds), Public and Private Sector Partnerships: Sustainable Success: 293-304: Sheffield Hallam University Press, UK. Medhekar, A. (2005), „Public-Private Partnerships for Regional Development in Queensland: Uncorking the bottlenecks‟, Proceedings of the 9th Annual National Sustainable Economic Growth for Regional Australia (SEGRA) Conference (CD Rom), Yeppoon, September 4th – 7th: SEGRA Secretariat. Mitroff, I. & Denton, E. E. (1999), A Spiritual Audit of Corporate America: A Hard Look at Spirituality, Religion, and Values in the Workplace, Jossey-Bass Inc., California. Moliner, M. A., Sánchez, J., Rodríguez, R. M. & Callarisa, L. (2007), 'Relationship quality with a travel agency: The influence of the postpurchase perceived value of a tourism package', Tourism and Hospitality Research, vol. 7, no. 3-4, pp. 194-211. Moller, K. (2006), 'Marketing mix discussion - Is the mix misleading us or are we misreading the mix? Comment on: The marketing mix revisited: Towards the 21st century marketing by Constantinides, E.', Journal of Marketing Management, vol. 22, no. 3-4, pp. 439-450. Montanheiro, L., F. Kuznik, and Ochojski, A. (2003), Public and Private Sector Partnerships: Sustainable Success eds. England, Sheffield Hallam University Press, UK. Morrison, A. M. (2002), Hospitality and Travel Marketing, 3rd ed., Delmar Thomson Learning, US. Morrison, A. M., Hsieh, S. & O'Leary, J. T. (1994), 'Segmenting the Australian domestic travel market by holiday activity participation', Journal of Tourism Studies, no. 5, no. 1 , pp. 39-56. Mowlana, H. & Smith, G. (1993), 'Tourism in a global context: The case of frequent traveler programs', Journal of Travel Research, vol. 31, no.3, pp. 20-27. Nishimura, S., King, B. & Waryszak, R. (2007), 'The use of travel guidebooks by packaged and nonpackaged Japanese travellers: A comparative study', Journal of Vacation Marketing, vol. 13, no. 4, pp. 291-310. OECD (1997), Conference on Partnerships in Tourism: A Tool for Job Creation, http://www.oecd.org/document/49/0,3343,en_2825_503546_1932849_1_1_1_1,00.html (cited on 21-9-09). OECD (2006), MENA Workshop on Public-Private Partnerships for Infrastructure Financing, http://www.oecd.org/document/19/0,3343,en_34645207_34645466_37419731_1_1_1_1,00.html (cited on 21-9-09). Palmer, R. & Wilson, H. (2009), „An exploratory case study analysis of contemporary marketing practices, Journal of Strategic Marketing, vol. 17, no. 2, pp. 169-187. Pearce, D. G. & Schott, C. (2005), 'Tourism distribution channels: The visitor's perspective', Journal of Travel Research, vol. 44, pp. 50-63.

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Pearce, D. G., Tan, R. & Schott, C. (2007), 'Distribution channels in international markets: a comparative analysis of the distribution of New Zealand tourism in Australia, Great Britain and the USA', Current Issues in Tourism, vol. 10, no. 1, pp. 33-60. Pearce, D. G., Reid, L. & Schott, C. (2009), 'Travel arrangements and the distribution behaviour of New Zealand outbound travellers', Journal of Travel & Tourism Marketing, vol. 26, no. 1, pp. 80-97. Pellinen, J. (2003), 'Making price decisions in tourism enterprises', International Journal of Hospitality Management, vol. 22, no. 2, pp. 217-235. Pesut, B. (2003), 'Developing spirituality in the curriculum: worldviews, intrapersonal connectedness, interpersonal connectedness', Nursing and Health Care Perspectives, vol. 24, no. 6, pp. 290-294. Piedmont, R. L. & Leach, M. M. (2002), 'Cross-cultural generalizability of the spiritual transcendence scale in India', The American Behavioral Scientist, vol. 45, no. 12, pp. 1888-1901. Rafiq, M. & Ahmed, P. K. (1995), 'Using the 7Ps as a generic marketing mix: An exploratory survey of UK and European marketing academics', Marketing Intelligence & Planning, vol. 13, no. 9, pp.4-16. Read, S., Dew, D., Sarasvathy, S. D., Song, M. & Wiltbank, R. (2009), 'Marketing under uncertainty: The logic of an effectual approach', Journal of Marketing, vol. 73, no. 3, pp. 1-18. Riege, A. M. & Perry, C. (2000), 'National marketing strategies in international travel and tourism', European Journal of Marketing, vol. 34, no. 11/12, pp. 1290-1305. Rinschede, G. (1992), 'Forms of religious tourism', Annals of Tourism Research, vol. 19, no. 1, pp. 5167. Rosentraub, M. S. & Joo, M. (2009), „Tourism and economic development: Which investments produce gains for regions‟, Tourism Management, vol. 30, no. 5, pp. 759-770. Rountree, K. (2002), 'Goddess pilgrims as tourists: Inscribing the body through sacred travel', Sociology of Religion, vol. 63, no. 4, pp. 475-496. Sagar, N.K. (2007), UNWTO adopts Uttarakhand as a 'tourism site', (November 26, 2007) http://www.nowpublic.com/style/unwto-adopts-uttarakhand-tourism-site (cited on 14-9-09). Schaeffer, P. V. and S. Loveridge (2002), "Towards an understanding of types of public-private cooperation." Public Performance and Management Review 26(2): 169-189. Scott, C. (2008), 'Using "Values" to position and promote museums', International Journal of Arts Management, vol. 11, no. 1, pp. 28-41. Selin, S., & Chavez, D. (1995). 'Developing and evolutionary tourism partnership model', Annals of Tourism Research, vol. 22, no. 4, pp. 844-856. Selin, S. (1999), „Developing a Typology of Sustainable Tourism Partnership‟, Journal of Sustainable Tourism, Vol. 7: 3 & 4. Shackley, M. (2002), 'Space, sanctity and service; the English Cathedral as heterotopia', The International Journal of Tourism Research, vol. 4, no. 5, pp. 345-352. Sharpley, R. & Sundaram, P. (2005), 'Tourism: a sacred journey? The case of Ashram tourism, India', The International Journal of Tourism Research, vol. 7, no. 3, pp. 161-171. Simpson, D. B., Cloud, D. S., Newman, J. L. & Fuqua, D. R. (2008), 'Sex and gender differences in religiousness and spirituality', Journal of Psychology and Theology, vol. 36, no. 1, pp. 42-52. Smith, K. A. (2007), 'Distribution channels for events: Supply and demand-side perspectives', Journal of Vacation Marketing, vol. 13, no. 4, pp. 321-333. Smith, R. A. (2009), 'A bleak outlook with a silver lining', Cornell Hospitality Quarterly, vol. 50, no. 1, pp. 12-14. Sousa, C. M. P. & Bradley, F. (2009), 'Price adaptation in export markets', European Journal of Marketing, vol. 43, no. 3/4, pp. 438 - 458.

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Tilson, D. J. (2005), 'Religious-spiritual tourism and promotional campaigning: A church-state partnership for St. James and Spain', Journal of Hospitality & Leisure Marketing, vol. 12, no. 1/2, pp. 9-40. Timothy, D. J. & Olsen, D. H. (2006), Tourism and religious journeys, in D. J. Timothy and D. H. Olsen (eds.), Tourism, Religion and Spiritual Journeys, Routledge, New York, pp. 1-21. Tollin, K. & Jones, R. (2009), 'Marketing logics for competitive advantage'? European Journal of Marketing, vol. 43, no. 3/4, pp. 523 - 550. Tribe, J. (2008), 'Tourism: A Critical Business', Journal of Travel Research, vol. 46, no. 3, pp. 245-255. UNESCAP (2004), Major Issues in Transport, Tourism and Infrastructure Development: Enhancing the Role of Tourism in Social and Economic Development and Major Initiatives of UESCAP: 1-11. Varkey, B. J. (2006), India is posed to climb up the ranks on the world tourist map by shifting its focus from mass tourism to niche segments like health, spiritual and eco tourism. http://www.mediascope.com/pres7.htm (cited on 14-9-09). Vu, J. C. & Turner, L. (2009), 'The economic structure of world tourism', Tourism Economics, vol. 15, no. 1, pp. 5-21. Wagner, T., Hennig-Thurau, T. & Rudolph, T. (2009), 'Does customer demotion jeopardize loyalty'? Journal of Marketing, vol. 73, no. 3, pp. 69-85. World Tourism Organization. (WTO 1999), Global Code of Ethics for Tourism, www.worldtourism.org/projects/ethics/ethics.html (cited on 14-9-09) World Tourism Organization. (WTO 2004), Ministerial Conference on Cultural Tourism and Poverty Alleviation, Hue, Vietnam: 1-12. World Tourism Organization. (WTO 2009), Facts and Figures, The UNWTO World Tourism Barometer, http://unwto.org/facts/eng/barometer.htm (cited on 3-8-09). World Tourism Organization. (WTO 2009), Travel & Tourism Competitiveness Report 4-3-09. http://www.weforum.org/en/initiatives/gcp/TravelandTourismReport/index.htm (cited on 2-9-09). Yuan, J., Cai, L. A., Morrison, A. M. & Linton, S. (2005), 'An analysis of wine festival attendees' motivations: A synergy of wine, travel and special events'? Journal of Vacation Marketing, vol. 11, no. 1, pp. 41-59. Zamani-Farahani, H. and H., Henderson, J. C. (2009), Islamic tourism and managing tourism development in Islamic societies: the cases of Iran and Saudi Arabia in, International Journal of Tourism Research 13 July 2009 published online 8:40PM DOI: 10.1002/jtr.741. John Wiley & Sons, Ltd., (cited on 24-9-09).

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R. M. Mano

I DON’T WANT TO READ ABOUT YOU IN THE PAPER

Ronald M. Mano Weber State University, USA ABSTRACT This paper is based on a speech on ethics that was given by the author to two separate professional groups. The objective is to encourage participants to always choose to do the right thing. The theme is that the author never wants his students to be written up in the newspaper or other news media for doing improper activities. Especially, he does not want any more of his students to go to jail for improper behavior. The paper includes examples of people who did improper activities. They include both individuals with whom the author is not acquainted and those with whom he is acquainted. The author is nearing the end of his academic career and refers to several articles which he and colleagues have published over the years. The Continental Vending/Valley Mortgage case of the late 1960‟s and early 1970‟s are a critical part of the paper. That is the first case in which auditors were tried and convicted as criminals in a failed audit. A critical lesson should have been learned from that case but it appears the profession has failed to do so. An important part of the paper is a discussion of “condition” and “criteria.” These are related to Principles-based and Rules-based accounting. These are related to the Enron and Global Crossing cases or recent years. Keywords: Ethics, Continental Vending, Valley Mortgage, Condition, Criteria, Principles-Based, Rules-Based, Accounting, Enron, Global Crossing.

INTRODUCTION I have often seen articles published that were actually speeches given by the author that was then picked up and published as an article. These were typically speeches made by rather famous people made to fairly high profile audiences. I am certainly not a famous person but I recently gave a speech to two different audiences that were not particularly high profile at least on the national scene. However, the speeches did seem to go over quite well so I decided to write it up as an article and see if a journal would pick it up and publish it as an article. Both organizations asked me to give a presentation on ethics and thus I chose as the title of my presentation a statement that I often make to my students. I often tell them about ethical situations either from the past or sometimes from current news. The recent Madoff and Rajartnam cases (Wall Street Journal October 17th and 20th, 2009) are two cases in point. I also tell them of cases regarding

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former students and colleagues from the professional world of whom I have read about in the paper for doing improper activities and in some cases actually went to jail. I happen to be a golfer and one of the people who asked me to make the presentation was the person who introduced me to golf so I began with a couple of golf stories. I have been a professor for over 35 years so I am nearing the end of my academic career and these two golf stories relate to some elderly golfers so I can relate to both stories. The first story is about a 70 year-old golfer who was still quite good but his eyesight was beginning to fail so he had difficulty seeing where his ball was landing. After telling his dilemma to a friend, the friend mentioned that he knew 90 year-old who did not like golf but loved to go walking and had perfect eyesight. The friend suggested that the two of them get together the next time and thus made the arrangement. When they got together, the 70 year-old teed it up and hit a wonderful drive right down the center of the fairway. He immediately turned to the 90 year-old and said, “did you see where it went”? The 90 year-old immediately replied, “yes.” The 70 year-old asked where it went and the 90 year-old replied, “I can‟t remember.” I am getting to the point where I can relate to the frailties of both the 70 and 90 year-old. The other golf story relates to an interesting clip that aired during the 2008 British Open. An old guy, like myself, and a young buck were on the tee box and between them and the green was a large bushy tree. The old guy said to the young buck, “When I was your age, I used to hit the ball right over that tree and onto the green.” Recognizing the challenge, the young buck teed up the ball and hit a terrific shot only to see it hit a branch at the top of the tree, trickle through the tree and land at the base of the trunk. The old guy then said, “When I was your age that tree was this tall (holding his hand about five feet above the ground).”

USING SLIDES IN MY PRESENTATION Several days prior to my presentation I was asked to submit any powerpoint slides or handouts that I would be using. I told them that I was not planning on using any of them. Then at the presentation I told them the following story. Several years ago on the very first day of class I found an article in the Wall Street Journal that was perfect for the class. So I made copies of the article which was less than a single page and took them to class. I handed out a copy to each student and we discussed it and how it related to the class. A few days later I was attending a CPA breakfast or lunch meeting and the speaker was discussing intellectual property. As he was speaking, I was getting increasingly anxious. Finally I raised my hand and asked, “If I were to find an excellent article in the Wall Street Journal and made copies for my students and took them to class and discussed it, would I be in trouble?” Instantly the speaker said, “Yes”. Then someone else raised his hand and said, “If Ron just made a transparency of it would that be okay?” Instantly the speaker said, “That would be worse.” He never explained why that would be worse and I never asked because I had heard enough. Therefore whenever I speak, I seldom use powerpoints or slides and I never make copies of any articles or jokes that I might see published and would like to use.

BERNIE MADOFF I was asked if I knew enough about Bernie Madoff to speak about him. I told the requester that all I knew about Bernie was what I had read in the papers just like everyone else. However, I replied that I

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R. M. Mano

did have some opinions that might shed some light on why the Bernie Madoff‟s of the world are able to succeed in what they do.

DON’T GO TO JAIL I began my speech by reading parts of an article that I wrote and which appeared in the October 25November 7, 1999 issue of Accounting Today. The article is titled, “Don‟t go to Jail and Other good advice for Accountants.” I read the following parts from the article: When I was a youth, one of my heroes was Ray Edmonds. Ray had been my scoutmaster. As I was about to graduate with my accounting degree, Ray was close to death. I went to visit him at his home. Although he was bedridden, he was still very much alert. He was pleased to see me and asked what I was doing at the time. I told him that I was about to graduate from college with a degree in accounting. He looked at me and said, “Don‟t go to jail.” I just chuckled and completed our visit, which was wonderful but was the last time I say Ray before his passing. I had often thought, “What a strange thing for Ray to say to me.” Now I think, “That was about the best advice I ever received in my life.” I am now an accounting professor and I often tell my students that I don‟t want to read about them in the paper (at least not because of improper behavior). I also tell them that if I did read about them in the paper, they would not, unfortunately, be the first former student whose name had appeared in the paper for improper behavior. I have a former colleague with whom I worked in public accounting who actually did go to jail. So let me give Ray‟s advice to accountants everywhere – “Don‟t go to jail.” We often hear of “management fraud.” For many years, I thought that it was a terrible thing that management could be as dishonest as to intentionally falsify financial statements in order to deceive investors or auditors. As I think about the issue of management fraud, it occurs to me that management fraud that results in falsified financial statements could never happen if all accountants were so completely honest that they would not allow the quality of their financial statements to be influenced by management pressures. We accountants must be interested in figuring out how much was made and reporting it. Unfortunately, too often we seem to be told how much management wants to report in income or earning per share and then we set out to manipulate the financial statements to make it happen…. On Sept. 28, 1998, Arthur Levitt, chairman of the SEC (now former chair) gave a speech at New York University. In it, he criticized what he called “earnings management.” Little discussion is necessary for readers of this article to understand the meaning of earnings management. We accountants tend to lay blame for this type of behavior at the feet of management. I believe that a major portion of the fault for such financial reporting lies right at our feet, as well at the feet of management. There are probably few managements of companies who could report managed earnings if their accountants absolutely refused to go along with the ruse. 45

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I recently viewed for the umpteenth time, the video “Billion-Dollar Bubble.” That video is the story of the massive Equity Funding fraud of the late 1960‟s and early 1970‟s. It is a classic case of where the accountant failed to insist that the financial statements be presented fairly and went along with management‟s desire to manage income. In that case, several company executives, including the accountant, actually went to jail. A long-time friend of mine, Bob Sterling, talks of what he calls “truth in accounting.” Few phrases have a sweeter ring to me than that. I happen to believe that there is some truth out there and it is our function as accountants to see that what we report is the truth. Frankly, I don‟t believe that generally accepted accounting principles necessarily represent the truth. In fact, when auditors say, “Fairly presented in accordance with generally accepted accounting principles,” I have always believed that two statements were being made rather than only one statement. As accountants, we must insure that our financial statements are fairly presented. In my opinion, it is even more critical that they be fairly presented than it is that they be in accordance with GAAP. Remember, it is better to sleep well than to eat well. So let me conclude by repeating the words of Ray Edmonds “Don‟t go to jail.”

SAMPLE AUDITOR REPORTS Kim Anderson, who invited me to speak gave me an audit report that someone had prepared as a joke stating that it was the audit report of the audit of Bernie Madoff‟s company. It states: We done the best we could on this audit and considering all things involved, we figure its pretty close. You know it‟s darn hard to hit it right on the button cause there‟s so many changes from year to year. Good help is hard to get and in order to keep down the cost of the audit, we had to estimate some of the items like the cash receipts and cash disbursements. We were able to do this by projecting figures we had on other companies, we worked on a few years ago. However, we verified the petty cash and come out pretty close to what they figured should be left. Some of the stuff we did check was pretty far off but we figure if they ain‟t worried about it, why get everybody upset. Well, as we said above, we done the best we could and whatever figures ain‟t exactly right, ain‟t too far off. It it‟ll make you feel any better, remember this is the same way we done it last year. Since Kim had given me the above auditors‟ opinion to use in my presentation, I decided to go to my files and find a couple other of my favorites. The following one appeared in the Wall Street Journal around 1980. I did not even copy the specific date of the issue. I hope it is not a violation of intellectual property rights to use it without a specific reference. We examined the Consolidated Balance Sheets of the Barrel-Proof Company as of December 31, 1880 and December 31, 1980. Our examination was made in accordance with what we 46

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will maintain, under oath are generally accepted auditing standards and included the record we considered necessary to cover ourselves under the circumstances. In our opinion, the Consolidated Balance Sheets of The Barrel-Proof Company display a uniquely creative exception to generally accepted accounting procedures. However, my favorite one appeared on the cover of the March 15, 1977 issue of Forbes magazine. To the Directors and Stockholders: We have examined the Consolidated Balance Sheet of the company and consolidated subsidiaries as of December 31, 1976 and 1975. In our opinion, these financial statements present fairly the financial position of the companies, in conformity with generally accepted accounting principles consistently applied. On the other hand, there is a growing body of opinion that holds that our opinion is not worth a damn.

CONTINENTAL VENDING CASE Usually when I speak to groups of professional accountants, I work in the Continental Vending case. I believe that this is perhaps the most important case to ever affect accountants but is perhaps one of the most forgotten cases. To briefly introduce this case, I read from an article titled, “Principles-Based Accounting” that I wrote with two colleagues in the February, 2006 issue of The CPA Journal. Continental Vending was one of the first major criminal cases successfully brought against auditors….The auditors were engaged to audit Continental Vending Machine Corporation. A Continental affiliate, Valley Commercial Corporation, borrowed a large sum of money from Continental. Valley then loaned the funds to a dominant officer and significant shareholder of both Valley and Continental. The auditors learned that the dominant officer would not be able to repay Valley, and the auditors knew that as a consequence Valley would be unable to repay Continental. Nevertheless, the Continental financial statements showed the receivable from Valley as an asset, with only a relatively obscure footnote explaining the circumstances surrounding the receivable. Continental never did collect payments from Valley on the receivable in question: in fact, Continental went bankrupt shortly after the financial statements were issued. When the U.S. government brought criminal charges against the auditors, the auditors maintained that they properly followed generally accepted auditing standards (GAAS) during the audit and that the footnote also complied with applicable standards. Moreover, several experts testified that the footnote disclosure explaining the receivable from Valley complied with generally accepted accounting principles (GAAP) and that the auditors had followed GAAS. …the district court judge instructed the jury that mere compliance with professional accounting standards was not a complete defense. Rather, the critical test was whether the financial 47

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statements fairly represented Continental‟s financial status. The jury found the defendants guilty. The appellate court judge…told the accounting profession that “fairly presented…in accordance with generally accepted accounting principles” is two statements rather than one. Furthermore, the clear message was that if one is to prevail over the other, it must be “fairly presented.” “Fairly presented” is principles based accounting and “in accordance with GAAP” is rules based accounting.

WE SHOULD DO SMART THINGS I then told a story about my daughter when she was about five years old. She is now in college. I was trying to get her to say something nice to me so I was saying things like, “you‟re cuter than cute” or “you‟re nicer than nice,” After several of those, she finally looked up at me with a twinkle in her eye and I thought that finally she was going to say something nice to me. She said, “you‟re dumber than dumb.” I use that story to introduce the fact that I believe that in several ways, we accountants have been dumber than dumb. Let‟s talk about a few examples. On August 5, 2005 I read a Wall Street Journal article about the sentencing of Betty Vinson and Troy Normand of WorldCom, the largest bankruptcy in the history of mankind. They were sentenced for their participation in the preparation of fraudulent financial statements after being pressured by their superiors Scott Sullivan and David Meyers. Just five days later on August 10, 2005 I was at the American Accounting Association annual meeting in San Francisco, California. One of the keynote speakers was Cynthia Cooper who was the internal auditor of WorldCom that found and exposed the fraud there. As Cynthia Cooper was talking about Betty Vinson and Troy Normand she read letters of resignation which were written by them. Parts of those letters are included in her book, Extraordinary Circumstances. According to her book, Troy Normand wrote: Due to circumstances surrounding the third quarter 2000 close, I feel I have no choice but to resign. I have chosen not to participate in the recommended course of action and have decided not to take any future risk. Betty Vinson wrote: Dear Buddy, This letter is to serve as notice of my resignation from WorldCom effective today. The actions proposed regarding quarter close entries has necessitated this action. If needed, I can assist with any transition issues that may arise. My income situation is such that I request we…work out an equitable arrangement regarding some sort of salary and benefits continuation until I can obtain other employment, because I feel that upper management has forced my decision surrounding my resignation. This is not the course of action I prefer, but feel I must take. It has truly been a pleasure working for you. As I was sitting in that meeting in San Francisco and listening to Cynthia Cooper read those letters of resignation I was asking myself what was going on. You see, I actually had the Wall Street Journal article about the sentencing in my hand as I was listening. Then Cynthia Cooper said, “They never sent the letters.” I suppose they had a house payment and a car payment and decided to go along with the 48

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fraud rather than resign and now are convicted and sentenced criminals. They were probably dumber than dumb. I next told the attendees a good story. It is about Ryan Thomas a student of mine. Ryan was not a typical accountant. He had long hair and maybe even an earring (I don‟t recall for sure). When Ryan was a student, he used to tell me that he would take me fishing and would often show me pictures of huge trout he had caught. He never did take me fishing but for many reasons, I took a particular liking to Ryan. I really did like him. A few years after he graduated, I got a call from Ryan. He wanted to talk about a situation that he was facing at his employment. He said that his employer was pressuring him to do some things that he felt were not right and perhaps even fraudulent. He asked for my advice. I told him that I would definitely not participate and that he should get out of that situation as soon as possible. After I hung up the phone, I had a totally sick feeling. I was sure that Ryan was going to go along with management and bow to the pressure just as Betty Vinson and Troy Normand had done at WorldCom. At that time I used to have one of the most outstanding accountants and a person of impeccable integrity come to speak to my auditing class. His name is Joe Knudsen. That fall when Joe came to speak to my class, there was Ryan Thomas at his side. After the presentation, I asked Ryan what had happened. He told me that he had a mortgage and car payment and family to feed. But after our conversation he went in and resigned his position. He did not have another job lined up but was able to get hooked up with Joe Knudsen and was pleased with his situation. I am convinced that he will never face those same pressures with Joe Knudsen as he did with his prior employer. I have always been proud of Ryan Thomas and know that he was NOT dumber than dumb. He did just the opposite of Betty Vinson and Troy Normand.

“CONDITION” AND “CRITERIA” In the February, 2006 CPA Journal article mentioned above, we talked about “condition” and “criteria.” Here is what we wrote: Internal auditors use what they call “condition” and “criteria.” Condition is the current situation: what actually exists. Criteria is what the ideal situation would be. The internal auditor must determine what to use as criteria. This is done by a careful analysis of the business situation based on the internal auditor‟s experience and knowledge. There is no rulebook for the internal auditor to use. Each situation is different and demands different analytical skills. The auditor must decide on the best practice. To determine criteria, the external auditor turns to GAAP. The external auditor applies those rules, and if the company‟s practice can be “squeezed” into the confines of GAAP, the external auditor declares that the practice is “fairly presented in accordance with GAAP.” The external auditor might not agree with the presentation yet support it because it fits within the rules. There is no commitment to the rule for the external auditor as there must be a commitment to criteria for the internal auditor…. “Criteria” in internal auditing would be principles-based accounting. “Criteria” in external auditing would be rule-based accounting. It seems clear that the profession needs principles49

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based accounting today. It needs external auditors to take some ownership in the criteria that they apply when they profess that the financial statements are “fairly presented.” I believe that Andy Fastow of Enron was the world‟s foremost expert on accounting for Special Purpose Entities. However, in my opinion, he used that expertise not to provide full disclosure of Enron‟s financial condition but used that knowledge to hide the truth. Quoting from an article that two colleagues and I wrote and was published in the May/June, 2003 issue of CPAFocus titled, “Present Day Lessons from Robert R. Steling‟s Lecture on Accounting Power,” we wrote the following about this disclosure. In the Nov. 5, 2001 Wall Street Journal, an article titled, “Andersen Faces Scrutiny on Clarity of Enron Disclosures” described how parts of the Enron annual report were “indecipherable.” The article quotes an Enron spokesperson, Karen Denne, as stating, “They comply with reporting requirements.” She continues by saying, “…investors who didn‟t understand the transactions didn‟t have to buy Enron stock.” Exactly one month after the first Enron article reference above, another Enron article appeared in the Dec. 5, 2001, Wall Street Journal. That article stated, “The company (Enron) hired legions of lawyers and accountants to help it meet the letter of federal securities laws while trampling on the intent of those laws. It became adept at giving technically correct answers rather than simply honest ones.” When accountants rely on GAAP rather than their own criteria which they believe in their heart-ofhearts, accounting such as happened at Global Crossing occurs. We discussed that case in the same February, 2006, The CPA Journal article referenced earlier. On March 11, 2004, the Wall Street Journal reported that Global Crossing had just reported a quarterly profit of $24.88 billion which dwarfed the prior record of $6.7 billion held by Exxon for its fourth quarter of 2003. Global Crossing had been under Chapter 11 bankruptcy protection. It managed to turn things around quickly on revenue of $719 million, or $34.60 of profit on every $1 of revenue – a fantastic profit margin. And that is net profit margin, not gross profit margin. To understand how it was able to claim this, remember the equation: Assets = Liabilities + Owners‟ Equity In bankruptcy, the liabilities are forgiven. Therefore, to keep the equation in balance, either assets must go down or owners‟ equity must go up. Without being privy to internal discussions, one might still reasonably assume that the company accountants challenged the auditors to show them “where in the rules” it says they could not do that. In fact, the rules do recommend that liabilities forgiven in bankruptcy be handled in exactly this manner. The authors believe that both the in house accountants and the auditors of Global Crossing would have been well served had they gone back and studied the statements made by the appellate court in Continental Vending. The application of Rule 203, the definition of “criteria” as used in internal auditing, and the lessons of Continental Vending would have clearly indicated that a better reporting approach would have been to take these gains directly to 50

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retained earnings rather than through earnings, and avoid a situation where a bankrupt company reports the highest quarterly profit (by fourfold) in the history of American business.

WHY DO WE HAVE SO MANY RULES? I am a firm believer that we need principles-based accounting. We need accountants who take ownership of the financial reporting of which they are partially responsible. A case that illustrates the need for this type of ownership is the situation that occurred in 1999 when the SEC issued their rule on revenue recognition (SAB 101). I discussed that problem in an article published in Accounting Today, April 17-30, 2000, titled “The SEC Promulgates the Obvious.” On Dec. 6, 1999, I received The Wall Street Journal, which contained an article titled, “SEC Lists Revenue-Booking Guideline, Says It Aims to Curb „Dot-Com‟ Abuses.” I read the article with some interest. It seems that the Securities and Exchange Commission had issued an official rule on the criteria that must exist before a company is allowed to book revenue. That day, I took the article to class with me and asked my undergraduate class at Weber State University what they thought should exist before a company recognized revenue. They came up with the following list:  An actual sale or goods or services  A specified price and  The ability to collect It turned out to be a pretty simple exercise because it took them about three minutes to come up with the list. Two days later, I spoke at an Institute of Internal Auditors meeting in Salt Lake City. Since the issue fit in well with my topic, I did the same exercise with that group of professionals. They came up with the same list in about the same amount of time. Next, I went to a faculty colleague and did the same exercise. In about the same amount of time, he came up with the same list. I have conducted the exercise a few additional times with other groups but always with the same result. Here is the list of criteria that the SEC came up with as reported in The Wall Street Journal on Dec. 6, 1999:  An agreement to deliver products and services  They have actually delivered the product or services  They have a fixed price for the product or services  They can collect the specified price Now I ask readers of this article: Why do we need a formal SEC rule to require what several different groups took about three minutes each to develop? Could it be that there are some problems out there that relate to the recognition of Revenue? It is regrettable when the SEC feels a need to promulgate as a formal rule, which should be totally obvious to even marginally qualified accountants.

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Exactly one month later (Jan. 6, 2000), while again reading The Wall Street Journal, I saw an article titled, “Auditors Miss a Fraud and SEC tries to Put Them Out of Business.” The title caught my eye so I read the entire article which mentioned a particularly bold fraud where the company, Cal Micro, was booking bogus sales to fake companies for products that didn‟t exist. Now surely, Cal Micro‟s accountants did not need the SEC rule to tell them that “booking bogus sales to fake companies for products that don‟t exit” is really not proper accounting.

WHO GETS INTO TROUBLE WITH ETHICS? Remember the title I choose for this article. I often tell my students that I don‟t want to read about them in the paper, at least not for doing improper activities. I also tell them that I don‟t want them to go to jail. However, I tell them that if I did read about them in the paper, they would not, unfortunately, be the first former student about whom I have read in the paper. I also tell them that if they were to go to jail, they would not be the first former student who actually went to jail. The next two people I am not going to name because I am pretty close to them personally. However, if you would like to google their names, please contact me directly and I will give you the names. Also, just putting some key words into Google from the information provided will pull up their names. Putting the names of two former students whom I knew had gotten in trouble into Google yielded the following: On February 5, 2007, in Salt Lake City…..(name withheld) was sentenced on January 10, 2007, to five months in prison, five months home detention, and one year of supervised release….(name withheld) was also ordered to pay $11,378 in restitution to the United States. On March 22, 2007…(former student and father) were indicted in separate indictments charging them with multiple counts of aiding and assisting in the preparation and presentation of false tax returns… In a case that is still pending google yielded the following: A special agent of the Office of Inspector General at the Department of Housing and Urban Development was arrested in Salt Lake City for making a false statement to federal authorities and bank fraud, according to the U.S. attorney‟s office for the District of Arizona. The indictment alleges that (name withheld) of Layton, Utah failed to report on a 2005 financial disclosure form that he held a position outside his duties as a federal agent in the company Funding Matrix LLC. He also failed to report on that same form that he conducted real estate business dealings…. A conviction for bank fraud has a maximum penalty of 30 years in prison, a $1 million fine or both. A conviction for making a false statement has a maximum penalty of five years in prison, a $250,000 fine or both. There are some other rather ordinary people who have gotten into trouble and whom I will not name because they were my neighbors. However, I will provide enough information that if you would like to look them up on the internet you could find them using some of the key words that I will provide. I hope disclosing these people does not give the impression that all my neighbors and students are crooks.

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The first person is one whom my daughter worked for when he owned a video rental shop in our neighborhood when such businesses were quite new. The Idaho Department of Finance today issued a Cease and Desist Order against a Utahbased company and its promoter ordering a halt to the offer and sale of a purported international, “elite bank trading program” in Idaho. Nations International LLC and (name withheld) are named in the order. Nations International operates from Sandy, Utah. This person was a fugitive for several months and was ultimately apprehended in Las Vegas, Nevada. The second person was an officer in my church. Hansen‟s co-defendant, (name withheld), of Salt Lake County, pleaded guilty to two second degree felony counts of Securities Fraud and a single count of Sales by an Unlicensed Broker-Dealer or Agent. Both defendents will be sentenced May 10, 2004 in Third District Court. The next person is one whom I have spent many a night with at scout camps. At one of those camps, for a half-hour he explained his business to me. At the end of that discussion, I said to myself, “I have been a CPA for over 30 years and have a Ph.D. in business and I don‟t have any idea what he was talking about.” When I returned home the next day, I told my wife that it sounds like money-laundering to me. Attorney, (name withheld), of Sandy, Utah was convicted on tax and fraud charges after a two week jury trial, the Justice Department and Internal Revenue Service (IRS) announced today….(name withheld), along with his co-conspirators, were indicted in November for conspiring to defraud the United States and to commit mail fraud and wire fraud. (name withheld) was also charged with tax evasion and assisting in the filing of false tax returns. This person is currently serving a ten-year prison sentence in federal prison.

CONCLUSION Accounting is a discipline that has had a wonderful reputation (at least prior to Enron). I believe that reputation is still strong but it is up to the current generation of accountants to see that it remains strong. I have often said to my students, “I am not proud of what my generation has done with this profession.” However, I tell them that I have great confidence that they will do better. Truly, if I did not have confidence in the next generation, I would not be able to continue to do what I do.

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Local Food Utilization: A Winner for the Environment and the Restaurant

LOCAL FOOD UTILIZATION: A WINNER FOR THE ENVIRONMENT AND THE RESTAURANT

Jeffrey Campbell1, Carl Pfaffenberg2 and Carol Costello3 University of Tennessee at Knoxville1,3, USA and Stephen F. Austin State University2, USA ABSTRACT The overall purpose of this research was to determine if utilizing locally-produced foods in some of the specialty restaurants in casinos would create a competitive advantage. A survey was designed to determine the practices and attitudes of individuals that visit casinos with regard to the purchase and utilization of locally-produced foods. Results indicated that fifty percent of the respondents visited a casino at least 7 times per year with the second largest group visiting 3-4 times per year (19.8%). Individuals ranked the “chance to win” as the most important component that contributes to their enjoyment for a casino type experience, but few (only 29%) indicated setting a limit on amount spent for food and beverage. Overall, service and food and beverage were ranked as important to the gaming experience, while the majority of respondents indicated they would frequent a restaurant that served locally grown foods. Respondents also indicated a willingness to pay an additional 10% for locally grown foods. Product quality and knowing where the food was grown were also cited as important. Results from this study indicate that individuals that visit casinos are likely to purchase locally grown foods when eating out in restaurants. Keywords: Locally Produced Foods, Gaming, Restaurants

INTRODUCTION Increasing concern for the environment has resulted in a recent interest in sustainability, the “Green” movement, and ways in which the two can be incorporated to appeal to consumers. One strategy in particular, which seems to have developed not only a relatively large following but also a great deal of academic interest, is the move toward locally-grown food products. Often viewed as a way to support local communities (Burchardi, Schroder, & Thiele, 2005; Darby, Batte, Ernst, & Roe, 2006) as well as increase food-related sustainability (Darby, et al., 2006; Robinson, & Smith, 2002), the use of locallygrown foods also has some interesting implications in terms of rousing consumer interest. The idea of locally produced foods is not a new concept, yet the channels in which these foods have become available to the masses have evolved over the years. Initially thought to be only available in fresh markets or framers markets, locally grown foods have moved into grocery channels, supercenters such as Wal-Mart and Target, Warehouse Clubs like Costco, specialty food markets, and even restaurants where chefs can add a touch of creativity to the products being served. Each channel offers a different level of experience to the consumer. The level of value that customers perceive from these local products, therefore, becomes a combination of various factors, including previous experience with 54

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local foods, the atmosphere in which the customers are buying or consuming, and qualities of the specific product they purchase. In light of this heightened awareness and demand for locally grown products, restaurants in a highly competitive environment are making changes to their menus to attempt to capture additional market share. The overall purpose of this research was to determine if utilizing locally-produced foods in some of the specialty restaurants in casinos would create a competitive advantage, as well as determine the practices and attitudes of those individuals that visit casinos with regard to the purchase and utilization of locally produced foods. Many casinos currently are recycling and incorporating “Green” strategies in their rooms division in response to customer interest in supporting these practices but little has been reported on utilizing locally-produced foods. Will casino customers choose properties that support the local communities and decrease the carbon footprint in this manner? Which type of casino customer will support these practices? Are there specific motivational or demographic characteristics that help to define these “locally-driven” customers? This descriptive research, through the use of cross-sectional analysis, will help to better understand the characteristics of casino patrons in their restaurant choice decisions and how this might impact the decision of specialty restaurants to begin offering more locallygrown product choices on their menus as a competitive advantage. The findings will also assist academics who have yet to adequately determine the role of “location” as it relates to purchasing locally grown foods, and what impact it may have on the consumer choice decisions.

LITERATURE REVIEW Though multiple studies have indicated consumer preference toward locally grown food products, and even a willingness to pay a premium for such products (Brown, 2003; Burchardi, et al., 2005; Darby, et al., 2006; Patterson, Olofsson, Richards, & Sass, 1999; Robinson & Smith, 2002), the particular meaning of “locally grown” seems to hold less sensitivity to the consumer than the concept itself. Darby, et al. (2006) found that freshness, support for local businesses, and taste were the highest ranking reasons for which the surveyed consumers chose to buy locally grown foods and that consumers overall were willing to pay more for locally produced foods than those produced elsewhere. These researchers reported that there was no significant differences in consumer‟s willingness to pay for products labeled as “grown nearby” versus “grown in Ohio” (the location of the study), indicating that state-grown is judged as equivalent to locally grown. Furthermore, a Colorado study determined that within the context of sustainability and consumer preference toward environmentally conscious food choices, consumers showed a greater willingness to pay for products that were grown within their own state than either equivalent organic or equivalent GMO-free products (Loureiro & Hine, 2002). A further willingness to pay study lead to Brown‟s (2003) findings in consumer segmentation which indicated that households that had an annual income of $50,000 or greater or held a graduate or professional degree were most willing to pay a higher price for locally produced food. With many “locally grown” studies focusing on local residents purchasing within their own place of origin, the findings of Patterson, Burkink, Lipsey, Lipsey, Roth, and Martin (2003) gain significance in broadening the understanding of consumer‟s reaction to locally produced food. Patterson, et al. (2003) found that tourists to Arizona valued locally produced items in their menu options at restaurants at their destination location resulting in willingness to pay increased premiums for locally grown menu items. The authors stated that “tourists are likely to be less price-sensitive and more willing to spend additional increments of income on gifts and restaurant foods. Purchasing state-branded products also might enhance their overall travel experience,” a sentiment which extends to the food they consume in their destination (p. 526). 55

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It appears that we depend increasingly on long-distance food. Encouraged by food processing innovations, relatively cheap oil, and subsidies, since 1961 the value of global trade in food has tripled and the tonnage of food shipped between nations has grown fourfold, while population has only doubled. In the United States, food typically travels between 1,500 and 2,500 miles from farm to plate, which is as much as 25% farther than in 1980 (Halweil, 2002). A byproduct of this globalization, however, is the amount of mergers and consolidation that have taken place within the supply chain between producers and retailers. Lyson (2007) states that within the U.S., the ten largest multinational corporations “control almost 60 percent of the food and beverages sold”. This provides little area for the small or local farmers in which to operate effectively and compete. Thus, points of differentiation and new distribution channels become even more important for the local farmers trying to stay in business. While this long distance food system offers unparalleled choice, it often runs over local cuisines, varieties, and agriculture, while consuming staggering amounts of fuel, generating greenhouse gases, eroding the pleasures of face-to-face interactions around food, and potentially, compromising food security. Fortunately, the long-distance food habit is beginning to weaken under the influence of a young, but surging, local foods movement. From peanut butter makers in Zimbabwe to pork producers in Germany and rooftop gardeners in Vancouver, entrepreneurial farmers, start-up food businesses, restaurants, supermarkets, and concerned consumers are propelling a revolution that can help restore rural areas, enrich nations, and return fresh, delicious and wholesome food to cities (Halweil, 2002). Many in the meeting planning industry think conference facilities should lead the green practice, and that planners and caterers should support those facilities‟ environmentally friendly practices through their patronage. The Keystone Conference Center, the largest conference center in the Colorado Rocky Mountains, has made a commitment to the environment by introducing clean energy technology. The center is powered by 100 percent renewable wind energy and boasts an energy-efficient lighting system, a composting program that reuses more than 12 tons of kitchen waste per year, and recycling efforts that diverted more than 127 tons of material in 2006. Keystone serves fresh organic and sustainable produce to its guests, and carryout meals at the center are served in reusable mesh bags to eliminate waste from cardboard and paper (Abbott, 2009). The restaurant industry seems to be responding to the perceived demand for local foods. The Dallas Fairmont Hotel has built a 2,000 square foot garden on its pool and terrace level. According to the Executive Chef J.W. Foster, the garden is cost-efficient. However, that was not his motivation. “I wanted the cooks working here to experience and understand the produce rather than just pulling it out of the fridge or off a truck” (Ruggless, 2008). Restaurants in The Gaylord Texan Resort in Grapevine, Texas have taken the use of local foods to a new level. Within their farm-to-market program, they now are able to move past buying local ingredients to match the menu items and actively seek local items first before building their menu offerings. This allows a step of creativity and uniqueness in offering local foods and utilizes those food items in peak season, ensuring high quality and freshness (Ruggless, 2008). While fine dining and upscale restaurants can have more flexibility in their food sourcing options, regional or chain restaurants also see the benefits of local sourcing. Clyde‟s Restaurant Group out of Washington, D.C. was an early pioneer in the use of local farmers in the late 1980‟s. They continue to utilize them as a preferred source of supply, noting that updated supply chain efforts and established partnerships with produce distributors have allowed a transition to a more established program. Other restaurant chains such as Elmer‟s Restaurants in Portland, Oregon have used this distribution channel as a way to reposition their product offering choices in a more family style atmosphere (Tanyeri, 2008).

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J. Campbell, C. Pfaffenberg and C. Costello

RMIC - Volume 3, Issue 5

Parasole Restaurant Holdings of Minneapolis just opened Manny‟s Steakhouse, an upscale operation at the new “W” hotel in September of 2008. According to Kip Clayton, the Vice President of Business Development, “We have a lot of younger guests who are pretty health-conscious. When it makes sense financially and otherwise, we offer freshness of local products as well as the savings on energy used to transport the product” (Ruggless, 2008). The hotel industry also has made some progress on providing a look into customer preferences related to a “green” effort. The J.D. Power and Associates 2007 North America Hotel Guest Satisfaction Survey indicates that nearly 75% of all hotel guests are willing to participate in their hotel‟s environmentally friendly programs (Butler, 2008). Individuals that visit casinos are exposed to some of the highest quality restaurants in the U.S. Many restaurants at these locations represent the most famous chefs and the newest trends. Though little research has been done to specifically draw a connection between casino visitors and their perception of and willingness to pay for locally-grown foods, one research study indicated that the “heavy spenders” in a casino destination also are those most likely to hold a higher interest in the destination community as a whole, are more likely to seek out information about that community than either light or medium spenders, and also spend more money than either of the other groups on such goods and services as lodging, food and beverages both inside and outside the casino, and gifts and souvenirs(Moufakkir, Singh, Moufakkir-van der Woud, & Holecek, 2004). These same heavy spenders were more likely to visit as a group rather than individually, stayed in the destination area for longer periods of time, were more likely to use overnight accommodations at hotels or motels, were more likely to visit multiple casinos, and were relatively more affluent than their counterparts. In addition, the Harrah‟s 2006 Profile of the American Gambler (Harrah‟s, 2006) reported that 21% gamblers versus 12% of non-gamblers like to be the first to try new restaurants. Also reported was that 25% of gamblers versus 16% of non-gamblers would try trendy new food and beverage. These data offer potential to incorporate trendy, locally grown foods into a menu. This information, combined with the aggregate scholarly literature concerning the locally grown movement, indicates a need to discover how this movement could impact the casino-goer and the restaurant industry. Whether they go green for altruistic or financial motives, it‟s undeniable that companies can benefit from letting their new shade be known. Greening demonstrates corporate responsibility, opens up niche markets and presents growing opportunities for marketing (Abbott, 2009).

METHODOLOGY A cross-sectional analysis was utilized and sample survey designed to assess the practices and attitudes of individuals who visit casino properties at least one time in the last year. In addition to questions that were focused on supporting food service establishments that use locally produced foods, questions about individual‟s demographics and gaming characteristics were included. The survey contained items from previously used surveys (Pirog, 2004; Chase, 2007) and incorporated information about locally produced foods and sustainable agriculture. Questions incorporated into the survey included what is considered locally grown and how likely was the individual to purchase a variety of locally grown items. In addition, questions related to what factors are important when purchasing food in a restaurant were designed with regards to usage of local foods. Demographic questions included age, work status, household income, and education. Questions related to gaming experiences included how often the respondent visits a casino per year, amount spent, limit established, and ranking of items that contribute to the casino experience. The survey was 57

Local Food Utilization: A Winner for the Environment and the Restaurant

pilot-tested with individuals who had visited casinos at least two times per year in the last two years. Suggestions relating to clarity and specificity were incorporated into the final survey. A mailing list was furnished by Southern Gaming and Destinations magazine. The editor agreed to mail out 3,000 letters to a random sample and included encouragement for their subscribers to respond. Individuals on the mailing list were sent a letter explaining the project, human subjects‟ information, and the URL to access the online survey. An incentive was offered of twenty $25 gift cards to encourage participation. Respondents were directed to the URL site that contained the survey and the informed consent information. The survey was posted with MRInterview software and data was saved into a SPSS data file. Data were analyzed with the use of SPSS statistics 16. Descriptive statistics and frequencies were calculated for each variable. Means were calculated for the ranked items. An exploratory factor analysis was performed for the 8 items that related to purchasing food in a restaurant. Three factors with eigenvalues greater than 1.0 were generated. Bartlett‟s test of sphericity was significant (p

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