The value of business tourism in the performance of an organisation
Thomas, Pieta Helen (Peta)
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The primary objective of this research is to review the value of business events in the performance of an organisation. Business events are categorised as part of the business tourism sector of the tourism industry. This sector is a strong financial contributor to many nations’ economies. The sector, sometimes also known as the M.I.C.E industry or meetings industry, focuses on creating business events to fit the knowledge needs of organisations across a wide range of industries. The business events are of several genre including exhibitions, training seminars, conferences, congresses and trade shows and all have been created for the purpose of helping organisations improve individual competitive advantages by learning from peers, competitors, suppliers and customers. The financial outcome of holding business tourism events is typically measured by such indicators as the number of business event venues booked, the number of business tourism visitors to a country attending business events, the number of hotel bed-nights sold that relate to business events, the number of add-on packages in the way of transport, entertainment and leisure tours used by business event attendees. Countries including South Africa have specific national policies to attract globally rotating business events to their own country. While hotels, transport and other tourism activities glean substantial financial benefit from the hosting of business events, the outcome of these events in terms of the new knowledge created for organisations is the primary objective of this research. As knowledge is intangible the value of knowledge is hard to understand in terms of past performance such as financial statements but it is seen in the literature review that there are many beneficial implications of seeking knowledge not limited to risk management through informed decision making. New knowledge has the ability to change the future work-place behaviour of employees in turn affecting the performance of an organisation. Lewin (1951) summarised that the level of behavioural change from the influence of new knowledge attained at an event is a function of the people at the event and the environment of the event. Understanding these variables speaks directly to managing the intangible value created from business events. Thus Lewin’s formula as applied to business events is considered a link in the value chain of intangible asset creation in this research. Knowledge is an intangible asset of every organisation often documented in formal normative managerial actions such as policies, processes and databases and also held informally by individual employees who have personal skills and abilities. Measuring the change in knowledge value through an intervention such as a business event has relevance in terms of valuing the contribution of business events to improving organisational performance. A secondary objective of this research was then to review the current use of the Kirkpatrick-Phillips return-on-investment model in relation to its effectiveness in defining knowledge objectives and measuring their effect on intangible asset creation. The model is the business events sector recommended methodology to set the objectives and key performance indicators that define the degree of success of the business event for an organisation. The utility of this model in helping to manage organisational knowledge value derived from business events is reviewed. The relevance of business events to future organisational performance improvement is understood by analysing firstly an organisation’s perspective of the value of business events and then the perspective of an employee of the organisation attending business events. The findings of the literature review guided the design of both the qualitative and quantitative surveys that were used to explore the way knowledge flows from events into organisations. These surveys fulfil the third and fourth objectives of the research. To understand the flow of new knowledge through an organisation many functions and hierarchies of command, a systems thinking methodology was applied in that it is assumed that all units of the organisation add value at their own level and this value accumulates upwards towards the overall value of knowledge for the organisation in creating competitive advantages. The literature review firstly highlighted the role of creating opportunity for socialisation at events as pivotal in improving an organisation’s knowledge. Then systems methodology tool of viable systems diagnosis suggested a theoretical viable systems model of what a healthy, successful organisational knowledge system would look like. The methodology was then applied to distil the secondary data reviewed to 12 variables each composed of many other variables that act within this theoretical model. The 12 variables were included in semi-open ended questions of a qualitative research instrument that interviewed 18 managers who either design or attend business events. The qualitative responses and the system of the 12 variables were then used to guide the creation of the quantitative instrument. The quantitative research produced 354 useable questionnaires that were statistically analysed by exploratory factor analysis. The latent factors identified were used in the design of a structured equation model (SEM). The SEM indicated that organisations rely on socialisation activities such as business events to create new knowledge. The SEM also indicates that employees of an organisation may well consider business event activities from a personalised perspective of their own continued professional development needs which may not always align to those of the organisation suggesting the alignment between organisational and personal goals as critical in maximising the value attained from a business event. This research therefore made a valuable contribution in that it explored the value chain between the business events and their role in improving an individual organisation’s performance. This in turn implies from a systems thinking point of view to the overall performance of a country’s economy. A further contribution of this study is recommendations made to improve the ease of application of the Kirkpatrick-Phillips model and thus manage the process of socialisation and ultimately knowledge creation better. A pre- and post event extension to the model is recommended defined in a template to be used in an iterative manner to improve the management and capturing of the value of knowledge arising from the event and this fulfils the final objective of the research.