Organizational CrisisTravel Industry Council of Hong Kong
Travel Industry Council (TIC)
Services provision of TIC
The services provided for the public (travelers) includes raising the awareness in travel safety & protection, handling enquiries and complaints, providing assistance in application for ex gratis payments from the Travel Industry Compensation Fund and financial relief from the Package Tour Accident Contingency Fund Scheme and setting up service hotlines.
Background information of the protagonist & incident
Some words from Ah Zhen in the incident
•
• “Don’t tell me you don’t need to shop. So later are you going to say you don’t need to eat? I will lock you out of your hotel rooms as you don’t have enough to stay there.”
• “It’s OK to be poor at home, but you can’t act like this when you are outside. In this world there is no such thing as a free lunch.”
• “Why did you bother to come to Hong Kong? For a group of 24 people you only just spent HK$13,000. How can you just walk out of the shop like that?”
Reason behind the incident
Golden Win International Travel Service Limited faced the problem in supervising the services provided by their tourist guide. Overall, TIC failed to supervise the work of the above parties.
The incident destroyed the image of HK (famous tourist destination). As a result, there was a lost of mainland tourist and decreased in profit. In the long run, the HK tourist industry would be collapsed. Negative impression was induced to the mainland people as HKSAR failed to assure their safety during traveling.
Ah Zhen claimed that it was out of her control about structural problem (zero or low-fare tours) but Golden Win general manager insisted that they did not force tourists to shop. It seems that there was a communication between both parties.
A Comic Strip to tell the story
Image Restoration
Assessing the Incident/risks
To deal with the case, the Travel Industry Council (TIC) immediately formed a Crisis Management Team (the Team). It was headed by the Chairman of TIC Mr. Michael Wu (胡兆英), supported by the Executive Director Mr. Joseph Tung (董耀中), senior staff of TIC, representatives from the Tourist Commission and Travel Agent Registry of the government.
The Team found that the incident was widely reported in TV, newspapers and internet web-sites in Canton, Beijing, Sichuan, Shandong mainland China in March 2010 and HK in July, 2010. From the view point of tourists, this incident brought a message to them that HK’s travel agents/tourism operators were reaping extravagant profit through coercive buying. According to the assessment of the Team, this message seriously lowered mainland tourists’ intention to come to HK. The Team further opined that if it was not tackled adequately and swiftly, tourists from mainland China would dwindle and the revenue would decline significantly.
Acknowledging the Problem
Ms Li Hau Chun, the protagonist of the incident, was interviewed by the Team. She repudiated that she had berated the group of mainland tourists in the video which was posted on internet. However, she admitted that she lost control after one tourist verbally abused her in the coach on that date.
Upon initial investigation, it was found that the evidence was concrete and overwhelming. The Team therefore had no doubt about the authenticity of the video. Accordingly it acknowledged that the incident adversely affected the image of HK’s travel industry.
Formulating & Implementing Responses
To tackle the torment of the incident brought forward, the Team formulated the following short and long term plans (A to C) with a view to resolve it:
A. Express Regret
TIC is responsible for ensuring HK tour agents/guides/escorts maintaining a high standard of services and complying with the codes of conduct promulgated by it from time to time. However, as the inadequate act was committed by an individual (i.e. Ms Li) and the majority tour guides/escorts were moral and law-abiding, it was not appropriate to admit the incident as a mistake of TIC. Nonetheless, TIC expressed regret to members of the public and the parties harmed in this incident. This message was delivered by the Chairman of TIC Mr. Michael Wu (胡兆英) to the audiences in C below.
B. Remedial Actions
There were an immediate and a long term remedial action respectively.
- Immediate remedial action
The Team carried out an in-depth investigation on the incident. Related parties including Ms Li Hau Chun (the protagonist of the incident), representative from Golden Win International Travel Services (the travel agent employing Ms Li), tourists of the mainland tour, government officials and a few experienced travel agents and tour guides, were interviewed. Actions including compensations, disciplinary action, temporary suspension or even revocation of license were given/taken where appropriate. Recommendations which could improve the travel industry performance and beneficial to the public were also made. (10 directives were subsequently promulgated to confine the conducts of tour guides.)
The investigation was scheduled to be completed within 1month and a report was made to the media.
- Long term remedial action
A Task Force will be set up to conduct a comprehensive review on the effectiveness of the whole regulatory framework and map out the way forward. The Task Force will consist of senior government officials (mainly from Trade Commission and Travel Agent Registry), senior staff from TIC, representatives from travel agents (both HK and mainland), tourist guides/escorts unions, Legislative Council members.
The followings preliminary options/actions will be considered by the TF. Other issues may be added where necessary.
(i) To amend the Travel Agent Ordinance to indicate clearly the role of the TIC in the regulatory framework, and revamp the composition of the TIC Board of Directors with a view to introducing more tourist guides/escorts into the Board.
(ii) To review the functions, powers and responsibilities of the TIC, and transfer certain disciplinary authorities (e.g. inspection, handling non-compliance and appeal cases, regulation of tourist guides and tour escorts) from the TIC to the government (e.g. the TAR).
(iii) To establish an independent statutory body to take up the TIC’s tourism industry regulatory functions.
(iv) To create a new government department to take over all duties/functions from the TIC and be responsible for the overall regulation of the tourism industry.
After the TF has come up with recommendations, a two to three-month public and trade consultation will be launched in April, 2011.
- Put advertisement on various media discoursing the corrective actions TIC is taking
C. Audiences:
media audiences include newspapers, radio, TV, net-news, officials from Tourism Commission and Travel Agent Registry, political parties, media representatives of mainland China stationed in HK such as 廣東衛視, China National Tourism Administration, Canton Tourism Bureau, tour guide/escort trade unions such as The Hong Kong Association of Registered Tour Coordinators (香港註冊導遊協會)
Negotiation
Negotiation: Tourist VS Ah Zhen
The tour guide from hell!
Case analysis
• Negotiation Style à Hard Negotiation (Compete)
• High concern for goals (Commission) ; Low concern for relationship (Tourist form Mainland)
Ah Zhen “Don't tell me you don't need [the jewellery], I say you don't need to eat either. Tonight I will lock all hotel room doors, because you don't need accommodation.“
• Pressure & Threats (lock them out of their rooms and no foods provide)
• Use power to pursue goals
Ah Zhen “Why did you bother to come to Hong Kong? For a group of 24 people you only just spent HK$13,000. How can you just walk out of the shop like that?”
Distrust of opponent (tourist)
Negotiation Outcome
• Negotiation Style [Hard Negotiation (Compete)] à Lose- lose Outcome
• Ah Zhen à lose her job
• Tourist à A bad travel experience
• Created a negative impression for Hong Kong Travel Industry à lose such a large amount of Mainland tourist
Distinctive negotiation behaviors
In case Ah Zhen “Why did you bother to come to Hong Kong? For a group of 24 people you only just spent HK$13,000. How can you just walk out of the shop like that?” Ah Zhen "So later are you going to say you don't need to eat?”. Hence AH Zhen already perform the asking questions behavior in the negotiations between tourists.
Negotiation: Tour agency VS TIC
• Negotiation Style à Hard Negotiation (Compete)
• High concern for goals (Keep the image of HK travel industry) ; Low concern for relationship (Tour agency & Tour guide)
Therefore Travel Industry Council was Apply pressure to travel agency and made threats (possibility that the company's license could be revoked). And TIC was being hard on problem and people also just demand one sided gain. As the result, TIC canceling Ah Zhen's license for six months and give penalty $ 47,500 to Golden Win travel agency.
Negotiation Outcome
Negotiation Style [Hard Negotiation (Compete)] à Win - lose Outcome
• TIC à temporary reverse the image (Win)
• Ah Zhen à lose her job Suddenly
• Golden Win (Travel Service Limited) à lose such a large amount of Mainland tourist & Reputation
1. Wertheim (1996) was mentioned the key to successful negotiation is to shift the situation to a “win-win” even if it looks like a “win-lose” situation.
2. Swinton (1996) was said in a win-win negotiation, all parties involved feel they've reached a successful outcome. With increasing complexity and specialism in the workplace and in relationships.
3. Leigh (2009) stated that many negotiators proudly describe their negotiations as win-win.
Diminishing marginal losses and gains in negotiation
Suggestions: Successful negotiation--- Tourist VS Ah Zhen
Proposition 3: Negotiators are more likely to gain support for their proposals if they are stated in terms of what the other side stands to lose if the proposal is rejected than if they are stated in terms of what the other side stands to gain by accepting (Deepak, M. & Ma, H., 2008).
• Ah Zhen ”The gold & silver unit price is rising continuously. If you don’t buy the jewellery, the price must rise later. It is now a good chance to invest the noble metal!”
Tourists are more motivated to avoid losses than they are to accrue gains. Tourist may more motivate to buy jewellery as well to prevent the potential loss. At the same time, Ah Zhen can earn more commission in the situation to achieve Win-win outcome. Outstanding leaders understand their customers. They place themselves in the customers’ minds and spend time with them to understand their current and future needs (Robert S. & David P., 2004).
Suggestions: Successful negotiation--- Tour agency VS TIC
• TIC “Impose penalty $80,000 on Golden Win travel agency for its tourist service training and improve the customer feedback system!”
An additional gain is not as pleasurable as the initial gains ; an additional loss is not as painful as the initial loss. TIC can help the Golden Win travel agency re-build the reputation also can show responsibility to the Golden Win travel agency. That can help the tour agency learn form mistake is better than punishments to achieve Win-win outcome. If the organization truly believes that bad news about it is false, there is an opportunity to correct the misimpression (Stephen A., 2009).
Knowledge Management
Knowledge Management is a process to enable people to develop a set of practices to create, capture, share & use knowledge to advance organizational goals. The following table shows the comparison between the implicit and explicit knowledge (H. Kasper & B. Haltmeyer).
Types | Implicit (Tacit) | Explicit |
Mode | Informal | Formal and systematic |
Content | Highly personal (memory) | Database (document) |
Communicate & share | Difficult | Easy |
Tacit Knowledge
Tacit Knowledge for personal experience of the tourist guide is language, Knowledge of the scenic spot and communication and customer services skills.
Tacit Knowledge is the culture of the travel agency E.g. Undocumented way to work in teams.
Explicit Knowledge
According to the TIC’s formal website (2011), the code of Conduct for Tourist guides mentioned:
•
• Principles governing shopping activities and ensure that visitors understand their consumer rights.
• Tourist Guide Course provide customer Services and Effective Communication Skills.
• Renting TIC Training Centers.
• TIC website provides agendas and minutes of the meetings.
Highlight of the 10 solutions released by TIC
1. Demerit System for Mainland Tour Reception Services (01/02/11). It aims to improve the standard of reception services for mainland tours and penalties to any violation of the rules.
2. No forced shopping.
3. Increased the requirement for application as tour guide and reinforce training on professional ethnics (The Sun News, 6 February 2011).
Suggestion (knowledge management)
According to the view of Faleh A. A. & Fayez J. A. (2008), the SECI model would be used for the analysis and made some suggestions for TIC.
A diagram showing the SECI model processing (Wikipedia,2011)
1.
Social gatherings and sharing between tour guides could give a chance for discussion about managing the work-related stress and formation of self help group especially the management of demanding and aggressive visitors. A forum for the people working in tourist industry which could help in brainstorming of ideas, sharing of self experience and setting some criterias in recruiting a tour guide. TIC could invite the meeting from other industry representatives. They may be able to offer some advice and assistance on such incident or team building culture. This also enhanced the independence and transparency for public. Active conversation with the National Tourism Administration would be essential. It could help to strengthen the supervision and offer the clear guidelines for the mainland's travel agencies that work with Hong Kong's counterparts (Lam, 2011).
2. Externalization (tacit to explicit)
Documentation was a formal way to collect the ideas from different travel agencies. TIC should prepare the minutes and records and shared in the meetings. Besides, organization about the on-line discussion databases from the forum would be essential. For instance, they can share the ideas on the requirement of a tourist guide for travel agency in order to hire a suitable candidate for suitable job
3. Combination (explicit to explicit)
4. Internalisation (explicit to tacit)
Communication and trust were essential as TIC acted as the central role between the tourist guide and the travel agency. For example, TIC should highlight the value of the knowledge sharing between travel agencies & tourist guide. This allowed everybody understand that every one could contribute the Tourist industry which finally affected Hong Kong’s reputation. The tourist guide could understand more about the expected outcome as this finally affect the operation and profits of all travel agencies. Expectancy theory stated that motivation could be raised when people are capable of performing the work, their efforts result in a certain outcome and payoffs are worthwhile (McShane, S.L. & Von Glinow, M.A.,2010). This could actually help to raise the motivation for people to change and learn. Besides, positive reinforcement could increase the frequency of a specific behavior (McShane, S.L. & Von Glinow, M.A.,2010).Conversely, TIC could set a system for appreciation about high quality service provided by the tourist guides and travel agency. Ranking could be published out as a competitive environment to motivate the others to make improvement.
Influence, Power and Politics
The nature, power can influence others for the expecting result. That’s similar as the herding dog doing his job. For example, the clip joint and travel agents using Reward Power to influence tour guide bring their tourist reach there for commission. Tour guide spend Coercive Power, violent, to make visitor shop. The “Ten Solutions” become the Legitimate Power, that TIC use to clean up the mess. You can see the power influence position is happening everywhere.
11.1 Possible Responses to the Use of Power
The problem is how every party responds to the power. There is no guaranty of the power influence success. Resistance, Tourist becomes angry, mad and disappointed of Hong Kong. 94 travel agencies have signed a petition endorsing about “ten solution”. They are disagree of the “Ranking System", “One guide per each group”, "designated service contract”. We can see there is no commitment under power in this case.
11.2 Organizational Politics
Other than power, politics another powerful weapon as well. The purpose of using politics base on self-interest, as you can see, the dishonest shop operators taking the biggest benefit of all these but they can stay out of the fire. They are taking very large profit from the tourist that’s why they can support the tour fee for them, commission for tour guide or maybe even the travel agents as well. But they do not have to take the blame or respond. Most of dishonest shop operators focus their business on tourist not for public. On the other hand, the Anhui tourist play good politics as well, he put himself into a violent situation with the tour guide and taking HKD$ 120,000 benefit from the travel agents. The Anhui tourist are successfully using the public media for weapon, even CCTV place "travel scandal“ as the title reporting the incident, revealing the current regulation of the industry's vulnerability. 13 billion of Chinese recognize the image of Hong Kong in a day. Another case of politics successful had been use. “If a tiny, localized, single event can trigger cascading failures resulting in a catastrophe, then it just might be that a small, localized single intervention could act as a circuit breaker.” (Bonabeau 2007)
11.3 Organizational Politics about “ten solution”
No wonder if “ten solutions” really can go through or not, but public not really giving hope on it. Tourism Legislative Council, Paul Tse, reply that TIC are the same group of the travel agents, there is pointless of letting TIC to manage the industry, as there is no law support, the “ten solution” is meaningless. Hong Kong Boarder Tour Operators Association, Mr Hou Shuqi reply, 94 travel agencies have signed a petition endorsing, disagree of the ranking system, one tour guide per group, designated service contract and announce schedule in bus. Some rules are meaningless, also focus to Mainland tour agent which is not fair.
11.4 Suggested Solution for the influence of power and politics
First, we will have to consider where is the problem is, tourist buy a low fee package come to Hong Kong which the fee not able to cover their expends. So, their shopping profit will cover the short. Plus everyone profit. It’s definitely not a healthy business model. HKSAR should bring the legislative power in to change this system. As long as the fee have been ruled, tour guide and agents taking profit from the tourist fee, not from the dishonest shop operators, the position of all party will suddenly been change.
Also, TIC is the same party with the travel agents, we should not court on TIC. An illegal power of government department should take the control of clean up the mess. However, many countries government regulation take control of qualifications and training of tour guides, but the HKSAR government has no role in this regard. Travel agent licensing, regulation, investigation, punishable only responsible by TIC, the dishonest store and the travel agents own total related interest. Only Hong Kong government can change the whole system and make this won’t happen again.
“Once more, though, we must be careful. A noble past doesn't entitle an institution to an illustrious future. Institutions deserve to endure only if they are capable of withstanding the onslaught of new institutions. A society's freedom to create new institutions is thus a critical insurance policy against its inability to recreate old ones.” (Hamel & Valikangas, 2003)
linkage
On one hand, TIC acted as the central party between the travel agency and tourist guide. Negotiation skills was important especially could be noticed in such incident. If TIC could manage the knowledge well, there would be a positive effect on all of them. This resulted in good image for TIC. On the other hand, HKSAR should make good use of its power to control TIC for such operation and maintain the image of HKSAR as well. Thus, these four aspects, image restoration, negotiation, knowledge management and power, were closely connected with each other.
Conclusion
Overhaul of the travel industry, structural, e.g. `demolish’ TIC and establish an independent statutory body to oversee the travel industry. It increases transparency, number of independent board members in TIC/statutory body, etc so as to respond to criticisms on self-monitoring. Only through our determined and concerted effort, will travel industry be re-built into a spectacular architecture in Hong Kong.
Group Reflection
We bring our knowledge and experience together by interacting toward a common goal (A good presentation). North Central Regional Education Laboratory was mention that collaborative partnerships often bring together individuals with very different knowledge bases, attitudes and assumptions. We have coordinating different ideas from numerous member to generate a wide variety of knowledge & ideas in the presentation. We work as a team that collaboratively can obtain greater resources, recognition and reward when facing competition for finite resources. We understand that organizational crises are solving by collaborative. Also we have a deep comprehend on those topics, their connection & how they affect the collaborative process.
14.0 References
Allred, K. G., Mallozzi, J. S., Matsui, F., & Raia, C. P. (1997). The influence of anger and compassion on negotiation performance. Organizational Behavior and Human Decision Processes.
Leigh, L. T. (2009). The Mind and Heart of the Negotiator.
Scott, Bill. (1981). The Skills of Negotiating. New York City: John Wiley & Sons.
Lee. C. (2010) Tear guide, The Standard. (Online)
Available:http://www.thestandard.com.hk/news_detail.asp?sid=29048672&art_id=101057&con_type=3&pp_cat=30 (10 April 2011)
Available:http://www.thestandard.com.hk/news_detail.asp?sid=29048672&art_id=101057&con_type=3&pp_cat=30 (10 April 2011)
Oriental Daily News (28 July 2010). (Online)
Available: http://orientaldaily.on.cc/cnt/news/20100728/00176_011.html (10 April 2011)
Lam K.K. (2011) Tourism: addressing the root problem, China Daily. (Online)
Available:http://www.cdeclips.com/en/hongkong/Tourism_addressing_the_root_problem/fullstory_60586.html
Faleh A. A. & Fayez J. A. (2008). Impact Assessment Of I/S Technology Utilization on
Knowledge Creation and Conversion: An Empirical Study in Jordanian Universities.
Journal of Knowledge Management Practice, Vol.9 No.1
H. Kasper & B. Haltmeyer. Knowledge Management and Organizational Learning in MNC’s. Vienna University of Economics and Business Administration.
TIC formal website (2011) (Online)
Available: http://www.tichk.org/public/website/en/index.html (11 April 2011)
Wikipedia (2011) (Online)
Available: http://en.wikipedia.org/wiki/Knowledge_management (10 April 2011)
The Sun News (6 February 2010). (Online)
McShane, S. L. & Von Glinow, M. A. 2010. Organizational behavior: Emerging knowledge and practice for the real world (5th ed.). New York: McGraw-Hill Irwin.
Deepak, M. & Ma, H. (2008). Psychological influence in Negotiation: An introduction Long Overdue. Journal of Management.
Stephen, A. G. (2009). Corporate brand reputation and brand crisis management. Emerald Group Publishing Limited.
Robert, S. & David, P. (2004). Measuring the Strategic Readiness of Intangible Assets. Harvard Business Review.
William L. Benoit. (Summer, 1997) Image Repair Discourse and Crisis Communication. Public Relations Review, 23(2): 177-186
Barbara Kellerman. (April 2006) When Should a Leader Apologize and Why Not? Harvard Business Review
Alice M. Tybout and Michelle Roehm. (December 2009) Let the Response Fit the Scandal. Harvard Business Review
David A. Thomas and Robin J. Ely. (Sept-Oct 1996) Making Differences Matter: A New Paradigm for Managing Diversity. Harvard Business Review
E Wertheim, Northeaster University. Resolving Conflicts: An Overview
香港旅遊業議會(Oct/2010) 檢討內地來港團經營模式與規管措施專責小組報告
吳志森(9/2/2011) 旅遊醜聞是零監管惡果. 蘋果日報
田北俊(8/2/2011) 倡設法定機構規管旅社. 澳門日報
www.legco.gov.hk/yr10-11/english/panels/.../edev0228cb1-1367-6-e.pdf
Legislative Council Panel on Economic Development (28 February 2011). Review of the Operation and Regulatory Framework of the Tourism Sector in Hong Kong
http://www.info.gov.hk/gia/general/201102/23/P201102230175.htm
Written reply by the Secretary for Commerce and Economic Development, Mrs Rita Lau, to a question by Dr Hon Lam Tai-fai in the Legislative Council (February 23)LCQ14: Regulation of travel industry
Bonabeau, Eric. (Summer 2007). Understanding and Managing Complexity Risk. MITSloan Management Review. P.65
Hamel,G & Valikangas,L. Harvard Business Review81. 9 (Sep 2003): 52-63.
港府研修例監管旅業, 2011-02-08, 頭條日報
