Strategy-making in the Irish small tourism firm: A critical literature review and future research trajectories

The Irish tourism industry continues to contribute to economic growth providing almost eight billion in G.D.P. contribution (Department of Trade, Transport and Tourism, 2016) and supporting around 200,000 in employment (Failte... [ view full abstract ]

The Irish tourism industry continues to contribute to economic growth providing almost eight billion in G.D.P. contribution (Department of Trade, Transport and Tourism, 2016) and supporting around 200,000 in employment (Failte Ireland, 2017). The small firm subsector of the industry continues to support the wider tourism industry, with contributions to G.D.P and employment apparent through the sheer number of small firms in tourism (I.T.I.C, 2017).  Support is further manifest as small firms buttress aspects of the wider tourism industry through providing niche tourism, transport services, bed and breakfast and guesthouse accommodation among a variety of activities (Kelliher et al. 2009).  Finally, small tourism firms contribute to the sustainable economic and social development of much of rural Ireland (Cawley et al. 2007; Kneafsey, 1998).  For the purposes of the paper small firms are defined as firms employing between ten and fifty employees and with a turnover less than ten million euro (EU, 2017).

Despite the contributions of the Irish small tourism firm, competitiveness challenges are posed across a number of areas including the development of strategic marketing capabilities (Failte Ireland, 2016; human resource development (Kelliher et al. 2009), and most notably in enhancing strategy-making capabilities (I.T.I.C. 2017; Walsh et al. 2011). It is with the latter challenge that the present paper is concerned.  The academic literature on strategy-making in the larger firm is long established.  Mintzberg (1973) poses the question as to how organisations make important decisions and then link the decisions to form strategies in a seminal study of strategy-making.  Burgelman and Andrew (2001) argue that the long term competitive survival of the firm emerges from the quality of strategy-making.  Hart (1992) argues that, notwithstanding the influence of management capabilities on the firm, it is within the quality of the strategy-making process that one finds the ultimate source of the longer term competitiveness of the firm.

Fundamental difference between the strategic management of the small firm and the large firm is highlighted in the seminal work of Covin and Slevin (1989), where a nuanced approach to exploring the strategic management of the small firm is posited.  A review of the small business literature highlights various theoretical approaches to strategic management.  For example, Osiyevskyy and Dewald (2015) explore cognitive aspects of small business strategy-making; Gibbons and O’Connor (2005) investigate influences on small firms’ strategic planning processes; O’Regan et al. (2010) consider the nature of strategic thinking in the small family business and Blackburn and Hart (2013) question the importance of formal strategic planning in context and argue for an emergent often heuristic based strategy embedded in owner/ manager relationships.  The uniqueness of strategy-making in the small firm context is argued by Verreynne et al. 2016, who challenge approaches based on an informal / formal dichotomy and instead argue for the importance of wider participation in strategy-making, both internally in the firm and externally in the stakeholder environment.

The present paper emerges from two previous streams of research.  The first emerges as the exploration of the nature of strategy-making in the small firm (Verreynne et al 2016; Gibbons and O’Connor, 2005; Dess et al. 1997).  The second takes the form of a call for greater context specific research into the nature of aspects of strategic management in the tourism small firm context (Thomas et al. 2011).  Comprising part of the second stream of research the present paper explores an Irish context reflecting a growing awareness of the unique challenges and opportunities faced by owner/ managers in the sector (Reinl and Kelliher, 2015; Hanrahan and Conaghan, 2014).  Reflecting the exploratory nature of the paper, the review concerns the nature and extent of strategy-making in smaller firms, specifically in the Irish tourism context.  The approach takes the form of a critical review of the literature on strategy development in smaller firms pointing to areas for potential future research and practitioner interest.

Small tourism firms provide a unique context for the study of strategy-making by comparison with other small firms across a number of dimensions.  People interaction at a deep level forms the basis of the small tourism firm guest experience and associated marketing strategies (Robinson and O’Connor, 2013).  In the Irish context, the people interaction is mediated by Irish identity (Wilkes and Quinn, 2016).  Lifestyle motivation influences the strategy making processes, with owner/ managers no longer purely agents of investor shareholders, and instead with strategy-making emerging from a complex conflation of lifestyle goals and profit motivation (Hanrahan and Conaghan, 2014; Marchant and Mottiar, 2011).  Allied to lifestyle motivation, embedded influences of family and local identity shape strategy making, with unique contextualisation in the Irish context (Murray et al. 2016; Kearney et al. 2014; Conway and Cawley, 2012).  New technologies are argued to possess the potential to transform the competitive landscape of the small tourism firm in the area of strategic marketing (Alford and Page, 2015), and in the Irish context given government support for technological development and the presence of major technology industries, a potentially unique platform for rethinking strategy-making is offered (Kelly et al. 2017).  In the Irish context, and challenging policy arguments around the limited managerial capabilities of owner/ managers (Failte Ireland, 2015) and the arguments of some academic literature (Lashley and Rowson, 2010), a recent study of tourism owner/ managers suggests high levels of education and considerable potential for the development of effective strategy-making (Hanrahan and Conaghan, 2014). 

Emerging from the critical literature review, a framework of strategy-making in context is developed.  The framework posits the central role of the owner/ manager and within this role highlights the importance of lifestyle motivation.  Family and community embeddedness are posited to shape strategy-making, in multiple and often complex ways.  However, the framework diverges from frameworks developed in other industry contexts.  Specifically, the role of government in the area of sustainability, marketing and technology provision is argued to comprise a powerful support towards a transformed model of strategy-making.  Finally, the framework is positioned in the context of wider environment emerging from which are streams of signals, interpreted by owner/ managers with the potential to ultimately alter the nature of strategy-making in the small tourism firm, over time.  Future research trajectories emerging from the framework of strategy-making are then discussed.

The paper contributes to a gap in the academic literature addressing the question of the nature of Irish small tourism firm strategy-making.  Building on previous research in the wider small firm, notably the work of Verreynne et al. (2016), Gibbons and O’Connor (2005) and, in the tourism context Thomas et al. (2011), a framework of strategy-making in context is proposed, thus offering a contextual understanding of a key aspect of owner/ manager work in an important industry sector.  Emerging from the framework a number of future research trajectories are discussed, helping to focus future research into strategy-making in context.

The paper makes a practice contribution in providing a framework of Irish small tourism firm strategy-making, thus helping the owner/ manager to engage with an important aspect of practice aimed towards maintaining and developing the firm’s competitive survival (Eppler and Platts (2009) cited in Verreynne et al. (2016).  Though following in the practice orientation of recent tourism management in an Irish context, for example Kearney et al. (2017; 2014) and Reinl and Kelliher (2015), the paper moves from a focus on management levels towards providing elucidation of the nature of strategy-making.  Emerging from the future research trajectories, opportunities for academic / practitioner collaboration are identified, with a view towards improving strategy-making, a vital element of sectoral competitiveness. 

There are several limitations to the present paper.  The paper is entirely theoretical, and in this regard recommendation for future empirical research is argued.  Secondly, as an initial exploration of the nature of small tourism firm strategy-making, the paper is developed without a specific theoretical framework.  Thus while the paper maps out the strategy- making terrain in context, future research might profitably consider using a specific theoretical framework, for example the potential inherent in the strategy as practice field is argued by Verreynne et al. (2016).  Finally, though the paper proposes a number of nuanced future research trajectories, the methodological challenges inherent in pursuit of individual research trajectories require future evaluation.