the bargaining power of the republic of cyprus accommodation providers in contractual and non ...

428 Pages·2017·6.01 MB·English

THE BARGAINING POWER OF THE REPUBLIC OF
CYPRUS ACCOMMODATION PROVIDERS IN
CONTRACTUAL AND NON-CONTRACTUAL
NEGOTIATIONS WITH LARGE EUROPEAN TOUR
OPERATORS

SAVVINA KARYOPOULI

A thesis submitted in partial fulfilment of the requirements of Bournemouth University for
the Degree of Doctor of Philosophy

July 2016
Bournemouth University
This copy of the thesis has been supplied on condition that anyone who consults it is
understood to recognise that its copyright rests with its author and due
acknowledgement must always be made of the use of any material contained in, or
derived from, this thesis.

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ABSTRACT
The bargaining power of the Republic of Cyprus accommodation providers in
contractual and non-contractual negotiations with large European tour operators
Savvina Karyopouli
This study examined the bargaining power of the accommodation providers (APs) of
the Republic of Cyprus (ROC) when undertaking contractual and non-contractual
negotiations with large European tour operators (TOs). Within a tourism and
hospitality context there was an insufficient understanding regarding bargaining
power, its antecedents, influencing factors and the implications for negotiation in
business-to-business (B2B) buyer-supplier relationships. Bargaining power is
embedded in B2B buyer-supplier exchanges, where parties engage in negotiations to
exchange resources in order to achieve their organisational objectives and survive.
A qualitative inductive approach was followed and an epistemological interpretivist
Grounded Theory methodology and design adopted, combining elements from two
versions of Grounded Theory: evolved and classic. Qualitative primary data were
collected in two stages: an exploratory stage and a main stage. The exploratory stage
was undertaken to better understand the contextual characteristics of the tourism and
hospitality industry in the ROC and the actors involved and guide the main stage of
primary data collection. Sixteen semi-structured interviews, using a purposive
convenience sampling technique, were conducted in the exploratory stage. The main
primary data collection stage used purposive snowballing sampling and forty-five
semi-structured interviews were conducted. Grounded Theory’s techniques were
employed to analyse the data.
This study has made contributions to knowledge, theory and practice. First, in terms
of contributions to knowledge this study has extended the bargaining power concept
within a tourism and hospitality context. As a result, it has advanced current
knowledge of power relations between B2B buyers and suppliers. In addition,
extending the resource-dependence perspective in the tourism and hospitality
context assisted in determining dependence patterns that can influence various
aspects of B2B buyer-supplier relationship, including negotiations. This study has
also contributed to knowledge by advancing understanding regarding the role of

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emotions in B2B buyer-supplier negotiations. Further, it has contributed to B2B
pricing management knowledge by identifying that B2B pricing in tourism buyer-
supplier negotiations is also influenced by culture, relative bargaining power and
relational factors (emotions) and relationship constructs, and not solely by
rationality and market characteristics as frequently accepted by economic models.
Second, a contribution was made to theory through the development of a substantive
theory combining three core categories, resources, relational factors and market
characteristics, in order to fully explain the bargaining power interactions in
negotiations between tourism buyers and suppliers, from the weaker party’s
perspective. Third, the practical contribution was made in terms of the explanation
of bargaining power interactions and the implications for the contractual and non-
contractual negotiations of the APs with the TOs. This knowledge can aid perceived
weaker parties such as APs to take more informed decisions in negotiations as well
as to better manage their relationship with the large perceived powerful TOs. These
were developed into recommendations for APs, TOs and Government.

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LIST OF CONTENTS
ABSTRACT ............................................................................................................................ 3
LIST OF CONTENTS ........................................................................................................... 5
LIST OF TABLES ................................................................................................................. 9
LIST OF FIGURES ............................................................................................................. 10
LIST OF ABBREVIATIONS ............................................................................................. 11
ACKNOWLEDGEMENTS ................................................................................................. 12
DECLARATION .................................................................................................................. 14
CHAPTER 1 - INTRODUCTION ...................................................................................... 15
1.1. INTRODUCTION ........................................................................................................ 15
1.2. RATIONALES FOR THE STUDY .................................................................................. 18
1.2.1. Introduction ...................................................................................................... 18
1.2.2. Personal rationale ............................................................................................ 19
1.2.3. Academic rationale .......................................................................................... 20
1.2.4. Relevance to practice ....................................................................................... 22
1.3. RESEARCH LOCATION: THE REPUBLIC OF CYPRUS (ROC) ..................................... 23
1.4. RESEARCH AIM AND OBJECTIVES ............................................................................ 24
1.5. RESEARCH METHODOLOGY ..................................................................................... 25
1.6. STRUCTURE OF THE THESIS ..................................................................................... 26
1.7. CONCLUSION ........................................................................................................... 28
CHAPTER 2 - LITERATURE REVIEW .......................................................................... 29
2.1. INTRODUCTION ........................................................................................................ 29
2.2. THE BUYER-SUPPLIER EXCHANGE: NEGOTIATIONS ................................................. 32
2.3. POWER IN A BUYER-SUPPLIER CONTEXT ................................................................. 36
2.3.1. Importance of power in a buyer-supplier context ............................................ 36
2.3.2. Defining power ................................................................................................. 38
2.3.3. The agency and structure debate ..................................................................... 42
2.4. BARGAINING POWER WITHIN A BUYER-SUPPLIER CONTEXT ................................... 45
2.4.1. Defining bargaining power .............................................................................. 45
2.4.2. The structural perspective ................................................................................ 47
2.4.3. The behavioural perspective ............................................................................ 53
2.5. CONCLUSION ........................................................................................................... 58

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CHAPTER 3 - THE TOURISM CONTEXT .................................................................... 61
3.1. INTRODUCTION ........................................................................................................ 61
3.2. DEFINING THE TOURISM INDUSTRY ......................................................................... 64
3.3. THE TOURISM DISTRIBUTION CHANNEL .................................................................. 65
3.4. RESEARCH ON POWER WITHIN A TOURISM CONTEXT .............................................. 68
3.5. BARGAINING POWER DYNAMICS BETWEEN TOURISM BUYERS AND SUPPLIERS: THE
ROLE OF THE LARGE TOUR OPERATORS (TOS) ................................................................... 70
3.5.1. Challenges in the relationship between the TOs and APs ............................... 73
3.6. CONCLUSION ........................................................................................................... 75
CHAPTER 4 – TOURISM IN THE REPUBLIC OF CYPRUS ...................................... 78
4.1. INTRODUCTION ........................................................................................................ 78
4.2. AN ACCOUNT OF THE REPUBLIC OF CYPRUS ........................................................... 79
4.3. TOURISM DEVELOPMENT ......................................................................................... 83
4.4. ACCOMMODATION SECTOR ..................................................................................... 88
4.5. CONCLUSION ........................................................................................................... 91
CHAPTER 5 - RESEARCH METHODOLOGY ............................................................. 92
5.1. INTRODUCTION ........................................................................................................ 92
5.2. RESEARCH AIM AND OBJECTIVES ............................................................................ 92
5.3. METHODOLOGY AND RESEARCH DESIGN ................................................................ 96
5.3.1. Grounded Theory methodology and research design ...................................... 96
5.4. CHOICE OF RESEARCH LOCATION – THE REPUBLIC OF CYPRUS (ROC) ............... 109
5.5. THE RESEARCH ...................................................................................................... 110
5.5.1. Introduction .................................................................................................... 110
5.5.2. Secondary data ............................................................................................... 110
5.5.3. Primary research ............................................................................................ 111
5.6. SAMPLING DESIGN AND SAMPLING METHODS ....................................................... 120
5.6.1. Introduction .................................................................................................... 120
5.6.2. Defining potential participants ...................................................................... 120
5.6.3. Rationale for number of participants ............................................................. 121
5.6.4. Sampling technique- Purposive Snowballing ................................................. 122
5.6.5. Profile of participants .................................................................................... 123
5.7. RATIONALE FOR THE SEMI-STRUCTURED INTERVIEW GUIDES .............................. 129
5.7.1. Introduction .................................................................................................... 129
5.7.2. Accommodation providers’ (APs) interview guide ........................................ 130
5.7.3. Tourism professionals’ and Government officials’ interview guide .............. 135
5.7.4. Local academics’ interview guide .................................................................. 138

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5.8. DATA ANALYSIS .................................................................................................... 140
5.8.1. Introduction .................................................................................................... 140
5.8.2. Transcription .................................................................................................. 142
5.8.3. Translation ..................................................................................................... 143
5.8.4. Open coding ................................................................................................... 144
5.8.5. Axial coding .................................................................................................... 153
5.8.6. Selective coding .............................................................................................. 157
5.9. EVALUATION ......................................................................................................... 157
5.9.1. Introduction .................................................................................................... 157
5.9.2. Credibility ....................................................................................................... 158
5.9.3. Transferability ................................................................................................ 162
5.9.4. Dependability ................................................................................................. 162
5.9.5. Reflexivity ....................................................................................................... 163
5.10. RESEARCH ETHICS .............................................................................................. 168
5.11. LIMITATIONS ........................................................................................................ 169
5.12. CONCLUSION ....................................................................................................... 170
CHAPTER 6 - ANALYSIS AND DISCUSSION ............................................................ 172
6.1. INTRODUCTION ...................................................................................................... 172
6.2. PROPOSITIONS INDUCED FROM PRIMARY DATA ANALYSIS ................................... 174
6.2.1. Proposition 1: Firm-specific tangible and intangible resources determine the
type of contract during contractual negotiations ........................................................ 174
6.2.2. Proposition 2: Government policies/regulations, culture and industry
characteristics influence contractual and non-contractual negotiations through their
impact on destination-specific resources .................................................................... 199
6.2.3. Proposition 3: Contractual and non-contractual negotiations are influenced
by negotiation characteristics and relationship constructs ........................................ 225
6.2.4. Proposition 4: Emotional factors influence contractual and non-contractual
negotiations ................................................................................................................. 252
6.2.5. Proposition 5: Culture and industry characteristics are influential factors in
pricing and volume of sales during contractual and non-contractual negotiations ... 270
6.2.6. Proposition 6: Negotiation characteristics, relationship constructs and
emotions during contractual and non-contractual negotiations determine market
characteristics in terms of pricing and volume of sales .............................................. 300
6.3. SELECTIVE CODING ................................................................................................ 324
6.3.1. Introduction .................................................................................................... 324
6.3.2. Storyline ......................................................................................................... 325

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6.4. CONCLUSION ......................................................................................................... 337
CHAPTER 7 - CONCLUSION AND RECOMMENDATIONS ................................... 339
7.1. INTRODUCTION ...................................................................................................... 339
7.2. OVERVIEW AND MAIN FINDINGS ........................................................................... 339
7.2.1. Introduction .................................................................................................... 339
7.2.2. Main findings .................................................................................................. 341
7.3. CONTRIBUTION OF THE STUDY .............................................................................. 347
7.3.1. Contribution to knowledge and implications for practice ............................. 347
7.3.2. Contribution to knowledge in the B2B buyer-supplier relationship between
TOs and APs ................................................................................................................ 347
7.3.3. Contribution to theory: the substantive theory .............................................. 349
7.3.4. Contribution and implications for practice .................................................... 351
7.4. RECOMMENDATIONS ............................................................................................. 356
7.4.1. Introduction .................................................................................................... 356
7.4.2. Recommendations for APs ............................................................................. 356
7.4.3. Recommendations for TOs ............................................................................. 360
7.4.4. Recommendations for Government officials .................................................. 361
7.5. FUTURE RESEARCH ................................................................................................ 363
7.6. FINAL REMARKS .................................................................................................... 364
7.7. REFLECTIONS ON THE RESEARCH EXPERIENCE ..................................................... 365
REFERENCES ................................................................................................................... 368
APPENDICES .................................................................................................................... 415
APPENDIX 1: EXAMPLES OF MEMOS ............................................................................. 415
APPENDIX 2: CYPRIOT ACCOMMODATION INDUSTRY CAPACITY .................................. 417
APPENDIX 3: EXAMPLE OF CODES AND CONCEPTS INDUCED FROM DATA .................... 418
APPENDIX 4: MEMO: SUB-CATEGORIES INDUCED FROM THE DATA .............................. 422
APPENDIX 5: EXAMPLE OF MEMO: REVISING PRICING CONCEPT ................................. 425
APPENDIX 6: PARTICIPANT INFORMATION LETTER ....................................................... 426
APPENDIX 7: FORM OF CONSENT ................................................................................... 427

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LIST OF TABLES

TABLE 1: DEFINITIONS OF NEGOTIATIONS ............................................................................................. 34
TABLE 2: DISTRIBUTION OF TOURIST ARRIVALS BY LOCATION ............................................................. 85
TABLE 3: CYPRIOT ACCOMMODATION CAPACITY FOR 2013. ................................................................. 89
TABLE 4: PROPOSITIONS INDUCED FROM THE EXPLORATORY DATA STAGE ........................................ 114
TABLE 5: PROFILE OF PARTICIPANTS: ACCOMMODATION PROVIDERS. ................................................ 126
TABLE 6: OPEN CODING: EXAMPLE OF CONCEPTS AND CODES ............................................................ 149
TABLE 7: SUB-CATEGORIES AND CATEGORIES INDUCED FROM THE DATA .......................................... 153
TABLE 8: AXIAL CODING: PROPOSITIONS DEVELOPED ......................................................................... 155

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LIST OF FIGURES
FIGURE 1: THE RELATIONSHIP BETWEEN TOURISM, HOSPITALITY AND TRAVEL INDUSTRIES ................ 64
FIGURE 2: THE TOURISM DISTRIBUTION CHANNEL ................................................................................ 66
FIGURE 3: MAP OF THE MEDITERRANEAN BASIN ................................................................................ 880
FIGURE 4: MAP OF CYPRUS. .................................................................................................................. 81
FIGURE 5: SECTION 1- ACCOMMODATION PROVIDERS’ INTERVIEW GUIDE ......................................... 131
FIGURE 6: SECTION 2-ACCOMMODATION PROVIDERS’ INTERVIEW GUIDE .......................................... 132
FIGURE 7: SECTION 3 - ACCOMMODATION PROVIDERS’ INTERVIEW GUIDE ......................................... 133
FIGURE 8: SECTION 4 - ACCOMMODATION PROVIDERS’ INTERVIEW GUIDE ........................................ 135
FIGURE 9: SECTION 5- ACCOMMODATION PROVIDERS’ INTERVIEW GUIDE ......................................... 135
FIGURE 10: SECTIONS 1 AND 2 -TOURISM PROFESSIONALS’ AND GOVERNMENT OFFICIALS’ INTERVIEW
GUIDE ........................................................................................................................................ 136
FIGURE 11: SECTIONS 3 AND 4 - TOURISM PROFESSIONALS’ AND GOVERNMENT OFFICIALS’ INTERVIEW
GUIDE ........................................................................................................................................ 137
FIGURE 12: SUPPLEMENTARY SET OF INTERVIEW QUESTIONS FOR INDIVIDUALS WITH DIRECT
RELATIONSHIP WITH THE LARGE TOS. ....................................................................................... 138
FIGURE 13: SECTIONS 1 TO 3 - LOCAL ACADEMIC'S INTERVIEW QUESTION'S GUIDE ............................ 139
FIGURE 14: SECTIONS 4 TO 6 - LOCAL ACADEMIC'S INTERVIEW QUESTION'S GUIDE ............................ 140
FIGURE 15: EXTRACT OF A CODED INTERVIEW BY AN ACCOMMODATION PROVIDER (AP). ................. 147
FIGURE 16: MEMO: INTEGRATING CONCEPTS INTO SUB-CATEGORIES ................................................. 150
FIGURE 17: OPEN CODING: CONCEPTS AND SUB-CATEGORIES INDUCED FROM DATA .......................... 151
FIGURE 18: OPEN CODING: CONCEPTS AND SUB-CATEGORIES INDUCED FROM DATA .......................... 151
FIGURE 19: EXAMPLE OF DEVELOPING SUB-CATEGORIES ................................................................... 152

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