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BSS057-6 Corporate Innovation and Entrepreneurship

  1. During the second half of the unit, you will need to research, identify and collect a series of patches on corporate entrepreneurship in context as the patches relate to a crisis situation, internal or external, that can lead to an entrepreneurial response(s).
  2. You will then conceive the best way in which to stitch together the patches so they present an integrated and holistic response to the crisis in question, supported by quality academic theories, models and frameworks.
  3. Drawing on the your critical analysis and evaluation of your collated patches, the final step of your task will be to reflect on the process of collating and stitching together information into a Patchwork that engages with CIE, completes the crisis-driven response, and aligns with the theme and assignment. You will present your analyses, findings and completed Patchwork, which should total 3,600 words (+/- 10%).

Solution:

Corporate Innovation & Entrepreneurship

Executive Summary

The purpose of this assignment is to evaluate leadership, culture, and organisational change in response to the changing environment and technologies. It includes several theories like transformational leadership theory, Burns theory, change management theory, and others to critically evaluate organisational operations. It has been identified that the leaders have implemented the VIBE framework in the organisation to implement a shared vision, team development, and innovation that helped to enhance the organisational operations. The cultural development of the company includes training and development along with the integration of machine learning technology that helped to maintain functionality in an automated way. However, the TUI Group is recommended to implement technologies like AI and Big Data to analyse market demand and integrate strategic advancement in the company.

1.  Introduction

Corporate innovation is defined as the intentional adaptation of innovative thinking in an organisation that helps to avoid different kinds of problems and increase the scope of the market with the help of collaboration (Paiva, et al., 2018). The main issues faced by TUI Group include complex problems related to innovation and creativity along with technological advancements that allow the management to make necessary developments. The purpose of this assignment is to analyse the entrepreneurial architecture, including leadership and culture, in the TUI Group of Tourism companies that help to identify the potential challenges related to technology and innovation. It also includes an analysis of the change in the company and the process of managing change in order to sustain the organisational operations. A wide range of theories and models, such as Kotter’s change management, transformational leadership theory, Lewin’s change management theory etc., have been undertaken in this assignment to justify the entrepreneurial architecture in the company.

2.  Overview of the company

TUI Group is one of the leading tourism companies based in Germany that has been providing services for more than 70 years, including significantly strong tour operators, including 1600 travel agencies, 400 hotels, 5 airlines, and 16 cruise liners (TUI Group, 2022). It has been identified that the company has made collaboration with reputed companies like First Choice Holidays PLC in the UK, Hapag-Lloyd in Germany, and many others to enhance the market position in the European tourism industry. In 2019, TUI Group generated revenue of €19 billion with a turnover of €70,000 from the previous year, reflecting an unmatched holiday experience for more than 27 million customers in 180 different locations (TUI Group, 2022).

3.  Critical analysis of entrepreneurial architecture

Entrepreneurial architecture is defined as the organisational framework that supports different areas of entrepreneurship in the corporate context, which facilitate coordination, communication, and culture in the company (Roša and Lace, 2018). It majorly includes three vital factors, such as leadership, culture, and implementation of change in the company that help the management to enhance the organisational approaches and lead towards sustainability. The ways of working in TUI are based on culture and mindset, where the trusted, inspiring, and unique elements are leadership, technology, workplace, and organisational operations. These factors support the entrepreneurial architecture based on the areas of innovation and a clear mindset of the management regarding the contribution of organisational development.

3.1       Analysis of leadership activities in the company

Leadership is defined as one of the significant areas in an organisation as it allows the workers to become focused on improving the overall organisational performance through guidance and inspiration from the leaders (Scott, et al., 2018). In the context of TUI Group, it has been identified that the leaders of the company have been focused on implementing the vision that defines the strategic advancements in the development of innovative thinking and technological advancements related to the delivery of tourism services.  The leadership development of the company is based on the VIBE model, which represents vision, inspiration, building teams, and execution that are associatively responsible for maintaining the leadership activities like merging with other companies, acquisition, and others.

Vision

According to the leadership development in TUI Group, vision is considered to define the challenges and strategies to be developed by the leaders in order to maintain the changing environment in the market. The vision of the leaders in TUI Group aims to partner with many countries in order to become one of the most reputed companies in the European tourism industry and broaden the minds of people (TUI Group, 2022). In this regard, the leaders acquired the vision of engaging employees and customers through values and enhancing the profitability of the company through enhancing reliability, consistency, uniqueness, and inspiring services. According to the transformational theory of leadership, it has been identified that the leaders are required to adopt changing environment of the industry or the organisation to maintain the sustainability of the operations and avoid losses. It also aims to integrate positive and valuable changes in the company based on the individual and social systems that help to increase the productivity of the company. In this context, the leaders of TUI Group are focused on establishing the vision of entering new marketplaces through acquisition and penetration. In this regard, the collaboration with the companies like First Choice Holidays PLC, Frontiers and shareholdings in the hotel groups RIU and Magic Life TUI AG etc., in order to continue services.

Defining the strategy is also considered another significant step of leadership in TUI Group as per the VIBE model, where the leaders are required to assess the strategic advancements in the changing environment. Due to the Covid-19 pandemic, it has been identified that the company has faced significant financial and resource-related losses due to the downfall of the economy globally. And restrictions on human movement. In this regard, the leaders made the decision to integrate the business model by offering business divisions like Holiday Experiences and Market and Airlines that aims to focus on business travellers. The management of TUI Group has analysed that the economic downfall, shifting demographics, and continuation of business travels are essential to be targeted in order to recover the losses. The business-related travels have increased in this regard, which represents the changing requirements and adoption of the company. Therefore, it supports the transformational leadership theory regarding the integration of changes in the company for better growth and satisfying the environment.

Inspiration

Based on the leadership development of TUI Group, it has been identified that inspiration includes creating engagement in all management levels of the company that helps to implement collaboration and enhance productivity (TUI Group, 2022). The company has integrated the values of discovering diversity and new horizons and experiencing different cultures in countries with the mindful importance of the travel and tourism industry. According to the contingency theory of leadership, adopting organisational changes according to the demands and requirements in the market is essential to enhance business growth in an industry effectively.  Sharing the strategy of business model integration and focusing on reduced pricing are also to be delivered to the employees by the leaders to establish a shared belief and reach common goals. Moreover, the vision of being one of the largest European tourism companies is also to be shared with the employees by the leaders, which helps to enhance the workforce capability through greater understanding. According to the Amabile model, creativity-relevant skill, domain-relevant skill, and task motivation are considered three major factors in developing a creative and potential workforce by the leaders of an organisation.

Figure 1: Amabile model of creativity, Source: (Carreiro and Oliveira, 2019)

In the context of creativity-relevant skills, it has been identified that leaders in TUI Group have been focused on developing the workforce by enhancing technological advancements as a creative approach. For example, the company has collaborated with Mobi regarding the development of Machine Learning technology that aims to analyse a large volume of information regarding the tourism industry (TUI Group, 2022). The initiative aims to evaluate the information of the employees efficiently and effectively, which helps to avoid the issues according to the strategic measures. This factor represents the creative thinking skill of the leaders due to the adaptation of advanced technology in the organisational operation.  According to the Burns leadership theory, it has been identified that transformational and transactional leadership are two exclusive styles that aim to support the organisational culture according to the demand. In this regard, the leaders of TUI Group have adopted transformation leadership to integrate new technologies to change the existing organisational culture. In terms of domain-relevant skills, the leaders are required to adopt leadership skills like negotiation, collaboration, teamwork, and guidance for the employees in order to develop a skilled workforce. In this regard, the TUI Group has developed the strategy of empowering employees at different management levels to make decisions according to the situation. The “Employees made TUI” initiative of the company indicates the domain-relevant skill development in different functional areas like marketing, HR etc., of the leaders that helped to focus on the wellbeing of the employees in the company for increased productivity related to encouraging the employees in the tourism industry. As per the Amabile model of creativity, it has been identified that motivation is a significant factor to be developed in an organisation by the leaders as it helps to encourage the employees to become a part of the overall organisational performance. The Care More programme of the TUI Group is considered the employee motivational programme that aims to provide monetary and non-monetary benefits to the employees to make a healthy working environment (TUI Group, 2022). This factor helped the leaders to become focused on developing the organisational workforce in areas like hotels and resorts, especially in exchange for the wide range of benefits that gradually helped to manage different areas of the company in the tourism industry.

Building team

Teamwork is defined as the capability of increasing collaboration in an organisation that aims to improve the performance of the employees regarding reaching the shared goals and supporting others in complex activities in the company (Daniëls, et al., 2019).  Based on the leadership development in TUI Group, it has been identified that building a team is a significant role of the leaders that allow the management to get the right people in the right position in the company. According to Tuckman’s theory of group development stages, it has been identified that the patterns of behaviours and characteristics are required to be categorised during the formulation of a team following the stages like forming, norming, storming, and adjourning (Sanyal and Hisam, 2018). Being one of the largest tourism-based organisations, it has been identified that TUI Group includes four major departments, such as Airlines, cruises, hospitality, and supporting animal welfare (TUI Group, 2022). In this regard, the leadership approach of the company regarding team building has helped the leaders to maintain the workforce in all four departments like airlines, hospitality, cruises, and animal conservation according to the demand, which leads to increased profitability. Moreover, the 1600 travel agencies and several departments in the hotels are also maintained with the help of the team-building initiative of the leaders that helped to maintain the functionalities successfully.

Execute

The execution stage of the VIBE model is based on removing obstacles, defining success, motivating, and making difficult decisions by the leaders that help to maintain the sustainability of the organisational development. The leaders of the TUI Group got the opportunity of joining the Global Masterclass, which allowed the management to get significant guidance in order to enhance encouragement in the area of self-development. It will be beneficial for both the employees and the company to get benefits of increased productivity and acknowledgement in the company. Decisions like remote working, merging teams, maintaining legislation in different countries, and leading high-performing teams are responsible for enhancing the overall success measures of the company (TUI Group, 2022).

3.2       Analysis of the organisational culture

Organisational culture is defined as the set of beliefs and shared goals of the employees at different levels of management that associatively help to maintain the behaviours among the employees in different aspects (Woods, 2019). In the context of TUI Group, the culture and mindset of the company are based on four major aspects, such as leadership, workplace, technology, and organisation, that are responsible for maintaining the organisational behaviours and activities in the tourism and leisure industry.

Leadership

In terms of leadership, the TUI Group has been able to establish a common vision among the workers regarding organisational activities that aims to enhance understanding among the workers and satisfy the goals accordingly. According to Vygotsky’s sociocultural theory, the leaders of an organisation are required to make continuous improvements in the social culture of an organisation that allows the employees to satisfy growth. The diversity statement of the company includes the integration of employees from more than 100 countries, supporting the LGBTQ+ community, and providing equal opportunities to all people that ensure a highly productive workforce (TUI Group, 2022). This factor represents the continuous development of social culture in an organisation that allows the company to adopt the trends effectively and maintain collaboration in the company. The diverse culture of the company has been ranked by the Financial times as a market leader, which indicates a significant working environment for the employees in the company based on different points of view of the people.

Workplace

According to the creative problem solving model of Isaksen, it has been identified that understanding information, generation of ideas, and preparation of action are significant steps in developing the workplace of an organisation. As a significant part of its culture, TUI Group has been able to develop teams and communities to create an understanding of the situation and information. The integration of Lightbulb Lab is considered a significant step in managing the internal departmental issues that help to reduce conflicts and maintain a healthy working environment in the company (TUI Group, 2022). Moreover, the annual forum of the marketing department also plays an integral role in identifying the trends and integrating them into the workplace according to to enhance the capabilities of the customers and satisfy the preparation of the action stage of the Isaksen model.

Technology

Technological integration is a significant step in developing the workforce capabilities with the help of delivering the organisational services efficiently and productively according to the demands. As per system theory, it has been identified that complex activities are required to be divided into multiple components in order to acknowledge aspects in relation to delivering the quality of tourism services and successfully maintaining the financial and social profitability of TUI. In the context of TUI Group, it has been identified that the IT department aims to share knowledge, organise innovative meetings, and integrate highly technical functionalities in the wider context of business. Moreover, the data science hackathon and Norther region hackathon is based on developing the skills and knowledge of the IT workers in the company, which help to enhance the integration of technological advancements.

Organisation

The integration of the teams like marketing, IT, strategy group, and training is considered a beneficial factor for the TUI group regarding the development of areas like hospitality, transportation, and innovation (Wingfield, et al., 2018). In this regard, it has been identified that the innovation-led culture of the company helped the employees to maintain creative approaches and become gradually successful as a market leader in the European tourism industry. With the help of external trainers, the employees of TUI Group have been able to learn a wide range of knowledge that indicates knowledge-based organisational culture.

3.3       Managing the process of change

Change management is a managerial process with the support of which technology, leadership strategy and decision-making methodologies of an organisation are strategically dealt with and transformed to meet the new requirement or adopt a changed environment (Tang, 2019).

Figure 2: Change Management Process; Source: (Tang, 2019)

For finalising the step of the change management process, the business head of an organisation is required to have an in-depth understanding of the factors which cause it to bring a defined kind of change so that its respective impact on its performance might be evaluated. The change management process for the administration of TUI Group is illustrated as follows, including a request for change, impact analysis, its readiness for the change and mechanism of change- 

Factors for Organizational Change

As per the principle of Jabri’s theory of change management, an organisation faces issues in continuing its defined operational activities in case it performs mergers or acquisitions without deploying an appropriate and common framework of organisational structure (Galli, 2018). On the evaluation of the administrative strategies of TUI Group, it is found that when the management of TUI AG merged with First Choice Holidays Plc, a leading tour operating company in the UK, in 2007, then it did not frame organisational structure to continue its administrative activity (TUI Group, 2022). In the case of a merger or acquisition situation, the presence of a structural, organisational framework helps entire internal and external stakeholders of TUI to follow a certain path to make an essential decision along with meeting the principle of Jabri theory in fixing managerial framework related issue of lack of innovation ability among staffs (Shin and Lee, 2020). The merger and acquisition-related activity performed by the management of TUI Group triggered the requirement of organisational structure-related change for curbing the possibility of decision-making-related conflict within the stakeholders of subsidiary entities.  The outcome of the absence of an effective managerial structure within TUI Group even after the merger with First Choice Holidays is that the degree of confusion among the new entity is increased in terms of liability and ways for making tourism and customer management related strategy. It means that the primary change which is required by the business head of TUI Group is related to the incorporation of a common organisational structure so that tourism-related activity might be performed effectively without any conflict with its subsidiary companies.

If the management of TUI Group will not follow the organisational structure-related change, then it will not be efficient in allocating appropriate kind of roles and responsibilities to the different stakeholders of its group companies, and this will eventually disable it from continuing its operating activities. In other words, the business head of the TUI group is required to follow the organisational structure-related change management process to limit the possibility of decision-making-related conflict and maximise the effectiveness of its tourism and marketing-related strategy. As per the principle of the Change management model Kotter, for continuing determined kind of operational activities, it is better for an entity to have a model for understanding the response of its employees against each strategic decision so that corrective action might be taken to minimise any conflict (Jayatilleke and Lai, 2018).

On the analysis of the administrative strategies of TUI Group, it is interpreted that its management is not currently having any platform using which its internal stakeholders, like employees, might put their thoughts about current and upcoming strategies. The outcome of the absence of collaborative communication platform-related change within the workplace of TUI Group has disabled employees of its different subsidiary entities like First Choice Holidays Plc to share their ideas for increasing the competitiveness of operational and marketing strategies. It means that another change which is required for the TUI Group is related incorporation and facilitation of an effective information-sharing platform as it will involve its employees to participate in every decision-making process, and this will eventually augment their motivation level (TUI Group, 2022). Besides this, to increase the degree of innovation and motivation among employees, the management of TUI Group is required to bring an appropriate kind of change within its training & development and appraisal policy.

Discussion of the Readiness of TUI Group for Change

As per the principle of force field analysis model of change management, for bringing determined change within the operational and managerial framework of an organisation, it is better to get whether it is ready for the respective change or not (Rosenbaum, et al., 2018).

It is evaluated that TUI Group has taken the initiative by framing an executive committee in which its potential decision-makers like Friedrich Joussen (CEO-Chief Executive Officer) & Sebastian Ebel (CFO-Chief Financial Officer) are available to assist in decision-making. It means that the management of the tourism service-providing Group Company has a sufficient number of experts because of the executive committee-related initiative to be part of its organisational hierarchy, and this will eventually help it to accomplish the decision-making structure related change management process (TUI Group, 2022). Apart from it, on the evaluation of the historical strategies of TUI Group, it is found that it has a digital platform for understanding the points of its employees and stakeholders in respect of ongoing strategies and work, but it is not having the service after the merger in 2007. The availability of an efficient information technology facility with TOI Group will help its management to develop a common platform on which its staff can share their thoughts for increasing organisational innovation and meet respective needs.

Different Mechanisms of Change for TUI Group

Following the principle of change management, the primary mechanism using which the business head of TUI Group might meet the organisational structure-related change management process is the categorisation and formation of existing leaders as per competitiveness (Rajan and Ganesan, 2017). The management of TUI Group should initially analyse the efficiency of each organisational leader like Sebastian Ebel in terms of the subject of expertise, integrity with employees and strategic experience and then respective responsibility should be provided to have an effective organisational structure. By bringing organisational structure-related change based on the competency of leaders, the management of TUI Group will be successful in continuing tourism-related activity innovatively without any conflict with employees and other subsidiaries. During the implementation of organisational structure-related change, employees of subsidiaries might put favour their own leaders to be part of it for having competitive support during operational work, and this might eventually arise internal conflict among staff. Apart from it, by developing a digital communication platform and drafting a policy for periodic involvement of staff in the collaborative decision-making process as per internal stakeholders’ feedback, TUI Group will be successful in meeting participating activity-related needs (TUI Group, 2022). If the business head of TUI Group will bring information sharing platform-related change as per the opinion of stakeholders like staff, then it will be successful in minimising the possibility of conflict during the change, and this will eventually augment their motivation and productivity

1.  Synthesis

According to the findings of the critical analysis of leadership, culture, and organisational change, it has been identified that the VIBE framework facilitated the leaders to adopt the changes according to the market. The challenges include complicated development procedures, including technological advancements that are hard to be developed for better growth in the company. The complexities related to adopting advanced technologies are also considered a significant issue that is to be mitigated by the company. Based on the shared visions, the leaders took the initiative of collaborating with companies like Holiday Experiences and Market & Airlines in order to build a significant brand image in the European tourism industry according to the organisational goals. Motivational approaches like the Care More programme have been able to encourage the employees in the company, which helped to enhance the brand image in the market. In terms of culture, knowledge and innovation-based cultures in the company have been able to develop technological knowledge among the workers, where the IT department has become focused on sharing knowledge with all the departments. The marketing department also becomes able to analyse the external environment of the company, allowing the management to focus on employee-based culture through empowering the workers in different areas like hospitality and transportation in the tourism industry accordingly. In terms of organisational changes, the adoption of collaboration tools, machine learning integration, and the development of training initiatives helped the company to become focused on employee development and integrate the functionalities in different countries associatively. The changes majorly include the integration of an internal communication platform for all the management levels and the leaders that aims to increase the overall collaboration and lead towards sustainable growth.

2.  Conclusions

Based on the analysis, it is concluded that the leaders of TUI Group have been able to establish a significant workforce in the company with the help of motivation, shared vision, and building teams. The change management initiative of the company in terms of development of organisational facilities, including technology that aims to integrate the departments like hospitality and transportation. It is also concluded that the development of diverse cultures has helped the company to enhance the workforce potential in order to lead towards sustainability.

3.  Recommendations

TUI Group is recommended to implement technologies like AI and Big Data analytics as it will help the IT and marketing department to identify market demands and implement strategic measures accordingly. It will also help to gather a large set of information about the customers and automate the booking systems in hotels, flights, and cruises, which will reduce downtime. Moreover, the automation will also increase the security of the customer data, including financial, and will eventually maintain the IP rights and maintain the position of the market leader.

4.  References

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