Overview of the case
The report aims to analyze the evolution of G Adventures Company, which was founded by Bruce Poon Tip in 1990. The report also aims to examine the life cycle stages of the company along with its control strategies, organizational culture and ethics. These examinations will be used to provide recommendations to the company for improving its operations and including new products.
While presenting an overview of the case, the report will focus mainly on its inception, growth and the controversies it faced. The report will then highlight the evolution of the business from a tourism company at the local level to a multinational company. The evolution also includes the stages of life cycle of the business. In business, the life cycle stages refer to the progression and phases of the business over time. The report will then focus on its organizational culture and ethics to map a comprehensive recommendation for the CEO, Bruce Poon Tip.
The analysis is to be done on G Adventures, a multinational tourism company with Bruce Poon Tip. His company attracted major student population in Belize, on the small Caye Caulker Island, who started skipping their classes to do the job at the company, especially the bicycle tours. After complaints from the local authorities, Tip came up with the plan to make a deal with the students that involved a guaranteed job and loaned bike. This “Bike with Progress” program soon resulted in the hike in attendance from 35% to 90% in 2008. The story demonstrated the way the company turned a negative social and economical influenced situation into a profitable, socially good venture.
However, it had its share of controversies when a ship carrying 154 of the company’s travelers sank in 2007 off Antarctica. Although no travelers were injured, the incident caused could have proved disastrous for the company had it not been for its immediate rescue response.
The company began with “nothing more than two credit cards and a burning desire to create an authentic, sustainable travel experience like nothing the world had ever seen”. It was named Gap Adventures initially and the idea of starting it popped up in Tip’s mind when he was on a backpack trip to Asia where he even was arrested in Burma. This trip made Tip realizes that a segment of travelers is also there who want to explore the world from a different perspective. Today, it boasts of more than 150,000 travelers a year across 100 countries that range from gampling – glamorous camping – to roughing.
In 1990, Poon Tip was just 22 when he started the company. His main idea behind it was to “balance the thrill of being arrested in Burma with the comfort of floating in a tin hotel on the ocean”. Initially, the company mainly attracted hard-core backpackers in search of adventure in countries of South and Central America, Asia and Africa. Seventeen years into the business, G Adventures was already a 100 million dollar company global company and in need of culture revolution. Then, with the start of the third decade, Poon Tip’s company evolved gradually into a company that associated itself with thirty-six programs that helped various communities have education and business opportunities. Poon Tip wants that giants like Ritz Carlton and Four Seasons adopt the ideals of his company to ensure a sustainable and transparent business.
Evolution of G Adventures
A business life cycle includes five phases of progression (Daft, Murphy & Willmott, 2010 pp. 356-358).
- Launch – In this phase, the company’s operations begin through the launch of the new products or services. For G Adventures, it was the launch of its tourism business with special attention to aestheticism, responsibility and sustainability.
- Growth – This phase is characterized by the rapid increase in sales. As the growth in sales is registered, business begins to enjoy profit once they move beyond the break-even point. In case of G Adventures, this break-even point came quite late, in the 2007, 2008 periods to be precise.
- Shakeout – In this phase, businesses begin to experience slower pace of growth in terms of sales. This happens due to numerous reasons such as new entries or market saturation. G Adventures has faced little competition over the years with Intrepid Travel being one of its closest competitors. Although, t has faced a decline in profits, the margin is negligible.
- Maturity – In this stage, markets mature and influence the pace of the sales as well as the profit margins. When a business approaches maturity, large capital expenditure is mostly behind the business and thus, cash generation is higher in the income statement than the profit income. It is interesting to note that Poon Tip extended his business cycle at this stage and focused on other areas thus allowing the smooth flow of cash.
- Decline – This is the final stage of the life cycle and in this stage, businesses experience decline in sales, profit and growth and accept failure. However, the case is opposite with G Adventures as it begins to buy other tourism firms and continues to grow.
The strategies that businesses apply to understand the vulnerability and standing in the market refer to control strategies (Daft, Murphy & Willmott, 2010, pp. 370-372). These strategies mainly involve premise control, strategic surveillance control, special alert control and implementation control. In G Adventures’ case, these strategies underwent some changes over the years as it went from being a local company to a multinational corporation. Initially, the company targeted the general demography of travelers who had interest in a different kind of travel – the hard-core backpackers. Then, the company began to invest in developing a business that contributed towards the society as well, the “Bike with Purpose” program being an example.
The interview process held in the later stages demonstrates the strategy to be creatively ahead of others. G Adventures maintains persistently maintains a start-up pep by giving more emphasis on freedom and happiness, which has not changed even after three decades in the business. The company has seen rough patches in its long journey especially in 2007 due to the events mentioned in the above section. However, it managed to demonstrate great special alert control strategy by going all out on the rescue response.
In the current stage, the CEO plans to explore opportunities in other sectors like outdoor clothing, vehicles and gear especially to apply the social enterprise model that has been so successful with its core business.
The culture boasted by the company is evident from its core values and the way interviews are conducted. “Love, Lead, Embrace, Create and Do” are the five core values promoted by the company that is reflected in its organizational culture as well. At G Adventures, employees are encouraged to be truthful about themselves and provide travelers with an experience that is nothing but authentic and within range. The organizational culture encouraged by Boon Tip is that of celebrating freedom, happiness and individuality.
As the company began going global, some of the organizational culture boasted by the company began to diminish. Many travelers complained of travel disasters and last minute altercations leading to chaos and confusion. However, the cases of such incidences are few and as per majority of travelers associated with G Adventures, the organizational culture has remained more or less the same – encouraging freedom, individuality and happiness.
When it comes to ethics, Poon Tip’s company is at the top in the industry. Sustainable tourism and community benefit has always been the top priority of G Adventures and Poon Tip has always ensured that is stays the same. In fact, the company is the first and only company in its industry that was invited to the inaugural UN World Tourism Organization Seminar on Ethics in Tourism. The company has also been vocal about responsible tourism and encouraged the belief, “travel is an exchange, not a commodity”. In view of this, the company founded Planterra, a non-profit unit dedicated to making sure that communities benefitted from the opportunities presented by the company. Apart from that, the company also boasts contributions in other welfare programs.
Stages of life cycle
After an elaborate analysis of the case study, certain recommendations could be made for the company to follow concerning its intentions to add other products.
- First, the company should develop and promote its online platform, as it is yet to reach a global user base.
- Second, the social enterprise model than Poon Tip plans to apply to other sectors should be tested duly prior to entering other sectors because times have changed and technology has taken over.
- Third, exploring other products such as outdoor clothing, vehicles and gear would mean that the company would have to take extra care for environmental impact.
- Fourth, the company should target a specific demography while keeping the core demography intact for venturing into clothing or other business.
Conclusion
In the end, it can be stated that the tourism company has excelled in maintaining its growth and keeping pace with the changing business scenario. As evident from the case study overview, the company evolved rapidly through the years. Starting as local backpacking travel company to becoming one of the leading tourism companies in the world, G Adventures had an exciting journey. The report presented an extensive study of the company and provided recommendations for it follow as the CEO considers venturing into other products.
Every organization faces the dilemma of whether to be stable or to incorporate change and if both options are preferred, the dilemma to balance the tensions. The problem with the changing business environment is that it makes the traditional businesses either merge with other merging businesses or exit the market completely. Very few businesses are able to survive. In such situations, it becomes important for organizations to strike a balance between stability and change. “Organizational life consists of an ever-changing world of encounters, experiences, and complex sociomaterial relations” state (Daft, Murphy & Willmott, 2010, p. 477). They further add that while standard routines could solve certain problems like inefficiency associated especially with stability images, these can cause problems in the complex organizational world that is ever changing. Daft, Murphy and Willmott, (2010, p. 477), remark that the change and stability dilemma has caused biased decisions when it comes to choosing leaders who could manage change and restore stability. While the young aged are preferably seen as capable of managing change, the older ones are entrusted with maintaining stability. This biasness further puts the organization in a dilemma whether to go with young aged leader or older leader.
The authors state that stability ensures the business that it would sustain for long years but it must have to withstand the many changes as well. Examples in the real world are in abundance that indicates the way major companies went bankrupt or vanished completely due to failing to comply with the change. Companies like Blockbuster, Polaroid, Pan American Airways and many more are organizations that stand as examples of organizations failing to balance between stability and change. Change is an inevitable factor in today’s rapidly evolving world and organizations have to adjust to these changes without compromising on the other elements.
To ensure that the organization survives and stays strong through the changes while maintaining stability, organizations must engage in strategic management. The strategic management in case of ensuring balance between stability and change must involve an appropriate approach to change management. The Lewin’s Change Management Model is a good way to bring about change within the organization and ensure that stability is also maintained.
According to the model, every organization goes through three phases of change:
- Unfreeze – In the first stage, the organization prepares for the change. It is important for the organization to resist the opposition to change and explain to people why change is required and important.
- Change – This stage is where the transformation or the change occurs. The changing process might take time and involve several problems but a good leadership would contribute towards the smooth transition.
- Refreeze – After the changes is made, embrace and accepted, the organization begins the process of stability again. At this stage, the organization and its staff start to refreeze, which means that things begin to go back to normal.
The model is appropriate for organizations to follow because it provides systematic process of change that does not disturb the stability. In fact, this model helps restore stability after the change is made. In addition, the approach makes sure that the core elements of the organization remains stable while other changes are being made. Daft, Murphy and Willmott, (2010). while pointing out the benefit of Lewin’s model state that it is the founding stone of all other change management models. The authors also state that the model has encouraged other subfields to emerge in the field of change management and strengthen this field. It is therefore, suggested that organizations adopt the change model of Kurt Lewin in order to strike a balance between stability and change.
References:
Daft, R. L., Murphy, J., & Willmott, H. (2010). Organization theory and design. Cengage learning EMEA.
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