Blue Horizon Cruises:
This simulation case is provided for educational use by the owner of the copyright, Dr. Je
y Glover. All rights of the author are protected by international copyright laws.
Blue Horizon Cruises:
A Case of Leadership
And Stakeholder Differences
(Online Version)
Fundamental Dilemma:
Do we ignore the product that caused us to be successful or retain a sense of place in local villages and the natural environment?
Developed by Dr. Je
y Glove
Copyright, 1998
Special thanks to Dr. Fons Trompenaars and Dr. Geerte Hofstede for their assistance in developing this simulation.
Blue Horizon Cruises: Participant’s Guidelines
The Setting:
Blue Horizon Cruises operates a successful eco-tourism business in a Pacific Island nation. They built a rapidly growing business by marketing to Japanese, German, American, and Australian visitors who want to experience the “real South Pacific.” Their operation is located in Kona, an emerging nation that has made a strong effort to use tourism as a major component of their economic development efforts.
The cruise trips offered by Blue Horizon visit an idyllic group of islands where travel
ochures describing the physical environment conjure up visions of a pristine tropical paradise. The inhabitants of the area still live and work in a traditional manner, reminiscent of earlier times. Because of the physical setting and traditional village life, visitors have been extremely satisfied with the product and cruise experiences of Blue Horizon Cruises.
Blue Horizon has experienced remarkable growth and profitability in its 10-year history. Except for the first year of operation, the company had operated in the black. In 1993, the fleet had been expanded from 3 ships to 10 in an effort to keep up with the demand for the cruises. The company was sold to a New Zealand businessperson in 1994. The new owner expects the company to continue its high financial return in the future.
Four Problems of Growth:
Although Blue Horizon Cruises has experienced considerable growth in recent years, four problems have begun to emerge. These four problems have the potential to affect the company’s future growth and sustainability.
The first problem involves the controversy over an environmental group’s study that evaluated the impact of tourism on the reefs in the area. Blue Horizon’s cruise ships have been dropping their anchors in the vicinity of the reef that su
ounds the lagoon where the passengers are taken ashore to visit the villages. The results of the study argue that, unless Blue Horizon took steps to minimize their impact on the reef, considerable damage could occur in the next five years. This is apparently due to the fact that Blue Horizon had increased the number of cruises each week from 3 in 1985 to 30 in XXXXXXXXXXMarket projections indicated that the demand could support as many as 40 cruises per week.
A second potential problem was that the traditional customs and hospitality enjoyed by previous visitors was beginning to change. People in the villages were becoming more motivated by “the dollar.” Several villages had developed thriving cash economies from the sale of straw goods and other tourism artifacts manufactured by local cottage industries operated by enterprising villagers. Tourists from the cruise ships had begun to complain about the commercial nature of the interaction with villagers.
“All they seem to care about is selling us trinkets.” One unhappy visitor had complained to an anthropologist who was writing about the eco-tourism potential of the area. “And we even noticed a made in Taiwan sign on the base of one of the gifts we bought in a village market.” Another tourist had told him in frustration.
A third potential problem area was related to the government’s plan for further development of the area. As with most developing nations, the government leaders were interested in creating capital from local resources. The Minister for Tourism Development was in the process of negotiations with an American investor to finance small luxury resort and an 18-hole golf course on one of the pristine islands. Developers argued that the resort would
ing “much needed jobs to local villagers.” However, other stakeholders are concerned about the possible negative impact of the plan on the area.
The fourth potential problem for Blue Horizon was the concerns of the village chiefs and many of the elders, who had become alarmed to see the traditional ways eroding in the face of rapid development. They also sensed their political power also eroding as many younger villagers obtained wage labor jobs and were no longer dependent on the village fund and the communal subsistence economy. They also felt that all income paid to villagers should be paid to the village fund, a system of redistribution and communal sharing controlled by the village chiefs. They had asked Blue Horizon to not permit any cash to exchange hands between the market vendors and the visitors. Instead the chiefs asked that all monies be collected by the ship’s captain and turned over to the appropriate village chief. If Blue Horizon does not comply with the suggested distribution of tourist revenues to the villages, the chiefs have threatened to prohibit the cruise ships from visiting the villages.
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Given the possible difficulties that these problems might
ing, The Chief Executive Officer and principle stock owner of Blue Horizon, Ian Thomas, has directed his Managing Director, John McClean, to look into the matters. John McClean has worked in Kona for over 15 years and he was one of the first executives hired by the original owners to develop the fledgling Blue Horizon operation in XXXXXXXXXXHe had a deep appreciation for these islands and was very concerned about the recent events. Both John and Ian Thomas agree that it is time to revisit the vision, mission, values, strategies, and practices of Blue Horizon Cruises.
John has contacted a consultant from Seattle who had extensive experience in troubleshooting economic development problems such as are being faced by Blue Horizon. This consultant, Mary Franklin, suggested that she also involve Brian Olsen, an anthropologist and eco-tourism expert with a university in Oregon.
Consultant’s Objectives:
Brian Olsen and Mary Franklin have decided it would be valuable to assess the situation before they travel to Kona to begin their contract with Blue Horizon Cruises. With assistance from the staff of Blue Horizon Cruises a virtual meeting of stakeholders has been organized to occur over a four day period.
During the online meeting each stakeholder will enter into a threaded discussion with other stakeholders and the two consultants via a web based discussion format. Special considerations such as a
anging for the local chief and village vendors to be able to participate via access to the internet in the local village school have been a
anged. Mary and Brian are excited about this opportunity to obtain advance information to use in planning their future consulting visit to Kona.
Their task is to use the four problems to focus the discussion on the company’s leadership direction, strategies and practices, and business goals. The expected outcome of their efforts will be to elicit dilemmas among stakeholders which will provide the first step in finding ways to resolve the four problems. The stakeholders who will be participating in the online four day meeting are:
1. Ian Thomas, CEO and principle owner
2. John McClean, Managing Directo
3. Marta Tufu, Minister of Tourism Development for Kona
4. Tomasi Va’valu, Paramount Chief of the villages
5. Joan Collins, representing the World Watch Environmental Protection organization
6. Ha
is Friedburg, international financier and develope
7. Joni Keritu, self-appointed representative of the villager vendors
8. Selini Keritu, self-appointed representative of the villager vendors
9. Ima Green, representing the World Watch Environmental Protection organization
10. Tusi Va’valu, Chief of Kona village
Note: Each student in this simulation exercise will receive a role play script via email. In some cases the assigned role play character’s gender and the student’s actual gender may not match. Also to make certain everyone in a course section is able to participate in the simulated meeting some student may have the same role as another student.