Journal of Travel & Tourism Marketing

ISSN: 1054-8408 (Print) 1540-7306 (Online) Journal homepage: https://www.tandfonline.com/loi/wttm20

Assessing the Value of Collaborations in Tourism

Networks: A Case Study of Elkhart County, Indiana

Florian Zach & Pradeep Racherla

To cite this article: Florian Zach & Pradeep Racherla (2011) Assessing the Value of
Collaborations in Tourism Networks: A Case Study of Elkhart County, Indiana, Journal of Travel &
Tourism Marketing, 28:1, 97-110, DOI: 10.1080/10548408.2011.535446

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Journal of Travel & Tourism Marketing, 28:97–110, 2011
Copyright © Taylor & Francis Group, LLC
ISSN: 1054-8408 print / 1540-7306 online
DOI: 10.1080/10548408.2011.535446

ASSESSING THE VALUE OF COLLABORATIONS

IN TOURISM NETWORKS: A CASE STUDY
OF ELKHART COUNTY, INDIANA
Florian Zach
Pradeep Racherla

ABSTRACT. This study explores the determinants of perceived value derived from interorganiza-
tional collaborations in a tourism destination. The authors propose a theoretical model of perceived
value drawing upon the rich stream of literature related to strategic collaborations and interorgani-
zational networks. The model was tested using a cross section of tourism organizations operating
within Elkhart County, Indiana. The results indicate that a significant positive value of collabora-
tion is achieved from dyadic relationships. Importantly, the results suggest that the positive effect
achieved from one-to-one partnerships decreases once an organization collaborates with several other
organizations. The article discusses various implications for managing strategic tourism partnerships.

KEYWORDS. Partnerships, collaboration, destination networks, tourism value chain, destination

management

INTRODUCTION for tourism management when it comes to: (a)

It has been well-documented that interorga-
nizational collaborations help tourism organiza-
tions overcome individual resource deficiencies
and, therefore, remain competitive (Wang &
Fesenmaier, 2007). This is especially impor-
tant in today’s dynamic and hypercompetitive
environment characterized by rapid technologi-
cal change and empowered customers (Wang &
Xiang, 2007). Collaboration is the key strategy
leveraging scarce resources (Selin & Chavez,
1995), an issue faced by essentially all publicly
funded convention and visitors bureaus (CVBs;
Buhalis, 2000); and (b) fulfilling tourists’ need
for holistic and individually meaningful experi-
ences (Woodside & Dubelaar, 2002).
Tourism is a complex phenomenon that can-
not be explained by conventional economic
or business logic. In a traditional sense, an
industry can be understood as a number of

Florian Zach is affiliated with the National Laboratory for Tourism and eCommerce in the School of
Tourism and Hospitality Management at Temple University, 1810 North 13th Street, Suite 310, Philadelphia,
PA 19122, USA (E-mail: fzach@temple.edu).
Pradeep Racherla is affiliated with the College of Business at West Texas A&M University, 2403 Russell
Long Boulevard, Canyon, TX 79016, USA (E-mail: pracherla@wtamu.edu).
The authors would like to extend sincere thanks to the director Ms. Diana Lawson, destination develop-
ment manager Mr. Mike Huber, and all other employees of the Elkhart County CVB for their hospitality
and support during the data collection process. The authors would also like to thank all the managers of the
organizations who participated in the study and provided valuable insights that improved the survey.
Address correspondence to: Florian Zach at the above address.

97
98 JOURNAL OF TRAVEL & TOURISM MARKETING
firms that produce a limited set of products
and services, and therefore, compete with one
another for customers and resources (Wells,
1989). Tourism organizations, however, find
themselves in “co-opetition” (Tsai, 2002) with
other tourism agents as they not only compete
with each other, but often collaborate to cre-
ate complementary goods and services. Further,
tourism experiences are evaluated holistically
rather than piecewise. Therefore, in the minds
of the tourists, a destination is evaluated as
a single product rather than a combination of
numerous organizations (Agarwal, 1997; Wang
& Xiang, 2007). Thus, the success of a destina-
tion depends on the seamless coordination of the
players comprising the tourism value chain to
provide wholesome and memorable experiences
to tourists.
The topic of tourism collaborations has been
discussed in a variety of contexts such as mar-
keting collaborations (Selin & Myers, 1998;
Wang & Xiang, 2007), tourism policy mak-
ing and sustainability (Dredge, 2006), destina-
tion development (Naipaul, Wang, & Okumus,
2009), as well as learning and knowledge shar-
ing among tourism organizations (Yang, 2007).
These studies emphasize that interdependencies
between destination businesses exist at the level
of the destination and are thus important to pur-
sue individual businesses’ goals as well as over-
all strategic goals for the destination (Ritchie
& Crouch, 2003). However, few studies apply
robust theoretical models or contemporary tech-
niques that explain the complexity of destination
collaborations—some exceptions include Scott,
Cooper, and Baggio (2008) who used network
analysis and Lemmetyinen and Go (2009) who
used the Value System Continuum framework.
Moreover, these studies focus on tourism col-
laborations at an aggregate level of the destina-
tion, thereby ignoring the meso-level dynamics
between smaller sets of organizations. While
it is generally understood that collaborations
among destination businesses create value for
the destination, researchers have yet to study the
various factors that impact how individual orga-
nizations perceive the value of collaborations
with organizations participating in destination
networks. The primary objective of this study is
to fill this gap in the literature.
This study is guided by the theories under-
lying strategic collaborations (Gulati & Singh,
1998; Prahalad & Hamel, 1990) and the net-
work theory of the firm (Powell, 1990) which
posit that the value of interfirm collaborations is
derived from “. . . a process by which the com-
petitive abilities of the partners are enhanced by
being in a relationship” (Wilson, 1995, p. 342).
At the same time, this study incorporates the
influence of larger social systems within which
individual firms are embedded. Based on these
two perspectives, this study posits that while
the antecedents and outcomes of collabora-
tions depend on the firm- and collaboration-
specific factors, certain inveterate aspects of
the networks enable and constrain the ability
of individual firms to take advantage of the
collaborations for which they are intended.
This article is organized as follows: (a) The
article begins with a general discussion of the
drivers of value in business-to-business (B2B)
collaborations, (b) the key factors driving value
creation in B2B collaborations are discussed,
(c) the model of value creation for organizations
within a tourism destination is proposed and the
associated constructs as well as their relation-
ships are discussed in detail, (d) the research
context and the methods used in data analysis
are presented, (e) the results and their implica-
tions for destination management are discussed,
and (f) the article ends with a brief discussion of
future research opportunities.
INTERORGANIZATIONAL
COLLABORATION IN TOURISM
DESTINATIONS
Scholars have long recognized that the
complexity of tourism destinations cannot be
explained by traditional organizational and mar-
keting theories (e.g., Ritchie & Crouch, 2003).
A destination, especially from the visitors’ point
of view, can be construed as a series of interre-
lated activities and attractions that have to work
in unison to create a satisfying and wholesome
experience (Woodside & Dubelaar, 2002). In
this sense, even though a destination consists
of numerous independent organizations, visitors
tend to see them as a whole (Agarwal, 1997).
 Florian Zach and Pradeep Racherla
Further, the tourism product is a service inten-
sive production that can be delivered only when
the tourist is present at the venue of produc-
tion. This creates an interesting paradox for the
organizations. On the one hand, they have to
market their own products and services, and
compete for a limited set of visitors present in
the destination. At the same time, they have
to cooperate and coordinate with each other to
focus on the total product; that is, the destination
itself which supports the tourism experience.
This is an extremely complex task since destina-
tions have numerous stakeholders who operate
with their own ideas, objectives, and resources.
The situation is further complicated with
the mix of few powerful organizations such as
CVBs, governmental organizations, and numer-
ous small- and medium-sized organizations
(SMEs; Ford & Pepper, 2008). In this scenario
of coexistence, managers have to simultane-
ously deal with two tasks: (a) They have to
expend certain cognitive and physical resources
to build and maintain business relationships
with individual organizations, and (b) they have
to operate within constraints that are created
by the larger social system of organizations in
the destination. Repeated interactions between
various organizations establish both formal and
informal norms, and social patterns that gov-
ern how a destination is managed and mar-
keted. Given this system of relationships within
tourism destinations, it is important to incor-
porate theoretical perspectives that explain the
interorganizational dynamics at the dyadic level
as well as their interplay in the social system at
the destination level.
Contemporary business theory argues that the
superiority in performance results, in part, from
the synergy of value adding relationships devel-
oped between individual organizations (Gulati
& Singh, 1998). Interorganizational collabora-
tions have been typically explained using two
different yet complementary theoretical lenses.
The first set of explanations is based upon
theories such as transaction cost economics
(Williamson, 1987), strategic management the-
ory (Prahalad & Hamel, 1990), and resource
dependency theory (Pfeffer & Salancik, 1978).
Transaction cost theory suggests that organi-
zations develop collaborations to minimize the
99
sum of production and transaction costs based
upon the fundamental assumption that mar-
kets are inefficient platforms for knowledge
and resource exchange, given the uncertainties
over appropriability and valuation. Therefore,
organizations tend to vertically integrate the
supply chain to gain control over the actions
of other organizations. In this regard, strate-
gic collaborations are considered effective tools
to overcome the inefficiencies of the market
and to increase reliance on partners (Baum &
Singh, 1994). Interfirm collaborations provide
an intermediate form of governance structure
that enables resource exchange based on trans-
action reciprocity. Ideally, collaborations over-
come risks of opportunism, create incentives
for knowledge and resources sharing, and dis-
courage partner firms from pursuing subgoals
(Powell, 1990). Similarly, resource dependency
theory and strategic management theory argue
that organizations attempt to gain control over
highly turbulent and uncertain markets through
strategic use of resources (Powell, Koput, &
Smith-Doerr, 1996). However, more often than
not, critical resources (such as money, skills,
etc.) tend to be scarce and do not reside within
the organization. Organizations, thus, enter into
collaborations to take advantage of complemen-
tary assets and capabilities, and at the same
time, attempt to exercise power and control over
these resources while minimizing threats to the
organizational autonomy. In addition, through
collaborative relationships, organizations obtain
access to a wider stock of knowledge, more
experience, and additional business opportuni-
ties (Wang & Xiang, 2007; Selin, 1993).
Networks are both economic and social.
Economic networks result from the firms’ cur-
rent resource stocks as well as other intangible
factors such as innovativeness and knowledge
(Gulati, 1998). Social networks emerge from the
interactions between the managers/members of
businesses that are embedded in a system of
relations which determines the decision-making
process and behavior (Granovetter, 1985). Thus,
the literature suggests that the ability of an orga-
nization to develop and maintain relationships
is dependent on its overall position in the net-
work in terms of attractiveness and potential as
well as the social capital built by the managers
100 JOURNAL OF TRAVEL & TOURISM MARKETING
of individual firms. This relationship reflects the
dual nature of interfirm linkages through indi-
vidual relationships between the firms, as well
as their interplay and impact at the aggregated
network level. Tourism research has recently
focused attention on partnership networks in
tourism destinations, and has demonstrated the
importance of the freedom in decision making
for individual businesses while pursuing goals
beneficial for the destination (von Friedrichs
Grängsjö, 2003); this research also discussed the
connectedness of destination businesses (Scott
et al., 2008) and the importance of networks
for tourism organizations (Lemmetyinen & Go,
2009). Collectively, these studies clearly doc-
ument the need for tourism organizations to
collaborate in a structured manner so that visi-
tors can move through a destination by “linking”
together individual places (Zach, Gretzel, &
Fesenmaier, 2008).
A PROPOSED MODEL OF
COLLABORATION VALUE IN
DESTINATION NETWORKS
A conceptual model that incorporates factors
from both the theoretical perspectives discussed
above is presented in Figure 1. The underly-
ing argument of this model is that collabora-
tion requires substantial investments in terms
of financial and human resources, and man-
agerial time and effort, which in turn, build
FIGURE 1. A Model of Perceived Collaboration Value in Destination Networks.
Heterogeneity
H1
a(
+)
H1b (+) Dyadic
Complexity
Effect
+)
c(
H1
Balance
H3a (+)
Embeddedness
trust and commitment. Additionally, it is posited
that an organization’s perception of fairness
in the investment and returns determines the
value attached to collaborations. At the same
time, it can be assumed that each firm main-
tains more than one relationship to maximize
the dyadic effect. However, being a mem-
ber of the larger social system gives rise to
a limiting network effect of maintaining the
overall relationships. This network effect rep-
resents constraints that are tangible in terms
of resource allocation or intangible in terms
of lost opportunities. Consequently, the depen-
dent construct in this study (the perceived over-
all value of collaborations), is derived from
both the dyadic and network effects. It is
operationalized as the surplus of dyadic bene-
fits derived from individual relationships when
compared to network effect constraints that
are imposed by the participation in the over-
all destination network. It is important to note
that the unit of analysis in this study is the
individual organization. Both the benefits of
dyadic relationships as well as network-related
constraints and their impact on the overall
value are perceptual measures; i.e., key man-
agers’ perceptions regarding benefits and con-
straints.
Dyadic Factors
As described in Figure 1, it is proposed that
three dyadic factors (heterogeneity, complexity,
H2 (+) Collaboration
Value
H4 (–)
Network
Effect
H3c (+)
H3b (+)
Resource
Dominance
Overlap
 Florian Zach and Pradeep Racherla
and balance) influence the perceived value of
partnerships. The following briefly discusses
each of these factors.
Heterogeneity
There is a strong association between the
structural aspects of organizations and the effec-
tiveness of collaborations (Parkhe, 1992). One
of the most important structural characteristics
is interfirm heterogeneity, which is defined as
the diversity/compatibility in resource profiles
and social structures of the collaborating orga-
nizations. Parkhe identified two types of het-
erogeneity: Type I heterogeneity refers to the
differences in resources and capabilities; and
Type II heterogeneity refers to the social dimen-
sions such as vision, management style, and
governance mechanisms. Importantly, Parkhe
found that heterogeneity (either Type I or Type
II) increased the interdependency between the
organizations which then enhances the effective-
ness of the collaboration. However, substantial
differences in the fundamental characteristics
of the partnering firms may require the orga-
nization to develop mechanisms which define
fairness in investments and risk sharing (Kumar
& Nti, 1998) and ultimately lead to significant
tension that adversely affect the health of the
relationship.
Complexity
The second factor is the complexity of the
alliance. Business relationships are generally
task based and goal driven relationships that
are aimed at enhancing the value for both the
firms. Also, collaborations often begin on a small
scale wherein the partnering firms assess each
other’s capabilities, and then expand into a more
complex set of tasks or the partnership can
be initiated on a wide range of services from
the start (Wang & Xiang, 2007). Subsequently,
as the complexity of the task(s) increases, the
need for coordination and management also
increases (Gulati & Singh, 1998). Complexity is
generally characterized along two dimensions:
the scope and the intensity of collaborations
(Zinn & Parasuraman, 1997). Scope is defined
as the range of services/products that must be
developed or managed through the alliance, and
101
intensity is the extent of direct involvement on
the part of the organizational members. For
instance, two organizations coming together
to develop a new and exciting tourist pack-
age requires a higher level of commitment in
terms of resources and manpower than a sin-
gle advertising campaign. An increase in the
complexity of the alliance entails greater coordi-
nation mechanisms, resource expenditures, and
constant communication between the firms on
a day-to-day basis. Applying a transaction cost
perspective, it can be assumed that higher com-
plexity and greater coordination mechanisms
will lead to high asset specificity and resource
lock-in.
Balance
Balance in the partnerships is defined as the
partners’ judgments regarding the fairness of
mechanisms, investments, as well as sharing
risks and benefits (Kumar & Nti, 1998). The rel-
ative perceptions of the partners regarding the
costs to benefits ratio is an important variable.
One partner’s perception of balance includes
the partner’s estimation of equity in resources,
the time, and cognitive resources allocated to
the alliance. Since partnership management is
ultimately a social mechanism, studies suggest
that perceptions of the managers regarding reci-
procity in resource allocation, as well as the
balance in risk and benefit sharing have a sig-
nificant impact on the value (Kumar & Nti).
Dyadic Factor Hypotheses
The following hypotheses are derived from
the above discussion:
H1a: Heterogeneity in the partner charac-
teristics has a positive impact on the
perceived dyadic effect.
H1b: Complexity of the alliance has a pos-
itive impact on the perceived dyadic
effect.
H1c: Balance in the alliance has a positive
impact on the perceived dyadic effect.
H2: The perceived dyadic benefits have a
positive impact on the overall value of
the collaboration.
102 JOURNAL OF TRAVEL & TOURISM MARKETING
Network Factors
Research on interfirm networks indicates that
embeddedness, dominance, and the overlap of
resources affect the success of organizational
collaborations (Podolny & Baron, 1997). That
is, as organizations develop relationships with
each other, they create a web of both direct and
indirect relationships that create opportunities as
well as impose constraints.
Embeddedness
Embeddedness is defined as the extent to
which a firm is embedded within the net-
work, and the extent of positive experiences
a firm has by participating in a series of
relationships (Gynawali & Madhavan, 2001).
Experience with partnerships increases organi-
zations’ chances of surviving and maintaining
existing relationships and also provides cer-
tain new capabilities and managerial skills that
enable development of new partnerships (Anand
& Khanna, 2000). Further, the position of the
firms in the interfirm network enhances their
attractiveness to other firms and provides a mul-
titude of diverse contacts that are known to
have a positive impact on tie-strength and tacit
knowledge flow (Capello & Camagni, 2000).
However, the negative fallout of embedded-
ness is that it makes organizations vulnerable
to exogenous shocks or insulating them from
resources that exist beyond the network (Uzzi,
1996). Therefore, networks built on repeated
ties can reduce the flexibility, lock in resources,
and ultimately lead to mediocrity.
Dominance
Dominance reflects the extent to which
resources (both physical and informational) flow
to and from an organization, and therefore
reflects the power of the organization rela-
tive to others in the network. It also captures
the popularity and visibility of an organization
within the network (Kenis & Knoke, 2002).
Dominance enables organizations to gain con-
trol over resources, obtain political support, and
participate in coordinated participative action.
Dominance also enhances the structural auton-
omy; i.e., the extent to which an organiza-
tion is able to pursue its own goals. There
is increasing evidence that network dominance
leads to a strong positive feedback and increas-
ing returns of scale. That is, a dominant orga-
nization attracts more preferential linkages and
increases subservience of the partners (Katz &
Shapiro, 1994). Similarly, a dominant partner
increases the legitimacy and stability of the rela-
tionships thereby driving benefits for the part-
ners (Venkatraman & Lee, 2004). The extent to
which an organization is dominant in a network
or allies with a dominant partner is therefore
argued to have a positive impact on the value
of collaborations.
Resource Overlap
Degree of resource overlap (van de Ven, 1976)
refers to the extent to which other organizations
in the network have similar resources and sim-
ilar customers. Overlap has significant impact
on the competitive intensity in the market and
constrains individual organizations in their eco-
nomic action. Even though resource overlap
connotes a negative impact, Stuart (2000) found
that it actually increases competitive intensity
and therefore drives innovation.
Network Factor Hypotheses
Based on the above discussion, it is hypothe-
sized that:
H3a: Embeddedness of a firm in the network
has a positive impact on the perceived
network effects.
H3b: Dominance of the firm in the network
has a positive impact on the perceived
network effects.
H3c: Resources overlap with other firms in
the network has a positive impact on
the perceived network effects.
H4: The perceived network effect will have
a negative influence on the perceived
value of collaboration.
METHODOLOGY
Study Context and Survey Methods
This study adopts a quantitative case study
approach wherein a single destination was
chosen as the study context. This study focuses
 Florian Zach and Pradeep Racherla
attention of the partnerships of the Elkhart
County CVB as it plays a central role in coor-
dinating the many actors within a destination to
produce value for both visitors and businesses
by pursuing activities such as planning the
destination’s development, promoting the des-
tination, and coordinating providers of tourism
products and services (Gartrell, 1988). The des-
tination of Elkhart County, Indiana, was chosen
for several reasons. First, within the Northern
Indiana region, the Elkhart County CVB is rec-
ognized as one of the most successful ones in
terms of both marketing the destination as well
as creating and maintaining relationships with
other organizations. Second, tourism is one of
the main economic forces in the destination.
Finally, the Elkhart County CVB was willing to
provide access to its membership base. The sam-
pling frame includes 188 businesses identified
as the partners of the Elkhart County CVB.
This study relies on single informant per-
ceptions. Previous research suggests that the
members of the top management have an overar-
ching view of the strategic activities of the firm
and, therefore are knowledgeable in the issues
related to interfirm collaborations (Huxham &
Vangen, 2000). This study focused on the CEO
or manager of the tourism-related organizations
located within Elkhart County, Indiana. The sur-
vey was conducted via the Internet and through
the mail, and included a series of questions
wherein the respondent was asked to identify
and evaluate partners with whom they collab-
orated in the past as well as the respondent’s
overall experience with partnerships. The sur-
vey effort followed a two step process. First,
an email invitation to the online survey was
sent to those 124 businesses where the CEO’s
personal email was available; simultaneously, a
paper-based survey was sent to the remaining
64 businesses. Then, 10 days after the initial
mailing, a reminder was sent to all participants
by the CVB emphasizing the importance of this
study. Ultimately, these efforts resulted in data
describing 83 dyadic relationships within the
destination.
Construct Measures
The measures used in this study were derived
from the literature in strategic collaborations
103
and interfirm networks in tourism as well as
general business disciplines. Specifically, the
measures for complexity incorporated both the
scope and the intensity of relationships (Zinn &
Parasuraman, 1997). To measure the scope, the
managers were asked to identify in how many
cases their organizations were collaborating with
the identified partner to do one of the following:
(a) joint marketing/advertising/media place-
ment, (b) tourist package development/special
promotion, (c) education/workshops, (d) grant
funding/sponsorships, and (e) strategic plan-
ning. Second, intensity was measured through
two questions: (a) The managers were asked to
indicate the number of years they have been in
collaboration with existing partners, and (b) the
number of times they communicate with each
other in a given month.
Partner heterogeneity was operationalized
through three measures to reveal differences
between the organizations in terms of capabil-
ities, resources, and structure (Parkhe, 1992).
The subjects were asked to evaluate differ-
ences in (a) organizational vision, and skills and
competencies (capabilities); (b) types of cus-
tomers (resources); and (c) performance mea-
surement metrics and organizational structure
(structure).
Balance was measured based upon man-
agers’ perceptions regarding fairness in invest-
ments and mutual sharing of risks and benefits
(Kumar & Nti, 1998; Morgan & Hunt, 1994).
Specifically, the respondents were asked to
evaluate: sharing risks and benefits (sharing);
and investments in time and effort, financial
resources, and adjustments to meet the partner’s
organizational needs (reciprocity).
The network constructs were measured using
7-point scales where 1 = extremely high and
7 = extremely low. Specifically, embedded-
ness was measured on the extent to which an
organization is connected within the destina-
tions network, as well as the overall expe-
rience they have with previous or existing
partnerships (Gynawali & Madhavan, 2001).
Dominance was measured based upon the rep-
utation and status of the partner following Katz
and Shapiro (1994) and Venkatraman and Lee
(2004). Last, resource overlap was measured by
the extent to which other organizations provide
similar products/services and compete for
104 JOURNAL OF TRAVEL & TOURISM MARKETING

similar resources/customers (Baum & Singh, TABLE 1. Means, Deviations, and Reliabilities
1994). of the Constructs
To measure the perceived value of the indi-
vidual relationships, the subjects were asked to Measure Mean SD Loading Cronbach α
evaluate: first, improvements in and develop- Dyadic factors
ment of new products/services and packages to Complexity .713
satisfy the needs of tourists; second, the attain- – Frequency 1.16 0.506 .889
ment of new customers or markets not available – Length 1.33 0.607 .716
Heterogeneity .849
prior to their participation in partnerships; and – Skills/ 2.81 1.804 .841
third, the enhancement of the tourists’ overall competencies
satisfaction (Stegeman, 1999). – Organizational 2.43 1.450 .607
The validity of the measures was evaluated vision
– Performance 3.34 2.079 .804
through a two step process. First, the relia- metrics
bility of the respective measures was tested – Organizational 3.48 1.934 .841
using the Cronbach’s coefficient alpha. Further, structure
the convergent validity of the items was tested Balance .754
– Financial 3.51 1.915 .839
through varimax rotated principle component investment
factor analysis. Carmines and Zeller (1979) – Risk sharing 3.67 1.907 .816
stated that loadings above .4 can be consid- – Investment in 2.93 1.659 .625
ered sufficient to reflect validity. In this study, time/effort
– Benefit sharing 2.73 1.523 .622
the initial reliability estimates for some of the Dyadic effect .829
individual constructs did not meet the widely – Customer 2.09 1.435 .801
accepted threshold of Cronbach’s alpha ≥.7 satisfaction
(Nunnally, 1978). This was not surprising given – Innovation/ 2.77 1.744 .687
adoption
the fact that these measures were being applied
Network factors
for the first time in the context of tourism indus- Embeddedness .922
try. The constructs not meeting this standard – Connectedness 2.72 1.521 .899
were redefined whereby certain items were not – Centrality 3.08 1.683 .884
included within the respective construct. As a Dominance .821
– Partner 2.45 1.328 .751
result, the values of Cronbach’s coefficient α reputation
for the respective constructs were close to .7 or Resource Overlap .865
higher (see Table 1). – Resources 5.53 1.189 .802
Network effect .639
– Missed 3.52 1.647 .878
opportunities
ANALYSIS AND RESULTS – Limiting new 2.25 1.231 .750
partnerships
The basic characteristics of the Elkhart Dependent
County tourism-related organizations including variable
Collaboration .948
size (number of employees) and the years of value
operation in the county are shown in Table 2. – Future 1.59 1.030 .946
As can be seen, most of the tourism organiza- collaboration
tions are small (less than 10 employees) and – Overall 1.76 1.061 .942
satisfaction
have been operating for over 10 years.
The proposed model was tested using PLS
Graph 3.0 with bootstrapping and individual
sign reprocessing. PLS was adopted since it not scale data are not necessary (Chin, 1998).
only generates estimates of standardized regres- The initial model did not explain a significant
sion coefficients for the paths, but also takes amount of variance in the endogenous con-
measurement errors into account. Additionally, structs. A series of alternate models were then
the assumptions of normality and the interval tested including a mediation model, whereby the
 Florian Zach and Pradeep Racherla 105

TABLE 2. Organization’s Size and Their Years collaboration value and resulted in an increased
of Operation in the Destination R2 for the value construct from .053 to .246.
The final model with the path coefficients and
Size (number Percent Years of operation Percent R2 values is shown in Figure 2 below.
of employees) in the destination

Less than 10 59.4 Less than 3 6.2

11–25 21.9 3–5
26–50 6.2 6–10
51–100 3.1 More than 10
More than 100 9.4
direct links from both dyadic factors and net-
work factors to collaboration value was exam-
ined. To establish whether this mediation model
exists or not, Baron and Kenny (1986) stip-
ulated that four conditions must be satisfied:
(a) the antecedent variables must be related to
the mediator; (b) the antecedent variables must
be theoretically linked to the dependent vari-
able directly; (c) the mediator must be related
to the dependent variable; and (d) the strength
of the relationship between the antecedents and
the dependent variable must be less than the
relationship between the mediator and depen-
dent variable. The results of the analyses of the
mediation model indicated that the direct links
between the dyadic constructs and collaboration
value were not significant, but were significant
between the network factors (i.e., embedded-
ness, dominance, and resource overlap) and
3.1
12.5 DISCUSSION AND IMPLICATIONS
78.1
The results indicate that the dyadic level fac-
tors lead to certain alliance specific value to
dyadic effect benefits that determine the per-
ceived value of collaboration. At the same time,
the network level factors directly constrain the
perceived value of collaboration. For the ease of
exposition, the results on dyadic and networks
effects are discussed separately.
Dyadic Factors
The most unexpected result was the signifi-
cant negative relationship between heterogene-
ity and perceived value (H1a). This finding
suggests that value of collaborations is mostly
explained through the similarity of partners
in terms of resources as well as governance
structures and business vision. The result can
be explained by the notion of repeated ties
whereby organizations enter into collaborations
to manage environmental uncertainty, crises, or
competition (see Wang & Fesenmaier, 2007).

FIGURE 2. An Alternate Model With the Direct Effects of the Network Factors.

Heterogeneity
–.180**
R2 = .115 R2 = .246
.097 (ns) Dyadic .241** Collaboration –.128 Network
Complexity
Effect Value Effect

.280***
Balance

–.219***
–.248*
–.178 (ns)

Resource
Embeddedness Dominance
Overlap

*Weakly significant p < .1(t values between 1.66–1.99)

**Marginally significant at p < .05 (t values between 1.99–2.64)
***Highly significant at p < .001 (t values between 2.64–2.89)
106 JOURNAL OF TRAVEL & TOURISM MARKETING
However, there are also considerable uncertain-
ties associated with entering into collaborations
(Gulati & Singh, 1998). Thus, while numer-
ous exogenous and environmental factors suffice
entering into collaborations, they may not pro-
vide enough cues to suggest with whom to
build ties (Gulati & Higgins, 2003). Therefore,
to reduce search costs and the potential for
opportunism, organizations may create stable
relationships with preferential partners, which
especially in a small destination, are charac-
terized by physical proximity and face-to-face
contact (Pavlovich, 2003). Over time, these rela-
tionships turn into embedded relationships char-
acterized by trust and rich exchange of infor-
mation. Hence, owners of tourism businesses
in Elkhart County may not be willing to make
adjustments to accommodate dissimilarities in
social and structural characteristics.
However, previous research suggests that
repeated social ties may be detrimental to new
possibilities and information (i.e., being in such
secure and familiar collaborations) in that they
may limit the ability of the organization to fully
benefit from relationships with heterogeneous
partners (Burt, 1995; Granovetter, 1985). It is
important, therefore, for tourism researchers to
investigate the trade-offs between the pursuits of
stability versus maximizing value by collaborat-
ing with heterogeneous partners. Understanding
this phenomenon is critical for destination man-
agement and success, since it may be possible in
the case of many destinations that smaller orga-
nizations may be sacrificing economic rational-
ity for the sake of social ties.
Importantly, the results do not support the
hypothesis that complexity positively influences
perceptions of dyadic value to effect (H1b).
This is interesting since the advantages of com-
plexity in collaborations are predicated on the
logic that higher complexity reflects a higher
number of activities (either markets or prod-
ucts) being managed by the partners. Since these
activities could not have been managed by indi-
vidual organizations due to a lack of resources
or capabilities, complexity could lead to activ-
ities that move the organizations higher up in
the value chain, and are therefore beneficial.
However, as discussed previously, higher com-
plexity entails higher coordination costs and
greater number of integration mechanisms. The
perception of value therefore can be untouched
by the complexity if organizations are con-
stantly exposed to a myriad of interfirm rela-
tionships. Tourism businesses, by default, are
always more connected with other businesses
than typical organizations. This suggests that
complexity is inherent in tourism collaborations
and therefore does not add value to tourism
businesses.
However, the result on complexity in this
study could also be an artifact of the context spe-
cific to Elkhart County and therefore requires
greater focus in future studies. Nevertheless,
the notion of complexity has important impli-
cations for tourism organizations. It is known
that small organizations operating within a des-
tination have fewer resources (organizational,
financial, and human) that can be dedicated
to alliance management. Complexity imposes
higher cognitive costs on the managers who
manage the collaborations. In this sense, it is
important for organizations to assess their “col-
laborative capacity”; i.e., organizations must
take a stock of their current resources and
capabilities before even entering collaborations.
Understanding their own capacity to initiate and
profit from collaborations can help managers
better manage their portfolio of alliances. Proper
mechanisms must be put in place even prior to
entering into collaborations so that the costs of
managing complexity do not exceed the ben-
efits. For instance, managers can pay greater
attention to how tasks are organized and delin-
eate roles and responsibilities that allow for
more efficient allocation of resources. Similarly,
partnerships based on limited scope might give
organizations the low risk opportunity to exper-
iment with various partners and governance for-
mats, and gradually scale up the complexity of
the partnerships. Tourism researchers need to
develop innovative tools to explain the value
generated by this sliding scale of complexity.
Last, the results support hypothesis H1c
(balance positively affects dyadic effect). As
hypothesized, perceptions of equity and fairness
in benefits and resource expenditures have a
positive effect on the dyadic effect of collabo-
ration. As emphasized by the equity theory, it is
not only important to maintain this perception
 Florian Zach and Pradeep Racherla
of fairness but also to communicate it to the
partner. Fairness and communication are criti-
cal to establish trust as the basic understanding
to enable future collaboration (Medina-Muñoz
& García-Falcón, 2000).
Network Factors
The significance of the alternate model
wherein the network effects failed to mediate
the effect of network factors and the direct neg-
ative influence of the network factors on the
perceived collaboration value was unexpected.
The significant negative effect of both embed-
dedness and dominance should be interpreted
collectively in the context of a tourist des-
tination, and that too with caution. Scholars
have explicated both the positive and negative
effects of embeddedness and dominance in a
network of organizational linkages. The results
from this study, however, suggest that the study
respondents viewed embeddedness and domi-
nance as negative fallouts of forming collabora-
tions. More often than not, tourism destinations
consist of few dominant players such as the
CVB or other governmental organizations that
tend to have an unequal amount of power in
making decisions and policies. As small firms
begin to operate in such a network, they might
be obligated to align with these few dominant
players to gain credibility and access to the
local resources. The deeper the firms are within
this form of dominant networks, the higher will
be the loss of autonomy and loss of involve-
ment, and additional opportunities that might
otherwise be available.
However, this study considers only one of
the many forms of embeddedness identified by
previous research. For instance, this study mea-
sures only positional embeddedness and over-
looks relational (the role of weak and strong
ties as mechanisms to obtain information and
resources; Gulati, 1998; Rowley, Behrens, &
Krackhardt, 2000) and structural embedded-
ness (structure of relations around the focal
social unit and the configuration of relation-
ships that make up the social unit’s network;
Zukin & DiMaggio, 1990). Tourism researchers
have often overlooked these important variables
when studying destination networks although it
107
is well known that embeddedness has important
implications for both the social and economic
interactions of organizations (Palmer & Bejou,
1995; Pavlovich, 2003; Wang & Xiang, 2007).
The same result can also be explained from
the point of view of the dominant partner(s).
The greater the dominance of the focal firm, the
greater will be its leadership role and adminis-
trative involvement. While this dominance leads
to higher control, it also leads to greater costs of
coordination, eventually having a negative influ-
ence on the perceived value of collaboration.
More often than not, a few dominant organi-
zations such as the CVBs essentially manage
all the interactions and coordination, especially
in smaller destinations. They play an important
role by working with numerous stakeholders,
obtaining funds, and generally driving commu-
nity buy-in into the destination development. At
the same time, these dominant organizations also
become sources of frustration for local organi-
zations given the preferential linkages within
the limited number of dominant organizations
who tend to garner all the resources and atten-
tion (Bornhorst, Ritchie, & Sheehan, 2010). It
is important for future research to focus on
these important constructs. Innovative sociomet-
ric techniques (network analysis) as well as
perceptual measures (used in this study) should
be applied to reconcile the positive and negative
effects of dominant partners on value of col-
laborations at both dyadic as well as network
levels.
The impact of resource overlap is consistent
with previous research. Given the limited num-
ber of tourists and the various other resources
available within a destination, it is obvious that
the presence of other organizations that compete
for similar resources and tourists is an added
strain on the tourism firms. The resource overlap
combined with the need to compete with dom-
inant destination organizations has a negative
impact on the managers’ perception of value.
LIMITATIONS AND FUTURE
RESEARCH DIRECTIONS
This study has several conceptual and meth-
odological limitations. The focus on a single
108 JOURNAL OF TRAVEL & TOURISM MARKETING
destination limits the generalizability of the
findings. To better understand the intricacies
of collaborations in tourism destinations, a
cross-sectional study across several destinations
ought to be conducted. Social network analy-
sis applied both as theory and as a tool, would
allow researchers to incorporate structural vari-
ables such as organizations’ position and power
within networks and to incorporate the mul-
tiple relationships in which organizations are
embedded.
Also, it is widely accepted that informa-
tion technology (IT) is a crucial driver for the
success of tourism destinations. However, this
study does not take into account how modern
IT enables tourism organizations to better man-
age their collaborations. For instance, there is
a growing trend of destinations adopting desti-
nation management systems that coupled with
e-commerce platforms considerably reduce the
costs of communication and information acqui-
sition; and therefore guide strategic priorities as
well as enable cooperative marketing opportu-
nities (Ritchie & Ritchie, 2002; Yuan, Gretzel,
& Fesenmaier, 2006). These platforms enable
tourism organizations to interact with each other
more efficiently and also give them access to
sources of considerable business intelligence.
It is possible that the modern IT platforms
can enhance some of the benefits accrued from
collaborations as well as alleviate the costs
associated with both dyadic and network level
relationship mechanisms (e.g., communication
and coordination costs). Future studies could
refine the model by including IT enabled com-
munication as an enabler of value generated
through collaboration.
Finally, this study focuses only on explicit
partnerships between the focal organizations.
However, due to the nature of travel, tourism
organizations are involuntarily related with each
other as tourists connect them when stay-
ing at the destination (Zach et al., 2008).
Tourism organizations often are not aware of
their partners and thus do not collaborate with
organizations they are connected to through
the movement of travelers within a destina-
tion. It is, thus, important to consider not only
organizations currently known as partners of
the CVB, but essentially every organization
within the destination in future research and also
data from consumer research. This would allow
researchers to fully understand the relationship
between providers of tourism services to pro-
pose relationships and collaborations between
organizations that are not aware of their state of
connectedness.
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SUBMITTED: March 19, 2010
FINAL REVISION SUBMITTED:
August 3, 2010
ACCEPTED: August 9, 2010
REFEREED ANONYMOUSLY