Risk Management Strategies and Management Implication of Cultural Difference for a P2P Virtual Enterprise

Risk Management Strategies and Management Implication of Cultural Difference for a P2P Virtual Enterprise

Sunny Jeong (Wittenberg University, USA)
Copyright: © 2015 |Pages: 20
DOI: 10.4018/978-1-4666-8606-9.ch016
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Abstract

This chapter examines and compares closely two virtual travel enterprises, Couchsurfing.org (CS, USA) and Gilbut.net (Gilbut, Korea). These platforms allow people to offer free travel resources including information, accommodation and transportation. Both organizations have become a mission driven enterprises similar to a not for profit model, and are run without receiving any advertising funds from the private sector. Their different cultural orientation provides interesting insights that emphasize same core strategies to create a critical mass of highly motivated contributors. At the same time, cultural differences suggest that technical features and core designs should be customized according to the cultural preferences such as the degree of individual visibilities and strong/weak group identity. Comparison of both networks provides an invaluable insight to understand how critical it is to set up strategic online features in order to promote reciprocity and a certain degree of anonymity.
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Introduction

Recent developments in online commerce and social media have made sharing travel services easier and affordable, leading to new business models involving peer-to-peer (P2P) options. Forbes estimates that the revenue flowing through the share economy directly into people’s wallets will surpass $3.5 billion this year, with growth exceeding 25% (Geron, 2013), and World Travel Market Global Trend Report made by Euromonitor International (2014) indicates that P2P travel services are recording strong growth in European markets. P2P is a gateway to allow complete strangers to rent out their homes to travelers (e.g. Airbnb.com, HouseTrip.com, Homeaway.com, Gilbut.net, Couchsurfing.org) to lend their vehicles (e.g. Blablacar.com & Avis bought car sharing company Zipcar for US$500 million in 2013), to lead guided tours (e.g. Vayable.com), and to meet out-of-towners for meals (e.g. Couchsurfing.org), all set up via the Internet.

Despite growing popularity, the P2P industry is experiencing growing pains. Feedback given by P2P users often include negative aspects of virtual organizations. Problems range from vandalism, defrauding and scamming users, illegal behavior, extreme cases of rape or inappropriate sexual conduct, gross violations of privacy, and residents’ rights, to difficulty of any real appeals or dispute resolution process, violation of local tax payment and short-term rental laws, etc. This study is particularly intrigued by the emerging strategies of P2P ventures to manage the risk and gain legitimacy of its operation and financial transactions. In a traditional hospitality industry, hotels and service providers seek a permit for business operation from the government, which provides legitimacies of its operation to customers. All transactions are made formally under the law, and responsibilities of service providers are clear. Conflicts between the customers and service providers are often mediated by 3rd parties such as Customer Council or Hotel Association etc. However, P2P business has emerged in an informal economy. Service matching websites connect travelers to individuals who can offer their houses or cars for a short term for extra income. Transactions are often made in cash. Most service providers, therefore, are not legitimized and regulated by the industry or commerce laws. P2P service matching websites or customers themselves need to find ways to build trust, legitimacy and manage uncertainties and risk. As such, there is a managerial and theoretical need for a more in-depth understanding of P2P venture management.

In order to understand the nature of the collective crowds in the P2P travel trend, this chapter focuses two salient risk management strategies: traceability and visibility management, in addition to the suggestion of cross-cultural management implication. By illustrating each strategy, this chapter addresses the following questions. What aspects of ICT allow a P2P venture to gain, keep, and grow customers where high risks are involved in delivering, using, and sharing services between strangers? Is it possible to create a safe environment to sustain users that encompass different nations, cultures, values, and norms? What are some contextual and technological strategies to improve the experiences of P2P online ventures?

This chapter examines and compares closely two virtual travel enterprises, Couchsurfing.org (CS, USA) and Gilbut.net (Gilbut, Korea) that I have studied over many years by active participations, observations, interviews and content analysis. Couchsurfing is a global online network of travelers that originated in the USA, and Gilbut is a national network started in South Korea where people offer free travel resources including information, accommodation and transportation. Both organizations have become a mission driven organization similar to a not for profit model, and are run without receiving any advertising funds from the private sector. Their different cultural orientation provides interesting insights that emphasize same core strategies to create a critical mass of highly motivated contributors. At the same time, cultural differences suggest that technical features and core designs should be customized according to the cultural preferences such as the degree of individual visibilities and strong/weak group identity. Comparison of both networks provides an invaluable insight to understand how critical it is to set up strategic online features in order to promote reciprocity and a certain degree of anonymity.

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