The Uniqueness of the Hospitality Industry and CSR Strategy - Article Example

An article entitled, “Practices of an Indian Hotel Giant,” by Sumesh Mangalassery explores the many dimensions of unethical practices that define the relationship between the Fishermen Cove Beach Resort, owned by the Tata Group. The author of the article, acting as the whistle blower in this matter is a founder member of a group called Kabani, a voluntary organization that deals with issues related tourism in India. The relationship between the resort and the locals resident at Kovalam fishing village has been defined by a series of protracted litigations over land rights and claims of harassment by the hotel management. According to the article, the hotel has not fulfilled the promises it made to the community involving the improvement of livelihoods and the promotion of their activities (Mangalassery, 2009). The hotel has engaged in a series of activities that systematically subject the locals to significant levels of trouble. According to the article, the hotel has reneged on a series of past promises that were aimed at improving the livelihoods of the locals. Some of them included environmental conservation, provision of clean water, and educational assistance to the impoverished community. There have also been disputes involving deliberate harassment of the locals and limitations in their freedom of movement, which the hotel management argues is disruptive to the calm that tourists require. In essence, the hotel prioritizes the interests of the visitors above the interests and welfare of the community. The corporate social responsibility policy adopted does not correspond to the needs of the locality (Mangalassery, 2009). In essence, there exists a significant disconnection between the practices of the hotel and the welfare of the fishing community. Essentially, the business practices carried out by the hotel are unethical in the sense that they do not conform to the principle of balance since a significant section of the stakeholders has been sidelined. On this score, it might be argued that the operation lacks the necessary checks that would be necessary to improve the relations between the community and the management. As the natives of the beach location, the natives have the right to benefit from the high profits that accrue from the proceeds of tourism (Mangalassery, 2009). The practice of Fishermen Cove Beach Resort exemplifies corporate greed and the inability of the management to adjust to the principles of good corporate practices. In essence, the hotel is incapable of sustainable tourism practices and ecotourism. Minerbi Luciano, a writer affiliated to Cultural Survival, highlighted the mismatch between CSR practices by the hospitality industry in Hawaii and the concerns of the locals. Cultural Survival is a group that advocates for the rights of cultures and the marginalized (Luciano, 2010). The article foregrounds claims of commercialization of local culture, prioritization of the interests if the visitors above those of the natives, environmental degradation, poverty, and general pollution. The article takes a balanced approach the highlights both the merits and demerits of the hospitality industry in Hawaii. Particularly, the writer focusses on the poor CSR policies that have encouraged the subjugation of the interests of the natives. Estimates from the publication show that Hawaii receives over six million tourists annually, which translates into 10 billion dollars injected into the economy in one year (Luciano, 2010). Over the times, Hawaii has experienced rapid development in tourism-related infrastructure in order to accommodate the rising numbers of guests who flock the island. There are concerns that these developments have had adverse effects on the diverse eco-system and native culture. More than half of the animal species on the island is classified as endangered. The state of Hawaii lacks the necessary capital that could be used to protect the species. The only viable alternative is the forging of resourceful cooperation between the government and the corporate entities that operate within the hospitality industry. The article is consistent with studies that have established that tourism firms have adopted a minimalist model in their application of the CSR programs in a manner that fails to connect the practices with the concerns of the locals. According to the scholars, the perspectives adopted are consistent with the assumptions regarding the low levels of power wielded by the natives as stakeholders (Luciano, 2010). Political developments, according to the researchers, will bring about radical changes in power by giving the people of the islands greater bargaining power on matters that engage the interest of the stakeholders (Luciano, 2010). On this score, it might be argued that some of the issues that relate to the development of tourism are anchored on the relationship between the investors and the developments. The ratification of the Akaka bill was expected to give the native more power to determine the usage of land and the manner in which it could be appropriated for tourism development activities. Lack of concern for the interests of the native people has led some developers to destroy ancestral burial sites despite protests from the locals. Good CSR practices require the attention of the developers to the cultural values, interests, and assets of the people. Companies operating in Hawaii have been blamed of engaging in superficial and piecemeal developments that do not affect significantly on the interests of the local communities. In this regard, it becomes necessary to consider the fact that some of the issues that relate to the development of the industry relate directly to interests of the natives. Developments have also caused the relocation of the Native Hawaiians and the dispossession of culturally significant lands (Luciano, 2010). Furthermore, the cultural ways of life of the natives have been altered by the disruptions resulting from the clearing of natural sites for increasing the capacity of lodgings, recreational fields, and other amenities that attend to the practices of tourism and hospitality. Concerns have included the fact that many of the companies that have sought opportunities to establish their hospitality businesses in Hawaii have failed to embrace ecotourism practices that are necessary for the sustainability of the region. The interests of the Native Polynesians are tied around land and assets (Luciano, 2010). All investors that engage in the developmental initiatives of the place should consider the importance of promoting the reality of land as an important asset that carries strong cultural significance and the heritage of the Native Hawaiians. On this note, it becomes necessary to consider the fact that good CSR practices have to address the plight of the natives as a way of addressing the needs of the stakeholders. Profits accruing from tourism have not sufficiently focused on the improvement of land and the protection of natural resources. The subject of corporate social responsibility and ethics in the hospitality industry continues to attract diverse perspectives and applications within and without the industry. Over the times, approaches to the application of corporate social responsibility (CSR) have evolved in ways that seek to adjust them to the fundamentals of corporate strategy and the fluid nature of the business environment (Idowu, & Leal, 2009, p. 40). Value, relevance, sustainability are some of the key considerations that define the suitability of any given CSR strategy. According to analysts and experts in the field of hospitality, the core concerns of any given CSR strategy is the production of a positive impact on the wider society while seeking to influence the customers in ways that retain them and attract others (Sloan, Legrand, &Chen, 2009; Pohl, & Tolhurst, 2010). Overall, the choice of CSR should seek to enhance the image of a corporate entity within the perspectives of the clientele and the market. According to some scholars, CSR in the hospitality industry should aim, as one of the company’s fundamental goals to increase its competitive advantage on the market (Pohl, & Tolhurst, 2010). The hospitality industry is one of the most competitive industries and the nearly the most unpredictable in the world. Performance in this industry is significantly tied to the element of perceptions and attitudes. According to some scholars, it is possible for the tourist industry to manipulate perceptions of the tourists by engaging in certain CSR activities that showcase their affiliation to matters of human development and social development. Studies have shown that many tourists seek information regarding the social impact of hotels in their areas of operation (Pohl & Tolhurst, 2010). Such information informs their decisions regarding choice and preference of the hotels. The conceptualization of CSR is usually considered as a double act that incorporates both strategy and ethics. Largely, there are issues that connect within the ethical consideration of business, which also affect the manner in which businesses are conducted and carried out within a global context. Concepts of global citizenship have often been included within the general understanding of CSR. Precisely, proponents argue that CSR activities are consistent with the obligation of corporate bodies towards a deficient society. Good CSR strategies should balance between the need to impact positively on the society and the enhancement of the brand image of the company. The choice of CSR strategy should revolve around activities that partly promote the cause of tourism, while at the same time promoting the interests of stakeholders. Case analyses and research findings have demonstrated that the value of a CSR strategy lies in the capacity to harness the external conditions of the environment with the long-term goal of promoting the core aspects of business. Certain activities such as environmental conservation promotion of sporting activities and talent development have been known to have significant positive impacts on the hospitality industry. According to Jonker and Witte (2006), one of the ways of determining the value of CSR is by assessing its value along utilitarian dimensions. Business ethics demand that companies demonstrate some level of obligations to the society or some section of the society (Clarke & Chen, 2012). The ethical position is rooted in the interconnectedness of processes and systems. In a world that is increasingly governed by the objectives of profits and growth, CSR programs are necessary to moderate corporate ambitions by transforming fiscal success into societal benefits. According to some studies, CSR strategies usually give a human face to corporate competition and success (International Conference on Sustainable Tourism, Pineda, & Brebbia, 2012). In essence, the concept of CSR strategies is built on the fact that the surplus of the corporate entities could be enlisted towards addressing the needs and limitations of the immediate community. Usually, the point of difference between the methods adopted by one firm over the other is the kind of strategy. Different companies may choose identical CSR programs but the method of conducting the programs may differ significantly (Conrady, Buck, & Tittel, 2011; Horner, & Swarbrooke, 2012). Usually, the point of difference revolves around the need for the companies to create systems that make them stand out and above competitors. According to business experts, the level of impact is the determining factor of strategy as understood within the context of business competition. The global nature of hospitality industry requires that the most effective CSR strategy should have some level of universal aspects that would make them easily identifiable by a global audience (Spenceley, 2012; Enz, 2009). Generally, the choice of CSR is influenced to a significant degree by the factor of visibility and memorability (Katamba, 2012; Chen, 2012). In the hospitality industry, CSR programs that are more visible to the outside observer have a greater impact as compared to those that are less visible. Visibility is usually interpreted as a scale of progress and success. Hospitality businesses that invest more in visible activities tend to attract more support from stakeholders as compared to those that are less visible (Chen, 2012). Although there are no standard practices in the application of CSR, there are basic standards that determine the degree of success or failure within the context of business. Usually, the application of CSR programs requires an adjustment of strategies in a manner that would suit the situations as they occur. Case examples show that hospitality businesses that regulate their CSR strategies in a flexible manner are more likely to benefit from the synergies of the market as compared to those that operate rigid CSR programs (Idowu, & Louche, 2011). Comparisons have been made between Marriott Hotels and Fairmont Hotels and Resorts. According to the case analysis, Fairmont Hotels and Resorts maintain the practice of aligning their CSR practices to their brand promise. The hotels management also seeks to tie the CSR programs to customer experience. As a result, the hotels easily attract the support of the customers who wish to be associated with the kind of activities carried out under the program. An important issue that falls under the CSR strategies within the hospitality industry is the matter of targeting (Hawkins, 2006). In normal practice CSR, programs are created in ways that address a particular segment of the stakeholders. The management will often tend to target a particular portion of the stakeholders that carries the most important impacts to the core operations of the business. Some CSR strategies are addressed to the interests of the suppliers while other programs seek to address the concerns of the customers. Traditionally, CSR practices are usually tailored to align to the interests of the immediate community (Hawkins, 2006; Korschun, 2008). In recent times, focus has tended to switch to areas that include the advantages of costs and convenience. Performance within the corporate sector is usually pegged on the aspect of cutting on costs (Benn, & Bolton, 2011; Lieberman, & Nissen, 2008). As such, the choice of CSR is considered basing on the factors of duration and costs as they apply within the context of corporate strategies. The objective of CSR is to create a positive image of the company to the general society. The impact often translates to the goodwill of the company as it transforms into some aspects that promote the core values of business. According to some studies, effective CSR practices often play out as complements to the processes of advertisement (Jaszay & Dunk, 2006; Fennell, 2006). On this score, it becomes important to consider the fact that the packaging of CSR strategies is designed in ways that contribute positively to the long-term objectives of the company. Usually, CSR practices are modeled around the objective of connecting with the environmental factors on which the survival and performance of the business is dependent (Fennell, 2006; Carter, 2007). In the general sense, the performance of industries, businesses, and corporations is largely controlled by macro-economic factors, which either hinder or promote the performance of the business in line with the specifics of the business. Industries and businesses that fail to connect adequately with the external environment often earn higher synergies of business as compared to the ones that shield themselves from the social realities around them (Fennell, 2006; Carter, 2007). Many of the businesses that serve under the hospitality industry are multinationals. Usually, their CSR programs are designed in ways that relate to their core business values (Jones, Comfort & Hillier, 2006). The organizational structures of some corporations are such that they operate on a singular agenda with regard to CSR. Such entities would undertake a common CSR agenda in different agenda. The benefit for such a system is that it makes it easy for planning and helps regulate the costs of maintaining the CSR through a single budget (Jones, Comfort & Hillier, 2006). On the negative side, such inflexible strategies may fail to connect adequately with the immediate needs of the stakeholders. On the other hand, some multinationals within the hospitality sector tend to work with CSR programs and schedules that adjust in accordance with environments and situations. According to analysts, such strategies offer a sense of flexibility that allows the companies to adjust to local situations more effectively and appropriately (Fooks et al, 2013). In this manner, it becomes necessary to consider the fact that the local environment regulates most of the issues that attach to the development of the hospitality industry (Holcomb, Upchurch & Okumus, 2007). It is important to consider the fact that some of the issues that connect with the ideals of corporate relations relate to the need to use the advantages of the environment to advance the course of the business. Ethically, the corporate institutions have a moral duty to contribute effectively to the development of the society (Holcomb, Upchurch & Okumus, 2007). This factor is understood together with the principle of reciprocity. The levels of performance of any industry must be measured against the impact it brings on the society. A range of alternatives and interventions are at the disposal of the industry players with matters of choice being determined by the nature of business, the needs of the environment, and the logistics of operations. An appropriate application of the CSR principles and strategies lessens the chances of conflict between the industry players and the immediate environment (Michael, Davidson, McPhail & Barry, 2011). In the long-term, the industries in the hospitality industry end up benefitting from positive associations and connections that result from the CSR programs. In the opinion of business analysts, it is important for corporate players to contribute to the general development of societies by supporting programs that align with governmental policies (Stefan, 2011). The developing world has remained one of the most favorable tourist destination spots in the world. These regions are underdeveloped and are lacking in basic services such as education, healthcare, and employment. These areas, for instance, are key indicators of economic growth. CSR programs that target the development of such areas are more effective than those that are directed towards addressing short-term programs (Bohdanowicz, & Zientara, 2009; Tobey & Yasanthi Perera, 2012). The provision for bursaries for education, for instance, remains one of the most important CSR interventions that has changed lives within the hospitality industry. Tailor-made programs have also emerged to enable the participation of corporate entities within the hospitality industry in the development of processes that are necessary for the growth and development of healthcare systems (Tobey & Yasanthi Perera, 2012). Healthcare is one of the most sensitive and expensive sectors both in the developed and the developing world. Usually, government funding has often fallen short of the required budget to fulfill the needs of populations. Lifestyle diseases such as diabetes, hypertension, and cancer have continued to afflict the lives of populations in urban and rural areas. Therefore, it would be more appropriate for the players within the hospitality industry to explore all possible ways through which they could intervene in complementing the efforts of governments by facilitating specific programs that are target to improving livelihoods. Studies have established that businesses that design their CSR programs in line with government policies are more likely to enjoy a conducive working environment as compared to others that fail to operate outside the policy framework under which the government runs its programs (Anna, Hanks, & Ellen, 2010). In some cases, the determination of the most appropriate CSR program must take into account the culture of the operating environment and the kind of political environment that prevails at the time of the business. Misunderstandings between the CSR strategy and government policies have often been understood, in some countries, as acts of sabotage (Shallini, Pawan & Rajen, 2011). It is in line with this realization it is most appropriate for businesses within the hospitality industry to come up with programs that are generally aligned to the needs of the society, and which do not come into conflict with any particular government policy or function. Some players within the hospitality industry have engaged in the building of schools and the provision of educational support to needy students and individuals. Others have sought to address unique problems such as inequalities that occur across the divide of gender, which systematically denies opportunities for the girl-child. Such support is aimed at achieving cultural change in ways that would affect positively the human development factor (Conrady, Buck, & Tittel, 2011; Horner, & Swarbrooke, 2012). The determination of the type of CSR is largely determined by the fact that some of the practices do not affect significantly on the targeted areas. Those who hold onto this view contend that some CSR practices are based on superficial goals, which do not translate into meaningful gains for the intended beneficiaries. Trends continue to emerge where operators in the hospitality sector seek to align their practices with current issues that engage the international agenda (Pohl & Tolhurst, 2010). In line with this trend, companies have continued to engage in practices that connect with issues of environmental conservation and the promotion of the rights of children. Many companies within the hospitality sector have engaged in activities meant to promote the environmental conservation. Such processes are usually designed to promote the image of the companies within a global context. Participating in such processes is usually considered as factors that determine the performance of the companies and businesses in various rankings. The hospitality business is significantly influenced by physical environment (Clarke & Chen, 2012). The flora and fauna of a destination attract tourists. Marketing strategies often emphasize on the physical and natural beauties of a place in their bid to attract and retain high volumes of the clientele. Conservation of nature is one of the necessary activities that are often included in the CSR programs. This is because the programs have the dual effect of advancing the goals of environmental observation besides creating the kind of environment that promotes tourism activities. It is precisely because of this reason that many firms within the hospitality sector endeavor to engage in activities that aim at environmental conversation in the long term. Supporting the establishment of Information Technology (IT) infrastructure is one of the areas that require attention in the CSR programs of firms within the hospitality sector (Conrady, Buck, & Tittel, 2011). Currently, the world in increasingly controlled by innovations and developments within the IT sector. Many parts of the world still lag behind with regard to the development of IT infrastructure (Conrady, Buck, & Tittel, 2011). Such a program is sustainable and visible. The program can increase the ratings of the company or firms within the hospitality sector because the benefits are manifest within a short span of time. Over the times, the ranking of businesses within the hospitality industry has included CSR as a determining factor of the level of performance. Such performance is considered in terms of the general impact on the society in relation to the performance of the companies in the financial aspects of performance. Consequently, firms within the hospitality sector have sought to adjust their systems in ways that offer them competitive advantage over their competitors. The assessment of the strength of the firms within the hospitality sector is determined by the impact of the CSR program on the targeted groups. In essence, it becomes important to consider the fact that the kind of CSR program determines the level and visibility of outcomes as understood within the corporate context. Conclusion Ultimately, the uniqueness of the hospitality industry requires an application of CSR strategy that responds to the core aspects of business. The type of CSR chosen should be carried out in ways that show a significant level of impact to the targeted area. The CSR should also be packages in ways that are easily visible. Two ethical foundations on which CSR are based include use of surplus for the development of humanity and the acknowledgement of the interconnections between social factors and business progress. Good CSR programs should be visible in terms of impact. CSR usually contributes significantly to the improvement of the brand image of a firm within the hospitality sector. Companies and businesses will tend to consider cost implications and durations before selecting a given kind of CSR. Generally, the choice of CSR is made in accordance with the mission, vision, and values of a business. The hospitality sector is one of the most sensitive and requires a careful assessment of the strategies in terms of their long-term and short-term impacts. Trends have shown attempts by hospitality firms to align their CSR programs in light with some of the dominant subjects in the world such as environmental conservation. Others are aimed at addressing some of local challenges and the promotion of development projects that seek to help entire communities. Factors of relevance, feasibility, and sustainability are key to the successful implementation of CSR strategies. Effective CSR strategies often mirror the corporate standings of a company. High performing companies such as Coca Cola have the capacity to engage in bigger CSR programs as compared to smaller companies. The effectiveness is dependent on the factors of organization, impact, and the nature of influence that the CSR leaves in the minds of customers or targeted stakeholders. Works Cited Anna, S, M, Hanks, L, & Ellen Eun, K, K 2010, The impact of company type and corporate social responsibility messaging on consumer perceptions, Journal of Financial Services Marketing, 15(2), 126-135. Benn, S, & Bolton, D 2011, Key concepts in corporate social responsibility, SAGE, Los Angeles. Bohdanowicz, P, & Zientara, P 2009, Hotel companies' contribution to improving the quality of life of local communities and the well-being of their employees, Tourism and Hospitality Research, 9(2), 147-158. Carter, C 2007, Business ethics as practice: Representation, reflexivity and performance, Edward Elgar, Cheltenham, UK. Chen, J, S 2012, Advances in hospitality and leisure, Emerald, Bingley. Clarke, A, & Chen, W 2012, International Hospitality Management, Routledge, London. Conrady, R, Buck, M, Viehl, P, & Tittel, K 2011, Trends and issues in global tourism 2011, Springer, Heidelberg. Enz, C, A 2009, Hospitality Strategic Management: Concepts and Cases, John Wiley and Sons, New York. Fennell, D, A 2006, Tourism ethics, Channel View Publications, Clevedon. Fooks, G, Gilmore, A, Collin, J, Holden, C, & Lee, K 2013, The limits of corporate social responsibility: Techniques of neutralization, stakeholder management and political CSR, Journal of Business Ethics, 112(2), 283-299. Hawkins, D, E 2006, Corporate social responsibility: Balancing tomorrow's sustainability and today's profitability, Palgrave Macmillan, Basingstoke. Holcomb, J, L, Upchurch, R, S, & Okumus, F 2007, Corporate social responsibility: What are top hotel companies reporting? International Journal of Contemporary Hospitality Management, 19(6), 461-475. Horner, S, & Swarbrooke, J 2012, International Cases in Tourism Management, Routledge, London. Idowu, S, O & Leal, F, W 2009, Professionals' perspectives of corporate social responsibility, Springer, Heidelberg. Idowu, S, O, & Louche, C 2011, Theory and practice of corporate social responsibility, Springer, Heidelberg. International Conference on Sustainable Tourism, Pineda, F, D, & Brebbia, C, A 2012, Sustainable tourism V, WIT Press, Southampton. Jaszay, C, & Dunk, P 2006, Ethical decision making in the hospitality industry, Pearson/Prentice Hall, Upper Saddle River, N.J. Jones, P, Comfort, D, & Hillier, D 2006, Reporting and reflecting on corporate social responsibility in the hospitality industry, International Journal of Contemporary Hospitality Management, 18(4), 329-340. Jones, P, Comfort, D, & Hillier, D 2006, Reporting and reflecting on corporate social responsibility in the hospitality industry, International Journal of Contemporary Hospitality Management, 18(4), 329-340. Jonker, J, & Witte, M, C 2006, Management models for corporate social responsibility. Berlin: Springer. Katamba, D 2012, Principles of corporate social responsibility (CSR): A guide for students and practicing managers in developing and emerging countries, Strategic Book Publishing and Rights, Houston. Korschun, D 2008, When and how corporate social responsibility makes a company's frontline employees customer oriented, Emerald, Bingley. Lieberman, K, & Nissen, B 2008, Ethics in the hospitality and tourism industry, Educational Institute of the American Hotel & Lodging Association, Lansing. Luciano, M 2010, Tourism and Native Hawaiians. Cultural Survival. Retrieved from http://www.culturalsurvival.org/ourpublications/csq/article/tourism-and-native-hawaiians-232 Mangalassery, S 2009, Practices of an Indian Hotel Giant, Tourism Scan, Retrieved https://groups.google.com/forum/#!msg/tourismscan/cj9d5xuNiR8/0x2a5-3pax4J Michael, C,G, Davidson, McPhail, R., & Barry, S 2011, Hospitality HRM: Past, present and the future, International Journal of Contemporary Hospitality Management, 23(4), 498-516. Pohl, M, & Tolhurst, N 2010, Responsible business: How to manage a CSR strategy successfully, Chichester, U.K: John Wiley & Sons. Shallini, S, T, Pawan, K, T, & Rajen, K, G 2011, Researches in corporate social responsibility: A review of shifting focus, paradigms, and methodologies, Journal of Business Ethics, 101(3), 343-364. Sloan, P, Legrand, W &Chen, J, S 2009, Eco-advantage in the Hospitality Industry, Routledge, London. Spenceley, A 2012, Responsible Tourism: Critical Issues for Conservation and Development, Routledge, London. Stefan, G 2011, Diversity management strategies of global hotel groups, International Journal of Contemporary Hospitality Management, 23(2), 224-240. Tobey, D, H, & Yasanthi Perera, B 2012, Corporate social responsibility initiatives, African Journal of Economic and Management Studies, 3(1), 95-115. Read More