Hotel Industry Changes and Socio-cultural and Environmental Change - Case Study Example

Running Header: Hotel Industry Student’s Name: Instructor’s Name: Course Code: Date of Submission: A Discussion on "the Nature of the Hotel Industry Changes with Socio-cultural and Environmental Change” Introduction Organisations exist to make profit by producing goods and services that create value to the customers. This means operating in a demand driven innovation. However, it has been proven that it is not the strongest organisation that survives, but that which is able to adopt to change (Tung, 2001, p.41). The basis of this argument is based on the fact that customers’ needs are dynamic and thus, the organisation has to keep abreast with them. The ultimate purpose of this paper is to qualify the statement that “the nature of the hotel industry changes with socio-cultural and environmental change”. To prove this statement, the discourse will analyse a recent change/ trend in the hotel industry. In the paper, the recent is used to imply to change that has occurred within a timeframe of two years. The change to be analysed in this paper is an environmental perspective. To be precise, the paper examines the concept of ecotourism within the paradigm of sustainability reporting where hotel industries align their operations with sustainable development concept by reporting on how they impact on the environment and how they control theses impacts through best practices. Moreover, the term hotel industry in this paper will be used to refer to four stars hotels and above in Australia. The paper actually narrows on Marriott Group of hotels in Australia and how they contribute to environmental conservation. The Change With the emergence of the sustainable development concept in the early 1970s, the business operation framework has also shifted (Ortas and Moneva, 2011, p.17). Globally, there is the realization that firms can not only base their performance on profits recouped alone (Geraghty, 2010, p.141). Ethical approaches to doing business have over the years gained a paramount position. Moreover, the environment perspective of sustainability has been a case for reaction. Sustainability calls for utilization of earth resources with the future generation in consideration. Sustainable development thus focuses on creating a balance between human economic need, social need and environmental need (Hubbard, 2011, p.824 and 825). Therefore, hotels as one of the main users or earthly resources are encouraged to be proactive in this agenda. Best environmental practices demand that hotels operate in eco-friendly manner. Legal stipulations in Australia demands utilization of environment in sustainable manner. The cause is further highlighted by the fact that operations of hotel industries to a great extent relies on physical environment. The approaches to these include use of environmental impact assessment (EIA) and auditing (EU). This would ensure that firms operate as stipulated in their environmental management program (EPM). In addition, development of internal control mechanisms such as safety health and environment (SHE) or occupational safety and health (OSHA) should be voluntarily initiated by firms. The annual reviews and findings should then be made public. In Australia, it has been reported that approximately 66 % of firms engage in sustainability reporting (Geraghty, 2010, p.143). Marriott International (2012), in the environmental policy indicates that they seek to maintain responsibility towards environment by focusing on five key elements internally. These include energy, water, waste & carbon so to be a green hotel. Under these, one of the principal aims is to reduce energy use by 20% in the year 2020. The next is empowering those whom they contract to build green hotels. The same policy they try to apply to their suppliers and guests. Further, from the external perspective they aim at conserving the environment. To conserve environment, they seek to adopt innovative approaches in conservation such as rainforest protection. Causes of the Change The cause for change so that hostel industry can be responsible towards environment can be theoretically analysed from two major perspectives. The first is from the corporate social responsibility angle, Kantian ethics and the legal angle. These models can be applied to Marriot International Hotel. The pure profit driven is based on the share-holder value approach as envisaged by Adam Smith. In a face value view, it is the government that is supposed to regulate the failures associated with pure economic approaches. However, there has been great recognition that this can’t be left to government alone. Business have equal task of addressing the same (Pigou, 1920 cited in Benabou & Tirole, 2010, p.1). Kantian ethics stresses for the need of doing the right things in the way they ought to be. The theory is against bad will and ill motives. Businesses can be seen to have a social contract with the rest of the public. Good faith concept in contractual agreement requires that one acts honestly and fairly in meeting his contractual obligation (Zeller, 2003, p.4). Iamandi (2007, p.6) notes that there are three levels of CSR. However, the ultimate one is the societal approach. The societal approach is built on social democratic and socio-economic framework where all operations of human beings are tied to promoting social welfare of society. Werhane (2010) provides the platform of understanding the need for corporate social responsibilities. Werhane (2010, p. 696) conducts analysis on two sets of guidelines. The first is the Global Economic Ethic (GEE). The second is the United Nations Global Compact (UNCG). In her initial investigation, she notes that article 3 of GEE posits that one of the company’s duties is to promote good and avoid evil. Further she notes that the other duty in this standard as articulated in article five is to avoid the impairment of people’s health through adverse working conditions. Lastly in her examination, she notes that article six advocates for sustainable treatment of the natural environment and avoidance of waste. The ultimate thinking is that people are becoming more conscious of organisation’s behaviour and those that can’t guarantee good behaviours are castigated. For instance issue of Kyoto Protocol and Global Warming has highlighted this. Effects of the Change The companies which engage in CSR have outlined various reasons why they do so. The first justification is based on pragmatic and rational reasons. The reason behind this is that firms want to improve their public image. Companies that engage in CSR have higher ratings in terms of image as opposed to those who do not. The second reason is deontological view. This is the sense that a business has a moral obligation to the society. The last is the social pressure. This is the worst route because the company has entrenched the concept out of societal pressure (Iamandi, 2007, p.7).The in this paper, the effects are analysed in terms of benefits driven by the organisation. The chief benefit is brand value. Firms are able to ride on the good reputation they have created amongst their clients (Geraghty, 2010, p.143). For instance a company that sponsors a conservation event can significantly improve their brand value. Abrahamsom, Forsgren & Lundgren (2003, p.4) notes that sponsorship gives a company leeway to enjoy promotion mix. In their conceptual framework, they note that the roles of sponsorship in promotion mix. One important aspect is the ability to inform through advertising supply through sales promotion, create positive lasting image through public relations and interact with customers through personal selling. Under these approaches then, promotion is able to support company’s product and services by reaching target market and consequently increasing sales. The basis of improving corporate image is attainable in areas such as sustainability reporting (Iamandi, 2007, p.8). A firm that supports a cause say conservation is likely to benefit from positive image since they have contributed to the cause during calamity. This is equally evident where the firm engages in corporate philanthropy by donating directly to an organisation. To prove this effect, various global organisations have engaged and spare a fraction of their revenue towards corporate philanthropy. Marriott has identified this benefit whereby they source some of their raw materials from people from disadvantaged background like aboriginals (Marriot, 2012, p.20). The other positive aspect of sustainability reporting is on the ability to build an image for the company by having psychological effects on consumers (Kim, 2012, p.3). Sustainability reporting falls under the promotion concept of 4Ps which is supply driven and in communication under the 4Cs. According to Kim (Kim, 2012, p.3), image of a company matters since it allows the consumers to relate with that brand name thus, creating psychological attachments. For instance, when companies sponsor sports event or music idols/ celebrities, when they perform and the brand name is displayed as well, the consumers are meant to believe that they will derive the same befit as those personalities. In a situation that a firm sponsors, charities or environmental clean ups they are able to build up image of responsible organisations. Conclusion The aim of the paper was to examine change in the hotel industry. The change examined was sustainability reporting where organisations reports on how they impact on environment and the control the same. The emerging theme is that the cause for this change is that there is need to enhance corporate social responsibility and meet legal regulations. The effect of adopting sustainability is brand value and corporate image since they are deemed to be responsible to the environment. Word Count: 1507 words References Benabou, R. & Tirole, J. (2010). Individual and corporate social responsibility. Economica, Vol. 77, pp. 1-19. Geraghty, L. (2010). Sustainability reporting - measure to manage, manage to change. Keeping Good Companies, No. 3. p 141-145. Hubbard, G. (2011). The quality of sustainability reports of large international companies: an analysis. International Journal of Management, Vol. 28, No. 3, part 2. Iamandi, I. (2007). Corporate social responsibility and social responsiveness in a global business environment: a comparative theoretical approach. Romanian Economic Journal No. 23, pp.1-16. Kim, J. (2012). The worth of sport event sponsorship: an event study. Journal of management and marketing research. Retrieved on 13 September, 2012 from: http://www.aabri.com/manuscripts/09382.pdf. Marriott International (2012). Marriott’s Strategy for Contributing to Environment Conservation. Retrieved on 13 September, 2012 from: http://www.marriott.com/corporate-social-responsibility/corporate-environmental responsibility.mi. Ortas, E. and Moneva, J. M. (2011). Origins and development of sustainability reporting: analysis of the Latin America context. GCG, Vol. 5. No. 2. ISSN: 1988-7116, pp: 16-37 Tung, R. L. (2001). Learning from world class companies. London: Cengage Learning. Werhane, P. H. (2010). Principles and Practices for Corporate Responsibility. Business Ethics Quarterly 20:4 (October 2010); ISSN 1052-150X, pp. 695-701 Zeller, B. (2003). Good Faith - Is it a Contractual Obligation? Bond Law Review Vol. 15, No. 2, pp. 1-16. Read More