Investigation of Current and Emerging Issues in Hospitality and Tourism - Assignment Example

Investigation of Current and Emerging Issues in Hospitality and Tourism By {Student’s name} Code+ course name Professor’s name University name City, State Date Option A (Globalization, Outsourcing and Ethics) In the last decade, we have witnessed arguably one of the most challenging periods for global business. Lapses in management judgment have occurred across a broad spectrum of industries. Numerous examples exist of such lapses which have led to business failures. The most recent is that of Lehman Brothers (USA) in 2010. Although the major instances of failed ethical and legal judgments were not masterminded by information technology departments, information systems were influential in many of these frauds. In many cases, the perpetrators of these misdeeds expertly used information available from financial reporting systems to carry out their crimes and bury their decision from the public inquiry in the vain hope that they would never be caught. In Australia today, for instance, cases of violent bank robberies have reduced significantly compared to the 1980s and 1990s. However, the Australian banking sector is losing more money compared to the past. Technology-savvy staff members are manipulating banking information systems with an aim of conducting and masking frauds. Ethical behaviour in business refers to the principals of right and wrong human beings, acting as free moral representatives, use to make decisions to guide their behaviors. In the public sector context, for instance, ethic entails favourable working relationships characterized by honesty, trust and integrity between public officials and other stakeholders. Public officials are likely to face ethical dilemmas since they must choose amongst competing set of principles that have potential of pulling managers in different directions thus causing them ethical dilemmas. Ethical dilemma, on the other hand, refers to a situation that needs a rational choice among competing principles, often in a value laden and complex contexts. Previous researches indicates that any of the ethical dilemmas facing people involves right versus right. As such, ethical dilemmas can result from the options that are justifiable to be equally right in different particular situations (Gregory & Hicks, 1999). In every ethical dilemma case, tension arises amongst different sets of competing values with possible conflicts such as choosing the best interest of serving the community, obeying supervisor's directive, following professional ethics with the desire to maintain one’s career. In the face of globalization, information systems raise new ethical dilemmas because they create opportunities for growth, while at the same time, threatening existing distributions of wealth, power, rights and responsibilities. In the banking sector for instance, globalized markets, changes in financial systems, and integration of regional and international economies have created many threats as well as opportunities. It is the way in which banks respond to challenges that determines whether they succeed or fail. The proactive organizations world over have taken advantage of these challenges to introduce innovative, market – driven solutions. Positive customer response to these products has earned them high revenues. Those organizations which have failed to provide market-responsive solutions have lost out on the benefits of information technology on profits, and market share. Information technology, just like other technologies can therefore be used to achieve social progress, but also to commit frauds, and hence threaten social ideals. The evolution of internet technologies and e-commerce has raised new ethical questions. In today’s business world, innovation has become an important and competitive resource for organizations. Research shows that great organizations have overwhelmingly institutionalized the culture of innovation. Failing organizations, on the other hand, take a lazy, disinterested approach to innovation. These companies do not feel any bit bothered by the high priority their more successful competitors give to innovation programs. Successful companies use internet and digital technologies to assemble, integrate, distribute information, research on consumer needs, and to protect personal privacy and intellectual property. Technology has provided a base on which customer acquisition and retention strategies are built. The more aggressive organizations throughout the world have anchored their business strategies on the technology platform. Thus, technology has provided the tools to level competitive barriers hitherto separating small organizations from big ones. Where it has been properly utilized, technology has succeeded to erase market barriers between smaller and larger organizations across the globe. However, technology is associated with major challenges that are facing nations. Technology and globalization, that is, increasingly closer integration of individuals and nations has a ripple effect, raising new ethical issues that must be dealt with at all levels (Ilbas, 2010). Key technology trends such as rapidly declining data storage costs, doubling of computer power, networking advances, advances in data analysis techniques and the internet have caused major problems which traverse state boundaries. Incurable diseases, terrorisms, environmental pollutions, refuges e.t.c. are some of the problems associated with changes of new technologies. Today, no country is absolutely invulnerable. Some time ago, individuals lived in their homes and never went further from their dwellings. Today, if there is a terrorist attack in Kenya and Pakistan, we see it on television. We are, therefore, coming face to face with new realities, namely: the acceptance that we are living in a global village. Many countries, including Australia, are signatory of various international laws and treaties that affect business operations. The treaties and laws include the UN, WTO, World Bank, IMF and ILO, all which plays a significant role in business operations. The General Agreement on Tariffs and Trade (GATT) which refers to an agreement between the member countries seeks to regulate the cross-border trade. According to its preamble, GATT was established under the premise of open trade achieved through considerable tariffs and non-tariffs trade barrier elimination on a mutual basis. However, it was developed after the negotiating governments failed to come up with International Trade Organization (ITO). The delegates envisioned the formation of GATT in an effort to promote cross-border negotiations on reduced tariffs. Liberalized trade allows the unrestricted flow of goods and services across borders. Further, GATT provides that resources should be traded across countries in response to competitive pressures of international trade. Scholars have, however, criticized the WTO. However, the international laws and treaties have raised ethical issues. According to Clarida, Galí & Gertler (2000) they play a greater role of increasing inequality. They are also viewed as undemocratic and do not consider labor conditions. Multi National Enterprises (MNE’s) play a critical role in the economies of host countries. In addition, they also enhance global economic relations which are currently of greater interest to many governments across the world. Through globalization, MNE’s brings substantial benefits to host and home countries through efficient utilization of labor, capital and technological transfers in overall resulting to both social and economic welfare. However, the demands made my many MNE’s before entering host countries may lead to interference with host country’s economic power while at the same time conflicting national policy objectives. Further, the complexity of many MNE’s and their inability to take into consideration their diverse operations, structures and policies relative to those of host country sometimes raise significant ethical concerns (Jensen, 2011). Property law is another aspect that raises ethical dilemmas as far as technology and globalization are concerned. Many countries around the globe do not adequately protect intellectual property rights. Surprisingly, most countries have laws that can offer comprehensive protection only on paper with the authorities lacking the will to enforce them. This, in part, reflects a strategic plan by some governments to facilitate cheap access to patented drugs that could assist their local firms to copy technology from other firms without paying for it. As such, this trend has raised serious concerns that require the establishment and enactment of effective Intellectual Property laws that could spur development. Regrettably, weak IPR policies have proven to encourage trading in counterfeits that are unsafe and could result to health related problems. According to previous research, the most recent WHO report indicated a sharp rise in trade of counterfeit medicines amounting to approximately $ 32 billion across the world. In addition, weak IPR policies limit the growth of artists’ who forms a significant percentage of domestic entrepreneurs since their business is hurt when their original music is pirated; leading to loss of millions in terms of revenue. Disappointingly, the evidence shows that the problem of infringement of IPR has contributed to about 4-5% poverty levels across the world. Option B (Labor & skills shortage, global financial crisis and changes in Australia demographics) Population ageing refers to the recent growth experienced in labor force participation, which is likely to come to an end, with the rate of participation projected to decline over the medium term. A fall in participation will have a dampening effect on economic growth. Most of Australia’s population is growing and ageing at such alarming rates that the government is constantly making attempts aimed at prioritizing healthy ageing so that the citizens are in a position to contribute to the economy of the country for the longest possible. This will also help in alleviating the burden of health care. The 2010 Intergenerational Report released by the Australian Government (The Treasury) projected that the population of the country would grow from approximately 22 million persons to 35.9 persons in 2050. In addition to this, the ageing of the nation’s populace was also projected to see the number of people aged between 65 and 84 years grow by more than double, while those with 85 years and above would more than quadruple. The number of persons of working age supporting every person aged 65 and above was 5 in 2010, though the same was projected to decrease to 2.7 people by 2050. These are worrying trends for any economy, and this is due to the fact that such a situation would adversely affect the proportion of the population of traditional working age. As a result of this, the rate of labor force participation across the entire populace is projected to take a nosedive Varma, A & (Budhwar, 2013). Tiffen & Gittins (67) define labor force participation as that section of the total populace which chooses to be actively involved in the labor force. The labor includes those people that are working in various capacities currently, as well as those people who are currently seeking work, despite being unemployed at the time. The rate of participation tends to move hand in hand with the business cycle, whereby during recession, it declines due to the discouragement of job seekers to go out there searching or non-existent jobs. On the other hand, participation levels increase as the cycle turns and formerly discouraged job seekers return to the market in search of job opportunities. As stated earlier, the trends being experienced by Australia are so alarming that the government has taken upon itself to make labor force participation and labor supply key policy issues in the country. Over the last three decades, female labor participation has had a tendency of show discrepancies in accordance with the trends in an economy as opposed to their male counterparts. As such, the rising female participation has partly been offset by declining male participation. To be more particular, females have tended to withdraw from the labor force rather than risk unemployment during the economic downturns; males have however opted to remain in the labor force. Since the beginning of 1981, more than 80 percent of the increase experienced in female labor participation reflected a corresponding increase in female part time participation. Part time participating in this context refers to the total number of unemployed females seeking part time employment, and part time employment females expressed as a proportion of the entire female populace. During the period, the decrease in the participation of males is largely a reflection of a decline in full time participation by 11.8 percent. This can partly be attributed to an aggregation in the part time participation of 6 percent (International Labour Conference, 2013). Labor force participation also varies by age, with variations in the aggregate participation in the labor force are frequently composed of a number of different trends for specific gender and age groups. A research study carried out to evaluate the age profiles of participation rated for males and females in the last three decades, beginning 1981 showed that male participation rates had decreased in most of the age groups while the reverse was true in the case of females. A rather interesting feature in the rates of female participation was realized in the reduction in the plunge in female participation in the 25 to 34 years age group. This reflected an increase in part-time participation by females in this age group, particularly amongst the married females. A trend depicting males leaving the labor force earlier than the retirement age was also identifiable from the data collected, with a fall of 9.5 percentage points between 1980 and 2000 in the participation rate of males aged 55 to 59 years. In the 2011-2012 period, males were more involved in the labor forces and this is evidenced by the labor force participation rate of 79 percent, against a rate of 65 percent for the females, all aged between 24 and 74 years of age. The two periods which experienced a marginal increase in the rates of labor participation for males were the 2002/2003 and the 2011/2012 periods, which rose by only a meager one percent, whereas the female rates by over 4 percent. The increase in female participation rates was actually attributable to the older females, as opposed to the much younger female populace (Budhwar, 2013). A direct outcome of declining death rates in Australia is the fact that the citizens, in general, enjoy one of the highest life expectancies globally. The age 65 year level only got to increase slightly in the period between 1900 and 1970, though, since 1970 to date, it has experienced constant improvement. The improvement in life expectancy has also grown since the early 1970s, though most of the gains in life expectancy amongst older Australians occurred during the last three decades, when the death rate from cardiovascular diseases (notably heart disease and stroke) fell significantly. This too has an effect on the economy because as stated earlier, it increases the number of people in the bracket of received support from those in the working age. Older persons are also more likely to use hospitals and healthcare facilities as opposed to the younger people. With increase in age, the period referred to as the length of stay (in hospitals) also increases, and the likelihood of entering residential aged care also increases with age (Budhwar, 2013). As stated earlier, the country’s aged population is projected to grow from the current 12 percent of the population to approximately 18 percent of the entire populace by the year 2021. This increase in the ageing of the population is basically driven by a decline in fertility levels, and an increased longevity. The youth population is projected to remain more or less the same and as such, the population of the working age who will be responsible for bringing in the income will only rise from 13.2 million to 15.1 million. As such, the level of dependence on the ageing and health services funded by the government will also increase a factor that has a great and considerable impact on the local government. A lot of the costs of ageing will be absorbed by the local and federal governments of the country (Cch, 2010). In Australia, the government is responsible for providing health and aged cares services, and in the last couple of years, the cost has more than doubled to approximately 4% of the Gross Domestic Product (GDP) in the last three decades. The government of Australia provides medical services through the Pharmaceutical Benefits Scheme, Medicare, contributions to the state hospitals, rebates to the private health insurers, and by offering grants to non-governmental organizations for community care, residential care and indigenous health care. In addition to these, aged care is projected to almost triple from the current 0.8 percent to more than 1. 8 percent of the country’s GDP in 2041/2042. This is exclusion of the payments that the government provides to the senior citizens in the form of service, pensions and other superannuation allowances (Cch, 2010). An ageing population will most certainly cause a reduction in the number of employed persons. As many of the citizens reach retirement age and leave their jobs, the fact that there are fewer people getting into the job market, it would appear on face value that productivity will increase if output remains constant. However, this will not be the case because decreases in the workforce will certainly lead to changes in the levels of output. The value may, however, remain unchanged depending on the technology used in the production processes. While it may be true that advancement in age brings about the experience and tends to increase productivity and hence production levels, it reaches a point where it contributes to global financial crisis. Financial crises are associated with business cycles. They are a culmination of a period of economic growth that is usually followed by a downturn. The aftermath of major world economic crises made economists and central banks acknowledge that the complexity of an economy is more important than earlier fathomed. In this regard, their ability to solve economic problems to avert economic shocks seemed unachievable. This lead to a situation where many economists seemed not to understand their economies in a way monetary policy rules could be applied effectively to prevent economic shocks and main stability. Nevertheless, the sense of misapprehension that resulted went contrary to the confidence people had on their ability to measure and control their economies. In this vein, those who viewed macroeconomic policies such as unemployment as too complex confirmed the imperfect understanding of its functioning. In Australia, production may increase with ageing of the population up until the point where the effects of ageing begin to affect the majority of workers, and production is bound to experience a major decline, all factors held constant. The result of this will be an inevitable decline in aggregate levels of production, hence a global financial crisis (Dennis, 2004). An ageing population will also lead to decreased supply of capital levels and this will be a hindrance to investment and growth. This is due to the fact that as people age, they are no longer involved in active income generating activities, and they tend to draw down on their savings. The drawing on savings, when done by a large section of the population has a great impact on the economy because it reduces the levels of bank reserves, and as such, reduces the amount of funds available for investment by the financial institutions. A decline in public savings will also be inevitable and this is due to the fact that the aging population causes an increase in government expenditure, and reduced taxation receipts. This in effect leads to reduced capital supply, and reduced investments, and hence a global financial crisis (Enright & Petty, 2013). The situation described above could bring about two possible effects to the country. First, the rate of capital deepening will reduce, and while some may predict that this will improve the intensity of capital flows of the world, data from the past shows that the effect is muted. Secondly, business organizations will not be in a position to obtain domestic funds for expansion, and this could lead to decreased growth and output due to the use of old technology (Calvo, 1983). Innovation by way of advanced research and development will be restricted. Businesses' could opt to source funds from overseas, though this would only serve to increase the country’s foreign debt. Australia’s low savings percentage will also contribute to a rise in net foreign debt as retirees' request more funds during their retirement. When all is said and done, the effect of the above on consumption rates will decrease due to reduced amounts of disposable income. The older people, who in this case represent a large portion of the total population, will reduce their level of purchases on items they consider luxurious. In effect, producers will move towards reduced production as a means of responding to the unplanned increase in inventory levels. The primary measure of output, Gross Domestic Product (GDP), will eventually decline and the final result will be a slowing economic growth (Adolfson, et al. 2011). References Adolfson, M et al. 2011. Optimal Monetary Policy in an Operational Medium-Sized DSGE Model. Journal of Money, Credit and Banking 43 (15), 1287-1331. Calvo G. 1983. Staggered Prices in a Utility-Maximizing Framework. Journal of MonetaryEconomics, 12 (8), 383-398. Cch, 2010. Australian Master Human Resources Guide 2010. Australia, CCH Australia Limited. Clarida R, Galí J., Gertler M. 2000. Monetary Policy Rules and Macroeconomic Stability: Evidence and Some Theory. The Quarterly Journal of Economics, 115 (1), 147-180. Dennis R. 2004. Inferring Policy Objectives from Economic Outcomes. Oxford Bulletin of Economics and Statistics 66 (23), 735-764. Enright, M.J & Petty, R. 2013. Australia's Competitiveness: From Lucky Country to Competitive Country. New York: John Wiley & Sons. Gregory, R. &: Hicks, C. (1999), ‘Promoting public service integrity', Australian Journal of Public Administration, vol. 58, pp. 3-15. Ilbas, P. 2010. Estimation of Monetary Policy Preferences in a Forward-Looking Model: Bayesian Approach. International Journal of Central Banking 6 (3), 169-209. International Labour Conference, 102nd Session, 2013. Report IV.Employment and social protection in the new demographic context. International Labour Office, Geneva, Switzerland. Jensen, H. 2011. Estimated Interest Rate Rules: Do they Determine Determinacy Properties? Journal of Macroeconomics 11 (1), 11-23. Varma, A & Budhwar, P. S. 2013. Managing Human Resources in Asia-Pacific. Ed: 2. London, Routledge. Read More