Overview of Contemporary Issues
Contemporary issues refer to the various issues that might be facing the organization in the present time. These issues may include International Conflict, Terrorism, Waste Management, Natural Resources & Energy Conservation, mobile technology and communication, and many other current issues.
In hospitality and tourism, the major contemporary issues include emotional intelligence, Professional Development (including employee empowerment, personality and conflict), Globalization and Cultural Diversity, Sustainability, Corporate Social Responsibility, values and Ethics. This paper will focus on corporate social responsibility as the contemporary issues facing hospitality industry.
Corporate Social Responsibility
In the hospitality industry, the issue of corporate social responsibility has been debated in detail and it is not yet clear how the industry should be regulated using corporate social responsibility actions. Corporate social responsibility deals with corporate conduct in respect to the broader societal values.
It questions the responsibilities of hospitality establishment to the entire society. Despite the lack of an accepted theory of corporate social responsibility, it is obvious that CSR draws on the fields of ethics and morals, which are basic to most cultures (Averch, 1990).
Hospitality establishments do not operate in a vacuum but constantly interact with the society. This is because it is a part of society. It interacts at a primary level with groups such as employees, distributors, consumers, stockholders, banks, suppliers and competitors.
At a secondary level, it interacts with such institutions as governments, local communities, media social pressure groups, business support groups and the public. With all these interactions, hospitality establishments cannot afford to go on with their businesses without responding to issues affecting these groups.
Thus, the reaction of hospitality establishments towards these groups is the source of corporate social responsibility (Demsetz, 1979).
Some people argue that there is no such thing as corporate social responsibility. Others argue that CSR must and will eventually result in long run profits, while others feel that modern organizations must undertake social responsibility regardless of the profit.
Whatever the argument, the question of accountability arises making CSR become a major contemporary issue in the hospitality establishments (De Wit, 2004).
Corporate social responsibility involves decisions. The corporate world is decision oriented and corporations have an impact on society through these decisions. Therefore, CSR raises the question of rightfulness of decisions and of which decisions are more right.
Furthermore, social responsibility goes beyond short run profitability of hospitality establishment. Merely meeting minimum legal and market directives does not constitute social responsibility. CSR is very subjective in nature and is influenced by the economic and social system within which it operates.
For example, benefits from social responsibility do not directly accrue to the firm making the expenditure on social responsibility. CSR is hence a system holding that the corporation should respond to the moral and ethical values of society within which it is licensed and which it serves.
A given corporation will draw from and shape the values of the society from which it draws its existence. CSR tries to fuse social values with profit maximization goals (Horn, 2009).
During this century, there has been great change in what the society expects of its institutions and in what hospitality establishment regard as the proper roles in organization. This change has gradually developed into a new concept of corporate social responsibility.
Increasingly, many hospitality establishments are adopting the view that besides the obligations they have on their business, they have a personal responsibility to the society.
Hospitality industry personnel and their managers are increasingly being held accountable for the social effects of their actions. However, it is not clear where such social responsibility begins and where it ends (Drucker, 1990).
In other words, corporate social responsibility may refer to the moral and ethical content of managerial and corporate decisions. That is to mean that the values used in business decision making are over and above the requirement of the law and market economy (Trevino, 2007).
Closely related to social responsibility is the concept of social responsiveness, which simply means the ability of a corporation to relate its operations and policies to the social environment in ways that are mutually beneficial to the economy and the society. The difference between social responsibility and social responsiveness is that the latter implies actions and the ‘how’ of enterprise responses.
Two areas of corporate accountability exist in the hospitality industry. Conventionally, it shows that management is professionally responsible to the board of directors while the directors run the corporation for the shareholders who are the providers of capital to their corporation.
It is logical that the shareholders expect a fair financial return for their investment. However, through separation of ownership and control, shareholders do not run the company. Therefore, by implication, management has the responsibility to ensure that the shareholders receive an adequate return.
Broadly and with a more modern view, hospitality establishments should be accountable to employees, customers, suppliers and the state. In short, corporations should respond to external forces that are of value to it. It is from these external forces that the corporation draws its existence. How then can it operate without them?
CSR involves decisions – the hospitality industry is decision-oriented and corporations have an impact on society through these decisions. Therefore, CSR needs to know how correct the decisions are and which of them are more applicable. Social responsibility goes beyond short run profitability, merely meeting minimum legal and market directives do not constitute social responsibility.
CSR is very subjective in nature and is influenced by the economic and social system within which it operates (Stephen, 2007). Social responsibility does not directly accrue to the firm making the expenditure on social responsibility.
CSR is hence a system holding that the corporation should respond to the moral and ethical values of society within which it is licensed and which it serves. A given corporation will draw from and shape the values of the society from which it draws its existence. CSR tries to fuse social values with profit maximization goals.
Many organizations have thus been evaluating the benefits and problems that are associated with corporate social responsibility. Some business organizations argue for but others are against them. Those supporting it say that since businesses create some problem, they should solve them as well as the fact that organizations owe society for supply of resources.
Those arguing against it say that social responsibility gives corporations too much power and that it will decrease profits and end up contradicting the real reason for firms’ existence.
The idea behind corporate social responsibility in hospitality industry has been articulated in several ways. In practice, the rationale of corporate social responsibility is about building sustainable businesses, which need healthy economies, markets and communities.
The core drivers for corporate social responsibility include enlightened self-interest. This creates an ethical synergy and cohesion in sustainable global market economies. This driver enables the communities and labor markets to function well together in the hospitality industries.
Social investment, as corporate social responsibility driver, contributes to physical development of infrastructure in the hotel industry and promotes the use of social capital as an important tool of doing business. On the other hand, transparency and trust as corporate social driver affect the hospitality establishments in the view of how businesses perceive trust issues in public.
There is increasing expectation that hospitality establishments will be more aggressive, accountable and better prepared to report publicly on their performance in terms of social and environmental issues.
Other aspects of corporate responsibility is geared towards increasing public expectations of business, hospitality establishments are thus expected to achieve much more than just providing job opportunities that increase economic growth through taxes and employment (Arrow, 1951).
There are different areas of social responsibility that hospitality establishments can exercise. This includes business giving donations, ecology and ensuring environmental quality such as noise control and aesthetic improvement. It should also ensure consumerism such as in the control of harmful products.
Some provide community needs such as the improvement of health care and education. Government relations such as the restriction on lobbying and internal relations, labor relations such as the expansion of employee rights, and promoting stockholder relations such as providing full financial disclosures are also necessary.
Companies are often in a position to do most of these things but the challenge to most corporations is the absence of immediate benefit (Adams, 1965).
Studies have also shown that there is a certain pattern of response to social demands. Hence, hospitality establishments can respond to social demands in three strategic approaches. The first one is adoptive strategy. This involves changing only when you are forced to do so by the society.
This implies complying with the law. The law gives business a general guideline of what is expected by a society. Legal compliance is the minimum that is expected by a society. Organizations that use this strategy adopt or react to the environment only when there is strong outside pressure. For example, the producers of body perfumes have to be ozone friendly.
The second one is proactive strategy. This involves an attempt at shaping the environment. The company using this strategy tries to manipulate the environment in ways that will be to their advantage. The steps they take may or may not be to the interest of the society in the end. For example, paying off politicians to avoid scrutiny is done to their own advantage.
The last one is interactive strategy. When a company is able to anticipate environmental changes and blend its own goals with those of the society, then it is said to have taken an interactive strategy. This involves reducing the gap between public expectations and business performance.
This calls for knowhow and skills on how to manage the company’s social relations with external forces, which may affect the company. That is, the firm tries to interact with the surrounding social environment in ways that will be mutually beneficial (Buckley, 1976).
Contribution of these trends towards Career growth and personal development
Corporate social responsibility is by far the most influential recent trend that contributes towards the survival of most businesses in the corporate world. Learning and appreciating this issue has enabled me to realize the need for giving back to the society.
This has strengthened my work-life relationship and has also helped me develop my career in the hospitality industry since it highlights on how to make better decisions and improve personal development.
This has improved both my personal and professional development. This issue has enabled me appreciate the need to have professional conduct and know how to deal with people in real life situation and as professionally as possible. In terms of personal development, corporate social responsibility has improved how I view the general roles expected of businesses and individual towards the community.
The social responsibility principle is a modern concept that provides businesses and organizations with corporate priorities. They are of significant influence to the way the organizations operate and especially its survival in the near future.
Customers are increasingly showing interest in doing business with those organizations that demonstrate responsibility and ethical practices. Those organizations that fail to achieve this suffer the consequences in many different ways. This may be through the loss of market share, which will reduce revenues and in the end, it may put organizations out of business.
Therefore, social responsibility decisions are of utmost importance in the running of any organization. Corporate social responsibility is what separates the successful hospitality establishments from the losers in the modern corporate world. It also determines the decisions that a company makes in ethical matters that would determine the success or failure of the company.
Conclusion
The hospitality industry should work towards developing strategies and making radical rehabilitations on the image of the various establishments through adopting and being keen on the effects of the various contemporary issues faced.
On one hand, corporate social responsibility may be a vital contemporary issue and so is the future of the hotel’s profits. Therefore, hotel establishments should be very cautious and on watch for potential contemporary issues.
References
Adams, J 1965, ‘Inequality in Social Exchange’, Advances in Experimental Social Psychology, Vol. 2, pp. 267.
Arrow, KJ 1951, Social Choice and Individual Values, John Wiley, New York.
Averch, H & Johnson, LL 1990, ‘Behavior of the firm under regulatory constraint’, American Economic Review, Vol.52, pp. 1052.
Buckley, PJ & Casson M 1976, The Future of Multinational Enterprise, Macmillan, London.
De Wit, B & Meyer, R 2004, Strategy: process, content and context, Thomson, London.
Demsetz, H 1979, ‘Ethics and Efficiency in Property Rights Systems’, Exploration of Austrian Themes, pp. 97.
Drucker, PF 1990, ‘Ethics in Management’, The Practice of Management, pp.124-125.
Horn, R 2009, The business skills handbook, Chartered Institute of Personnel and Development, London.
Stephen, G, Dirk, DS & Daniel S 2007, Managing social and ethical issues in organizations, IAP, New York.
Trevino, L & Nelson KW 2007, Managing business ethics: Straight talk about how to do it right, Hoboken, NJ.