The cruise industry has been in decline in recent years due to the coronavirus pandemic and the consequences of the discovery of the disease among passengers on board cruise ships. This situation can have both short-term and long-term consequences for large companies in the industry (Feuer, 2020). According to the stakeholder theory, the company’s operations are interconnected with and influenced by external (customers, suppliers, creditors, investors, society, and government) and internal stakeholders (employees, managers, owners) (Freudenreich et al., 2020). This theory suggests that the needs of stakeholders should be the basis of all business activities, which is the source of value creation for companies (Barney & Harrison, 2018). This theory is related to the ethical and moral obligations of companies to stakeholders, which is extremely relevant for the situation with the cruise industry.
International cruising companies are expected to react to such negative media publicity as it questions companies’ concern for the safety of their passengers. To sustain value creation, companies need to emphasize that they place the health and well-being of their customers above all else. It is also linked to the need to generate profits to meet the needs of shareholders and investors, as well as comply with the law.
In this regard, applying the stakeholder theory, it is expected that cruise companies will make any disclosures within their annual reports or on their corporate websites in relation to the hardship suffered by passengers on cruise ships during this pandemic. This is necessary to establish the ethical responsibility of companies, which is the basis of modern corporate responsibility (Fares et al., 2021). The companies are required to build strong relationships with passengers as they are the only source of profits and sources to protect the interests of other stakeholders for them (Jones et al., 2018). For companies in the current environment, retaining customers through rebuilding trust is the only way to revive the industry. References to companies’ attribution and their concern for the well-being of passengers are necessary to meet the needs of all stakeholders.
References
Barney, J. B., & Harrison, J. S. (2018). Stakeholder theory at the crossroads. Business & Society, 59(2). Web.
Freudenreich, B., Lüdeke-Freund, F., & Schaltegger, S. (2020). A stakeholder theory perspective on business models: Value creation for sustainability. Journal of Business Ethics, 166, 3-18. Web.
Jones, T, M., Harrison, J. S., & Felps, W. (2018). How applying instrumental stakeholder theory can provide sustainable competitive advantage. Academy of Management Review 43(3), 371-391. Web.
Fares, J., Chung, K., & Abbasi, A. (2021). Stakeholder theory and management: Understanding longitudinal collaboration networks. PLoS ONE. Web.
Feuer, W. (2020b). How the deadly coronavirus brought an industry to its knees: The ‘cruise lines 9/11’. CNBC. Web.