Posted on 19/09/2018 by Lukas James
Consumers are placing greater expectation on the companies that they support, demanding sustainable practices and holding them accountable to broader social responsibilities. This new paradigm presents challenges for the industry, but for those that rise to the occasion there are ongoing benefits to being a good global citizen.
International companies have been seen to be the main beneficiaries of a globalized economy, acquiring vast wealth for shareholders through this process of internationalization. In line with this, society has developed expectations that these companies should have the responsibility to return something to society.
Corporate Social Responsibility (CSR) is the act of companies taking a voluntary responsibility towards the environment, society or economy. It has emerged as an important issue within the hospitality industry, with most hotels integrating social policies into their operations. When implemented correctly the result is win-win, with benefits to broader society, while the hotels themselves can achieving greater customer loyalty and take advantage of opportunities for innovation and positioning.
Social Responsibility Policies
Whilst there are a huge number of initiatives that hotels can undertake, most of them fit within a few broad categories:
Benefits of Corporate Social Responsibility
Whilst CSR programs are entirely voluntary, the benefits of such programs have been demonstrated in many ways within hotel and hospitality operations.
With the service industry's product offering being intangible, evaluation of the quality and reputation of hotels is reliant on a range of other factors. The goodwill created by acting as a good corporate citizen transfers to brand image which in turn provides valuable differentiation in a highly competitive industry. This reputational benefit can often translate to customers being willing to pay a premium price for socially conscious policies like environmentally sustainable hotels or restaurants focusing on organic ingredients or locally sourced produce.
Of further importance is that customers that are behind a company's CSR initiatives are more willing to forgive hotels for errors or slips in their usual standards if they believe in the organization's mission.
Programs focussed on employee development and training can provide a safe and nurturing work environment which can assist with staff retention, an ongoing issue within the industry.
Appropriate Management of Corporate Social Responsibility Plans
Public opinions and expectations are constantly evolving and it is important to pay attention to these cultural shifts. A clear example of an event that once had positive association for the hotel but has become problematic is the the King's Cup Elephant Polo Tournament, Anantara Resorts annual fundraising event. The luxurious affair is one of the largest charitable events in Southeast Asia and attracts celebrities and socialites to their riverside resort in Bangkok. Elephants are mounted by professional polo players and the teams of elephants compete in a giant game of polo. Funds raised are used for a variety of elephant related charities and the event has been a fixture in Bangkok's social calendar for two decades.
The event has drawn positive publicity for many years but changing attitudes towards the treatment of elephants and the use of the animals as objects for human entertainment have recently drawn the ire of the public. Wildlife campaigners protested against the treatment of the elephants, calling it wildlife exploitation and threatened court action. Globally, public figures are withdrawing their support for other elephant polo events across the globe and the sport faces a credibility crisis.
As the organizer of the event, Anantara was forced to defend themselves from a barrage of negative press from around the country and across the globe. The future of the fundraising event seems unclear with growing negative public sentiment about the event, and by association with their brand. It is a clear example of the importance of making sure CSR initiatives are in line with public expectations.
The Future of Corporate Social Responsibility
With so many CSR initiatives being implemented by hotels and other large organizations, companies within the hospitality space can be left behind if they do not have clear policies in place. By not doing so, companies can miss out on valuable opportunities to create valuable differentiation in a crowded competitive environment.
In order to launch a CSR campaign, a careful assessment of the core competencies of the organization is essential, along with a deep understanding of the issues and concerns of their customers. When done correctly, it can be a powerful driver for company growth and build a loyal customer base.
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