CRITICALLY ASSESS THE IMPORTANCE OF CORPORATE SOCIAL
RESPONSIBILITY TO COMMERCIAL HOSPITALITY ORGANISATIONS
MATRICULATION NUMBER: 40515230
Corporate Social Responsibility (CSR) is a self-governing model that was introduced to help
organisations to be socially accountable to its stakeholders, to the public and to itself. The
demand for increased transparency of organisations has now forced them to design activities to
positively impact the society, environment and economy of the community and design their
operations to meet the expectation of the public (Fernando, 2021). Involving effective CSR policy
in organisational activity can improve the reputation of an organization and provide them
competitive advantages over their peers. Organisations are now concentrating on developing
effective CSR policies so that it could benefit their operation by minimising the cost of operations
and also establishing them as environment friendly institutions. CSR is very important in
hospitality organisations and they should be used ethically to produce the best result.
Hospitality is a huge industry which comprise of all the sector which deals with leisure needs of
customers. The industry includes a wide category of services such as lodging, transportation,
event planning, theme park and many more. Hospitality industry is worth billions of dollars
combining all the different sectors. The industry is highly reliant on the customer satisfaction and
availability of disposable income. Hospitality industry can be mainly classified into four sections:
Food and beverage, travel and tourism, entertainment and recreation and Accommodation
(Novak, 2017). Since the industry is so vast and comprises of huge man and money involvement
the problems it can cause to the surrounding world can be very high. This all make Corporate
Social Responsibility an integral part of hospitality industry.
Corporate Social Responsibility also deals with three P’s which are People, Planet and Profit. The
first P which is for People refers to the customers and employees, customers today demand more
transparency in every aspect than earlier. They tend to select where to do business depending
on the impact each organisation make to the environment. CSR activities of an organisation can
make the public aware about the stand they take on various aspects of the business including
waste management and social commitment of the company. Some researches even show that
when businesses offer similar price points then the customers tend to compare work ethics. The
second P stands for Planet which is obviously pointed towards the environment. Waste
management should be done scientifically and more importantly it should be done ethically.
Simply dumping waste that are toxic for land fill can damage the quality of underground water
supply but if waste management is done properly by segregating plastic and other toxic materials
from the waste and possible materials should be recycled. Recycling of plastic can save energy
when compared to just burning it. The third P stand for Profit, with effective CSR activities, profit
will automatically follow. With good company reputation customers will increase and employees
will be satisfied, this both will help in increased profit. Also recycling of materials can bring
additional income (Basham, 2016).
CSR is the commitment of an organisation to operate in socially, environmentally and
economically acceptable to the public, this makes CSR policies an integral part of business
activities. CSR does not only help in the business to deliver best possible value to the involved
stakeholders but also enhance the performance of business and develop business along with the
development of society. Basic principle of CSR can be comprising in three category such as
Sustainability, Accountability and Transparency (David Crowther, 2008).
Sustainability refers to the controlled usage of resources so that they can meet the needs of
present day without compromising the future requirement. Organizations need to make policies
that can guide them to use resources in their operation in an effective way and reduce waste
generation by incorporating recycling policies. Hospitality industry is one of the industries that
gives out massive amounts of waste products and the majority of which is from food and
beverage sector. The industry also relays highly on the natural attractions which highly attracts
tourist, it is necessary to conserve these resources since they are the basic building block of
hospitality sector (BauscherHepp, 2018). Therefore, hotels are required to focus on creating
strategies that can enable them to use their resources effectively and exploit resources that can
be regenerated. Measuring the sustainability rate will help organisations to calculate the
consumption rate of resources that will allow them to limit their cost of production and increase
the rate of profit generation while preserving resources.
Accountability is associated with generating an understanding about the actions of organisations
and their impact on the external environment. It is the responsibility of the organisation to
analyse the impact of their actions both in internal and external environments of business.
Inclusion of stakeholders in the decision-making process is also essential as it can allow the
investors to involve their input in the business and try to reduce the negative impact that can be
caused by their actions (Chen, 2020) .
Transparency is an important factor in CSR policy as it will help in understanding the real issue
within an organisation and enable them to involve strategies that can help to overcome the
situation. Management of an organisation should not manipulate any data that can affect the
authenticity of their reporting as the reports are the only source of information that can provide
information about the background and present situation organization to the external
stakeholders. Some companies campaign to have certain eco-friendly policy and later proved to
be wrong in what they claimed (Fransen, 2020). Transparency in the reporting system can help
in recognising the responsibility of an organisation and make the external stakeholders’ equal
part of the decision-making process.
While it is easily understandable that CSR policies of an organisation can have a positive impact
on its environment, society and bring positive changes in the economy, CSR is a powerful tool to
develop the business itself. Effective implementation of CSR can bring benefits like increased
customer retention, better relationship with customers, attract and retain satisfied workforce,
reduce running cost and energy saving, stand out among competitors, increase reputation of the
brand image, increase investment opportunities and increase publicity.
Government also plays an important role in implementing Corporate Social Responsibility among
organisation. They have the power to give proper framework in which CSR should be followed.
The widening of scope and scale of huge organisations has forced Government to take necessary
action regarding the environmental and social problems that they began to cause. While it is easy
for the corporates to put out the data regarding the CSR activities only with the proper
monitoring from the Government, these CSR activities can be standardized. Government also has
the authority to improve the transparency of CSR activities that many organisations do (Force,
2018). Many cases of raiding restaurants and seizing rotten food are reported in different parts
of the world (Sub-standard, rotten food seized from hotels, 2016). This is one of the biggest
violations of the social responsibility. It is the responsibility of a food joint to keep hygiene in their
premises and failing to do so and serving the rotten food is very unethical. The monitoring from
Government’s side is very helpful in achieving an ethical business model.
Globalisation has changed many business models and demand for hospitality sector also
increased, these high demands also started causing negative environmental impacts. The
increased awareness of customers in such problems has made many customers to consider the
overall viewpoint of organisations outside of their business towards environment and society.
This has made many institutions to take a positive stand towards their impact in social, ethical
and environmental aspects. Therefore, industries are concentrating on inclusion of CSR policies
in their operation as it can be beneficial to the business. There are many hotel organisations that
have already recognised the importance of CSR policies and include them in their activities.
Marriott, Lancaster and Apex have already developed CSR strategies that have positively
impacted on their business growth. Involving CSR policies will not only benefit the business but
also form effective relationships with local communities and thus promote positive brand image
and attract more customers.
Stronger brand image, recognition among consumers and approval in society are key ingredients
that are required by organisations to do good in business. Effective CSR strategy can increase the
involvement of customers and helps the business to expand their operation in the global
platform. Many giants in hospitality sector like Marriott have started designing their hotels into
LEED (Leadership in Energy and Environmental Design) certified buildings which focus on
buildings that are more concentrated in energy savings, reduced CO2 emission, water efficiency
etc. These global brands are strategically advertising these developments to gain public attraction
cleaner brand image and universally approved. Similarly, hotel chain Accor started to plant their
own vegetables to aiming at cutting down food wastage (AFP, 2016). To attract more customers
the brand should be a household name and to achieve such status the corporates need regular
quality check and always provide quality services to avoid negative reviews. CSR activities are an
added advantage to boost brand image, with the right PR team CSR can do better than any costly
advertisement. These all show the positive impacts CSR can bring to the society while
simultaneously bring in profit for organisations.
Incorporation of effective CSR policy can not only attract new customers but it also helps in
increasing the employee performance too. Although it is a customer driven sector, hotels are
required to satisfy their employees too. Since guest’s satisfaction depends highly on the service
the staff provides. Implementation of good CSR policies can generate employee engagement,
which means an employee who loves his/her work. A satisfied employee will work without
hesitation for achieving the company goal which in the end benefits the organisation itself.
Employees feel motivated and inspired that can impact on the quality of their work and develop
their professional abilities along with personal development. When an employee feel he is
working for a company which is doing good to the society he will feel pride inside, added to this,
when he is rewarded and appreciated for the effort that he is putting into the work can motivate
him to give his 100% to the job (Half, 2021). Apart from retaining existing staff and getting their
maximum output, being a sustainable and reputed organisation can attract new talents. This can
help in building upon the strength of the company. Retaining existing staff can be helpful in
cutting down cost that may emerge because of recruitment and retraining (Rivera, 2018).
Satisfied staff is as much important as satisfied customer.
CSR policy not only helps in increasing the economic performance of organisations but also
improves their environmental performance. Involving environment friendly goods and
equipment can help in reducing the production of carbon and use the resources in the most
effective way. Fast food giant McDonald’s has already launched cooking oil to bio-fuel conversion
in countries like Netherlands and this bio-fuel is used in trucks to transport their own goods
(Yates, 2020). This method can help in cost reduction and also reduce carbon emission. As the
waste production rate is high in the hotel industry, introducing their own methods to tackle this
problem can reduce the effects on environment. Environment friendly decisions like this can
increase customer’s brand loyalty and employee loyalty as well. Along with this, governments of
respective countries are required to control the tourism development and reduce the overloads
of infrastructure so that it can protect the environment from degradation.
Apart from positive environmental impacts CSR can bring, it also can contribute to the community
growth also. By diversifying work force and by introducing positive employment practices, many
hotel chains have benefited the communities also. The positives that are given to a community
can help in return also. A famous pizzeria in USA LaRosa’s Pizzeria when affected by a fire, around
two hundred volunteers who were benefited by the pizzeria in the past came for help and
rescued it from bankruptcy (Garrick, 2015). Involving the local community and having healthy
conversation with them can benefit the future.
Effective implementation of CSR policies can attract investors to the companies. Everyone is
attracted to firms that has positive brand image and have an optimistic ideology. Also, some
studies suggest that companies with good employee relations can bring in more investors since
employee contribution increases productivity (Firms taking care of their staff attract investors,
2016). In recent years business models were formed that were not forcing CSR as a marketing
gimmick but genuinely following sustainable practices. One such emerging business in hospitality
is Airbnb. Airbnb’s business model is one which encourages implementation of sustainable
tourism. When compared to hotels, Airbnb has significantly low wastage of water, energy and
improved waste management (Dudovskiy, 2019). On the other hand, there are innovative
hospitality companies like Uber which concentrate on ride-hiring services that has a great
business model but fail to reflect that success in their CSR. Uber has even lost their licence to
operate in London due to their lack of social responsibility (Schrieberg, 2017).
However, many establishments including hospitality sector has been green washing their
customers and stakeholder by creating false impressions about their activity and providing
inaccurate information about impact of their products (Sophie, 2019). To make the consumers
feel a satisfaction for being a part of an eco-friendly organisation, false advertisements are
projected to the society. Green washing can be difficult to find out but customer can be more
cautious while seeing company ads that are projecting themselves to be very environmentally
friendly and has good work ethics without providing proper supporting background.
CSR funds can also be seen widely misused in many sectors. In places where people are not that
much aware about CSR activities that a company is entitled to follow as part of their company
procedures, whereas they are projecting a false identity who are made to believe that the
organisations are doing welfare activities only aiming at the wellbeing of the community. These
giant companies earn the trust of public and manipulate them to do things that are favourable
to the company which are sometimes unethical. For example, CSR wing of a Corporate Company
called Anna-Kitex Group located in India, used their CSR fund (Twenty-Twenty) to do social
welfare activities and thus gained public trust and attention. Later, the Corporate company
funded candidates for Local Body Government Election and the public voted and elected these
candidates owing to the trust that they earned from the so-called charity and welfare activities
(P, 2020). Unethical and greedy activities like these can dismantle the very basic foundation and
purpose of CSR. Similarly, many giants in hospitality sector also use CSR as just a marketing tool.
Considering a scenario without CSR in a hospitality organisation, all the above-mentioned points
will be neglected and organisations will only work as a money-making machine. No amount of
thought will be put into the decision-making process before taking an action. All the ethics of
business will be lost without proper company policy towards CSR. Corporate Social Responsibility
of a company is implemented aiming only positive outcomes both for the organisation and the
public. CSR enforces a very healthy relation between organisation, community, the stakeholders,
employees and our environment. Without CSR, there will be only a one-way gain which will be
solely owned by the organisation, but with CSR implemented along with the organisation making
profit, the stakeholders will also be benefited.
From the above study, it can be concluded that CSR activity is an integral part of the hospitality
sector as they can bring positive change to the environment, society and economy. Organisations
that are performing in the international market need to develop effective CSR policies that can
enable them to maintain their market growth and position in the global platform. There are many
giants that have already changed their way of conducting the work but there are several other
hospitality organisations that need to recognise the importance of CSR policies and make changes
as per the demons of the market. Effective CSR policy not only helps environmental stability but
also help in attracting new customers to the organisation and improves the retention rate of
employees. CSR activity of an organisation has enabled them to pursue pro-social objectives and
create positive influence on the society. Even though many examples of improper CSR
implementation and misuses can be seen throughout different organisation including hospitality
with proper monitoring and ethical business model, CSR has only positive outcomes which can
bring to society, environment, and the business.
References
AFP. (2016, April 13). French hotel giants Accor to plant veg to cut food waste. Retrieved from
TheLocal.fr: https://www.thelocal.fr/20160413/french-hotel-giants-accor-to-plant-veg-tocut-food-waste/
Basham, K. (2016, February 23). Corporate Social Responsibility: Three Ps. Retrieved from
https://medium.com/@KevinBasham/corporate-social-responsibility-three-psec8753027ad7
BauscherHepp. (2018, May 22). The Importance of Sustainability in the Hotel and Hospitality
Industry. Retrieved from deepplate.bauscherhepp.com:
https://deepplate.bauscherhepp.com/blog/sustainability-in-the-hotel-and-hospitalityindustry
Chen, J. (2020, May 31). Corporate Accountability. Retrieved from
https://www.investopedia.com/terms/c/corporate-accountability.asp
David Crowther, G. A. (2008). Corporate Social Responsibility. In Corporate Social
Responsibility (p. 14). bookboon. Retrieved from
https://my.uopeople.edu/pluginfile.php/57436/mod_book/chapter/121631/BUS5116.Crow
ther.Aras.CSR.pdf
Dudovskiy, J. (2019, September 24). Airbnb Corporate Social Responsibility (CSR): a brief
overview. Retrieved from research-methodology.net: https://researchmethodology.net/airbnb-corporate-social-responsibility/
Fernando, J. (2021, February 02). Corporate Social Responsibility. Retrieved from Investopedia:
https://www.investopedia.com/terms/c/corp-social-responsibility.asp
Firms taking care of their staff attract investors. (2016, February 02). Retrieved from wbs.ac.uk:
https://www.wbs.ac.uk/news/firms-taking-care-of-their-staff-attract-investors/
Force, G. (2018, May 09). Does Government Have a Role to Play in Corporate Social
Responsibility? Retrieved from GivingForce.com: https://www.givingforce.com/doesgovernment-have-a-role-to-play-in-corporate-social-responsibility/
Fransen, B. (2020, February 06). Why Making Your CSR Transparent Matters. Retrieved from
Ecomatcher.com: https://www.ecomatcher.com/why-making-csr-transparent-matters/
Garrick, A. (2015, April 17). Corporate Social Responsibility in the Hospitality Industry.
Retrieved from Linkedin: https://www.linkedin.com/pulse/corporate-social-responsibilityhospitality-industry-arlene
Half, R. (2021, January 18). 4 little known benefits of CSR for any company. Retrieved from
Roberthalf.com: https://www.roberthalf.com.hk/blog/employers/4-little-known-benefitscsr-any-company
Novak, P. (2017, April 24). What Are The 4 Segments Of The Hospitality Industry. Retrieved
from https://www.hospitalitynet.org/opinion/4082318.html
P, S. H. (2020, May 08). Social Grievances and Corporate Greed: Twenty20 and Conflicts in
Kizhakkambalam. Retrieved from
https://journals.sagepub.com/doi/10.1177/0972266120916305
Rivera, C. (2018, July 9). How CSR can help to attract and retain talent. Retrieved from
https://resources.cornerstoneondemand.co.uk/blog/how-csr-can-help-to-attract-andretain-talent
Schrieberg, D. (2017, September 22). Uber Loses License To Operate In London Over Its 'Lack
Of Corporate Responsibility'. Retrieved from Forbes.com:
https://www.forbes.com/sites/davidschrieberg1/2017/09/22/uber-loses-license-tooperate-in-london-due-to-lack-of-corporate-responsibility/?sh=37bdadb71018
Sophie. (2019, September 10). Greenwashing. Retrieved from
https://www.aconsideredlife.co.uk/2019/09/what-is-greenwashing-examples.html
Sub-standard, rotten food seized from hotels. (2016, AUGUST 12). Retrieved from The Times of
India: https://timesofindia.indiatimes.com/city/kochi/sub-standard-rotten-food-seizedfrom-hotels/articleshow/53663886.cms
Yates, S. (2020, June 25). McDonald’s launches oil-to-biofuel partnership in the Netherlands.
Retrieved from Foodbev.com: https://www.foodbev.com/news/mcdonalds-launches-oilto-biofuel-partnership-in-thenetherlands/?__cf_chl_jschl_tk__=efd82356aacd0c0990c259e0540518aeaba0c3dc1615827577-0AT0xfCVM2VsYgSiV1zgHPgLy46ISdFsixSBbVG4GxxKAIWE5DoQLv37rRU_HxH1_ZVyTEIQtJVHAf5PmWq-Ns