Sample Report on Ethics, Risk & Decision Making in Tourism & Hospitality

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Ethics, Risk & Decision Making in

Tourism & Hospitality Industry

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Table of Contents

Task 1 ...............................................................................................................................................2

1.1 Ethical concepts and issues in White Swan ..........................................................................2

1.2 Evaluation of public, private and voluntary sectors in tourism and hospitality ...................5

1.3 Sustainability and corporate social responsibility .................................................................6

TASK 2 ............................................................................................................................................7

2.1 Decision making at different levels of an organisation .........................................................7

2.2 Evaluation of ethical decisions and ethical concepts ............................................................8

2.3 Business risk management ....................................................................................................8

Task 3 Ethics in tourism and hospitality research ...........................................................................9

3.1 Assessing market research needs and data collection methods.............................................9

3.2 Ethical issues in tourism and hospitality research ...............................................................11

3.3 Market research methods ....................................................................................................12

Task 4 Ethics in context of marketing ...........................................................................................13

4.1 Ethical issues for tourism and hospitality marketing ..........................................................13

4.2 Contemporary issues in tourism and hospitality industries .................................................14

4.3 Business decision making in context of ethics ....................................................................15

Task 5 Roles of managers and stakeholders on strategic planning ...............................................17

5.1 Evaluation of levels of influence and power among stakeholders ......................................17

5.2 Triple bottom line ................................................................................................................19

5.3 Scope of business decision making to strategic plans .........................................................20

Conclusion .....................................................................................................................................20

References ......................................................................................................................................21



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In a business organization, there are number of employees who are engaged in providing

services to their customers. However, in a hospitality industry, there are various firms which are

engaged in delivering day to day services to thousands of customers. Managers of the different

firms whether it is travelling firm, hotel, restaurant or any other business, it is very crucial for

each and every firm’s manager to keep control over there working practices and activities which

can provide sufficient knowledge about their expected profitability (Perdue, Immermans and

Uysal, 2004). In every hospitality firm, it is obvious to have interference of government in every

sector, either public or private. It is because regulatory authorities plays crucial role in providing

different facilities like training and development programs, decision making schemes and

financial assistance as well. In this context, business entities has to follow rules and regulations

imposed by government necessarily otherwise they can be changeable against law.

On the other hand, business firms also have to make certain policies regarding risk and

decision making in order to gain high profitability. Along with that, there are number of internal

as well as external factors which influence business in its operations and policies. In order to

make effective control over them, firms have to make certain plans and policies for making good

control over consistent changes in external as well as internal environment. In this report, White

Swan is the chosen hospitality firm which is situated in the UK (Rimmington, Williams and

Morrison, 2009). It is luxurious hotel in Bondgate, UK. It is one of the oldest hotels in UK which

is providing services to customers in most efficient manner.

Task 1

1.1 Ethical concepts and issues in White Swan

There is a growing concern for business ethics in this hospitality firm as hospitality

professionals are faced with ethical dilemmas in the daily operational activities in delivering



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services to customers. There are number of complex as well as interesting issues that affect the

top level management of the firm who manages business from restaurant operations to tourism

based businesses (Becken and Hay, 2007). Some of the ethical challenges faced by this

hospitality firm are not new but they are being in existence since long time period. However, in

modern days, hospitality managers are facing these issues and other employee honesty issues on

a regular basis.

Tourism currently is regarded as one of the top industry that is the driving the global

economy because major part of marginal revenue is generated from these sectors only. Almost

all countries are engaged in dealing with tourism sectors where some of the nations are engaged

in sourcing market while some are playing role of destinations for travelers. As a matter of fact,

tourism industries operate their business in very complex environment; as a result there has been

a growing concern on its negative social as well as environmental impacts (Younes and Kett,

2007).

Sample Report on Ethics, Risk & Decision

Making in Tourism & Hospitality Industry

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Impacts of ethics in the cited tourism and hospitality industry are as follows:

Decision making: - Ethical decision making process is mostly influenced by the

nature of ethical issue faced. White Swan managers have the responsibility of

maintaining the highest levels of services, guest satisfaction and optimal return on

investment as well. In order to meet these objectives, managers of the firm have to

deliver such services that can meet needs as well as expectations of customers

(Fennell, 2006). However, decision making process should include such specialists

who have the ability to play dominant role in providing valuable suggestions which

can be satisfactorily accepted by every manager. Effective decision making can lead

the firm to the top because right decision can only drive the firm towards success

whereas poor decision making leads to failure if the firm as well.

Quality: - In the modern era, customers are more quality oriented rather than price.

Therefore, it has become crucial form every firm to provide such a quality to their

customers which can really meet their expectation level (Silvers, 2009). In other

words, firm has to make specific research on expectations and demands of customers,

as a result, their requirements can be fulfilled in desired manner. Keeping pure

quality of services can changes perceptions of customers from negative to positive.

Additionally to it, pyre quality of services is very essential in order to increase

profitability as well as efficiency of the firm. Good quality of service will definitely

impress customers to select the cited firm because they require quality rather than

quantity (Litvin, Goldsmith and Pan, 2008). Qualitative services are able enough to

bring the cited firm at standardized level and most of the other high level firms are

highly focusing on their customer’s perceptions regarding quality.



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Employee turnover: - In hospitality industries, it has been identified that employee

turnover is one of the biggest problem. The main reason behind this factor is that

managers are not interested in their own human capital but they are focusing only on

customers (Yaman and Gurel, 2006). By the way, fact is that, if employees are the

key to success because without motivating employees, it is not possible to take work

from them with their full potentiality. Therefore, in order to reduce speedily rate of

employee’s turnover, certain training and development methods are required to

improve their efficiencies. Not only that but, working environment of these

employees is also one of the most critical factor responsible for increasing employee

turnover in the firm. It is because inadequate working environment always depress

them to work with full potency. Managers of the cited are required to create such an

environment which fits the needs and expectation levels of employees as well (Bowie

and Buttle, 2004).

Employee’s satisfaction – Satisfaction level of employee mainly depends on the

nature of their managers because their way of treating employees is very crucial. It

can either make positive or negative impact on them. However, in order to make them

satisfied with their job as well as firm, it becomes crucial for the top level

management to provide them good payment on time also because inappropriate

payment methods can often de-motivate employees towards their managers and this

leads to employees turnover (Kang, Hsu and Wolfe, 2003). Employees are considered

as one of the most important asset of the firm and if they are not taken care of, firm

has to bear huge loss in near future. Employees are the only medium through which

customers can be attracted and impressed toward the hotel. Their nature and way to

talking with customers highly influence perceptions of customers. Therefore, special

training should be provided to them regarding behavior with customers. Specific



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training to employees helps the firm to increase their level of dependency on them

and profitability as well (Vanclay & d).

Customer’s perception: - It is one of the most common as well as new concept that

every hospitality firms wants to consider. Because reading the minds of customers is

very important and working according to their expectation level is the key to success

for each and every firm (Quintal, Lee and Soutar, 2010). Changing customers

perceptions is very important because in the modern era, it has also been ascertained

that with low priced services, customers thinks it cheap whereas in high priced

services, customers are of the view that service are good. In order to change this

perception, management has to deliver such kind of services which can really divert

minds of customers.




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1.2 Evaluation of public, private and voluntary sectors in tourism and hospitality

The tourism and traveling industry in UK are always changing and developing within

themselves in order to meet continues changing needs or perceptions of customers. However, the

industry is largely dominated by privates sectors which are made up of numerous small and

medium sized sector firms (Yeung, 2004). These private firms are mainly dependent on latest

technological models and also vulnerable to external pressures like down turns in the economy.

Private sector

This organization is directly or indirectly in private ownership. The main aim of the

private sectors enterprises is to make huge profit within a specific time period. They are required

to create such kind of services and products which highly influence customers and tries to

changes their perceptions. Shareholders of the firm receive huge benefit from these kinds of

firms because they get high rate of dividends as per their investments (Jogaratnam and Ching-

Yick Tse, 2006). However, the main activities of private sectors are to provide catering,

accommodation, entertainment, travel -services and tourism. Most of the private firms are

indulged in improving their marginal revenues every year by setting and specific time limit. It

has been estimated that private sector industries holds as much as of 50% of the UK market.

Hospitality industries include hotels, theme parks, travel agencies and restaurants. However, the

largest operators have considerable power and control on the market (Kim and Miller, 2008).

Public Sector

Public sectors are mostly funded by regulatory authorities or government. As these firms

are funded by government, their strategies and policies are highly influenced by government.

Hospitality firms are playing major role in attracting large number of customers every year and

they are earning huge marginal revenue which is indirectly benefiting the economy of the nation.

Hospitality industries also employ large number of people which is assisting the economy by

reducing unemployment (Holcomb, Upchurch and Okumus, 2007). These public enterprises



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include the tourist boards and local authorities, which aids facilities such as museums, art

galleries and tourist information centers. Not only that but main role of public sector enterprise is

to support and help to promote hospitality firms. Many of the local authorities play dominant role

in developing, promoting, run events and festivals. Public sector enterprises also look after much

countryside which is regarded as an important natural attraction.

Voluntary sector

These organizations are usually non-profit making or charitable firms because they often

have very strong beliefs and principles. They are not really motivated by making profit by there

are some other reasons which provide them satisfied with their level of services (Bohdanowicz,

2005). These organizations are funded from a variety of methods including donations or the

selling of products and services. The National Trust looks after historic properties and large areas

of countryside. It is funded by legacies (money left o them when people die), member

subscriptions, selling goods, and charging entry to the properties. They also receive grants to

help manage the countryside in an environmentally friendly way. They are often managed by

and run by volunteers (Ayuso, 2006). Examples of voluntary sector organizations include travel

clubs and a wide range of conservation, countryside recreation and heritage pressure groups such

as the Rambler’s Association, Tourism Concern and the National Trust.

1.3 Sustainability and corporate social responsibility

In business organizations, sustainability refers to that biological system wherein the firm

remains diverse and productive all the times by changing its methods and procedures. In simple

words, sustainability means strengths or survival of systems and procedures adopted in the firm.

However, the main principle for sustainability is sustainable development of the firm (Jeffery,

2009). Principle of sustainability includes ecology, economics, politics and culture as well.






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Corporate social responsibility is a form of corporate self-regulation incorporate in the

business model. This policy plays the role of a self-regulatory mechanism wherein the cited

business monitors and ensures its active conformity with the law, ethical standards and

international standards. Corporate Social Responsibility aims to grasp responsibility for

corporate actions and in order to encourage a positive impact on the environment and

stakeholders including consumers, employees, investors, communities, and others (Stenzel,

2010). This policy is titled to assist the cited organization's mission as well as a guide to what the

company stands for to its consumers. Business ethics is the part of applied ethics that examines

ethical value and moral or ethical difficulties that can originate in environment of the business.

ISO 26000 is the recognized international standard for corporate social responsibility. Public

sector organizations stick on to the triple bottom line (TBL). It is widely accepted that CSR

matches to similar principles, but with no conventional act of legislation as well (Geneva, 2010).



http://en.wikipedia.org/wiki/Corporate

http://en.wikipedia.org/wiki/Self-policing

http://en.wikipedia.org/wiki/Business_model

http://en.wikipedia.org/wiki/Stakeholder_(corporate)

http://en.wikipedia.org/wiki/Business_ethics

http://en.wikipedia.org/wiki/Applied_ethics

http://en.wikipedia.org/wiki/ISO_26000

http://en.wikipedia.org/wiki/Triple_bottom_line

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TASK 2

2.1 Decision making at different levels of an organisation

Managers at all the levels are required to make some decisions on behalf of the company

and these decisions are related to the basic functions of Whiteswan, i.e., planning, organising,

staffing, directing and controlling.

Owner or Board: The mission of the Whiteswan is created by its owner or the board. It is

followed by all the management and business activities and a mission statement is also

prepared by them for its external and internal audiences (Frey, and George, 2010.). The

successful accomplishment of the mission takes various forms, and the forms selected

gives the vision of the business.

Top Management: The top management of the said company need a strategic plan.

Decisions related to the strategy formed involves the company matters performed over

long term. The management of White Swan then chooses a grand strategy like

diversification or growth for the accomplishment of the strategic goals. The top managers

spend much time in planning and decision making as compared to other levels of the

organisation. They also possess power of decision making over the middle management

(Mueller and et. al., 2003).

Middle Management: The middle management decides the smaller tactical objectives that

can be put together for achieving the strategic goals. These tactics are geared towards

some department or functions where an objective involves quality improvement or

efficiency that can be measured.

Operational Management: The operational management is also known as the first-line

management and is responsible for the employees. These managers work for the

accomplishment of the objectives of middle management by choosing their own goals on



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a weekly, monthly or daily basis. The decisions and plans adopted by these managers

includes scheduling, budgeting, inventory, etc (Tzschentke, Kirk and Lynch, 2008).

2.2 Evaluation of ethical decisions and ethical concepts

White Swan has been working successfully over the years because it ensures ethical

decision making. It pays enough consideration over keeping a balance between the satisfaction of

the employees and the customers and maintaining the moral values and customs. The decisions

making should be done by analysing the ethical approach towards the same as it will help in

softening the implication and in selecting a decision with better and long term results (DWYER,

2005). If decisions are not made ethically, it may harm the company in the future. On the

contrary, if decisions are made ethically, better short term results can be seen which can prove

beneficial for the said company as well as for its employees and customers.

In order to ensure ethical decision making in the organisation, White Swan adopts Fair

Trade practices in the organisation. It is about decent working conditions, fair terms of trade and

better prices for the customers. It provides better working conditions to its employees with health

and security benefits. It also provides better products and services to the customers at a lower

price then its competitors (Olsen, 2004). Adoption of Fair Trade results in an increase in the

economies of scale, output and production; and provides the company competitive advantages

too. It also improves the efficiency of the resource allocation and promotes use of new

technologies and innovative production methods. Adopting Fair Trade has also resulted in

gaining foreign exchange and has contributed towards increasing the rate of economic growth,

real income and living standards of the people by creating increased productivity, efficiency,

production level and competitive industries (Huber, Herrmann and Morgan, 2001).




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2.3 Business risk management

Risk management in business includes the processes and methods used to seize

opportunities and for managing the risks for achievement of the objectives. It involves

identification of particular circumstances or events related to the organisational objectives and

then assessing them in terms of magnitude of impact and likelihood, monitoring progress and

determining response strategy. It can also be referred as a risk-based approach.

There are several kinds of risks that can arise in an organisation. Some of them are:

Hazard risk (like, property damage, liability torts, natural catastrophe, etc.), Financial risk (like

currency risk, pricing risk, liquidity risk, etc.), Operational risk (like integrity, product failure,

reputational risk, customer satisfaction, etc.), Strategic risks (like social trend,

competition, capital availability, etc.). White Swan has been taking proper preventive measures

to reduce or eradicate these risks (Holjevac, 2003).

The risk management process adopted by the said company involves:



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Establishment of context: It involves the operating conditions of the company on an

internal, risk management and external context.

Identification of Risks: It involves representation of the areas that may exploited by the

said company for competitive advantage and documentation of the threats to

accomplishment of the organisational goals.

Quantifying/Analysing risks: It involves arranging and creating a probability distribution

of the outcomes of material risks, if possible (Gössling and Hall, 2006).

Integrating risks: It involves aggregation of risk distribution, reflecting portfolio effects

and correlations, and formulation of results on the basis of impact on White Swan's key

performance.

Prioritizing/Assessing risks: It involves determining appropriate prioritization and

contribution of each risk towards the aggregate risk profile.

Exploiting/Treating risks: In this, the strategies for exploiting and controlling various

risks are being developed.

Reviewing and Monitoring: It involves the continual monitoring and measurement of the

risk environment and performances of risk management strategies (Manaktola and

Jauhari, 2007).

Task 3 Ethics in tourism and hospitality research

3.1 Assessing market research needs and data collection methods

In order to deliver the best level of services to customers, it becomes very significant for

the firm to assess needs and demands of market because it is the only way through which firm



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can gain popularity and achieve objectives in desired manner. However, there are various

reasons which demonstrates the requirement of assessing need for market research, they are:

Helps to identify opportunities to serve various groups of customers: - Assessment of

market needs is crucial in getting opportunities to serve number of people according

their needs and demands (Ashley and et. al., 2007). In other towards, it can be said that,

market assessment assists the firm to measure consistent changes in customer’s

perceptions or requirements related to firm's products and services.

Examination of market size: - The cited hotel White Swan is a very old hotel and

managers of the firm are running business by maintaining proper standard. But this

standard can only be maintained by continuous research over market (Sillignakis and d).

As a matter of fact, there are continuous changes in market day by day, therefore, it can

be said that market size is continuously expanding. In this competitive marketing

condition, managers of the firm makes proper evaluation of market for meeting their

needs.

Determination of the best methods for meeting needs: - Assessing market needs helps

the firm to determine or identify the best suitable methods to meet demands of

customers in accurate manner. Firm can improve its services and quality of products

through determining customer’s expectations and purchasing frequencies (Yeoman,

2004). Though the cited hotel is very old but luxurious but maintaining quality is the

most important as well as necessary task to be performed

Data collection methods

Data collection is the technique of gathering and measuring information related to variables of

interest. Methods used in collecting data are of different types and they are explained below :



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Surveys: - In the cited hotel firm White Swan, managers conduct surveys which is also

known as paper and pencil method wherein number of open ended and closed ended

questions are asked to customers regarding firm's products and services (Smith and

Duffy, 2003). However, surveys are conducted through questionnaires and the most

advantageous feature of this method is that, it can be applied to large number of people

at single time and it is cost effective too.

Interviews: - Interviews are conducted wherein number of questions are asked to

respondents. It may be open ended or closed ended. The cited hotel White Swan can also

organize online interviews where data can be collected through asking questions online.

However, interviews can be formal or informal, structured or unstructured and can be

one on one or group interviews (Jafari, 2002).

Observations: - It is another data collection technique which helps to understand

behavior of people regarding the firm. Managers of the firm observes factors like

frequency of purchase, perceptions about the firm and feedback of customers. However,

observations depends of observers capability that how much information or data he or

she can gather in a specific time period (Hudson, 2008).

3.2 Ethical issues in tourism and hospitality research

In the cited firm, managers have to deal with number of issues on daily basis. In order to

remain sustainable in competitive market, organisations are taking on different initiatives for

staying well ahead of its competitors through lowering prices and increasing quality of services.

But the major issue is that, most of the customers are of the perception that competitive services

by number of firms are alike and there is no difference in among them (Brotherton, 2008).






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However, mangers of the firm have realized that competing only on the basis lowered prices is

not fruitful because it leads to uneven profits and unsettled marketing conditions. Therefore, they

have decided to build collaborative relationships and excellent partnerships with their own

customers in order to gain more knowledge about their customers so as a result, they can serve

them well. On the other and, some organisations regard ethics as a positive factor and realizes

that ethics and profits are inversely proportional to each other (Middleton and Clarke, 2012).

Complex and interesting ethical issues affects large firms which operates their business

from restaurants to tourism based industries. Top level management of the firm keep on facing

these issues on regular basis. Study states that European-based hospitality industries are

performing far better than American-based industries in context of implementing ethical

practices and corporate social responsibilities. The main reason behind that is, European

industries possess better knowledge of taking responsibilities and understating ethics through

publicizing their codes of ethic (Ritchie. and Crouch, 2003). Ethical decision making in the cited

hospitality firm includes deontology and teleology wherein the former is closely related with the



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notion of universal principles and truths while the latter one is used by managers of the firm to

solve ethical dilemmas.

Ethical issues make great impact on firm, most especially in context of decision making.

In this regard, ethical decision making is mostly influenced by the type or nature of ethical issue

faced by the firm. In the recent years, the firm has recognized that there is scarcity of natural

resources and this has resulted in the reinforcement of the environmental ethic (Yeoman and et.

al., 2012). Management gas dealt with number of initiatives in order to make appropriate use of

natural resources in order to manage their future operations. On the other hand, impact of ethical

issues can also be observed on quality of services and products provided by the firm. White

Swan managers have changed their way of services and production in order to ensure the best

quality of services. But quality can be achieved through maintaining standards. However, main

factors to be considered while managing quality are proper estimation of guest desires,

expectations and requirements suitable standards to meet satisfaction of customers (Buhalis and

Costa, 2006). But quality can be achieved when the firm has got good employees who can

understand and respect value of ethics both in their work as well as in their life.

3.3 Market research methods

In order to gain knowledge about market environment, there are number of methods

which can be used by the firm in order to understand consistent changes in customer’s

perceptions, needs and demands. Not only that but various external and internal factors are also

to be determined while researching market (Fennell and Malloy, 2007). Some research methods

that can used by White Swan hotel management are as follows: -

Primary research methods: - These research method are used to gather original information

through the help of different mediums such as Surveys, direct observations, interviews and focus

groups. Surveys are conducted by the firm in the form of questionnaires where a sample of



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population is targeted by the firm in order to ask various questions related to firm's services and

products. This method does not take much time to gather or collect information from people

because all target people can be surveyed in single time period (Tribe, 2011). The main

advantage of this method is that, it generates standardized, quantifiable, empirical data and some

qualitative data as well. It depends on White Swan managers whether the survey should be

descriptive or explanatory because it involves entire population or sample of it.

While, observation totally depends on the ability or capability of the observer who

collects data or information through his consciousness. It allows the researcher to represent the

actual behavior rather than responses related to behavior (Ryan, 2002). There are various types

of observations which includes participant or non-participant observation, candid to convert

observation and from structured to unstructured observation. In interview technique, number of

open-ended questions are asked to respondents which helps to generate quantifiable data and

more in-depth qualitative data as well. Though chances of mis-communication or

misinterpretation between researcher respondents are more but this technique helps to gather real

information about respondent's perceptions. Focus groups is qualitative research technique

wherein a group of people get together and they are asked about their perceptions, opinions and

beliefs towards products and services of the firm. In this method, questions are asked in

interactive manner (Buhalis and Law, 2008).




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Secondary research methods: - In this research method, information is collected through

published data. That can be either books, journals, new papers, internet, magazines or

educational institutions. Information gathered in this form of market research are already found

out by other and researchers find it easy to collect in short time period. The information gathered

through secondary research methods may include biasness. It is because information is updated

by different parties and people often add unnecessary or even false information to increase their

data (Hudson and Miller, 2005).

Task 4 Ethics in context of marketing

4.1 Ethical issues for tourism and hospitality marketing

Hotel White Swan, in order to deal with its marketing management, has to deal with

various ethical issues for promoting and maintaining standard of their business. It is very crucial

to maintain number of policies and procedures for increasing number of customers and providing

equal amount of satisfaction to customers as well as their own employees. Ethical issues in

context of marketing includes appropriate quality of services to customers without adulteration.

It has been seen many a time that hotel industries contaminate food by keeping it for long time



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period and customers has to face difficulties after receiving services from the firm (Dwyer and

et. al., 2009). It is prior responsibility of the cited firm to ensure their customers about quality of

foodstuffs and services they are providing. Marketing department of the firm needs to conduct

standard marketing research in order to ascertain knowledge about issues that are changing

customer’s perception and follow them to meet their requirements. The cited hotel has to make

effectively advertising strategies to promote business on broad level. However, firm can adopt

online advertising strategy also because most of the customers are using internet and they among

them. Huge portion of customers comes under the category of youth generation. Impressing them

through various schemes can be very helpful promoting the firm (Kang, Lee and Huh, 2010).

White Swan's marketing managers has to target their customers which and then have to

make effective policies to attract them. Marketing strategies made in order to increase

trustworthiness among customers. This is the most basic requirement for every firm to create a

sense of trustworthiness among their targeted customers. Loyalty is another professional ethic

that should be demonstrated by hospitality industries. Being loyal is one of the best policy to win

heart of customers (Laroche, Bergeron and Barbaro-Forleo, 2001). In this competitive market,

customers seek for those firms on which they can fully rely. In this context, management has to

avoid conflicts among their employees and to create a friendly-hood environment in the working

place. Simultaneously, firm has to treat its stakeholders in fair manner. Providing equal

opportunities to employees while recruitment and selection process, building a risk free

environment, assisting customers the best quality of services, payment of salaries and wages in

timely manner, distributing dividend to shareholders, following rules and regulations imposed by

the government of UK are some areas where the firm has to show fairness. Therefore, the above

mentioned ethics highly influence business firms in their marketing policies (Carrigan and

Attalla, 2001).



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4.2 Contemporary issues in tourism and hospitality industries

The cited hotel managers has ascertained the significance of developing and

implementing ethics in hospitality industry. Similarly, scholars are also interested in examining

the decision behavior of hospitality industries. However, ethical issues in hospitality

management includes social responsible behavior, implementation of ethics codes and human

resource's ethical decision making. Human resources includes professionals and staff members

of the firm who has to make decisions and to face challenges on daily basis (Holjevac, 2008).

Ethical behavior of front-line employees: - In the cited hotel, ethical values and job-related

behaviors and of the front line employees play significant role in business transactions and

providing consumer service experience. In almost every hotel industry, it is not necessary that

customers get satisfied by tangible services like standard or furnished rooms and qualitative food

but along with that they also seek for well behavior of staff towards them. Customers also need

to get favorable interaction with front line employees (Legohérel and et. al., 2004). Positive

attitudes of staff members towards visitors increases possibility of repetition of customers in the

same firm while on contrary to it, if attitudes and behavior of customers is perceived negatively

or unethical by guests, they are likely to reduce their assessment of the service received. There

are four types of dimensions that can be observed in hotel employees job-related ethics such as

'no harm', for example, making a phone call in customer’s room in order to inspect presence of

customer. Second one is, 'unethical behavior', or example, offering free tea or coffee at hotel or

restaurant. Thirdly, 'passively benefiting' for example, breaking of hotels assets like glass, table

or plate but blaming on customer’s carelessness (Scott and Orlikowski, 2012). And lastly,

'actively benefiting' for example, accepting tips in order to arrange a room change for a guest.

Manager's ethical orientation and behavior: - Most of the scholars are of the view that hotel

managers should keep more focus on their shareholders in order to gain more and more



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profitability. Along with that, social responsibility orientation and profitability are compatible

and critical to the organization's success.

4.3 Business decision making in context of ethics

Managers of White Swan hotel are very often required to make various types of decisions

in the business environment in day to day operations in order to compete with external market.

However, employees or managers who are working in the hospitality firms are often required to

follow an ethical model or framework while making decisions. Important thing is that, all the

business ethics points out acceptable behavior that the cited firm expect to see from their

employees (Slaper, 2011). Following business ethics can lead to strong decision making and

business ethics which can assist the firm to select the business opportunities. Decision making in

business ethics normally requires the firm to ascertain specific ethical standards which means

different things to different people. As the cited firm can consistently develop and expand, new

staff members who are employed in the firm are not necessary to possess all business ethics

which are possessed by existing senior employees.

However, there are five types of ethical standards such as: utilitarian, rights, fairness or

justice, common good and virtue. Where, utilitarian ethic is that type of standard which is aimed

at performing goop practices mostly and avoiding or limiting the amount of harm for each and

every individual working in the firm (Mahon, Becken and Rennie, 2013). Whereas, the rights

ethic is a standard that protects the moral rights of employees who are impacted by the decisions

taken by the top level management. Another great advantageous ethic is fairness or justice,

which approaches to build equality in all the staff members. The common good ethic focuses

getting betterment in society as a whole. Last but not the least, the virtue plan of action triggers

on the ideal moral excellence for promoting employees for White Swan.



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From the functional point of view, business ethics is a special tool that is used by the

cited firm in order to ensure managers, director as well as executive officers to act responsibly in

certain business consequences. Ethical business decision making helps the firm in promoting the

company as a whole, rather than letting one individual profit from business decision. On the

negative side, individuals who consistently make business decisions which are based on their

personal benefit are likely to create legal liabilities for the firm itself and results in bankruptcy.

For any business organization, it not possible to create an ethical business environment in

manner. It is essential for the cited firm too, to spend huge amount of capital for training and

developing their employees to get learn everything related to business ethics. Every time it is not

possible to get positive feedback from employees and managers after rendering training and

development programs. The firm can also find negative feedback from their employees and other

staff members regarding training of ethical business decision making policies. However,

conflicting or engaging this negative feedback of employees can be a very difficult part of

implementing business ethics.

For coping up with these ethical issues, the cited firm can take assistance from

professional consultants, seminars as well as other training methods in order to train and develop

employees on decision making in business ethics. Apart from giving training on ethical decision

making, all these outside sources also helps the firm to provide an objective review of their

existing operations and offer advice on how to implement powerful ethical code in cited firm's

business operations. Though these external sources are very expensive, but they help the cited

firm to develop an ethical business environment over a longer time period.




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Task 5 Roles of managers and stakeholders on strategic planning

5.1 Evaluation of levels of influence and power among stakeholders

Stakeholder analysis is the process of identifying the groups or individuals that can or can

be affected by an action and sorting them on the basis of the impact the actions will have on

them and the impacts they will have on the actions. The main aim of stakeholder analysis is to

develop cooperation between the project team and the stakeholders and, thus, ensuring successful

outcomes of the project. Examples of the key stakeholders of an organisation are directors,

government, creditors, employees, trade unions, community, owner, supplier, customers, etc.

Stakeholder analysis helps in formulating the marketing strategies effectively because it pays

enough consideration over the target customers, product development and promotions

(Legohérel and et. al., 2004). It also helps in optimizing production and satisfaction of the

employees by analysing their role in the organisation. Stakeholder analysis helps in motivating



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the employees by understanding their needs and interests. It leads to impress the community by

maintaining a favourable image in the community. It also helps in forming partnerships because

partners usually expect openness and integrity for the benefit of all those who are involved in the

business.

White Swan uses the Power/interest Matrix for the purpose of evaluating the level of

influence and power among the stakeholders. Following are the four quadrants of the said

matrix:



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The stakeholders that lie in manage closely quadrant possess high power and high interest

in the business. The stakeholders under this quadrant should be provided with enough work in

order to keep them engaged and great efforts should be done for their satisfaction. It includes the

owner, customer, creditors, etc. These stakeholders can affect the business to a great extent.

In the Keep satisfied quadrant, stakeholders possess high power and low interest. The

stakeholders under this quadrant should be provided with adequate work so that they don't get

bored with the work and remains satisfied simultaneously (Holjevac, 2008). It includes trade



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unions and the government. These can affect the business but do not have much interference or

interest in the business.

The stakeholders in the Keep Informed quadrant possess low power and high interest in

the business. These stakeholders should be provided with adequate information to ensure that no

major issue arise in the business. These people sometimes prove to be beneficial regarding the

details of the projects of the company. It includes suppliers and directors of the organisation.

In the Monitor quadrant, the stakeholders possess low power and low interest. The

stakeholders in this quadrant should be communicated properly but it should be ensured that they

are not bored with the excessive communication. The management pays minimum efforts for the

satisfaction of the stakeholders under this quadrant (Dwyer and et. al., 2009). It includes

employees and the community.

5.2 Triple bottom line

It is an accounting framework which includes three parts such as social, environmental

and financial. These three divisions are known as three Ps, people, planet and profit and are also

'known as three pillars of sustainability'. Most of the organisations including White Swan has

adopted this framework to evaluate their performance in a wide context. However, in traditional

business organisations, “bottom line” strategies was used which meant either profit or loss. But

in the modern era, triple bottom line framework is used.

People: - It refers to fair and advantageous business practices towards employees, community

and region in which a business entity corporate business (Mahon, Becken and Rennie, 2013).

The cited firm adopts this framework which ensure that it seeks to provide benefit to many

constituencies and also does not exploit or endanger any of them. Another major influence of



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Triple Bottom Line can be seen in the form of resisting every company to not to make used of

child labour and it also monitors all contracted firms for child labour exploitation.

Planet: - Planet means sustainable environmental practices followed by the firm. A triple bottom

line firm attempts to benefit the natural order as mush as possible and never tries to harm or

reduce environmental impact on the firm. A triple bottom line firm never produces harmful

products like weapons, toxic chemicals or batteries which contain dangerous heavy metals.

Profit: - It is the economic value which is created by the organization after reducing the cost of

all the inputs including cost of capital. Therefore, it is totally different from traditional

accounting definitions of profit (Rimmington, Williams and Morrison, 2009). This aspect needs

to be seen as the actual economic advantage gained by the host society. Therefore, the genuine




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triple bottom line approach cannot be understood as simply traditional corporate accounting

profit plus social and environmental consequences unless the profits of other entities are

enclosed as a social welfare.

5.3 Scope of business decision making to strategic plans

Strategic plans plays very crucial as well as influencing role in business decision making

process. Plans which are created by the firm are fixed for a long period but environmental

changes are changeable in frequent manner, therefore, the cited firm has to gain flexibility in its

operations. Procedures of the firm should be arranged in such a way that can fit in any

circumstances. However, planning impact most probably financial part because, financial

managers calculates the required amount of capital for a specific time period, in this situation, if

there is any internal or external change occurs, firm has to modify their capital in order to meet

requirement of the change (Perdue, Immermans and Uysal, 2004). For example, sudden climatic

changes like flood or earthquake can changes the perceptions of customers. In this type of

situations, firm needs to implement changes in its policies, procedures and decisions.

In nutshell, it can be said that decision making process of the firm is entirely based on

strategic planning of the firm. In any, decision are taken on the basis of planning. In the cited

firm also, management has to make effective decisions which fits the need and requirement of

the firm to meet their objectives. White Swan is the chosen firm, which is one of the oldest hotel

in the UK. Therefore, it can be understood that managers of the firm would be highly talented.

So, they will have numerous plans and policies into their minds regarding uncertainties. They

would have enough knowledge about tackling with situations of changes in decision making on

the basis of plans they have made (Dwyer and et. al., 2009). It can be said that if the firm makes

effective planning before initiating business or any other small project, management will not find

it difficult to achieve their goals due to strong planning.



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Conclusion

With the help of this report, it has been concluded that tourism and hospitality industries

have to tackle with number of problems on daily basis. And for coping up with all those issues,

they have to make effective planning and strategies which can easily help them to solve their

problems. Ethical issues have been broadly explained in this project through which it ha been

understood that tourism sectors have to keep control over its activities through following

numerous ethics in their business. It has also been concluded that business decision making and

strategic planning are closely interrelated with each other.



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References

Books

Becken, S. and Hay, J. E., 2007. Tourism and climate change: Risks and opportunities.

Multilingual Matters.

Brotherton, B., 2008. Researching hospitality and tourism: a student guide. Sage.

Buhalis, D. and Costa, C., 2006. Tourism management dynamics: trends, management, and

tools. Routledge.

Fennell, D. A. and Malloy, D., 2007. Codes of ethics in tourism: Practice, theory, synthesis.

Channel View Publications.

Fennell, D. A., 2006. Tourism ethics. Channel View Publications.

Gössling, S. and Hall, C. M., 2006. Tourism and global environmental change: Ecological,

social, economic and political interrelationships. Taylor & Francis.

Hudson, S., 2008. Tourism and hospitality marketing: a global perspective. Sage.

Jafari, J., 2002. Encyclopaedia of tourism. Routledge.

Middleton, V. T. and Clarke, J. R., 2012. Marketing in travel and tourism. Routledge.

Perdue, R. R., Immermans, H. J. P. and Uysal, M., 2004. onsumer psychology of tourism,

hospitality and leisure. CABI.

Rimmington, M., Williams, C. and Morrison, A., 2009. Entrepreneurship in the hospitality,

tourism and leisure industries. Routledge.

Ritchie, J. B. and Crouch, G. I., 2003. The competitive destination: A sustainable tourism

perspective. Cabi.

Silvers, J. R., 2009. Risk management for meetings and events. Routledge.



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Smith, M. and Duffy, R., 2003. The ethics of tourism development. Psychology Press.

Tribe, J., 2011. The economics of recreation, leisure and tourism. Taylor & Francis.




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Date post:	22-Jan-2018
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Sample Report on Ethics, Risk & Decision Making in Tourism & Hospitality

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