Management in the Hospitality Industry, Ethics in Decision Making - Essay Example

Management in the Hospitality Industry ETHICS IN DECISION MAKING Introduction The element of human behavior which takes into account the “rightness or wrongness” of people’s actions and the impact of their deeds forms the basis for most of the critical issues confronted today in the business world including the hospitality industry. The key issues regarding right versus wrong behavior form ethical issues because ethics examines the extent to which the impacts of acts are beneficial to the individual, the organization, the industry and society as a whole. Decision-making is defined as the process of identifying and selecting alternative solutions that can help to achieve specific intended objectives. It is also referred to as problem solving, strategy making, strategy formulation, and planning. The decision criteria used in selecting from alternatives are “cost, profit, danger or benefit” of each choice (Kusluvan, 2003: 631). Decision-making is one of the main responsibilities of managers in hospitality organizations and may be undertaken at the individual, collective or organizational levels. In the international industry including that of hospitality, there is increasing complexity of decisions being made by management. Hence there is greater need for managers to consider the ethical implications of their decisions, and the associated impact on the various stakeholders. The purpose of this paper is to examine how ethical decision making and the importance of good corporate citizenship has impacted on the management practices within the hospitality industry. Discussion In all the critical issues related to the contemporary hospitality industry, the core element is ethics or judgments regarding right or wrong behavior. However, the reality of hospitality operations make the application of ethical prinicples difficult. Hence, it is essential to develop ethical orientation in all dimensions of hospitality management for the purpose of ensuring ethical decision making. For improving the quality of the ethical decision-making process, the management of the hospitality organization should answer to themselves, particular questions related to the decision. The questions to be answered would be whether the decision to be taken would violate the rules and regulations, whether anyone would get hurt because of the decision, how the management would feel if the particular decision were to be made public through the media, how the decision makers would feel to be at the receiving end of the implications of the decision, and their own gut feeling regarding the correct decision that needed to be taken. The above questions if posed by the decision makers to themselves, can help to evaluate the extent to which the decision would prove to be an ethical one. Kusluvan (2003: 641) confirms the importance of self-questioning. He adds that during all the stages of the decision making process, an open and fair dialogue with all the stakeholders would increase ethical decision-making. Ethics in hospitality management play a crucial part in various areas. One example is the degree of truth in representation of menus with claims of high standards of the products. Further, in the competitive arena of hotel marketing and sales of rooms, facilities and services, ethical dilemmas such as overbooking of rooms to ensure the highest possible occupancy rate involves lying to potential guests by guaranteeing a non-existent room. Ethics is involved particularly in the impact of goal-oriented behavior such as business activity, hence much of the behavior of managers in the hospitality industry is related to ethical considerations. Whitney (1990: 59) agrees that this link between business behavior and ethical considerations especially “holds true in the hospitality industry where most critical issues have strong ethical components”. Other serious ethical issues include the acceptance of bribes and gifts from suppliers, evading the payment of governmental taxes, lack of interest in installing and maintaining adequate safety and security systems, and attracting experienced employees from competitors’ staff. In the area of liquor liability, limiting the service of alcoholic beverages to guests to prevent inebriation and consequent danger to themselves if drinking and driving after they leave the hotel premises; and whether different standards should be applied to guests who will stay within the hotel. Due to adverse occurrences such as road accidents due to inebriation, these ethical issues are taken to the courts, leading to increase in the insurance of restaurants by insurance companies. The employment of labour is a crucial operating expense in the hospitality industry. There is a high rate of turnover of employees and a strong inclination to maximize the services of an employee in order to maintain labor costs at the lowest possible level. This is supported by Whitney (1990: 60), who adds that this leads to the necessity for employees to protect themselves from exploitation regarding working hours, pay, and benefits such as provision of uniforms. It is crucial that managers in the hospitality industry recognize that the philosophical dimension of a business problem is more difficult to quantify, and that ethical problems may be more complex than technical ones. Moreover, categories describing people’s ethical orientations are complex, and codes of ethics are generally used as policy statemens for the purpose of public relations. From their research study, Whitney (1990: 66) found that the hotel managers in the sample had strong traditional values. They were not philosophical about ethical issues, but based their behavior more on personal values developed from a young age. However, when the demands of the business are not in harmony with their traditional values, managers were found to give the responsibility for making tough ethical decisions to the law which became the ethical consience of the management. Professional associations define codes which form the basis for maintaining professionalism and integrity among members of the profession. Improving the code of ethics of individual corporations including hotels have come under focus in recent times. Professional codes and ethics have taken on greater significance in contemporary times, since employee loyalty towards individual organizations is declining, while employee loyalty towards their profession is increasing. As compared to other hospitality associations, the Meeting Professionals International (MPI) and The American Society of Association Executives (ASAE) advance the most comprehensive and specific professional codes for implementation by the hospitality industry. “The MPI Principles of Professionalism and the ASAE Standards of Conduct provide thorough and useful examples of existing codes of ethics in the hospitality industry” (Coughlan, 2001: 157), and the codes of these two hospitality associations address each of the four characteristics necessary for ethics in management: justice, integrity, competence and utility. Several organizations including hotels use ethical codes as a way of articulating ethical policies. Though ethical codes are not a solution to unethical management decision making, codes help to manage the hospitality industry’s culture and ethical values of employees. Codes can be strategic management tools in attempting to institutionalize ethics as an inherent part of the industry’s operations. How these values are communicated to employees in the organization determine the effectiveness of the ethical codes. Research conducted by Stevens (1997: 270) confirmed that ethical codes are being used by hospitality organizations to express corporate values through their decision making in various areas of management. Corporate ethical decision making in the area of employee recruitment and selection (Woodside et al, 2001: 225) should ensure that no discrimination is allowed in the selection and employment of staff, whether on the basis of race/ ethnicity, age, gender, disability, or sexual orientation. Diversity in the hospitality organization would not only ensure employment for minority groups, but also help the organization become socially responsible. Similarly, ethical decisions need to be taken regarding recycling of hotel operations waste, pollution control, energy consumption control and green consumerism in purchase of supplies in the routine operations of the hospitality organization. This would entail allocating collection points for used bottles, newspapers, cans and other recyclable items to reduce costs and disposal of waste; pollution control by means of ensuring that the premises of the hotel have plenty of trees and greenery which emit oxygen and thus purify the environment; control energy consumption by using solar-powered heating systems as far as possible; and post notices for guests to switch off electric lights and gadgets when they are not required; and green consumerism through purchase of organically grown fruits and vegetables, fair trade products which do not exploit third world labor, and items produced by factories that use environmentally sustainable production techniques. The formulation of clear objectives and policies helps to develop the culture of the hotel based on a formal frame of reference for decisions in various situations. Concurrently, a common organizational culture or philosophy based on several rules, beliefs and traditions also play an important part in decision making. Philosphies related to ethical standards help to guide the hotel’s management and staff in their dealings with guests, suppliers and other agencies. Examples of how the philosophy and culture of a hotel can affect its decisions in various areas are: expressing a helpful attitude to guests who cannot be accommodated due to being fully booked, by suggesting alternatives; admitting to suppliers if any mistake in giving the correct specifications had been committed; and treating the local authority inspector with courtesy and making his work easier by providing full cooperation. At the same time it is important to refrain from speaking in a disparaging manner about competitors to guests; and not recruit staff by withholding important information which may affect their decision to join the organization. Medlik & Ingram (2000: 33) believe that the management should be wary of accepting gifts from suppliers who try to influence their decision towards finalizing a contract with them for supplies. Other philosphies can also drive organizational culture and form the basis for management ethical decision making towards operational standards, such as impeccable hygiene and cleanliness. This approach leads to initiatives from all employees to maintain high standards of cleanliness in all aspects of the hospitality organization. Similarly, the management’s belief that employees can contribute richly to the conduct of the hotel and have a right to be consulted in matters that concern them, can ensure employee participation in decision-making in the hotel’s management and operations. However, this provision of freedom of expression can sometimes lead to employees registering their opposition to management’s philosophies, either individually or in a collective form. Lashley & Lee-Ross (2003: 58) and Laws & Prideaux (2006: 138) state that opposition and politics within the hospitality organization usually concerns the allocation of scarce resources, the distribution of power, and identification of whose interests are being taken care of. These views are taken into account in decision-making by a democratic management. Further, the law or policies upheld by regulatory bodies also influence the organization’s philosophy. According to Medlik & Ingram (2000: 34), both policies and philosophies are codes which determine the approach and guide the management in taking ethical decisions. Conclusion This paper has highlighted ethical decision making in hospitality management. The increasingly complex decisions that hospitality management is required to take in the international industry necessitates the consideration of the ethical dimension of the decisions including impact on the employees, the guests, the suppliers and other stakeholders, as well as the industry’s sustainability and corporate responsibility. For improving existing codes of ethics of professional associations in the hospitality industry and for raising the standards of the industry, Coughlan (2001: 157) suggests that a certification program should be incorporated into them. Guidelines that are formulated for ethical decision making in management should be enforced by means of specific procedures, and revised when necessary in order to keep up with the increasing complexity of decisions that managers are required to take in various dimensions of their work. The future implications of the law being given the responsibility of regulating ethical issues in the hospitality industry are that future code of ethics in the industry may consist more of legally imposed regulations rather than management’s self-generated or self-imposed industry ethical norms (Whitney, 1990: 67). Hence, the recommendations to the hospitality industry management would be to base their decision making on recognition of ethical problems for what they are; develop a personal ethical philosophy and lead by highly principled example; demand ethical behaviour from subordinates; reward ethical behavior and act firmly when it is lacking; exercise sensitivity in dealings with employees; ensure that staff and management respect the law upheld by regulatory agencies; however, the responsibility of ensuring ethical management practices should not be relegated to the law, but should be ensured by initiatives taken by all employees, including those at higher levels than the manager in the corporate hierarchy. The specific ethical issues that confront individuals related to the hospitality industry need to be further examined, for which required research should be carried out to explore the relevance and effectiveness of existing professional codes. This will help in developing approaches for improving ethical decision making by hospitality industry management in the future. For ethical decision making at optimal levels, several significant meaures can be adopted, such as ethics training, ethics audits, ethics accountability and provision of hotlines, as well as appointment of ombudsmen to deal with complaints in ethical issues. References Coughlan, R. 2001. An analysis of professional code of ethics in the hospitality industry Hospitality Management, 20: 147-162. Lashley, C. & Lee-Ross, D. 2003. Organization behavior for leisure services. Massachusetts: Butterworth-Heinemann. Laws, E. & Prideaux, B.R. 2006. Tourism crises. New York: The Haworth Press. Kusluvan, S. 2003. Managing employee attitudes and behaviors in the tourism and hospitality industry. New York: Nova Publishers. Medlik, S. & Ingram, H. 2000. The business of hotels. Massachusetts: Butterworth-Heinemann. Stevens, B. 1997. Hotel ethical codes: a content analysis. International Journal of Hospitality Management, 16 (3): 261-271. Whitney, D.L. 1990. Ethics in the hospitality industry: with a focus on hotel managers. International Journal of Hospitality Management, 9 (1): 59-68. Woodside, A.G., Mazanec, J.A. & Crouch, G.I. 2001. Consumer psychology of tourism, hospitality and leisure. Cambridge: CABI Publishing. Read More