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  1. 1. Lecture 10 Professional Ethics From Malpractice to Service IntegrityHTM2002 Freshman Seminar
  2. 2. Learning Outcomes By the end of this lecture, YOU should be able to:-• Discuss the significance of business ethics in hospitality and tourism industry• Explain the concept of Corporate Social Responsibility in the globalized hospitality and tourism environment 2
  3. 3. SocialResponsibility of Business ~A Controversy ?
  4. 4. Milton Friedman (1970) Do YOU agreewith Friedman ?Why ? Why Not ? “” The Social Responsibility of Business is to Increase its Profits
  5. 5. Social Responsibility of Business Friedman 1970• Corporate Executives/Managers – Agency relationship based on contractual arrangements – Agent serving the interests of his/her principals, who are the shareholders owning the corporation – Responsible for his/her employer – Make as much MONEY as possible while conforming to the basic rules of the society
  6. 6. Failure in Fulfilling the Agency Relationship Friedman 1970• Reduce returns to stockholders – Spend stockholders’ money• Raise the price to customers – Spend customers’ money – Lower the wages of some employees• Impose “tax” – Should be a governmental function
  7. 7. Market Mechanism: An Ideology of Capitalism 7
  8. 8. Market Mechanism: A Political Doctrine
  9. 9. Market Mechanism: Ideal Free Market• Resting on private property – No individual can coerce any others – All kinds of co-operation are voluntary – All parties will benefit from such co-operation – Otherwise, they need not participate
  10. 10. Market Mechanism: Ideal Values and Society Are these ideal values upheld ?
  11. 11. Political Principles What is the real world? Universal suffrage ?How representative is a “Representative” government ? Clout of large corporations ? …… etc ?
  12. 12. What is “Legal”• Legality: A matter of laws – Minimum age of work ? – Rigidity of work safety procedures ? – Employee discrimination ? – Minimum wages ? – Strategic alliances of airlines ? – Overbooking hotel rooms ? – Level of pollution allowed ? – Accounting practices ?• Preventive laws vs Reactive laws
  13. 13. Bacon Contained Toxic Chemicals found in Burger King in Taiwan Apple Daily, 15th June 2011, A19 台灣 Burger King 煙肉含瘦肉精 港拒回應食材是否同樣來自美國
  14. 14. Ethics vs Legality 14
  15. 15. Ethics
  16. 16. Ethics: Definition“A set of moral principles and values that people use to answer questions about right and wrong” Walker, 2009, p.485 16
  17. 17. How Ethics Are Formed Walker 2009 Ethics 17
  18. 18. Why Ethics is Important in Hospitality and Tourism Industry• Profits vs Social Responsibilities – Short-term profit maximization vs Long-term sustainability• Multiculturalism – Workforce and customers of different socio-cultural backgrounds having different ethical standards• Activism – Consumers become more concerned about “rights”, “ethics”, “environmental conservation”, etc• Recruitment and retention of talents – Employees become more concerned about the ethical behaviors and corporation social responsibilities of the companies• Trivial matters easily being overlooked, but have serious consequences 18
  19. 19. Corporate SocialResponsibilities
  20. 20. Corporate Social Responsibility: Definition“A business’ intention, beyond its legal and economic obligations, to do the right things and act in ways that are good for society” Robbins & Coulter, 2012, p.125
  21. 21. Corporate Social Responsibility: Obligations• Extend beyond the statutory obligation to comply with legislation• See organizations voluntarily taking further steps to improve the quality of life for employees and their families as well as for the local community and society at large
  22. 22. Corporate Social Responsibility:Responsible for the Impacts on Stakeholders
  23. 23. An Example of Corporate Social Responsibility Hotel Icon: Charity Moon Cakes 23
  24. 24. Codes of Ethics
  25. 25. Code of Ethics for the Hospitality and Tourism Industry … 1 Ethics of Hospitality Management by Stephen Hall (Quoted in Walker, 2009, p.486)1. We acknowledge ethics and morality as inseparable elements of doing business and will test every decision against the highest standards of honesty, legality, fairness, impunity, and conscience2. We will conduct ourselves personally and collectively at all times so as to bring credit to the hospitality and tourism industry3. We will concentrate our time, energy, and resources on the improvement of our own products and services and we will not denigrate our competition in the pursuit of our success4. We will treat all guests equally regardless of race, religion, nationality, creed, or sex 25
  26. 26. Code of Ethics for the Hospitality and Tourism Industry … 2 Ethics of Hospitality Management by Stephen Hall (Quoted in Walker, 2009, p.486)1. We will deliver all standards of service and product with total consistency to every guest2. We will provide a totally safe and sanitary environment at all times for every guest and employee3. We will strive constantly, in words, actions, and deeds, to develop and maintain the highest level of trust, honesty, and understanding among guests, clients, employees, employers, and the public at large4. We will provide every employee at every level all the knowledge, training, equipment, and motivation required to perform his/her tasks according to our published standards 26
  27. 27. Code of Ethics for the Hospitality and Tourism Industry … 3 Ethics of Hospitality Management by Stephen Hall (Quoted in Walker, 2009, p.486)1. We will guarantee that every employee at every level will have the same opportunity to perform, advance, and be evaluated against the same standard as all employees engaged in the same or similar tasks2. We will actively and consciously work to protect and preserve our natural environment and natural resources in all that we do3. We will seek a fair and honest profit, no more, no less Do YOU think this Code of Ethics are sufficient ? Why ? Why Not ? 27
  28. 28. Global Code of Ethics for Tourism World Tourism Organization (UNWTO)• Set a framework of reference for the responsible and sustainable development of world tourism Minimize the negative impacts of tourism on the environment and on cultural heritage Maximize the benefits for residents of tourism destinations 28
  29. 29. Global Code of Ethics for Tourism: Principles … 1 World Tourism Organization (UNWTO) http://www.unwto.org1. Tourisms contribution to mutual understanding and respect between peoples and societies2. Tourism as a vehicle for individual and collective fulfillment3. Tourism, a factor of sustainable development4. Tourism, a user of the cultural heritage of mankind and contributor to its enhancement5. Tourism, a beneficial activity for host countries and communities 29
  30. 30. Global Code of Ethics for Tourism: Principles … 2 World Tourism Organization (UNWTO)• Obligations of stakeholders in tourism development• Right to tourism• Liberty of tourist movements• Rights of the workers and entrepreneurs in the tourism industry• Implementation of the principles of the Global Code of Ethics for Tourism Do YOU think this Code of Ethics are sufficient ? Why ? Why Not ? 30
  31. 31. A Reflection: Is the Codeperson’s ethics are shaped to one’s value If a of Ethics Sufficient by Ensure Ethical Practices in Hospitality necessary for the hospitality and systems, it is and Tourism Industry tourism organizations to initiate a fundamental change in the organizational cultures to value a Culture of Ethical Behavior Ethics 31
  32. 32. Examples of CorporateSocial Responsibility in Hong Kong ~Caring Company Scheme
  33. 33. Caring Company Scheme … 1 http://www.caringcompany.netMission• To build a cohesive society by promoting strategic partnership among businesses and social service partners and inspiring corporate social responsibility through caring for the community, employees and the environmentObjectives• To raise public awareness of good corporate citizenship demonstrated by the business and public sectors and their contribution to a caring community• To motivate strategic partnership initiatives among the public, business and non-profit organizations• To recognize organizations which demonstrate good corporate citizenship 33
  34. 34. Caring Company Scheme … 2 http://www.caringcompany.netAdjudication scopes for “Caring Company”• Recognizing private companies which demonstrate good corporate citizenshipCaring for the communityCaring for employeesCaring for the environment 34
  35. 35. Caring Company Scheme … 3 Caring for the community Volunteering Giving Mentoring Employing vulnerable 35
  36. 36. Caring Company Scheme … 4 Caring for employees Recognize employees Employee safety Employee wellness Employee family responsibility Work-life balance Well-established communication mechanism 36
  37. 37. Caring Company Scheme … 5 Caring for the environment Successful implementation of environmental protection practices Eco-friendly manufacturing processes Reduce carbon emissions Green partnership Environmental label or other recognition 37
  38. 38. Caring Company Scheme … 6 http://www.caringcompany.netAwardees for “5 Years Plus Logos” Transportation (Some Examples) Cathay Pacific Airways Ltd China Aircraft Services Ltd Hong Kong Dragon Airlines Ltd 38
  39. 39. Caring Company Scheme … 7 http://www.caringcompany.netAwardees for “5 Years Plus Logos” Food and Beverage (Some Examples) Cathay Pacific Catering Services (HK) Ltd McDonald’s Restaurants (HK) Ltd Morton’s of Chicago, The Steakhouse Pizza Hut HK Management Ltd The Stonegrill 39
  40. 40. Caring Company Scheme … 8 http://www.caringcompany.netAwardees for “5 Years Plus Logos” Convention, Exhibition and Event Management (An Example) Hong Kong Convention and Exhibition Centre (Management) Ltd 40
  41. 41. ReferencesEllis, D. (2012). Becoming a master student. Boston, MA: Wadsworth Cengage Learning. – Chapter 7 & 10Friedman, M. (1970, September 13). The social responsibility of business is to increase its profits. The New York Times Magazine.Robbins, S. P., & Coulter, M. (2012). Management. Upper Saddle River, NJ: Pearson Education Inc. – Chapter 5Walker, J. R. (2009). Introduction to hospitality. Upper Saddle River, NJ: Pearson Education Inc. – Chapter 14 & 16World Tourism Organization (UNWTO). (2011). Global Code of Ethics for Tourism. Retrieved June 18, 2011 from http://www.unwto.orgYaman, H. R. (2003). Skinner’s naturalism as a paradigm for teaching business ethics: A discussion from tourism. Teaching Business Ethics, 7, 107-122..
  42. 42. Professor for A Day
  43. 43. Professor for A Day Ms Wendy LukSenior Manager (Caring Company Scheme), Sector Development and Partnership, The Hong Kong Council of Social Service“Practices of Corporate Social Responsibility in the Hong Kong Hotel and Tourism Industry” 43
  44. 44. BreakSource from Creative Commons: 44