Corporate Social Responsibility and Financial Performance

This assignment requires students to investigate the relationship between corporate social responsibility (CSR) and financial performance. By examining case studies and research papers, students will analyze how CSR initiatives can impact business growth, profitability, and access to finance. The assignment will also explore the role of managerial efficiency, customer participation, and employee attitudes in CSR programs. Students are expected to provide a detailed analysis and conclusion based on their findings.

Sustainable Hospitality
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
1. Evaluation the extent to which the hospitality industry contributes to the issues...................1
2. Analysis the impact of the issues on the hospitality industry's profitability............................4
3. Evaluate the importance of Corporate Sustainability Management in the hospitality industry
......................................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Hospitality refers to the relationship between a guest and a host. It is one of the most
important industry where various hospitality units such as hotel, motel, restaurant and
amusement park etc. are working in order to earn profits. It comes under the service industry
which includes events, theme park, cruise line, travelling, food and drink service etc. (Lopes,
2016).
Sustainable hospitality management refers to the management of sustainability of the
hospitality industry who are consuming so many resources without worrying about the future
generation (Cheng, Ioannou and Serafeim, 2014). This lead industry to face environmental,
social and economic issues, which impact the profitability of the industry as well as societies.
Present report will highlight the evaluation of issues arise due to hospitality industry. It
will also highlight the impact of these issues on the profitability of the hospitality industry. It will
also evaluate the importance of Corporate Sustainability Management in the hospitality industry.
MAIN BODY
1. Evaluation the extent to which the hospitality industry contributes to the issues
Hospitality industry overview-
Hospitality sector in UK is broad category of areas within service industry that involves
food and drink service, lodging, theme parks, event planning, cruise line, transportation,
travelling and additional areas within tourism industry. Taking care of consumers is heart of
hospitality industry, clients service in this sector prepares hospitality managers to match and
exceed people expectations through quality and good services or products that is evident in all
of its operation, its plan and people. In short hospitality industry is wide group of businesses that
offers quality services or goods to its customers. Hospitality industry is very important as they
provide important facilities such as food, accommodation, lodging and other for clients, whether
they are on move for reasons of needs, Luxury or leisure. It is the major element in every
business trip and holiday plan and is thus essential to each customers and to organizations.
Sustainability is one of the main important problem recently facing world, hospitality industry
have historically had the dramatic environment effect through water and energy consumption,
durable products, use of consumable, hazardous waste creation and solid.
As Hospitality industry will grow more and more and give many opportunities to local and
residential people as employment which is quite beneficial and helpful for them. But due to their
growth there are many issues were arisen which is not appropriate for economy, people and
environment as it also affect people health.
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There are various issues which arise due to changing aspects of hospitality industry.
These issues are broadly divided into three parts -
Environmental Issues
Environmental issues are those issues which arise due to human activities and
negatively impact the biophysical environment. Example of environmental issues are such as -
global warming, acid rain, air pollution, urban sprawl, waste disposal, ozone layer depletion,
water pollution, climate change and many more which negatively impact the environmental
sustainability (Harper, Harper and Snowden, 2017). In other words Environmental problems is
harmful impacts of human actions on biophysical environment. Population, business expansion
and other expansions are the main reason behind environmental problems that create more
pollution and affect healthy atmosphere around people. It defines as issues with planets
systems such as water, air, soil etc. that developed as outcomes of human mistreatment and
interference of planet. Pollution is the main cause of different of other environmental concern,
including biodiversity and climate change.
Due to hospitality industry, biological issues are created. Biological diversity refers to the
varieties of plants and animals in the planet. Due to profitability in the hospitality industry,
companies and units are expanding their business by opening more or new branches which
lead to cutting of the tree, wastage of natural resources, so many consumptions of water and
increasing level of pollution in air, land, noise and water etc. These all impact the plants and
animals which in turn impact the biological diversity. Due to deforestation, species' natural
habitat and foods are getting destroyed which impact their health and living. These all impact
the ecosystem of the environment. It leads to change in the balance of ecosystem too which in
turn negatively impact the environmental sustainability. Due to biological diversity issues, there
is changing in climates which cause to happening of natural disaster. It also leads to pollute the
oxygen which impact the health of societies and species. It also helps in increasing global
warming too (Parnwell, 2018).
Rapid growth of hotels, restaurants and other business covered in hospitality industry
make negative impact on economy and country environment. Cutting down trees, land and
planet is essential to build buildings and produce wood for construction and other applicants,
logging activities kills tress which is potentially leaded to negative affects on environment and
ecosystem as whole. Companies or organizations under hospitality industry expand their
business for the purpose of increasing profit and enhancing productivity which helps to gain
profitability more than before. Due to expansions procedure most of the land and trees were cut
it down which is not appropriate for environment as spoil the whole. Planets and trees support to
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economy environment by providing fresh oxygen, climate amelioration, preserving oil, improving
air quality and many more things. Hospitality industry capital expansion process impact healthy
and well being living standards of people. Trees provide free air which is quite beneficial for
healthiness, cutting down planets, forest areas for construction is not appropriate and make
negative impact on environment.
Economic Issues
Economic issues are those issues which arise due to human wants & activities and
negatively impact the usage of resources which are scare.
Economic problems called central or basic economic issues, it asserts that economy's
finite assets is insufficient to satisfy people and all human needs and wants. Limited or scarcity
resources is one of the most common economic problems faced by UK economy. They operate
into scarcity because assets is limited, they are the community within unlimited demands.
Due to limited hospitality industry profit, lack of economy growth issues is created which
impact negatively on nation. Thus, if hospitality sector in some country cannot be able to
generate high revenue and profitability they will not be capable to improve economy standards
that makes barriers in economy growth and country development. Limited profitability cannot
allow hospitality sector to pay taxes on each of their business activities and international trade
procedure which is not appropriate for people. Due too constricted financial budgets and profit
margin organizations cannot pay heavy taxes on each duties and activities which they operate
in country that make negative image in marketplace and lower down the GDP of economy the
most. GDP- Gross Domestic Product is wide measurement of countries all over economic
activity, it is monetary value of all finished services and products produced within nations
borders in particular time period. It indicates to gauge well being of nation economy, due to
limited assets and money of hospitality sector it gets affected.
Limited profit does not permit organizations working within hospitality industry to hire
more applicants in company as it make negative effect the growth and sustainability of UK
economy.
Social Issues
Social issues are those issues which arise due to social factors and impact the societies
negatively as a whole.
Social problems is the issue that impact considerable number of individual within
community. It is distinguished from economic problems; however, some of these have both
economic aspects and social. Population growth, health consciousness, age distribution,
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customer preference changes, career attitudes, lifestyle structure changes, income distribution
and population trends are the factors included in social issues.
Due to limited funds and profitability, hospitality industry cannot be able to make some
innovations and creations within their business structure. It makes difficulties for customers to
switch form one place to other. This sector cannot supply clients good quality products or
services that makes many issues as for people who already plan their holiday. Due to limited
resources in hospitality sector guest cannot enjoy its holidays which also impact on business
profit margin, market share and financial budgets rather than before. Customers is group of
people and part of economy who purchase services or goods from businesses or shop. They
help to generate revenue, increase money, make market reputation and other things which
beneficial for hospitality industry as whole. If companies cannot be able to satisfy clients needs
it makes social issues in which people life styles get affected the most. When organizations
such as Hilton Hotel cannot offer the best quality products to consumer, people give low rating
to them. If they do not provide facilities according to current trends, people avoid visiting in that
place and get disappointed. They pay good amount to spent some time with their family and
friends that is spoiled due to poor services and lack of staffing.
2. Analysis the impact of the issues on the hospitality industry's profitability
There are various factors due to which hospitality industry has to faced economic, social
and environmental issues. These issues impact the hospitality industry's activities and
profitability. Impacts of these issues are as follows -
For the hotels, restaurants and another units under the hospitality industry, the economy
always plays an important role in determining the level of both personal and business
expenditures and spendings. In this industry and sector, global events have a major impact on
the fluctuations in international spending of hospitality units. This is one of the biggest
challenges facing by hospitality industry and its units. As soon as the demand for
accommodation and air travel will low, the total revenue and profitability will also be decrease
(Parnwell, 2018). This will lead to prices to be reduced. And after increasing rates to recover the
loss and costs is a difficult task.
Lack of labours, employees and workforces are one of the biggest challenges facing the
hospitality industry and its units which impact the profitability of the industry too. Due to decline
talented and qualified pool of suitable candidates, the shortage is becoming an issue. The
quality of the employees hired has a direct impact on brand reputation, revenue and overall
costs of the industry. The another impact of this challenge is that employees can not be
equipped to meet these hospitality jobs. Small workers are demanding jobs with a reputation for
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high salaries & wages with better working conditions & policies in the industry. This lead
industry to fulfil their demands which reduce their profitability.
Due to global economic crisis, well performed industry may not be able to survive which
impact the businesses running under the industry. Due to economic crisis and recession,
customers and employees lost their jobs which lead to reduce the consumptions of the
hospitality services. This impact the revenue and profitability of the companies and industry
(Aissa, S.B. and Goaied, 2016). Like this, economic issues discourage not only customers but
also hospitality units to spend too much because the revenue sources of the units are stop
which lead industry not to able to carry out its activities which impact the profitability of the
industry.
Although market pressure in today's economic environment has a significant impact on
the profitability of the industry and its units. There are various large number of institutions work
as financial intermediaries and financial units which have the significant impact on the
economy's operations of the industry. Apart from this, due to internationalization of operations of
hospitality industry helps in integrating the world economy and improving efficiency of the
industry but due to internationalization, so many small industrial units are not able to survive
which impact the industry's profitability and reduce the revenue & increase the operational costs
which is not good for the industry's growth (Makki, Singh and Ozturk, 2016).
It is considered that the hospitality industry is one of the largest sources of income and
foreign currency for many developed and developing countries as well as it is one of the largest
industry at the global level due to its versatility. This industry is one of the most profitable
service industries, which is widely acceptable as the main force in global economy. But
corporate and industrial performance depends upon the economic situations, conditions and
trends in this industry, which means that when the economy is in bull condition, profitability will
increase, but when the economy is in bear condition, it will decrease the profitability.
Due to negative impact of hospitality industry on social life, government are imposing
heavy tax and penalty which reduce the profitability of the industry as well as investment
opportunities too (McWilliams, 2015). Also, government is continuously changing in rules,
regulations and guidelines which is related to the hospitality industry, this lead industry to pay
heavy fees which reduce the profitability as well. In order to increase the profitability of the
companies, industry is paying low salaries, commissions, wages and bonuses which lead
employees to leave the companies which also reduce the profitability of the industry (Ahmad,
Salman and Shamsi, 2015).
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Due to high demand for the hospitality services by the customers, industry is consuming
so many resources which lead to problem of proper waste disposal. Due to not proper disposal
of wastage materials, various problems are arising such as converting of green land into barren
land, production of toxic substances due to plastics, gases from incineration and give off a foul
smell or leach into groundwater etc. These all increase the pollution level and affect the
ecosystem, environmental balancing system and communities' health etc. These all lead to
creation of opposition against the hospitality industry which affect the profitability and reduce it.
It also impacts the goodwill and growth of the industry as well.
3. Evaluate the importance of Corporate Sustainability Management in the hospitality
industry
Corporate Sustainability Management
Corporate Sustainability Management (CSR) is the combination of three words –
Corporate, Sustainability and Management (Crowther and Seifi, eds., 2018). Thus, for the clear
understanding of the term of Corporate Sustainability Management, there is a need to
understand the three terms individually. The meaning of these three terms are as follows -
Corporate
Corporate refers to the term which is related to the business, its group, its activities and
its operations. Basically corporate refers to the organization which is running as a single and
legal unit.
Sustainability
Sustainability refers to the term in which company is fulfilling their customers' needs and
wants as well as its own objectives with protecting, sustaining and enhancing the natural and
environmental resources.
Management
Management refers to the process of managing people, resources, activities and
procedures of the organization in order to achieve organizational gaols.
At last, Corporate Sustainability Management refers to the process of managing its
business activities and procedures in order to fulfil the needs of customers without harming
environment and its aspects along with the objectives of company.
Importance of Corporate Sustainability Management
Corporate sustainability is the best approach where aim is to create longer term
stakeholder value through implementation of business plan that centering on social, ethical,
environmental, economic and cultural dimensions of doing business (Grayson and Hodges,
2017). It is very important to manage corporate sustainability within business structure because
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it provides long term period benefits and help to retain in marketplace for so longer.
Sustainability management is required because it is the essential part of capability to
successfully balanced or maintain quality of business in international market. Any business
need to managed their corporate social responsibilities which is quite beneficial for them as
business growth. Companies need to contribute in social and environmental well being and
sustainability that helps to grow and improve economy situations within UK. Corporate
sustainability management give many opportunities and advantages to companies and support
to protect ecosystem and maintaining biodiversity (Tai and Chuang, 2014). Managing CSR is
very important as it contributes to make good reputation and high position in marketplace. The
importance of corporate sustainability management is to improve health of people, save money,
increase safety and protect environment around people. For example, if hospitality industry cut
tress less than before passing years they can be able to protect environment and reduce risk of
air population.
Hospitality Industry's Corporate Sustainability Management
Hilton Hotel working under hospitality sector and give their many facilities or services to
customer through contributing in CSR. With more than 4,600 holding and 759,000 rooms
company worldwide sets the shining example of CSR at higher volume in hospitality sector
(Zientara, Kujawski and Bohdanowicz-Godfrey, 2015). Corporate social responsibility is the
progressively essential characteristics of corporate all around the world. It is the best way in
which organization recognise its environmental and social affect and improve and create
initiatives that benefits community. At Hilton sustainability and efficiency is significant parts of
business structure. They continuously work to make developments and improvement and
achieve knowledge from other conspirators with successful Corporate social responsibility
reputations. Whole food and swapped energy management of Hilton team make plan to achieve
fresh perspectives on how to improve and good conserve natural assets. Its is very important for
Hilton Hotel to managed their Corporate sustainability and perform well in it because it is
essential and beneficial for its growth as well as economy well fair (Flammer, 2015). Company
identified the demand for hotel room upgrades such as door gasket replacements, energy
efficiency LED lights, and plan to stage out inefficient and inappropriate room appliances that
make negative impact on CSR. Energy is the third or second biggest cost of averaging hotel. In
taking these simple stage, firm increasing financial and environmental efficiency.
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CONCLUSION
The present study has been concluded that hospitality industry contribute to many
issues such as economic issue, social and environmental issues that impact on people and
country development and sustainability. Lack of effective and skilled workforce, labour and
workers are the main problems facing by hospitality industry that impact on their profitability and
productivity the most. Lack of knowledge employees make more difficulties for this sector in
which they cannot be able to serve its best and better than its competitors in marketplace.
Furthermore, CSR is essential for hospitality industry as well as Hilton Hotel, they must
managed their work by following the norms within corporate social responsibilities which is
beneficial and appropriate for business growth and long term success.
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REFERENCES
Books And Journals
Ahmad, N., Salman, A. and Shamsi, A., 2015. Impact of financial leverage on firms’ profitability:
An investigation from cement sector of Pakistan. Research Journal of Finance and
Accounting. 6(7). pp.2222-1697.
Aissa, S.B. and Goaied, M., 2016. Determinants of Tunisian hotel profitability: The role of
managerial efficiency. Tourism Management. 52. pp.478-487.
Cha, M.K., Yi, Y. and Bagozzi, R.P., 2016. Effects of customer participation in corporate social
responsibility (CSR) programs on the CSR-brand fit and brand loyalty. Cornell
Hospitality Quarterly. 57(3). pp.235-249.
Cheng, B., Ioannou, I. and Serafeim, G., 2014. Corporate social responsibility and access to
finance. Strategic management journal. 35(1). pp.1-23.
Crowther, D. and Seifi, S. eds., 2018. Redefining Corporate Social Responsibility. Emerald
Group Publishing.
De Grosbois, D., 2016. Corporate social responsibility reporting in the cruise tourism industry: a
performance evaluation using a new institutional theory based model. Journal of
Sustainable Tourism. 24(2). pp.245-269.
Flammer, C., 2015. Does corporate social responsibility lead to superior financial performance?
A regression discontinuity approach. Management Science. 61(11). pp.2549-2568.
Grayson, D. and Hodges, A., 2017. Corporate social opportunity!: Seven steps to make
corporate social responsibility work for your business. Routledge.
Harper, C., Harper, C.L. and Snowden, M., 2017. Environment and society: Human
perspectives on environmental issues. Routledge.
Lopes, M., 2016. The hospitality industry. (Doctoral dissertation).
Makki, A.M., Singh, D. and Ozturk, A.B., 2016. HotelTonight usage and hotel
profitability. Journal of Hospitality and Tourism Technology. 7(3). pp.313-327.
McWilliams, A., 2015. Corporate social responsibility. Wiley encyclopedia of management. pp.1-
4.
Parnwell, M.J., 2018. Environmental issues and tourism in Thailand. In Tourism in South-East
Asia. (pp. 304-320). Routledge.
Singal, M., 2014. Corporate social responsibility in the hospitality and tourism industry: do family
control and financial condition matter?. International Journal of Hospitality
Management. 36. pp.81-89.
Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness. 6(03). p.117.
Zientara, P., Kujawski, L. and Bohdanowicz-Godfrey, P., 2015. Corporate social responsibility
and employee attitudes: evidence from a study of Polish hotel employees. Journal of
Sustainable Tourism. 23(6). pp.859-880.
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