Ethical Decision Making Scenario in the Hotel Industry

Ethical decision making is vital criteria for tourism and hospitality industry, as these along with business practices help in enhancing brand image. Every organization belonging to tourism and hospitality industry needs to follow a particular model regarding ethical decision making in order to make effective decision. This essay focuses on analysis of an ethical decision making scenario through transitional ethical business model and its barriers.

As opined by Basak, Liu and Law (2014) due to increase level of tourism and business travels, hotel industry is facing stiff competition as large numbers of hotels are evolving to take advantage of growth in tourism industry. As result of stiff competition, there is very little margin for error in industry and hotels are coming up with various new innovative ideas and schemes to increase their profitability. In order to enhance their profitability and stay competitive, hotels are taking various strategic decisions which at times are perceived as un-ethical in nature but they tend to overlook as those decisions creates positive outcomes for business. One such ethical decision making scenario which may come in hotel industry is regarding relationships with their suppliers. As stated by Ayoun, Rowe and Yassine (2015) hotels aim to source raw materials from their suppliers at lowest possible cost so that they can generate greater profit from sale of their products and while sourcing, they only verify quality standards of raw materials so that it complies with demands and requirements of their customers and tend to avoid verifying other processes, which are associated with operations of suppliers as they are only concerned with sourcing of raw materials at lowest possible cost. As stated by Valentine, Godkin and Mandabach (2014) after detailed investigation, it has been found that in order to supply raw materials to hotels, at lowest possible cost, many suppliers employ various un-ethical business practices such as employing child labour, under-paying their workers and depriving them from rewards and benefits. As responsible and ethical corporate entity, it is duty of hotels to source raw materials from suppliers who are ethical in nature and practices, even if it involves greater acquisition costs and lesser profit margins.

Above mentioned scenario acts as barrier in ethical decision making of hotels and it can be categorized as overvaluing outcomes which describes that individuals and organization tends to give a pass to un-ethical behaviour if outcome is positive. In context of above situation it can be stated that hotels often tend to pass this sort of un-ethical decision processes of suppliers as outcomes created are positive for hotels in form of increased profitability. Therefore, it creates barrier for hotels in ethical decision making process.

Overvaluing Outcomes and Its Barriers to Ethical Decision Making

As stated by Ogunyemi and Laguda (2016) in order to eliminate such type of barriers in ethical decision making process, hotels need to examine both their good and bad decision for their ethical implications.

The traditional ethical model of decision making consists of various steps which help in taking an ethical decision by analysing outcomes. The analysis of above situation based on transition model is as follows:

Identifying problem- the problem which is associated in above situation is that whether hotels should continue to source raw materials from un-ethical suppliers at low costs in order to maintain their profitability or discontinue doing so even if it involves greater costs and lesser profitability.

Identifying potential issues involved- the potential issues involved with suppliers are that many of them follow un-ethical business practices such as employing child labour and under-paying their workers in order to sell their materials to hotels at low cost.

Reviewing relevant ethical guidelines- review of relevant ethical guidelines states that no organization should employ child labour to decrease operating cost of their businesses and every business must also pay adequate salary and wages to their staffs based on specific standards.

Knowing relevant laws and regulations- relevant laws and regulations suggests that many countries have banned child labour and have imposed strict regulations regarding Child Labour Prevention and Protection. Every country has also in place various laws regarding equal pay and fair pay of the individuals based on economic standards of country.

Obtain Consultation- it is very necessary for hotels to obtain consultation from industry experts and also from various industrial associations in order to take decision which promotes organization as ethical one.

Consider possible and probable courses of actions- The possible and probable courses of actions which can be undertaken are continuing contract with existing supplier without taking any initiative to stop un-ethical behaviour or cancelling contract with supplier and continuing only after it has adopted ethical business practices in their day to day operations.

Consequences of probable courses of actions- The consequence of continuing contract with existing supplier without taking any initiative to stop un-ethical behaviour results in lower acquisition costs and higher profitability but also leads to negative brand image. The consequence of cancelling contract with supplier will lead to higher costs and lesser profitability but increased reputation in market. The consequence of continuing contract with existing supplier after it has adopted ethical business practices will lead to increased costs and limited profitability but will help in enhancing relationships with supplier in long run.

The Traditional Ethical Model of Decision Making

Deciding on what appears to be the best course of action- the best course of action which can be taken is cancelling contract with supplier though it will lead to increased costs and lesser profitability but will help in enhancing corporate image of hotel, which will prove beneficial in long run.

The above mentioned model can be considered as the most helpful model regarding ethical decision making as the above mentioned model of ethical decision making helps in taking the most ethical decision by analysing all the activities and consequences which are associated with the decision making process.

It is very useful for an individual to understand the idea of unintended consequences and complex adaptive system while making large broad decisions as these are the two vital points which helps an individual in taking decisions which are large and broad in nature.

As stated by Lin and Pantano (2015) unintended consequences are defined as the outcomes which are not the ones which are foreseen and intended for a purposeful action. There are various causes of unintended outcomes such as ignorance, errors in analysis, immediate interests over long term interests, basis values which may require or prohibit certain actions even if the long term result might be unfavourable and self-defeating prophecy. The various types of un-intended consequences are unexpected benefit, unexpected drawback and perverse results. Therefore it is very important for an individual to take into account various types of unintended outcomes when takin a long broad decision as it allows the individual to prepare an action plan in advance in case of occurrence of unintended outcomes so that it does not harm the intended outcomes associated with the results.

A complex adaptive system is defined as a system in which an ideal understanding of the individual parts does not automatically convey a perfect understanding of the behaviour of the whole system which means that the behaviour of the ensemble is not predicted by the behaviour of the components and such system may be open and it may be difficult or impossible the system boundaries. As stated by Hinzey (2016) it is very important for an individual to take into account the complex adaptive system into consideration while making a long broad decision as the there are various elements or entities associated with the decision is being taken as the ideal understanding of any one entity does not automatically convey a perfect understanding of the entire system, associated with the decision making. Therefore the decision maker has to take into account the consequences of each of the entities of the decision process based by individually analysing each of the entities and its associated behaviours, so that an effective decision is being taken. Therefore an individual should take into account unintended consequences and complex adaptive system while taking a long and broad decision.

Thus it is clearly observed that there are various barriers to ethical decision making process in an organization and organizations need to identify the type of barrier and accordingly implement strategy to eliminate such barriers. It is also clear that an individual must take into account unintended outcomes and complex adaptive system into considerations while taking broad decisions.

References

Ayoun, B., Rowe, L., and Yassine, F. (2015). Is workplace spirituality associated with business ethics? International Journal of Contemporary Hospitality Management, [Online] 27(5), 938-957. Available at doi:https://dx.doi.org/10.1108/IJCHM-01-2014-0018 Accessed as on 24/11/2018

Basak, D. G., Liu, W., and Law, R. (2014). Can setting hotel rate restrictions help balance the interest of hotels and customers? International Journal of Contemporary Hospitality Management, [Online] 26(6), 948-973. Available at doi:https://dx.doi.org/10.1108/IJCHM-01-2013-0020 Accessed as on 24/11/2018

Hinzey, A. L. (2016). Exploring how complexity leader behaviors shape the connectivity of agents within a complex adaptive system: A case study. Business Premium Collection. [Online]  Available at https://search.proquest.com/docview/1778511334?accountid=30552 Accessed as on 24/11/2018

Lin, W., and Pantano, J. (2015). The unintended: Negative outcomes over the life cycle. Journal of Population Economics, [Online] 28(2), 479-508. Available at doi:https://dx.doi.org/10.1007/s00148-014-0530-z Accessed as on 24/11/2018

Ogunyemi, K., and Laguda, E. (2016). Ethics, workforce practices and sustainability by multinationals in nigeria. Worldwide Hospitality and Tourism Themes, [Online] 8(2), 158-181. Available at https://search.proquest.com/docview/1826811358?accountid=30552 Accessed as on 24/11/2018

Valentine, S., Godkin, L., and Mandabach, K. (2014). Ethical employment context and ethical decision-making in hospitality organizations. Journal of Quality Assurance in Hospitality & Tourism, [Online] 15(3), 227. Available at https://search.proquest.com/docview/1552877553?accountid=30552 Accessed as on 24/11/201