Csr Drivers In Hilton Hotel

Published Date: 02 Nov 2017

Introduction

Under the pressure of globalization, corporations have to confront with a great deal of challenges. Especially for those corporations operating international business, it is a key time to take corporate social responsibility into serious consideration so as to develop sustainably. As a matter of fact, many corporates ranging from manufacturing industry to service industry have been aware of the importance of corporate social responsibility and some have even delivered corporate social reports annually in recent years. This trend illustrates clearly that the competence among the corporates worldwide currently is not only restricted to the annual revenues but also the capabilities of growing healthy with the mind of environment and society. This paper is dedicated to study the application of corporation social responsibility in those international corporate. Firstly, in terms of the sufficient literature review, the concepts and reviews of CSR could be discussed and summarized. Secondly, take Hilton Hotel as a typical case, this paper would be emphasis on analyzing the specific green policies of its social performance. Finally, several suggestions to build the Hilton Green better would be presented.

Literature Review

In front of an ever-changing global market, it is indispensable for corporations to reconsider their role in the world including their impact on the social environment (Gunther, 2005). There are rich academic theories and research on the field of the relationship between the corporate and society.

The definition of CSR

The Definition of corporate social responsibility has a long history, which can be traced back into the beginning of 1950s (Carroll, 1999). Bowen (1953) forwarded his belief related to CSR, stating that CSR involves the business policies, decisions, objectives and values affected by the need of the society in that age. Then the definitions after 1950s and 1960s did not vary much. In the light of Carroll’s view (1999), it is just evolved and comprehended a little with the change of the time.

Therefore, to meet the need of current society, the meaning of CSR just displays a clearly for those ownerships and stakeholders. According to Welford research (2000), over the last decade, it has been found that more and more businesses began to embark on environmental issues and improve their operation systems on account of environment, but due to the variety of these issues, it is hard to be defined. Carly Fiorina (2003), as a former CEO of Hewlett-Packard also agreed that, in the past, what corporations do was always isolated from the human development. While nowadays they transform their business strategies to increasingly innovative management rooted in the responsibility for society and environment, which would be beneficial to the next generation. on both markets and employees. In Wiggen and Bomann-Larsen’s view (2004), "With power comes responsibility." The concrete meaning of the business responsibilities is to concern with the potential impact of operations on human and environment, avoid the harm and minimize the damage rather to deliver certain sounding slogans (Wiggen and Bomann- Larsen, 2004). As a kind of voluntary commitment, corporate social responsibility is considered to enhance community well-being by implementing business practices and making contributions to corporate resources (Kotler and Lee, 2005). Similarly, Mcwilliams and Siegel (2000) once defined that CSR is a key for organizations who intend to perform better on society besides earn more profits and it is oriented by law. CSR embodies the managers’ respect to the non-market forces or company’s social actions beyond a regular structure of business, which covers employee welfare, community programs, charitable donations and environmental protection (Carter et al, 2000). It can be concluded that environment, society and economy are the three fundamental dimensions of CSR and all of them are equivalently significant for businesses to promote sustainability (Henriques, 2004).

2.2 The influence of CSR on modern businesses

The inception of managers to the CSR theories would impose great influence in their future business decision-making (Agle et al, 1999). To be more specific, Waldman (2006) thought that under the globalization background, managers guided with CSR principles would obviously be affected on their business culture and leadership. Additionally, the influence of CSR values on the business financial performance has heralded a hot debate in recent years. Wright and Ferris (1997) and Stanley Vance (1975) stand in the negative side, insisting on that CSR is no use in the rise of revenues at all. While on the contrary, Posnikof as well as Richard Wokutch and Barbara Spencer discovered the positive correlation between financial performance and CSR. And it is even found that there is no link between these two fields. However, Marc Goergen (2012) argued that due to confined measurements of testing the link by financial statistics, the results that there is no relationship are questionable. After analyzing the two types of CSR: stakeholder management and social issue participation, Goergen (2012) pointed out that CSR focusing on the benefits of stakeholders would foster the business profits, while if it is realized to take part in the society issues, it would increase the operation cost and reduce the financial interest.

Indeed, most of studies of CSR are concentrating on the cost calculation, while other intangible effects such as corporate reputation and social influence cannot be ignored and counted (Saeed and Arshad, 2012). Apart from continuous study on economic exploration of CSR, more researches related to strengthen the market competitive advantages need to be expanded. In terms of Muhammad Mohtsham Saeed and Faria Arshad’s (2012) prospective, CSR, once integrated with both internal and external practices of business management, is a useful solution to build up public image, minimize the harm to society and perform promising on the financial sector as well.

Furthermore, normally, the investment of CSR activities is regarded as a net cost. Nevertheless, after having studied on the link between reputation and CSR for all S&P 500 companies, Dylan Minor and John Morgan (2010) found that such continuous CSR activities, as a long-term strategy in business, would reinforce the company’s capabilities of reputation risk control to certain extent instead of failing in the financial performance. For example, once an unexpected incident happens, despite the loss of money, a company sticking to the strategy of CSR might effectively save its regular reputation, the reliability of customers and suppliers, and even the loyalty of its employees from being hurt.

2.3 The obstacles and suggested CSR module- Carroll’s pyramid

In the way of application CSR to specific companies, there still exists certain obstacles. On one hand, most CSR activities conducted today are complied with the government laws or regulations and the consideration of stakeholder’s satisfaction. It obviously lacks the self- motivated actions to realize the CSR. On the other hand, it is insufficient researches on clarifying how to achieve the goal of competitive advantage by implementing the business mechanism integrated with CSR all over the company’s structure (Saeed and Arshad, 2012). Moreover, the insight of the visible characteristics of CSR activities is of same significance for customers, investors and deciders as well. It is crucial to figure out that the practices of CSR can only make up with the image damaged by the working negligence rather than natural disaster like flood, earthquake (Minor and Morgan, 2010).

Hence, regarding CSR as a source of strategic management is the key to attain the benefits across all the business system and gain a long-term development under such an intense competitive business environment (Carroll, 1997). In Carroll (1991)’s pyramid theory, CSR encompasses four areas: the obedience of legislations, the meet of the economic growth, the concern of ethical issues and the philanthropic obligations (See Figure 1). The four component parts in this pyramid vividly address the business executives the different role of CSR in spite of the fact that CSR penetrates across the body the business. Different from analyzing the functions of the four dimensions, Carroll’s pyramid emphasis on the importance of ethical and philanthropic responsibilities, for they are set up upon legal and economic ones.

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Based on the Caroll’s pyramid, it is suggested that the module of Saeed and Arshad (2012) in the establishment of CSR guide in those international businesses would be more comprehensive (See Figure 2). This pattern shows the CSR values in today’s modern business management.

Figures and tables index

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But according to the different types of business, every company should be careful to take diversified measures as the application of CSR to their specific cases (John, 2006).

Case study: Hilton Worldwide

3.1 The background of Hilton CSR

Known as the leading hospitality company in the world, Hilton Worldwide’s business covers wide hotel industry ranging from luxurious fully-service hotels and resorts to extended-stay suites. In addition, it also extends the business to mid-price market. Over 92 years, Hilton worldwide has always managed to make the customers satisfied by offering the finest accommodation facilities, well-trained service and putting the innovative and modern values of business management into practices. It owns such brands as Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Hilton Hotels & Resorts and so on. More than 3,750 hotels with almost 615,000 rooms in 85 countries help the increase of Hilton profits and damage the social environment every day as well.

Account of the importance of CSR to the future sustainable development, Hilton Worldwide has already evolved Conrad N. Hilton’s merits to create shared value for its business and the common living community. The objectives of CSR in Hilton aim to pursue the chances of generating economic values to the business and benefiting to the social justice and environmental protection simultaneously, as Ann Bernstein (2010), the head of a South African think-tank called the Centre for Development and Enterprise, advocated in CSR.

The reputational drivers of CSR values

It is reported that Hilton Dubai Jumeirah Resort was the first hotel awarded with Dubai Chamber of Commerce and Industry’s CSR Label in Oct, 2012 (Carley, 2012), which is a strong evident for Hilton in the accomplishments of implementing CSR strategies. Undoubtedly, this piece of news promoting Hilton’s environment-friendly image has helped the company win the public appealing and dependability.

Looking back into its history of doing good things, Hilton Worldwide enjoys a high appraisal of its enthusiasm on charity career. As reported, Hilton is keen on making charitable donations to people who need help. What’s more, owing to the pursuit of progressing with our common community, Hilton are inclined to share its management systems, training knowledge and service experience with the peers in the same industry rather to become hotel monopoly by all means. As for the employment area, its staff comes from different countries with diverse cultural and ethnical background, but all of them are guaranteed to be treated equally thanks to the company’s commitment to CSR. The practices of CSR also stimulate the company to pay more attention to the human rights and ethical issues and strive for eliminating the inequity and discrimination. All these policies were carried out under the guide of CSR, which not only have contributed a lot to Hilton itself and their customers but also have exerted a great positive effect on the globe (Hilton Supply Management 2010).

Corporate Responsibility Report Executive Summary 2011, the theme of 2011 corporate responsibility is shifted to "Travel with Purpose", which includes four aspects: creating opportunities, strengthening communities, celebrating cultures and living sustainably (www. Hiltonworldwide.com, 2013). The company’s strategies and behaviors oriented with the ethics and social responsibilities have been embodied thoroughly in its code of conduct (Daniel, Radebaugh and Sullivan, 2013).

The management commitment to the global issues and CSR values

Firstly, as for the ownership and scare resources, Hilton has made a lot of efforts to promoting their CSR values in its business activities. 93% of team members are aware of its values. For example, the green policy of Hilton Worldwide has been implemented well in the UK. Account of the scarce energy like water and electricity, Hilton suggests its customers to reuse the room towels and has equipped the hotels with safe and efficient light bulbs as possible as they can in order to save energy. As a result, about 12 million gallons of water are estimated to be saved yearly (Mercer, 2007). Over the last three years, 450 million kilowatt hours of renewable power was purchased to supply the insufficient use of scarce resources (CSR report, 2011).Though these measures haven’t been taken in all of the Hilton Hotels, it is convinced that Hilton would make all efforts to realize the green policy.

Secondly, as confronted with such catastrophes as the poverty and disasters, Hilton would always be the first to In addition, obedient to the related regulations of UK Government Hospitable Climates energy efficiency agreement in the hotel industry sector, Hilton is driven to reduce the fuel consumption and pollution. As estimated in 2000, approximately 160kg of CO2 per square meter of floor areas would be released from a hotel, which equals about 10 tons per bedroom (Hospitality Net, 2000). According to the numbers in Hilton CSR report 2011, the company has succeeded in cutting the carbon output and waste output by 10.9% and 23.3% respectively. And the energy use has been reduced by 9.7%. Similarly, the water resource has been saved by 7.5%. Then the expenditure of 147 million US dollars on utility costs has been saved, attributed to the enforcement of LightStay, a Hilton Worldwide’s management program for sustainability. Thus, Hilton’s LightStay program, mostly concentrating on the hot social environment issues such as global warming, resources waste, and renewable energy, has enlightened the trends of company’s future development. The Hilton initiatives from the respect to the ethics and environment have already generated great rewards both tangibly and intangibly. Consequently, the implementation of CSR values in the business management would not be contradictory to the financial performance all the time. On the contrary, if the company’s management strategies guided by CSR meet the needs of the market, they would bring about rich returns on the company itself and the common community as well instead of increasing the burden of costs.

Secondly,

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