Introduction - Navigating Post-COVID Challenges in the Hospitality Sector
This essay will examine the business environment and business objectives the whole essay revolves around major three topics that are business ethics, CSR, and sustainable leadership. Business ethics are the principles and moral values that a business needs to follow to fulfill its corporate social responsibility and fiduciary responsibility (Shaw, 2016). Corporate social responsibility is a management topic that says that companies need to include environmental and social concerns while taking business decisions. A company uses various resources of society so it has the responsibility to pay back society. Sustainable leadership is a leadership style in which the leader is focused on the ecosystem, the main aim is to reduce waste and protect the environment (Bendellet.al. 2017). This helps companies to adaptsocially and environmentally accountable business practices which will further help in reducing operating costs and developing good stakeholder relations, at the same time increasing profitability and building a competitive advantage.The report highlights and critically assesses the ethical implications and impacts of business goals and sustainable leadership for stakeholders. The report also includes how business leaders can interact with stakeholders in an ethically sound and effective way to maintain competitive advantages, particularly in the post-Covid-19 business environment.
The report will explore these ideas in relation to the hospitality industry. This industry includes a range of services such as lodging, food service, drinks, travel, and tourism. It consists of hotel companies, travel agencies, and restaurants (Hrechyshkina and Samakhavets, 2019). The hospitality industry is appropriate for this investigation because business ethics and CSR plays an important role in this particular industry. This industry is also appropriate because this is greatly impacted by the COVID-19 pandemic, and it is important to understand the post-pandemic environment of the hotel industry.
The report starts with a discussion of the business environment and business objectives. It mainly focuses on the post covid business environment of the hospitality sector. The report will highlight types of business objectives to understand the role of ethics in forming them. Next, the report elaborates on the concept VUCA and how it is important in the easement of the business environment. The report included a study on stakeholders in the hospitality sector, it included the concept of stakeholder mapping for a better understanding of the topic. The next major topic covered in the report is sustainable leadership, it includes how sustainable models and theories are relented in the post covid environment and their importance in creating competitive advantage. In the last part of the report, a discussion is given on competitive advantage and VUCA related to post-Covid 19.
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Business environment refers to all factors which affect the operation of the company. The business environment is further divided into two parts that are internal and external environment. The internal environment includes all the factors which are inside the company such as employees, management, and organizational culture (Prajogo, 2016). The eternal environmentconsists of all the factors which belong outside of the company; these are suppliers, government, market trends, innovation, and technologies. The business environment has a direct as well as indirect impact on the success and growth of the company.
Key sustainability concerns and the impact of business activities on these concerns
After Covid 19, there are many changes occurred in the business environment of the hospitality industry. Because of the lockdown and restrictions on travel, sector has been affected most by the pandemic (Volintiru and Miron, 2015). The hospitality industry is facing many challenges related to both internal and external business environments. The following are major challenges in the post-business environment of the hospitality industry:
Shortage of staff:after the reduction in restrictions and removal of lockdown, the demand in the hospitality sector is increasing day by day and now surpassing the pre-pandemic level. But the hotels face a shortage of staff and they are unable to hire the required number of staff with appropriate skills (Sila, 2015). A recent Mckinsey poll discovered that 47 percent of hospitality workers are planning to leave their work in the near future.In the latest interview conducted by CNN, in which the CEO of AccorHotels revealed that the company's mainly alarming industry challenge is persuasive staff to return to their jobs. M. Bazin, the CEO also noted that Accor is working its hotels with 15% fewer workers than pre-pandemic. The company is finding it hard to offer the expected service level.
Top talent: the hospitality industry needs people which are passionate about hospitality and strongly believe in ethics. During post-pandemic time it is getting difficult to find candidate which have all these qualities to perform work.
Industry support: in recent time industry is recovering from the effects of the pandemic. So that the importance of some management functions is increasing, these functions are marketing, sales, and revenue management (Akteret.al. 2016). Companies need to focus on marketing and sales to survive in this competitive environment.
VUCA
Vuca stands for uncertainty, complexity, volatility, and ambiguity. It is created in the 1986, on the basis of leadership theories to deal with environmental situations and conditions. This isa framework that is used by leaders to check the suitability of the market to introduce new products or services (Mack et.al. 2015). This model helps to understand the business environment in which the company operates its business. To stay in the industry companies needs to beat the competition and increase decision-making within the business,
Volatility: refers to the ability to change frequently and rapidly. Little change in the circumstances has a greater impact on the environment.
Uncertainty: it refers to the situation when an unpredictable situation or event occurs in the business environment (Millar et.al. 2018). The studies did not go according to the expectations, for example, there was a prediction of a rise in the prices but in the actual scenario, prices are falling.
Complexity: when there are multiple factors and issues in the environment and they are interrelated and interconnected. Change in one factor leads to change in all other factors as well.
Ambiguity: this is the situation where things are not clear and information is misunderstood. Facts can be doubtful and lead to misinterpretation (Abidi and Joshi, 2015).
A range of relevant theories and models such as the Triple Bottom Line, corporate social responsibility (CSR), business ethics and the role of the market
Companies are implementing sustainable leadership to guide their sustainability efforts. The idea of "triple bottom line accounting" has been used by businesses to help them better understand how they are supporting sustainability within their operations. The triple bottom line model is currently one of the best approaches to evaluate how sustainability objectives are being pursued. The triple bottom line is a foundation for sustainable development since it is only possible to accomplish it when economic success, social fairness, and environmental preservation all live harmoniously. The triple bottom line is also known as the three "P's." It represents for prosperity, the world, and humanity. The alignment and success of the overlapping sectors are consciously considered while designing the 3 P's of the triple bottom line to ensure maximum sustainability.
Business objective
These are the goal that the company aims to achieve. The business objective is the purpose of the company to get into a specific industry. The company set business objectives under a time frame and allocation of limited recourse for the different objectives (Benn et.al. 2016). The business objective is formed while considering the stakeholder of the company, in the case of the hospitality industry major stakeholders are visitors, hotel operators, government, suppliers, employees, etc. the business objective is mainly two types, which are given below:
Strategic objectives: these are the long-term objectives of the hotel company; they are the broad goals of the organization and the employees. For example, the strategic objective is developing the best criteria for recruitment and selection right people.
Tactical objectives: tactical objectives are short-term objectives, these are made to complete the strategic objective. This includes various steps and actions that need to be taken to achieve the strategic objective.
Figure 1: types of objectives
Stakeholders
A stakeholder is an individual or a group of person which are interested in the workings of the business. A stakeholder has a direct and indirect impact on the success of the company. Stakeholders are very vital for companies because they have positive as well as a negativeinfluence on the business (Tantalo and Priem, 2016). Stakeholders are divided into two types, these are internal stakeholders and external stakeholders.
Internal stakeholders: internal stakeholder is from the inside of the companies. They are directly affected by the internal environment of the company. The majority of the internal stakeholder are employees of the company. It includes employees, managers, the board of directors, shareholders, etc.
External shareholders: This kind of shareholder belongs to the outside environment of the business. They have an influence on the operations of the company and are also affected by the company's operations (Martikainenet.al. 2015). External shareholders include customers, suppliers, creditors, the government, and society.
Do different companies have different stakeholders or are different stakeholders important to companies in different ways?
All the companies in the hospitality industry have the same kind of stakeholders:
Internal stakeholder
Employees: Every hotel has employees and they are interested in working for the company to get paid for the work performed by them. Employees are one of the main internal stakeholders of the hotel business, and every company has employees to provide services to their clients. Hotels need to pay attention to the need and feedback of the employees (Sneader and Sternfels, 2020). It also needs to endure a good working environment by focusing on health and safety at the workplace.
Managers: Managers are the main stakeholder of the hotel; they are interested in working with the company to know that the strategies are implemented in the right way. Managers are the key person who runs the hotel business and take all the decision related to the business. Every company has managers to run it, all have the same type of stakeholders.
Board of directors: This stakeholder has the maximum interest in the business because they have the responsibility to maximize the profit and return it to the investors.
External stakeholders
Customers: In the hospitality industry, visitors are the customers and they come to the hotel for a good stay experience. Consumers are the key to any business and every hotel company has these stakeholders. Consumers look for a good stay at a reasonable price.
Government:Government is interested in business to ensure that the hotel follows all rules and regulations. Government majorly helps the hotel industry to promote tourism in the country and it has a good impact on the business.
Society: Companies need to perform corporate social responsibility for every stakeholder especially society. Society is interested in business because of employment opportunities, and services provided by companies.
All the stakeholders have different levels of significance in the different companies.
Stakeholder mapping/examples
Stakeholder mapping is a framework for drawing a visual presentation of all people interested in and affected by the company. The diagram tool attached in figure 2 offer a clear image of who are the stakeholders and their motives or interests.Stakeholder maps are planned to smooth the progress of the assessment of the business environment by stressing what authorities are available to assist or delay the progress of the company.
Hilton hotel is one Example of a hotel that has the best stakeholder mapping framework. The company is very effective in performing stakeholder mapping.
Relevance to competitive advantage and post Covid environment
Stakeholder mapping is a very important tool for gaining a competitive advantage, especially in the post-pandemic era. It helps in recognizing key players in the stakeholder groups. Further decisions can be made more quickly and with accuracy.
Figure 2: Stakeholder mapping in the hospitality industry
Sustainable leadership
Sustainable leadership refers to adopting all practices while considering their impact on the environment and society. This means the companies consider their entirestakeholder before taking any major or minor step. It is veryvital to start exploring and accepting how every individual leader's roles might add to undertaking global challenges like climate change and gender inequality (Bendellet.al. 2017). .Sustainable leadership entails adopting a moral and responsible stance toward leaders’ positions of authority as well as taking the time to consider the larger effects of their decisions on society and the environment. This can entail considering the restrictions of the company's larger stakeholders as well as the natural systems in which it operates.
Various stakeholders are encouraging the organization to Work which may be vital for a sense of reason since it can offer goals to work towards each day and profits to support financially. Think about how their activities can impact their customers, employees, the wider society, and the environment (Savageet.al. 2015). Understanding what sustainable leadership which can help to recognize that there or should there be a difference between sustainable leadership and leadership that is sustainable.
Difference between sustainable leadership and leadership that is sustainable:
Sustainable leadership is aaccountable leadership method that considers the holistic impact of the company's activities on internal stakeholders, external stakeholders, and the environment. They set strategies and ensure teams deliver results that satisfy the criteria for good financial, environmental, and social performance. Sustainable leadership can foster long-term relations with multiple stakeholders by valuing their interests and engagement. Various authorities are introducing different legislations and rules to help organizations to have sustainable practices. Sustainable leadership can boost a company's sustainability efforts (Macke and Genari, 2019). These leaders initiate various procedures and change the organization’s culture to prioritize having the appropriate holistic impact. Sustainable practices and priorities can help the organization follow sustainability regulations and laws. Authorities can allow the business to conduct its operations because it follows these rules. Other stakeholders can appreciate the company's effort to obey government laws.
Sustainability leadership should include the following traits:
Figure 3: traits of sustainability leadership
Examples of business leaders that demonstrate sustainable leadership
NH hotel group CEO, Ramon Arohones:This leader is well recognized sustainable leader in the hospitality industry. This hotel focused on green technology implementation in the operations of the company. Carbon emission is one of the major challenges faced by the world, the company is committed to reducing it. NH is the first hotel company which has the aim to reduce all types of emission by 2030.
Viceroy Hotel Group CEO, Bill Walshe: Bill Walshe has become a sustainable leader by coordinating with all stakeholders of the hotel. The company implements this to gain more advantages in the long term. The company also discovering a sustainable solution to deal with climate change.
Sustainable leadership theory which are relevant in post covid era
Sustainable leadership includes ethics and corporate social responsibility, to increase the experience of every stakeholder of the company. The covid 19 pandemic was very challenging for the hospitality sector and leaders need to adapt to changes that took place because of the pandemic (Hamid, 2019).
The COVID-19 epidemic demonstrates that leaders have a significant and pressing difficulty with adaptation. Building trustworthy relationships, cooperating with one another, and assigning leadership tasks to subordinates can help leaders increase their organisations' chances of surviving a crisis. Furthermore, effective management of employees who are stressed out as a result of ambiguous circumstances calls for understanding, compassion, and flexibility.Additionally, in order to lead their organizations, leaders need to have both emotional intelligence and emotional stability. The findings show that since employees have a basic need for safety and personal security at work, leaders must stand-innetworks and belief by modeling actions that are empathetic and completely transparent.COVID-19 negatively affected society from a financial viewpoint, a moving viewpoint, and anmoral viewpoint. COVID-19 offers a chance for employees to observe the leadership of managerial leaders, and how the leaders manage the situation of crisis.
Critical evaluation of appropriate sustainable business strategies
Discussion on Competitive advantage, VUCA, Post Covid-19
Sustainable competitive advantages are a set of resources, uniqueness, or abilities that permit an organization to assemble its clients’ needs superior to its rivals can. The competitive advantage of the company refers to the business's capacity to surpass its competition by providing better quality products and services at low cost (Dhir, 2018). If a company sustains its competitive advantage for the long term that's called sustainable competitive advantage. It helps a company to earn more profits than others in the industry.
Leadership and sustainability are important in creating a sustainable competitive advantage. There are various factors given by porter that suggested how leadership helps in creating sustainable competitive advantage. Leadership style refers to a functioning style of organization, indicating paths of the company to achieve its objectives.
After the covid pandemic hospitality industry has faced many challenges, such as spiraling inflation and disruptions in supply chains.
The four elements of VUCA play an important role in this environment; the leaders turn risk into opportunities and create sustainable competitive advantage.
Volatility: the hospitality industry environment is very volatile because there is a low level of entry barriers and anyone can enter the market. The new technological tool also reduced the entry barrier in the market. This industry requires a large number of resources including human and material resources. Airbnb has disrupted the entire hotel industry and the new company has rewired the needs of the consumers and turned them into the biggest opportunity. A business leader can adopt a more dynamic framework to deal with the volatility in the market.
Uncertainty: the hospitality industry was a certain industry but the pandemic has changed everything, it proved that no business is certain. A leader should focus on contingency planning to deal with uncertain situations. Successful leader understands that uncertainty exists in the business environment but they can handle it by introducing new ideas and business models. Uncertainty in post covid environment can also be handled by effective communication between leaders and followers. A leader needs to align organizational culture with its core value to create a competitive advantage in the hospitality business.
Complexity: The post-pandemic business environment is more complex but the use of digital technologies made it simpler. The hospitality industry is currently driven by technologies like Artificial intelligence and virtual realities. The consumer can get a room visit experience even while sitting in their homes. Complexity is a vital part of the business environment but a leader can use it to create competitive advantages.
Ambiguity:In the present time the business has all business intelligence and machine, analytics but it is not possible to remove all the ambiguity. There are some well knows organizations that also faced ambiguity, for example, Radio Shack, Kodak, Nokia, etc. The leaders need to collect the required data and transform it into useful information (Elkington, 2018). This will help in creating a sustainable competitive advantage. A famous example of this is Nespresso, this company turns ambiguity into an advantage. The company serves coffee with the tagline 'ultimate coffee experience' in selected stores. But the senior managers evaluated data and expanded the business served into hotels and restaurants. This turns out to be the biggest hit for the company's success.
Conclusion
The report is concluded thatbusiness ethics, CSR, and sustainable leadership are very important for every business. The main arguments presented for the business ethic and their impact on the varicose stakeholders of the company.The theories and concepts examined in the essay confirm that Sustainable leadership is a leadership style in which the leader is focused on the ecosystem; the main aim is to reduce waste and protect the environment. Sustainable leadership has a very vital role in particularly the hotel industry and it is visible in the case of Airbnb. The report also concluded that numerous developments have taken place in the business landscape of the hospitality sector since Covid 19. The hospitality industry has been hardest hit by the virus due to lockdown and travel restrictions. Ethics have a great impact on the business objectives, if a company has an ethical organizational culture it will form the business objective while considering every stakeholder of the business.
Business objectives are the ultimate aims of the organization that they set to achieve. The business objective set under sustainable leadership helps create a competitive advantage while considering all the stakeholders of the company. The leaders in the hospitality industry need to implement a suitable leadership style to create a positive organizational culture, which will satisfy all the stakeholders including employees, customers, government, etc. in the post-pandemic era the companies need on meeting the needs of different stakeholders, for example, employees want safety at workplace, customers want a leisure experience but without harming their health. The companies need to focus on VUCA in the environment and turn risk into opportunities.
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