November 2021 Editors’ Letter

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By Manisha Singal, Ph.D., Virginia Tech, and Seoki Lee, Ph.D., Pennsylvania State University

Despite decades of discussion and debate around the merits of the shareholder versus the stakeholder approach to business and the relationship of Corporate Social Responsibility (CSR) with corporate financial performance, neither scholars, public policy experts, nor practitioners have reached any consensus regarding clear initiatives and action to move forward.  The Business Roundtable in 2019 redefined the purpose of the corporation to promote an economy that “serves all Americans” – a commitment to all stakeholders of a corporation.  The global pandemic brought home to all business firms and especially those in the hospitality and tourism industries the value of dedicated employees, loyal customers, steadfast suppliers, strong leadership, and corporate governance, along with respect for the environment and green and sustainable practices. Simultaneously, diversity, equity, and inclusion issues were brought to the forefront of social discourse and companies realized the value of CSR initiatives not only as being instrumental to financial performance but also as insurance and a tool for crisis management.  

It is in this highly relevant and timely context that we present to you our special issue on the several dimensions of CSR within the hospitality industry – and in some cases, guidelines on how companies can move forward. The authors of our articles are scholars at reputed universities conducting empirical, data-driven research on important corporate social issues relating to all sectors of the industry including hotels, restaurants, casinos, and airlines. Below we briefly describe each of the articles to whet your appetite to read further. 

In her article, “How different are Corporate Social Responsibility and Corporate Governance in Today’s Business Environment,” Yuan Li from James Madison University discusses the important connections between corporate governance with its underlying shareholder primacy approach and corporate social responsibility with its inherent stakeholder approach.  The business environment today necessitates the convergence of the two as corporate leadership recognizes that social and environmental initiatives are part of their governance agenda, not only helping them financially in the long run but also helping sustain them during crises situations. During the pandemic, not only did several hotels and restaurants donate food and lodging to frontline workers but in a show of solidarity, several top hospitality executives took pay cuts to share the pain of laid-off hospitality employees. 

In their article, “Does Corporate Social Responsibility Matter During A Crisis,” Seoki Lee from Pennsylvania State University, and Manisha Singal from Virginia Tech, offer several instances from research in the different sub-sectors of the hospitality industry where CSR activities offer an insurance-like protection during situations ranging from economic recessionary periods to oil price hikes to the pandemic. 

Related to the pandemic, authors Hyejin Yoon, and Changsik Kim, Ph.D., from Baewha Women’s University, and Sunny Ham, from Yonsei University collaborate to conduct a study describing the Clean Zone initiative of Korean hotels, and customers’ perceptions about the effectiveness of hotel’s disinfecting and cleaning practices ensuring safe stays during the global pandemic with implications especially for families with children. Similarly, authors Eojina Kim from Virginia Tech, Yoon Jang from Woosong University, Korea, and Vivica Kraak from Virginia Tech in their article, “Restaurants Can Innovate And Recover From The Covid-19 Pandemic,” highlight the importance of economic and environmental sustainability as integral parts of restaurant strategy. They urge consumers and industry players to redesign not only their utensils and packaging for eco-friendliness but also use technology and digital tools for outcomes that range from attracting capital to reducing food and water waste – initiatives that will appeal to the new generation of Millennial and Generation Z consumers.

Shaniel Bernard and Simone Bianco from Virginia Tech write about an expedient dilemma for small hotels. In their article, “To Green or Not To Green? A Guide for Small Hotel Properties,” the authors caution against “greenwashing” and “greenhushing,” delineating the tension between the costs and benefits of investments in environmentally friendly practices that are firm-serving rather than public-serving. They propose baseline strategies for small hotels that include clear communication of their sustainability efforts, balancing reward versus participation requests, and using the United Nations Sustainable Development Goals as a guide for adopting environmental initiatives.

The hospitality and tourism industry by its very nature employs and caters to diverse a population. It is no wonder then that diversity and inclusion matter strategically to the industry. In their article, “What Leads To Recognition For Diversity?” Ashokkumar Manoharan from Flinders University Australia, Juan Madera, from the University of Houston, and Manisha Singal from Virginia Tech, examine the links between a firm’s strategic diversity statements, their diversity initiatives, and recognition obtained for diversity efforts (i.e. do companies walk the talk on diversity claims?).  In their study of hospitality firms in the Fortune 1000 list, they examined diversity strategic statements and corresponding practices mentioned on webpages and linked these to diversity recognition like awards and reputation lists for diversity.  They advise firms to implement their diversity practices boldly and firmly, integrate their diversity statements and practices, set up internal diversity awards, and be proactive in diversity award submissions. Most importantly, they emphasize the need to communicate their diversity initiatives and practices, as part of their CSR strategy for positive outcomes. 

Finally, in “Does the Life Cycle Stage of a Firm and its Corporate Governance Structure Matter?” Jihwan Yeon from Pennsylvania State University outlines the stages of a firm’s life cycle and discusses the importance of different stakeholders at the different stages of the firm from the initial stage to growth, then maturity, and eventually decline. 

Overall, we hope this special issue triggers action on CSR on the part of the managers and leaders in the hospitality industry to forge forward, generates new ideas for scholars and students, and informs consumers and the public regarding the varied dimensions and issues relating to environmental, social and governance issues relating to the hospitality and tourism industry. 

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