Ethics, Responsibility or Sustainability in Business
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In the globalization era, everything seems to be developed and grow fast. The modern economy is one of the great examples for the rapid development. Among the fastest growth rate in the world of economy, there are some critical issues which are always threatened the companies. Ethical issues become the significant factor which can affect positively and negatively on corporate operation (Stephen and Timothy, 2008). The companies which emphasize on the ethical principle have a chance to reach the sustainable growth (Vojko and Matjaz, 2009). These companies also gain both great reputation and develop strong brand image from ethical policies. On the other hand, companies which ignore moral principles tend to receive negative feedback from customers. The unethical business cannot survive in the sustainable way. These immoral companies have a tendency to grow in the short run and end up finally. Additionally, the public sector pays attention to the moral principles and business ethics as the essential factor for all organizations (Charles, 2008).
Both profit and non-profit organizations seem to be monitored by public sector that is responsible for following the corporate performances. Accor Group is one of the multinational companies which focus on the ethical practices in operating business. Accor Group is the world’s giant hotel operator in 92 countries with 3,500 leading hotels such as Sofitel, Novotel, Mercure and etc. Accor Group provides a wide range of services from luxury to budget for global clients. According to the business operation, Accor Group hires 160,000 employees worldwide. In order to achieve corporate policy, Accor Group implements the ethic policy in all sectors. This paper aims to analyze the ethical issues and sustainability policies implemented by Accor group based on the theory of business ethics.
As the leading hotel operator, Accor Group has managed extensive brands and hospitality businesses in 92 countries through the world. The type of business owned by Accor Group includes operating and franchising hotels and hotel investment. Under the brand of Accor Group, 3,500 hotels are considered as the strong brand which has powerful distribution system. The ultimate goal of Accor Group is to provide hotel room services by maximize fees, effective CRM and loyal-brand strategy. According to ownership and investment sector, Accor Group has operated 1,400 hotels via leases. Accor Group is responsible for managing the asset portfolio through acquisitions. The brand under Accor Group can be divided into three segments; Luxury, Midscale and Economy.
Each unique brand aims to provide customers with great hospitality experiences. The first segment is called Luxury. Luxury segment provides the exclusive services and develops flagship hotels through service excellence practices and brand values. This segment includes the hotel brand of Sofitel, MGallery and Pullman. Sofitel is the luxury hotel chain offering 120 hotels in 40 nations. The hotel provides the service treatments for personal touch with excellent performances. MGallery is the upscale hotels with remarkable design and unique personality. Pullman is the up-market hotel brand providing customers who have executive lifestyles. The target group is travelers from around the world including business and holiday trips. Also, Pullman is the modern hotel for new generation who really enjoys hyper-connected lifestyle. The second segment is Midscale. Midscale concentrates on brand differentiation and innovation. Midscale segment includes Novotel and Mercure.
Novotel: Novotel is recognized as the historical hotel brand. The target group is family and business people. Mercure is the largest midscale hotel chain in the world. Although Mercure is the midscale hotel, this brand provides customers with uncompromising quality and cozy experiences. The last segment is Economy. Economy is recognized as the economic brand and world-class reputation focusing on consistent quality and ultimate comfort. The uniqueness of this segment is the innovative decoration with artistic styles. According to managerial context, Accor Group is able to be successful in business management by strategic leveraging throughout 45 years in hospitality industry. Accor Group has implemented the best-in-class distribution strategy for franchise and partnership management. The distribution channels are operated by web-based central booking system and room-booking front. The online distributors have full connectivity with 14 million members throughout 28 countries. These enable Accor group to establish great partnership and effective franchise network.
The key potential growth of Accor group is in European market but this brand attempts to focus on economy hotels in many countries by applying low penetrate rates and repositioning strategy of economy hotel brands. The high potential market for of economy hotel brands by Accor Group includes India, China, and etc. besides, Accor Group applies the tailor-made strategy so as to meet local preferences and enhance service flexibility. In addition, Accor Group is one of the leading hospitality brands which emphasize on the human resource development. Accor HR’s teams are specialized in the international talent recruitment sector which enables to hire and retain employees effectively. Another unique HR principle applied by Accor Group is to embrace workforce diversity.
Besides, career training program is one of the successful strategies which can help Accor to develop management and sales skills for professional talent in the hospitality services in today’s world. Even though Accor Group is successful in running hospitality business in the world, the company attaches significance to not only financial benefits but also social responsibility. Accor Group has realized that the sustainable growth of each business depends on not only financial successes but also ethical values in operating business. The ethical policy is the most powerful strategy which produces the competitive advantages for the brand and partners of Accor Group. The main policy of corporate social responsibility at Accor is sustainable issues of social and environment. Besides, the ultimate goal of this leading hotel brand is to maintain sustainable growth in the long run. To achieve this goal, Accor has recognized that the human resource development is the vital factor for actualizing this objective. As above, human resource development becomes one of the sustainable policies for this giant brand.
All of the ethical practices and CSR policies implemented by Accor Group are highly related to the ethical theory of relativism and utilitarian ethical framework. The philosophical field of ethics called ethical relativism is aimed to study about ethical values and ultimate judgment based on each cultural sense, social norm and personal feeling. Ethical relativism concentrates on the way to show the serious challenges to ethical consideration such as business ethics (Laura, Joseph and Chris, 2013). According to relativism concept, there is no right or wrong in ethical judgments. Ethical issues are only the opinion which cannot be judged by legitimate way (Joseph, 2011). Relativism plays a key role in the international business in today’s world. It cannot be denied that there are a plenty of ethical issues affecting directly on running business globally such as child abuse, corruption, sexual discrimination and etc. Although these ethic issues are related to social responsibility and moral principles, the acceptance and judgment are different in each culture and country.
For example, the issue of child labor which is working in the bad condition with the very low rates may be accepted in some undeveloped countries such as Cambodia, Laos and other eastern cultures. On the one hand, this issue cannot be accepted by many developed nation and western cultures. As above, the values and judgment of ethical issues are based on the different practices of culture norm. Another interesting example is sexual harassment. The issue of sexual harassment is difficult to be judge based on same standard principles. The sexual harassment can be the form of employment condition. Some managers may feel that sexual harassment is right while some women truly believe that it is absolutely wrong. From the concept of ethical relativism, both of these opinions and feeling have equal validity so it is difficult to claim that sexual harassment is ethical or unethical issue. Some people may argue that sexual harassment is highly relevant to the unfair practices on discrimination. Both men and women have same equal right and opportunity in the workplaces.
Women can a full right to deny unacceptable options or practices which may be threatening to their lives. Anyway, some relativists believe that harassment is absolutely wrong since it is the unsuitable power relationship between employees or candidates and employment. Harassment practices are against integrity and self-respect values of individuals. According to these reasons mentioned above, it can be conclude that ethical judgment based on ethical relativism concept are different because of different societies have different moral beliefs. There is no standard of right or wrong on the ethical issues in different cultural norms. Due to this fact, ethical judgment is considered as the challenging issues for all business cultures. The second ethical theory is utilitarian ethical framework. Utilitarian is recognized as the modern theory which has massive impacts on the current world. Especially, this theory has influences on the economics, politics and public sector (Mark, 2007). According to utilitarian ethical framework, the ethical actions rely on the consequences of actions and policy of greatest practices. In the business, this theory emphasizes on the right or wrong outcomes of actions (Steiner, 2012). In the free economic system, the purpose of business is to satisfy market demand and customers’ needs.
However, in the reality, the scarcity and fierce competition are the great obstacles for customers to receive everything they want from the free market. According to this reason, bargaining system is used as a tool to maximize customers’ needs and reduce the limitation from scarcity and fierce competition in the free marketplace. Particularly, utilitarian ethical framework can be applied to the decision-making process in the business world. For example, the entrepreneurs are always challenged by ethical dilemmas such as the balance of quality level and acceptable profits. This ethical issue forces business owners to concern about not only profit maximization but also fair practices in the wage level. The company may use low-wage workers from overseas due to price competition while it is crucial for them to avoid laying off local employees and provide them with higher salary.
On the contrary, if the company ignores to use low-wage foreign employees, the company tends to lose ability to compete in the marketplaces which may lead to layoffs of high-wage local workers. Anyway, using low-wage workers may reduce the standard of living and purchasing competency in the market. From this point, the company has to consider carefully on the decision making of ethical practices and competitive ability. In the workplace, utilitarian ethical framework seems to become important for the organization. Today, most of the workplaces are dynamic and flexible rather than the traditional ones. Comparing to traditional organizations, team-working concept and collaboration are the working style commonly found in modern companies. The employee involvement and numerous advantages may cause some conflicts in the companies.
As above, the ethical principles are defined as the action to reduce the immoral actions and improve productivity in the teamwork including public images. Anyway, utilitarian concept is quite tough to implement and achieve if there is no strong written policies, defined processes and strong ethical culture (Tom, 2008). Top-management support is considered as the vital factors to help the organization to achieve in the ongoing training policy in ethics and morality (Fred and Michele, 2006). Accor Group is one of the giant corporate which pay close attention to the sustainability policy and corporate social responsibility. The company firmly believes that sustainable development can provide them with decisive competitive advantage for the corporate brand, partnership, customers and entire organization. The sustainability policy implemented by Accor Group includes sustainable development projects such as PLANET 21. PLANET 21 enables ACCOR Group to enhance competitive advantages in brand values and partnership.
The social and environmental practices established by PLANET 21 can help the company to enter a stage of sustained expansion in hospitality business. Furthermore, ACCOR GROUP has established Department of Sustainability Development in order to manage PLANET 21 effectively. The Department of Sustainability Development enables to ACCOR GROUP to operate the support function efficiently through internally and externally communication strategy. The sustainable development policy benefits ACCOR GROUP in these following aspects. Firstly, ACCOR GROUP is allowed to enhance resource productivity. ACCOR GROUP can employ the high potential employees throughout the world and manage the supply chain optimization. Besides, sustainable workforce policy helps the company to utilize employee potential and mange workforce diversity effectively. These help ACCOR GROUP to not only grow revenue but also reduce overall costs of business management.
Besides, the corporate social responsibility through various sustainable policies enables Accor Group to enhance the competitive advantages. For example, PLANET 21 is not only CRS practices but also effective operational tool for hotel management of ACCOR GROUP. This policy provides the great solution to the environmental problem and energy crisis which results in the cost reduction. ACCOR GROUP enables to reduce the energy consumption based on the corporate social responsibility of the global sector. Additionally, ACCOR GROUP gains a huge benefit from the sustainable policies in the aspects of talent management. In the ACCOR culture, the employee is under the fair management system and equal practices in the corporate policy such as promotional plan and career growth. The ethical policy enables to increase the level of employee engagement and commitment. As above, ACCOR staffs are willing to work productively and constructively for the organization.
However, there are many reasons why ACCOR may fail to launch CSR policy. First of all, some stakeholders seem to be not interested in CSR policies. Some of them pay attention to only corporate and private benefits while social advantages are ignored. They use moral policies as the advertising tool to promote their products and services. Due to this fact, the local community and public benefits cannot gain any advantages from ethical policies. For example, CSR policies may be distorted by some stakeholders who are not interested in the real outcomes of this policy. CSR is implemented for maintain corporate reputation and brand awareness. Due to this fact, ACCOR may fail in achieving the ultimate goal in launching CSR policies. Another reason is disconnected strategy. Ethical policies and CSR may fail to launch in the practical way because of no links between policy and strategic planning. One of the common problems which are threatening to the success of CSR implementation at ACCOR is the disconnection between management policies and employees.
The insufficiency in communicating system between corporate leaders and employees may lead to the misinterpretation of CSR policies in the practical way. Especially, the operational staffs which are the key success factors for successful CSR policy seems to have not enough communication with executives. Lacking of enough communication enables executives and operational employees to have poor opportunity to realize the corporate policy. As above, the unclear understanding in CSR and ethical values may be the great obstacles for corporate and society benefits. Due to this fact, ACCOR group cannot reduce the energy costs and financial budgets while the failure in CSR policies can affect on the corporate advantages such as revenue reduction and negative impacts on ACCOR’s brand. All of these above reasons obstruct the sustainable growth of organization and invaluable practices which can improve the corporate advantages, working life of staffs and a whole community.
All in all, the culture of ethics is necessary for all kinds of business to survive in the uncertainty in the dynamic world. Also, the corporate ethics can help companies to reach the sustainable growth in a long run. Especially, in the great recession, every organization has realized that only financial benefits are not the ultimate goal for business survival. It is vital for them to focus on the ethical concept rather than financial outcomes. As above, ethical practices are widely used in both non-profit and profit organizations. Corporate leaders have the full responsibility to implement the concept of CSR. ACCOR GROUP is the leading brand of hotel chain which focuses on the ethical principles in business operation. The company is willing to focus on the CSR principles for not only legal duty but also moral principles in running business. For example, the company prevents child use policy on the same standard of global recruitment.
Besides, the company always concentrates on the transparency of business operation. In each business process managed by ACCOR GROUP aims to maintain the transparency and equality. All of the ethic operations applied by this leading brand can help them to achieve corporate objectives in the long run. Moreover, the company can maintain the strong relationship with local community and environment. In the future, an initiative guideline of standard CSR will be required to show in the public. The strong CSR principles in each company will allow employees to engage in the setting procedure of CSR. ACCOR GROUP should continue and develop the policy of sustainability and ethical values. The company can implement the new strategy of local community in order to increase the local employment and offer career opportunity to them. For example, ACCOR GROUP should provide the ethical training courses for employees throughout the world.
Every staffs in all positions should be encouraged to involve in the CSR activities. Also, they should have the opportunity in the corporate engagement in design the CSR activities and other ethical policies. The employee engagement enables employees to realize the core principles and values of ethical practices in running business. Besides, ACCOR GROUP should abide by the financial law to avoid unlawful practices in the fraudulent financial reports. The employees should be highly motivated by ethical behaviors while executives should be responsible for moral behaviors in the financial reports. The corporate leaders at ACCOR are crucial to be consistent with the good governances and CSR principles in running business for the sustainable growth. In addition, ethical dilemma is one of the problems which are the great challenges in many MNEs. Most of them are challenged by some ethical dilemma on business practices such as fair payment. Ethical dilemma is the common problems found in the modern business practices. It is found that the ethical dilemma can lead to serious effects on business management. Due to this fact, ACCOR should be aware of the moral conflicts which may occur in the real world of business uncertainty.
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