Business Ethics as an Aspect of Corporate Governance of Organizations Working in the Hospitality Branch - Essay Example

The importance of business ethics is evident in all areas and business sector especially with different reforms and developments that has transformed the manner in which business works. This has made organization give relevance and importance to corporate governance which will thereby ensure that all aspect associated with customers, employees, suppliers, government bodies, society and others associated with the business is looked at. This will ensure that the business remains ethical and the organization is able to provide the required dues to the people concerned. The importance of business ethics further increases in case of the hospitality sector as the main component here is services. Since, organizations working in the hospitality sector looks towards differentiating themselves based on services it is important that they remain ethical and provide the customers what they have stated. This will help to build the required brand and create awareness through which the organizations will be able to act ethical. This paper looks towards presenting the manner business especially those working in the hospitality sector looks towards remaining ethical in their doings. While looking to present those different theories and examples have been included which will help to act in an ethical manner and ensure that the business is able to do the required justice to the different strategies that have been incorporated by them. Business ethics is an aspect of corporate governance which has gained prominence and looks towards ensuring that the customers, employees, shareholders and society are being looked at (Silva, 2004, p. 1). This thereby looks towards looking into different aspect like accountability, communication, proper services and diversity in their perspective of doing things so that the business is able to act in an ethical manner (Silva, 2004, p.1). The importance of business ethics increases in case of hospitality sector as the organization has to look towards providing services and need to provide their customers with what has been stated in their services. This will require that the organization in the hospitality sector has to look towards acting in a fair manner and being ethical in all the work that has been carried out. A theory which looks towards providing directives on the manner in which organization needs to act so that they remain ethical is the agency theory. This theory requires that business especially those working in the hospitality or service sector look towards moving away from the perspective of profit and look towards customer satisfaction and acting in the fair interest of the society (Nicholson, 2008, p. 1). This will make organization take decision which will ensure that they remain fair and take decisions looking at the larger picture. This will have the hospitality sector to ensure that the organization is able to provide the required service that they have promised to deliver. This can be seen in the case of McDonalds which while entering into India clearly acted fair. There were situations were different incidents were highlighted which showed that McDonalds uses animal fat especially cow fat and since it is against the custom of people in India the fast food chain made the required changes and ensured that none of their products had animal fats especially cow fat and ensured that the products supplied were different from those in other areas (Enright & Subramanian, 2008, p. 148). This shows that the business looked towards acting fair and remained ethical in their business doings. This has thereby ensured that the business was able to carry out their operations in the most ethical manner and ensure that they remain fair. Another important consideration for being ethical in the hospitality sector is to ensure that they look towards providing services to customer which has been stated in the agreement. This is especially true in case of tourist travelling from one destination to another. The fact that the number of tourist travelling to different places has multiplied especially those to Europe so it is imperative that the organization looks towards providing services which matches the expectations of the customers. This will require that organizations look towards differentiating their services for which the customer might have to pay something extra but while looking to do so care should be taken to ensure that they remain ethical and provide the customers with what has been agreed (Krishna, 2010, p. 2). This will help to build customer loyalty and will ensure that the organization is able to gain the required leverage through which the business will be able to provide better services. Another theory which can be looked in this direction so that business remains ethical is the stakeholder theory. This theory looks towards stating that organizations have to look towards the well being of the people and the society and ensure that they act in the most ethical manner (Hill & Jones, 2002, p. 201). This will require that organizations performing in the ethical sector act in a fair way by not only looking towards providing services to the customers but also ensure that the society and other associated with the business is looked after. A step in this direction can be seen from McDonalds which looks towards using materials which don’t harm the environment as the boxes which have been developed looks towards being eco friendly and doesn’t look towards haring the environment (Dash, 2005, p. 9). This has ensured that Dominos take steps which looks towards preserving the environment and at the same time has ensured that the additional cost which had to be incurred to have the required material through which the products are provided don’t have an effect on the quality of product supplied by them. This goes in line with the stakeholder theory as it looks towards ensuring that the organization looks towards the larger section of the society and looks towards providing the customers and the society with the required ethical work. One of the most important aspects that the organization working in the hospitality sector has to deal with is that they need to have the required flexibility through which the different strategic options are chosen so that the environmental changes are adapted (Aharoni, 2006, p. 26). This will help to ensure that the organization is able to act fairly and work according to the local responsiveness at the same time create the required knowledge through which better services can be provided and acted in a fair manner so that they remain ethical. This will also ensure that the organization is able to provide the required services through which the business will be able to provide the required directives through which correct services are provided (Kotler, Bowen & Makens, 2010, p. 83). Another important directive which shows that organization act in an ethical manner not only towards the customer but also towards the employees can be seen from the manner in which growing restaurants and other tourist provider worked in the country. The fact that the employees work over time at a very low wage rate especially those working in the restaurant sector in developing countries witnessed a change as it was lower than the pay requirements. The hospitality sector ensured a transformation by ensuring that the employees were paid as per the requirements and changing business scenario (Lim, Dollar & Sense, 2013, p. 1). This ensured that the business acted fair and looked towards protecting the larger interest of the society by ensuring that they were able to deliver quality services. This has also ensured that the organization working in the hospitality sector was able to act in a fair manner and ensured that they were able to deliver the required service through which they were able to provide the customer with their required dues. The manner in which the organization has increased the dependence on providing quality service has looked towards ensuring that they act in a fair manner. This will require that organization find out the underlying factor based on which they act in a fair manner. This will require that they look toward providing services based on different parameters and directives so that the they are able to ensure that service act as a differentiation and looks towards providing the required services based on which they will be able to build their brand image (Kotler, Bowen & Makens, 2010). This thereby makes it imperative that organizations working in the hospitality sector looks towards being ethical and acting in a manner where they are able to provide quality services to its customers and others associated with the organization. This will require that the business delivers the required performance based on the standards which have been prescribed and looks towards acting in a manner where they remain ethical. This will ensure that the business looks towards working in a domain where they are able to deliver quality performance on the required standards. This has made organization give relevance and importance to corporate governance which will thereby ensure that all aspect associated with customers, employees, suppliers, government bodies, society and others associated with the business is looked at. This will ensure that the business remains ethical and the organization is able to provide the required dues to the people concerned. Even different theories and directives in the same direction provides the same and highlights the manner in which the business has been able to undergo the required changes so that they remain fair and act in a manner which will ensure that customer satisfaction gets enhanced. References Aharoni, Y. 2006. The organisation of global service of MNC. International Studies of Management & Organisation, 26 Dash, K. 2005. McDonalds in India. Thunderbird School of Management Enright, M. & Subramanian, V. 2008. An organising framework for MNC typologies. Business & Economics, 47 (6), 145-157 Hill, C. & Jones, T. 2002. Stakeholder Agency Theory. Journal of Management Studies, 24 (2), 191-205 Krishna, R. 2010. Role of CRM in customer interaction and services. ezine articles. Retrieved on Feb 17, 2012 from http://EzineArticles.com/?expert=Rama_Krishna Kale, S. 2009. CRM evolves from Synergy. Innovating Ideas, urbino.net Kotler, P, Bowen, J & Makens, J 2010. Marketing for hospitality and tourism, 5th edition, Prentice-Hall, Upper Saddle River NJ, USA. Lim, J., Dollar & Sense. 2013. How High Could Minimum Wages Go? Retrieved on Feb 17, 2012 from http://truth-out.org/news/item/14574-how-high-could-the-minimum-wage-go Nicholson, M. 2008. Applying Agency Theory and the concept of corporate governance. Retrieved on Feb 17, 2012 from http://www.lotsofessays.com/viewpaper/1706098.html Silva, M. 2004. Corporate Governance in a turbulent world. 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