1. Lecture 10
Professional Ethics
From Malpractice
to Service Integrity
HTM2002 Freshman Seminar

2. Learning Outcomes
By the end of this lecture, YOU should be able to:-
• Discuss the significance of business
ethics in hospitality and tourism industry
• Explain the concept of Corporate Social
Responsibility in the globalized
hospitality and tourism environment
2

3. Social
Responsibility of
Business ~
A Controversy ?

4. Milton Friedman (1970)
Do YOU agree
with Friedman ?
Why ? Why Not ?
“”
The Social
Responsibility of
Business is to Increase
its Profits

5. Social Responsibility of Business
Friedman 1970
• Corporate Executives/Managers
– Agency relationship based on contractual arrangements
– Agent serving the interests of his/her principals, who are the
shareholders owning the corporation
– Responsible for his/her employer
– Make as much MONEY as possible while conforming to the basic rules
of the society

6. Failure in Fulfilling the Agency Relationship
Friedman 1970
• Reduce returns to stockholders
– Spend stockholders’ money
• Raise the price to customers
– Spend customers’ money
– Lower the wages of some employees
• Impose “tax”
– Should be a governmental function

7. Market Mechanism: An Ideology of Capitalism
7

8. Market Mechanism: A Political Doctrine

9. Market Mechanism: Ideal Free Market
• Resting on private property
– No individual can coerce any others
– All kinds of co-operation are voluntary
– All parties will benefit from such co-operation
– Otherwise, they need not participate

10. Market Mechanism: Ideal Values and Society
Are these ideal
values upheld ?

11. Political Principles
What is the real world?
Universal suffrage ?
How representative is a “Representative” government ?
Clout of large corporations ?
…… etc ?

12. What is “Legal”
• Legality: A matter of laws
– Minimum age of work ?
– Rigidity of work safety procedures ?
– Employee discrimination ?
– Minimum wages ?
– Strategic alliances of airlines ?
– Overbooking hotel rooms ?
– Level of pollution allowed ?
– Accounting practices ?
• Preventive laws vs Reactive laws

13. Bacon Contained Toxic Chemicals found in
Burger King in Taiwan
Apple Daily, 15th June 2011, A19
台灣 Burger King 煙肉含瘦肉精
港拒回應食材是否同樣來自美國
http://hk.apple.nextmedia.com/template/apple/art_main.php?iss_id=20110615&se

14. Ethics vs Legality
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15. Ethics

16. Ethics: Definition
“A set of moral principles and values
that people use to answer questions
about right and wrong”
Walker, 2009, p.485
16

17. How Ethics Are Formed
Walker 2009
Ethics
17

18. Why Ethics is Important in Hospitality and Tourism Industry
• Profits vs Social Responsibilities
– Short-term profit maximization vs Long-term sustainability
• Multiculturalism
– Workforce and customers of different socio-cultural backgrounds
having different ethical standards
• Activism
– Consumers become more concerned about “rights”, “ethics”,
“environmental conservation”, etc
• Recruitment and retention of talents
– Employees become more concerned about the ethical behaviors and
corporation social responsibilities of the companies
• Trivial matters easily being overlooked, but have serious
consequences
18

19. Corporate Social
Responsibilities

20. Corporate Social Responsibility: Definition
“A business’ intention, beyond its legal
and economic obligations, to do the
right things and act in ways that are
good for society”
Robbins & Coulter, 2012, p.125

21. Corporate Social Responsibility: Obligations
• Extend beyond the statutory obligation to
comply with legislation
• See organizations voluntarily taking further
steps to improve the quality of life for
employees and their families as well as for the
local community and society at large

22. Corporate Social Responsibility:
Responsible for the Impacts on Stakeholders

23. An Example of Corporate Social Responsibility
Hotel Icon: Charity Moon Cakes
23

24. Codes of
Ethics

25. Code of Ethics for the Hospitality and Tourism Industry … 1
Ethics of Hospitality Management by Stephen Hall (Quoted in Walker, 2009, p.486)
1. We acknowledge ethics and morality as inseparable
elements of doing business and will test every decision
against the highest standards of honesty, legality, fairness,
impunity, and conscience
2. We will conduct ourselves personally and collectively at all
times so as to bring credit to the hospitality and tourism
industry
3. We will concentrate our time, energy, and resources on the
improvement of our own products and services and we will
not denigrate our competition in the pursuit of our success
4. We will treat all guests equally regardless of race, religion,
nationality, creed, or sex
25

26. Code of Ethics for the Hospitality and Tourism Industry … 2
Ethics of Hospitality Management by Stephen Hall (Quoted in Walker, 2009, p.486)
1. We will deliver all standards of service and product with total
consistency to every guest
2. We will provide a totally safe and sanitary environment at all
times for every guest and employee
3. We will strive constantly, in words, actions, and deeds, to
develop and maintain the highest level of trust, honesty, and
understanding among guests, clients, employees, employers,
and the public at large
4. We will provide every employee at every level all the
knowledge, training, equipment, and motivation required to
perform his/her tasks according to our published standards
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27. Code of Ethics for the Hospitality and Tourism Industry … 3
Ethics of Hospitality Management by Stephen Hall (Quoted in Walker, 2009, p.486)
1. We will guarantee that every employee at every level will
have the same opportunity to perform, advance, and be
evaluated against the same standard as all employees
engaged in the same or similar tasks
2. We will actively and consciously work to protect and
preserve our natural environment and natural resources in
all that we do
3. We will seek a fair and honest profit, no more, no less
Do YOU think this
Code of Ethics are
sufficient ?
Why ? Why Not ?
27

28. Global Code of Ethics for Tourism
World Tourism Organization (UNWTO)
http://www.unwto.org
• Set a framework of reference for the
responsible and sustainable development of
world tourism
 Minimize the negative impacts of tourism on
the environment and on cultural heritage
 Maximize the benefits for residents of
tourism destinations
28

29. Global Code of Ethics for Tourism: Principles … 1
World Tourism Organization (UNWTO)
http://www.unwto.org
1. Tourism's contribution to mutual understanding
and respect between peoples and societies
2. Tourism as a vehicle for individual and collective
fulfillment
3. Tourism, a factor of sustainable development
4. Tourism, a user of the cultural heritage of mankind
and contributor to its enhancement
5. Tourism, a beneficial activity for host countries and
communities
29

30. Global Code of Ethics for Tourism: Principles … 2
World Tourism Organization (UNWTO)
http://www.unwto.org
• Obligations of stakeholders in tourism development
• Right to tourism
• Liberty of tourist movements
• Rights of the workers and entrepreneurs in the
tourism industry
• Implementation of the principles of the Global
Code of Ethics for Tourism Do YOU think this
Code of Ethics are
sufficient ?
Why ? Why Not ?
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31. A Reflection: Is the Codeperson’s ethics are shaped to one’s value
If a of Ethics Sufficient by Ensure
Ethical Practices in Hospitality necessary for the hospitality and
systems, it is and Tourism Industry
tourism organizations to initiate a fundamental
change in the organizational cultures to value a
Culture of Ethical Behavior
Ethics
31

32. Examples of Corporate
Social Responsibility in
Hong Kong ~
Caring Company Scheme

33. Caring Company Scheme … 1
http://www.caringcompany.net
Mission
• To build a cohesive society by promoting strategic partnership among
businesses and social service partners and inspiring corporate social
responsibility through caring for the community, employees and the
environment
Objectives
• To raise public awareness of good corporate citizenship demonstrated by
the business and public sectors and their contribution to a caring
community
• To motivate strategic partnership initiatives among the public, business
and non-profit organizations
• To recognize organizations which demonstrate good corporate citizenship
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34. Caring Company Scheme … 2
http://www.caringcompany.net
Adjudication scopes for “Caring Company”
• Recognizing private companies which demonstrate
good corporate citizenship
Caring for the community
Caring for employees
Caring for the environment
34

35. Caring Company Scheme … 3
http://www.caringcompany.net
 Caring for the community
 Volunteering
 Giving
 Mentoring
 Employing vulnerable
35

36. Caring Company Scheme … 4
http://www.caringcompany.net
 Caring for employees
 Recognize employees
 Employee safety
 Employee wellness
 Employee family responsibility
 Work-life balance
 Well-established communication mechanism
36

37. Caring Company Scheme … 5
http://www.caringcompany.net
 Caring for the environment
 Successful implementation of environmental
protection practices
 Eco-friendly manufacturing processes
 Reduce carbon emissions
 Green partnership
 Environmental label or other recognition
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38. Caring Company Scheme … 6
http://www.caringcompany.net
Awardees for “5 Years Plus Logos”
 Transportation (Some Examples)
 Cathay Pacific Airways Ltd
 China Aircraft Services Ltd
 Hong Kong Dragon Airlines Ltd
38

39. Caring Company Scheme … 7
http://www.caringcompany.net
Awardees for “5 Years Plus Logos”
 Food and Beverage (Some Examples)
 Cathay Pacific Catering Services (HK) Ltd
 McDonald’s Restaurants (HK) Ltd
 Morton’s of Chicago, The Steakhouse
 Pizza Hut HK Management Ltd
 The Stonegrill
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40. Caring Company Scheme … 8
http://www.caringcompany.net
Awardees for “5 Years Plus Logos”
 Convention, Exhibition and Event
Management (An Example)
 Hong Kong Convention and
Exhibition Centre (Management) Ltd
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41. References
Ellis, D. (2012). Becoming a master student. Boston, MA: Wadsworth Cengage
Learning.
– Chapter 7 & 10
Friedman, M. (1970, September 13). The social responsibility of business is
to increase its profits. The New York Times Magazine.
Robbins, S. P., & Coulter, M. (2012). Management. Upper Saddle River, NJ:
Pearson Education Inc.
– Chapter 5
Walker, J. R. (2009). Introduction to hospitality. Upper Saddle River, NJ:
Pearson Education Inc.
– Chapter 14 & 16
World Tourism Organization (UNWTO). (2011). Global Code of Ethics for
Tourism. Retrieved June 18, 2011 from http://www.unwto.org
Yaman, H. R. (2003). Skinner’s naturalism as a paradigm for teaching
business ethics: A discussion from tourism. Teaching Business Ethics, 7,
107-122.
.

42. Professor for A
Day

43. Professor for A Day
Ms Wendy Luk
Senior Manager (Caring Company Scheme),
Sector Development and Partnership,
The Hong Kong
Council of Social Service
“Practices of Corporate Social Responsibility in
the Hong Kong Hotel and Tourism Industry”
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44. Break
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