Sustainable Intercultural

Sustainable and Intercultural Hotel Management

WS 2012/2013 Prof. Dr. Christian Buer

Hochschule Heilbronn – Heilbronn University


Index

  Part I: Sustainable Hotel Management –  Aspect of Sustainability in Tourism –  Corporate Social Responsibility –  Environmental Dimension –  Economic Dimension –  Social Dimension –  Conclusion

  Part II: Intercultural Hotel Management –  Culture –  Hofstede’s cultural dimensions –  Human resource strategies

Prof. Dr. Christian Buer - Sustainable & Intercultural Hotel Management 1


Literature   Chen, Joseph S., Sloan, Philip und Legrand, Willy. Sustainability in the Hospitality

Industry: Principles of Sustainable Operations. Butterworth Heinemann, 2009.   Clarke, Alan und Chen, Wei. International Hospitality Management: Concepts and Cases:

Issues and Applications. First. Butterworth Heinemann, 2007.   Dahlsrud, Alexander. „How corporate social responsibility is defined: an analysis of 37

definitions”. Corporate Social Responsibility and Environmental Management 15 (Januar 2008): 1-13.

  Deloitte. Hospitality 2015: Game changers or spectators. London, 2010.   Fechner, Ellen/Buer C.. Die touristische Wertschöpfung, Analyse des deutschen

Reisemarktes im Jahr 2006, Uni Editon, 2006..   Kriegl, U. „International Hospitality Management: Identifying Important Skills and Effective

Training”. Cornell Hotel and Restaurant Administration Quarterly 41 (1. April 2000): 64-71.

  Müller, Hansruedi, Tourismus und Ökologie: Wechselwirkung und Handlungsfelder, 3. Auflage, Oldenbourg, München, 2007.

  Saee, John. Managerial Competence within the Tourism and Hospitality Service Industries: Global Cultural Contextual Analysis. Routledge, 2006.

  Swarbrooke, John. Sustainable Tourism Management. First. CABI, 1999.   Tesone, Dana V. und Pizam, Abraham. Handbook of Hospitality Human Resource

Management. Butterworth Heinemann, 2008. Prof. Dr. Christian Buer - Sustainable & Intercultural Hotel Management 2


SUSTAINABLE HOTEL MANAGEMENT

Part I



Worldwide Contribution of Travel & Tourism   GDP: Direct Contribution

The direct contribution of Travel &Tourism to GDP is expected to be US$1,850.0bn (2.8% of total GDP) in 2011, rising by 4.2% pa to US$2,860.5bn (2.9%) in 2021 (in constant 2011 prices).

  GDP: Total Contribution The total contribution of Travel &Tourism to GDP, including its wider economic impacts, is forecast to rise by 4.2% pa from US$5,991.9bn (9.1% of GDP) in 2011 to US$9,226.9bn (9.6%) by 2021.

  Employment: Direct Contribution Travel & Tourism is expected to support directly 99,048,000 jobs (3.4% of total employment) in 2011, rising by 2.0% pa to 120,427,000 jobs (3.6%) by 2021.

  Employment: Total Contribution The total contribution of Travel & Tourism to employment, including jobs indirectly supported by the industry, is forecast to rise by 2.3% pa from 258,592,000 jobs (8.8% of total employment) in 2011 to 323,826,000 jobs (9.7%) by 2021.

  Visitor Exports Travel & Tourism visitor exports are expected to generate US$1,162.7bn (5.8% of total exports) in 2011, growing by 6.6% pa (in nominal terms) to US$1,789.2bn (4.7%) in 2021.

  Investment Travel & Tourism investment is estimated at US$652.4bn or 4.5% of total investment in 2011. It should rise by 5.4% pa to reach US$1,487.9bn (or 4.6%) of total investment in 2021.

Source: http://www.wttc.org/eng/Tourism_Research/Economic_Research/



Contribution of Tourism in Germany   Figures are based on the study “Gesamtwirtschaftliche

Bedeutung des Tourismus in Deutschland” (2007)

  GDP: Total Contribution –  The total contribution of tourism to the German GDP, including its

wider economic impacts, is 4,27% (€ 98.418bn of €2.303.000bn)   National Income: Total Contribution

–  The total contribution of tourism to the German national income, including its wider economic impacts, is 5,65% (€ 98.418bn of €1.728.000bn)

  Employment: Contribution –  The contribution of Tourism to employment in Germany is 3,48mio

direct jobs and 1,68mio jobs through indirect employment effects.



Revenue steps in German Tourism Industry (2007)


Source: Fechner, Reisemarktanalyse Deutschland anhand der touristischen Wertschöpfungskette


Problem Definition   An industry as big and internationally oriented as tourism has an

inevitable, large impact on the environment, economies, cultures and societies in general.

  The hotels, motels and all the various forms of accommodation comprise the largest sector of the travel and tourism industry, and it has been shown that hotels have the highest negative influence on the environment of all commercial buildings.

  According to estimations, an average hotel releases between 160 and 200kg of CO2 per square meter of room floor area per year and water consumption per guest per night is between 170 and 440l in the average five-star hotel. On average, hotels produce 1 kg of waste per guest per night.



Definition   World Business Council on Sustainable Development:

We define sustainable developments as forms of progress that meet the needs of the present without compromising the ability of future generations to meet their needs. Given the scale of poverty today, the challenge of meeting present needs is urgent. Given the damage our past and present actions may visit upon our descendants, concern for future needs for environmental, human, social, and other resources is also compelling.

  World Tourism Organization: Sustainability principles refer to the environmental, economic and sociocultural aspects of tourism development, and a suitable balance must be established between these three dimensions to guarantee its long-term sustainability.



Sustainability: Balancing the dimensions


Environmental Dimension

Economic Dimension

Social Dimension

Sustainable Development

Synergies & Conflicts

Source: GTZ


Value Generation Through   Environmental Effects:

Generating Value for Hotel & Guests in Protecting the World   Economic Effects:

Generating Income for Hotel Generating Income for GDP Generating Jobs Generating Multiply Effects of Income

  Social Cultural Effects: Exchange of intercultural information (Cultural Clash) = Process : Euphoria, Apathy, Annoyance, Antagonism Authenticity



Value Generation Multiply Effect of Income


Source: Bauer Sina, based on Swarbrooke, 2004


Prof. Dr. Christian Buer - Sustainable & Intercultural Hotel Management

Factors necessary in a sustainable hotel operation:

Environmental Dimension

Economic Dimension

Social Dimension

Source: Chen et al., Sustainability in the Hospitality Industry

…minimize environmental

impacts?

…maximize internal and external

economic profit?

…maximize social well-being of all stakeholders?

How can a hotel operation…

Sustainability in the hospitality industry

12


Aspect of Sustainable Tourism Development


Source: Müller, 2007, 29


Sustainability drivers for hospitality (1/3)   Hospitality is an asset-heavy sector with a large

environmental footprint –  Hotels rely on a wide range of natural resource inputs and generate

significant waste through their lifecycle. –  Once built, buildings are expected to last for decades and major

retrofits can be expensive. –  Existing buildings contribute to almost 80% of the carbon emissions

in some large cities through their energy use. Risk of economic cost and negative media publicity as marketplace concern around climate change grows.

–  Consumer attitudes and public policy continue to change and force the hospitality industry to change.



Sustainability drivers for hospitality (2/3)   Regulatory changes and commodity prices will impact the bottom

line –  Reliance on scarce resources such as water, electricity, and natural gas for

building operations exposes the industry to commodity risks and falling margins as prices rise.

–  Planned and pending regulation around the globe targeted at increased efficiency and carbon offsetting through payments/ licenses will further impact the industry.

–  Sustainability will become a driver of improved profitability as the regulatory lanscape evolves and resource prices increase.

Example:   In the UK, the CRC Energy efficiency scheme will see hotel brands required to

participate in a new cap and trade scheme aimed at reducing carbon emissions and creating a market mechanism to facilitate this.

  A public league table will also explicitly measure performance and seek to influence consumer attitudes.


Source: http://www.decc.gov.uk/en/content/cms/emissions/crc_efficiency/crc_efficiency.aspx


Sustainability drivers for hospitality (3/3)   Marketplace awareness of environmental sustainability

–  Growing consumer preference for green hotels. –  Current consumer behavior suggests that location and price remain the

most important selection criteria and guests will only select a green hotel if all other things are equal. This is changing.

–  In the next years sustainability will increasingly become the norm and part of consumer expectations.

–  Strategy and operations that are considered environmentally irresponsible will negatively impact stakeholder decision making from investors through to customers.

–  As consumer attitudes continue to change, expectations that influence choice and inform perceptions about product and brand will also change.

  Critical and detailed media coverage of sustainability issues, especially concerning the environment (e.g. BP oil spill in the Gulf of Mexico)



Today’s savvy hospitality consumer   Main driver of sustainable development   Highly informed and connected through the Internet   Aware of decreasing natural resources and the importance

of sustainable living   Mind-set shift towards responsible consumption   Privately active

–  Organic food –  Waste separation –  Energy conservation

  Increasing demand for sustainable tourism solutions –  Lifestyles of Health and Sustainability “LOHAS” –  Ecotourism




Source: Chen et al., Sustainability in the Hospitality Industry

Influences on responsible consumer behavior

Personal wellbeing

Personal wellbeing

Personal wellbeing

Personal wellbeing

Sustainable consumption decision process

Personal experience Publicity

Press

Practicality

Prestige

Preparation methods

Product chain

Production methods


Importance of the customer David Michael Jerome, Senior Vice President Corporate Social Responsibility, Intercontinental Hotels


http://www.youtube.com/watch?v=7uasDjQ_BR4


CORPORATE SOCIAL RESPONSIBILITY



Definition   Through a content analysis of 37 CSR definitions, following five

dimensions of CSR have been found: –  The Environmental Dimension –  The Economic Dimension –  The Social Dimension –  The Stakeholder Dimension

  Consider impact on company’s stakeholder –  The Volutariness Dimension

  Voluntary activity   Not enforced by governmental regulations

  Definition by the Commission of the European Communities: CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.


à Sustainability


CSR overall business benefits (1/3)   Improved financial performance

–  Several academic studies have shown a correlation between CSR and improved financial performance. Through improved innovation, competitiveness and market positioning, CSR is as much about seizing opportunity as avoiding risk.

–  Drawing feedback from diverse stakeholders can be a rich source of ideas for new products, processes and markets, resulting in competitive advantages.

  Reduced operating costs –  The improved operational efficiency through a systematic approach

to management that includes continuous improvement is key in reducing operating costs.

–  Environmentally oriented program: Energy efficiency reducing utility bills, recycling reducing waste disposal costs.

–  Human Resources program: Work–life scenario reducing absenteeism and increasing retention, thus reducing employee turnover costs.



CSR overall business benefits (2/3)   Enhanced brand image and reputation

–  Organizations that perform well with regard to CSR can build their reputation. Reputation, or brand equity, is founded on values such as trust, credibility, reliability, quality and consistency.

  Responsible consumerism and customer loyalty –  Ethical conduct and environmental and social consciousness of

companies make a difference in purchasing decisions. Companies have a key role to play in facilitating sustainable consumption patterns and lifestyles through the goods and services they provide and the way they provide them.

  Increased productivity and quality –  Improved working conditions equal to a greater employee

involvement in decision-making processes, increasing productivity and reducing failures.



CSR overall business benefits (3/3)   Increased ability to attract and retain employees

–  Strong CSR commitment facilitates recruitment of highly qualified candidates, boosts morale and results in higher retention rates. Employees are not only front-line sources of ideas for improved performance, but are champions of a company for which they are proud to work.

  Improved relations with regulators –  In a number of jurisdictions, governments have expedited approval

processes for firms that have undertaken social and environmental activities beyond those required by regulation.

  Access to capital –  Financial institutions are increasingly incorporating social and

environmental criteria into their assessment of projects. When making decisions about where to place their money, investors are looking for indicators of effective CSR management.

–  A business plan incorporating a good CSR approach is often seen as a proxy for good management.



Best Practice: IHG Corporate Responsibility


http://www.youtube.com/watch?v=vM_-XmY9BsI


Best Practice: Banyan Tree Corporate Social Responsibility


http://www.youtube.com/watch?v=74kOynIYUMs


ENVIRONMENTAL DIMENSION Sustainability



Environmental Dimension   There are only two types of energy: renewable which is unlimited and

non- renewable which will run out eventually.   Worldwide energy consumption for the period from 1995 through 2005

witnessed an average annual growth of 2.4%.   World primary energy demand is prospected to increase by 36%

between 2008 and 2035, or 1.2% per year on average.   Oil and oil derivates remained the most important energy sources in

2005 accounting for 36.8% in the total amount of the primary energy sources, although this represents a somewhat lower amount than in 1995 (39.0%).

  During the same period renewable energy sources in the form of geothermal, solar and wind energies, as well as biomass grew to 370 billion kWh in 2005 but only rep- resenting 0.93% in the total world energy production. In 1995, it accounted for 0.6%.

  Global demand for each fuel source increases, with fossil fuels – coal, oil and gas – accounting for over 50% of the increase in total primary energy demand.


Source: International Energy Agency


Environmental Dimension   Organization’s impact on

–  Air –  Water –  Flora & fauna

  Environmental footprint (use of resources, production of waste and emissions) of –  Operations –  Facilities –  Finished products

  Goals in environmental sustainability: –  Productivity maximization and efficiency of all assets and resources –  Avoid short- and long-term environmental damage –  Maintain and promote natural diversity



Potential impacts of tourism on the natural environment


Source: Swarbrook, Sustainable tourism management


Potential impacts of tourism on the built environment




Sustainability trends at major hospitality companies


Company Publicly announced sustainability targets? Target summary

Hilton Yes Five year reduction targets (energy, waste, water, and CO2 emissions) from direct operations.

IHG Yes

Three-year energy reduction targets per available room night and plans to launch “Green Engage” programme in 100% of owned and managed facilities.

Marriott Yes

Ten-year energy and water consumption reduction targets per available room. Established green building targets and implementing green-sourcing programmes.

Starwood No

No formally announced target – however the company has launched the Element brand which incorporates the LEED construction standards.

Wyndham No (In-Progress) Defined sustainability strategy and identified core focus areas. In-process of establishing sustainability targets.

Source: Deloitte, Hospitality 2015


Energy use in hotels   Energy is one of the fastest growing operating cost in hotels   Energy use depends on

–  Hotel size –  Category –  Number of rooms –  Customer profile (business/ leisure) –  Location (rural/ urban) –  Climate zone –  Services/ activities and amenities offered

  Three distinct zones: –  Guest room area (bedrooms, bathrooms/ showers, toilets) –  Public area (reception hall, lobby, bars, restaurants, meeting rooms,

swimming pool, gym, sauna etc.) –  Service area (kitchens, offices, store rooms, laundry, staff facilities,

machine rooms and other technical areas)



Ways to increase energy efficiency (1/2)   “4 r” approach: reduce, reuse, recycle, rethink   Renewable energy usage

–  Solar power   Passive architectural design à sun = light and heating system   Solar water heating   Photovoltaic solar panels

–  Wind power   Passive architectural design à wind = cooling system   Wind turbines

–  Hydropower and wave power   Uses flowing waters as energy source

–  Geothermal power   Heat pumps

–  Biomass:   Biomass fuels are produced by converting plants or other biological

material into electricity.



Ways to increase energy efficiency (2/2)   Buying green electricity

–  Sustainably produced energy from renewable resources   Carbon offsetting


One ton of carbon dioxide is emitted when you:   Travel 3.200 km on a plane   Drive 2.100 km in a large sport utility vehicle   Drive 3.000 km in a mid-size car   Drive 9.600 km in a hybrid gasoline-electric car

To offset 1.000 tons of carbon dioxide you could:   Move 145 drivers from large SUVs to hybrid cars for one year   Run one 600 kW wind turbine for an average year   Replace 500 lightbulbs of 100-watt with 18-watt compact

fluorescent lights   Replace 2.000 refrigerators with the highest-efficiency model

  Install 125 home solar panels

  Plant an acre of Douglass fir trees

Source: http://www.cleanair-coolplanet.org/ConsumersGuidetoCarbonOffsets.pdf


4r approach – reduce, reuse, recycle   Reduce

–  Water consumption: measure your water consumption and utilise technology, such as flow restriction devices.

–  Energy consumption: use energy efficient light bulbs and timer controls to turn off lights in unoccupied periods.

  Reuse –  Encourage guests to reuse towels and reuse paper in your office.

  Recycle –  Glass, paper, plastic, light bulbs, wire coathangers, batteries and

linen can all be recycled or even sold.   Rethink

–  Education: start a green education programme for staff to broaden awareness and understanding of environmental issues.

–  Animals and plants: being green can also mean providing protection for wildlife and plant life, build an aviary, grow your own fruit and vegetables.



Best practice: world’s first hotel with a zero energy-balance


http://www.youtube.com/watch?v=YFoAsJVz88Q


Best practice: IHG’s sustainable innovation hotel


http://innovation.ihgplc.com


ECONOMIC DIMENSION Sustainability


Source: http://www.flickr.com/photos/60364452@N00/2698573338/


Economic Dimension: From a destination’s point of view



Economic benefits of tourism Costs of tourism

  Job creation   Injection of income into the local

economy through the multiplier effect   Helping keep local business viable   Regeneration and restructuring of the

economies of towns and cities where other industrial activities are in decline

  Stimulates inward and industrial investment

  Many jobs are low paid and/ or seasonal   Opportunity costs, i.e. money invested in tourism that cannot be used for other purposes   Congestion   The need to invest in expensive infrastructure which may only be required for part of the year   Over-dependence on tourism which makes the host economy vulnerable to changes in the tourism market


The multiplier effect in tourism


  Tourism not only creates jobs in the tertiary sector, it also encourages growth in the primary and secondary sectors of industry.

  This is known as the multiplier effect which in its simplest form is how many times money spent by a tourist circulates through a country's economy.

  Money spent in a hotel helps to create jobs directly in the hotel, but it also creates jobs indirectly elsewhere in the economy.

  The hotel has to buy food from local farmers, who may spend some of this money on fertilizer or clothes. The demand for local products increases as tourists often buy souvenirs, which increases secondary employment.

  The multiplier effect continues until the money eventually 'leaks' from the economy through imports - the purchase of goods from other countries.

Source: http://geographyfieldwork.com/TouristMultiplier.htm


Leakages


A study of tourism 'leakage' in Thailand estimated that 70% of all money spent by tourists ended up leaving Thailand (via foreign-owned tour operators, airlines, hotels, imported drinks and food, etc.). Estimates for other Third World countries range from 80% in the Caribbean to 40% in India.

High leakage Low leakage Areas in developing countries with economies based largely on primary production such as agriculture, where tourism is a relatively new phenomenon.

Well-established major tourist destinations in developed countries.

Source: http://www.publicsector.org/local_agenda_21and_you/WhileTravelling/5Questions.html


Economic Dimension: from a hotel’s point of view   Main aim of every private business is to make profits, if not the

operation stops.   In recent years, it has become obvious that some practices that

contribute to environmental sustainability can also provide significant short- and long-term business benefits.

  Saving costs through installing energy and water efficient technologies, using energy efficient equipment and ensuring efficient and fair staff practices can increase internal profitability.

  Additional business benefits of improved relationship with stakeholders, improved staff morale and motivation, enhanced public reputation, increased market share can result from sustainable management systems.



  Guest satisfaction is the number one priority in the hospitality sector, and hotel operators are often hesitant to engage in activities that could be perceived as reducing comfort, convenience, or the overall brand experience.

  However, energy represents one of the single fastest-growing operating cost in the lodging industry.

  Improved operating income translates to higher asset value for owners. Cost reductions through energy efficiency are quantifiable and can be described using key financial metrics, such as revenue per available room (revPAR) or the equivalent increase to the average daily rate (ADR).


Just 10% reduction in energy consumption would have the same financial effect as increasing the ADR (average daily rate) by USD 0,60 in limited-service hotels and by USD 2,- in full-service hotels. Source: http://www.energystar.gov/hospitality

Economic Dimension: from a hotel’s point of view


Economic drivers of sustainability (1/2)   Rising prices of scarce resources and forthcoming CO2

regulations make energy efficiency an important issue for hotel operators.

  Luxury hotels will face the problem of water constraints. Governments charge higher rates or limit water use at commercial properties. These reductions will limit a hotel’s ability to use fresh water for landscaping, spas and swimming pools.

  Given the importance of these features for resort guests, such reductions may have an impact on revPAR.

  Improving water efficiency can lower a hotel’s sewage bill, which is sometimes even larger than the cost of water.



Economic drivers of sustainability (2/2)   Input prices rise, which exposes the industry to commodity risks

and margin reductions. Therefore, operational efficiency needs to be addressed.

  Investment in efficiency initiatives on new constructions and retrofits are environmental friendly and benefit the economic bottom line.

  A weak portfolio from the perspective of sustainability is likely to have an increasingly detrimental impact on brand perception and profitability.

  A hospitality company committed to a sustainable business policy supports and participates in the development of the local economy and will aim to generate economic benefits for local people through increased local employment opportunities, business linkages and other income generating opportunities.



Case Study: Sustainable All-Inclusive in Montelimar/ Nicaragua   Study from 2004 initiated by the GTZ (now GIZ: Deutsche

Gesellschaft für Internationale Zusammenarbeit)

  Research on the influence of the Barcelo Playa Montelimar Resort & Casino on the local population in comparison to other income and employment groups in the region



Case Study: Key Figures


All-Inclusive Hotel Sugar factory Employment of Nicaraguans 96,8% 100%

Average net income US$ 119,- US$134,10 Employee training spendings US$ 350 US$580

Revenues US$ 5,64mio US$ 9,5mio Domestic spendings (% of total spendings) 90% (US$ 1,9mio) 43% (US$ 390.000)

  Whose regional economic impact is higher and more sustainable?

  What other impacts do you see from the side of the All-Inclusive Hotel?


SOCIAL DIMENSION Sustainability



Social Dimension   The social dimension deals with the impact an organization has

on the society within which it operates.   The main consideration of the social dimension is how the

hospitality operation can positively contribute to the lives of local people in the present and in the future.

  A hospitality operation needs to be able to assess the social impact of its activities in order to enhance the well-being of individuals and communities.



Scope of the Social Dimension

of sustainable tourism




Potential impacts of tourism on host cultures and societies




Issues of the social dimension   Most companys adress the social dimension within their CSR

programmes   Common issues are:

–  Public health –  Social justice –  Human rights –  Labor rights –  Community issues –  Equal opportunities –  Skills and education –  Workplace safety and working conditions.

  Furthermore they –  maintain and promote social and cultural diversity –  involve communities –  consult stakeholders and the public –  train staff in regard to sustainable practices.



Best Practice: Marriot “Spirit to serve our communities”


http://www.youtube.com/watch?v=t4kRbNYfzGc


Best Practice: Shinta Mani Hotel/ Cambodia   Shinta Mani is a boutique hotel in Siem Reap built around a foundation of

sustainable tourism.   It strives to make an impact on the welfare of Cambodians by raising guest

awareness, administering vocational training programs and language education, and providing assistance with basic food, water and shelter.

  Although the hotel’s Development Centre was initially established to provide vocational training to unskilled adults, the hotel’s initiatives are now spread across several villages and have benefited thousands in rural Siem Reap with the support of private donations from Shinta Mani guests.


Sources: http://www.shintamani.com/philosophy/ http://www.mascontour.info/Media/Insight_PATA%20COMPASS_%20March_April2009.pdf?id=50730

Without question our school and community activities have provided the hotel with a distinctive competitive advantage. Bill Black, Shinta Mani.


CONCLUSION Sustainability



Conclusion   Sustainability will become a defining issue for the industry   Rising populations and increasingly scarce resources will provide a

challenging business environment in which sustainability will need to be embedded within all facets of the hospitality industry.

  Hospitality industry is approaching a tipping point, although the pace of change will differ across the globe.

  Changing stakeholder attitudes and initiated regulations have a great influence on the political, business and consumer sustainability agendas, which will affect the hospitality industry.

  By 2030 the hospitality landscape will be unrecognizable compared to that of today and sustainability will be one of the biggest drivers.

  Technology, people, business models, physical assets, operational practices and financial efficiency will need to be adapted to the changes.

  Embracing sustainability across every part of a business from strategy to operations, from brand value to asset management, will be a big competitive advantage.



Transition to intercultural management   Hospitality is one of the fastest expanding industries.   International lodging companies have hotels all over the world,

in every cultural environment.   This can lead to conflicts, since cultures are different and often

do not follow the same values or prioritize them differently.   Especially concerning sustainability issues, it is important to

analyze the dominating cultural values in the country of expansion.

  Values of the brand might not fit the values of the host country   As a consequence, a number of challenges occur:

–  Find fitting employees, that can understand and identify with the hotel company’s values

–  Organizing employee training concerning sustainability issues –  Management of cultural diversity

  These issues and more will be looked into the following slides.



INTERCULTURAL HOTEL MANAGEMENT

Part II



Why culture is important?   Impacts the way strategic moves are presented   Operating in international environments demands the abilities to

cope in diverse and complex situations, and in particular with people who have different values, beliefs and backgrounds

  Influences management, decision making, negotiations   Culture makes international business difficult or easy


Main features of culture:

  Culture is shared   Culture is intangible   Culture is confirmed by others


Key cultural issues   Cultural etiquette

–  The manners and behavior that are expected in a given situation   Cultural stereotypes

–  Our beliefs about others, their attitudes and behavior


Culture

Beliefs

Values Norms


Major obstacles to intercultural communication   The main sources of misunderstanding among cultures arise from differences in

values and priorities.   Some of the most common misconceptions reflect the ways in which different

cultures understand the following issues: –  Time –  Different modes of thinking and reasoning –  Stereotyping –  Personal space –  Materialism –  Language –  Nonverbal communication –  Clothing –  Posture –  Facial expression –  Eye contact –  Touch –  Smell –  Religion –  Ethnocentric beliefs



Cultural Sensitivity   Cultural sensitivity is a matter of understanding the international

customers, the context and how the international customers will respond to the context.

  Hospitality companies need to determine whether to promote a local or foreign image for their products.

  The products of some countries may be perceived as being particularly desirable and of higher quality than products from other countries. A firm may be able to enhance its competitive advantage by effectively exploiting this perception.

  This reinforces why the hospitality marketers need to study carefully when they move into different countries.

  When a hospitality company acquires a foreign company, it automatically acquires its brands in most situations. In some instances those brands will be maintained; in others they will be folded into a larger brand in order to capture economies of scale and to promote global brand recognition.



Skills of successful international hospitality managers


  Cultural sensitivity   Interpersonal skills   Managerial flexibility   Adaptive leadership   International motivation   Intercultural competence   Ability to work with limited resources   Understanding of international business   Interest   International etiquette   Stress management   Functional skills   Technical skills

Source: Kriegl, International Hospitality Management

Impo

rtan

ce

highest

lowest


Diversity Best Practice


http://www.youtube.com/watch?v=5o4toxfzyek


Importance of cultural details   Successful hospitality managers must know about and utilize numerous

details that are driven by culture, custom, precedent, and a long history of how business is conducted.

  Hospitality managers will likely be involved in business meetings and negotiations, and may be responsible for business entertaining.

  Simple greetings and the giving of gifts are also natural activities in business and personal situations.

  It takes some time to learn about these and other traditions, but successful businesspersons take the time to do so.

  Then they consistently practice these protocols to enhance their business and off-work relationships with persons from the host country.



Hofstede’s Cultural Dimensions   Prof. Geert Hofstede

Culture is more often a source of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster.

  Hofstede gathered extensive data on the world's cultures and

developed the 5 cultural dimensions: –  Power distance –  Individualism –  Uncertainty avoidance –  Masculinity –  Long-term orientation


http://www.geert-hofstede.com/



Source: Tesone, Handbook of Hospitality Human Resource Management

Power distance The extent to which the less powerful members of institutions and organizations within a country expect and accept that power is distributed unequally.




Individualism The tendency of people to look after themselves and their immediate family and neglect the needs of society.




Uncertainty/ risk avoidance The extent to which members of a society feel threaten by uncertain or unknown situations.




Masculinity/ Rigid gender roles The tendency within a society to emphasize traditional gender roles.




Long-term orientation A basic orientation towards time that values patience.


HUMAN RESOURCE STRATEGIES Intercultural Management



Human Resource Strategies   Ethnocentric

–  This is where management positions are filled entirely by people from the company’s country of origin. For example, managers would be appointed from the domestic market.

–  It is often felt that they understand the company better and are more familiar with their goals, policies and procedures.

–  There are disadvantages, managers may not fully understand the country that they are operating in and the culture and language will be different to what they are used to. This could cause some problems as managers try to adapt their ways to fit in with the local culture.

  Polycentric –  Here the company hires local managers from the host country. –  They would know the area and understand the culture and therefore would be able to manage their

staff more effectively. –  However one problem with this approach is the fact that they may have difficulty dealing with the

international company and may find it difficult to handle some of the company’s core values.



Human Resource Strategies   Geocentric

–  Here the best managers are recruited within or outside the company, regardless of their nationality. –  For example, if the company feel that the best managers for their business are people from China

then they will recruit them, however if they feel that managers from America will do a better job then they will recruit staff from America.

–  One big advantage with this approach is the fact that the company will get the best staff, having hired them based on their experience and knowledge.

  Regiocentric –  This is for regional businesses and would involve recruiting managers from within the wider

geographic region of operation. –  This has benefits of transferability but may also gloss over the needs for local knowledge in particular

areas. The selection of any one of these approaches creates the context in which the managers must operate and communicate within the organization.

–  Managers communicate both through action and inaction. To keep open lines of communication, managers must follow through with action on what has been discussed and then agreed upon, such as a contract.

–  The management of cross-cultural communication depends largely on a manager’s personal abilities and behaviours. The behaviours associated through research with cross-cultural communication effectiveness are: respect, empathy, tolerance for ambiguity, orientation to knowledge, interaction posture and other oriented role behaviours.



Locals vs. Expatriates


Advantages Disadvantages

Use Locals   Lower compensation   Increased acceptance of

hospitality organization in the community

  Easier to incorporate local concerns into the decision making process

  Can be a challenge to merge local employment demands with the organization’s concerns and needs

  May be difficult to recruit qualified applicants for vacant positions

  Can reduce the organization’s control of labor

Use Expatriates   Culture is similar to that of the hospitality organization

  Closer operating control will be possible

  Provides the organization’s employees with international management perspectives

  Will likely involve significant compensation expenses

  Makes it more difficult to adapt the organization to the local culture

  Can have a negative impact on the morale of locale employees

  May need to address government regulations about expatriate employment.


Global Work Experience   Several concerns impact the prospective global candidate professionally and personally,

including: –  The political environment: Governments in some countries are not stable, and

problems can arise quickly, even in countries with long-term leaders and political organizations in power. Revolutions can occur, and coups can change governmental structures and leaders overnight. Travel restrictions can be imposed that can create great concerns about the welfare of expatriates and their families.

–  Economic concerns: The costs of conducting business and living in other countries create challenges. Tax laws differ, exchange rates and inflation must be considered, and this knowledge must be factored into compensation plans that are negotiated for service abroad.

–  Cultural environment: Managers relocating to a country in which the culture and its norms are significantly different from those of their native country may suffer culture shock unless they and their families have been prepared in an extensive pre-departure training and counseling program.

  Managers who are likely to have successful expatriate experiences: –  Are able to adapt to and accept change. –  Have an interest in living in another country or region of the world. –  Know (or have an interest in learning about) the culture and language of the



Overview if a Global Work Experience



Selection   Formalized selection process is important:

–  The candidate’s experience and ability should be of special concern. –  Does his or her work experience suit the needs of the position to be filled? –  This issue addresses required competencies, and the expatriate must have the cultural sensitivities to

make decisions in an unfamiliar environment. –  He or she must also be able to interact with staff members at all organizational levels from different

sociocultural backgrounds.

  Does the candidate’s family fully support the assignment? –  Many early returns result from family problems. These can easily arise if spouses and families do not

accompany the expatriate, but significant problems also occur when families do relocate, but cannot adjust to lifestyle changes, including housing, transportation, shopping, educational programs for children, and numerous other activities that become a new part of everyday life.

  Motivations and expectations of the candidate: –  One who must relocate to help an employer, or who is doing so because it is judged necessary for

career advancement, may not have significant positive motivating influences. –  Other inappropriate reasons for selecting a global assignment include “because it appears exciting,”

or when perceived problem staff members are relocated to “get them out of the way.”

  Counseling sessions: –  can help persons anticipate lifestyle and other situations in which they will likely find themselves, and

can help ensure that persons interested in global assignments know what to expect if they are selected.



Preparation   Before-departure training

–  provides additional information about the culture of the host country. Explanations about how business is conducted within the country of the assignment also become important.

–  This training must also provide details about personal aspects, such as norms of dress, local costs, availability and quality of schools, the local currency, and (seemingly) innumerable other matters involved in adapting to the new environment.

  Interviewing and counseling sessions –  with the candidate and family will be helpful in identifying and anticipating situations that are likely to

occur, and they can further minimize the possibility of surprises that create stress.   Much information must be provided to help managers and their families adapt to life in

the new country. Examples include: –  Information about the form of government and the role it plays in business –  Overview of the prevalent religion(s) –  Examples of important social and cultural standards –  Significant information about non verbal communication –  Basics of legal concerns that may differ from those in the home country –  Size,population,history,holidays,recreationalactivities,andrelatedcountry- –  Information about medical facilities and how to access quality medical care –  Costs for housing, food, and all other likely purchases, and information about currency and exchange

rates –  Basic language training, if applicable, will also be of great assistance.



On-job concerns   Additional training

–  and adjustment to the new organization and position will be required when the expatriate arrives in the host country.

  Personal lifestyle concerns –  such as living arrangements and social interactions that will

influence the manager’s and his or her family’s perceptions of the assignment must also be addressed.

  Learning –  about and adapting to the work and the new culture will be

continuous during the assignment.   Motivation and preparation

–  Proper motivation and attitude towards learning is the best foundation for an enjoyable assignment.

–  By contrast, those who are less prepared may be confronted with a culture shock.



Follow-Up   Next assignment

–  A global manager may return to headquarters without knowledge of his or her next assignment. –  Sometimes this problem occurs because top-level managers have not thought about the issue –  Others return to discover that career opportunities have actually diminished, and their peers have

received significant promotions with increased responsibilities during their absence. –  Frustrations about the worth of the relocation will likely arise, as can concerns about one’s future with

the organization.   Reverse culture shock

–  Reverse culture shock can cause problems for those who have learned and worked in another culture.

  No recognition for global assignment –  If the hospitality organization is focused on domestic operations, returning expatriates may not be

recognized for their newly acquired knowledge and skills. –  Frustration can also arise if these managers believe that they have new knowledge and skills that are

not used or that are underused in their next domestic assignment.

  Systematic transition –  Career planning activities can begin with the manager’s current status in the organization. –  Access to mentors who have served in expatriate management positions can be helpful, as can a

formal process of recognizing the returning manager’s international contributions. –  The after-assignment process is easier if the expatriate has received regular communication and

updates from headquarters during the time of the international assignment.



THANK YOU FOR YOUR ATTENTION


Sustainable Intercultural

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