Tag Archives: strategic management

Environmental Responsibility in the Hospitality Sector

In a recent media release Hyatt has reiterated its commitment to environmental stewardship with a focus on energy, waste and water reduction, sustainable building, supply chain management as well as stakeholder engagement. In Hyatt’s Corporate Responsibility Report, the listed hotel corporation has unveiled an aggressive set of environmental goals for the year 2020, all designed to strengthen Hyatt’s collective ability to collaborate, inspire and further its commitment to environmental stewardship. Hyatt has also defined a suite of measurable and actionable targets. Hyatt hotels aim to create a more sustainable future for themselves and for their neighbours. The hotel group posits that the conservation efforts have reaped fruit, resulting in major reductions in greenhouse gas emissions and water and energy usage by property across their portfolio. Hyatt maintains that its commitment to environmental stewardship touches every aspect of its business, from the way how the hotels are built and operated, to the way they collaborate with their global supply chain, to the way the hotel chain influences change through the passion and commitment of its employees around the world.
Setting Focus Areas
Hyatt 2020 Vision focuses on significantly expanding the global chain’s strategic scope, especially in areas where past efforts have not had as much of an impact due to occupancy fluctuations and rapid business growth in developing markets. With this in mind, the hotel chain’s three strategic priorities include the following;
• “Use Resources Thoughtfully: Hyatt is committed to examining how its hotels source, consume and manage natural resources to serve their guests. Hyatt will identify ways for Hyatt hotels to reduce energy consumption and greenhouse gas emissions, use less water, produce less waste and make more environmentally responsible purchasing decisions. As a highlight, Hyatt has set the goal to reduce water use per guest night by 25 percent, and within water-stressed areas, Hyatt has set a 30 percent reduction goal. Additionally, Hyatt is elevating its recycling efforts by challenging every hotel to reach a 40 percent diversion rate, as well as by setting a recycling goal for renovation waste.
Build Smart: Hyatt will work closely with stakeholders to increase the focus on building more efficient, environmentally conscious hotels across the enterprise. Beginning in 2015, all new construction and major renovation projects contracted for Hyatt managed hotels will be expected to follow enhanced sustainable design guidelines. Hyatt will lead this initiative by mandating that all new construction and major renovation projects for wholly owned full service hotels and resorts achieve LEED certification, or an equivalent certification.
Innovate and Inspire: This goal reflects Hyatt’s commitment to be a catalyst for bringing more hearts, hands and minds to the table to help advance environmental sustainability around the world. This includes Hyatt’s commitment to create a funding mechanism to support the innovation, ideation and acceleration of sustainable solutions within its hotels that can be replicated across the Hyatt portfolio, as well as the broader hospitality industry” (Hyatt Corporate Responsibility Report, 2013/2014).

Reporting Progress
Hyatt’s reported some of its major milestones, including:

• “The launch of Ready to Thrive, Hyatt’s global corporate philanthropy program focused on literacy and career readiness, which included a $750,000 investment in career readiness programs in Brazil.
• Building 11 libraries and supporting reading and writing programs in 30 schools through a new partnership with Room to Read, impacting 30,000 students in India.
• Donating 35,000 books to kids in need across the globe through We Give Books and Room to Read.
• Donating more than 100,000 volunteer hours in 2013 – a 69 percent increase from 2012.
• More than 80 percent of Hyatt hotels recycling at least one or more waste streams.
• A reduction in resource use intensity in each of Hyatt’s three regions compared to 2006 – up to a 20 percent reduction in greenhouse gas emissions, up to a 13 percent reduction in energy and up to a 15 percent reduction in water.
• Development of responsible seafood sourcing goals based on a global purchasing audit in partnership with World Wildlife Fund.
• Required more than 40,000 of its global associates — including housekeepers, front office, concierge, guest services, key service and security personnel, and all management-level colleagues — to complete Human Trafficking Prevention Training. Hyatt also implemented a standard for all of its hotels to have training measures in place” (Hyatt Corporate Responsibility Report, 2013/2014).

Sources:
Hyatt Thrive: http://thrive.hyatt.com/en/thrive.html
Hyatt Corporate Responsibility Report (2013-2014): http://thrive.hyatt.com/content/dam/Minisites/hyattthrive/Hyatt%20Corporate%20Responsibility%20Report-2013-2014.pdf

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Filed under Corporate Sustainability and Responsibility

Generating Synergistic Value for Business and Society

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Synergistic value integrates insights from the stakeholder theory [1] [2] [3] and the resource based view theory [4] [5].

The stakeholder theory [1] provides opportunities to align business practices with societal expectations and sustainable environmental needs. Businesses ought to reconcile disparate stakeholders’ wants and needs (e.g. employees, customers, investors, government, suppliers etc.). Firms can create synergistic value opportunities by forging alliances with internal and external stakeholders.  This may lead to an improvement in mutual trust and understanding. As a result, there are also benefits for corporate reputation, brand image, customer loyalty and investor confidence. This societal engagement also responds to third party pressures, it lowers criticisms from the public and minimises regulatory problems by anticipating legal compliance.

The synergistic value model [6] as featured in Figure 1. presents the potential effect of the government’s relationship on the organisation’s slack resources. Moreover, scarce resources are a facilitator for quality and innovation. Therefore, discretionary expenditures in laudable practices may result in strategic CSR [7] outcomes  including; effective human resources management, employee motivation, operational efficiencies and cost savings (which often translate in healthier financial results) [6]. business-comment_05_temp-1359037349-510143a5-620x348(source: Camilleri, 2012)

This promising notion suggests that there is scope for governments in their capacity as regulators to take a more proactive stance in promoting responsible behaviours. They can possibly raise awareness of social and sustainable practices through dissemination of information; the provision of training programmes and continuous professional development for entrepreneurs [6]. They may assist businesses by fostering the right type of environment for responsible behaviours; through various incentives (e.g. grants, tax relief, sustainable reporting guidelines, frequent audits et cetera) [6].

 

Synergistic value implies that socially responsible and environmentally-sound behaviours will ultimately bring financial results – as organisational capabilities are positively linked to organisational performance. Synergistic value is based on the availability of slack resources, stakeholder engagement and regulatory intervention which transcend strategic CSR benefits for both business and society.

References:

[1] Freeman, E.E. (1994). The Politics of Stakeholder Theory: Some Future Directions Business Ethics Quarterly, 4(4), 409

[2] Jones, T. M. (1995). Instrumental stakeholder theory: A synthesis of ethics and economics. Academy of Management Review, 20(2), 404–437.

[3] Donaldson, T., and Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, Evidence and implications. Academy of Management Review, 20(1), 65–91.

[4] Orlitzky, M., Siegel, D. S. and Waldman, D. A. (2011). Strategic Corporate Social Responsibility and Environmental Sustainability. Business & Society, 50(1), 6-27.

[5]McWilliams, A. and Siegel, D. 2011. Creating and capturing value: Strategic corporate social responsibility, resource-based theory and sustainable competitive advantage. Journal of Management, 37(5), 1480-1495.

[6] Camilleri, M. A. (2012). Creating shared value through strategic CSR in tourism.. University of Edinburgh. https://www.era.lib.ed.ac.uk/handle/1842/6564 accessed 10th July 2014.

[7] Werther, W. and Chandler, D. (2006). Strategic Corporate Social Responsibility: Stakeholders in a Global Environment. London: Sage Publications.

[8] Porter, M. E. and Kramer, M.R. (2011) Creating shared value. Harvard business review 89.1/2 (2011): 62-77.

 

Links:

http://www.timesofmalta.com/articles/view/20131010/business-comment/Unleashing-shared-value-through-content-marketing.489766

http://www.timesofmalta.com/articles/view/20130523/business-comment/Leveraging-organisational-performance-through-shared-value-propositions.470940

http://www.timesofmalta.com/articles/view/20130124/business-comment/Creating-shared-value-for-long-term-sustainability.454548

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Creating Shared Value Leverages the Value Chain

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Socio-economic actions and environmental changes play a vital role in determining the prices of core commodities. Undoubtedly, the availability of commodities can change the dynamics in supply chain relationships. It is in the interest of suppliers to forge fruitful and collaborative working relationships with their customers. For instance, farm workers are demanding bigger shares from the profits of wine producers, coffee makers and the like. In this day and age, businesses will have to look at new ‘shared value’ models as customers are often expecting greater reliability, higher quality, reduced lead times and frequent deliveries from their suppliers.

‘Creating shared value’ needs to address not only value chain requirements but to ensure that programmes are built on joint principles. Of course, many businesses may be genuinely interested in investing in philanthropic initiatives. However, this particular proposition suggests that businesses can leverage themselves as they gain a competitive advantage.  Inevitably, this notion suggests  that there is a need for co-creative and innovative approaches rather than blueprints.

CASE STUDIES

“Take Novartis as an example. They saw a shared value opportunity in selling their pharmaceuticals in rural India, where 70% of the population lives. The obstacle was not the prices they charged but the social conditions in the region: a chronic lack of health-seeking behaviour in the community, healthcare providers with virtually no healthcare training, and tens of thousands of local clinics without a reliable supply chain. Looking through a shared value lens, Novartis saw these social problems as business opportunities: they hired hundreds of community health educators, held training camps for providers, and built up a distribution system to 50,000 rural clinics.

For Novartis, the result was an entirely new business model that is essential to their future. In the coming decade, emerging markets with similar challenges are predicted to account for 75% of the growth in global pharmaceutical sales. For 42 million people in India, the results are access to a vastly improved level of healthcare that neither government nor NGOs were providing.

Or consider Southwire, a US company that manufactures wire and cable in a small town in Georgia. Their machinists were retiring and the local high school, burdened by a 40% dropout rate, wasn’t producing the workforce they needed. So Southwire partnered with the school, opened a factory nearby to employ the most at-risk students, part-time, using attractive wages as an incentive, and mentored their academic performance. Nearly 100% of the students in the Southwire program completed high school, and 1/3 went on to become Southwire employees. And, by the way, that factory near the school generates a million dollar annual profit.

These examples are not examples of corporate social responsibility or sustainability. They are examples of businesses grabbing hold of a social issue that is at the core of their business, and figuring out how to wrap that into their strategy and operations. These companies are using the resources and capabilities of business to solve very specific social problems in ways that are aligned with the company’s strategy, that strengthen its competitive positioning, and that enable it to make more money” (More details are available in the Guardian – Better ways of doing business: Creating Shared Value).

More blogs about “Shared Value” approaches!

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February 5, 2013 · 4:36 pm