THE MANAGEMENT OF HOSPITALITY AND TOURISM BUSINESSES:
SOCIAL, ECONOMIC, POLITICAL & CULTURAL ENVIRONMENT IMPACT
INTRODUCTION
In recent years, increased attention has been paid to the management of the growing field of hospitality and tourism business, which have been widely recognised as very important sectors of the service industry. However, there is more to the approach of management of the said businesses than just the internal factors affecting it. Four environmental factors, namely: social, economic, political and cultural, largely play an important role in the approach to the management of the hospitality and tourism businesses. Within the sphere of the environmental factors are the groups of participants involved and affected by hospitality and tourism. According to , & (2001), they are: (1) the tourists; (2) the businesses providing the goods and services that the tourist market demands; (3) the government of the host community; and (4) the host community. The different kinds of operations required from such businesses share the management problem of providing customer satisfaction. As tourism and hospitality are the most wide-ranging industries, in the sense that it demands products from the many sectors of the economy and employs millions of people in different sectors, the careful management of its business activities require the knowledge of the environment in which it operates on. As a manager, one should command much specialised knowledge of them ( & 2005). This paper analyses if the four aforementioned environmental factors indeed affect the management of a country’s hospitality and tourism business.
SOCIAL ENVIRONMENT
The social environment of a business basically involves people, the people in which it interacts on a daily basis. The hospitality and tourism industry interrelates with various people in the course of its business: the tourists, local clients, business stakeholders, and even the management itself. These are the components of the sphere in where the industry, and all business for this matter, operates in. In most organisations, most organizations, the dominant factors impinging on role performance are social or symbolic rather than economic, thus the major foci of human resource management programs should be on creating and maintaining good human relationships in the workplace ( 1996). Motivation, teamwork and leadership, gender and diversity, groups and technology, and the networked organisation are the themes which management and society are explored against the background of change in the field of business, especially in the hospitality and tourism industry where major advances are acutely felt.
The American business, as an example, has begun to place more emphasis on the management of human resources. Buffeted by recession, deregulation and international competition in tourism and hospitality industries, managers have looked for ways to improve productivity and quality ( 1999). American managers began to realise that these goals could not be achieved without a dramatic change in the relationship between management and workers and between union and management. As observed by (1999), Japan has a different yet successful model in that within the context of their own society, the Japanese have developed a collaborative relationship between management and labour and between unions and management which resulted to improved productivity and quality.
In a strictly natural environment context which is embraced by the social responsibilities of any business, the marked growth of tourism and the hospitality industry has, among other detriments to the natural environment, severely altered fragile terrestrial and marine ecosystems. In the Caribbean, tourism-induced intrusions have included the deforestation and erosion of upland forests for condominium clusters and road works, as well as beach loss, lagoon pollution, and reef damage from sand mining, dredging, and cruise-ship anchoring ( & 1998). In the Mediterranean, large-scale coastal hotel/marina and infrastructure construction has filled in salt ponds, disfigured shorelines, and polluted near-shore waters with sewage ( 1989). In popular Pacific resort areas, delicate mangroves have been harvested for construction material and reefs irreversibly scarred by trampling and collecting by tourists ( & 1997). Because of its intensive development, Guam has been compared to suburban Los Angeles, while even the Galapagos, the naturalists’ paradise, has allegedly been overrun by excessive visitation ( & 1993).
These environmental intrusions have prompted calls for more sustainable tourism styles to avoid the cyclic instability of the colonial economy (, , & 1996; & 1995; & 1997). As a goal, sustainability involves carefully blending a complex set of often conflicting objectives. A workable definition drawn from (1994), (1997), and others ( & 1995) suggests that sustainability ideally seeks to preserve a permanent and widely shared stream of income by creating an adaptive competitive destination niche through the ongoing guidance of participatory community planning without unacceptably sacrificing the socio-cultural and natural integrity of the asset base. On a more operational level, sustainability requires simultaneously satisfying the diverse long-term preferences of tourism’s major stakeholders: hosts, guests, entrepreneurs, and policy makers ( 1995). These include improved quality of life for hosts, unique and enduring experiences for gusts, continued profitability for commercial interests, and sustained asset and cultural diversity for destinations. Achieving this combination of goals is daunting given the formidable difficulties of planning in small islands in general and of managing tourism in particular.
ECONOMIC ENVIRONMENT
The economic environment of a country has implications for the management of the hospitality and tourism industry which operates inside it. Technology, for one, is an essential aspect in which a nation’s economy palys an important part. Even when other less economically-advanced nations emerged into the modern age and started their own industrial revolutions they had further disadvantages in the technological sphere. Some of the modern technologies and techniques that they had imported from the more advanced nations were not appropriate to their climatic and socio-cultural conditions ( 2000). Even today, some of the sophisticated machinery that is imported to the less-advanced countries does not work there properly. In the context of the hospitality and tourism industry, the technology that tourists may look for in a less-economically advanced country may not be there, prompting them to become unsatisfied with the services that it has to offer. The tendency for management, then, is to either divert the attention of the clients into what is inherently abundant in their respective countries rather than on familiar technology, or adopt the technology which the clients are looking for. Even this has an economic impact for the industry in that their resources will have to be diverted in the acquisition of these technologies. There is, in another perspective, a shortage of skilled manpower to operate it or to maintain it when there is a breakdown. This is directly related to the inadequate educational provisions in some of these nations, which not only prevent them from understanding and operating properly the imported technology, but also prevent them from initiating scientific and technological break-throughs in the first place.
As a result, advanced countries became specialised in technologically-driven services, such as finance and insurance in the industry. The less-developed nations specialised in primary products and those business activities which did not require advanced and sophisticated technology. The characteristics of the market, such as supply, demand and price fluctuations are such that the tourism and hospitality industry have relatively little control over them. In addition, the value-added element in their services is very small. By contrast, the producers of sophisticated products and services, with higher value-added components, enjoy a much greater control over their markets. The disadvantages and handicaps suffered by the former in the international market in comparison with the latter are obvious.
POLITICAL ENVIRONMENT
The political environment of a country largely affects how the tourism and hospitality businesses are managed within the region. The alarming issues regarding political instability and terrorism has significantly changed the way the industry maintains the security and safety of their clientele as well as their employees. The Philippine incident where terrorists were found to have kidnapped visiting tourists reverberated the world over and has caused fervour in the campaign against terrorism. More importantly for the industry of tourism and hospitality in the Philippines, it suffered a great setback and significant decrease in the rate of tourist coming in and out of the country to visit. In this crisis situation for the industry, management of tourism and hospitality businesses in the Philippines launched extensive campaigns to promote the tourism industry of the country and various marketing and management techniques were employed by businesses to revive the flailing industry in the face of political turmoil. The development of these and other phenomena on a global scale clashes with the entrenched policies and institutions designed for national frameworks, as public policies, debated and occasionally agreed upon in international fora as they may be, still lack the global dimension. In this context, it is not remarkable that tourism activity is both the cause and effect of accelerated globalization.
(1995), in a comparison of French, British and German domestic and international hospitality and tourism businesses, found that they were heavily embedded in the political institutions of their respective home nations. There was a constant interaction between firms and markets on the one hand, and social institutions on the other, which Lane conceptualised as national industrial order. Furthermore, she argues, the strong concern for the social embeddedness of economic structures and processes has necessarily led to an emphasis on the national distinctiveness of industrial orders and their historical shaping and reproduction. Moreover, as (1998) points out, in earlier decades it was often claimed that it is companies, not countries that compete against each other. This was never entirely true: countries did compete against each other, some more aggressively and some more successfully than others.
CULTURAL ENVIRONMENT
The study of culture and management has evolved into a paradigmatic dualism with opposing underlying assumptions about ontology, methodology, epistemology, and human nature. & (1994) claimed that management systems are functions of their own cultures. The importance of examining the culture of a particular country in order to understand how a business is being managed cannot be overemphasised. While there are three other paths to understanding the management system of a country (social, economic and political), the cultural approach is still a very appropriate factors toward understanding the management system of a business, in this case the hospitality and tourism businesses, because the different countries in which this industry exists have cultures that has produced and nurtured its own.
For instance, the Korean management system is culture bounded in that it strives to enhance the performance of organisations in the most effective way within the context of the Korean culture ( & 1994). Further according to them, The Korean culture is unique, even though it shares certain features of Oriental culture with the Chinese and the Japanese. In the context of Chinese culture and management, functionalism and the rationalist paradigm set to which it belongs is an alien, imported, or imposed Western worldview ( & 2003). The development of indigenous approaches to the subject is prescient and requires the incorporation of Chinese worldviews. The Eastern archetype, additionally, is dialectic in expecting an unfolding pattern to emerge from an acceptance of simultaneous multiple realities. In other words, several opposing or contradicting propositions or truths can be explored simultaneously and judgment about them can be suspended until dialectic synergies produce better ideas. As a result, “What are conceived as opposites in the rational and pragmatic modes are inseparable polarities in the holistic mode” ( & 1997:). Therefore, the whole and the parts are codetermined and neither is coherent outside the mutuality, complementarity, and “oneness” they share. Western rationalism is wedded to bivalent either-or antinomies, to black-and-white linear reductionism.
In the context of the hospitality and tourism industry, these diverse sets of cultures affect the management of their businesses in the basic conduct of even the smallest of business details. Taking the Scandinavian countries as an example, there is more vertical communication in hospitality and tourism organisations and employees are less afraid of disagreeing with their boss ( 1993). Further, leadership in the business is achieved, not ascribed, and managers are not selected on seniority and can be younger ( 1999). Also the Scandinavian governments have been late to adopt such widespread financial options as allowing a firm to buy its own shares and to allow share-option schemes in general (‘’ 1996). On the other hand, Scandinavians have an ingrained respect for rules, unlike, for instance, the Chinese ( & 1993). The result therefore is that organisations, not only in the hospitality and tourism industry but on a general scope, have more rules and regulations as compared to other industry Honesty among Scandinavians is certified by others as well. A Scandinavian manager is not supposed to publicly reveal his or her feelings - and if he or she does, it should be separated from 'objective' and 'rational' decisions ( & 1998). This means, among other things, that Scandinavians are commonly described as 'serious' (, & 1993). There is also the Western approach to doing business, which treats management as a profession and regards emotionally detached rationality as ‘scientifically’ necessary ( 1998). This numerical, cerebral approach not only dominates Western business schools, but other economic and business faculties.
CONCLUSION
As much as the social, economic, political and cultural environment of a country impacts the management of the hospitality and tourism businesses of a particular country, it is also important to point out that it works both ways. This has been noted in various scholarly studies made on the subject but is still insufficiently addressed practically by businesses in the tourism and hospitality industry. Cutthroat competition and rapid technological changes that require social adjustments place a severe strain on managerial wisdom acquired during more socially stable and less advanced times. The dilemmas posed by technological advances, new organisational structures, and related moral and ethical values, all within a global context, must be addressed. Managers must find ways to reduce, control, and redirect their drives for power away from aggrandisement and oppression and move toward cooperation and self-fulfilment, taking into much consideration the social context under which the hospitality and tourism industry functions in.
In every culture in the world such phenomena as authority, bureaucracy, creativity, good fellowship, verification and accountability are experienced in different ways. The increasing internationalisation of business life requires more knowledge of cultural patterns. In the hospitality and tourism industry, pay-for performance can work out well in the Western cultures, while in the more communitarian cultures like France, Germany and large parts of Asia, it may not be so successful ( 1998). Therefore management of people and processes within this large sector of the service industry varies and is dependent on the national culture where the said businesses are situated. With the increasing internationalisation of the industry, managers in organisations must support or create corporate cultures that benefit not only people like themselves but also people unlike themselves, those with differing ways of perceiving and doing things.
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