Corporate social responsibility: The disclosure–performance gap
Highlights
► Corporate social responsibility policies and practices differ widely. ► Larger hotel chains normally have more comprehensive policies. ► Environment and customer engagement are the greatest disclosure–performance gaps. ► Low gaps are due to policies aiming to comply with legislation.
Introduction
Despite Friedman’s (1970) view on the limitations of the responsibility of business, the notion that businesses have responsibilities beyond providing economic returns to the owners of capital is, judging by the profusion of claims by corporations as to their Corporate Social Responsibility (CSR) activities (KPMG International, 2008), as well as the academic CSR discourse (Carroll, 1999), widely accepted. Nonetheless, while the meaning of CSR is contested, to aver, as Frankental (2001) does, that because CSR is a vague and intangible term it is effectively without meaning. The foundation of CSR is the acknowledgement that businesses have responsibilities to society that go beyond shareholder wealth maximisation. This belief is widely held, and hence a degree of shared understanding and common meaning exists.
Some (e.g. Bendell, 2004, Hess, 2008) have argued that the nature of global business with its shift in power from the state to supranational corporations has ushered in an era of increased corporate accountability, a view further expedited through the multitude of cases of corporate fraud and accounting irregularities at the turn of the millennium (e.g. Enron and WorldCom). Certainly, the past decade has seen growing pressure on corporations from individual consumers, consumer groups, NGOs and governments take stock of their non-commercial impact on society. However, businesses’ acknowledgement of the CSR agenda does not necessarily result in more responsible behaviour (Hess, 2008, has for example questioned to what extent social reporting leads to improved CSR performance, or whether conversely it is just a method to avoid additional introduction of regulation). Furthermore, it is not enough to be responsible, corporations realise that their CSR activities also need to be reported, and that transparency in reporting is crucial if companies are to be held to account for their actions.
This study addresses these issues in relation to the tourism industry. Specifically, the study set out to investigate to what extent ten global hotel chains’ CSR claims were supported by evidence, or whether they were, at worst, mere rhetoric. In other words, this study looks at the potential disclosure–performance gap. Publicly available information was scrutinised, the hotel chains were given the opportunity to comment on our initial analyses and site visits were subsequently conducted to seek corroborating evidence for the companies’ claims.
The study provides a unique analysis of CSR behaviour and reporting in the tourism industry at a time when interest in businesses’ impacts on society is only likely to increase. As the tourism industry grows so do concerns about its relationship to society and the environment, both as a force for good as well as in terms of its negative impacts (Goodwin, 2011). It is hardly surprising then that the concept of CSR has received some attention within the context of tourism (Bohdanowicz and Zientara, 2009, Dwyer and Sheldon, 2007, Inoue and Lee, 2011, Lee and Park, 2010, Miller, 2001) and that the importance of CSR for tourism firms is likely to increase (Kang, Lee, & Huh, 2010). Wood (2010) suggests that despite the proliferation of literature in the area of CSR, much of this has focused on the link between corporate social performance (CSP; a sister concept to CSR) and financial performance and that furthermore CSP scholars suffer from a lack of data. This lack of data on CSR specifically in tourism is suggested by Holcomb, Upchurch, and Okumus (2007). An overreliance on measuring CSP using information in company annual reports, and indeed content analyses in general, was also highlighted by Unerman (2000, p. 677): “studies focusing exclusively on annual reports risk capturing an incomplete picture of the amount of CSR companies are engaging in.” This study addresses both of these issues by firstly attending to the disclosure–performance gap, and secondly, in its analysis of a wealth of data that goes beyond a sole reliance on company reports and proclamations. As such it contributes to the literature on CSR specifically in tourism as well as contributing to the under-researched area of the relationship between disclosure and performance more generally.
Section snippets
The CSR concept
It is acknowledged that CSR as a concept is used widely and loosely. It is a concept that has no universally accepted definition (Freeman & Hasnaoui, 2011).Carroll (1999) suggests it is a multidimensional construct that has evolved over recent decades. Initially Carroll’s four dimensions of CSR comprised economic, legal, ethical and discretionary dimensions with his later work (Carroll, 1999) proposing the latter be replaced by a philanthropic dimension. These categories provide a fairly
Methodology
This study examines the CSR disclosure–performance gap of international hotel chains only to choose one sub-sector of the tourism industry to allow data comparability. The study was commissioned by the International Consumer Research and Testing on behalf of eight European consumer associations (see Acknowledgements). These consumer associations pull together resources to commission research on individual industries identified as of interest to their members. The recognition by the corporations
Results
We first present evidence for the six key themes identified above. The analysis draws initially on the ten international hotel groups’ corporate social responsibility policies as documented in publicly available sources, responses to the surveys and internal information (Table 4). We then move on to review how the field visits partly validated certain aspects of the corporate policies and procedures (Table 5). This then sets the scene for the discussion of results against the backdrop of the
Discussion
Table 6 brings together the evidence from the previous two tables into a single weighted ranking of CSR practices that forms the basis of the following discussion.
As Accor came out on top in CSR policy as well as performance and disclosure it also ranks first in the overall assessment of companies’ CSR performance. Sol Meliá who come in on second place overall scored poorly on the disclosure–performance gap (Table 5). Marriot who scored third overall on CSR policy scored a poor ninth in terms
Conclusions
The picture of CSR performance is a mixed one. While on the whole discrepancies between policy and performance exist, in some cases considerable discrepancies, in others CSR activities in fact exceeded policy requirements. Non-adherence to policy does not automatically therefore mean weaker CSR performance at the level of the individual hotel, it means not following company standards. We would argue that having been able to assess the implementation of policy on the ground has added a valuable
Acknowledgements
We would like to thank International Consumer Research and Testing for financing this study, on behalf of their members that published the results in: Austria (Verein Fur Konsumenteninformation), Belgium (Association Belge des consommateurs Test-Achats), Denmark (Taenk/Forbrugerraadet), Finland (Kuluttajavirasto), Italy (Euroconsumers Servizi SRL), Portugal (DECO-Proteste Editores LDA), Spain (OCU-Organización de Consumidores y Usuarios Ediciones SA) and Sweden (Rad & Ron). The research was
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