How Entrepreneurship in the Hospitality and Tourism Industry Can Be a Cause of Ethical Concerns?

Topics: Small business, Ethics, Tourism Pages: 12 (3188 words) Published: March 21, 2013
How Entrepreneurship in the Hospitality and Tourism Industry can be a Cause of Ethical Concerns?

“At a more fundamental level, it can be argued that the very nature of what some might refer to as acting in an entrepreneurial way raises ethical questions”. (Morris et al., 2002 p 31).

In many academic studies, the hospitality and tourism sector has been associated with low degree of entrepreneurial behaviour. Mentions can be made of the likes of the internationally endorsed Conrad Hilton and Thomas Cook, with the more recent innovators such as Richard Branson and Stelios Haji-Ioannou, all of whom have deeply transformed their respective sectors. However, the international tourism industry seems to be lacking entrepreneurial impulse in contrast to other sectors (Page et al., 1999; Andriotis, 2002; Morrison & Teixeira, 2003). This short paper aims to explain the ethical issues associated with entrepreneurship and how it could concern the tourism and hospitality industry. By cross-referencing the theories of ethics and entrepreneurship, the ethical and value dilemmas that underlie this issue will also be discussed and analysed on the macro and micro environment. This assignment will rely on case studies which will support managers in different aspects such as the identification of the stakeholders involved and its implications, and the provision of potential measures focussing on the implementation of professional judgements as part of strategic planning with the goal of redressing this issue.

Conceptual and Theoretical Foundations on Entrepreneurship Ethics Ethics focusses on the self-awareness between what one represents right and wrong. It emphasises with the grounds and nature of morality, incorporating rules of conduct, moral judgements and standards (Taylor, 1975). Hunt and Vitell’s model (1993) highlights three important ethical theories and explain how personal moral codes are being influenced by deontological, theological or environmental practices. Other major macro-environmental ethical theories include stockholder, stakeholder and social contract theories (extended to Integrative Social Contracts Theory (ISCT) by Donaldson and Dunfee in1994).

The Entrepreneurial Context of Ethics
According to Morrison (2000a), Greenbank (2001) and Pittaway (2005), entrepreneurship is assimilated with a multi-dimensional attitude that coordinates economic and non-economic behaviours such as ideology, legitimacy, social mobility and psychological factors (McKay, 2001). Vyakarnam et al. (1997) demonstrate that small business entrepreneurship ethics could be classified under three themes; the impact of the owner’s personality on business ethics, which is leading to the conflicts of personal values, and the entrepreneurial activity itself. On a macro-economic level, it has been demonstrated that entrepreneurship is linked to distinctive challenges; emerging from industry settings. New enterprises are often subject to limited financial resources, recurrent over-dependence on a restricted offer, their propensity to depend on a niche consumer base, and constant environmental changes. A moderately restricted market presence, inhering small enterprises to significant demand instability, enhanced by the lack of support from distributors and suppliers, an aggressive competitor’s penetration may also impact start-ups negatively (Boyd and Gumpert, 1983).

Stages of Entrepreneurship development
According to extensive literature review, entrepreneurial development stages (Figure 1) have a profound impact on ethics as the company develops and grows from venture ideas to a mature organisation (Dodge, 1992). While small business entrepreneurs differed significantly from their big business counterparts, Longenecker et al., (1989) could not demonstrate one as being “more” or “less” ethically strict. Therefore, it seems that the ethical evolution of companies is inherent to a number of countering forces which depends on many...
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