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Acknowledgment

In performing our assignment, we had to take the help and guideline of some respected

persons, who deserve our greatest gratitude. The completion of this assignment gives us much

pleasure. First and foremost, we thank our Creator, almighty God, who gave us the wisdom,

knowledge and understanding needed to compile this assignment. We would like to show our

gratitude to Dr. Darcia Roache for giving us a good guideline for assignment throughout

numerous consultations. We are grateful beyond measure to all who assisted with providing valid

information, which assisted us tremendously to achieve our objective for the overall presentation.

We must also extend special thanks to our classmates who have made valuable comments and

suggestions which gave us an inspiration to improve our assignment. We hope you enjoy

appraising this assignment as much as we enjoyed putting it together.

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Introduction

According to the Concise Oxford Dictionary ethics is defined as, “a set of moral

principles or rules of conduct.” Is ethics important to the operations of a business? Should the

governance of a business be structured by the government only, current employers or employees

or by the stakeholders? Many persons believe that personal ethics should govern business ethics,

some compare it to“a game of poker” that has unethical behaviour justified while others are of

the view that persons have to concede to certain business principles in order to uphold the image

of the company even if it goes against personal ethics. However,in the world of business, several

variables help to determine the need for ethical obligations to be upheld.

This project seeks to inform the reader of the importance of ethics in business

organizations. This is explained by providing information about moral and ethical theories,

describing the relationship between government, business and society and emphasise the ethical

treatment of employees and employers in the business organisation.In this project, examples

cited are related to Hotel Ethica, a member of the Hotel Industry of Jamaica. The term ‘team

members’, is used to refer to the persons who gained information about Hotel Ethica in order to

cite examples relevant to the project. The recommendations suggested are the intent of the team

members to be addressed at an appropriate time.

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Background to Hotel Ethica

Hotel Ethica is a 200 room, all-inclusive resort located on the scenic north coast of the

island of Jamaica in a bay close to Montego Bay. It offers a wide range of services to its guests

on the shores of a calm beach with turquoise water. This is the destination of choice for families

looking for a getaway and to revitalize. Hotel Ethica offers the best facilities such as Jacuzzi,

sauna, freshwater swimming pool, gym and wellness centre with a range of different treatments

and messages. Guests comfort and entertainment are the hotel’s top priority as such it offers a

high quality all-inclusive service. The hotel offers a wide variety of dishes in the buffet

restaurant where guest get to sample the best cuisine prepared by expert chefs in the themed

restaurants.

Hotel Ethica ensures all its guest has an excellent time. The hotel has a gym, table tennis,

volleyball, windsurfing,kayaking, snorkeling, diving and other water activities. Engaging daily

and nightly entertainment is always provided. The hotel is ideally situated and guest can venture

out to discover Jamaica’s treasures in close proximity to duty free shopping, historic sites and

breathtaking views of the sunset. Hotel Ethica ensures that it has qualified, trained staff and only

the best are recruited. The hotel boasts 200 staff who are pleasant and professional. At Hotel

Ethica, families get to experience and discover the magic of Jamaica.

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Ethical Theories and Business Practices

Morality

According to Beauchamp & Bowie, (2000) morality is concerned with social practices or

norms which are believed to be either right or wrong and incorporate well-defined customs,

rules, principles, actions and intentions, etc. It’s what should be done for an action to be morally

acceptable by a group of people or society and is usually passed down culturally from generation

to generation. Morality concerns itself not only with self-interest but the interest and benefit of

everyone in the group. As a result the principles of morality do apply to businesses, more

specifically; Chief Executive Officers, managers, and other employees have moral obligations.

However, should the purpose of a business be focused on what is considered to be morally

good?  Or should companies concentrate only on maximizing shareholder returns within the

confines of the law? These two questions imply moral concepts which are subjected to a

company’s accepted values and social norms. However, the first of the two suggests that

companies, like people, should be held to moral standards.  The latter implies a separation

between arbitrator and competitor: the government defines the legal boundaries while the

company conducts its activities for the greatest outcome within these boundaries. 

The team members view this way of looking at morality as highly narrow-minded. 

Instead of thinking of itself as an entity, which is what the questions above do, a business should

think of itself as collections of individuals working for a common interest because individuals

are motivated by moral purpose. Every employee must respect the natural rights of other

individuals, which includes honouring contracts, not engaging in fraud, not using coercion

against others, and honouring representations made to the local community. Additionally, the

team members believe that businesses should not support government economic interventions,

such as price supports (government assistance in maintaining the levels of market prices
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regardless of supply or demand), tariffs, and subsidies, even though doing so might result in

higher profits. This, the team members believe is a business’s moral responsibility.

The team members believe that living up to these ethical virtues will significantly aid in a

corporation’s pursuit of profit and that the free market does reward courteous, cooperative, open,

honest, realistic, trustworthy, creative, fair businesses. The team members believe that dishonesty

and cheating other businesses, misleading consumers, and mistreating their employees all have

serious adverse consequences. Additionally, the team members are of the opinion that in the long

run, profitable businesses tend to be operated in accordance with the basic ethical principles most

people hold dear.

Approaches to the Study of Morality and Ethical Theory

Beauchamp, Bowie and Arnold, (2008) stated that there are three (3) main approaches

relative to the study of Morality and Ethical theory. The first is called the scientific or descriptive

approach which is an approach most used in the social sciences and examines human behaviour

and conduct from an empirical perspective. This means a sociologist or psychologist may

observe and gather data about human behaviour over time and make certain conclusions.

However, they would not make any judgments as to what is morally right or wrong nor would

they prescribe how humans ought to behave. The second is the Conceptual approach which

examines the significant terms in ethical theory and their meaning as also how they relate to each

other analytically. Conceptual problems are also identified and distinguished. The final one is the

Normative (prescriptive) approach which deals with norms (standards) and prescribing how

human beings ought to behave, not just describing how they do, in fact, behave. The Normative

approach of ethical theory encompasses the making of moral judgments rather than just the

presentation or description of facts or data such as seen in the descriptive approach.

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Clearly, neither the scientific nor conceptual approach to morality defines or prescribes

how human beings ought to behave nor do they make any judgments as to what should be

morally good or bad. Instead, they both expose the concept of morality from a theoretical and

empirical perspective. From the view point of the team members both of these approaches are

considered to be more of a guide to understanding morality. This greater understanding of

morality leads to better business ethics; which is the study of business situations, activities, and

decisions where issues of right and wrong are addressed.

The team members believe, however, that it is important for an organization to distinctly

outline its rules and policies on the principles of morality and ethical values. These are

considered to be obligations of what ought to be done in the interest of good morals, ethical

responsibility and at the same time maximizing profit. Furthermore, the rules and policies that

govern an organization must be that which can be endorsed by everyone in the organization. This

universal endorsement by rational persons is what enables Kant to say that everyone is both

subject and sovereign with respect to the rules that govern them. This normative approach to

morality and business ethics is a Kantian theory to the organizational design of a business firm

endorsed by the team members. The following are some principles the team members believe

should be adhered to by Businesses:

1. Businesses should consider the interests of all the affected stakeholders in any decision it

makes.

2. Businesses should ensure that those affected by the firm’s rules and policies participate in

the determination of those rules and policies before they are implemented.

3. When a situation arises where it appears that the interest of one set of stakeholders must

be subordinated to the interests of another set of stakeholders, that decision should not be

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made solely on the grounds that there is a greater number of a stakeholder in one group

than in another, this is the utilitarian approach.

4. Businesses should have a limited, but genuine, duty of beneficence.

5. Businesses should establish procedures designed to ensure that relations among

stakeholders are governed by rules of justice.

Virtue Ethics

Dobson (2007) posited that the fundamentals of integrating ethical standards in the

everyday operation of a business can be categorized into two different approaches:

1. The action-based approach

2. The agent-based approach

The action-based approach is the traditional way of incorporating ethics into a business by

focusing on the development of rules and policies to constrain or restrict management’s

actions. These rules or policies are generally outlined in the company’s codes of ethics, or

code of conduct. On the Contrary, whilst the action-based approach focuses on rules

governing action, the agent-based approach focuses on the fundamental character and

motivations of the individual agent. As a result, the agent-based approach does not limit

moral behaviour to the adherence of rules or policies but rather involves the individual

rationally pursuing moral excellence as a goal in and of itself. In essence, ethics becomes

central to the rationality concept as an objective rather than a constraint: "something

positively good, something to be sought after" (Ladd, 1991, p. 82).

Agent-based approaches generally derive their philosophical foundation from virtue-

ethics theory. In essence, the 'virtue' in virtue-ethics is defined as some desirable character

trait, such as courage, that lies between two extremes, such as rashness and cowardice. Thus

the 'virtuous' agent is involved in a continual quest to find balance in decision-making. Such
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an agent does not apply any specific 'rules' in making decisions, but rather attempts to make

decisions that are consistent with the pursuit of a particular kind of excellence that in turn

entails exercising sound moral judgment guided by such 'virtues' as courage, wisdom,

temperance, fairness, integrity, and consistency.

Patel (nd) stated that virtue ethics is currently one of three major approaches in

normative ethics. It may, initially, be identified as the one that emphasizes the virtues, or

moral character, in contrast to the approach that emphasizes duties or rules (deontology) or

that which emphasizes the consequences of actions (consequentialism). For example, suppose

it is obvious that someone in need should be helped. A utilitarian will point to the fact that the

consequences of doing so maximize happiness of those affected by the act of helping. A

deontologist points to the fact that, in helping the one in need, the agent is acting in

accordance with a moral rule such as “Do unto others as you would be done by”. A virtue

ethicist points to the fact that helping the person is exercising the character trait of

benevolence. All the three moral theories will agree that helping the person in need is

ethically correct.

Aristotle is an early developer of virtue ethics. Aristotle writes, “The virtue of man

also will be the state of character which makes a man good and which makes him do his own

work well“. The aim is to perform the right action, with the right person, to the right extent, at

the right time, and in the right way. Although this is the objective, Aristotle considers

achieving this goodness as rare, laudable, and noble. Aristotle believes people are naturally

suited to do the right thing, but do not automatically develop such inclinations to do “good”.

He strongly believes you are what you do, so in that respect the ideal virtuous person does the

right thing because she desires to be virtuous. One cannot be accidentally or coincidentally

virtuous.The virtue ethics approach focuses on the “integrity” of the moral actor. The goal
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with this approach is to be a good person. In virtue ethics, one’s character emerges from a

“relevant moral community”.  Therefore, it is important to account for the moral agent’s

community or communities within which she operates. This approach is particularly useful

for individuals who work within a professional community that has developed high standards

of ethical conduct for community members.

The team members believe that businesses should establish and implement a system of

value standards which are used as a guide to develop their employees with the attitudes,

dispositions and character traits that enable each employee to be and to act in ways that develop

these potentials. In order to promote a culture and climate of virtue, businesses should

communicate their ethical expectations and conveys a sense of identity to their employees that

aid in guiding their decisions and that will elicit their loyalty. Loyalty produces partiality,

interest, and personal identification with a firm. An appropriate tone needs to be set at the top

and time devoted to discussing the importance of virtues and values. The team members is of the

opinion that businesses should take the time needed to express what the company finds to be

meaningful, how the employees should be functioning, and how the firm wants to be regarded

both internally and externally.

This enables them to pursue the ideals adopted by the company. Honesty, courage,

compassion, generosity, fidelity, integrity, fairness, self-control, and prudence are all examples

of virtues that should be encouraged by all businesses. How does a business help to develop

virtues in its employees? Virtues are developed through learning and through practice. As the

ancient philosopher Aristotle suggested, a person can improve his or her character by practicing

self-discipline, while a good character can be corrupted by repeated self-indulgence. Just as the

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ability to run a marathon develops through much training and practice, so too does our capacity

to be fair, to be courageous, or to be compassionate.

Virtues are habits. That is, once they are acquired, they become characteristic of a person.

For example, a person who has developed the virtue of generosity is often referred to as a

generous person because he or she tends to be generous in all circumstances. Moreover, a person

who has developed virtues will be naturally disposed to act in ways that are consistent with

moral principles. The virtuous person is the ethical person. At the heart of the virtue approach to

ethics is the idea of "community". A person's character traits are not developed in isolation, but

within and by the communities to which he or she belongs, including family, church, school, and

other private and public associations. The team members encourage employees to become

members of special clubs and non-profit organizations and other social units which are based on

virtue ethics. The team members believe that the moral life, then, is not simply a matter of

following moral rules and of learning to apply them to specific situations. The moral life is also a

matter of trying to determine the kind of people we should be and of attending to the

development of character within our communities and ourselves.

Right Theories

The rights theory states that the best method to deal with ethical issues is to form a basis

of obligations in order to justify every individual’s entitlement to human rights (Shaw, 2010).

Besides that, the rights theory also insists that human rights should be independent from the

influence of other factors. Human right is simply the natural rights belonging to every person by

virtue of being a human being (Shaw, 2010). There are two types of human rights; positive and

negative rights. Positive rights are obligations to provide goods and services to other people

(Jennings, 2008). On the other hand, negative rights are obligations imposed on people to stop

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them from interfering with other people’s freedom of action (Jennings, 2008). One of the major

arguments pertaining to the rights theory is the lack of hierarchy to determine which rights has

more value than the rest.

According to internet article ‘Rights Theories: the General Approach’ (nd), theories of

rights can be realist or constructivist. In relation to the realist views, rights holders have rights as

one of their intrinsic features. We have to recognize and respect those rights, or struggle for them

to be respected. According to constructivist views, the best theory regarding how to behave

towards beings who are morally considerable is to grant them rights and to respect those rights or

to struggle for them to be respected. Constructivist theory does not accept that rights holders

have rights as something intrinsic. Rather, it claims that individuals choose to grant them to each

other. However, it defends this as a good thing to do.

Rights theories are ordinarily deontological theories, that is, they maintain that there are

norms we should always obey irrespective of circumstance. In fact, they should be obeyed

whenever the opportunity of doing so appears, even when it means that this or other norms won’t

be obeyed by others or by ourselves in the future. It is also possible to defend consequentialist

theories of rights. These theories entail that we should maximize the (number of) rights that are

respected and minimize the (number of) rights violated, regardless of whether it is we or others

who respect or violate them and whether the violation happens now or in the future.

In contrast, standard theories of rights, deontological ones, claim that we should respect a

right now even if it means we won’t be able to respect other rights later, or even if it means that

other people won’t be able to respect the rights of others. There are anthropocentric theories of

rights according to which only humans can be considered rights holders. However, many

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theories contest this view and contend that nonhuman animals should also be considered rights

holders. The team members believe that business should conform to all the policies and

principles as it relates to the rights of its employs and should incorporate universally established

human rights and diversity policies. The team membersare of the opinion that a business should

endeavour to operate within the confines of the Law relating to its employees and believe that a

business should view its employees as their most important resource. A business should take

seriously the rights of all its employees in the workplace -- including the right to privacy, fair

compensation, and freedom from discrimination. The team members also believe a job applicant

also has certain rights even prior to being hired as an employee. Those rights include the right to

be free from discrimination based on age, gender, race, national origin, or religion during the

hiring process.

The team members also embrace an employee’s right to privacy in the workplace. This

right to privacy applies to the employee's personal possessions, including handbags or briefcases,

storage lockers accessible only by the employee, and private mail addressed only to employee.

Employees also have a right to privacy in their telephone conversations or voicemail messages.

However, it must be noted that employees have very limited rights to privacy in their e-mail

messages and Internet usage while using a business computer system. Other important employee

rights endorsed by the team members include:

 Right to be free from discrimination and harassment of all types;

 Right to a safe workplace free of dangerous conditions, toxic substances, and other

potential safety hazards;

 Right to be free from retaliation for filing a claim or complaint against an employer

(these are sometimes called "whistle-blowers" rights);

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 Right to fair wages for work performed.

Stakeholders vs. Stockholders Management

The stockholder theory states that there is only one social responsibility of business: to

use its resources to engage in activities designed to increase its profits so long as it operates

within the confines of the Law. This theory was introduced by Milton Friedman, a prominent

economist and Nobel Prize winner, who believed that the corporations’ only responsibility was

to its stockholders and that the latter are interested in profit maximization. Therefore, leaders

should act as agents for stockholders and focus on their interests.

Another extreme is the stakeholder theory by R. Edward Freeman, which focuses on who

is being affected. In Freeman’s “A Stakeholder Theory of the Modern Corporation,” he suggests

that leaders are obligated to all stakeholders: customers, suppliers, management, owners,

employees, and the local community, those that are vital to the survival and success of the

corporation. We all have a moral obligation toward other human beings. Corporations that make

profits should be held socially responsible for contributing to the improvement of society

financially and in other ways, e.g. recycling of products and contributing to worthy causes

regularly and frequently, rather than waiting for a disaster to occur and then contributing with a

view to gain publicity.

Immanuel Kant analyzed Friedman’s stockholder theory and Freeman’s stakeholder

theory, also known as Kantian capitalism and added that when corporations follow the

stockholder theory, they fail to recognize and respect the needs of those who contribute to their

existence and place themselves in a position to self-destruct through negligence and selfishness.

Therefore, the stakeholder theory is superior to the stockholder theory.

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The team members believe that businesses should regard both its stakeholders and

stockholders as very important to the survival of its business. However, unlike what some

companies may do when faced with severe hardship, by laying off people, in line with the

stockholder theory,the team members are of the opinion that businesses should have more

concern for employees’ needs and try to reach some form of compromise and in so doing,

demonstrate their concern for the families of their employees. The team members are also of the

opinion that the result is usually favourable to both the business and its employees.

When Frederick Winslow Taylor’s views on scientific management were being put into

practice by business organizations, owners were the only stakeholders. Leaders were obliged to

focus on profits maximization, and employees had to work hard for unsatisfactory wages.

Environmental issues were not a concern, and customers bought what was offered in the market.

Today, firms have to deal with the bargaining power of employees, trade unions, customers,

suppliers, etc. and there are environmental concerns, government regulations, etc. Unfortunately,

many firms still focus (mainly) on profits and pay attention to stakeholder needs only when

pressured to do so.

Business, Government and Society

Accountability and Responsibility

In modern days, the world has witnessed the increasing importance and visibility of a

range of initiatives led by businesses, social organizations and governments, with the stated aim

of compelling companies to behave in more socially responsible and accountable ways. This is a

new development for many parts of the business world. Previously, the government was assumed

to lead standard setting and behavioural norms for businesses in relation to most categories of

stakeholders. When community organizations and interest groups wanted to change business

behaviour, they focused on changing the law. From the 1990s the focus changed, reflected in the
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emergence of new alliances and regimes of influence over business norms, linking together

consumers, communities, workers and producers.

The traditional model of business management proposed by Beauchamp, Howie and

Arnold (2009) identifies the stockholders, employees, suppliers, managers, local community and

customers as being stakeholders. Besides these stakeholders, currently other secondary

stakeholders are included, for example financial institutions and creditors. The team members

viewed that Hotel Ethica believed that the stakeholders of any business organization represent

the backbone and support system needed to achieve its long term and short term goals. There are

accepted moral standards specified by each stakeholder, found in profession-generated

documents, as well as, legal duties established or approved by the government represented in an

Act or Law. Thus, there has to be a climate of trust between the business and all stakeholders to

promote growth and development.

The team members consider Hotel Ethica as a progressive, tourist accommodation that

operates within the confines of the regulations of the 1955 Jamaica Tourist Board Act. In

Section 23 of the Tourist Board Act(1955) it states that, “Every application for a licence under

this Act in respect of Tourist accommodation, shall be made to the Board in such form and

manner as may be prescribed or approved by the Board.” The legal requirements of hotels

obtaining a tourist accommodation licence in Jamaica stipulates that, “all entities operating in the

tourism sector must have a JTB (Jamaica Tourist Board) license, all operators using the beach or

beach front for environmental activities must apply for beach licences, all building or sites must

have Natural Conservation Authority permits, all water sports operators must have Maritime

Authority licences and fisheries licences, a Public Health Certificate and if there are contract

carriage operators transporting the guests they should have PPV licence.” (Licensing-Tourism

Product Development Company, (nd). The team members are of the view that managers of Hotel
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Ethica ensure that they fulfil their moral and ethical obligations by complying with the

requirements outlined by the Jamaica Tourist Board.

The Government, as a stakeholder, requires that business entities accomplish their legal

obligations in the following ways. The company must be a member of a registered financial

institution, obtain a tax registration number from the Inland Revenue Services Department,

register the company with the Companies Office of Jamaica and submit an Articles of

Incorporation. Other financial obligations include: submission of annual company tax based on

audited financial report, monthly statutory deductions for employer and employees such as

Income tax, Education tax, National Insurance Scheme tax and National Housing Trust

Contributions. The head of the accounting department would monitor the calculation and

payments of taxes made on behalf of the company.

To minimize the occurrence of fraudulent actions, internal and external auditors are

required to carefully examine the financial statements of the company and express an opinion of

it, whether or not it is true and fair. The right of the stakeholder or shareholder to accurate

information ought to be protected. Thus the need for codes that govern the ethics of the business

practices. The code also guides the leadership, accountability of managers and employees,

remuneration process and relations with shareholders. This process protects the users of the

financial statements from receiving misleading information. Based on information received by

the team members, Hotel Ethicais controlled by a Board of Directors who has a fiduciary

position to oversee the economic development of the company, maximize wealth for the

shareholders, show reasonable competence and prepare financial statements. This type of

relationship between the stakeholders and the company is viewed as corporate governance.

Corporate governance refers to the set of systems, principles and processes by which a

company is governed. They provide the guidelines as to how the company can be directed or
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controlled such that it can fulfil its goals and objectives in a manner that adds to the value of the

company and is also beneficial for all stakeholders in the long term. Stakeholders in this case

would include everyone ranging from the board of directors, management, shareholders to

customers, employees and society. The management of the company hence assumes the role of a

trustee for all the others. (Thompson, 2009)

The main purpose of corporate governance is to improve the level of accountability of

any company and mitigate the risk of ethical or legal problems that may occur. In the article,Why

is Corporate Governance Important by Leo Sun, it was cited that, “failed energy giant Enron, and

its bankrupt employees and shareholders, is a prime argument for the importance of solid

corporate governance.” If a company is engaged in scandals, frequent lawsuits by employees or

the government or not being transparent in its policies, then there will be a tainted image of the

company by society which would decrease the likelihood of attracting new investors.

It is therefore the view of the team members that companies need to be accountable to

their stakeholders and use available resources and expertise to improve the level of efficiency,

production and overall performance. One of the ways of achieving and maintaining optimal

corporate governance in a company is to establish an approved set of policies that govern the

norms and values upheld by the organization. A Code of Ethics or a Code of Conduct is used to

accomplish this task. This provides a platform that guides the decisions of stakeholders,

identifies acceptable and unacceptable business practices and describes the roles and

responsibilities of each stakeholder.

Corporate Character and Individual Responsibility

An individual who aims to be successful should act in such manner; likewise a business

that aims to be successful should have a brand that represents such. The team members saw that

Hotel Ethica was of the view that companies that promote positive values, such as integrity and
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fairness, and use such in developing their business strategies and operational plans often have a

good reputation in society and thus increase market share. The Arthur W. Page Society (2013)

has concluded that, “Each enterprise must have a clear sense of what defines it- why it exists,

what it believes, how it acts and what value it creates and how- and that definition must be

translated into action across the enterprise on a consistent basis. Corporate character describes

the unique identity that distinguishes each enterprise-the characteristics that define its very

nature”. (p. 11)

Corporate character needs to be developed and each stakeholder has a responsibility to

improve the level of transparency. This will allow persons to acknowledge that the purpose of

the company is not merely the creation of wealth but satisfying the welfare of all stakeholders,

through a customer-friendly environment. This shows that businesses have a corporate social

responsibility. Taylor (2015) claims that, “Corporate social responsibility refers to a business

practice that involves participating in initiatives that benefit society”. Some persons view this

concept as being time consuming and irrelevant to development of the good ethical behaviour at

an organization.

Milton Friedman, a philosopher and economist, in his 1970 article states that, “ The

social responsibility of (a) business is to increase its profits.” He further explained that a

business is not an individual therefore it cannot possibly have a moral responsibility and the

social problems that a society experiences should be addressed by the government. The managers

should manage the company for the stockholders and allow the persons elected by government to

find solutions for society’s problems. Friedman (1970) refers to corporate social responsibility as

“ a fundamentally subversive doctrine” and in a free society , “ there is only one social

responsibility of a business- to use its resources to engage in activities designed to increase

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profits so long as it stays within the rules of the game, which is to say, engages in open and free

competition without deception and fraud”. (p.55)

We believe that businesses do impact the society and most, if not all contribute to

pollution, contribute to the taxes of a country, provide employment for citizens and rely on the

financial support from investors, customers and suppliers. Hence, it would be relevant for

businesses to have a corporate social responsibility. Dudovskiy (2012) cites Archie Carroll’s

definition of corporate social responsibility as:

Corporate social responsibility involves the conduct of a business so that it is

economically profitable, law abiding, ethical and socially supportive. To be socially

supportive then means that profitability and obedience to the law are foremost conditions

when discussing the firm’s ethics and the extent to which it supports the society in which

it exists with contributions of money, time and talent.(1983: p.608)

Carroll has subdivided corporate social responsibility into four levels, namely

economical, legal, ethical and philanthropic, with economical being the lowest level of the

pyramid and philanthropic at the highest. At the economic level, the company has a

responsibility to be profitable since this is the foundation and all other levels are dependent on

economic growth. At the legal level, the company has a moral obligation according to the moral

standards of society to obey the law, while at the ethical level, the company has an ethical

obligation to do what is right and fair. Then at the philanthropic level, the company has a

responsibility of being a good corporate citizen. (Carroll’s CSR-Pyramid).

The Triple Bottom Line principle conceptualized by John Ellington supports the

objective of the corporate social responsibility, in which it views companies as having an

economic, environmental and social value. This concept helps to sustain the company and

prevent the decline of the social, political and economic structure of a company.Therefore, if a
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company uses some of its profits to assist with mentorship programs for at-risk youth in a

community, this would attract more employees, customers and investors to the corporation. The

team members propose that some of the corporate social responsibilities of Hotel Ethica may

include: providing resource or donations to community programs adhere to the labour laws so

that employees are treated fairly and aim to create an environmentally friendly society. If the

policies that govern an organization are based on positive values which seek to benefit the

stakeholders, and create an environment that is financially, socially and ethically sound, it will

achieve short term and long term benefits.

Rights and Obligations of Employees and Employers

In order to maintain industrial peace and work in the spirit of harmony and cooperation

employee and employer relations should be governed by law. Basic rights of employees should

be respected by the employers and the employees should render their obligations to the

employers. Once an Employment relation is formed there are certain obligations that are imposed

on an employer. Such obligations may serve as the rights of the employee by default. Employers

are responsible for ensuring that all their employees receive certain employment rights.

Employees have a responsibility to the organization to which they are employed. They are

expected to be fully committed to acting in the best interest of the organization, to be honest and

loyal and do nothing that will bring the organization into disrepute or affect its image.Below are

a few of the documented rights of the employees and the obligations of the employers at Hotel

Ethica. (Labour Relations and Industrial Disputes Act, amended 2010)

Obligation of Employers / Rights of the Employees:

1. A female worker is entitled to three (3) paid maternity leave, while in the employ of the

same employer 

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2. Every permanent employee is entitled to holiday with Pay

3. Every permanent employee is entitled to sick leave

4. To provide work to the employee according to the contract of employment.

5. To pay the employees’ wages and other necessary payments that should be made.

6. To respect the worker’s human dignity.

7. To take all the necessary occupational safety and health measures and to abide by the

standards and directives given by the appropriate authorities in respect of these

measures. 

8. Provide instruction and training to employees on health and safety

9. Provide protective clothing and equipment for employees, particularly those working in

highly hazardous area.

10. Employers should have written grievance and disciplinary procedures that will serve as a

guide for the employees.

Obligation of theEmployee / Rights of Employer

1. To perform in person the work specified in his contract of employment 

2. To follow instructions given by the employer based on the terms of the contract and work

rules 

3. To handle with due care all instruments and tools entrusted to him for work.

4. To report for work always in fit mental and physical conditions 

5. To give all proper aid when an accident occurs or an imminent danger threatens life or

property in his place of work without endangering his safety and health. 

6. To inform the employer immediately of any act which endangers himself or his fellow

workers or which may prejudice the interests of the undertakings.

21
7. To observe the provisions of this proclamation, collective agreements, work rules and

directives issued in accordance with the law. 

Ethical Treatment of the Employees at Hotel Ethical

The Management of employees can be a daunting prospect, especially if one is new to

management. While great leadership is often measured by one’s ability to lead and mentor their

employees, it’s also important to remember that as an employer and manager it is a requirement

to treat all employees equally and fairly. There are a range of employment laws and regulations

that managers need to be aware of such as those that protect employees against discrimination

and sexual harassment, wage and overtime abuse and more. If they are ignored these and the

business run the risk of creating an environment for disgruntled employees and the potential for a

government investigation or lawsuit. Based on the culture at Hotel Ethica all new employees

receive mandatory training in their respective areas for at least a period of two weeks. Every new

employee then receives a copy of the company’s hand book which outlines the rules and

regulations concerning conduct, terms and condition of employment to include but not limited to

termination, probation, sick leave, vacation and tips. This we believe is a good ethical practice as

it ensures that employees are aware of their policies and procedures as well as their rights.

Hiring, Firing and Recruitment Processes

Ethical decisions are "both morally and legally acceptable to the larger community," writes

scholar Jones (1991). As employee advocates and guardians of corporate values and standards,

human resource managers are ethically bound to oversee the recruitment process with honesty,

consistency and objectivity. Human resources should protect the ethical integrity of every step in

the hiring process to help managers avoid actions that could put the organization at risk.

Based on the culture at Hotel Ethica their hiring process is conducted through the Human

Resources Department. When a position becomes available within a specific department the
22
human resource manager is advised by the head of that department and the position is posted

either internally or externally. When this position is posted internally the hotel administration

only does this as a formality as they are well aware that the position is either filled or is to be

filled by someone who was already identified. This is unethical as this only shows a lack of

honesty and fair dealings that needs to be exercised in relationships between employer and

employee.

Another observation with their recruitment and hiring process is as it relates to their

selection of candidates for specific positions. Their records show that positions for Executive

Chefs for example were not extended to Jamaican nationals although qualified, but is instead

given to ex-partitas. In addition should a national be given the opportunity they are paid far less.

This is quite unethical as this shows that the company is obviously discriminating against

national applicants. Good business practice by an organization would ensure that there are no

indication of bias in the hiring process as this can lead to serious legal issues.

The rate of turnover at Hotel Ethica is quite high. 30 % of their employees spend on

average 6-8 months in their positions. Reasons cited for this included the lack of resources as

well as the volume of work that they are expected to do and failure to properly compensate.

Faced with this problem coupled with their refusal to pay these employees fairly, Hotel Ethica

has sought to hire interns who are paid minimum wage and is expected to do the same work that

a full time employee would have done. This practice is unethical as this may be considered as

exploitation. Inhumane work conditions are not only unethical but also bad for business creating

a culture of distrust.

It is unethical to terminate an employee on the basis of sex, age, pregnancy etc.

Discrimination based on a person’s ethnicity or culture may impact the workplace negatively. At

Hotel Ethica there have been practices of redundancy under the pretence that a particular position
23
is no longer needed or “does not align with the company’s goals”, however the company will

hire an individual and task them with the same responsibilities but creates a different title for that

individual. This is an unethical practice and does not foster an atmosphere of cooperation and

harmony in the workplace.Unethical practices in the workplace can create legal issues, affect

employee’s performance and relations and impacts on an organizations image and questions their

credibility.

Privacy

Issues with privacy arise in Hotel Ethica when employers invade the employees’ rights to

privacy, and by privacy we mean the rights of the employee to keep their personal matters and

relationships secret. As cited by Johnson (2013), ethical issues arise with the gathering of

information, assessing its accuracy, correcting it and disclosing it. Ways in which the hotel

invade the privacy of staff include with the use of technology and by requesting personal

information during recruitment process such as fingerprints, background checks, AIDS test or

medical screening. However, for management, the reasons and benefits sited for monitoring its

employees include lower operating cost and high productive rate and, that background checks are

done to ensure information supplied by employees are valid and accurate. The question of ethics

then is; do the employees’ rights to privacy outweigh the management’s right to run the hotel as

they desire.

With the increased use of technology this has created privacy issues because Hotel Ethica

has several ways to monitor or invade the privacy of employees, mainly through surveillance,

email and social media. Managers at the hotel use the software program Investigator 2.0 to track

computer usage, unaware to employees. With the widespread use of social media sites such as

Facebook and Twitter, management monitors employees on and off the job. These sites are used

to obtain background information or to conduct personality checks which management explains


24
is for ethical reasons such as for quality control and to protect against liabilities, but at the same

time, employees were of the view that management should not infringe on their personal lives

when they are not at work as stated by Hwang, Kikuyama, & Zeng (2010). According to

Kantianism, act so that you always treat both yourself and other people as ends in themselves,

and never as a means to an end, therefore, computer monitoring is wrong because managers are

monitoring their subordinates as a means to earning a higher profit not as ends in themselves.

Other ways in which the hotel invades employees’ privacy is with the use of cameras.

These are widely used in offices and at various locations on the compound to monitor activities;

this has contributed to undue stress for employees who are constantly being watched.

Management also have access to employees’ personal, file which contains private information

some of which is shared with external entities such as banks. Fingerprints, AIDS test and

medical screening is required of all employee but most employee is of the view that these should

be requested for certain positions and job types and is considered excessive and invasive for

some positions for which they are not relevant; they are aware that laws and regulations exist to

protect them against such unethical practices but for fear of dismissal, they usually comply. It is

thought that some of the ways the hotel monitor employees privacy are legal but can be

considered unethical.

To solve the issue with privacy at the hotel concerning technology, clear policies

regarding the proper use of technology and the types of monitoring needs to be established and

communicated. In relation to surveillance, this should be minimal and for the benefit of the job.

There should be no secret monitoring so, to monitor internet use at work employees could use

filtering software to filter sites not allowed to be visited during work hours. Employees must be

made aware and have access to all information obtained about them. Management must consider

their limits in dealing with privacy issues in relation to employees of the hotel and must ensure
25
that everything is done ethically and lawfully. They must therefore develop an accountable

process for employee monitoring.

Whistleblowing

When a past or current employee divulges information of misconduct or malpractice by

his employer in the public’s interest this is classified as Whistleblowing, or as it is more formally

known, 'making a disclosure in the public interest'. Whistleblowing can be seen as an unselfish

act or one of disloyalty to an organization. In recent times, laws have been enacted to protect

whistle-blowers and companies are encouraged to adopt a system of accountability to protect

their staff and business operations. The management of Hotel Ethica knows the implication that

can result if an employee blows the whistle; therefore, Manuals are available to guide employees

about the process of reporting wrongdoing or misconduct internally. However, employees were

not informed about making reports externally, nevertheless, employees need to be advised that

before they blow the whistle they should ensure that they follow the prescribed process. They

should ensure that the breech is real and has substantial evidence to substantiate the claim. Once

they have reasonable grounds to believe the public is at risk they should make the disclosure

internally to someone who is able to correct the breech that was committed. If their supervisor,

General Manager or person in authority does not act to rectify or try to rectify the breech then the

employee can contact the appropriate authorities, in some cases it might be the Bureau of

Standard or Jamaica Tourist Board. If the worker feels unable to make the disclosure internally,

it should be made to a prescribed person, so that the employee’s rights are protected.

26
Whistle-blowing - Public Interest Disclosure (nd), stated that to qualify as a disclosure,

one or more of the following matters should either be happening, has taken place, or is likely to

happen in the future.

1. A criminal offence

2. The breach of a legal obligation

3. A miscarriage of justice

4. A danger to the health and safety of any individual

5. Damage to the environment

6. Deliberate attempt to conceal any of the above.

A survey was conducted at the hotel which revealed that 70% of the workers supported

whistle blowing while 25% stated that they saw whistle blowers as “informers” or disloyal to the

hotel and would not support such practice. Most employees were of the view that if the engineers

at the water sanitation plant at the hotel uncovered safety issues they would hope the engineers

would have sufficient opportunity to report this without fear of reprisal; avoiding danger and

incident and allowing for the hotel to assess and improve its practices.

Employees should be aware that if they blow the whistle and is dismissed or victimized

for doing so, they can claim unfair dismissal. In order to be protected or compensated the

employee will have to show that he made a disclosure, that he followed the correct disclosure

procedure and that he was dismissed or suffered a detriment as a result of making the disclosure.

However, a tribunal will have the power to reduce any compensation by up to 25% if they think

the disclosure was made in "bad faith".For whistle blowing to be adverted, the hotel management

must not only be cognizant of its implication on businesses but should institute adequate policies

and guidelines to report wrongdoings. The use of telephone hotlines is one such provision the

hotel could institute as some workers might not want to appear in person due to the view that
27
they are being disloyal to the company. The company should ensure that they act on reports of

wrongdoing to mitigate against any consequences that may occur as there are authorities in place

to ensure that rules and regulations are adhered to in protecting the publics’ interest.

Diversity and Discrimination in the Workplace

In this global economy that now exist, diversity or variety as the word implies, is very

beneficial in all organizations and is even more critical in the Hotel Industry. Reynolds & Media.

(nd) mentioned the fact that the level of diversity within a hotel will determine the level of

discrimination or favouritism. However, employees should be treated fairly and with equality

regardless of age, gender, sexual orientation, disability, marital status, pregnancy, ethnicity, race,

economic standing, etc. This is important to the principles of ethical business and ethical

organizations.

In Hotel Ethica, the Assistant General Manager was employed from the United States of

America, he is Caucasian and he was cultured from home to believe that whites are superior.

When he took up the position as Assistant General Manager he was not aware that he would be

working with a coloured General Manager. At first he resented the idea and did not perform his

duties professionally which affected lower level staff as well as the image of the hotel. He soon

came to realize that the belief he hold was wrong and unethical. Guest observed his crudeness

and reported him to the General Manager who was a person who encouraged creativity and

effective problem solving among workers. The reality was that guest from various cultures

stayed at this first-class hotel and having a diverse employee base made for easier interact. The

Assistant General Manager therefore came to understand and accept the importance of equal

employment opportunity.

Notwithstanding, the Assistant General Manager had his share of problems when he first

came to the hotel, as staff were of the view that he was aged, racist and suffered from a
28
disability, additionally, they thought someone could have been identified internally who was

suitable to fill the post. He was employed due to his years of experience in the hotel industry and

he had a proven track record to show; he was just not use to having a coloured manager. His

disability was that he walked with a limp but because the hotel also catered for disabled guest,

management thought it prudent to not discriminate against employing such individuals. As a

resolution, Hotel Ethica should include a standard for diversity and non-discrimination practices

in their code of ethics that employees would be expected to sign off on to show acceptance of the

hotel’s policies. Training sessions could also be conducted for management and its employees in

understanding how to deal with conflicts that may result from discrimination and diversity.

Management must accept the fact that diversity must be welcomed and embraced if the hotel is

to be profitable and sustainable.

Insider Trading in the Organization

According to Smith (nd) insider trading is the practice of using important information that

has not been made public to execute trading decisions. It gives traders an unfair advantage over

others and most forms of insider trading are illegal. Many investors are tempted to make quick

returns from insider trading, but doing so can be dangerous. In most cases, these individuals play

an important role in the decision making of the financial or investment activity of the business.

They may sometimes hold the positions of financial directors, company officers, or persons who

are basically responsible for the securities trading. Often times, people within the stock market

community refer to insider trading as unethical or corrupt based on the fear that trading hurts or

weaken the stock exchange. Insider trading is often understood as being illegal or is of bad

practices in the business market, and has both a legal and illegal side to it. There are a variety of

ways that insider trading can be conducted they are as follows:

29
1. Members of an organization purchasing a security. Employees or members of publicly

traded companies are in key positions to access information that would not otherwise be

available to the general public. Some of them buy and sell securities based on this

information and hope to profit from it when the news is eventually released. Employees

are given stock options so there are legal instances where they can purchase shares.

However, the rules are complicated and the line is often blurred between what is a legal

form of insider trading and what is not.

2. Professionals who do business with the corporation. Bankers, lawyers, paralegals, and

brokers are but a few of the consultants who have access to confidential documents of their

corporate clients. They may choose to abuse this privilege as an opportunity to make a

quick buck through insider trading.

3. Friends, family, and acquaintances of corporate employees. Corporate employees often

share information within their own circles that is not shared with Wall Street and the

general public. Sometimes these disclosures are made innocently, but other times they are

made with the intention of allowing their friends to trade securities with an advantage that

other investors would not have. Employees may give these tips to help out a friend in a

tough time or they may be asking their friends to pay them a small incentive. Employees

may trade through their friends and acquaintances since they are less likely to be

scrutinized by the authorities than the employees themselves.

4. Government officials. Officials of different government agencies can gain access to

confidential information through the execution of their duties. They may conduct insider

trading with this information this kind of behaviour by government officials usually falls

in the category of corruption.

30
5. Hackers, corporate spies, and other thieves. Clever criminals find a number of ways to

gain access to corporate information which they can use to conduct securities fraud.

The team members believe that it is legal for the owners of Hotel Ethica to trade stocks

and security of their own. Insider trading practice can also deteriorate the investors’

confidence that they may have on securities of the company. Insider trading in the Hotel

Industry has lately become an issue in society and refers legally to the trading activities and

the non-activities that are carried out by the use of sensitive information that is not accessible

to shareholders or the public in general.

There has been only a little detail on ethical issues that are associated with Insider

Trading, including tax payer which has an adverse effect on the economy, by providing a less

efficient market, such as the loss of profit by shareholders. The government may provide its

resources with a certain benefit and cost to police insider trading to prevent criminal activities.

An often time, insider trading is seen as a victimless crime. However, it can be a deep problem

that is dealt with by many organizations; but nevertheless, this can be dealt with by punishing or

imposing some form of criminal liability for such act. Maloney and Mulherin (2003) indicated

that “trading is likely to deteriorate the stability and efficiency of the company’s stocks in the

market.”

The Hotel Industry has its complexity like other Industries and its main concern is that of

corruption which has become very popular over time. “Corruption is the abuse of entrusted

power for private gain. It can be classified as grand, petty and political, depending on the

amounts of money lost and the sector where it occurs” as defined in the article,What is

Corruption (2015). Corruption today has caused so much damage to this industry. It has also

created an unfair advantage and anti-competitive practices in the environment, it contributes to

31
organized crime and is seen as an obstacle in the development of the economy, it weakens the

rules of laws and trust in the Tourist Industry. Corruption is a serious problem that can only be

controlled and not totally eliminated.

This bad practice affects the hotel industry and unfortunately, contributes to a bad

economic life. From the business perspective of Insider Trading, there has been some ethical

issues with insider trading which may be viewed as an unethical behaviour. The practice of

Insider Trading is conducted mainly by “insiders” including the managers, workers or even the

directors, their main goals are to obtain monetary gains or some other benefits. As cited in the

web article, Sample Essay on Insider Trading: Insider Trading (2015):-

“Insider trading laws are not that effective; they affect the freedom of business,

diminish innovation and reduce micro and macro efficiency. In essence, they also

represent a cost to shareholders. Arguments on both sides about insider trading

are well developed, although arguments against are more problematical. Its

occurrence is what has made many ventures successful.”

It is obvious that Insider Trading is a very problematic and complex issue, but organizations can

avoid these challenges, by obtaining their visions and knowledge of a keen investment decision

so that they will be able to understand the market in which they are operate.

Bribery and Corruption in the Organization

According to the web article, What is Bribery and Corruption? (nd) “Bribery is a specific

offence which concerns the practice of offering something, usually money, to gain an illicit

advantage and corruption is an abuse of a position of trust in order to gain an undue

advantage.”Bribery is the main form of corruption and is an illegal practice that has been a

problem in the hotel industry and other parts of the workforce; this however leads to a reduced

business climate whenever the society’s trust is put at risk. This negative practice may take the
32
form of embezzlement and extortion that contributes to the reduction of business creditability

and profit, whenever one misuse their position to make secret profit or personal gain, however

the team members agree that taking part in any form of corruption and bribery can be a barrier to

economic and social stability in a business and ultimately the society.

It is critical that a corporation establish policies which prohibit its employees from

getting involved in any act of bribing or corruption. Corporations should not tolerate this

practice and should have clearly defined Anti-Bribery and Anti-Corruption Policy, which

provide the guidelines in details; therefore if employees should breach this policy then a punitive

action will be taken. The team members are aware that the practice of corruption and bribery

may not only affect the hotel industry but the society at large. One of the disadvantages is that it

gives the rich people the ability to get away with breaking the laws by paying off their money to

officials; this however helps to create an unjust society that prosecutes the poor while leaving the

rich invincible.

Bribery and corruption leads to the inefficiency of business, however, whenever a

resource is tampered with and is misused, the company will suffer a decline in the development

of business and may also damage the image or reputation of the company. The team members

are of the opinion that practical advice should be given to all internal stakeholders on how to

comply with established Anti- Bribery policy, under such a policy; consequences of diversion

from these guidelines, should be explicitly explained. This policy should also be applicable to

directors and the managers of the business and if in the event that they are being convicted of a

bribe offence their tenure in the business will be immediately terminated. The team members

also share the opinion that businesses should value their images and reputation as well as

committed to providing the highest level of customers and employees trust and ethical standards.

The team members have realized that the risk of bribery is a growing concern to the public and
33
as such, believe that businesses have a duty and responsibility of ensuring that it maintains a

highly ethical standard against corruption and bribery. It is the responsibility of managers to

ensure that all employees are informed of the policy and their responsibilities and must ensure

that they act in accordance with the procedures.

34
Conclusion

Morality and Ethics are the building blocks of any society and therefore should be the

building block of our corporations. Ethics is undoubtedly very important to any organization

since it can mean the difference between the success and failure of a business. Businesses, and

especially the hotel industry, need to ensure that they are aware of the different concepts that

represent ethics and understand the various cultures that operate within the boundaries of their

establishments. They have a moral obligation to take care of the wellbeing of the various

stakeholders, who are very essential to the sustainability of the organization. Businesses

underestimate, to their own peril the importance of ethical treatment and the resultant

maximization of profits when all stakeholders are treated ethically.

The Government and various stakeholders also have their part to play in ensuring that

businesses operate ethically within the law and in the public’s interest. Corporations must also

understand that the sustainability of the earth’s ecological and biological systems is central to the

survival of the human race and ultimately their businesses. As a result, ethical treatment of the

environment is not only the responsibility of consumers but more so the responsibility of

business. Henry Kravis states, “If you build that foundation, both the moral and the ethical

foundation, as well as the business foundation…then the building won't crumble.” It is important

for businesses not to allow greediness to corrupt their judgment. The enormous mistakes made

by Enron and Arthur Andersen shall serve as a lesson for those businesses which consider

straying from the path of morality and sound business ethics.

35
Recommendations

This project, though debatable, has presented the views of several theorists and

intentionally presented a plausible view of the fact that Corporate Social Responsibility and

ethical practices in business organizations contributes to a more lucrative business. The

Hospitality and Tourism industry continues to be a fast growing industry and based on the

predictions of economists, it will continue to grow. The team members have cited that Hotel

Ethica is experiencing a few challenges, and if not addressed might deter the growth of the

company. The proposed recommendations include:

 Hotel Ethica needs to review or completely change their hiring, firing and recruitment

processing policies to be aligned with established ethical standards in relation to the legal

rights of employees / potential employees.

 Engaging employees in quarterly Professional Development Workshops to address

internal issues such as: Discrimination in the workplace, updated work policies or

personal development.

 Ensuring that Managers and Supervisors attend business ethics programme for small and

micro enterprise organisations (SMEs). This programme focuses on ethics development

and strategy alignment, building the institution’s ethical reputation and improving the

company’s ethical culture.

 Host an annual social function for all stakeholders of Hotel Ethica

 Contribute to or sponsor at least two community related initiatives

These recommendations will foster a strong sense of social obligation and environmental

responsibility of Hotel Ethica, as they seek to become a globally recognized organization with a

reputation for honesty, integrity, trust and a stable ethical culture.

36
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