The Research for the Awareness Level of the Hotel Business About the Social Responsibility and Accountability Concepts

Transcription

1 Journal of US-China Public Administration, ISSN January 2012, Vol. 9, No. 1, D DAVID PUBLISHING The Research for the Awareness Level of the Hotel Business About the Social Responsibility and Accountability Concepts Azzem Özkan Erciyes University, Kayseri, Turkey Şükran Güngör Tanç Nevşehir University, Nevşehir, Turkey Every successful business has to understand and apply the mentioned principle so as to provide the business performance and maintain its operations. One of the main corporate governance principles starting with social responsibility is accountability. Accountability means responding to the authorities using the business authority and liability, taking the criticism and demands into consideration and taking responsibility in the event of failure, incompetence and dishonesty. The fundamental objective of the research is to determine the awareness levels of the mentioned principles in hotel business and the region of Cappadocia. The data level of the concept of social responsibility and accountability in hotel businesses and the practices regarding the mentioned principles is determined with the questionnaire taking place in hotel businesses. In the case of applying the corporate governance principles for small and medium enterprises, the research also aims to establish the availability level of hotel businesses. According to findings obtained from the research results, it is seen that the employees working as department managers in the hotels are aware of the social responsibility and accountability concepts and also apply them. Keywords: corporate governance, social responsibility, accountability, hotels Today the companies are not defined just as technical and economic institutions, but also as social institutions. As the expectations of the society from the companies gained a new dimension, the enterprises have to undertake social responsibilities or revise them by changing their stands and attitudes toward the society. Modern companies are no longer the institutions only producing goods and services, but also marketing them and gaining profit; they continue their operations as an organization that has certain responsibilities against the society and fulfill these responsibilities in the framework of accountability (Çetin, Çimen, Türk, Fedai, & Şahin, 2010, p. 12). The companies that perform the aforesaid operations apply the corporate governance principles that have an important effect on ensuring sustainability. Corporate governance is built on the principles of equality, transparency, accountability and social responsibility (Poroy Arsoy, 2008, p. 20). Many definitions of corporate governance stress the potential conflicts of interest between insiders (managers, boards of directors, and majority shareholders) and outsiders (minority shareholders and creditors) of the company. The set of internal and external mechanisms to balance these conflicts of interest is what it is usually known as corporate governance (Garay & González, 2008, p. 195). Azzem Özkan, associate professor, Department of Business Administration, Erciyes University; research fields: accounting, finance. Corresponding author: Şükran Güngör Tanç, assistant professor, Department of Business Administration, Nevşehir University; research fields: accounting, finance. sukrangungortanc@gmail.com; sgungor@nevsehir.edu.tr.

2 THE RESEARCH FOR THE AWARENESS LEVEL OF THE HOTEL BUSINESS 91 The social responsibility and accountability concepts of corporate governance principles are the basis of this study. The social responsibility concept in this context is one of the oldest concepts among the concepts about its roots and focuses on philosophy of ethics. Corporate social responsibility in general sense is about the role of the companies in the society (Tokgöz & Önce, 2009, p. 257). The accountability concept is a duty that is fulfilled by a person or company voluntarily or due to legal obligations. Responsibility and accountability are two different concepts, but they are interrelated. Responsibility means to function in order to fulfill a certain task; accountability means that a person or a company makes explanations, proves or reports due to their activities (Tokgöz & Önce, 2009, p. 258). One of the three main principles of the corporate social responsibility is accountability. It envisages that the activities of a company may affect the outer world, and so company is responsible for effects of its activities. In this framework, the effects of these activities should be assessed both for inner and outer worlds. In general, this concept is to report the performance assessments of all the units affected by these activities (Aras, 2007). While social responsibility refers to the obligation of an individual, group or institution to fulfill their task, accountability refers to the obligation of an individual, group or institution to report the authorities about the fulfillment of the task, as well as the obligation to explain and justify the reason to the authorities if the task is not fulfilled. In other words, accountability is to give clear and certain answers to the questions about how well or bad our responsibilities are fulfilled (Bayri, 2006, pp ). Social responsibility can be defined as the assessment of the environmental, economic and social effects of corporate activities on the social partners, and the implementation of activities to diminish the negative effects and contribute to the development of the society and company (Angay, 2007, p. 150). Accountability is a fundamental principle of good governance that begins with responsibility. It is the principle of accepting responsibility for one s actions, being answerable for one s conduct, being responsive to citizen inquiries, and publicly reporting activities and results in a clear and transparent manner. Accountability fosters trust through greater transparency and credibility, promotes collaboration with other parties, and strengthens the confidence of citizens and stakeholders in your organization or group. The accountability principle mentions the issues about the stakeholders and explains the rules about regulating the relations between the companies and the stakeholders. The stakeholders of the company include the allottees, employees, debtees, clients, suppliers, unions, various non-governmental organizations, state and even the potential savers tending to invest in the company (Dinç & Abdioğlu, 2009, p. 160). To better understand this, we have to explore the possible systemic effect (that is on business as a social phenomenon) of individual companies being driven by the logic of today s competitive markets to extend their accountability to embrace a growing range of social and environmental impacts. From this perspective, corporate responsibility has to be understood not as a static, functionally defined phenomenon but as a contingent, negotiated pathway of change in the role of business in society (CIDA, 2011). Accountability is also one of the fundamental principles of the supervision. Corporate social responsibility covers the classification of the units responsible for the finance of the company, thus elaborating the relations. As this concept is based on the responsibility principle of the companies, it has a more complex nature including different relations and it is based on the main requirements of the supervision on issue for centuries (Aras, 2007). The sustainability of the hotel business functioning in the tourism sector is of the essence both for the national economy and for the interest groups. In this context, it is aimed to detect the awareness levels about the

3 92 THE RESEARCH FOR THE AWARENESS LEVEL OF THE HOTEL BUSINESS social responsibility and accountability, the fundamental principles of the corporate governance, in the hotel businesses prioritizing the satisfaction of the society and individuals by producing services. Also it is detected that there is a positive relation between the awareness levels and implementation levels of the social responsibility and accountability concepts. Literature Review New global economic activities require the emergence of new regulations and their enforcement. Transnational corporations are increasingly participating in rule-making and rule implementation in a global context, in areas where, previously, only nation-states have the responsibility. One of these areas is within the framework of corporate social responsibility. In just one decade, corporate social responsibility has become an extremely important economic, social and political question in both developed and developing countries and at local, national, regional and international levels. Many companies are under pressure from civil society organizations and corporate accountability networks monitoring business malpractice (Albareda, 2008, p. 431). More companies in a growing number of countries are increasingly attempting to adopt better corporate governance practices. Furthermore, the larger companies of the region, especially those that belong to the financial sector, are in the process of adopting other international codes of best corporate governance practices, such as the Sarbanes-Oxley Act and the Principles of Corporate Governance developed by the Organization for Economic Co-operation and Development (OECD, 1999). It is not difficult to predict that the success or failure of these initiatives will depend on the real impact that they may have on the financial performance and market valuation of the companies that adopt them (Garay & González, 2008, p. 194). Besides the theoretical studies published about the corporate governance mentality in the literature, there are also empirical studies. Corporate Governance Association of Turkey (TKYD) (2008) examined how the adaptation to the corporate governance principle effects the performance in the Corporate Governance Perception Study. According to the findings of the study, it is detected that the sustainability strategies of the company, creating employee engagement and the potential to attract foreign capital are the essential factors in terms of effect. Dinç and Abdioğlu (2009) showed that the relation between the corporate governance mentality and accounting information system was examined and a positive relation between the corporate governance mentality and accounting information system was detected. Brennan and Solomon (2008) revised the studies about the corporate governance and accountability in traditional sense, and made suggestion for the future studies. Yılmaz and Alkan (2006) examined the perception of the social responsibility concept of the accounting in the small- and medium-sized enterprises. A. B. Başar and M. Başar (2006) did a research about the social responsibility reports in the operand companies in the Istanbul Stock Exchange. According to the findings of the study, the corporate governance is aware of the obligation to serve the society, although it causes a decrease in the profit rates. According to the results, small- and medium-sized enterprises could not develop the corporate governance mentality. Shahin and Zairi (2007) did a research about ensuring corporate social responsibility perfection in the corporate governance. Ararat (2008) examined the corporate social responsibility practices in Turkey by exploring the role of the economy, state and societal culture. Pelit, Keleş, and Çakır (2009) did a research to determine the social responsibility practices in hotel businesses. According to the findings, social responsibility gets the most positive comments among the responsibilities for the shareholders. Al-Khater and Naser (2003) analyzed the awareness levels of corporate social responsibility and accountability concepts and contributed the literature with an empirical study. Bendell (2005) did a research

4 THE RESEARCH FOR THE AWARENESS LEVEL OF THE HOTEL BUSINESS 93 titled In Whose Name? The Accountability of Corporate Social Responsibility, and examined whether the social responsibility was accountability or not. Albareda (2008) analyzed the corporate social responsibility and accountability concepts in companies and concluded that these concepts strengthened the companies. Jones (2008) did a research about internal control, accountability and corporate governance and concluded that internal control system had an effect on the accountability of the company. Methodology and Findings In this section, we present the major steps of our methodology. The aim of this research is to conduct a field study on the department managers in the hotel businesses in Nevşehir and to examine the awareness levels about the social responsibility and accountability concepts, the fundamental principles of the corporate governance of the aforesaid hotel businesses. There are 46 accommodation facilities that have tourism license in Nevşehir and it is aimed to contact all of these facilities. As nearly half of these facilities are boutique hotels, it is estimated that the number of the department manager is around And 74 department managers returned the questionnaire forms. In the research, questionnaire technique is used as data collection technique. The questionnaire form is composed of three chapters. In the first chapter, the statements about the awareness levels of the social responsibility and accountability are asked with 5-point Likert scale (1 = Strongly Disagree; 2 = Disagree; 3 = Neither Agree, Nor Disagree; 4 = Agree; 5 = Strongly Agree). In the second chapter, the statements about the social responsibility and accountability practices are asked with 5-point Likert scale (1 = Strongly Disagree; 2 = Disagree; 3 = Neither Agree, Nor Disagree; 4 = Agree; 5 = Strongly Agree). In the third chapter, there are statements to determine the demographic characteristics of the sample. The scales used in the research about the awareness levels of the social responsibility and accountability are compiled from the statement regarding the Responsibility and Accountability research made by the Canadian International Development Agency, CIDA, and the statements from the research about the social responsibility perception by Çetin et al. (2010), and also the statements from the research about the social responsibility by Yılmaz and Alkan (2006). The findings are analyzed in SPSS package program and the aim of the correlation analysis is to show how the descriptive statistics and variables affect each other. The hypothesis developed to be tested in the research is as follows: There is a positive relation between the awareness level and implantation level of the social responsibility and accountability. And 13 statements are used in the study to assess the awareness levels of social responsibility and accountability, and the reliability coefficient is Cronbach s Alpha The Cronbach s Alpha value regarding the practice levels of the social responsibility and accountability concepts is Both values are high enough to be regarded as significant in terms of statistics. The findings of the study are as follows. According to the findings of the research (see Table 1), 66.2% of the participants are male and 33.8% of the participants are female. In terms of age ratio, 50% of the employees are years old. The majority of the department managers in the hotel businesses, namely 51.4%, are graduates. The work experience of the employees is more than 1 year, and the experience of 24.3% is 6-10 years and the experience of 35.1% is more than 15 years. According to the findings, 28.4% of the hotels in the region of Cappadocia are boutique hotels, 10.8% are 2-star hotels, 4.1% are 3-star hotels, 41.9% are 4-star hotels and 14.9% are 5-star hotels. In terms of the total bed amount of the hotels, 21.6% of the hotels are 0-50 bed capacity, 25.7% are bed capacity, 28.4% are bed capacity, and 17.6% are bed capacity.

5 94 THE RESEARCH FOR THE AWARENESS LEVEL OF THE HOTEL BUSINESS Table 1 The Descriptive Statistics Regarding the Demographic Characteristics of the Participants Demographic characteristics N % Demographic characteristics N % Male Boutique hotel Gender Female star hotel years old and less Number of the stars 3-star hotel Age Education Work experience star hotel star hotel and more High school Academy University Postgraduate Less than 1 year years and more Hotel capacity (Number of beds) and more Table 2 The Correlation Results Regarding the Relation Between the Awareness Levels and Implementation Levels of the Social Responsibility and Accountability Variables Mean Std. Deviation P 1. The awareness of social responsibility and accountability The implementation of social responsibility and accountability ** Note. ** P < According to the results of the analysis (see Table 2), both the awareness levels of social responsibility and accountability, and the implementation levels of social responsibility and accountability of the enterprises are above the average. Thus, it can be said that the aforesaid hotels are aware of the social responsibility and accountability and implement these concepts. When the results of the correlation analysis are examined, there is a significant and positive relation between the awareness levels and the implementation levels of social responsibility and accountability in these hotels. In other words, as the awareness levels of social responsibility and accountability in the hotels increase, also the implementation levels of social responsibility and accountability increase. ANOVA analysis is carried out in order to find whether the awareness levels and implementation levels of social responsibility and accountability change according to the number of the stars, and to find whether there is a significant difference between the groups or not. According to the results of the ANOVA analysis (see Table 3), there is a significant relation between the number of the stars of the hotels and the awareness levels of the social responsibility and accountability (F = 4.243, Sig = 0.004). At this point, it can be said that the 2-star hotels have lower awareness levels of social responsibility and accountability than the other hotels. When the implementation levels of the social responsibility and accountability in the hotels are compared, there is also a significant difference between the groups (F = 3.664, Sig = 0.009). According to their answers, it

6 THE RESEARCH FOR THE AWARENESS LEVEL OF THE HOTEL BUSINESS 95 can be deduced that the boutique hotels have higher implementation levels of social responsibility and accountability than other hotels. Table 3 The Results of the ANOVA Analysis The number of the stars of the hotels The average levels of the awareness of The average levels of the implementation social responsibility and accountability of social responsibility and accountability 2-star hotel star hotel star hotel star hotel Boutique hotel Note. P < Conclusions In the conditions of competition increasing in parallel with globalization, in order to develop and sustain this development, the states must carry out adaptation studies in an international scale, and put these into practice as series of regulations. The corporate governance secures the sustainable performance of the enterprises by enabling the fundamental data about ensuring sustainability of the company. If the companies aim to ensure sustainable performance, they must apply the critical corporate governance principles effectively to increase the accountability of the companies in the long-term. Corporate governance can be regarded as reliability, ethical value and the prestige of the company (Aras & Crowther, 2008, p. 434). In order to increase the level of the corporate governance in Turkey efforts are made, on the one hand, to establish the norms and the code of practice of corporate governance, on the other hand, to make the economic, judicial and politic institutions eligible for the aforementioned practices. The awareness levels of the social responsibility, which is the basis of the corporate governance principles in the hotels, and the accountability concepts, which controls the implantation of the social responsibility, in the hotels are 4.08 and the implementation levels of social responsibility and accountability are 4.05 and above the average. Thus, it can be said that the aforementioned hotels are aware of the social responsibility and accountability concepts and implement these concepts. According to the results of the ANOVA analysis, there is a significant difference between the number of the stars of the hotels and the awareness levels of social responsibility and accountability. At this point, it can be said that the 2-star hotels have lower awareness levels of social responsibility and accountability than the other hotels. There are some limitations in this study. The questionnaire is carried out in a small region, region of Cappadocia. It may not be accurate to generalize the results for all the sectors. Corporate governance may be compelling in the beginning due to the implementation of some rules; however, it will have facilitator effects on the companies. The implementation of the corporate governance principles plays a key role for the increase in the international portfolio and direct foreign investments. Achieving solid corporate governance together with social responsibility and accountability increases the productivity in the state. References Albareda, L. (2008). Corporate responsibility, governance and accountability: From self-regulation to co-regulation. Corporate Governance, 8(4),

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