STQM411 – PRELIMINARY REVIEWER LLJG

Week 1: Strategic Management and Total Quality

Management
STRATEGIC MANAGEMENT
 is the set of managerial decision and action that
determines the long-run performance of a corporation.
It includes environmental scanning (both external and
internal), strategy formulation (strategic or long-range
planning), strategy implementation, and evaluation and
control. The study of strategic management therefore
emphasizes the monitoring and evaluation of external TWO TYPES OF GOALS
opportunities and threats in lights of corporation’s Short Term Goals
strengths and weaknesses. Usually accomplished quickly (1-3 Days)
 The ongoing process of setting an organization’s high- Example: Doing dishes, finishing a paper, etc.
level goals, developing plans of action, and effectively Long Term Goals
allocating resources to execute those plans. Usually takes longer to accomplish (Month-Years)
IMPORTANCE OF COMPANY’S STRATEGY Examples: Graduating from high school, getting a job, etc.
 A compelling need exists for managers to proactively SHORT TERM AND LONG-TERM PLANNING COVERING
shape how a firm’s business will be conducted Short Term Planning
 A strategy-focused firm is more likely to be a strong  Establish Production Cycle
bottom-line performer than one that views strategy as  Create Level Scheduling
secondary  Determine Manpower Levels
 A strategy must focus and coordinate an organisation’s  Finalize New Products
activity from the top down to achieve its mission. Long Term Planning
 Such a well-developed strategy ensures consistent  Meet Future Needs
direction withing the company’s business units, and  Purchase Equipment’s
reduced uncertainly in decision making.  Develop Marketing Activities
 A business unit is the lowest level of the company  Financial Forecasting
which contains the set of functions that carry a product
through its life span from concept through manufacture, Week 2: Strategic Management
distribution, sales and service. THE ORIGIN OF STRTAEGIC MANAGEMENT
 A sound strategic plans allow companies to out  The increasing importance of strategic management
maneuver their completion may be a result of several trends. Increasing
o Getting there fast is no good if you are going in competition in most industries has made it difficult for
the wrong direction some companies to compete. Modern and cheaper
 Market forces continually conspire to deplete profits. transportation and communication have led to
Powerful business strategies can counteract those increasing global trade and awareness. Technological
tendencies. development has led to accelerated changes in the
Many, many tools to use global economy. Regardless of the reasons, the past two
o Porters five forces decades have seen a surge in interest in strategic
o Blue Ocean Strategy management.
o McKinsey’s strategy building blocks THREE PERSPECTIVES ON STRTAEGIC MANAGEMENT
o The Art of War Traditional Perspective
o The Art of the Advantage Origin: Economics, other business disciplines, and
consulting firms
View of Firm: An economic entity
Approach to Strategy Formulation: Situation analysis of
internal and external environments leading to
formulation of mission and strategies
STQM411 – PRELIMINARY REVIEWER LLJG
Source of Competitive Advantage: Best adapting the THE STRATEGIC MANAGEMENT PROCESS
organization to its environment by taking advantage of
strengths and opportunities and overcoming
weaknesses and threats
Resource-Based View
Origin: Economics, distinctive competencies, and
general management capability
View of Firm: A collection of resources, skills, and
abilities Approach to Strategy Formulation: Analysis of
organizational resources, skills, and abilities
Acquisition of superior resources, skills and abilities
Source of Competitive Advantage: Possession of
There is a more fundamental conclusion to be drawn
resources, skills, and abilities that are valuable, rare, and
from the foregoing analysis: the strategy of a fi rm
difficult to imitate by competitors
cannot be predicted, nor is it predestined; the strategic
Stakeholder View
decisions made by managers cannot be assumed to be
Origin: Business ethics and social responsibility
the product of deterministic forces in their
View of Firm: A network of relationships among the firm
environments. On the contrary, the very nature of the
and its stakeholders
concept of strategy assumes a human agent who can
Approach to Strategy Formulation: Analysis of the
take actions that attempt to distinguish one’s firm from
economic power, political influence, rights, and
the competitors.
demands of various stakeholders
THE PRINCIPLE OF ENACTMENT
Source of Competitive Advantage: Superior linkages with
 The principle of enactment assumes that organizations
stakeholders leading to trust, goodwill, reduced,
do not have to submit to existing forces in the
uncertainty, improved business dealings, and ultimately
environment; they can, in part, create their
higher firm performance.
environments through strategic alliances with
 As the field of strategic management began to emerge
stakeholders, investments in leading technologies,
in the latter part of the 20 th century, scholars borrowed
advertising, political lobbying, and a variety of other
heavily from the field of economics. For some time,
activities.
economist had been actively studying topics associated
 For example, a small restaurant firm may have a
with the competitiveness of industries.
difficult time influencing national government agencies
 These topics included industry concentration,
and administrators. However, smaller organizations often
diversification, product differentiation, and market
band together into trade groups, such as the National
power. However, much of the economics research at
Restaurant Association, to influence government policy
that time focused on industries, and some of it even
on pressing issues like minimum wage, immigration
assumed that individual firm differences did not matter.
policy, and health – care costs. Also, they may form
 The traditional process for developing strategy consist
alliances with other entities.
of analyzing the internal and external environments of
DELIBERATE STRATEGY VERSUS EMERGENT STRATEGY
the company to arrive at organizational strengths,
 The traditional school of thought concerning strategy
weaknesses, opportunities, and threats (SWOT). The
formulation also supported the view that managers
results from this “situation analysis,” as the process is
respond to the forces discussed thus far by making
sometimes called, are the basis for developing missions,
decisions that are consistent with a preconceived
goals, and strategies.
strategy. In other words, strategy is deliberate.
 Deliberate strategy implies that managers plan to
pursue an intended strategic course. In some cases,
however, strategy simply emerges from a stream of
decisions. Managers learn as they go. An emergent
strategy is one that was not planned or intended.
According to this perspective, managers learn what will
work through a process of trial and error.
STQM411 – PRELIMINARY REVIEWER LLJG
EFFECTIVE STRATEGIC PLANNING Our Vision: The first choice for customers, employees,
 In summary, scholars have determined that both shareholders, and business partners
adaptation and enactment are important to Our Mission: Delighting customers each time
organizations. They should adapt to environmental forces Our Guiding Principles (Core Values):
when the costs of enacting (influencing) the We will ensure leadership drives for results.
environment exceed the benefits. We will make customer loyalty a key driver of our
 However, they should be proactive in creating their business.
own opportunities. In addition, organizations should We will enable decision making at customer contact
engage in deliberate strategic planning processes, but point.
they should also be willing to make mistakes and learn We will demonstrate honesty, care, and integrity in all our
from them as they chart a strategic course. relationships. (SAMPLE ONLY)
 In other words, strategy should be both deliberate CHARACTERISTIC OF STRATEGIC THINKING
and emergent, and firms should both adapt to and enact Intent Focused – Built on a managerial vision of where
their environments, with the situation determining the firm is going and what it is trying to become. This is
which option to choose called strategic intent.
The strategic management process Comprehensive – A “systems perspective. Envisions the
firm as a part of a larger system value creation.
Understands the linkages between the firm and the
other parts of the system.
Opportunistic – Seizes unanticipated opportunities
presented to the firm.
Long-Term Oriented – Goes beyond the here and now.
Looks several years into the future at what the firm will
become, based on its strategic intent.
Built on Past and Present – Does not ignore the past or
present. Instead, learns from the past and builds on a
SWOT ANALYSIS foundation of the realities of the present.
A framework used to evaluate a company’s competitive Hypothesis Driven – A sequential process in which
position and to develop strategic planning. creative ideas are then critically evaluated. Is willing to
Strategic Direction take a risk. Learns from mistakes.
 Strategic direction pertains to the longer - term goals
and objectives of the organization. At a more Week 3: The Environment and External Stakeholders
fundamental level, strategic direction defines the THE ORGANIZATION, ITS PRIMARY STAKEHOLDERS,
purposes for which a company exists and operates. This AND THE BROAD ENVIRONMENT
direction is often contained in mission and vision ASSESSMENT OF THE BROAD ENVIRONMENT
statements. Important forces in the Broad Environment and how
 An organization’s mission is its current purpose and some organizations respond to them.
scope of operation, while its vision is a forward - looking Scanning. GENERAL INDICATORS—LOOKING FOR EARLY
statement of what it wants to be in the future. Unlike WARNING SIGNALS FROM MANY TRENDS.
shorter - term goals and strategies, mission and vision Monitoring. FOLLOWING SPECIFIC INDICATORS—AN
statements are an enduring part of planning processes ONGOING OBSERVATION OF KEY IMPORTANT TRENDS
within the company. Projecting. FORECASTING THE IMPACT OF KEY TRENDS
For example, the philosophy, vision, mission, and ON THE ORGANIZATION BASED ON MONITORED
guiding principles of Shangri - La Hotels and Resorts SPECIFIC CHANGES OVER TIME.
are: Adapting. DETERMINING WHAT REQUIRES CHANGE IN
Our Philosophy: Shangri - La hospitality from caring THE ORGANIZATION BASED ON AN ASSESSMENT OF THE
people TIMING, INFLUENCE, AND IMPORTANCE OF SPECIFIC
STQM411 – PRELIMINARY REVIEWER LLJG
TRENDS. THE KEY QUESTION IS HOW THE TRENDS WILL  A generation may shape its identity or distinctive
AFFECT FIRM STRATEGY beliefs and views as a result of social, political, and
The Broad Environment forms the context in which the economic events that occur during the preadult years.
firms and its operating environment exist. GENERATIONAL COHORTS IN AMERICA
THE KEY ELEMENTS IN THE BROAD ENVIRONMENT, 1. Depression cohort (born from 1912 to 1921)
AS IT RELATES TO A BUSINESS ORGANIZATION AND Memorable events: The Great Depression, high
ITS OPERATING ENVIRONMENT, ARE: unemployment, poverty, and financial uncertainty
1. Socialcultural influences Key characteristics: risk adverse, desire for financial
2. Global economic influences security, and strive for comfort
3. Political influences 2. World War II cohort (born from 1922 to 1927)
4. Technological influences Memorable events: men going to war and many not
THE SOCIALCULTURAL CONTEXT returning, the personal experience of the war, women
 Society is composed of the individuals who make up a working in factories, and a focus on a defeating a
particular geographic region. Some sociocultural trends common enemy
are applicable to the citizens of an entire country. Key characteristics: the nobility of sacrifice for the
 For example, a few of the major social issues currently common good, patriotism, and team players
facing the United States are: 3. Post-war cohort (born from 1928 to 1945)
 Role of government in health care and elder Memorable events: sustained economic growth, social
care Terrorism and levels of violent crime tranquility, The Cold War, and McCarthyism
 Security of travel and public places Key characteristics: conformity, conservatism, and
 Global warming traditional family values
 War and role of the military 4. Baby Boomer cohort I (born from 1946 to 1954)
 Declining quality of education Memorable events: assassination of John F. Kennedy
 Financial market failures and Martin Luther King Jr., political unrest, putting a
 Quality and health levels of various imported man on the moon, Vietnam War, antiwar protests, social
and manufactured food products experimentation, sexual freedom, civil rights movement,
 Pollution and disposal of toxic and nontoxic environmental movement, women’s movement, protest
waste and riots, and experimentation with various intoxicating
ANALYSIS OF SOCIETAL TRENDS drugs.
 The value of watching social trends is that it helps fi Key characteristics: experimentation, individualism,
rms to understand preferences, strengthen ties with free- spirited, and social cause oriented
existing customers, and create innovative products. 5. Baby Boomer cohort 2 (born from 1955 to 1964)
 Rising popularity of green hotels and restaurant menus Memorable events: Watergate, Nixon resigns, the Cold
with organic foods War, the oil embargo, inflation, and gasoline shortages
 Hospitality firms that pay attention to social trends Key characteristics: distrust of government, pessimism,
are able to: general cynicism
Recognize opportunities 6. Generation X cohort (born from 1965 to 1983)
Identify unique generational and cultural Memorable events: Challenger explosion, Iran-Contra,
differences social malaise, Reaganomics, AIDS, safe sex, fall of Berlin
Enhance corporate reputation Wall, and single-parent families
Avoid unwanted legislation Key characteristics: quest for emotional security,
GENERATIONAL AND CULTURAL AWARENESS entrepreneurial, and informal
 Culture is defined as an evolving set of shared beliefs, 7. Generation Y cohort, also called N Generation (born
values, and attitudes that help shape how a social group from 1984 to present)
thinks, sees, acts, and reacts to various events and Memorable events: rise of the Internet, September 11th
situations. attacks, cultural diversity, and two wars in Iraq
STQM411 – PRELIMINARY REVIEWER LLJG
SOCIAL RESPONSIBILITY a highly regulated environment; however, hospitality fi
Correct assessment of social trends can help rms tend to be less regulated than fi rms in other
businesses avoid restrictive legislation, which can be a businesses are.
threat to organizational success. THE TECHNOLOGICAL CONTEXT
 Legislative activity is often generated in response to a  Technology refers to human knowledge about
public outcry against the actions of firms or industries. products and services and the way they are made and
 A socially responsible firm not only refrains from acting delivered. This is a broad definition of technology.
unethically, but also voluntarily seeks to improve Typically, technology is defined in terms of such things
society. as machinery, computers, and information systems.
THE ECONOMIC CONTEXT However, technologies don’t have to be technically
A FEW OF MANY GLOBAL ECONOMIC FORCES TO sophisticated.
MONITOR AND PREDICT  Technological change creates new products,
Force Potential Influences processes, and services, and, in some cases, entire new
Economic Growth Consumer demand, cost of industries. It also can change the way society behaves
factors of production, and what society expects.
availability of factors of  Notebook computers, compact discs and MP3 players,
production (especially labor
direct satellite systems, and cellular telephones are
and scarce resources)
technological innovations that have experienced
Interest Rates Cost of capital for new
projects, cost of refinancing extraordinary growth in the last decade, leaving
existing debt, consumer formerly well - established industries stunned, creating
demand (due to customer whole industries, and influencing the way many people
ability to finance purchases) approach work and leisure
Inflation Interest rates, cost of factors TECHNOLOGICAL CHANGE IS DIFFICULT, BUT NOT
of production, optimism or IMPOSSIBLE, TO PREDICT. AN UNDERSTANDING OF THE
pessimism of stakeholders THREE CHARACTERISTICS OF INNOVATION CAN HELP AN
Exchange Rates Ability to profitably remove ORGANIZATION DEVELOP A PLAN FOR MONITORING
profits from foreign ventures, TECHNOLOGICAL CHANGE. THEY ARE:
government policies toward 1. Innovations often emerge from existing
business
technologies.
Trade Deficits Government policies,
incentives, trade barriers 2. A dominant design will eventually be widely
THE POLITICAL CONTEXT adopted.
 Political forces, both at home and abroad, are among 3. Radical innovations often come from outside of
the most significant determinants of organizational the industry group.
success. Governments provide and enforce the rules by DEALING WITH TECHNOLOGICAL CHANGE
 Monitor trends by surfing the Web, studying
which organizations operate. These rules include laws,
journals, and staying current with the latest
regulations, and policies.
reports.
 Some countries have established independent entities
 Solicit the opinion of experts outside of the
to counsel them on government policy. For example, the
organization. This is a more formal method of
Australian government uses task forces to help devise
technological forecasting, and these experts
policy. They are independent of both business and
may be interviewed directly or contacted as part
government.
of a formal survey, such as a Delphi study.
 Some organizations find themselves in a situation in
 Develop scenarios of alternative technological
which they are almost entirely dependent on
futures, which capture different rates of
government regulators for their health and survival. In
innovation and different emerging technologies.
many countries, tight regulatory controls are found in a
Scenarios allow an organization to conduct
wide variety of industries. In countries such as China or
“what
Cuba, the government has significant control over the
actions of firms. In the United States, utilities are a good
example of
STQM411 – PRELIMINARY REVIEWER LLJG
- if” analyses and to develop alternative plans for  Competitive benchmarking is a popular technique for
responding to new innovations. keeping up with competitors. Benchmarking is a tool for
MANAGING THE OPERATING ENVIRONMENT assessing the best practices of direct competitors and fi
 The operating environment may seem overwhelming rms in similar industries, then using the resulting stretch
to many managers. Powerful customers or suppliers can objectives as design criteria for attempting to change
limit organizational success and profitability. Powerful organizational performance.
competitors can make it difficult to remain competitive.  While benchmarking may help a company improve
Substitute products put pressure on prices and other elements of its operations, it will not help a fi rm gain
product features. competitive advantage. Benchmarking is a little like
 When entry barriers are low, new competitors enter shooting at a moving target. While a fi rm is shooting,
the industry on a regular basis. Finally, external the target is moving. If an organization benchmarks
stakeholders can be powerful and difficult to deal with, against an industry leader, that leader will probably
based not only on When entry barriers are low, new have moved on by the time the benchmark is achieved.
competitors enter the industry on a regular basis. POLITICAL STRATEGIES
Finally, external stakeholders can be powerful and  Political strategies include all organizational activities
difficult to deal with, based not only on that have as one of their objectives the creation of a
ECONOMIC ACTIONS friendlier political climate for the organization.
 Firms may take a variety of economic actions to offset  Many large organizations hire lobbyists to represent
forces in the operating environment their views to political leaders. While lobbying can be
For example, if entry barriers are low, companies may part of a political strategy, it is only a small part of the
work to erect new entry barriers that prevent other bigger political picture. Companies may donate to
firms from entering, thus preserving or stabilizing political causes or parties, special - interest groups, or
industry profitability. charities.
 Although a difficult task, the erection of entry barriers  Organizations may partner for political reasons;
can be accomplished through actions such as increasing however, many other types of partnerships exist. Often
advertising to create product differentiation or by fi rms partner to obtain complementary technologies or
constructing larger facilities to achieve economies of knowledge.
scale
COMPETITVE TACTICS Week 4: Organizational Analysis and Competitive
 Industry rivals apply a variety of competitive tactics in Advantage
order to win market share, increase revenues, and Business Models
increase profits at the expense of rivals.  A business model is a company’s method of making
 Competitive tactics include advertising, new - product money relevant to its business environment.
launches, cost - reduction efforts, new service methods,  A business model is the conceptual structure
and quality improvements, to name a few. supporting the viability of a business, including its
 Typically, a particular industry can be characterized by purpose, its goals and its ongoing plans for achieving
the dominance of one or more of these tools. For them. At its simplest, a business model is a specification
example, the chain restaurant industry is characterized describing how an organization fulfills its purpose
by high levels of advertising as a competitive weapon.  A business model is a company’s core strategy for
 the entrance of international competitors into national profitably doing business. Models generally include
and regional hospitality markets has placed an information like products or services the business plans
increasing emphasis on product differentiation through to sell, target markets, and any anticipated expenses
high levels of quality. Other common competitive tactics BUSINESS MODELS EMOLYED BY SOME COMPANIES
include providing high levels of customer service and AS FOLLOWS:
achieving economies of scale (which can lead to lower  Customer solutions model.
costs, thus allowing lower prices to customers)  Profit pyramid model.
 Advertising model.
 Switchboard model.
STQM411 – PRELIMINARY REVIEWER LLJG
 Time model.  The profit multiplier is a business valuation method
 Profit multiplier model. that looks at the profits that a company makes over a
 De facto industry standard model. period of time.
Customer Solutions Model  First, you determine the company's profit or their
 A dyadic relationship where the Organisation engages gross income minus expenses. Once you arrive at an
with a customer about a problem that the Customer annual profit, you multiply that amount by a multiplier
faces, and provides an integrated solution to that that you determine
problem De Facto Industry Standard Model
 Customer modeling is the process of predicting and  standards that are widely adopted by an industry and
forecasting behavioral aspects of customers' future its consumers. Such standards are also referred to as
perspectives. The process includes identification of market-driven standards. They are established when a
marketing and campaigning targets and optimizing significant portion of an industry likes them enough to
predictive analysis use them collectively.
Profit Pyramid Model  A de facto standard is a custom or convention that has
 A profit model refers to a company's plan that aims to achieved a dominant position by public acceptance or
make the business profitable and viable. It lays out what market forces (for example, by early entrance to the
the company plans to manufacture or provide, how market)
sales will be generated, and all the expenses that the VALUE CHAIN ANALYSIS
business will incur in a bid to make the model viable.  The value chain framework is made up of five primary
 It caters to the variations in customer preferences, and activities -- inbound operations, operations, outbound
helps companies develop a range of products & services, logistics, marketing and sales, service -- and four
which help, build a firewall against competition and secondary activities -- procurement and purchasing,
maintain good margins. human resource management, technological
Advertising Model development and company infrastructure.
 The strategic use of advertising mediums is known as
an advertising model. The goal behind using such a
model is to reach a specific audience. These act as
blueprints to help advertisers create persuasive ads, be it
Print, Digital, or TV.
Switchboard Model
 This model involves a firm who acts as an
intermediary to connect multiple sellers and buyers.
Financial planners juggle a wide range of products for
sale to multiple customers with different needs.
Time Model PRIMARY ACTIVITIES
 A time series model, also called a signal model, is a Inbound operations
dynamic system that is identified to fit a given signal or  The internal handling and management of resources
time series data. The time series can be multivariate, coming from outside sources -- such as external vendors
which leads to multivariate models. and other supply chain sources. These outside resources
 Example: A time series is a group of observations on a flowing in are called "inputs" and may include raw
single entity over time —the daily closing prices over materials.
one year for a single financial security, or a single Operations
patient's heart rate measured every minute over a one-  Activities and processes that transform inputs into
hour procedure. "outputs" – the product or service being sold by the
Profit Multiplier Model business that flow out to customers. These "outputs"
are the core products that can be sold for a higher price
than the cost of materials and production to create a
profit.
Outbound logistics
STQM411 – PRELIMINARY REVIEWER LLJG
 The delivery of outputs to customers. Processes  Optimize activities to maximize output and
involve systems for storage, collection and distribution minimize organizational expenses.
to customers. This includes managing a company's  Potentially create a cost advantage over
internal systems and external systems from customer competitors.
organizations.  Understand core competencies and areas of
Marketing and sales improvement.
 Activities such as advertising and brand-building,
which seek to increase visibility, reach a marketing Week 5: Corporate Social Responsibility
audience and communicate why a consumer should There is no more powerful institution in society than
purchase a product or service. business... The business of business should not be about
Service money, it should be about responsibility. It should be
 Activities such as customer service and product about public good, not private greed. – Anita Roddick,
support, which reinforce a long-term relationship with Business as Usual
the customers who have purchased a product or service. DEFINITION OF CORPORATE SOCIAL RESPONSIBILITY
SECONDARY ACTIVITIES  Corporate social responsibility is a form of
Procurement and purchasing international private business self-regulation which aims
 Finding new external vendors, maintaining vendor to contribute to societal goals of a philanthropic,
relationships, and negotiating prices and other activities activist, or charitable nature by engaging in or
related to bringing in the necessary materials and supporting volunteering or ethically oriented practices.
resources used to build a product or service.  Corporate Social Responsibility (CSR) describes how a
Human resource management company manages its industry and takes responsibility
 The management of human capital. This includes for its social impact. Corporate social responsibility
functions such as hiring, training, building and encompasses various characteristics like economic
maintaining an organizational culture; and maintaining dependence, legal conformity, ethical requirement, and
positive employee relationships. societal influences
Technology development  Corporate Social Responsibility is a management
 Activities such as research and development, IT concept whereby companies integrate social and
management and cybersecurity that build and maintain environmental concerns in their business operations
an organization's use of technology. and interactions with their stakeholders. CSR is generally
Company infrastructure understood as being the way through which a company
 Necessary company activities such as legal, general achieves a balance of economic, environmental and
management, administrative, accounting, finance, social imperatives, while at the same time addressing
public relations and quality assurance. the expectations of shareholders and stakeholders.
Benefits of value chains CSR as per World Business Council
 The value chain framework helps organizations  According to Bowen, CSR was “the obligations of
understand and evaluate sources of positive and negative businessmen to pursue those policies, to make those
cost efficiency. Conducting a value chain analysis can help decisions, or to follow those lines of action which are
businesses in the following ways: desirable in terms of the objectives and values of our
 Support decisions for various business activities. society.”
 Diagnose points of ineffectiveness for corrective What Are the Benefits of Corporate Social
action. Responsibility?
 Understand linkages and dependencies between  Embracing CSR increases customer retention and
different activities and areas in the business. For loyalty, increases employee engagement, improves brand
example, issues in human resources imaging, attracts investment opportunities and top
management and technology can permeate talent, and makes a difference for bottom-line financials
nearly all business activities. Is CSR part of Strategic Management?
STQM411 – PRELIMINARY REVIEWER LLJG
 In order to ensure that the welfare of society is always  Voting in local elections
safeguarded, the government places a greater emphasis SAMPLE OF CSR – COMMUNITY INVOLVEMENT IN
on corporate social responsibility within the business HOTEL INDUSTRY
sector. Good corporate social responsibility is only Good Hotel
possible in conjunction with strategic management.  Created by two young Dutch designers, Good Hotel is
CSR as a business tool a floating 148- room property that helps the long-term
 It is an integral element of a firm's business and unemployed find work through a custom-made training
corporate level differentiation strategy. Even when not program. After an initial training phase, candidates are
directly tied to a product feature or production process, given on-the-job training at Good Hotel (with a full-time
CSR can be viewed as a form of reputation building or salary) before receiving assistance to find permanent
maintenance. work.
The Millennium Development Goals –  This non-profit pop-up hotel was first launched in
CSR INTERNATIONAL Amsterdam in 2015, helping 70 long-term unemployed
1. Eradicate extreme poverty and huger locals reintegrate into the job market. Then last
2. Achieve universal primary education November, the 8 million-kilo floating platform was
3. Promote gender equality and empower women hauled by a submerged barge across the North Sea to
4. Reduce child mortality the Royal Victoria Docks in London—its new home for
5. Improve maternal health the next five years.
6. Combat HIV/AIDS, malaria and other diseases  Continuing its previous mission, Good Hotel London is
7. Ensure environmental sustainability offering local people from every walk of life the
8. Develop a global partnership for development opportunity to build confidence and develop the kind of
CSR--->Community Involvement--->Economic Growth--- work-based skills employers are looking for. All profits
>Environmental Action are subsequently reinvested to support each successive
COMMUNITY INVOLVEMENT intake.
What is community involvement in CSR? The Magdas Hotel
 Community involvement is the power to bring  As the European refugee crisis shows little sign of
positive, measurable change to both the communities abating, the Magdas Hotel in Vienna serves as a beacon
in which you operate and to your business. Community of hope. Opened in February 2015, this 88- room
involvement examples include in-kind and financial boutique property (previously a retirement home) is
donations, employee volunteer days, enduring nonprofit staffed almost entirely by refugees—from the cleaning
partnerships, and more. staff through to the front of house.
 Engagement with the local community and  The project was made possible thanks to a €1.5m loan
authorities. from the Catholic charity Caritas and €60,000 in
 Good reputation of business, as many consumers are crowdfunding. Volunteers, companies and local
now environmentally conscious. neighborhoods all pitched in during the planning and
Examples of Community Engagement building phase, and much of the furniture was upcycled
 Volunteering at a local food bank, animal shelter from the previous residents.
or homeless shelter  Of the 28 members of staff, 20 arrived in the country
 Maintaining a community garden as refugees from 14 different nations. Despite living in
 Participating in a local blood drive Austria for years, many had been unable to find work.
 Helping set up a local farmers market Asylum-seekers in Austria aren’t allowed to work until
 Advocating for others their application has been approved, and even when it
 Creating support groups in your community has, communication issues and a lack of work-based
 Attending and participating in town hall and city skills often hamper efforts.
council meetings  To help prepare for an intimidating job market, staff
 Attending and participating in school board are trained in hospitality and customer service skills,
meetings given German and English language lessons, and receive
STQM411 – PRELIMINARY REVIEWER LLJG
an industry-standard wage. As well as employing how a company’s products are environmentally friendly.
refugees, the hotel also offers a sanctuary for young In the context of the food and drink industry, this can
asylum-seekers who have entered the country and are range from anything like companies claiming to have
seeking a place to live. eco- friendly packaging, that turn out to be harmful to
ECONOMIC GROWTH AND RESPONSIBILITY the environment in some shape or form, or claiming
Economic Responsibility food items are sustainable, when actually they cause
 Economic responsibility is the practice of a firm damage and harm to the environment.
backing all of its financial decisions in its commitment to  It is a term used to describe businesses that provide
do good in the areas listed above. The end goal is not to misleading or unsubstantiated claims in regard to their
simply maximize profits, but make sure the business environmental impact.
operations positively impact the environment, people, Examples of Greenwashing
and society.  McDonald’s paper straw campaign
 Economic responsibility refers to the practice of  Oatly milk greenwashing claims
making financial decisions based on a commitment to  Fiji Water marketing
doing good. Some common examples of economic
responsibility include investing in alternative energy
sources, putting more money into education programs
and funding local charities as a way of bolstering their
mission.
Benefit of CSR in terms of Economic Aspect
 If an organisation has a good reputation, recruitment
and potential investment is often easier.
 Less employee turnover due to a good reputation can
decrease the cost of recruitment.
 Workers are more productive working for a company
they are proud of.
 Food publicity in the media can result in a rise in profit.
Reducing waste to make money, through
redistribution, not using as much energy or having
fewer costs associated with sending waste to landfill.
ENVIRONMENT
Environment in CSR
 Environmental CSR is a programme of actions
undertaken by a company to reduce its impact on the
planet's ecosystem and increase its environmental
sustainability. Standard environmental CSR activities
include Recycling and Waste reduction.
GREEN WASHING in the Hospitality Industry (Lewis,
2021)
Benefit of CSR in terms of Environmental Aspect
 Environmentally friendly, with a green ethos.
 Energy saving
 Waste control
 Recycling
What Does Greenwashing Mean?
 Greenwashing is the process of conveying a false
impression or providing misleading information about