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Business ethics and tourism: from micro to macro perspectives
•UTTERWORTH I'I~E
[ N E M A N N
026 I-5177(95)00015- I
Tourism Management, Vol. 16, No. 4, pp. 26.3-268, 1995 Copyright © 1995 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0261-5177/95 $10.00 + II.00
Current issues
Business ethics and tourism: from micro to macro perspectives Alf H Walle Travel and Tourism Program, University of Nebraska, West Center C226, Kearney, NE 68849, USA
Business ethics is a complex field which the tourism industry must understand. In addition, tourism is a unique industry; although general concepts of business ethics are often useful, tourism transcends mainstream business and must be evaluated accordingly. By forming alliances with subdisciplines of business which parallel our own interests, tourism can advance in appropriate ways.
In recent years, tourism has become an increasingly important industry. As a result, a familiarity with theories of business ethics is essential. The general nature of much business thought,* however, is not totally appropriate for tourism, which is a unique industry with its own special needs, priorities and considerations. This paper begins with an overview of business ethics as crystallized in a polemical exchange between Milton Friedman and Keith Davis. Since the tourism industry is greatly influenced by such thought, this analysis nests tourism ethics within a familiar setting. Using this overview as a stepping stone, the uniqueness of tourism is discussed in order to emphasize its character and to propose ethical strategies which operate in concert with it. By forming alliances with subdisciplines of business such as macromarketing, the tourism industry can embrace *Since the Second World War and especially since 1960, the business disciplines have increasingly portrayed themselves as general/universal and capable of bcing employed by all organizations. In marketing, for example, the definitive statement of such an expanded role is Phillip Kotler and Sidney Levy's "Broadening the concept of marketing', Journal Of Marketing (1969) which explicitly considers lourist activities such as m u s e u m attendance. Although such an orientation is useful in many contexts, it ignores profound w m a t i o n between different professions and industries and can mask variations which need to be acknowledged.
more appropriate models and allies. Applying the fruits of such multidisciplinary cooperation to the ethical realm, the appropriateness of such selective borrowing will be explored and demonstrated. A debate within business theory Modern business ethics can be described with reference to a debate between Nobel prize-winning economist Milton Friedman and Keith Davis of Arizona State University. As is well known, Friedman argues that ethics are not the province of business while Davis insists that business must embrace social responsibility, not merely profitability. Friedman 1'2 argues that the only legitimate role of business is to generate profits for stockholders and he asserts that dwelling on ethical considerations for their own sake perverts its true purpose. Friedman also argues that executives are specialists; thus, it is foolhardy to assume that they are qualified to forge appropriate social policies and strategies. Friedman, it should be added, does insist that all organizations should obey the law; however, he emphasizes that once enacted, laws become the 'rules of the game' which must be universally obeyed. But until legislation limits options, organizations should pursue their most fruitful opportunity. Friedman, nonetheless, does acknowledge that a firm might legitimately act in a socially responsible 263
Current issues
Table I
Ethical orientations: a comparison Social obligation
Social responsibility
Social responsiveness
General overview
Legal and profitable
Current social problems arc responded to
Future social and/or environmental problems are anticipated and addressed
Choosing options
The sole consideration aside from profitability is legality
Decisions respond to social issues which overtly need to bc addressed
Decisions arc based on an anticipation of future needs and/or social problems even if they do not impact on the firm and/or are not caused by it
Strategies are evaluated with reference to:
7. Is the strategy legal?
Has the organization responded to problems and issues which have emerged as significant?
Future problems are addressed even if the organization is not directly involved in causing them
2. Is the strategy profitable enough (however measured)'?
manner if executives perceive that doing so is a good tactic. While Friedman's arguments are most powerful from a theoretical vantage, Keith Davis analyzes modern business as it actually exists. 3'4 Davis emphasizes the powerful position of modern business; as a result of this clout, he argues, stockholders are merely one of several legitimate stakeholders which must be considered when strategies are being forged: economic power and its impacts create moral and ethical responsibilities. Once Davis establishes this point, however, he parallels Friedman by asserting that socially responsible behaviour ultimately benefits the organization and can help prevent government intervention and regulation. In addition to merely staving off government interference, furthermore, the good publicity which derives from socially responsible behavior can enhance the organization. Theoretically, Friedman and Davis hold completely different positions regarding social responsibility. Once they get beyond theoretical issues, however, their arguments closely parallel one another. A c o n t i n u u m o f social c o n c e r n
The polemics between Friedman and Davis reflect a continuum of ethical orientations which exist in business thought; it is usually envisioned as having three categories: Social Obligation, Social Responsibility, and Social Responsiveness. Social obligation theory largely parallels Friedman's position; besides obeying the law, nothing is required. Firms, however, can and should pursue any ethical or socially responsible policy which is believed to be a good tactic. But such motives transform social responsibility into a profit-making ploy. Social responsibility theory, in contrast, is closely allied with Davis's position which suggests that business profoundly impacts on the fabric of life; thus, powerful and influential organizations should act in ethical and socially responsible ways. Social respon264
sibility theory, however, limits itself to addressing problems which currently and overtly exist. Social responsiveness theory can, perhaps, best be seen as an extension of social responsibility theory. Instead of merely responding to problems which are overtly obvious, however, socially responsive organizations anticipate future developments and address them in a forwarding-thinking and proactive way. These three positions can be portrayed as set out in Table 1. By being aware of these three basic positions and remembering that they are milestones on a broad continuum, tourism professionals will be better able to discuss ethical strategies and tactics. T o u r i s m as a special case
General theories of business ethics are generic concepts; they are not inherently geared towards specific applications. Individual industries such as tourism, in contrast, have their own unique sets of problems and concerns; thus, the specific ethical considerations of tourism need to be individually tailored to our needs. Unique ethical considerations in the tourism industry must be evaluated from a specific (not a general/generic) perspective. Looking at the evolving tourism industry (and the professional thought which accompanies it) at least three keystone concepts emerge. They include: • The concept of 'progress' is not a central or unifying concept within tourism theory and ethics. • The product which tourism provides may be destroyed or undermined by pressures created by the industry. • The needs of all relevant stakeholders must be addressed when tourism strategies are being forged.* ~Each of these concepts is widely discussed in the contemporary tourism literature. It is impossible in a short space to analyze fully
Tour&m Management 1995 Volume 16 N u m b e r 4
Current issues
Since the days of Social Darwinism in the 19th century, various thinkers, especially those in the fields of business and economic development, have (covertly or overtly) asserted that 'progress' is both inevitable and inherently good (even if short-term growing pains might be experienced along the way). Today, furthermore, many developing countries continue to look at progress (as measured by technology and the societies of the industrialized West) as a yardstick to measure their own cultures, economies and nations. Those who champion 'progress' inevitably consider almost all economic development to be ethical since it brings various benefits to a region.-~;uch perspectives are alive and well in business theory. A powerful concept in modern marketing, for example, is the 'GIobalization of Markets' theory advanced by Harvard's Theodore Levitt5~ who argues that technological progress and the international communication/interaction it makes possible are creating a universal, 'global' culture. As a result, he argues that local and ethnic differences are destined to fade as universal needs and wants emerge. Levitt suggests that the optimum strategy of the firm is therefore to force homogeneous consumption patterns upon customers even in cases where markets resist such tactics. In spite of such models of unilateral evolution, disciplines such as applied anthropology and public sector folklore combine with tourism to question such a 'knee jerk' reaction to the cult of progress. Tourism and related disciplines emphasize that cultural differences are real and lasting. Even if unilateral cultural 'progress" may occur in the long term, it is viewed as a development destined to culminate in the unforeseen future and, therefore, not the stuff from which viable strategic plans should be forged. Increasingly, for example, development projects (such as those involving World Bank participation) require both social and environmental impact analysis. Funded projects, furthermore, are typically required to devise ways to mitigate negative impacts on the environment and society caused by development. Thus, riding the wave of 'progress' is increasingly being viewed as merely one option; the costs and benefits of doing so must be weighed in
accordance with other available alternatives (including a maintaining of the status quo). Tourism, furthermore, differs from other industries since the product offered often cannot be easily replaced if it should become undesirable or unsought.** In addition, the tourism product can become 'shopworn' or pass( and, thereby, weakened in the marketplace if aggressive tactics are not employed to prevent the eroding of demand which can, otherwise, result. In other endeavors, such as manufacturing, products can be readily replaced or altered; indeed, the usual strategy in such industries is to deploy research and development money so that existing products are superseded in profitable ways. In such cases of (planned or unplanned) product obsolescence and replacement, the emphasis is upon the inevitability of a product life cycle and manipulating it so that the organization constantly develops new merchandise to satisfy evolving consumer demands. The product life cycle, of course, has become a well-used concept in tourism ever since Butler first applied it to the industry in the early 1980sJ ~ Although such concepts have had a profound impact, the tourism literature has increasingly refined the product life cycle to emphasize its conditional, not inevitable nature (for a discussion see Walle7). A key aspect of such thought is that although a product life cycle of 'birth', "growth', 'maturity' and 'death' may sometimes occur, this procession is not preordained and is not usually beneficial. If the product life cycle is increasingly viewed as a negative potential which exists if active steps are not taken to forestall or prevent it, the tourism industry should manage itself accordingly by accepting that the tourism product is not readily replaceable or alterable. Not only is such a position inherently ethical, it is also essential if viable, long-term strategies are to be pursued. Otherwise, in many situations tourism might parallel extractive industries, such as mining, where after a short period of 'harvesting' the region must be abandoned. Such strategies, of course, are not in the best interests of investors or regions. Tourism is also a special case because the needs of several different types of stakeholders need to be taken into account when strategies are being forged.
and critique such developments; as a result, thcy will considcred in general ways, as necessary, within the context of this article. My orientations stem primarily from social anthropology and public sector folklore. 1 have significant practitioner experience presenting 'traditional people" in a festival setting. I have a considerable background in marketing including teaching, practitioner assignments and academic publishing. :l:See especially 'The globalization of markets" essay which was originally published in Harvard Business Review (May/June 1983). A critique of Levitt's theory of globalization is found in my review of the book which appeared in The Journal C)~ Macromarketing in 1985.
:+:*This is not totally true, of course; thus, it is possihle to build or update hotels and other facilities in order to keep a location 'state of the art'. It is also possible for a region to serve new roles as Atlantic City did when it embraced gambling as a new component of the tourism mix in that city . . . etc. Nonetheless, on many occasions, the public wants to visit a mttural or cultural resource which might bc compromised by ovcruse, despoilment or unwise m a n a g e m e n t , If people come to a region to visit nature, for example, rapid+ unregulated development or long-term use which exceeds the region's carrying capacity can undermine its attractiveness+ In recent years such concerns have emerged as a major issue in the tourism literature and in parallel fields such as park management,
Tourism Management 1995 Volume 16 Number 4
265
Current issues Table 2
Special ethical considerations of tourism
Tourism perspective
Social obligation
Social responsibility
Social responsiveness
'Progress' is not inevitable or inherently beneficial
Since the concept of 'progress' is not universal or inevitable, we should not place an overreliance upon it in our strategies and tactics
Tourism has a rcsponsibility to encourage development which meshes with the local environment and culture, not in accordance with a universal concept of 'progress'
Since 'progress" leads to concomitant changes in culture and the environment, tourism strategy should be appropriate and mitigate its impact
Tourism can be undermined by pressures of the industry
Change wrought by tourism might undercut the industry. Such potentials should be prevented and mitigated when doing so is a good tactic
Tourism causes negative impacts and pressurcs on people and the environment which should be mitigated
The industry has both practical and ethical reasons to rcspond to impacts on the environment and local people
All relevant stakeholders need to be considered when strategies arc forged
Government regulation and loan conditions might demand responding to the needs of all relevant stakeholders
Tourism should respond to the needs of various stakeholders which are impacted on by the industry
The industry should anticipate future impacts from various sources and respond in proactivc ways
In mainstream business, the focus tends to be upon the organization and its customers. The marketing concept, for example, argues that marketing should focus almost entirely upon the needs of customers and that pleasing customers is the only justification for the organization's existence. In mainstream management, furthermore, workers are viewed as rational beings who choose to be associated with an organization. In addition, it is usually assumed that these rational workers are able to dissociate themselves (emotionally as well as physically) from the organization in their free time; thus, the organization demands nothing of employees besides their hours on the job. Such notions are severely challenged by the tourism, applied anthropology and public sector folklore literature. These fields emphasize that economic activity (in our case tourism) involves many different stakeholders which should be considered when development takes place. The local population and the stability of the local culture are of especial significance. Such considerations of the tourism profession are inherently ethical because they strive to prevent some groups from benefiting unfairly at the expense of others. In addition, they have a practical value. If, for example, tourism activity will be disruptive to a region, negative side-effects might eventually undercut the profitability and even viability of the tourism industry in a region. As has been widely discussed in the literature, alienation of the local population (a possible side-effect of tourism development) may lead to hostility, a higher crime rate, and various social problems which incur additional costs and even undermine the attractiveness of a tourism destination. Thus, on both ethical and practical grounds, satisfying the needs of all relevant stakeholders is an important activity. Tourism, therefore, emerges as a special case with its own needs and problems, not as an example of universal business strategies and tactics. Because of 266
this uniqueness, tourism must forge its own strategies of marketing and deal with the impacts caused by its presence. Although various marketing techniques may be used as ad hoc tactics, the uniqueness of the tourism industry dictates that long-term strategies should be guided by the principles and orientations of our field, not by generic paradigms from business which largely developed in the manufacturing industries. Table 2 illustrates how the tourism industry can combine various orientations of ethics with the unique situations it faces. The field of tourism, while largely influenced by business theory and methods, is a unique discipline and profession. Because our industry is a special case of social and economic activity, our specialized strategies and tactics should dominate the decisionmaking process. While the industry should use generic techniques of business as ad hoc tools when appropriate, our industry should not allow such orientations to exercise unwarranted authority.
Forging responsive partnerships Tourism is not a generic industry since it uniquely impacts on the environment, society and cultural systems in ways which require a holistic orientation within a broad and multidimensional context. Contemporary business ethics, however, has been slow to embrace such a holistic perspective. Historically, the focus has been upon the organization and its customers. Impacts on third parties (externality issues) have often been ignored. Thus, the market,ing concept suggests the organization should focus solely upon customer needs and advance its goals in this way. Such perspectives, however, do not consider the environment and local populations which are not customers. Nonetheless, the marketing concept continues to dominate many for-profit and not-forprofit organizations. And in a micro sense, it can be considered ethical since the organization is viewed as Tour&m Management 1995 Volume 16 Number 4
Current issues
satisfying human needs, an ethical course of action. Certain sub-disciplines within business, however, are holistically oriented in ways which parallel the development of modern tourism theory. Kenneth Boulding, for example, is a prominent business thinker who made significant contributions to General Systems Theory, a discipline which focuses upon interrelationships between various entities, interacting with one another. In order to link such thinking to the tourism profession, it is useful to examine a specific subdiscipline of business: macromarketing. According to a published definition of the field, ~,9 Macromarketing activity is concerned with three basic issues (wording slightly adjusted here):
• The impact of marketing upon society: The total impact of marketing is examined. Macromarketing considers the impact of marketing on third parties who are not part of the patron-client relationship between an organization and its customers. In addition, macromarketing is increasingly concerned with the long-term impact of marketing on the greater social and physical environment. • Understanding marketing systems: Macromarketing includes considering 'the totality of any marketing action' even where it transcends the buying and selling of goods by patrons and clients. So envisioned, macromarketing considers 'understanding' to include appreciating impacts and stakeholders which could be overlooked in a purely micro evaluation. • The impact of society upon marketing: While much marketing thought attempts to forge universal principles, macromarketing acknowledges that different people conceptualize and practice marketing in their own ways. This is true of different cultures and/or different industries. Since much tourism activity takes place on the cusp between different cultures and/or industries, this aspect of macromarketing is especially useful for the tourism industry. Such perspectives are expanded in relevant ways in the tourism literature and bolstered by the concern which many macromarketers have in developing countries and in the field of economic development. Two especially useful overviews are William Meade and Robert Nason's 'Toward a united theory of macromarketing: a systems theory approach m and Donald Dixon's 'Macromarketing: a social systems perspective'. ~J Modern macromarketing is typically juxtaposed with what is usually called the 'marketing management' approach, which is almost entirely concerned with pleasing customers and achieving organizational goals in this way. The modern marketing concept, narrowly focused as it is around the patron-client relationship, comes from this tradition.
Tourism Management 1995 Volume 16 Number 4
The micro approach is so circumscribed that anything which falls outside its focus blurs into obscurity. Although macromarketing acknowledges that micro techniques are often useful, macromarketers also emphasize that marketing has other legitimate concerns (mentioned above) which transcend profitably catering to customer needs in self-serving, micro ways. Two especially relevant areas of macromarketing thought examine environmental/ ecological issues, transcending a myopic focusing upon customer needs as the be all and end all of organizational strategy. Viewing macromarketing as a viable subdiscipline with its own literature and traditions, business theory emerges as a multifaceted tradition comprising various and varied components, not as a homogeneous monolith. In addition, circumscribed subdisciplines of business such as macromarketing (not generalized truisms such as the marketing concept) emerge as particularly relevant to the tourism industry. Since it focuses upon the broader implications of marketing activities, macromarketing considers the needs of many different stakeholders besides organizations and their customers; thus, macromarketing lends itself to a broad conception of social responsibility using a systems theory model. Such an orientation parallels much contemporary tourism research, t* The tourism literature is also responsive to macro-orientations. Michael Haywood's 'Revising the marketing concept as it relates to tourism', 12 for example, deals with important macro issues in a manner which parallels macromarketing, but appears to have developed independently of it. Haywood argues that for a number of reasons the mainstream marketing concept does not adequately deal with the issues raised by the tourism industry, He lists a number of key variables which, as in this paper, suggest tourism is a unique industry and should be evaluated accordingly. Specifically, he observes: It is quite evident that managers of tourism organizations encounter numerous externally and internally driven reasons that make it difficult to implement the marketing concept. (12p 200) Haywood states several reasons for this, including: T h e t r a d i t i o n a l a s s u m p t i o n s o f the m a r k e t i n g conc e p t (emphasize serving customers) . . . Yet few, if
+tThe Journal O f Macromarketing is the major, specialized journal in the field. It is published out of the Marketing Department of Michigan State University with Bob Nason as the editor. There is an annual macromarketing conference seminar. Over the years various leaders in the field of tourism have participated in both the journal and the conferences. One notable tourism scholar who has been especially active in macromarketing is Chuck Goeldner, editor of The Journal O f Travel Research. Announcements for the conference as well as abstracts from it are published in the journal each year.
267
Current issues"
any of these attractions are ever designed explicitly for tourist use or consumption. (12pp 200-201) Citizens of a community are direct or indirect recipients of the economic costs and benefits derived from tourism. (12p 201) From the perspective of tourism, then, a customer orientation needs to be balanced with the community. (lZp 201) Using these and other considerations, H a y w o o d goes on to propose revising the marketing concept as it applies to tourism. Such an orientation portrays important parallels between tourism and macromarketing which should be enhanced and strengthened. Although m a c r o m a r k e t e r s may not initially be versed in tourism, they do embrace paradigms and orientations (such as systems theory) which dovetail with the c o n t e m p o r a r y literature of tourism. For this reason, communicating with such individuals can be fruitful and mutually beneficial. Since macromarketing shares our concern with examining and possibly mitigating the impact which the modern world (and tourism) exerts upon the ecological and cultural subsystems, this specialized subdiscipline appears to be more relevant to our needs than general business theory. By portraying tourism as a subsystem which impacts on larger systems (and vice versa), the specialized paradigms of macromarketing can be employed when discussing the ethical structures of our industry. The tourism industry has often borrowed very general concepts from business without adequately adjusting them to our unique needs. Subdisciplines such as macromarketing, however, provide a more fruitful source of cross-disciplinary cooperation. I have focused upon the marketing literature merely because it is an area I know. Other alliances can surely be formed elsewhere; certain aspects of the 'human relations' areas of m a n a g e m e n t thought are one obvious example. It is hoped that by seeking out such specialized subdisciplines, we can better structure tourism methods and ethics.
Conclusion: appropriate and strategic communication The field of business has evolved generic theories of ethics and social responsibility. Tourism scholars and practitioners need to understand such thinking.
268
So armed, we will be better able to negotiate and communicate with a variety of people. Starting with an analysis of the debate between Milton Friedman and Keith Davis, the paper outlines an ongoing polemic within business ethics. Both Friedman and Davis's positions, however, can be depicted as 'micro theories' since, in the final analysis, they tend largely to focus upon the micro benefits derived from an organization serving a specific set of clients. Such paradigms should be supplemented with more holistic perspectives which exist in various subdisciplines of business thought. To be specific, macromarketing can be combined with our attempts to restructure the marketing concept using holistic, not micro orientations. By being aware of and building upon business subdisciplines which parallel our work, tourism scholars and practitioners will be able to find allies within business and expand our toolkit of appropriate models and techniques. Such cross-disciplinary exchanges have both practical and ethical implications.
References Triedman, M 'The social responsibility of business is to make ~jrofits' New York Times Magazine 1970 (13 September) ohnson, W "Freedom and philanthropy: an interview with Milton Friedman' Business And Society Review 1989 (Fall) 11-18 3Davis, K 'Five propositions for social responsibility' Business Horizons 1975 (June) 4Davis, K and Fredrick, W C Business And Society 5th edn McGraw Hill, New York (1984) ~Levitt, T The Marketing Imagination Free Press, New York (1983) 6Butler, R 'The concept of a tourist area cycle of evolution: implications for management of resources' Canadian Geographer 24 (1) 5-12 7Walle, A H 'The festival life cycle and tourism strategies: the case of the cowboy poetry gathering' Festival Management and Event Tourism 1994 SFisk, G 'Editor's working definition of macromarketing' Journal of Macromarketing 1982 (Spring) 3-4 '~Hunt, D 'The three dichotomies of marketing: an elaboration of issues' in Slater, C C (ed) Macro-Marketing: Distributive Processes For A Societal Perspective Business Research Division, University Of Colorado, Boulder, CO (1977) ~°Meade, W K and Nason, R W 'Towards a unified theory of macromarketing: a systems theory approach' Journal of Macromarketing 1991 (Fall) 72-82 HDixon, D 'Macromarketing: a social systems approach" Journal of Macromarketing 1984 (Fall) 4-17 ~2Haywood, M 'Revising and implementing the marketing concept as it relates to tourism' Tourism Management 1990 (September) 195-204
Tourism Management 1995 Volume 16 Number 4
[ N E M A N N
026 I-5177(95)00015- I
Tourism Management, Vol. 16, No. 4, pp. 26.3-268, 1995 Copyright © 1995 Elsevier Science Ltd Printed in Great Britain. All rights reserved 0261-5177/95 $10.00 + II.00
Current issues
Business ethics and tourism: from micro to macro perspectives Alf H Walle Travel and Tourism Program, University of Nebraska, West Center C226, Kearney, NE 68849, USA
Business ethics is a complex field which the tourism industry must understand. In addition, tourism is a unique industry; although general concepts of business ethics are often useful, tourism transcends mainstream business and must be evaluated accordingly. By forming alliances with subdisciplines of business which parallel our own interests, tourism can advance in appropriate ways.
In recent years, tourism has become an increasingly important industry. As a result, a familiarity with theories of business ethics is essential. The general nature of much business thought,* however, is not totally appropriate for tourism, which is a unique industry with its own special needs, priorities and considerations. This paper begins with an overview of business ethics as crystallized in a polemical exchange between Milton Friedman and Keith Davis. Since the tourism industry is greatly influenced by such thought, this analysis nests tourism ethics within a familiar setting. Using this overview as a stepping stone, the uniqueness of tourism is discussed in order to emphasize its character and to propose ethical strategies which operate in concert with it. By forming alliances with subdisciplines of business such as macromarketing, the tourism industry can embrace *Since the Second World War and especially since 1960, the business disciplines have increasingly portrayed themselves as general/universal and capable of bcing employed by all organizations. In marketing, for example, the definitive statement of such an expanded role is Phillip Kotler and Sidney Levy's "Broadening the concept of marketing', Journal Of Marketing (1969) which explicitly considers lourist activities such as m u s e u m attendance. Although such an orientation is useful in many contexts, it ignores profound w m a t i o n between different professions and industries and can mask variations which need to be acknowledged.
more appropriate models and allies. Applying the fruits of such multidisciplinary cooperation to the ethical realm, the appropriateness of such selective borrowing will be explored and demonstrated. A debate within business theory Modern business ethics can be described with reference to a debate between Nobel prize-winning economist Milton Friedman and Keith Davis of Arizona State University. As is well known, Friedman argues that ethics are not the province of business while Davis insists that business must embrace social responsibility, not merely profitability. Friedman 1'2 argues that the only legitimate role of business is to generate profits for stockholders and he asserts that dwelling on ethical considerations for their own sake perverts its true purpose. Friedman also argues that executives are specialists; thus, it is foolhardy to assume that they are qualified to forge appropriate social policies and strategies. Friedman, it should be added, does insist that all organizations should obey the law; however, he emphasizes that once enacted, laws become the 'rules of the game' which must be universally obeyed. But until legislation limits options, organizations should pursue their most fruitful opportunity. Friedman, nonetheless, does acknowledge that a firm might legitimately act in a socially responsible 263
Current issues
Table I
Ethical orientations: a comparison Social obligation
Social responsibility
Social responsiveness
General overview
Legal and profitable
Current social problems arc responded to
Future social and/or environmental problems are anticipated and addressed
Choosing options
The sole consideration aside from profitability is legality
Decisions respond to social issues which overtly need to bc addressed
Decisions arc based on an anticipation of future needs and/or social problems even if they do not impact on the firm and/or are not caused by it
Strategies are evaluated with reference to:
7. Is the strategy legal?
Has the organization responded to problems and issues which have emerged as significant?
Future problems are addressed even if the organization is not directly involved in causing them
2. Is the strategy profitable enough (however measured)'?
manner if executives perceive that doing so is a good tactic. While Friedman's arguments are most powerful from a theoretical vantage, Keith Davis analyzes modern business as it actually exists. 3'4 Davis emphasizes the powerful position of modern business; as a result of this clout, he argues, stockholders are merely one of several legitimate stakeholders which must be considered when strategies are being forged: economic power and its impacts create moral and ethical responsibilities. Once Davis establishes this point, however, he parallels Friedman by asserting that socially responsible behaviour ultimately benefits the organization and can help prevent government intervention and regulation. In addition to merely staving off government interference, furthermore, the good publicity which derives from socially responsible behavior can enhance the organization. Theoretically, Friedman and Davis hold completely different positions regarding social responsibility. Once they get beyond theoretical issues, however, their arguments closely parallel one another. A c o n t i n u u m o f social c o n c e r n
The polemics between Friedman and Davis reflect a continuum of ethical orientations which exist in business thought; it is usually envisioned as having three categories: Social Obligation, Social Responsibility, and Social Responsiveness. Social obligation theory largely parallels Friedman's position; besides obeying the law, nothing is required. Firms, however, can and should pursue any ethical or socially responsible policy which is believed to be a good tactic. But such motives transform social responsibility into a profit-making ploy. Social responsibility theory, in contrast, is closely allied with Davis's position which suggests that business profoundly impacts on the fabric of life; thus, powerful and influential organizations should act in ethical and socially responsible ways. Social respon264
sibility theory, however, limits itself to addressing problems which currently and overtly exist. Social responsiveness theory can, perhaps, best be seen as an extension of social responsibility theory. Instead of merely responding to problems which are overtly obvious, however, socially responsive organizations anticipate future developments and address them in a forwarding-thinking and proactive way. These three positions can be portrayed as set out in Table 1. By being aware of these three basic positions and remembering that they are milestones on a broad continuum, tourism professionals will be better able to discuss ethical strategies and tactics. T o u r i s m as a special case
General theories of business ethics are generic concepts; they are not inherently geared towards specific applications. Individual industries such as tourism, in contrast, have their own unique sets of problems and concerns; thus, the specific ethical considerations of tourism need to be individually tailored to our needs. Unique ethical considerations in the tourism industry must be evaluated from a specific (not a general/generic) perspective. Looking at the evolving tourism industry (and the professional thought which accompanies it) at least three keystone concepts emerge. They include: • The concept of 'progress' is not a central or unifying concept within tourism theory and ethics. • The product which tourism provides may be destroyed or undermined by pressures created by the industry. • The needs of all relevant stakeholders must be addressed when tourism strategies are being forged.* ~Each of these concepts is widely discussed in the contemporary tourism literature. It is impossible in a short space to analyze fully
Tour&m Management 1995 Volume 16 N u m b e r 4
Current issues
Since the days of Social Darwinism in the 19th century, various thinkers, especially those in the fields of business and economic development, have (covertly or overtly) asserted that 'progress' is both inevitable and inherently good (even if short-term growing pains might be experienced along the way). Today, furthermore, many developing countries continue to look at progress (as measured by technology and the societies of the industrialized West) as a yardstick to measure their own cultures, economies and nations. Those who champion 'progress' inevitably consider almost all economic development to be ethical since it brings various benefits to a region.-~;uch perspectives are alive and well in business theory. A powerful concept in modern marketing, for example, is the 'GIobalization of Markets' theory advanced by Harvard's Theodore Levitt5~ who argues that technological progress and the international communication/interaction it makes possible are creating a universal, 'global' culture. As a result, he argues that local and ethnic differences are destined to fade as universal needs and wants emerge. Levitt suggests that the optimum strategy of the firm is therefore to force homogeneous consumption patterns upon customers even in cases where markets resist such tactics. In spite of such models of unilateral evolution, disciplines such as applied anthropology and public sector folklore combine with tourism to question such a 'knee jerk' reaction to the cult of progress. Tourism and related disciplines emphasize that cultural differences are real and lasting. Even if unilateral cultural 'progress" may occur in the long term, it is viewed as a development destined to culminate in the unforeseen future and, therefore, not the stuff from which viable strategic plans should be forged. Increasingly, for example, development projects (such as those involving World Bank participation) require both social and environmental impact analysis. Funded projects, furthermore, are typically required to devise ways to mitigate negative impacts on the environment and society caused by development. Thus, riding the wave of 'progress' is increasingly being viewed as merely one option; the costs and benefits of doing so must be weighed in
accordance with other available alternatives (including a maintaining of the status quo). Tourism, furthermore, differs from other industries since the product offered often cannot be easily replaced if it should become undesirable or unsought.** In addition, the tourism product can become 'shopworn' or pass( and, thereby, weakened in the marketplace if aggressive tactics are not employed to prevent the eroding of demand which can, otherwise, result. In other endeavors, such as manufacturing, products can be readily replaced or altered; indeed, the usual strategy in such industries is to deploy research and development money so that existing products are superseded in profitable ways. In such cases of (planned or unplanned) product obsolescence and replacement, the emphasis is upon the inevitability of a product life cycle and manipulating it so that the organization constantly develops new merchandise to satisfy evolving consumer demands. The product life cycle, of course, has become a well-used concept in tourism ever since Butler first applied it to the industry in the early 1980sJ ~ Although such concepts have had a profound impact, the tourism literature has increasingly refined the product life cycle to emphasize its conditional, not inevitable nature (for a discussion see Walle7). A key aspect of such thought is that although a product life cycle of 'birth', "growth', 'maturity' and 'death' may sometimes occur, this procession is not preordained and is not usually beneficial. If the product life cycle is increasingly viewed as a negative potential which exists if active steps are not taken to forestall or prevent it, the tourism industry should manage itself accordingly by accepting that the tourism product is not readily replaceable or alterable. Not only is such a position inherently ethical, it is also essential if viable, long-term strategies are to be pursued. Otherwise, in many situations tourism might parallel extractive industries, such as mining, where after a short period of 'harvesting' the region must be abandoned. Such strategies, of course, are not in the best interests of investors or regions. Tourism is also a special case because the needs of several different types of stakeholders need to be taken into account when strategies are being forged.
and critique such developments; as a result, thcy will considcred in general ways, as necessary, within the context of this article. My orientations stem primarily from social anthropology and public sector folklore. 1 have significant practitioner experience presenting 'traditional people" in a festival setting. I have a considerable background in marketing including teaching, practitioner assignments and academic publishing. :l:See especially 'The globalization of markets" essay which was originally published in Harvard Business Review (May/June 1983). A critique of Levitt's theory of globalization is found in my review of the book which appeared in The Journal C)~ Macromarketing in 1985.
:+:*This is not totally true, of course; thus, it is possihle to build or update hotels and other facilities in order to keep a location 'state of the art'. It is also possible for a region to serve new roles as Atlantic City did when it embraced gambling as a new component of the tourism mix in that city . . . etc. Nonetheless, on many occasions, the public wants to visit a mttural or cultural resource which might bc compromised by ovcruse, despoilment or unwise m a n a g e m e n t , If people come to a region to visit nature, for example, rapid+ unregulated development or long-term use which exceeds the region's carrying capacity can undermine its attractiveness+ In recent years such concerns have emerged as a major issue in the tourism literature and in parallel fields such as park management,
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Current issues Table 2
Special ethical considerations of tourism
Tourism perspective
Social obligation
Social responsibility
Social responsiveness
'Progress' is not inevitable or inherently beneficial
Since the concept of 'progress' is not universal or inevitable, we should not place an overreliance upon it in our strategies and tactics
Tourism has a rcsponsibility to encourage development which meshes with the local environment and culture, not in accordance with a universal concept of 'progress'
Since 'progress" leads to concomitant changes in culture and the environment, tourism strategy should be appropriate and mitigate its impact
Tourism can be undermined by pressures of the industry
Change wrought by tourism might undercut the industry. Such potentials should be prevented and mitigated when doing so is a good tactic
Tourism causes negative impacts and pressurcs on people and the environment which should be mitigated
The industry has both practical and ethical reasons to rcspond to impacts on the environment and local people
All relevant stakeholders need to be considered when strategies arc forged
Government regulation and loan conditions might demand responding to the needs of all relevant stakeholders
Tourism should respond to the needs of various stakeholders which are impacted on by the industry
The industry should anticipate future impacts from various sources and respond in proactivc ways
In mainstream business, the focus tends to be upon the organization and its customers. The marketing concept, for example, argues that marketing should focus almost entirely upon the needs of customers and that pleasing customers is the only justification for the organization's existence. In mainstream management, furthermore, workers are viewed as rational beings who choose to be associated with an organization. In addition, it is usually assumed that these rational workers are able to dissociate themselves (emotionally as well as physically) from the organization in their free time; thus, the organization demands nothing of employees besides their hours on the job. Such notions are severely challenged by the tourism, applied anthropology and public sector folklore literature. These fields emphasize that economic activity (in our case tourism) involves many different stakeholders which should be considered when development takes place. The local population and the stability of the local culture are of especial significance. Such considerations of the tourism profession are inherently ethical because they strive to prevent some groups from benefiting unfairly at the expense of others. In addition, they have a practical value. If, for example, tourism activity will be disruptive to a region, negative side-effects might eventually undercut the profitability and even viability of the tourism industry in a region. As has been widely discussed in the literature, alienation of the local population (a possible side-effect of tourism development) may lead to hostility, a higher crime rate, and various social problems which incur additional costs and even undermine the attractiveness of a tourism destination. Thus, on both ethical and practical grounds, satisfying the needs of all relevant stakeholders is an important activity. Tourism, therefore, emerges as a special case with its own needs and problems, not as an example of universal business strategies and tactics. Because of 266
this uniqueness, tourism must forge its own strategies of marketing and deal with the impacts caused by its presence. Although various marketing techniques may be used as ad hoc tactics, the uniqueness of the tourism industry dictates that long-term strategies should be guided by the principles and orientations of our field, not by generic paradigms from business which largely developed in the manufacturing industries. Table 2 illustrates how the tourism industry can combine various orientations of ethics with the unique situations it faces. The field of tourism, while largely influenced by business theory and methods, is a unique discipline and profession. Because our industry is a special case of social and economic activity, our specialized strategies and tactics should dominate the decisionmaking process. While the industry should use generic techniques of business as ad hoc tools when appropriate, our industry should not allow such orientations to exercise unwarranted authority.
Forging responsive partnerships Tourism is not a generic industry since it uniquely impacts on the environment, society and cultural systems in ways which require a holistic orientation within a broad and multidimensional context. Contemporary business ethics, however, has been slow to embrace such a holistic perspective. Historically, the focus has been upon the organization and its customers. Impacts on third parties (externality issues) have often been ignored. Thus, the market,ing concept suggests the organization should focus solely upon customer needs and advance its goals in this way. Such perspectives, however, do not consider the environment and local populations which are not customers. Nonetheless, the marketing concept continues to dominate many for-profit and not-forprofit organizations. And in a micro sense, it can be considered ethical since the organization is viewed as Tour&m Management 1995 Volume 16 Number 4
Current issues
satisfying human needs, an ethical course of action. Certain sub-disciplines within business, however, are holistically oriented in ways which parallel the development of modern tourism theory. Kenneth Boulding, for example, is a prominent business thinker who made significant contributions to General Systems Theory, a discipline which focuses upon interrelationships between various entities, interacting with one another. In order to link such thinking to the tourism profession, it is useful to examine a specific subdiscipline of business: macromarketing. According to a published definition of the field, ~,9 Macromarketing activity is concerned with three basic issues (wording slightly adjusted here):
• The impact of marketing upon society: The total impact of marketing is examined. Macromarketing considers the impact of marketing on third parties who are not part of the patron-client relationship between an organization and its customers. In addition, macromarketing is increasingly concerned with the long-term impact of marketing on the greater social and physical environment. • Understanding marketing systems: Macromarketing includes considering 'the totality of any marketing action' even where it transcends the buying and selling of goods by patrons and clients. So envisioned, macromarketing considers 'understanding' to include appreciating impacts and stakeholders which could be overlooked in a purely micro evaluation. • The impact of society upon marketing: While much marketing thought attempts to forge universal principles, macromarketing acknowledges that different people conceptualize and practice marketing in their own ways. This is true of different cultures and/or different industries. Since much tourism activity takes place on the cusp between different cultures and/or industries, this aspect of macromarketing is especially useful for the tourism industry. Such perspectives are expanded in relevant ways in the tourism literature and bolstered by the concern which many macromarketers have in developing countries and in the field of economic development. Two especially useful overviews are William Meade and Robert Nason's 'Toward a united theory of macromarketing: a systems theory approach m and Donald Dixon's 'Macromarketing: a social systems perspective'. ~J Modern macromarketing is typically juxtaposed with what is usually called the 'marketing management' approach, which is almost entirely concerned with pleasing customers and achieving organizational goals in this way. The modern marketing concept, narrowly focused as it is around the patron-client relationship, comes from this tradition.
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The micro approach is so circumscribed that anything which falls outside its focus blurs into obscurity. Although macromarketing acknowledges that micro techniques are often useful, macromarketers also emphasize that marketing has other legitimate concerns (mentioned above) which transcend profitably catering to customer needs in self-serving, micro ways. Two especially relevant areas of macromarketing thought examine environmental/ ecological issues, transcending a myopic focusing upon customer needs as the be all and end all of organizational strategy. Viewing macromarketing as a viable subdiscipline with its own literature and traditions, business theory emerges as a multifaceted tradition comprising various and varied components, not as a homogeneous monolith. In addition, circumscribed subdisciplines of business such as macromarketing (not generalized truisms such as the marketing concept) emerge as particularly relevant to the tourism industry. Since it focuses upon the broader implications of marketing activities, macromarketing considers the needs of many different stakeholders besides organizations and their customers; thus, macromarketing lends itself to a broad conception of social responsibility using a systems theory model. Such an orientation parallels much contemporary tourism research, t* The tourism literature is also responsive to macro-orientations. Michael Haywood's 'Revising the marketing concept as it relates to tourism', 12 for example, deals with important macro issues in a manner which parallels macromarketing, but appears to have developed independently of it. Haywood argues that for a number of reasons the mainstream marketing concept does not adequately deal with the issues raised by the tourism industry, He lists a number of key variables which, as in this paper, suggest tourism is a unique industry and should be evaluated accordingly. Specifically, he observes: It is quite evident that managers of tourism organizations encounter numerous externally and internally driven reasons that make it difficult to implement the marketing concept. (12p 200) Haywood states several reasons for this, including: T h e t r a d i t i o n a l a s s u m p t i o n s o f the m a r k e t i n g conc e p t (emphasize serving customers) . . . Yet few, if
+tThe Journal O f Macromarketing is the major, specialized journal in the field. It is published out of the Marketing Department of Michigan State University with Bob Nason as the editor. There is an annual macromarketing conference seminar. Over the years various leaders in the field of tourism have participated in both the journal and the conferences. One notable tourism scholar who has been especially active in macromarketing is Chuck Goeldner, editor of The Journal O f Travel Research. Announcements for the conference as well as abstracts from it are published in the journal each year.
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Current issues"
any of these attractions are ever designed explicitly for tourist use or consumption. (12pp 200-201) Citizens of a community are direct or indirect recipients of the economic costs and benefits derived from tourism. (12p 201) From the perspective of tourism, then, a customer orientation needs to be balanced with the community. (lZp 201) Using these and other considerations, H a y w o o d goes on to propose revising the marketing concept as it applies to tourism. Such an orientation portrays important parallels between tourism and macromarketing which should be enhanced and strengthened. Although m a c r o m a r k e t e r s may not initially be versed in tourism, they do embrace paradigms and orientations (such as systems theory) which dovetail with the c o n t e m p o r a r y literature of tourism. For this reason, communicating with such individuals can be fruitful and mutually beneficial. Since macromarketing shares our concern with examining and possibly mitigating the impact which the modern world (and tourism) exerts upon the ecological and cultural subsystems, this specialized subdiscipline appears to be more relevant to our needs than general business theory. By portraying tourism as a subsystem which impacts on larger systems (and vice versa), the specialized paradigms of macromarketing can be employed when discussing the ethical structures of our industry. The tourism industry has often borrowed very general concepts from business without adequately adjusting them to our unique needs. Subdisciplines such as macromarketing, however, provide a more fruitful source of cross-disciplinary cooperation. I have focused upon the marketing literature merely because it is an area I know. Other alliances can surely be formed elsewhere; certain aspects of the 'human relations' areas of m a n a g e m e n t thought are one obvious example. It is hoped that by seeking out such specialized subdisciplines, we can better structure tourism methods and ethics.
Conclusion: appropriate and strategic communication The field of business has evolved generic theories of ethics and social responsibility. Tourism scholars and practitioners need to understand such thinking.
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So armed, we will be better able to negotiate and communicate with a variety of people. Starting with an analysis of the debate between Milton Friedman and Keith Davis, the paper outlines an ongoing polemic within business ethics. Both Friedman and Davis's positions, however, can be depicted as 'micro theories' since, in the final analysis, they tend largely to focus upon the micro benefits derived from an organization serving a specific set of clients. Such paradigms should be supplemented with more holistic perspectives which exist in various subdisciplines of business thought. To be specific, macromarketing can be combined with our attempts to restructure the marketing concept using holistic, not micro orientations. By being aware of and building upon business subdisciplines which parallel our work, tourism scholars and practitioners will be able to find allies within business and expand our toolkit of appropriate models and techniques. Such cross-disciplinary exchanges have both practical and ethical implications.
References Triedman, M 'The social responsibility of business is to make ~jrofits' New York Times Magazine 1970 (13 September) ohnson, W "Freedom and philanthropy: an interview with Milton Friedman' Business And Society Review 1989 (Fall) 11-18 3Davis, K 'Five propositions for social responsibility' Business Horizons 1975 (June) 4Davis, K and Fredrick, W C Business And Society 5th edn McGraw Hill, New York (1984) ~Levitt, T The Marketing Imagination Free Press, New York (1983) 6Butler, R 'The concept of a tourist area cycle of evolution: implications for management of resources' Canadian Geographer 24 (1) 5-12 7Walle, A H 'The festival life cycle and tourism strategies: the case of the cowboy poetry gathering' Festival Management and Event Tourism 1994 SFisk, G 'Editor's working definition of macromarketing' Journal of Macromarketing 1982 (Spring) 3-4 '~Hunt, D 'The three dichotomies of marketing: an elaboration of issues' in Slater, C C (ed) Macro-Marketing: Distributive Processes For A Societal Perspective Business Research Division, University Of Colorado, Boulder, CO (1977) ~°Meade, W K and Nason, R W 'Towards a unified theory of macromarketing: a systems theory approach' Journal of Macromarketing 1991 (Fall) 72-82 HDixon, D 'Macromarketing: a social systems approach" Journal of Macromarketing 1984 (Fall) 4-17 ~2Haywood, M 'Revising and implementing the marketing concept as it relates to tourism' Tourism Management 1990 (September) 195-204
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