Corporate social responsibility always has a positive impact on firm performance. However, there is a lack of studies that may illuminate the impact of CSR practices as a strategic tool for the hospitality industry. Although there is a significant research gap with respect to the theoretical perspective and impact of initiated CSR activities. The gap is potent in the case of CSR activities and its association with business performance, goodwill, customers, and stakeholders. Thus, this chapter has been written purposively to make readers understand the impact and significance of CSR practices in the hospitality industry for customers, stakeholders, and the environment. The postulate seems to be true as the study reflects vividly upon the theoretical perspectives, literature, and findings associated with the effect of CSR activities on hotels.
TopBackground
Corporate Social Responsibility (CSR) is one of the leading global phenomena and has originated due to a severe increase in environmental issues along with betterment in environmental legislation around the globe. The arrangement of CSR activities has also been admired by various stakeholders including the public, government, and other important elements. In fact, the impact of CSR practices has been observed not only on human behavior and response but also on business activities and performance. Therefore, the public expects firms to recognize their role in the improvement of society and therefore firms are also found to be more inclined towards CSR activities which have also been reflected through the implementation of various CSR programs (Li et al., 2017).
Modern CSR was initiated back in the year 1950 as previously the concept was known as social responsibility which was majorly associated with individual values and perspectives rather than businesses that are involved in the process. However, through the proceeding era of formalization in the 1960s and proliferation in the 1970s the concept transformed to corporate social responsibility (Kang, 2016). Defining vividly CSR is the activity by virtue of which companies provide their existence in the betterment of the country by providing benefits to stakeholders through initiatives that are beyond their self-interest (Kang et al., 2010).
In fact, according to one of the most complete and a formal definition CSR is the commitment that has been shown by the business towards the attainment of sustainable economic development. This includes working with employees, and families of employees. Local community & overall society in order to enhance the quality of life (Kang, 2016). The base of CSR is initiated from the perspective provided by Friedman (1970) and Freeman (1984). The initial one is associated with the importance of shareholders importance while the second one is related to the stakeholders’ perspective. The latter one is actually the base that marks CSR activities as investments and reflects these activities' primary and secondary stakeholders. Hence there are several studies that are based on the relationship of CSR activities with organizational performance and relate streams like profitability, product market, capital market, brand image, customer satisfaction & loyalty, etc. (Rhou & Singal, 2020).
Hence in recent firms, there is an ever-growing concern towards corporate social responsibility leading companies are trying to highlight their concern and commitment to CSR initiatives. In fact, the actions of even leading firms are affected by stakeholders, consumer societies, and governments. Thus, research witnessed several components of CSR activities under the focus of study including the ethical, legal, and economic aspects of CSR activities (Kang et al., 2010).