Ethics

1. Ethics Personal and professional perspectives

2. Defining ethics 1. • There are many definitions, mostly ‘loose’ ones as they deal with morality which is an inherantly subjective issue. • Essentially ethics represents: “A set of moral principles or values.” Trevinho 1999 • Hemmingway put it another way: “What is moral is what you feel good after - ethics is different: it is what you do hoping others will feel good after.”

3. Defining ethics 2. • Trevinho believes a better definition is: “The principles,norms and standards of conduct governing an individual or group.”…. citing Skooglund she continues: “Ethics is the ground rules of how we are going to relate to other people - the expectations and understandings that define how we are going to deal with others. And by ‘others’ we mean customers, suppliers, governments, communities, but most of all, one another.”

4. Why care about ethics at all? 1. • Because, if we don’t, not only may we become ‘out of step’ with our ‘stakeholders’ we may overstep the legal ‘mark’. • Not only is our corporate ‘persona’ at risk - so is our personal integrity.

5. Why care about ethics at all? 2. • Bowen H McCoy writing for Real Estate Issues (vol 9 iss 3). Chicago 1994 noted poignantly: “Bad practices grow incrementally. Each small twist of the wheel goes unnoticed. People are rewarded for behaviour which reinforces bad practices instead of good practices. We are told from natural science that a frog will sit in a pan of tepid water as the heat is slowly turned up until it dies. While, if the frog is thrown into over-heated water, it will jump out. Entitlement replaces responsibility. We each have our own vision of organizations gone awry; and as we wonder how senior management could have condoned such bad practices, perhaps the only answer is the incremental gradualism of evil where there is a lack of moral awareness or imagination”

6. Why care about ethics at all? 3. • McCoy, again suggests, that if we don’t care no-one else will, and that abrogation of our responsibility is not an option: “We are each individual moral agents with great potential to do good as well as evil. The problem is that we rarely live up to our potential and that we too readily give up our moral authority to others,including the organizations where we make our living.” • King, Martin Luther Jr.“Our lives begin to end the day we become silent about things that matter.” • Edmund Burke "The only thing necessary for the triumph of evil is for good men to do nothing."

7. Ethics and the Law 1. .

8. Ethics, Law and Regulation 2 Law (EU PHTD) Purview of Ethics (Societal/business perceptions of what is ‘right’) Govt. regulation (A.S.A) Industry self-regulation (ABTA) Corporate self-gov. (Corporate Governance / ethical pols)

9. Ethics and the law 2. • All law should be ethical (but it may not be dependent upon time and perspective) • Not all ethical matters are enshrined in law. (Because of time and the nature & process of legislation) • If ethics goes beyond the law, why should we expect ethical compliance of individuals and corporations?

10. But Whose Law? Whose Ethics? • Legal systems and the norms and expectations of societies vary the world over by: • geography, • state of development, • political & religious context So…are ethics absolute or relative?…And how does your answer affect Tourism? Journals: Business Ethics: A European Review,

11. Ethics and Tourism • Given tourism has some particular characteristics: • global…moving people from many national settings and cultures into a different set of contexts • largely intangible & sold by description • relatively fixed capacities causes competition • winners take the spoils and losers bear the costs in the dominant mode of development. …is it that surprising that tourism offers the potential to be an ethical minefield?

12. Oviously Ethical price competition market entry (eg Expedia) Blatantly Unethical Telling an agent not to divulge a material fact which might stop a booking proceeding Mapping the ‘Minefield’ The obvious is easy …. Try these ---->

13. Circumstance A price-fixing cartel for cross channel ferries operated openly Classification Unethical & Illegal : operating in restraint of trade is not acceptable to public policy, regardless of whether it is done behind closed doors or in the open. Mapping the ‘Minefield’ 1.

14. Circumstance Holiday brochure picture taken on the sunniest, most idyllic day of the year, with a tobacco filter and wide angle lens, from the best view possible Classification Ethical & Legal. ‘caveat emptor’ applies. Nothing has been actually misrepresented to an unacceptable degree Mapping the ‘Minefield’ 2.

15. Circumstance Holiday brochure picture taken on the sunniest, most idyllic day of the year, with a tobacco filter and wide angle lens, from the best view possible. Construction work airbrushed out of the picture. Classification Depends! If the airbrushing was because the work would have been complete by the time the holidays are beginning, probably OK. If willful misrepresentation, NOT. Mapping the ‘Minefield’ 3.

16. Circumstance Airline deliberately overbooks/sells seats by 25% more than capacity. Result: all flights leave passengers standing. Q…Did any of you normally overbook flights to even the smallest of degrees? Classification Unethical despite the need to fill capacity and keep fares low. The overselling is unreasonable as there is knowledge that on every flight people will be ‘bumped’. Mapping the ‘Minefield’ 4.

17. Circumstance Airline deliberately overbooks/sells seats by just 5% more than capacity. Result: some flights leave passengers standing but they are admittedly well compensated. Classification Still Unethical!Contracts must be entered into in good faith. Selling one more seat than the plane has is technically in breach of contract because a passenger may not be able to secure the seat he has paid for! Compensation does not change matters: the 101% capacity customer thought he was being offered an available seat. The company would be unhappy if he didn’t have the money to pay for it!!!! Mapping the ‘Minefield’ 5.

18. Circumstance Poaching competitor clients once they become visible - eg offering them upgrades as they get out of a competitor limo. Classification Unethical. The client has already entered into a contract to fill a seat and pay. The ‘poacher’ is inciting the competitor’s client to breach his contract. Mapping the ‘Minefield’ 6.

19. Circumstance A large player seeking to guarantee his source of supply, ‘suggesting’ to suppliers, that it would not be a good idea to supply to a competitor. (‘You know where your bread is buttered’) Classification Unethical, despite the fact that this arises from scale of business / importance of client and fear of loss rather than actual pressure. Mapping the ‘Minefield’ 7.

20. Circumstance A developer using his power to influence a government in a poor, developing nation to cut a deal, which, though legal (according to local law and regulations) & entered into freely, the developer knows will not be in the long term interests of the area. Classification Debatable! (why??) Mapping the ‘Minefield’ 8.

21. Circumstance Tourists going on holiday expressly to be able to do in the destination things which are not acceptable at home… “because we deserve the right to ‘unwind’, ‘express ourselves and ‘exercise our freedom’.” Classification Debatable! (why??) May/may not be legal in the destination may / may not be socially acceptable (ethical in the local [relative] view) in the destination Unethical if one takes an absolutist view Mapping the ‘Minefield’ 9.

22. Circumstance 18-30 type operators deliberately promoting holidays abroad based on ‘the outrageous’. Classification Undoubtedly unethical because they have experience of the destination and know full well the negative impacts and unacceptability / cultural conflict. ASA found campaigns of certain operators in breach of their regulations. Mapping the ‘Minefield’ 10.

23. Circumstance The development of ‘all-inclusive’ resorts by inward investors / western development corporations in less developed nations. Classification Unethical if one takes an absolutist view as developers know full well that these developments offer precious little value to the local community and economy. Mapping the ‘Minefield’ 11.

24. Circumstance Classification Mapping the ‘Minefield’ 12. In the light of the above - think back to your dealings as a consumer or provider of tourism services…on reflection, are there things you or your employer might have been doing that are not quite whiter than white?

25. Mapping the ‘Minefield’ 13 Ethical & Legal UnethicalAnti- Public Pol Unethical but legal Unethical and against PHol TD Some others for you to think about: • Price competition by a large operator running at minimum profit so that smaller competitors with lower economies of scale cannot match prices without financial loss. The maintenance of this over a period of time to force competitors out of business and take their market share with a view then to allowing prices to rise. • Price competition in airline operation by a large carrier dropping the price below real cost to drive out compn. • A travel agent not volunteering the fact that a terrorist event has happened recently near the hotel being booked. Clients didn’t ask. • A travel agent not volunteering the fact that an outbreak of Hepatitis occurred in the resort being booked. Clients didn’t ask.

26. Mapping the ‘Minefield’ 14. Some others for you to think about: • A western developer affording lower construction health and safety protection for workers in developing nations than in Western Europe and North America, yet in full compliance with local conditions and laws • A western corporation giving a 'bribe' to an official in a developing nation where such practise is the norm. • A nation desperate for development using the forced labour of its own citizens in the construction of the tourism infrastructure • A tour operator contracting with government tourism agencies in the country concerned in the Q above • Developing nations expropriating land from peasant farmers to give to tourism developers to support the development of the tourism industry • Advertising of 'Free Child Holidays' which are limited in number and time to a small fraction of the likely take up market. • Relating holiday package price cuts to insurance contracts

27. Business, Life and Ethics 1. • Should business be concerned with ethics at all? Some perspectives from Carr in Chryssides & Kalor: "It is fair to say that...if a businessman feels obliged to tell the truth, the whole truth and nothing but the truth - then he is ignoring opportunities permitted by the rules and is at a heavy disadvantage in his business dealings” " So long as a businessman complies with the law of the land and avoids telling malicious lies, he's ethical. If the law as written gives a man a wide open chance to make a killing, he'd be a fool not to take advantage of it... if the law says he can do it, that's all the justification he needs. There's nothing unethical about that: it's just plain business sense."

28. Business, Life and Ethics 2. (Contd.)……………. " If we're going to stay in business, we have to look for profits wherever the law permits. We don't make the laws: we obey them. Then why do we have to put up with this 'holier than thou' talk about ethics. If ethics aren't embodied in the laws by the men who made them you can't expect businessmen to fill in the lack.” 'Decisions in business are ones of strategy, not of ethics"

29. Business, Life and Ethics 3. • But is it that clear cut? • MMC report publication 98 on Vertical Integration in travel & tourism operation to counter the worry that the concentration in the hands of the multiples, though not illegal, was producing a number of unsavoury, even unethical, side-effects. • Estelle Morris ‘falling on her sword’ and resigning after some not inconsiderable education system failings came to light ‘on her watch’. • Nolan Committee on Standards in Public Life ('Cash for Questions' etc) • Greenbury Committee on boardroom pay policy & 'fatcats' • BMA consideration of gene research / transplants/ euthanasia etc • ASA on race discrimination and professional standards in advertising. (A car manufacturer took a promotional photo of a group of the workforce then airbrushed out the one coloured guy in the picture and used the photo) • Ulrika Jonsson’s disclosures/allegations of a private matter in the public domain … or is the problem with the press feeding frenzy and the inevitable name-dropping? • BA v Virgin 'saga' • Body Shop ethical credentials questioned • Enron, Arthur Andersen.. WorldCom..MyTravel .. ‘interesting’ accounting procedures..

30. Business, Life and Ethics 4. • But is it that clear cut? We now have: • A raft of watchdogs and regulators established by the public sector principally to try and exert some moderating social and political influences over the recently privatised utilities and other areas of commerce : • Ombudsmen, • OFWAT / OFGAS / OFTEL etc, • PIA. • Beyond this we have other private sector self-regulatory organisations such as: • ABTA, BIA etc (these being formed in many cases as a proactive venture by principal industry players as a 'buffer' intended to reduce the perceived need for legislation or state regulation.)

31. Business and Ethics 5. • But is it that clear cut? We now also have: • Media programmes like ‘Watchdog’ and ‘Holiday Hell’ and consumer rights organisations like the Consumers’ Association. • ‘Movements’ in society and the marketplace: • ‘Rights’ - demanding 100% of personal legal entitlement…and beyond from society, the state and suppliers • Responsibilities - people who accept that they bear some responsibility towards others in their consumption activities. Both of these different yet distinctive pressures are forcing businesses to consider how their stakeholders are perceiving activities which my be legal but which may not be entirely ethical. As a result, self-regulatory body memberships are up and companies are adopting ‘codes of conduct’ and ‘ethical policy statements’. The motivations behind them and the will to police them, however, are other issues entirely.

32. The ‘Beautiful Game’(with apologies to Ben Elton) When the body of existing law is inappropriate (perhaps overtaken by technological development or product and service innovation) both the consumer and commercial sector providers are, if you like, playing on the 'football' field without a referee.

33. The ‘Beautiful Game’(with apologies to Ben Elton) As the basic ‘rules of the game’ as set by law seem to be inappropriate or outmoded, the commercial team tends to take on the role of developing general rules (often in association with the consumer, who in effect owns the ball, so the commercial sector cannot have it all its own way) so that a reasonably acceptable game can be played until the state referee belatedly arrives with a new set of draft FA rules under his arm (Green Paper / White paper) to conduct a 'friendly game' (consultation). Thereafter the new rulebook is adopted, but inevitably with new pressures even this becomes inappropriate after a time so the whole process re-starts.

34. Codes of Conduct • The big problem here is one of visibility, compliance and enforcement. See: • WTO Global Code of Tourism Ethics(then scroll down & see menu on LHS) • Look at the Articles and consider • will you change as a result • will corporations • If not, how will it be enforced to change the status quo? • Journal of Business Ethics -Payne, D & Dimanche, F: Towards a code of conduct for the tourism industry: An ethics model(Sept 96 Vol 15 Issue 9)

35. Further Sources • See my Ethics page • Business Ethics: A European Review (Journal via Ingenta) • Journal of Business Ethics