CCC ooo mmm pppeeetttiiitttiiivvveee EEE nnn vvviiirrrooo nnn mmm eeennn tttaaalll SSStttrrraaattteeegggiiieeesss iiinnn HHH ooo ttteeelllsss:::

Supervised
by
Adriana
Budeanu


Department
of
International
Economics
&
Management
 MSocSc
in
Service
Management


97
pages/168,615
STUs
 November
2012


Maureen
Angelica
T.
Padilla


C C C o o o m m m p p p e e e t t t i i i t t t i i i v v v e e e E E E n n n v v v i i i r r r o o o n n n m m m e e e n n n t t t a a a l l l S S S t t t r r r a a a t t t e e e g g g i i i e e e s s s i i i n n n H H H o o o t t t e e e l l l s s s : : :

T Th T h he e e C Ca C a a s s s e e e o o o f f f M M Ma a a r r r c c c o o o P Po P o o l l l o o o D Da D a a v va v a a o o o i i in n n t t t h he h e e P Ph P h hi i il l li i ip p pp p p i in i n ne e es s s

Abstract


Hotels
particularly
affect
the
sustainability
of
the
natural
environment
due
to
consumption
 of
 large
 amounts
 of
 natural
 water
 and
 energy
 and
 leaving
 behind
 substantial
 amounts
 of
 waste.

There
has
been
growing
social
concern
and
demands
among
different
stakeholders
 for
 environmentally
 friendly
 hotels.
 
 Despite
 the
 growing
 demand
 and
 popularity,
 only
 a
 handful
of
hotel
companies
are
said
to
have
adopted
environmental
management
and
used
 it
for
gaining
competitive
advantage.



The
 study
 takes
 on
 the
 case
 of
 Marco
 Polo
 Davao,
 a
 chained
 hotel
 in
 the
 Philippines.
 
 A
 competitive
environmental
strategy
was
suggested
for
the
firm
after
examining
the
different
 factors
 and
 actors
 that
 are
 said
 to
 influence
 the
 firm’s
 decisions
 on
 environmental
 management.

The
perceptions
on
environmental
management
of
the
managers
of
Marco
 Polo
Davao
were
first
looked
into.

An
examination
of
the
other
factors
and
actors
that
are
 said
 to
 influence
 managers’
 suggestions
 and
 decisions
 in
 selecting
 a
 competitive
 environmental
strategy
followed.

The
factors
include
environmental
legislation,
resources
 and
 capabilities,
 facilitators/opportunities
 &
 barriers/challenges.
 
 
 The
 actors
 include
 the
 suppliers,
 employees
 and
 customers,
 who
 were
 also
 interviewed
 and
 surveyed
 for
 their
 respective
views
and
opinions.

Lastly,
recommendations
for
action
areas
are
enumerated,
 according
to
the
findings
from
the
interviews
and
surveys.


The
study
found
out
that
there
is
a
positive
attitude
towards
environmental
management
 among
 the
 four
 stakeholder
 groups.
 
 The
 hotel
 has
 current
 environmental
 efforts
 but
 is
 limited
by
resources
and
market
conditions.

Most
of
the
findings
on
the
factors
affecting
 decisions
on
environmental
management
supported
the
theoretical
assumptions.

One
very
 significant
finding
however,
was
that
none
of
the
managers
regard
customers’
demand
as
a
 facilitator
while
the
customer
survey
results
showed
that
there
is
indeed
a
high
interest
in
 environmentally
 responsible
 hotels.
 A
 beyond
 compliance
 strategy
 is
 suggested
 for
 Marco
 Polo
 Davao
 to
 adopt
 in
 designing
 its
 environmental
 management
 program.



Acknowledgements

The
completion
of
this
thesis
marks
the
end
of
my
journey
through
the
MSocSc
in
Service
 Management
program.

I
wish
to
thank
CBS
for
giving
me
the
opportunity
to
go
through
the
 program
 and
 ultimately,
 through
 this
 unique
 experience
 of
 acquiring
 knowledge
 in
 my
 chosen
field.




I
would
like
to
thank
Ms.
Adriana
Budeanu
for
her
guidance,
motivation
and
patience.
I
also
 wish
 to
 express
 my
 most
 sincere
 appreciation
 to
 Ms.
 Claire
 Magno
 and
 Mr.
 Rafael
 Dominguez,
 for
 helping
 make
 this
 project
 possible
 and
 to
 everyone
 at
 Marco
 Polo
 Davao
 who
willingly
participated
and
helped
me
with
everything
that
I
needed
for
the
project.




My
deepest
gratitude
goes
to
all
my
family
&
friends
who
have
supported
me
through
this
 challenging
time.

Special
thanks
goes
to
my
parents,
Ms.
Sally
Teves
and
to
Ms.
Caitlin
Yao


&
family.


Table
of
Contents


Abstract ...2


Table
of
Contents ...4


List
of
Figures
&
Tables...6


1.
 Introduction ...7


1.1
 Background ...7


1.2
 Purpose
of
the
Research...9


1.3
 Clarification
of
concepts ...11


1.4
 Thesis
Structure ...12


2.
 Related
Literature... 14


2.1
 Corporate
environmental
strategies...14


2.1.1
 Environmental
management
and
the
firm’s
value ...14


2.1.2
 Competitive
environmental
strategies ...15


2.1.3
 Sustainability
as
key
driver
to
innovation...16


2.1.4
 Sustainability
&
shareholder
value ...17


2.1.5
 Discussion
on
Corporate
environmental
strategies ...18


2.2
 Environmental
Management
in
Hotels...23


2.2.1
 Managers’
roles
in
strategy
decisions ...24


2.2.2
 Factors
influencing
managers’
decisions
on
the
choice
of
an
environmental
strategy ...25


2.2.3
 Actors
 (Stakeholders)
 influencing
 managers’
 decisions
 on
 the
 choice
 of
 an
 environmental
 strategy...27


2.2.4
 Actions
Areas ...29


2.2.5
 Current
Environmental
Business
Practices
in
Hotels...32


2.3
 Conceptual
framework ...34


3.
 Methodology... 39


3.1
 Research
Design...39


3.2
 Philosophical
Considerations ...41


3.3
 Data
Collection
Process ...43


3.4
 Interviews ...45


3.5
 Surveys...47


3.6
 Data
Analysis...48


3.7
 Reliability
&
Validity...49


3.8
 Limitations ...50


4.
 The
Case ... 51


4.1
 The
hotel
industry
in
the
Philippines ...51


4.2
 The
Hotel ...51


4.3
 Business
Model...52


4.4
 Current
business
situation ...52


4.4.1
 Current
environmental
efforts
of
Marco
Polo
Davao ...53


5.
 Findings
&
Analysis... 58


5.1
 Interviews
with
Managers ...58


5.1.1
 Managers’
role
on
environmental
management...59


5.1.2
 Factors’
influence
on
managers’
decisions
in
the
choice
of
an
environmental
strategy...59


5.1.3
 Actors/Stakeholders’
 influence
 on
 managers’
 decisions
 in
 the
 choice
 of
 an
 environmental
 strategy...64


5.2
 Supplier
interviews ...65


5.3
 Employees’
survey ...67


5.4
 Customers’
survey ...68


5.5
 Recommendations
on
Action
Areas...71


6.
 Discussion ... 76


7.
 Conclusion... 80


Bibliography... 82


Appendices ... 88


Appendix
A:
Managers’
Interview
Questionnaire ...88


Appendix
B:
Suppliers’
interview
questions...91


Appendix
C:
Employees’
Survey ...92


Appendix
D:
Customers’
Survey ...93


Appendix
E:
Other
environmental
efforts
being
done
by
the
F&B
department ...94


Appendix
F:
Other
environmental
efforts
being
done
by
the
Technical
department...95


Appendix
G:
Other
environmental
efforts
being
done
by
the
Housekeeping
department ...97
 


List
of
Figures
&
Tables

Figure
1:

2010‐1015
Forecast
of
Philippine
Hotel
Sales
(in
Millions
of
Pesos)
……….9


Figure
 2:
 Model
 of
 linkage
 between
 strategy,
 environmental
 management
 and
 firm
 performance

……….15


Figure
3:
Generic
Competitive
Environmental
Strategies
………..16


Figure
4:
Key
dimensions
of
Shareholder
Value
………..…
17


Figure
5:
Conceptual
Framework
………..……….35


Figure
6:
Familiarity
with
an
environmentally
friendly
hotel………..……….69


Figure
7:
Interest
in
staying
at
a
green
hotel……….………..…69



 Table
1:
Environmental
Strategies
as
presented
by
select
authors
……….19


Table
 2:
 Survey
 results
 for
 facilitators
 in
 implementing
 an
 environmental
 management
 program
……….62


Table
3:
Survey
results
for
barriers
in
implementing
an
environmental

 management
program
……….63


Table
4:
Employees’
survey
results……….……….68


Table
5:
Customer
survey
results
for
local
Philippine
tourists
……….70


Table
6:
Customer
survey
results
for
foreign
Philippine
tourists
………..………...71
 


1. Introduction
 


1.1 Background


Tourism
 is
 the
 world’s
 largest
 industry,
 contributing
 to
 11.5%
 of
 the
 world’s
 GDP
 and
 employing
12.5%
of
the
world’s
workforce.

It
is
expected
to
grow
at
an
annual
rate
of
3‐4%


from
2011‐2016,
mainly
due
to
the
strong
economies
of
emerging
countries
(Euromonitor
 International,
2012).


The
 global
 growth
 in
 tourism
 naturally
 brings
 in
 more
 revenue
 to
 different
 countries
 and
 mobility
among
different
populations.

However,
it
also
brings
in
issues
that
have
harmful
 impacts
 on
 society
 and
 the
 environment.
 
 The
 issues
 of
 growing
 population,
 increasingly
 scarce
resources
and
inappropriate
practices
and
developments
in
tourism
put
pressure
on
 natural
 habitats
 and
 resources,
 which
 hastens
 environmental
 degradation.
 
 This
 situation
 brings
 in
 more
 focus
 on
 the
 importance
 of
 addressing
 the
 issue
 of
 sustainable
 tourism.



There
 is
 an
 ever‐increasing
 demand
 for
 sustainable
 tourism
 as
 driven
 by
 businesses
 supporting
 sustainable
 practices,
 authorities
 and
 local
 communities
 (Euromonitor
 International,
2012).


The
travel
accommodation
is
one
of
the
largest
sectors
of
the
tourism
industry,
and
hotels
 have
 proven
 to
 be
 the
 biggest
 players
 in
 the
 sector.
 
 There
 is
 a
 growing
 awareness
 in
 environmentalism
nowadays
for
both
the
industry
players
and
the
customers.




There
is
a
global
trend
showing
that
hotel
guests
are
more
eco‐minded
and
are
concerned
 about
how
their
choices
can
affect
the
environment.
Hoteliers
also
increasingly
know
about
 the
 need
 to
 implement
 sustainability
 practices
 to
 reduce
 costs,
 attract
 new
 guests
 and
 benefit
from
future
cost‐saving
opportunities
(Euromonitor
International,
2012).

In
spite
of
 the
higher
awareness
and
demand,
there
are
only
a
few
companies
in
the
hotel
industry
that
 have
a
comprehensive
approach
to
sustainable
practices
(Lopez‐Gamero,
Molina‐Azorin,
&


Claver‐Cortes,
2010).


The
 world’s
 largest
 hotel
 operators
 are
 only
 just
 beginning
 to
 address
 social
 and
 environmental
challenges.

Accor
plans
to
cut
its
energy
and
water
consumption
by
10%
in


five
years
through
its
Earth
Guest
program.

The
Intercontinental
Hotel
Group

(IHG)
has
an
 in‐house
 sustainability
 system,
 the
 Green
 Engage
 program
 which
 targets
 to
 save
 20%


annually
 in
 energy
 consumption.
 Marriott
 plans
 to
 reduce
 25%
 energy
 and
 water
 consumption
per
room
by
2017.

Other
players
such
as
Hilton,
Hyatt,
Starwood
have
similar
 programs
put
in
place
(Euromonitor
International,
2012).


Accor
is
currently
the
most
sustainable
of
the
world’s
10
largest
hotel
groups.

Accor
has
a
 score
of
only
55%,
followed
by
IHG
with
43%
and
Marriott
with
35%.

Other
hotel
groups
 score
well
below
the
top
3,
with
the
remaining
7
of
the
top
10
only
garnering
scores
within
 the
range
of
6%‐17%.


A
number
of
other
hotel
groups
outside
the
top
10
such
as
Scandic,
 Radisson,
Movenpick
are
also
having
sustainability
efforts
but
clearly
has
a
long
way
to
go
in
 terms
 of
 integrating
 sustainability
 management
 within
 core
 processes,
 monitoring
 performance
 and
 engaging
 with
 stakeholders
 on
 how
 to
 address
 sustainability
 challenges
 (Euromonitor
International,
2012).




The
 World
 Economic
 Forum
 Sustainability
 ranking
 takes
 into
 consideration
 the
 country’s
 environmental
 regulations,
 CO2
 emissions,
 particulate
 matter
 concentration,
 threatened
 species
 and
 environmental
 certifications.
 
 The
 rankings
 show
 that
 there
 is
 a
 strong
 correlation
 between
 wealth
 and
 countries
 achieving
 high
 sustainability
 rankings.
 
 
 Europe
 leads
the
world
in
sustainable
destinations
while
the
worst
performing
countries
are
mainly
 those
from
the
developing
world.

The
Philippines
is
among
the
lowest
ranked
countries
in
 terms
 of
 sustainability,
 with
 Manila,
 its
 capital
 city,
 placing
 among
 the
 bottom
 5
 least
 sustainable
Asian
Cities
(Euromonitor
International,
2012).




Natural
 disasters
 and
 pandemics
 are
 also
 being
 felt
 more
 in
 developing
 countries,
 posing
 threats
to
the
countries’
tourism
industry
and
travel
accommodation
sector.
The
Philippines
 is
no
exception,
which
was
hit
by
strong
storms,
and
tropical
cyclones
the
past
few
years.



These
storms,
observed
to
have
become
stronger
lately
due
to
climate
change,
have
brought
 about
natural
disasters
such
as
floods
and
landslides,
displacing
and
killing
millions
of
people
 in
the
country.


In
 the
 Philippines,
 hotels
 are
 taking
 up
 90%
 of
 total
 travel
 accommodation
 sales
 (Euromonitor
International,
2010).

Its
value
has
increased
by
12%
in
2010
and
it
is
expected
 to
 grow
 in
 constant
 value
 at
 a
 compounded
 annual
 growth
 rate
 (CAGR)
 of
 8%
 until
 2015.



The
number
of
outlets
is
also
expected
to
increase
with
a
CAGR
of
1%
until
2015.
The
said
 forecast
is
mainly
attributed
to
the
global
growth
of
the
tourism
industry
and
the
popularity
 of
intra‐regional
destinations
(Euromonitor
International,
2010).

With
the
growth
in
tourist
 arrivals
and
increase
in
hotel
sales,
it
has
become
even
more
important
for
the
players
in
the
 Philippine
hotel
industry
to
take
up
responsibility
in
addressing
sustainability
issues
in
the
 destination.

Doing
this
 will
not
only
help
save
the
environment
from
further
degradation
 and
contribute
in
reversing
the
effects
of
climate
change
but
will
also
save
population
from
 suffering
more
disasters,
one
hotel
at
a
time.




Figure
 1:
 
 2010‐1015
 Forecast
 of
 Philippine
 Hotel
 Sales
 (in
 Millions
 of
 Pesos)
 Source:


Euromonitor
International


1.2 Purpose
of
the
Research


Having
 established
 the
 need
 for
 hotels
 to
 respond
 to
 the
 demands
 of
 environment
 and
 society,
this
study
looks
into
how
hotels
can
contribute
to
sustainable
tourism.






Studies
 regarding
 sustainability
 efforts
 of
 hotels
 in
 the
 Philippines
 are
 rare
 even
 if
 the
 country
is
an
emerging
market
for
the
hotel
industry.


Although
there
are
environmental
 efforts
in
different
hotels
in
the
country,
it
is
at
a
very
minimal
level
and
certainly
lag
behind


0.00
 10,000.00
 20,000.00
 30,000.00
 40,000.00
 50,000.00
 60,000.00
 70,000.00
 80,000.00
 90,000.00
 100,000.00


2010
 2011
 2012
 2013
 2014
 2015


Hotels


Chained
Hotels
 Independent
Hotels


those
 of
 the
 developed
 countries.
 
 There
 is
 also
 no
 data
 available
 for
 sustainability
 performance
of
hotels
in
the
Philippines.
Thus,
the
researcher
decided
to
inquire
in
this
area.


There
 are
 four
 alternative
 forms
 of
 sustainable
 tourism,
 namely
 green
 tourism,
 ethical
 tourism,
 responsible
 tourism
 and
 eco‐tourism
 (Euromonitor
 International,
 2012).
 
 This
 research
focuses
on
green
tourism
particularly
on
how
efforts
that
are
geared
towards
the
 environment
are
selected,
as
opposed
to
efforts
that
concentrate
on
ethical,
cultural,
local
 welfare,
political
and
economic
elements
of
the
destinations.




In
order
for
a
hotel
to
be
able
to
contribute
to
green
tourism,
like
every
other
business,
it
 needs
 to
 have
 clear
 environmental
 strategy,
 implemented
 through
 an
 environmental
 management
program.

Sustainability
issues
impact
on
corporate
strategy
and
performance
 (Rohm
&
Dan,
2011).

The
choice
of
an
environmental
strategy
impacts
on
the
company’s
 environmental
 performance.
 
 Different
 authors
 present
 different
 sets
 of
 environmental
 strategies
that
a
company
can
follow
and
implement
for
its
environmental
efforts,
one
of
 which
is
named
“Competitive
environmental
strategies.”

This
is
a
set
of
strategies
based
on
 the
 competitive
 advantage
 and
 competitive
 focus
 of
 different
 environmental
 strategies.



Examination
 of
 the
 different
 factors
 that
 lead
 to
 the
 general
 manager’s
 selection
 of
 a
 competitive
environmental
strategy
is
done.



The
Philippines
lags
behind
the
developed
countries
in
terms
of
sustainability
and
there
is
 also
 a
 trend
 that
 most
 hotels
 do
 not
 have
 clear
 environmental
 strategies
 for
 their
 operations.
 
 Thus,
 the
 market
 would
 be
 a
 very
 relevant
 and
 practical
 area
 for
 study
 on
 competitive
environmental
strategies.

The
goal
of
this
research
is
to
suggest
a
competitive
 environmental
 strategy
 for
 a
 Philippine
 hotel.
 
 This
 is
 done
 by
 examining
 the
 different
 factors,
actors
and
conditions
that
lead
to
the
general
manager’s
selection
of
a
competitive
 environmental
 strategy,
 which
 the
 hotel
 can
 adopt
 in
 planning
 and
 implementing
 its
 environmental
management
program.



The
research
project
is
mainly
written
for
the
general
manager
of
a
hotel.
This
means
that
 the
analysis,
findings
and
final
recommendations
are
to
serve
how
the
management
team
 can
optimize
their
environmental
efforts.


The
research
question
for
the
study
is:


What
 competitive
 environmental
 strategy
 can
 Marco
 Polo
 Davao
 adopt
 for
 its
 environmental
management
program?



In
order
to
answer
this
research
question,
the
following
sub‐questions
were
formulated:



o What
 is
 the
 role
 of
 the
 general
 manager’s
 and
 the
 department
 managers’


perceptions
on
selecting
a
competitive
environmental
strategy?




o What
are
the
factors
and
actors
that
lead
for
a
strategy
to
be
suggested
by
the
 department
managers
and
chosen
by
the
general
manager?


o What
is
the
influence
of
the
factors
and
actors
on
the
selection
of
a
competitive
 environmental
strategy?



o What
 are
 the
 recommendations
 for
 Marco
 Polo
 Davao
 on
 the
 following
 action
 areas:

(1)
green
program
structure
(2)
energy
efficiency
(3)
resource
and
waste
 management


(4)
sustainable
supply
chain
management


1.3 Clarification
of
concepts


With
the
focus
on
green
tourism,
this
thesis
used
the
terms,
environmental
performance/


environmental
management/
environmental
strategies/
green
efforts
in
lieu
of
sustainability
 performance,
sustainability
management,
sustainability
strategies
and
sustainability
efforts.



This
clarifies
the
focus
of
the
study,
which
is
on
the
environmental
part
of
sustainability.


Sustainability
 stands
 for
 practices
 that
 protect
 and
 enhance
 the
 human
 and
 natural
 resources
needed
by
future
generations
to
enjoy
a
quality
of
life
equal
to
or
greater
than
our
 own
(US
Environmental
Protection
Agency,
2010).
It
is
a
matter
of
making
decisions
in
the
 short
run
that
does
not
have
negative
impacts
in
the
long
run
(Field
&
Field,
2009).





Sustainable
efforts
pertain
to
the
actions
towards
achieving
sustainability.

Considering
the
 scope
and
limitation
of
this
study,
the
term
is
considered
synonymous
with
green
efforts,
 environmental
efforts
and
environmental
actions.


Sustainability
 strategies
 would
 then
 be
 “structural
 changes
 based
 on
 sustainability
 that
 impact
 corporate
 strategies
 and
 performance”
 (Rohm
 &
 Dan,
 2011).
 Environmental
 strategies
is
used
synonymously
with
the
term
in
this
thesis.


Environmental
 management
 deals
 with
 technical
 and
 organizational
 activities
 aimed
 at
 reducing
 the
 environmental
 impact
 of
 the
 company’s
 operations
 (Carmona‐Moreno,
 Cespedes‐Lorente,
&
De
Burgos‐Jimenez,
2004).




Energy
 and
 waste
 management
 means
 strategizing
 of
 the
 use
 and
 conservation
 of
 resources,
usually
done
by
exploring
possible
alternative
energy
sources
and
by
finding
ways
 to
reduce
energy
consumption,
reduce
waste
and
recycle
(Euromonitor
International,
2012).


Supply
 chain
 management
 is
 the
 effort
 to
 effectively
 and
 efficiently
 manage
 the
 supply
 chain
 activities
 in
 order
 to
 maximize
 customer
 value
 and
 have
 a
 sustainable
 competitive
 advantage.
Supply
 chain
 activities
 cover
 everything
 from
 product
 development,
 sourcing,
 production,
 and
 logistics,
 as
 well
 as
 the
 information
 systems
 needed
 to
 coordinate
 these
 activities”
(Handfield,
2011).


The
general
manager
refers
to
the
person
who
is
in
charge
of
administering
all
operations
of
 the
hotel.
The
department
managers
refer
to
those
who
are
responsible
for
administering
 the
 operations
 of
 a
 specific
 department.
 In
 this
 study,
 the
 use
 of
 the
 term
 “the
 managers/the
management”
will
refer
to
both
parties.


1.4 
Thesis
Structure


Below
is
the
list
of
chapters
in
this
thesis
with
a
brief
description
of
each.



Chapter
 1‐
 Introduction:
 Introduces
 the
 topic
 of
 hotel
 sustainability,
 and
 presents
 the
 research
problem
to
be
studied,
research
purpose
and
research
questions
to
be
addressed.



The
chapter
contains
the
definition
of
terms
and
the
structure
of
the
thesis.


Chapter
2‐
Literature
review:
The
main
literature
within
the
field
is
reviewed
and
the
study’s
 theoretical
 framework
 is
 presented.
 The
 frameworks
 on
 corporate
 sustainability
 that
 are
 related
 to
 the
 study
 are
 presented
 first,
 and
 then
 a
 discussion
 on
 environmental
 management
in
hotels
follows.

The
chapter
ends
with
the
conceptual
framework
wherein
 the
appropriate
theories
used
for
the
study
are
be
pointed
out.


Chapter
3‐
Methodology:
Explains
the
research
and
introduces
the
scientific
approach
and
 the
methods
used
in
conducting
data
collection
and
data
analysis
procedures.
The
overall
 process
of
the
study
is
also
discussed.


Chapter
4‐
The
case:
Gives
a
background
on
the
Philippine
hotel
industry,
history
and
current
 situation,
and
the
case
of
the
chosen
hotel
in
the
Philippines.


Chapter
5
Findings
&
Analysis:
This
chapter
discusses
and
analyzes
the
data
findings
in
order
 to
come
up
with
general
conclusions
from
the
data
gathering
process.


Chapter
6‐
Discussion:
This
section
of
the
paper
will
discuss
the
analyzed
findings
and
use
it
 to
answer
the
research
question.



Chapter
7‐
Conclusion:
Final
remarks
and
conclusions
end
the
paper.


Appendices‐
materials
gathered
and
regarded
relevant
for
further
explanation
 


2. Related
Literature


Environmental
 management
 refers
 to
 all
 efforts
 to
 minimize
 the
 negative
 environmental
 impact
of
the
firm’s
operations
processes,
which
contribute
towards
sustainability
(Klassen


&
McLaughlin,
1996).

It
involves
a
wide
variety
of
initiatives,
which
would
differ
per
industry
 due
 to
 difference
 in
 operations.
 
 The
 initiatives
 are
 usually
 classified
 as
 technical
 and
 organizational.
 
 Long‐term
 planning
 and
 integration
 with
 other
 corporate
 decisions
 determine
the
environmental
strategy
of
the
firm
(Lopez‐Gamero,
Molina‐Azorin,
&
Claver‐

Cortes,
2010).



A
firm’s
environmental
strategy
refers
to
how
the
firm
responds
to
environmental
issues
and
 how
it
uses
them
as
a
competitive
tool.

Different
authors
identify
different
strategies
but
 one
 common
 theme
 among
 the
 strategies
 is
 that
 it
 is
 organized
 in
 a
 continuum
 from
 low
 commitment
to
advanced
strategies
(Lopez‐Gamero,
Molina‐Azorin,
&
Claver‐Cortes,
2010).



Environmental
performance
measures
how
successful
a
firm
is
in
reducing
and
minimizing
its
 impact
 on
 the
 environment
 (Klassen
 &
 McLaughlin,
 1996).
 It
 is
 shown
 in
 terms
 of
 results
 achieved
by
the
company
from
having
an
environmental
management
program,
which
goes
 hand
in
hand
with
an
environmental
strategy
that
defines
a
firm’s
competitive
orientation
 (Lopez‐Gamero,
Molina‐Azorin,
&
Claver‐Cortes,
2010).



2.1 Corporate
environmental
strategies


2.1.1 Environmental
management
and
the
firm’s
value


Many
 suggest
 that
 profitability
 is
 adversely
 affected
 by
 higher
 production
 costs
 of
 environmental
 management
 initiatives
 (Klassen
 &
 McLaughlin,
 1996).
 
 According
 to
 Maignan,
customers
usually
want
firms
to
inform
them
of
their
sustainability
initiatives.
This
 usually
influences
the
customer’s
purchase
behavior
as
customers
are
now
expecting
firms
 to
be
more
socially
and
environmentally
responsible
(Pomering,
Noble,
&
Johnson,
2011).






The
 environmental
 orientation
 of
 the
 firm
 is
 determined
 by
 corporate
 strategy.




Environmental
management
becomes
an
integral
element
of
corporate
strategy
as
it
affects
 the
company’s
environmental
performance.

Operations
strategy
is
the
pattern
of
structural
 and
 infrastructural
 choices
 that
 guide
 decisions
 in
 operations
 to
 support
 overall
 firm


performance
 (Klassen
 &
 McLaughlin,
 1996).
 
 However,
 according
 to
 Reinhardt,
 there
 is
 a
 group
of
executives
and
business
academics
that
disagree
because
environmentalism
makes
 management
lose
focus
on
the
real
problems
of
business
(Reinhardt,
1998).




Nevertheless,
 there
 are
 indicators
 that
 effectively
 link
 environmental
 management
 and
 financial
 performance.
 
 Firms
 who
 invested
 in
 activities
 that
 minimized
 environmental
 impact
were
rewarded
in
the
marketplace
by
higher
valuation
(Klassen
&
McLaughlin,
1996).


This
 view
 however,
 is
 criticized
 by
 the
 interpretation
 that
 business
 is
 concerned
 with
 sustainability
efforts
and
environmental
management,
only
to
the
extent
that
it
contributes
 long‐term
 value
 for
 the
 owners
 of
 the
 business
 and
 not
 for
 the
 good
 of
 society
 (van
 Marrewijk,
2003).


Figure
 2:
 Model
 of
 linkage
 between
 strategy,
 environmental
 management
 and
 firm
 performance


2.1.2 Competitive
environmental
strategies


A
 study
 by
 Orsato
 presents
 a
 framework
 on
 the
 different
 competitive
 environmental
 strategies.

It
helps
managers
optimize
economic
return
on
investments
and
transform
these
 investments
into
sources
of
competitive
advantage
(Orsato,
2006).

This
would
fit
well
for
 companies
 trying
 to
 find
 functional
 solutions
 that
 create
 value
 in
 terms
 of
 the
 company’s
 economic,
social
and
ecological
performance
as
motivated
by
the
view
that
sustainability
is
 in
the
inevitable
direction
that
progress
takes
(van
Marrewijk,
2003).


In
1980,
Michael
Porter
identified
two
generic
types
of
competitive
advantage,
low
cost
and
 differentiation.
According
to
Porter,
a
firm
can—through
efficient
use
of
labor
and
capital—

obtain
 competitive
 advantage
 by
 selling
 products
 or
 services
 with
 the
 lowest
 cost
 in
 its
 industry.
 On
 the
 other
 hand,
 a
 firm
 can
 use
 differentiation
 strategies
 to
 create
 unique
 features
for
its
products
or
its
services
(Orsato,
2006).


The
Resource‐Based
View
highlights
the
influence
(internal)
organizational
processes
exert
 on
 competitiveness.
 
 Competitive
 advantage
 should
 be
 seen
 as
 a
 result
 of
 the
 ability
 to
 acquire,
use,
and
manage
resources,
such
as
technical
capabilities,
ownership
of
intellectual
 property,
brand
leadership,
financial
capabilities,
and
organizational
structure
and
culture.



All
 these
 advantages
 can
 be
 utilized
 at
 the
 firm’s
 advantage
 in
 environmental
 innovation.


(Orsato,
2006).


In
 the
 framework
 presented
 in
 the
 study,
 organizational
 processes
 tend
 to
 have
 a
 more
 encompassing
scope
than
products
or
services
and
it
can
be
used
to
define
a
strategy
for
a
 product
or
the
whole
business.

Environmental
strategies
must
be
aligned
with
the
overall
 business
strategy
in
order
to
optimize
resources
(Orsato,
2006).


Figure
3:
Generic
Competitive
Environmental
Strategies


2.1.3 Sustainability
as
key
driver
to
innovation


In
 another
 study,
 Nidumolu
 et.al
 looked
 at
 30
 companies
 and
 their
 research
 has
 demonstrated
 that
 companies
 end
 up
 with
 lower
 costs
 when
 becoming
 environmentally


friendly
due
to
having
reduced
inputs.

It
is
opined
that
in
the
future,
only
companies
that
 make
 sustainability
 a
 goal
 will
 achieve
 competitive
 advantage.
 
 In
 order
 to
 become
 sustainable,
 there
 is
 a
 need
 for
 companies
 to
 rethink
 business
 models,
 products,
 technologies
and
processes.

There
are
5
stages
in
the
process
of
becoming
sustainable
and
 these
will
be
discussed
in
detail
below
together
with
that
of
the
similar
strategies
proposed
 by
Orsato.



2.1.4 Sustainability
&
shareholder
value


A
 sustainable
 enterprise
 delivers
 simultaneously
 economic,
 social
 and
 environmental
 benefits
 toward
 achieving
 sustainable
 development
 (Hart
 &
 Milstein,
 2003).
 
 Business
 is
 expected
 to
 accomplish
 social
 goods
 and
 initiatives
 (Brønn
 &
 Vidaver‐Cohen,
 2009).



However,
firms
usually
find
it
difficult
reconciling
sustainability
and
increasing
shareholder
 value
(Hart
&
Milstein,
2003).


Orsato
 showed
 a
 framework
 based
 on
 competitive
 advantages
 and
 competitive
 focus
 as
 discussed
above.

Hart
&
Milstein
however,
presents
a
framework
that
focuses
on
the
how
 sustainability
 affects
 shareholder
 value.
 
 They
 present
 shareholder
 value
 as
 a
 multidimensional
construct
using
a
model
with
2
axes.
The
vertical
axis
is
built
on
the
firm’s
 need
 to
 manage
 the
 business
 while
 simultaneously
 creating
 tomorrow’s
 technology
 and
 markets.

The
horizontal
axis
looks
at
the
firm’s
need
to
grow
internal
organizational
skills
 while
infusing
knowledge
from
outside.


Figure
4:
Key
dimensions
of
Shareholder
Value


Sustainable
development
is
also
a
multidimensional
challenge.
There
are
four
sets
of
global
 drivers
of
sustainability.

The
first
is
related
to
industrialization
and
how
it
brings
irreversible
 effects
to
the
environment.
The
second
is
the
growth
of
groups
in
civil
society
to
monitor
 and
even
enforce
social
and
environmental
standards.

The
third
set
of
drivers
is
related
to
 emerging
 technology
 that
 can
 possibly
 provide
 solutions
 to
 the
 material
 and
 energy‐

intensive
processes
today.

The
fourth
set
relates
to
the
increase
in
population,
poverty
and
 inequity.
 
 The
 challenges
 associated
 with
 global
 sustainability
 can
 help
 identify
 strategies
 and
 practices,
 which
 improve
 performance
 in
 all
 four
 quadrants
 of
 the
 shareholder‐value
 framework
(Hart
&
Milstein,
2003).

In
order
to
maximize
shareholder
value
over
time,
firms
 must
perform
well
simultaneously
in
all
four
quadrants
(Hart
&
Milstein,
2003).


2.1.5 Discussion
on
Corporate
environmental
strategies



Before
a
firm
is
able
to
implement
environmental
efforts,
it
is
essential
that
a
strategy
be
 chosen
after
doing
a
company
diagnosis.

The
selected
strategy
will
guide
the
design
of
the
 company’s
environmental
management
framework.



The
three
authors
presented
above
offered
various
environmental
strategies
that
are
similar
 to
 each
 other.
 Orsato’s
 competitive
 environmental
 strategies
 will
 mainly
 be
 used
 for
 this
 study
 but
 the
 important
 and
 defining
 points
 in
 the
 similar
 theories
 presented
 by
 Hart
 &


Milstein
and
Nidumolu
et.
al
will
also
be
integrated
with
Orsato’s
to
obtain
a
more
holistic
 view
of
the
different
strategies
that
can
be
used
in
this
study.



Strategy
1:
Eco‐Efficiency



Organizations
 should
 be
 able
 to
 transform
 costs
 into
 profits
 by
 identifying
 concealed
 opportunities
for
innovation,
leading
to
more
efficient
organizational
systems.

By
working
 towards
 eco‐efficiency
 within
 and
 beyond
 the
 firm,
 it
 will
 be
 able
 to
 save
 money
 and
 decrease
the
environmental
impact
of
its
processes
(Orsato,
2006).


Eco‐efficiency
is
usually
 done
to
diminish
negative
effects
on
the
environment
by
using
strategies
such
as
reducing
 resource
consumption,
energy
use,
emissions
and
wastes,
landfill
use
and
toxic
releases
and
 recycling
(McDonough
&
Braungart,
2000).

However,
Mc
Donough
&
Braungart
claim
that
 thinking
of
eco‐efficiency
as
sustainable
is
a
misconception
because
it
provides
the



Table
1:
Environmental
Strategies
as
presented
by
select
authors


appearance
of
change,
when
in
fact
with
simply
reducing
and
recycling,
does
not
really
put
a
 halt
 in
 environmental
 destruction.
 
 Thus,
 better
 actions
 such
 as
 product
 redesign
 (i.e.


replacing
 non‐biodegradable
 and
 harmful
 chemicals
 used
 in
 products
 contents
 to
 environmentally
 friendly
 ones)
 and
 radical
 innovation
 should
 be
 done
 in
 order
 to
 ensure
 long‐term
success
in
environmental
performance
(McDonough
&
Braungart,
2000).


This
 strategy
 is
 quite
 similar
 with
 that
 of
 Nidomulo,
 et.
 al’s
 stage
 1
 called
 ‘viewing
 compliance
as
an
opportunity.’
The
difference
is
that
it
puts
more
focus
on
the
influence
of
 standards
 on
 how
 the
 companies
 would
 view
 opportunities
 for
 sustainability.
 
 In
 another
 theory
 by
 Hart
 &
 Milstein,
 the
 first
 quadrant
 in
 the
 shareholder
 value
 framework
 is
 concerned
with
cost
and
risk
reduction.

This
supports
eco‐efficiency
because
the
reduced
 use
 of
 resources
 would
 potentially
 lead
 to
 quarterly
 earnings
 growth
 and
 reduction
 in
 exposure
 to
 liabilities
 and
 other
 potential
 losses
 (Hart
 &
 Milstein,
 2003).
 
 At
 this
 level,


AUTHORS: ORSATO NIDUMOLU, PRALAHAD &

RANGASWAMI

HART & MILSTEIN

Eco-efficiency Viewing compliance as an opportunity

Cost & Risk Reduction

Beyond compliance Viewing compliance as an opportunity, Making value

chains sustainable

Reputation and Legitimacy

Eco-branding Designing sustainable products

& services

Innovation and positioning

Environmental cost management Developing new business models

Growth path & trajectory STRATEGIES:

Creating next practice platforms

business
 is
 concerned
 with
 how
 sustainable
 efforts
 in
 business
 operations
 and
 decision‐

making,
reduce
risks
and
costs
(van
Marrewijk,
2003).


Strategy
2:
Beyond
Compliance
Leadership



The
Beyond
compliance
leadership
strategy
takes
eco‐efficiency
a
step
higher
by
seeking
to
 be
acknowledged
in
their
efforts
for
the
environment.

In
this
strategy,
firms
are
willing
to
 voluntarily
spend
money
on
environmental
improvements
beyond
what
is
required
(i.e.
to
 have
its
environmental
management
system
certified),
and
on
the
marketing
of
their
efforts
 (Orsato,
2006).

Complying
with
more
stringent
standards,
even
before
they
are
enforced
is
 a
 good
 way
 of
 fostering
 innovation
 and
 it
 also
 provides
 companies
 with
 the
 possibility
 of
 benefiting
 from
 the
 first‐mover
 advantage
 (Nidumolu,
 Prahalad,
 &
 Rangaswami,
 2009).
 
 It
 can
 give
 business
 major
 opportunities
 for
 out‐designing
 the
 competition
 (McDonough
 &


Braungart,
2000).


Those
against
environmental
protection
argue
that
the
move
towards
environmentalism
and
 putting
environmental
standards
or
regulations
in
place
are
the
reasons
behind
recessions
 and
 economic
 slowdown
 of
 industrialized
 nations
 (Shrivastava,
 1995).
 
 Keith
 Davis
 further
 supports
this
by
stating
that
environmental
regulation
actually
restricts
flexibility
of
decision‐

making.

For
businesses,
it
is
actually
more
desirable
to
have
less
regulation
in
order
to
have
 more
 freedom
 in
 decision
 making
 to
 be
 able
 to
 meet
 market
 and
 social
 factors
 (Brønn
 &


Vidaver‐Cohen,
2009).



Another
 important
 concept
 that
 can
 be
 factored
 in
 the
 second
 strategy
 of
 going
 beyond
 compliance
 is
 what
 Nidomulo
 et.
 al
 presented
 as
 stage
 2
 of
 being
 sustainable
 or
 ‘making
 value
 chains
 sustainable.’
 
 This
 is
 the
 stage
 where
 the
 companies
 already
 got
 past
 compliance
 and
 are
 trying
 to
 increase
 efficiencies
 throughout
 the
 value
 chain.
 
 The
 difference
 of
 this
 from
 eco‐efficiency
 is
 brought
 by
 the
 fact
 that
 it
 also
 helps
 make
 the
 suppliers
 environment‐conscious
 towards
 the
 goal
 of
 having
 a
 sustainable
 supply
 chain
 (Nidumolu,
 Prahalad,
 &
 Rangaswami,
 2009).
 
 Environmental
 concerns
 drive
 socially
 responsible
firms
to
have
a
sustainable
supply
chain
while
higher
profitability
from
adopting
 sustainable
supply
chains
encourages
other
firms
to
do
it.

A
firm’s
environmental
decision
 not
only
has
effects
on
itself
but
on
its
customers
and
suppliers
as
well
(Hall,
2001).


The
last
theory
that
can
be
integrated
to
this
stage
is
that
of
Hart
&
Milstein,
presented
as
 reputation
 and
 legitimacy
 as
 shown
 in
 the
 shareholder
 value
 framework
 extends
 to
 numerous
 external
 stakeholders
 in
 the
 value
 chain.
 
 Fostering
 the
 stakeholders’
 interests
 may
 lead
 to
 enhanced
 reputation
 and
 legitimacy
 leading
 to
 growth
 of
 shareholder
 value.



The
 view
 indicates
 that
 organizations
 have
 to
 balance
 stakeholders’
 interests
 and
 shareholder’s
 wealth.
 
 Stakeholder’s
 interests
 can
 affect
 or
 can
 be
 affected
 by
 the
 achievement
of
an
organization’s
objectives
(Hart
&
Milstein,
2003).


This
is
further
supported
by
the
fact
that
companies
are
an
integral
part
to
society;
they
are
 responsible
to
serve
the
needs
and
satisfy
society.

In
this
view,
motivated
by
the
importance
 of
 reputation
 and
 social
 legitimacy,
 there
 is
 thus
 a
 need
 to
 balance
 economic,
 social
 and
 ecological
 concerns
 by
 going
 beyond
 compliance
 level
 and
 profit
 considerations
 (van
 Marrewijk,
 2003).
 
 This
 view
 of
 Hart
 &
 Milstein
 on
 the
 importance
 of
 reputation
 and
 legitimacy
 is
 different
 from
 what
 Orsato
 presented
 as
 beyond
 compliance
 leadership
 because
 this
 focuses
 on
 the
 reputation
 of
 the
 firm
 and
 its
 stakeholders,
 but
 it
 however
 supports
it
since
reputation
and
legitimacy
are
effects
that
the
company
can
attain
by
going
 beyond
compliance.


Strategy
3:
Eco‐Branding



Once
 the
 company
 has
 gone
 beyond
 compliance
 and
 has
 strengthened
 its
 organizational
 processes,
 it
 would
 be
 time
 to
 further
 explore
 opportunities
 for
 environmental
 differentiation
in
terms
of
products
and
services,
which
could
further
provide
a
competitive
 advantage
 (Orsato,
 2006).
 
 In
 environmental
 product
 differentiation,
 a
 business
 creates
 products
that
provide
greater
environmental
benefits,
or
that
impose
smaller
environmental
 costs,
than
similar
products.
The
changes
in
the
products
or
the
production
process
usually
 raise
 operating
 costs
 but
 it
 enables
 the
 company
 to
 command
 a
 price
 premium
 in
 the
 marketplace
 or
 to
 capture
 additional
 market
 share
 (Reinhardt,
 1998)
 through
 filling
 the
 green
market
niche
willing
to
pay
a
premium
for
environmental
products
(Blanco,
Lozano,
&


Ray‐Maquieira,
2009).



Nidumolu
et.
al’s
stage
3
in
becoming
sustainable
is
named
‘designing
sustainable
products
 and
services.”

This
is
almost
identical
to
eco‐branding
strategy
of
Orsato
since
it
takes
on


the
 challenge
 of
 developing
 sustainable
 offerings
 or
 redesigning
 existing
 ones
 to
 become
 eco‐friendly
(Nidumolu,
Prahalad,
&
Rangaswami,
2009).




The
innovation
and
repositioning
strategy
of
Hart
&
Milstein
in
the
sustainable
shareholder
 value
framework
is
also
similar
to
the
eco‐branding
strategy
because
it
is
about
generating
 products
and
services
for
the
future.

It
is
a
search
for
creating
synergistic
(economic,
social
 and
ecological)
value
through
the
adoption
of
sustainability
efforts
(Hart
&
Milstein,
2003).



The
difference
however
is,
it
puts
more
focus
on
innovation
and
points
out
its
importance
in
 current
business
strategies.



Strategy
4:
Environmental
Cost
Leadership



This
 strategy
 entails
 radical
 innovations
 in
 product
 design.
 
 Innovation
 is
 extended
 to
 the


"revenue
basis"
of
the
firm,
and
there
is
a
large
number
under
development
(Orsato,
2006).



In
order
to
do
this,
one
should
consider
if
the
product
is
ecologically
intelligent,
socially
just
 (in
manufacturing,
use
and
disposal)
and
guilt‐free
throughout
the
production
and
delivery
 process.

It
is
also
imperative
in
this
strategy
that
innovation
and
adaptation
occur
in
order
 to
gain
a
competitive
advantage.

(McDonough
&
Braungart,
2000)




Nidumolu
et.
al’s
stage
4
is
on
developing
new
business
models,
which
means
finding
novel
 ways
 of
 delivering
 and
 capturing
 value,
 which
 will
 change
 the
 basis
 of
 competition
 (Nidumolu,
 Prahalad,
 &
 Rangaswami,
 2009).
 
 Businesses
 have
 now
 taken
 the
 leap
 from
 looking
at
firm’s
sustainable
activities
as
limited,
unprofitable
and
isolate
to
adopting
with
 organization‐wide
framework
tools
and
programs
(Larson,
Teisberg,
&
Johnson,
2000).

The
 full
benefits
of
sustainability
approaches
will
not
be
realized
if
it
is
just
treated
as
add‐ons
or
 performance
 variables
 and
 are
 not
 integrated
 into
 the
 firm’s
 strategic
 vision
 and
 business
 model
(van
Marrewijk,
2003).





This
fourth
strategy
is
similar
and
can
be
connected
with
Hart
&
Milstein’s
last
quadrant
of
 the
 shareholder
 value
 framework,
 which
 is
 growth
 path
 and
 trajectory.
 
 The
 theory
 of
 growth
path
and
trajectory
is
more
concerned
with
the
external
dimensions
associated
with
 future
performance.

There
should
be
a
clear
outlook
for
future
growth
by
either
offering
 new
products
or
entering
new
markets.



Nidomulo
et.
al
further
presents
a
stage
5
or
the
last
stage
of
being
sustainable
which

is
 creating
 next‐practice
 platforms.
 
 This
 stage
 requires
 the
 expertise
 to
 synthesize
 business
 models,
 technologies,
 and
 regulations
 in
 different
 industries
 (Nidumolu,
 Prahalad,
 &


Rangaswami,
 2009).
 
 A
 network
 of
 alliances
 across
 a
 group
 of
 firms
 in
 the
 value
 chain
 is
 needed
 in
 order
 to
 be
 able
 to
 manage
 innovative
 change
 processes
 and
 have
 a
 truly
 sustainable
business
(Larson,
Teisberg,
&
Johnson,
2000).

Nidomulo
et.
al
further
state
that
 stages
 4
 and
 5
 would
 be
 a
 challenge
 for
 firms
 in
 most
 industries,
 as
 this
 requires
 costly
 investments
 in
 innovation.
 It
 is
 however,
 a
 good
 possibility
 for
 the
 future
 (Nidumolu,
 Prahalad,
&
Rangaswami,
2009).


2.2 Environmental
Management
in
Hotels


Hotels
 have
 also
 been
 inspired
 by
 increasing
 environmental
 consciousness
 among
 stakeholder
 to
 take
 actions
 to
 reduce
 the
 impact
 of
 its
 operations
 on
 the
 environment.



Having
 an
 environmental
 management
 program
 addresses
 this.
 
 Environmental
 management
is
the
set
of
processes
and
practices
introduced
and
done
by
an
organization
 for
the
reduction,
prevention
and
elimination
of
negative
environmental
effects
arising
from
 its
operations
(Hsieh,
2012).




The
hotel
industry
is
made
up
of
a
large
number
of
small
operations
that
consume
relatively
 small
amounts
of
energy,
water
and
other
resources,
and
due
to
this,
the
impact
of
hotels’


operations
 on
 the
 environment
 is
 diffuse
 (Carmona‐Moreno,
 Cespedes‐Lorente,
 &
 De
 Burgos‐Jimenez,
 2004).
 
 This
 leads
 to
 the
 perception
 that
 it
 does
 not
 cause
 gross
 environmental
pollution
or
degradation.

However,
if
the
impacts
that
all
the
small
individual
 operations
 bring
 are
 added
 together,
 then
 the
 hotel
 does
 have
 a
 significant
 effect
 in
 resource
 depletion
 and
 pollution
 contribution
 (Kirk,
 1995).
 
 Despite
 knowing
 this,
 the
 perception
 that
 it
 does
 otherwise
 still
 remains,
 leading
 to
 a
 lack
 of
 legislation
 made
 specifically
 for
 the
 industry,
 paving
 way
 for
 the
 trend
 of
 the
 voluntary
 nature
 of
 environmental
management
in
the
hotel
industry
(Carmona‐Moreno,
Cespedes‐Lorente,
&


De
Burgos‐Jimenez,
2004).



All
activities
that
have
environmental
impact
should
be
covered
by
a
hotel’s
environmental
 management
 program
 to
 reduce
 the
 hotel’s
 environmental
 impact
 (Carmona‐Moreno,


in
 environmental
 issues
 that
 relate
 to
 waste
 management
 &
 recycling,
 energy
 and
 water
 conservation,
 building
 permits,
 legislation
 &
 regulations
 compliance,
 purchasing
 and
 environmental
education
(Hsieh,
2012).





The
International
Hotels
Initiative
(1996)
states
that
having
a
clear
environmental
policy
is
 one
of
the
elements
of
an
environmental
program
(Hsieh,
2012).

The
policy
will
be
guided
 by
a
competitive
environmental
strategy,
which
will
be
determined
by
different
actors
and
 factors.

The
main
actor
in
the
case
of
a
hotel
is
the
hotels’
group
of
managers,
usually
made
 up
of
the
general
manager
and
middle
managers.
The
managers’
views
and
opinions
are
very
 important
in
making
environmental
decisions
and
this
will
be
discussed
further
in
the
next
 section.
Following
this
will
be
an
investigation
of
the
factors
and
stakeholders
that
affect
the
 managers’
decisions
on
utilizing
environmental
management
to
bring
competitive
advantage
 to
the
firm.



2.2.1 Managers’
roles
in
strategy
decisions



According
 to
 studies,
 a
 positive
 relationship
 exists
 between
 management’s
 perceptions
 of
 environmental
 issues
 as
 opportunities
 and
 the
 adoption
 of
 proactive
 environmental
 strategies.

Managers
accountable
for
the
company’s
commitment
to
the
environment
have
 opportunities
 to
 influence
 the
 organization’s
 level
 of
 commitment.
 
 Their
 interpretations,
 preferences
 or
 decisions
 help
 them
 make
 their
 decisions,
 which
 also
 depend
 on
 the
 possibility
of
gaining
competitive
advantage
associated
with
environmental
actions
(Lopez‐

Gamero,
Molina‐Azorin,
&
Claver‐Cortes,
2010).


The
 passive
 accommodating
 or
 proactive
 environmental
 attitude
 of
 managers
 determines
 what
resources
will
be
needed
for
a
firm’s
environmental
behavior.

If
the
managers
have
a
 passive
 attitude,
 then
 end‐of‐pipe
 technologies
 are
 usually
 adopted.
 
 Proactive
 managers
 would
 require
 a
 shift
 to
 using
 proactive
 technologies
 that
 would
 reduce
 pollution
 to
 a
 greater
 extent
 or
 would
 completely
 remove
 it.
 
 Shifting
 from
 a
 reactive
 to
 a
 proactive
 approach
would
require
substantial
resource
allocation
and
investments
in
terms
of
green
 products,
green
technologies,
employee
skills
and
a
restructuring
of
the
strategic
planning
 process
(Lopez‐Gamero,
Molina‐Azorin,
&
Claver‐Cortes,
2010).


The
 general
 manager
 is
 the
 main
 person
 in
 charge
 of
 the
 whole
 hotel
 and
 he
 ultimately
 decides
on
strategies
to
be
adopted
by
hotel.

However,
it
is
the
department
managers
that
 mainly
handle
the
planning
and
implementation
process,
thus
their
suggestions
shape
the
 general
manager’s
decision.

The
department
managers’
perceptions
on
factors
and
actors
 affecting
 decisions
 on
 an
 environmental
 management
 are
 important
 because
 it
 directly
 influences
 their
 suggestions
 to
 the
 general
 manager
 in
 terms
 of
 selecting
 a
 competitive
 environmental
strategy
for
the
hotel.


2.2.2 Factors
 influencing
 managers’
 decisions
 on
 the
 choice
 of
 an
 environmental
strategy


The
department
managers
mainly
influence
the
decision
of
the
general
manager.

However,
 their
suggestions
from
their
individual
units
of
responsibility
are
also
taken
into
account
in
 planning
the
hotel’s
environmental
program.

The
following
factors
influence
the
managers’


perceptions
 on
 the
 different
 environmental
 strategies
 for
 the
 hotel.
 
 The
 managers’


perceptions
in
turn
influence
the
general
manager’s
ultimate
choice
of
strategy.




The
section
below
discusses
how
the
factors
and
its
current
conditions
shape
the
managers’


perceptions
on
environmental
management
and
decisions
on
a
competitive
environmental
 strategy.



• Environmental
Legislation


Environmental
 legislation
 has
 been
 the
 main
 driving
 force
 behind
 managerial
 perceptions
 and
 a
 positive
 relationship
 between
 this
 and
 according
 to
 Rivera
 and
 Molero,
 managerial
 perception
can
help
design
environmental
management
as
an
opportunity
(Lopez‐Gamero,
 Molina‐Azorin,
&
Claver‐Cortes,
2010).

Studies
have
shown
that
environmental
legislation
 for
hotels
is
usually
scarce
and
unclear,
making
it
more
difficult
to
comply,
possibly
leading
 managers
to
choose
inaction
(Shrivastava,
1995).




• Resources
and
capabilities


Resources
 and
 capabilities
 owned
 by
 the
 firm
 influence
 managers’
 perception
 of
 environmental
responsibility.
The
resources
and
capabilities
that
the
firm
owns
are
usually
 readily
 available
 and
 can
 bring
 costs
 down,
 thereby
 facilitating
 the
 adoption
 of


environmental
 efforts.
 
 What
 the
 firms
 have
 and
 what
 its
 capabilities
 are
 in
 terms
 of
 investments
 and
 implementing
 a
 system
 help
 set
 limitations
 in
 its
 decisions
 on
 what
 environmental
 strategy
 it
 can
 pursue.
 Thus,
 it
 is
 important
 to
 determine
 what
 are
 the
 resources
available
for
the
firm’s
use
for
its
environmental
efforts
(Lopez‐Gamero,
Molina‐

Azorin,
&
Claver‐Cortes,
2010).


Moreover,
the
firms’
capabilities
in
terms
of
experience
can
make
the
process
of
adopting
an
 environmental
 management
 program
 in
 a
 more
 efficient
 manner
 (Lopez‐Gamero,
 Molina‐

Azorin,
 &
 Claver‐Cortes,
 2010).
 
 A
 lack
 in
 education
 may
 hinder
 the
 implementation
 of
 environmental
practices
and
having
a
systemized
measurement
and
documentation
of
utility
 consumption
rates
and
costs
(Scanlon,
2007).


• Facilitators/Perceived
opportunities


There
are
a
number
of
factors
that
are
perceived
to
bring
in
competitive
advantage.

These
 include
 improvements
 of
 company
 image,
 delivery
 of
 specific
 service,
 cost
 savings
 in
 the
 medium/long
 term,
 better
 relationship
 with
 public
 authorities,
 increasing
 staff
 motivation
 and
compliance
with
legal
requirements
(Ayuso,
2006).

These
differences
are
brought
about
 by
 cost
 saving
 through
 cost‐reduction
 measures,
 additional
 revenue
 through
 lower
 costs.


Moreover,
influencing
suppliers
to
deliver
supplies
of
high
quality
would
strengthen
supplier
 ties.

Quality
improvement
results
from
reinforcing
total
quality
management,
leading
the
 company
 to
 have
 a
 competitive
 edge
 and
 reduced
 liabilities
 in
 long‐term
 issues
 such
 as
 environmental
and
social
challenges
(Shrivastava,
1995).



In
support
of
this,
a
study
by
Lee,
et
al.
entitled
“Understanding
how
consumers
view
green
 hotels:
how
a
hotel’s
green
image
can
influence
behavioral
intentions”
shows
that
a
hotel’s
 green
image
can
influence
behavioral
intentions.

A
hotel
with
a
sound
sustainable
program
 and
 a
 good
 green
 image
 can
 reduce
 costs,
 appeal
 to
 investors,
 motivate
 employees
 and
 cultivate
guest
loyalty,
leading
to
a
greater
market
share.

This
is
based
on
the
premise
that
 in
today’s
society,
firms
are
judged
on
its
financial
outcomes
and
behavior
towards
society
 based
on
ethics,
social
accountability
and
socio‐economic
awareness.

This
is
also
driven
by
 the
increasing
education
on
global
warming
and
climate
change.

A
green
hotel
image
thus
 becomes
 a
 powerful
 tool
 in
 gaining
 market
 share
 and
 having
 a
 green
 positioning
 and
 philosophy
in
operations
can
help
attain
this
(Lee,
Hsu,
Han,
&
Kim,
2010).


• Barriers/Challenges



There
are
also
barriers
that
companies
face
in
implementing
an
environmental
management
 program.
 
 First
 is
 the
 cost,
 it
 is
 quite
 costly
 to
 invest
 in
 sustainability
 programs
 and
 this
 usually
discourages
managers
who
are
working
to
meet
short‐term
performance
goals.

In
 some
 settings,
 there
 is
 lack
 of
 know‐how
 and
 environmental
 information,
 wherein
 crucial
 information
is
not
available.

Then
there
is
always
a
resistance
to
change
the
procedures
and
 systems
that
the
company
has
been
used
to.

This
will
also
entail
changing
decision
routings,
 standard
procedures
and
cultural
habits
(Shrivastava,
1995).




External
barriers
also
exist
including
the
high
opportunity
cost
of
environmental
investment,
 limited
infrastructure
services,
the
rigidity
of
legislation
and
bureaucratic
complexity;
lack
of
 knowledge
 or
 difficulty
 understanding
 the
 legislation;
 and
 troubles
 derived
 from
 the
 competitive
pressures
(Lopez‐Gamero,
Molina‐Azorin,
&
Claver‐Cortes,
2010).


2.2.3 Actors
 (Stakeholders)
 influencing
 managers’
 decisions
 on
 the
 choice
of
an
environmental
strategy


In
addition
to
the
factors
discussed
above,
the
following
section
discusses
the
stakeholders
 or
 actors
 that
 are
 considered
 to
 influence
 the
 managers’
 perceptions
 on
 the
 different
 environmental
 strategies
 for
 the
 hotel.
 
 The
 section
 below
 discusses
 how
 the
 actors
 and
 their
current
opinions
and
demands
influence
the
managers’
perceptions
on
environmental
 efforts.



Stakeholders
influence
managers
by
either
pressure
or
cooperation.

The
stronger
pressure
 the
stakeholders
exert
on
the
company,
and
the
greater
the
cooperation
opportunities
with
 its
 stakeholders,
 the
 greater
 the
 positive
 impact
 on
 the
 managers’
 perception
 on
 the
 environment
as
a
competitive
opportunity.

The
influence
of
the
stakeholders
gives
way
for
 the
company
to
develop
collaborative
relationship
with
stakeholders
in
finding
solutions
for
 environmental
issues.


This
also
fosters
innovation
among
the
organizations
(Lopez‐Gamero,
 Molina‐Azorin,
&
Claver‐Cortes,
2010).





o Employees


Employees
are
the
main
players
of
environmental
sustainability
in
the
hotel.

According
to
 Green
Hotels
Association
(GHA)
founder
Patricia
Griffin,
"A
housekeeper
can
see
if
a
towel
 and
 sheet
 program
 is
 causing
 less
 wear
 and
 tear,
 or
 soap,
 water
 and
 labor
 savings,
 for
 example.
They
have
so
much
more
input
on
changes
that
can
be
made."
The
sustainability
 programs
 actually
 become
 a
 force
 that
 bonds
 management
 and
 the
 employees.



Empowering
employees
and
making
them
see
the
differences
are
encouraging
(Block,
1998).


Griffin
adds
that
educating
employees
is
very
important
in
conservation,
as
it
is
they
who
 make
all
the
investments
productive.

She
states
that
”You
can
spend
hundreds
of
thousands
 of
dollars
to
install
energy
efficient
lighting,
but
if
the
employees
aren't
educated
and
don't
 turn
them
off,
what
good
does
it
do?"
(Block,
1998).


How
the
employees
perceive
environmental
management
and
their
willingness
to
engage
in
 environmental
efforts
would
help
the
managers
gauge
the
level
of
readiness
and
capability
 of
the
employees
and
the
whole
hotel
in
taking
on
a
competitive
environmental
strategy.




o Suppliers


The
suppliers’
willingness
to
collaborate
with
the
company
is
essential
for
the
hotel
to
be
 able
to
have
a
sustainable
supply
chain.

It
is
important
to
know
if
the
suppliers’
attitudes
 and
opinions
on
environmental
policies
are
in
line
with
that
of
the
hotel.
Their
cooperation
 and
openness
to
adapting
to
the
hotel’s
environmental
standards
will
influence
managers’


perceptions
that
will
influence
the
general
manager’s
choice
of
strategy.




o Customers


The
 customers
 are
 the
 ones
 who
 bring
 in
 revenue
 to
 the
 business,
 thus
 their
 demands
 should
 be
 fulfilled.
 
 There
 has
 been
 a
 growing
 demand
 for
 green
 hotels
 among
 the
 customers.


This
trend
is
shown
in
the
results
of
a
US
Survey
by
Deloitte
wherein
95%
of
 respondents
 believe
 that
 the
 hotel
 industry
 should
 be
 taking
 green
 initiatives
 and
 38%
 of
 business
 travelers
 have
 tried
 to
 determine
 whether
 a
 hotel
 was
 green.
 Another
 study
 by
 Accor
shows
that
76%
of
hotel
guests
felt
sustainable
development
is
important
to
them.
It
 also
found
out
that
guests
have
high
expectations
for
hotels
to
have
efforts
in
the
areas
of
 water,
 energy,
 and
 waste.
 Of
 the
 7,000
 guests
 surveyed,
 51%
 of
 guests
 take
 a
 hotel’s