Introduction
Risk management is a process that assists businesses in detecting, monitoring, evaluating, assessing, and managing unanticipated business incidences by providing a consistent framework. This technique has been discovered to be helpful by disaster management groups worldwide. Nature and human social life, tourism, entertainment, and events, are all impacted by undesirable events. The concept of risk management should be used by organizations in the tourism industry, destination countries, corporations, and institutions. Risk management and business strategy are two of the most critical parts of the success of the hospitality industry (Camilleri, 2017). The primary drivers of this trend, which is projected to continue, include strong sensitivity to both external and internal elements and a desire for a significant competitive edge and business stability. When designing a business plan, it is common for these companies to shift their focus from emergency response to risk analysis and assessment.
Risk management entails identifying and analyzing potential hazards and taking the required procedures to mitigate their impact. This analytical essay conducts a critical analysis of risk management’s legal, ethical, and sustainable environmental components. Each dimension’s significance is demonstrated, and examples from the plane crash incident in the case study are utilized to highlight each one. Because it comprises various lodging, event planning, and tourism, every example of the hospitality sector can access the measure in a unique context (Seele, 2017). Finally, the essay summarizes the key points of the discussion and discusses the implications for travel and tourism in the future. Every stage of the risk management process needs communication and consultation as essential components. Establishing and maintaining internal and external communication processes and discussions involving stakeholders and decision-makers with different opinions in various domains.
Many ethical, legal and environmental factors go into risk management in the tourism, hospitality, and events industries. These topics are thoroughly examined in an analytical article. While rigorous risk management can help avoid crises, a lack of it can lead to misunderstandings and mismanagement (Stahl et al., 2020). Tourism organizations must consider the probability of adverse incidents disrupting ordinary operations when designing risk management plans. Risk management is a multi-step process involving internal and external contacts to establish rules and processes within and outside the organization.
Case Study
In a plane crash near Almaty, Kazakhstan, at least 15 persons were killed, and many more were injured. Authorities report that 66 persons were admitted to the hospital; several are in critical condition. Ninety-three passengers and five members of the crew were on board. After taking off from Almaty, Kazakhstan’s financial center, Bek Air’s Fokker 100 crashed on its way to the capital city of Nur-Sultan. According to Kazakhstan’s Civil Aviation Committee, the jet crashed into a two-story building after bursting through a concrete fence before takeoff. It was unclear what had caused the catastrophe (Abc.net.au, 2019). There is video evidence of a jet landing near the house being shattered into two pieces. Due to flight cancellations, the likelihood of future tragedies has been eliminated, harming the tourist and hospitality businesses (Wijethilake & Lama, 2019). The significant repercussions of these different aspects show us that risk management includes many components and challenges that arise at various phases.
Legal Dimension of Risk Management
In the legal context, the airline is deemed to have violated legal provisions by not carrying out comprehensive investigations to determine the causes of the plane crash. It did not have rules in place to spell out the course of action in the events of the accident and catastrophic occurrences. The owners or custodians of the story buildings, together with the families and relatives of the affected parties, could sue the airline company for the damages caused by the crash. It can be argued that the safety of the story building premises was significantly compromised. Taking legal responsibility for an act, omission, or conduct that causes harm to someone else without paying the victim is a significant risk management concern. The bankruptcy of the production company of the plane involved in the crash could be used as an avenue to put forward claims of negligence and failure to address continued routine maintenance improvement. Workers in the hotel and hospitality sector must be aware that they are responsible for their acts and those of others over which they have no control.
An instance is when one puts together a theme park event for parents and young children. As a result, one must act to discover who was responsible for the accident. For example, due diligence is an issue in risk management in the tourism industry. An unbreakable link forms between the hotel, its guests, and the tour guides and participants (Xie et al., 2022). If the parties involved are not addressed, and there is a foreseeable risk of disaster, it is regarded as taking preventative measures; otherwise, it is understood as executing remedial activities. A duty of care violation occurs when a person or organization behaves unreasonably and fails to provide services or products that meet the established standards and expectations.
An instance is when a contractor neglect to fix a leaky gas pipe while working on structural renovations at a hotel; the property is harmed. A gas pipeline leak is an obvious example of the dangers associated with hotel management (Silvius et al., 2017). As this incident shows, a hotel that a gas leak has damaged is immediately at risk of significant harm. However, even though the hotel may have an excellent cause to fix the gas leak, they will choose not to endanger guests and property. The hotel’s disregard for industry standards for due diligence will result in damage and even life-threatening situations.
Anyone who fails to act reasonably or does so in an unreasonable way is guilty of negligence. It can happen in situations where an average individual would have done the right thing. A person may file a negligence lawsuit against an organization if its safety policies fall short of established standards. Non-ethical business practices and the legal and ethical aspects of risk management are covered in depth in negligence. Those in the tourism, hotel and hospitality industry should adhere to the following rules and criteria to avoid being held responsible for facility damage or loss of life or property. The victims of negligence seek a monetary settlement in the travel and tourist business. To prevent negligence, the tourism and hotel industry must obtain safety certificates from suppliers and other contractors.
Ethical Dimension of Risk Management
In an ethical view, the airline company, Bek air, compromised the codes by allowing flight operations from Almaty to go on without looking into the root of the matter and what caused the airplane crash. It can be seen as disregarding concern and violating common sense and safety, fundamental human behavior. It involves honesty, caution, openness to others’ perspectives and feelings, fairness, dignity, avoidance of suffering, and kindness. The flight company’s refusal to comment can be attributed to a lack of honesty and transparency. There was a timely need to provide an extensive and comprehensive report of mitigation strategies to avoid future incidences of a similar nature. Relevant information should be provided to allow for proper and appropriate precautionary practices, with ethics serving as guidelines for how individuals and organizations behave. It also includes an appropriate forwarding technology in the bundle. Administrative and human management systems based on resource management will synergize if the basics outlined above are implemented. Consider the following scenario: a corporation does not follow a code of ethics or adhere to established regulations in its operations. As a result, the firm will meet substantial issues, including the potential of weakening moral values such as honesty and responsibility.
Business ethics develops a moral philosophy for firms in the hospitality industry by subscribing to society’s values, conventions, and practices. It also raises worries about its stakeholders, such as its employees, customers, and suppliers. At this level of danger, the “ethical gap” determines the difference between prominent and low-cost threats. When the acceptable risk is less than the detection risk, it is impossible to establish whether the risk is acceptable or not. To close the gap between the bearable and detectable levels, the tolerated level of risk must be reduced to a perceptible level. Risk exposure and acceptance are independent ideas (Rostamzadeh et al., 2018). Because a person or organization is taking a risk when they are aware of it and prepared to deal with it. However, when we talk about risk exposure, we mean the behavior of a person or organization put in a position of heightened risk or harm owing to external causes or human behavior. Ethical principles demand and competent risk mitigation are necessary for sound risk management. The management of risks and the application of moral standards are closely linked.
Sustainability Dimension of Risk Management
In the sustainability dimension, the crash, the flight operations, and the tourism and hospitality sector are in an advanced manner. The damage caused to the building that was hit by the plane is another instance that affects the perception and attitude accorded to the comprehensive parties involved in air transport and tourism activities. It is customary to conceive sustainability as a one-time commitment rather than a continuous obligation for the hospitality industry. While risk management is not always an issue everyone can agree on, it does not have any distinctive characteristics because the other difficulties are concerned with the future; risk management does not (Vij, 2019). Because of the interconnection of environmental and social responsibility risk management challenges, unpredictability is a component of any business’s existence. The business will thrive if the motel has an ecologically conscious subculture and is aware of the dangers involved with its activities, although the business may sometimes struggle.
Different parts of sustainability have competing purposes, and sustainability aims to bring stability to these competing objectives within the framework. In the long run, the Corporation’s survival is reflected in its long-term sustainability plan (Silvestre et al., 2018). Risk management is an organization’s long-term strategy for capitalizing on a developing business potential when it comes to risk management. It is more effective to incorporate sustainability into risk management to improve control and monitoring. Hazard control is inspired by sustainability, which encompasses the economy, society, and the physical environment. It is possible to attain long-term success through improved management and procedures that are in place to provide a higher level of confidence, which eventually leads to the long-term viability of a company.
Previous thinking held that the cost and feasibility of the company’s long-term viability placed a specific weight and obligation on society as a whole, as did the company’s social and environmental responsibility, which has altered since then. It contributed to their incapacity to communicate to their supervisors about the defective quality or shape of their client interactions. As a result of this dissociation, the necessity of incorporating sustainability into catastrophe risk reduction became apparent when the full ramifications of this detachment were apparent. Companies become more excellent, sustainable, and resourceful due to the internalization of risk management principles, which is achieved via applying these concepts (Hogarth et al., 2018). The tourism organization should make the most of nonrenewable resources to the maximum extent possible to encourage environmentally-friendly practices throughout the business. It is critical to enhance and improve the current ecological practices as much as possible. While tourists are present, tourism operators should ensure that the medical history and biodiversity of the locations are protected as much as possible.
Conclusion
To sum up, risk management policies must be legally, ethically, and sustainably integrated to ensure the success and innovation of both internal and external stakeholders. Organizations in the hospitality industry are expected to adhere to ethical standards of character, diligence, and legislation imposed to regulate the industry. Having a well-thought-out plan for long-term viability is essential for any organization. Organizations must address risks and problems before they become disasters by implementing these three risk management principles. Maintaining a profitable travel and tourism business while safeguarding the interests of our stakeholders and the environment requires conducting business in the most ethical manner possible. Sustainable business can be conducted in both the host and home countries. Businesses must adjust to the shifting demands of the tourism industry and the places they serve. For stakeholder rights and interest protection, resources must be used in the most efficient, ethical, and legal manner possible. Concerning air travel, flight operations, and the tourism and hospitality industry, safety and security are of utmost importance.
References
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