Management Chapter 3 1 Teaching Note The Carlson Company And Protecting Children The Global Tourism Industry

TEACHING NOTE:

THE CARLSON COMPANY AND PROTECTING CHILDREN

IN THE GLOBAL TOURISM INDUSTRY

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This case illustrates the following themes and concepts discussed in the chapters listed:

Theme/Concept Chapter

Stakeholder theory; stakeholder analysis 1

Corporate social responsibility 3

NGOs/Activist 4

Methods of ethical reasoning; human rights 5

Global corporate citizenship; codes of conduct 6

Community relations 18

Public Relations/Media 19

Case Synopsis:

This case describes a dilemma facing Marilyn Carlson Nelson, CEO of the Carlson Company, a

leader in the international travel and hospitality industry. Carlson, which has adopted a global

code of conduct aimed at protecting children from sexual exploitation in the global tourist trade,

must decide whether or not to develop a potentially lucrative resort complex in Costa Rica, a

Central American nation known for child trafficking. Can the company move forward, while

honoring its commitments to the code of conduct and to global human rights?

Summary of Discussion Questions

1) Why did the Carlson Company sign the Code of Conduct for the Protection of

Children from Sexual Exploitation in Travel and Tourism? Do you agree with the

company’s decision, and why or why not?

2) What are the advantages and disadvantages to the Carlson Company of developing

the hotel complex in Costa Rica?

3) What stakeholders would be affected by a decision to develop the hotel complex in

Costa Rica, and how would they be affected? What are their interests and sources

of power in this situation?

4) Would developing the hotel complex in Costa Rica be ethical, or not? Why do you

think so?

5) If the Carlson Company decides to proceed with the hotel development, what steps

can it take to assure that the company remains in compliance with the code of

conduct it has signed?

Discussion Questions and Answers

1) Why did the Carlson Company sign the Code of Conduct for the Protection of

Children from Sexual Exploitation in Travel and Tourism? Do you agree with the

company’s decision, and why or why not?

2) What are the advantages and disadvantages to the Carlson Company of developing

the hotel complex in Costa Rica?

3) What stakeholders would be affected by a decision to develop the hotel complex in

Costa Rica, and how would they be affected? What are their interests and sources

of power in this situation?

The instructor may wish to develop a table on the board, showing the relevant market and

nonmarket stakeholders, their interests, and their sources of power, as follows:

Sample cells are filled in, to illustrate.

STAKEHOLDER

INTEREST

POWER

Carlson employees

Jobs; professional development

Authority to prohibit sex

trafficking in the hotel property

Carlson senior executives and

board of directors

To promote profitable

development; to meet public

commitments, e.g., to the Code

Authority to make decision to

develop the property

Victims of sex trafficking

To escape from trafficking;

economic and educational

opportunity.

Low power

Sex traffickers

To promote their business

interests

To go elsewhere

Sex tourists

To operate without legal

constraint

To go elsewhere

Ordinary tourists

To vacation without exposure

to sex trafficking

To go elsewhere

Travel agencies

To bring in travel business

To refer business to other hotels

Other hotels in region

To compete effectively

—

Code monitors

To assure compliance with the

Code

To report publicly on failures of

compliance; bad publicity

NGOs addressing trafficking

To reduce the incidence of sex

trafficking; to promote the Code

To report publicly on failures of

compliance; bad publicity

Local politicians

To enhance tax revenue from

the tourism industry; to

maintain a positive reputation

as a tourist destination

To provide permits

Local law enforcement

To enforce local laws

Legitimate legal authority

Republic of Costa Rica

To maintain a good reputation

as a tourist destination; to

enhance tax revenue; to

promote business development

Legitimate legal authority

The stakeholder analysis reveals that the board and senior executives are likely to have a strong

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4) Would developing the hotel complex in Costa Rica be ethical, or not? Why do you

think so?

Instructor tip: This questions provides an opportunity to apply the four methods of

TEACHING TIP: VIRTUE ETHICS

The textbook defines virtue ethics as follows:

[Virtue ethics] focuses on character traits that a good person should possess, theorizing that

moral values will direct the person toward good behavior. Virtue ethics is based on a way of

being and on valuable characteristics rather than on rules for correct behavior…. [Most]

If Carlson develops the hotel complex and effectively enforces the Code there, its reputation as a

responsible and “virtuous” corporation will be enhanced. On the other hand, if the sexual

TEACHING TIP: UTILITARIANISM

The textbook defines utilitarianism as follows:

[Utilitarian reasoning] emphasizes utility, or the overall amount of good that can be produced

by an action or a decision… It is often referred to as cost–benefit analysis because it compares

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TEACHING TIP: RIGHTS

The textbook defines rights as follows:

Human rights are another basis for making ethical judgments. A right means that a person or

group is entitled to something or is entitled to be treated in a certain way… The most basic

If Carlson develops the hotel complex and effectively enforces the Code there, no rights will be

violated. On the other hand, if the sexual exploitation of children occurs on the property, the

basic human rights of these children will have been badly violated.

TEACHING TIP: JUSTICE AND FAIRNESS

The textbook defines justice and fairness as follows:

Justice, or fairness, exists when benefits and burdens are distributed equitably and according to

some accepted rule. For society as a whole, social justice means that a society’s income and

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5) If the Carlson Company decides to proceed with the hotel development, what steps

can it take to assure that the company remains in compliance with the code of

conduct it has signed?

Whether or not the company can remain in compliance with the Code in Costa Rica

depends to a large extent on the local employees who must manage the hotel and enforce

Students may offer the following suggestions about steps Carlson can take to assure

compliance:

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Epilogue:

Carlson Company eventually decided to develop its Regent Hotels & Resorts, Carlson’s

luxury brand, in Papagayo, Costa Rica to provide higher-end accommodations to clients than

was available through its Radisson brand. The decision to complete the project offered Carlson

the opportunity to expand its luxury chain into a lucrative and growing Central American market.

Management agreed that it was Carlson’s obligation to go forward and recognize that the

expansion of the Regent brand into the Papagayo region was a problem that could be “managed

and solved over time.” From an operational and social responsibility perspective, management

believed it was doing more for the tourist industry by “entering into this environment and

proving it could run a hotel in a legitimate fashion.”