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review of the evolution of the CSR construct is one
of many authors who have described the develop-
ment of the relationship between business and soci-
ety (Lee (2008). He takes early formal endeavours to
explain this relationship back to the first half of the
20th century. The modern era of the social respon-
sibilities of business is argued to have occurred with
the publication of Bowen's (1953)
Social Responsi-
bilities of the Businessman
(Carroll, 1999). At this
time other definitions of CSR do not mention the
environment at all but focus on the broader concept
of social ends. This is understandable from a histor-
ical perspective where the environmental movement
was really only beginning to emerge with works
such as (Carson, 1962)
Silent Spring
and a decade
later Meadows, Meadows, Randers, and Behrens
(1972),
Limits to Growth
(Hussey & Thompson,
2000). It was only later, towards the end of the
20th century that distinctions between social and
environmental dimensions of responsibility were
formally voiced in, for example, Elkington's (1998)
now famous phrase of the triple bottom line of:
profit, people and planet (sometimes also referred
to as economic, social and environmental impacts).
Whereas the general discussions around the busi-
ness and society relationship have therefore had a
longer history of dealing with the impacts of busi-
ness on society, in tourism, due to the emergence
and pre-dominance of the concept of sustainable
tourism which itself arose out of the sustainable
development movement, the environmental dimen-
sion appears to have attracted more attention.
The above review serves to explain, at least in
part, why working conditions have not featured
as strongly as environmental concerns in tourism.
This is not to argue that working conditions have
been completely ignored as this is manifestly not
the case, demonstrated by the appeals from aca-
demics discussed above. And yet, if Baum (2007)
conclusions are valid then little has in fact changed
in the last 20-30 years when it comes to working
conditions in the sector. This lack of progress
relates however not just to employment practices
in tourism but also to the development of theory
amongst tourism scholars. Thus, whereas the
responsibility of business to its employees has
received some attention drawing on the related
concepts of CSR, social responsiveness, stake-
holder theory and so forth, we argue that these
discussions have remained marginal compared to
debates around sustainable tourism.
turmoil brought about by the 'get rich quick at any
costs' mentality that was seen to pervade the finan-
cial services sector, which has even be described as
psychopathic (Boddy, 2011). This left little space for
consideration of stakeholder needs beyond those
of shareholders and senior management. More
than twenty years after Freeman (2010) wrote his
seminal work on the stakeholder approach to busi-
ness, much of the business community seems to
have only paid lip-service to it. The suggestion that
businesses have responsibilities that extend beyond
satisfying the needs of owners and shareholders
can be found at the core of CSR (Carroll, 1999)
and is where stakeholder theory and CSR over-
lap. Indeed, the often-quoted rebuttal of CSR as
a concept that came from Friedman (1973) targets
precisely the extent of a company's responsibility,
arguing that first and foremost the firm is respon-
sible to its shareholders. The kernel of Friedman's
(1973) position is that managers (agents) are acting
irresponsibly if they do not act in the best inter-
est of the owners (principals). Any activity that
detracts from shareholder value, such as corpo-
rate philanthropy, or paying employees more than
necessary to retain them, is irresponsible (leaving
aside momentarily the business case considera-
tions often attributed to CSR). Traditional eco-
nomic theory suggests that once the firm has met
all its financial obligations any residual income, or
profits, go to the owners of the firm as recompense
for their assumption of financial risk.
Blair (1998) on the other hand contests the idea
that economic value equates solely to profits, i.e.
what is left to shareholders once all other finan-
cial obligations have been met. She would include
payments to employees as stakeholders of the firm
part of the firm's wealth creation. Wealth created
by the firm is the sum of profits and payments
to employees, not as traditionally viewed prof-
its where payments to employees are regarded as
a cost. This latter view will result in attempts to
reduce the 'wage bill' as the residual profits will
increase in line with a reduction in 'costs'.
To further substantiate the claim that wealth
creation includes payments to employees Blair
(1998) argues that risk inherent in business is also
carried by employees. If a business fails the employ-
ees are at risk of losing their jobs. They may not
have invested capital in the business, but they have
invested their labor, and developed firm-specific
human capital. This firm-specific human capital
allows them to command a wage premium, but if
they lose their jobs, they are likely to face a reduc-
tion in wages because, by definition, they cannot
take their firm-specific human capital with them.
Blair (1998) was however writing in a very gen-
eral, non-sector specific sense. One of the often-
cited characteristics of tourism employment is its
4
EMPLOYEES AS STAKEHOLDERS OF
THE TOURISM FIRM
Today, the nature of the business and society rela-
tionship is in the spotlight due to the economic
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