Validating a framework of the integration of Corporate Social Responsibility and Culture: The Case of Hotel Industry

Although Corporate Social Responsibility (hereafter CSR) concept has been introduced for decades, it has only recently been acknowledged and implemented by most companies throughout the world. This is triggered by the need for sustainability and created competitive advantage. CSR is originated from Western countries which have cultural and national differences from Eastern countries. In fact, the majority of empirical studies of CSR had been conducted in Western countries. The generalization then becomes inappropriate. Thus, it is a must to study the diffusion of the local culture with CSR. CSR has increasingly received attention from hotel management as one of its marketing strategies for dealing with the fierce competition in the hotel industry. In addition, culture and tourism are regarded as one entity that link to and influence each other. Part of Balinese culture is Tri Hita Karana which is widely accepted as a way of life to preserve a harmonious relationship between human with God (parahyangan), human with human (pawongan), and human with the environment (palemahan). Therefore, the purpose of this paper is to validate a framework of the integration of CSR and culture particularly in the hotel industry in Badung regency, Bali. The framework had been drawn from previous research and needs to be validated utilizing quantitative research since the framework had been developed using qualitative research. A Confirmatory Factor Analysis is a method used to test the validity of the factors in the framework. The findings revealed that the factors in the framework are confirmed. The reasons for implementing CSR based on Tri Hita Karana are: (1) CSR as philanthropy; (2) CSR as risk management; and (3) CSR as value creation. These three are intended to build the company’s reputation and earn the trust from society, which in turn would increase the company’s value in society. The CSR programs are the collaboration between hotel and stakeholders such as customers, shareholders, employees, partners, communities and organizations (e.g., educational institutions, associations, governments, foundations and NGOs). Hotel and stakeholders are in constant communication to improve their relationship.