Corporate Social Responsibility: Banyan Tree Holdings Essay Sample

In today’s concern environment. a firm’s endurance is dependent on how it responds to its stakeholders ; CSR is a manner that response is communicated. This paper explores whether CSR is necessary for the endurance of Banyan Tree in today’s environment. We will measure the possible ways that CSR benefits the company and show that CSR is non necessary for Banyan Tree’s endurance but it does play a strategic function in constructing trade name equity along with a sustainable concern.


Corporate Social Responsibility ( CSR )

There are multiple readings of what CSR means. and while there is no set rule. we have defined CSR as the responsibility of a corporation to make wealth in ways that avoid injury to. protect. or heighten social assets for the intents of treatment.

Predominating attacks to CSR were disconnected from scheme such that it obscured many chances for companies to profit society. The mentality of CSR has changed since and modern concern organisations have started to integrate CSR. both internally and externally into their operations. taking to accomplish sustainable concern development. This development arose due to increasing governmental ordinances and social outlooks sing the operation of companies. therefore making a divergency in concern public presentation and outlooks. CSR facilitates concerns in contracting their performance-expectation spread.

In the modern concern environment. companies do non merely vie on monetary value and quality of service. they need to be cognizant that stakeholders are progressively spoting of how a house handles environmental and societal issues. Taking into consideration the performance-expectation spread. houses aim to explicate their CSR initiatives to run into stakeholders’ outlooks. Typically. CSR is viewed as a cost to the company. but it can besides be a beginning of chance and competitory advantage that is indispensable for the company’s success in today’s progressively competitory industry.

Survival refers to the province of go oning to be. while sustainable development refers to development that meets the demands of the present without compromising the ability of future coevalss to run into their ain demands. CSR is the application of sustainable development to the activities and attach toing duties of concerns.

CSR Model
Figure1. CSR Model

This CSR theoretical account will be the model used to measure Banyan Tree’s CSR initiatives. It is based on 3 wide facets of Environment. Society and Economy.

The economic facet is attributable to the apprehension of the direct touchable impact on the company and its relevant stakeholders. The societal facet mostly refers to the social impacts the company’s enterprises have on their employees and the community. The environmental facet is to analyze the impacts of CSR on the natural environment Efficaciously overlapping the three facets will guarantee the accomplishment of sustainable concern development through CSR.

Banyan Tree and CSR

Banyan Tree Holdings ( BT ) was started in the 1980s after the laminitiss Ho Kwon Ping and Claire Chiang took over Bang Tao Bay. an derelict Sn mine. and transformed a extremely contaminated site into a wildlife oasis. Mr. Ho believes that the more flush public have a duty to utilize the agencies available to them to lend to the economic development and improvement of people’s supports in topographic points that need betterment. BT was founded with the nucleus value of driving sustainable development ; their strong belief in sustainable development and committedness to CSR is tangible as it continues to accomplish extended success in the cordial reception industry. This value rests on a ternary bottom line of economic system. society and the environment. Mr. Ho attributes BT’s success to strategic trade name edifice. dexterously executed with CSR.

BT purposes to accomplish success in concern that is grounded in good direction patterns every bit good as excellence in corporate duty. BT is greatly influenced by its founders’ vision of a successful corporation that creates meaningful benefits for society. Changing in their natures and grades of influence. BT is cognizant of their assorted stakeholders concerns and addresses them consequently.

Banyan Tree Holdings has been a publically listed company since 2006. Their concern theoretical account includes hotel investing. hotel direction. spa operations. gallery operations. hotel abodes. belongings gross revenues. design and other services. and existent estate cordial reception financess. For the intent of treatment. this paper will concentrate specifically on BT’s resorts in the Maldives. and their two chief CSR enterprises – Embracing the Environment and Empowering People. We will analyse BT’s CSR attack to concern. a possible beginning of its border. how it might impact its endurance and guaranting sustainable development in today’s environment.

CSR Initiative 1: Embracing the Environment


Over the last decennary. the impression of eco-tourism has swept the Earth ; flush travelers are progressively demanding a green experience with 74. 5 % stating that a hotels environmental policies influence their determination to remain at that place. Adopting environmentally friendly attacks to CSR keeps BT competitory as they deal with increasing operating costs. BT has besides established its purpose in guaranting environmental sustainability. The farness of the Maldivian resort besides means there are recognizable resource restraints that Embracing the Environment can relieve. Some enterprises that BT has undertaken are the frequent coral clean ups. turtle protection attempts. rigorous waste disposal methods. and their group-wide enterprise. Greening Communities.


In 2007. Banyan Tree launched a group broad attempt to supervise and consistently cut down the C emanations from its resorts. Much of their attempts is internally focused. and has led to cut down energy and H2O ingestion by each resort and enhanced waste direction patterns. BT has ensured the wellness and safety of workers who live and work on the Maldivian resort by using rigorous waste disposal methods every bit good as curtailing the usage of chemical merchandises for cleansing. This ensures that resort employees are non subjected to taint of their imbibing H2O and life environment.

While there may be some cost nest eggs in relation to the lower energy and H2O ingestion. it is non important adequate to state that this benefits BT’s underside line. We feel that these enterprises do non give BT a distinguishable competitory advantage over their rivals in the Maldives as resorts in the luxury market section compete based on invitee experience and client trueness.

We do observe that CSR may hold other effects in keeping the repose and clean environment of the resort every bit good as other wellness related effects on invitees and employees. Furthermore. committedness from employees has a direct correlativity to a company’s position on corporate citizenship. albeit a alone and little part to overall occupation satisfaction. BT has acted on their belief of environmental duty through Community Clean Up Days. BT’s associates conduct beach and habitat clean ups to guarantee the natural environment is preserved in its most pristine status. Via the Greening Communities plan. locals and invitees are invited to works two 1000 trees at each resort yearly. Through such enterprises. BT hopes to make out to the community to leave the importance of environmental consciousness and the jeopardies of environmental devastation.

Admiting the impact of constructing a resort in an country with a finely balanced biodiversity that can be disrupted through improper development. BT has engaged a squad of Marine life scientists to analyze marine life and work on reef-building undertakings such as the Necklace and Barnacle undertakings at Angsana Ihuru. a BT resort on Maldives and at their Maldives Marine Conservation Lab.

Similar to Greening Communities. the abovementioned enterprises may so fancify the surrounding environment and assistance in the development and preservation of marine life but they do non profit BT’s net incomes straight. In fact the most immediate donees are the frogmans who are able to appreciate the marine life underwater.


Embracing the Environment is BT’s manner of showing its Corporate Citizenship doctrine with respects to the environment. These attempts benefit the economic system. society and the environment. but we are dubious if they can help in the endurance of the house in a meaningful manner.

These enterprises affect the environment straight by maintaining it clean every bit good as to better on its current province. Society is better off by holding less contaminated Waterss and an consciousness of the importance the environment holds for their economic system.

By leting invitees to take part in their turtle undertakings. where babe polo-necks are released into the wild after hatching. BT enhances the invitee experience and strategically purchases on CSR to impact bottom line and client trueness. We suggest that BT can farther deduce economic value from the effects of its CSR by integrating enterprises. such as coral clean ups. into scuba diving classs and submerged Tourss to its bevy of invitee services. However. it is of import to observe that pecuniary nest eggs from increased operational efficiencies does non lend significantly to bottom line.

CSR develops societal value for BT as it enables a closer relationship with the community. nevertheless its consequence on survivability is non readily seen. On a deeper analysis. one could detect that the trees do so fancify the environment of the resort but its impact is improbable to be important in a manner that travelers are drawn to them over rivals. BT’s enterprises are geared towards making an informal societal contract with the community and guaranting sustainability in footings of pulling and retaining employees.

In decision. although this CSR attempt is straight in line with BT’s nucleus doctrines. it does non supply touchable benefits for the house. While non indispensable to the endurance of the company. it is indispensable for the sustainable development of the house as it maintains the environment for future coevalss. However. if BT is able to strategically integrate these enterprises into their operations. there might be greater economic benefits. switching from a sustainable natural and reinforced environment theoretical account to a sustainable concern theoretical account.

Figure 2. CSR Model for Embracing the Environment

CSR Initiative 2: Empowering Peoples


An economic expert and a sociologist severally. the laminitiss of BT. Ho Kwon Ping and Claire Chiang. seek to be an agent of societal and economic development through responsible touristry. This subdivision of CSR is seen to be in line with BT’s ternary bottom line of economic system. society. and environment and is grounded in their initiation values of making long-run value for multiple stakeholders. Lending to the authorization of people has been an digesting cause of BT. guaranting that people who require the most help have it. Acknowledging the demand in the community. BT has initiated assorted steps such as their Banyan Tree Galleries and Seedlings undertakings among others.


Incorporated in 1994. the Banyan Tree Gallery ( BTG ) is a retail arm of BT that is committed to back uping autochthonal prowess supports of small town craftsmans. Based on the vision of continuing and advancing traditional trade accomplishments from the local communities. BTG provides a planetary selling platform and gross revenues web for locals to sell their handcrafts. conserving the community heritage and sustaining support through paid employment.

This CSR is alone as BTG is a for-profit endeavor that is besides able to accomplish societal ends. Its lending gross in 2007 was S $ 10. 7 million. While that is a important sum. it is to be noted that most of the Gallery’s gross revenues are a consequence of increased hotel tenancy and higher dealing volumes. Therefore. we infer that gross revenues are finally dependent on BT’s ability to pull in tourers who are able and willing to pass.

Though this inaugural benefits the community and Banyan Tree financially. it would be assumptive to claim that it is necessary for endurance. BT’s chief draw will still be its alone invitee experience. In add-on. we question whether BT remunerates these craftsmans equitably as they could be working the labour of the locals by paying low rewards and blow uping the monetary values of their merchandises through cause selling to accomplish such consequences.

In 2007. BT launched the group broad enterprise. Seedlings. It adopts a holistic attack for fostering immature people at hazard of social exclusion by supplying them with the motive and agencies for finishing their instruction. and thenceforth successfully come ining the labour force. BT views Seedlings as a manner of supplying fiscal and societal development.

It is of import to observe that with merely 55 mentees and 13 take parting hotels as of 2011. there is small impact on turnover and moreover. bottom line. Although a respectable enterprise that contributes towards BT’s trade name image as a responsible concern. Seedlings is limited in range and range. We view this CSR as a strategic inaugural BT uses to advance its image of being socially witting.


This scope of CSR enterprises are in line with BT’s CSR vision of driving sustainable development in the Maldives. BTG and Seedlings benefits BT’s net incomes and society in meaningful ways. However they are limited in range towards environmental impact.

BTG’s part to BT’s gross is non indispensable for their endurance as the grosss from the Gallery gross revenues do non significantly affect their overall net income. BT’s core beginning of gross would still be its hotel investings. Though it is a strategic enterprise. it has minimum impact on BT’s operations and it contributes more in footings of hiking its repute as a responsible concern.

We perceive that BTG uses signifiers of cause selling to increase their trade name value every bit good as to make out to the socially witting. These attempts may bring forth some signifier of intangible benefits for BT. Lending to the community by supplying employment and educational chances. could assist increase BT’s trade name value and perchance beef uping consumer trueness Furthermore. implementing CSR enterprises may besides assist to pull and retain employees as the repute of employers is going important in this modern universe.

In decision. BT has recognized that it can assist the community environing the resorts and have undertaken several enterprises in this country in hopes of helping the community at big. CSR enterprises are non merely about philanthropic gift but interpreting these thoughts into practical concern schemes. BTG is so model of this doctrine. However. the acceptance of such enterprises is besides in hopes of run intoing the demands of stakeholders and in portion. impacting bottom line. Nevertheless. BT’s part to the society and economic system is of import in its strive for sustainable concern development.

Figure 3. CSR Model for Empowering Peoples


For this study. we have limited our analysis of BT’s CSR initiatives to the hotel direction division and gallery operations. specifically CSR in the Maldives. While an in deepness research and analysis of all of BT’s CSR enterprises could hold given us a more holistic position of its public presentation. we could non make so due to infinite restraints. Despite carry oning an interview with the Coordinating Director of CSR for Banyan Tree Global Foundation. there still lies a job with imperfect information. The representative could hold withheld certain information in order to advance his sentiment of how BT’s CSR is received in the community.

Second. we could non efficaciously quantify the intangible benefits that BT may acquire with the project of their CSR enterprises. As such. we have limited range in the impact towards stakeholders.


Given the positive responses from BT’s assorted stakeholders. BT has so put in much idea in implanting CSR into their resort operations. Incorporation of CSR enhances BT’s sustainability but presently has limited impact on endurance at nowadays.

BT’s prevailing attacks are aligned with its CSR vision. but there is room for betterment. Greening Communities can be bettered by implementing a system to followup on participants. This system will supply them extra ways to protect the environment. guaranting that it will be a sustainable attempt and non a one-off activity.

At present. CSR is non indispensable for BT’s endurance since it has limited impact on the basic map of the concern. Traveling frontward. BT should farther weave CSR into corporate scheme as we find CSR is non merely a craze but is to be taken earnestly by concerns. Making more holistic CSR patterns that aid in the sustainability of the company will enable BT to react more efficaciously to unexpected challenges and chances. giving them a farther border over their rivals. Additionally. this besides aids in contracting the performance-expectation spread.

We do observe that BT’s CSR enterprises are a factor in their trade name creative activity scheme. Having a strong trade name in western consumer markets can be a important competitory border and would help in their endurance over the long tally.

Our group feels that BT have taken a immense measure in run intoing stakeholders’ involvement by collaborating with other rivals by prosecuting in CSR enterprises and new undertakings. Having a separate entity for CSR helps to get the better of the barriers in working with other companies. This is a make bolding enterprise and it is perchance the hereafter of CSR. It besides has huge part to BT’s stigmatization as a responsible concern non merely with their stakeholders. but besides its rivals.

In the concluding analysis. sustainability issues are altering daily and companies need to set with the unstable nature of the market in order to last. BT has already built a strong trade name to guarantee sustainability ; it now needs to integrate touchable economic benefits to the house to guarantee survivability. As the CSR theoretical account suggests. the convergence of economic. societal and environment will enable BT to accomplish sustainable development and guarantee their survivability in the hereafter. Ending off with a quotation mark by a concern led think-tank ‘Tomorrow’s Company’ . “The function of modern concern: To supply of all time better goods and services in a manner that is profitable. ethical and respects the environment. persons and the communities in which it operates. ” This leads us to see the modern concern as one that engages its stakeholders meaningfully and collaborates with authorities and society in accomplishing sustainable concern development.

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