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 hasonly recently been acknowledged and implemented by most companies throughout the world. This is triggered by theneed for sustainability and created competitive advantage. CSR is originated from Western countries which have culturaland national differences from Eastern countries. In fact, the majority of empirical studies of CSR had been conducted inWestern countries. The generalization then becomes inappropriate. Thus, it is a must to study the diffusion of the localculture with CSR. CSR has increasingly received attention from hotel management as one of its marketing strategies fordealing with the fierce competition in the hotel industry. In addition, culture and tourism are regarded as one entitythat link to and influence each other. Part of Balinese culture is Tri Hita Karana which is widely accepted as a way oflife 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 theintegration of CSR and culture particularly in the hotel industry in Badung regency, Bali. The framework had beendrawn from previous research and needs to be validated utilizing quantitative research since the framework had beendeveloped using qualitative research. A Confirmatory Factor Analysis is a method used to test the validity of the factorsin the framework. The findings revealed that the factors in the framework are confirmed. The reasons for implementingCSR based on Tri Hita Karana are: (1) CSR as philanthropy; (2) CSR as risk management; and (3) CSR as valuecreation. These three are intended to build the company’s reputation and earn the trust from society, which in turn wouldincrease the company’s value in society. The CSR programs are the collaboration between hotel and stakeholders such ascustomers, 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.