Research in Action: Morality in Decision Making

By Kaitlin Dunn, Writer, Hospitality Sales & Marketing Association International (HSMAI)

At HSMAI’s ROC 2019 event in June, six college and university faculty members from hotel schools across the U.S. and Canada presented research in areas related to revenue optimization in the hospitality industry. During one of the presentations, Dr. Jeffrey Beck, associate professor in Michigan State University’s School of Hospitality Business, discussed his research on “The Role of Individual, Organizational, and Moral Intensity Factors on Revenue Manager Decision Making,” which focuses on how revenue optimization professionals respond to certain situations. The premise of this research, Beck said, was that “revenue managers and those responsible for the revenue management function are the most sensitive to ethical situations,” or that they are more attuned to recognizing situations and judging them as being ethical or unethical.

Background: Beck gave research participants — a mix of hospitality professionals — a series of scenarios that revenue managers may face and asked if they thought the situation described was an ethical problem, if the revenue professional should do the proposed action, and if the participant would do the proposed action if he or she were in the scenario. They were also asked about the harm caused by the action and if most revenue professionals would agree the action is wrong. Seventy-seven percent of those surveyed had a code of ethics in place at their properties, while 23 percent did not

Of the participants, 28.2 were on-property revenue professionals, 13 percent were regional or cluster revenue professionals, 2.28 percent were RM consultants, 7.8 percent were sales managers, 37 percent were owners or general managers, and 12 percent described themselves as “other.”

Scenarios: Beck presented to the ROC audience a few of the scenarios he gave to participants, including one involving a revenue professional who was asked by the general manager to instruct staff to quote a higher rate to guests who walk in without a reservation in the hopes of reaching the period’s revenue goal; if the guest resists, the staff will offer a reduced rate, still higher than the quoted rate on other channels. Sixty-eight percent of participants said that the situation was an ethical problem, 71 percent did not think the revenue manager should follow the GMs instructions, and 79 percent said they personally would not do what the GM instructed them to do. Thirty-three percent of participants thought the overall harm as a result of the action would be small, 50 percent disagreed thought the overall harm would not be small and 17 percent were neutral, while 68 percent believed that most revenue professionals would think the action was wrong, 19 percent said they did not believe most revenue professionals would think the action was wrong and 13 percent were neutral. Twenty-three percent believed the action would not cause any harm in the immediate future, 60 percent said the action would not cause any immediate harm and 17 percent were neutral.

Takeaways: According to Beck, prior research indicates that codes of ethics specific to revenue optimization impact ethical-situation recognition, judgement, and intention.

Categories: Revenue Management, Strategy
Insight Type: Articles