Do ethical and sustainable practices matter?

Abstract

Purpose – The purpose of this study is to investigate the influences of Maignan et al.’s (1999) four-dimension model of corporate citizenship (based on economic, ethical, legal and discretionary responsibilities) on business performance in the hospitality sector. Design/methodology/approach – This study obtained its empirical evidence from international tourist hotels in Taiwan and applied structural equation modeling (SEM) analyses. Findings – The results show that ethical and sustainable practices of corporate citizenship have positive effects on employee affective organizational commitment, organizational innovation and customer loyalty, while affective organizational commitment, innovation and customer loyalty all have positive effects on business performance. Most important of all, bootstrap estimations based on SEM show that corporate citizenship has indirect positive effects on business performance through the mediating roles of affective organizational commitment, innovation and customer loyalty. Originality/value – While most prior studies were conducted in Western contexts, based on this work’s empirical investigation of international hotels in Taiwan, it is concluded that proactive corporate social responsibility strategies and practices, such as corporate citizenship, can ultimately increase the overall effectiveness of the hospitality industry in a Chinese context.