The environmental management practices and their impacts on the hotels performance


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The environmental management practices and their impacts
on the hotels performance

Abdullah A.S Al

Ahliyya Amman University

Faculty of Administration & Financial Sciences

Department of Hotel Management & Tourism



Dr. Jihad Abu Ali

Ahliyya Amman University

Faculty of Administration & Financial Sciences

Department of Hotel Management & Tourism





day, many businesses seek to manage their firm’s management
impacts and performances by adopting Environmental Management
Practices (EMP).
The research present in this study is an attempt to fill
gap in current literature on environmental management practi
Because of the aforementioned research gap, it is vital that the
environmental attitudes and management actions of hotels and other
actors in the hospitality and tourism industry be examined. The scope of
the study will focus on the hotels industry.

This study is passed on the preliminary work of Klassen and
McLaughlin. It proposed a model of
Environmental Management

and performance, while EMP proposed as an independent
variable that proposed to be positively and significantly associated wit
hotels performance.

argued that
Environmental Management

is independent variable in the relationship with hotel

ne of our study

to explore the extent to which hotels
performance evolves with the deployment o
f more extensive
environmental management activities.
And was
attempted to investigate

the extent of environmental management practice EMP on 4 and 5 star
hotel industries.


, System, Practices
, Operation,

Tourism and

Hotels Performance.


This study is an attempt to fill the gap
n current literature on
management systems
practices. A review of current
literature reveals that it is mostly focused on the high level, strategic
sues of


environmental management


practices (EMP)
relating to sustainable development or descriptions and analyses of
specific environmental tools.


There is a limited amount of research, which is primarily focused, on

environmental man
agement practices


and on how these

hotel’s performance. We still do not know what
the sub
of EMPs

construct are. Few studies have been done
concerning the antecedent of env
ironmental management practices and
firms i

in other words, there is a lack in the literature concerning
how the EMP could be nurtured or developed. Many researchers suggest
that profitability is hurt by the higher production costs of environmental
management initiatives, while others cite

anecdotal evidence of increased
profitability [37], [44].

Environmental Management System (EMS) is a system that a company
implements in order to improve firms’ performance. Environmental
issues have become very important for businesses in recent

organizations are adopting the ISO 14000 Environmental Management
Standards. The hotel industry is one of the most promising industries,
which requires key strategies to contribute to the economic agenda of the
nation. One strategy of which has to be from
the standpoint of
Environmental Management Practices (EMP).


This research will investigate the Hotel Performance and Environmental
Management Practices determinants and consequences. The relationship
between EMP and hotel performa
nce would be conceptually examined.
Specifically, the effect of EMP on the hotel performance would be
investigated from the marketing, operational and organizational
perspectives. Overall, this study attempts to understand the
environmental management pra
ctices (EMP) that influence the


In reviewing the literature on the growing domain of environmental
business research, we identified three common features. Firstly, some
researchers focus on general level

tal management practices

in which EMP relate to decision making [35]. Secondly, articles tend to
focus on one or tools and technique [29]. Thirdly, many of the articles are
anecdotal or conceptual lacking the empirical emphasis [38]. However,
previous st
udies analyzed mainly the relationship between the financial
and the environmental management practices from the viewpoint of the
organization prov
iding services [25], [22], [13].

A review of literature on environmental management, focusing on the
hotel i
ndustry will be presented as well as factors that may influence
environmental management and the eventual relationship between them
and the hotel performance will be further explored. Research on hotels
industry evolves very
quickly [42], [26].

ntal Management Practices


This section begins with an identification of common environmental
management practices system and recent studies that assess the adoption
of these practices by manufacturing firms. The second part of this section
reviews re
search on how firms are integrating
management practices with their operations and whether there is a
positive relationship between adopting these practices and improving
profitability and performance.

The purpose of environmental manageme
nt system (EMS) is to develop,
implement, manage, coordinate and monitor corporate environmental
activities to achieve two goals; compliance and waste reduction. An
environmental management system is a systematic approach for
managing an organization’s env
ironmental issues and
opportunities [

Environmental Management Systems (EMS) is becoming increasingly
important to both national and multinational firms. Underlying its
emergence and acceptance is the premise that improved systems
associated with EMS c
an make achievement of strategic goals more
likely. Additionally, new standards such as ISO 14000 are predicted to
set a higher level of expected environmental performance worldwide,
facilitate trade and remove trade barriers [8].


To date, ISO 14000 stand
ards may be the best example of a structured
EMS. In other words these standards do not tell organizations what
environmental performance they must achieve aside from compliance
with environmental regulation. Instead the standards describe a "system"
will help an organization to achieve its own objectives and targets.
While many believe in the link between firm performance and EMS, the
question still remains; can EMS lead to enhanced profitability? There is a
clear need for empirical testing of this re
search question. Various studies
has surveyed and identified the adoption of environmental management
practices by different firms [10], [31]. Some of the studies especially
address environmental reporting practices and related issues. One study
reveals br
oad trends in the adoption of environmental management
practices among the firms studied, e.g. environmental audits, total quality
management, pollution prevention plans, environmental training, life
cycle analysis, appointment of an environmental manager,

research and
development, and environmental standards for suppliers [43]. Another
study deals with aggregate approaches to environmental business
practices such as sustainability and resource productivity. Hart (1997)
focuses on sustainable development an
d business opportunities related to
sustainability. Hart also discusses environmental strategies, such as
pollution prevention, product stewardship, and development of clean
technologies and sustainable development [17]. In a very influential and
sial article, Porter and van der Linde (1995) stress the idea of
resource productivity and innovation offsets [34].

Corbett and Van Wassenhove (1993) explored the issue of how a firm
should respond when confronted with an environmental issue. The
authors r
ecommend that a firm should pick a response that leads to a
corporate environmental behavior that best fits its long
term goals and is
consistent with its internal and external constraints. Their work does not
address the importance of operational environm
ental management
practices that firms often use [6]. Very few empirical studies have
focused on operational environmental practices. We review these studies
below and identify constructs and dimensions of EMP.


Operational Practices in Hotel

Hotels should

evaluate all potential EMS opportunities at the operational
practices and prepare action programs addressing the costs incurred and
the risks involved. The adoption of environmental operational practices
has been shown to benefit companies through lower o
perating costs,
increased revenue, and the more effective use of monetary and human
capital [30]. Operational practices taking the form of pollution prevention
and emission reduction being related to reduction, and efforts to turn
typical wastes into raw m
aterial related to reuse and recycling.
Furthermore, economic ways to abate pollution by detecting waste in
operating conditions, establishing material, energy, and water balances,
following legislative trends, and predicting future waste treatment costs
n the light of present expenses.

The hotel’s use of these operations management procedures constitutes a
strategic capability that may provide a sustainable competitive advantage
by reducing cost or differentiating the hotel’s services [22]. Developing
is capability usually takes a long time, since it is based on the hotel
employees’ acquisition of certain abilities, such as knowledge,
experience, co
ordination and skills with respect to both operations
management techniques, and the hotel operations and

delivery system
[16]. Some aspects of environmental protection become increasingly
important for operations management, and are perceived as a core
component of operations strategy [1], [18]. Klassen (1993) found that
operational practices are central to
a firm’s environmental management

Few studies relating to operational practices and firm’s environmental
strategy have been mainly concentrated on the more highly regulated
manufacturing sectors (e.g. the chemical and furniture industries
) [


summary, the existing EMP literature has a lack of empirical
emphasis, most studies are conceptual in nature, and there is a dearth of
comprehensive research exploring simultaneous operational practices. A
number of conceptual and anecdotal studies have u
ncovered EMPs in
specific industries with some studies focusing on waste reduction, some

on manufacturing and remanufacturing issues, and yet others on design,
or strategy.

Hotel Performance

Performance measurement has been identified as a key agent in a
attempts to manage industry change [2]. The design of hotel performance
system appropriate for modern industry is a topic of increasing concern
for both academics and practitioners. In addition to the challenges posed
by an increasingly competitive env
ironment, it has been recognized for
some time that hotel performance measurement systems need to enable
managers to effectively cope with organizations characterized by a
number of significant contingent features including, for example,
operations which d
emonstrate a relatively high fixed cost base. There is
apparent, however, a considerable degree of concern that, despite the
progress taking place with regard to the design of more effective
performance measurement systems, hotel organizations are still fo
on more traditional forms of performance measures [5], [3].

Hotel performance models attempt to address some of the hotel specific
problems identified by Brown and McDonnell (1995) and Phillips (1997)
[5], [32]. Hotels have relied on performance mea
surement systems that
best help managers to control, monitor and make incremental
improvements in operations. Phillips (1999a) notes that although the
balanced scorecard is gaining in popularity, identifying and in gauging
the attributes is not without its

shortcomings. In addition to the
challenges posed by an increasingly competitive environment, it has been
recognized for some time that hotel performance measurement systems
need to enable managers to effectively cope with organizations
characterized by a

number of significant contingent features [33].

Environmental Management Practices


Several previous studies have evaluated the environmental management
claim that the adoption of environmental management practices will lead
to incre
ased profits and improved performance [17], [34], [37], [41].

These researchers claim that industry's adoption of environmental
management practices is a transformation in business decision
and firms are realizing the significant role that performa
nce can play in
overall business performance. These management practices include
environmental audits, total quality management, pollution prevention
plans, environmental training for employees, total cost accounting, life
cycle analysis, hiring a designat
ed environmental manager, R&D,
environmental standards for suppliers, and employee incentive programs
for environmental suggestions [12], [27], [40].

These studies reveal broad trends of adoption of environmental practices
across industrial sectors and fi
rm sizes. According to Porter and van der
Linde [34], firms are increasing their profits and improving their
performance by focusing on resource productivity. They state that
resource inefficiencies are most obvious within a company in the form of
te material utilization and poor process controls, which results
in unnecessary waste, defects, and stored materials. They argue as
examples of how companies have embraced innovation for pollution
prevention, recognizing environmental improvement as an iss
ue of
productivity and competitiveness. A study on the adoption of
environmental management practices and the performance of all the firms
in a particular industrial sector has not been conducted. As Florida [11]
states, these case studies are little more
than existence proofs. In addition,
Shelton [39] reports that, after an initial flurry of environmental
management practices and pollution prevention projects, firms are
reining in their environmental efforts. Walley and Whitehead [44] claim
that firms hav
e not been able to improve their performance as expected,
primarily because of the differences between business objectives and
environmental management objectives.

The apparent lack of environmental management tradition in the hotel
industry and existence

of feedback loops that hinders progress in
environmental practices discourage the measurement of environmental
strategy through the amount of time in which such practices remain
operational [13]. Empirical evidence shows that hotels have begun to
to the need of environmental management. The first step in the
process, as suggested by Elkington and Burke [9], is the formation of an

environmental policy. Kirk’s [20] sample of general managers in
Edinburgh shows an even smaller number, with only 19% ha
ving a
written environmental policy at the time of the study. A subsequent study
showed comparable numbers of 22% having an environmental
21], [4].

Hotel operations are characterized by a massive number of activities that
taken individually, have
environmental impact and therefore arguably
difficult to identify and regulate (Dobers, 1997). The hotel industry is
characterized by a sharp distinction between activities confronting
individual customers’ face
face (front office), and those performed
of sight (back
office). The importance of face
face activities in hotel
management practices may have a dual effect on environmental practices.
On one hand, direct observation by customers of practices that eventually
deteriorate or protect the envi
ronment may influence their overall
assessment of hotel management. Further, insofar as clients are largely
responsible for the consumption of resources and the generation of waste,
hotels channel their commitment to practices pertaining to environmental
rotection [45].


This study is to identify environmental management practices of hotels
and related business. The study will attempt to synthesize tourism and
environmental management related theories and studies in a novel
manner, in o
rder to shed light on the background and current outcomes of
tourism development viewed through the microcosm of the hotel.

Because of the aforementioned research gap, it is vital that the
environmental attitudes and management actions of hotels and other

actors in the hospitality and tourism industry be examined. The study sets
out to uncover environmental management practices, with a particular
focus on the hospitality industry. This is in preparation for further
research, whereby surveys will be distrib
uted to managers in hotels, then
to employees to determine the effectiveness of different types of
environmental management strategy.


To understand the area of environmental management practices,
particularly, the dimensions of operation practices in whi
ch EMP related
to decision
making that influences the performance of hotel industry.

To explore the extent of environmental management practices
implementation in Hotels Industry.

To explore the effect of environmental management practices on Hotel

This study is passed on the preliminary work of Klassen and McLaughlin
[22], [13], [26]. It proposed a model of EMP and performance, while
EMP proposed as an independent variable that proposed to be positively
and significantly associated with hot
els performance.

Research Model and Hypotheses

The conceptual model is presented in Figure 3.1 based on the literature
review. The dependent variable of this study is hotel performance, which
are of primary interest to this study. Hotel performance indicat
ors are
influenced by the independent variable of Environmental Management,
which includes operational practices. The relationship is drawn upon the
Based View (RBV) where EMP is used to manage the
idiosyncratic resources of the hotel that are rat
ed, inimitable and un

Based on the above
mentioned discussion, the conceptual model
developed for this study is shown in Figure 1.

Figure (



Operational Practices



Environmental Management Practices and Hotel

According to

Rondinelli and Vastag [35], the responses of hotel to
environmental pressures have led to practices that impact profitability.
Currently, more hotels are trying to understand the benefits of a proactive
approach to environmental policies [42]. Extant evid
ence on the
relationship between EMP and Firms’ performance is contradictory.
While some studies suggest a positive relationship between firms’
performance and environmental management practices [36], [19], [22],
other investigations have found a negative
relationship [7]. Accordingly,
in this study, we will attempt to explore the extent to which hotels
performance evolves with the deployment of more extensive
environmental management activities.

Hypotheses No1.

Hotels with greater emphasis on Environment
al Management Practices
(EMP) will have higher performance.

In addition, it was asserted by scholars that the relationships between

practices as a dimension of EMP and hotel performance do
exist. They found this relationship positive and signif
icant [46], [14]

Other investigations have found a negative relationship [24].

Operational Practices

Hypotheses No2.

Hotels with greater emphasis on operational practices will have higher

Research methodology

This study approved out questio
nnaire survey in organization to find
sectional data from the hotel industries through the environmental
management practices, and hotel performance. The survey technique of

research was used to allow the researcher to identify broad trends and
tions in the EMP measures and current emphasis hotel industry. This
method was chosen since it can reach out to as many respondents as
possible in the hotel industry. Finally, the variables and measures, as well
as statistical analyses that utilized were b
riefly elaborated. Data obtained
in this study were analyzed using SPSS 13 for windows.

Research Design

This study attempted to investigate the extent of environmental
management practice EMP on 4 and 5 star hotel industries. One
significant requisite of
this study is to examine what is the extent of EMP
and the influence driving factors of the environmental management
practices have an impact on hotel performance. Furthermore, it is
essential to note that hotel industry selected to be surveyed in this stu
adopt and use the developed EMP as an implementation for improving
the hotel performance. As the practice of environmental management is
common in any organization, it is expected that there are hotels
promising practice of some elements of the EMP meas
ures either
intentionally or unintentionally, or customizing it according to their
needs. Therefore, in the questionnaire, hotels were asked about their
practices of environmental management measures which are commonly
practices or adoption by hotels. As a

result, the issue where about 65% of
the hotels participated in the study adopt EMP.

Sampling Design

The study is based on data collection using mail survey, with postage
paid return envelop included in each mail. Mail survey was chosen
because it enabl
es the researcher to survey a large random sample of a
population at a relatively low cost. Mail survey also puts less pressure on
an immediate response and provides the respondents with a feeling of
anonymity (Gosselin, 1997). For this study, Tourism Acco
2004 was used as the population frame, where a total of population 158
hotels were listed with 4 or 5 star
ratings. As a result, this research was

look into a few other factors such as advance notification, follow
letters, and choice of incent
ives and questionnaire length.

Data Collection Procedure

This environmental management practices study conducted from 4 and 5
star category hotels. Given that patrons of 4 and 5
star hotels are largely
corporate clients and high
end leisure
, th
eir service delivery is
expected to be of high quality. These luxury hotels (4 and 5
compete on excellent service and stay experience. Additional details such
as preserving natural surroundings and

as opposed to price
remain the niche for

these high income
. Therefore, it does not
come as a surprise when observing that a number of 4 and 5 star hotels
marketed themselves in the eco
tourism segment and/or appear to be
environmentally friendly.

Although profit margins and customer s
atisfaction would not be
compromised for going “green”, for example an effective environmental
management could be used to achieve cost savings and increase
operational efficiency to the extent of delivering great guest value. Since
it is difficult for low

end hotels to compete in this segment (let alone
having an environmental management in place), it would be appropriate
to only select 4 and 5 star hotels to study the environmental management

Factor Analysis of Environmental Management Practi

Awareness of environmental management practices was measured by
questions that were answered on a 5
point Likert scale. The results for
the Measure of Sampling Adequacy (MSA) to EMP as independent
variable were above the essential .84, although t
he Bartlett’s test of
sphericity was significant for the variable. In terms of the independent
variable, out of the 10 original questions in the EMP, two questions 7 and
8 were excluded because they have MSA values below (.5).



Factor, Dimension L
oadings, and Analysis on EMP



EMP: Environmental Management Practices


EMP3: The hotel rewards the advocates of the best environmental initiatives.

EMP4: The hotel uses ecological arguments in its marketing campaigns.

EMP2: The hotel gives i
ts employees training about environmental issues.

EMP1: The hotel quantifies its environmental savings and costs in its budget.

EMP6: The hotel applies water
saving practices.

EMP5: The hotel organizes or sponsors environmental protection activities.









Percentage of Variance


Bartlett’s test of sphericity






Factor Analysis for Hotel Performance (HP)

The result of the factor analysis concerning Hotels Performance shows
that all of th
e items in hotel performance are loaded within one factor,
thus hotel performance is found to be one dimensional construct with 6
items, thus, labelled overall hotel performance. Thus, hotel performance
is found to be within a one
dimensional construct of
6 items, with total
variation of 69% of the variance of the data, and posses .90 KMO value.

The rotted component matrix cannot obtain, and thus, the values of Anti
image correlation can be considered for items deletion, if an item
possesses Anti
image cor
relation below .50, it should be deleted.
However, from the results, all of the items found to have a satisfactory
image correlation (above .90), thus, all items were remained. Table

5.6 below shows the summary of the findings, while the full SPSS res
are appended in Appendix B4.


Factor, Items Loadings, Analysis on Hotel Performance (HP)



HP1: Our hotel was ahead in ROI

HP2: Our hotel was ahead in sales growth

HP3: Our hotel was ahead in profitability

HP4: Our hotel was ahead
in retention rate

HP5: Our hotel was ahead in satisfaction rate

HP6: Our hotel was ahead in market share








Percentage of Variance



Bartlett’s test of Sphericity






Note: one componen
t extracted, the solution cannot be rotated.

Hypothesis Testing

In the earlier section, Pearson product moment correlation analysis
identifies the patterns of relationship between the variables. Though,
neither the strength of relationship nor its influe
nce can be explained
during correlation analysis. For this purpose, multiple regression analysis
(MRA) was performed to determine the sets of antecedent variables and
their contribution towards the variation of the independent variables.


Multiple Regr
ession Analyses between EMP and Hotel

Besides correlation analyses, to determine the relationships between
independent variable, namely, environmental management practices and
hotel performance, multiple regression analyses were also performed.

Table 5.10 presents the regression results between environmental
management practices (EMP) and Hotel Performance (HP).


Simple Regression Results: the Relationships between EMP and HP

Dependent Variable

Hotel Performance

Std Beta

EMP: Environmental Management Practices



Adjusted R

F value




Note: *significant at .01, **significant at .05
Recapitulation of the Study’s Findings

The Extent of Environmental Managem
ent Practices in Hotels Industries

The descriptive statistics in the preceding chapter indicate that all 4 and 5
star hotels in Malaysia basically practice implement environmental
management practices (EMP) on a moderate scale given that the mean
value of

3.35 is slightly above the median. It should be emphasised that
such implementation is confined basically to higher category hotels

category hotels are more inclined to be more cost

and are
thus unwilling to risk the

higher investment co
st associated with

EMP implementation. The study found that while hoteliers stated that
environmental issues are important for the industry, the respondents also
indicated that they believed environmental issues to be more relevant to
based tourism

(Bohdanowicz, 2005a).


The study also managed to uncover both the business and non
reasons for energy conservation in hotels. Essentially, these conservation
efforts were driven by the desire for increased profitability through a
in ope

costs, the potential for improved market share, and
the preservation of limited natural resources to promote sustainable
development. As such,
water and

energy conservation procedures follow
a standard industry pattern. For instance, towel reuse pro
grams are well
established in most 4 and 5 star hotels throughout the world as this
measure is deemed to save water and electricity, reduce detergent use,
and prolong the durability of the said item.

This finding is affirmed by similar findings in other s
that suggest

that performance gains are
often associated

with the adoption of
environmental management practices related to cost reduction, resource
savings opportunities for innovation, and customer retention.


The two

purposes of the studies were: first, is to investigate the relationship
between environmental management practices and hotel performance and
second to undertaken an in
depth review on environmental management
practices, and hotel performance literature, a
nd provides a robust claim that
two streams of research are linked together and not conflicting.

Moreover, this study argued that EMP is independent variable in the
relationship with hotel performance. Furthermore, this study claims that
EMP is the main
driver of hotels performance. This study is consistent with
those of previous researchers [13]. These propositions theoretically
introduced, but however, need to be empirically supported, and that is a
direction for the future research on this area on stud




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