EMA to improve sustainable performance of Indonesia’s hotels

Oleh : | Rabu, 24 Mei 2023 | Dibaca : 878 Pengunjung

EMA to improve sustainable performance of Indonesia’s hotels

Hotels in Indonesia generate greater waste compared to hotels in other developing countries in Asia, necessitating effective waste management. Hotels can handle this by themselves or by hiring waste management companies. There is also a need to improve the number of hotels in Indonesia that implement waste management mechanisms, which currently stands at only 48 percent.

This gap underscores the importance of ensuring effective waste management, which can be done through internal and external controls. Internally, hotels can implement an environmental management control system known as environmental management accounting (EMA). Externally, control is exercised through community supervision and stronger government regulations.

However, regulatory compliance remains low, as 51 percent of hotels do not apply the 3R concept of reduce, reuse and recycle and 35 percent lack environmental systems based on applicable local regulations. This is partly because not all waste management standards are mandatory.

Environmental control is a crucial aspect of EMA, and plays a significant role in an organization's planning and control processes. Companies have started implementing EMA to enhance sustainable performance, modifying conventional management accounting by incorporating information related to environmental management accounting. This accounting practice helps companies increase environmental benefits and achieve sustainable performance.

Managers can use EMA information to stay up-to-date with environmental and social regulations, helping them to maintain compliance with regulations and avoid penalties. Therefore, managers should increase their use of EMA information to improve sustainable performance.

Hotel managers in Indonesia should enhance management mechanisms to effectively address issues related to sustainable performance. Through a sustainable management mechanism, hotel managers can access relevant data on sustainable hotel operations, including information on customers, government, local communities, shareholders and other resources.

EMA enables managers to monitor current activities and progress, as well as develop action plans for necessary maintenance or improvement. For instance, a hotel manager seeking information on the latest technology to accelerate customer service can use this information to create a plan for investing in new technology, ultimately attracting more customers and generating higher revenues. EMA information is also valuable in providing managers with insights and feedback on customer data and complaints, allowing them to take appropriate actions in serving hotel customers.

Labor issues, environmental pollution and the impacts of a business’s operations on the local community are significant concerns in developing countries. However, Indonesia has made progress in organizing labor and community issues, putting in place legal instruments related to environmental concerns.

 

Stakeholders expect companies to fulfill these legal obligations. Nevertheless, existing regulations should be made mandatory to ensure higher compliance. This research serves as a reference for policy improvement to strengthen the mandatory nature of regulations, given that economic, social, environmental and cultural issues are significant challenges in today's business environment.

Hotels’ sustainability commitment revolves around three main aspects: organizational greenness, level of competition and attitude toward change. Organizational greenness indicates a company's environmental awareness in achieving sustainable performance. It directly influences employee loyalty, reduces turnover, enhances employees’ capacity to maintain quality, and fosters employees’ concern for the environment.

Level of competition refers to the strength of competitors in a highly competitive environment or vice versa. International hotel chains demonstrate adaptability in intense competition, take proactive measures to avoid price wars and engage in promotions. Fierce competition compels hotels to increase innovation. Managers recognize that environmental responsibility is essential for sustainable performance in the face of competition.

Attitude toward change reflects an organization's readiness to enter or establish new markets, implementing new ideas, services or technological practices. One approach adopted by international hotel chains to meet customer demand for sustainability commitment is to conduct sustainability audits, enabling rapid environmental adaptation.

By: Komang Adi Kurniawan Saputra, SE, MSA, Ak, CA, CRA, ASEAN CPA

Lecturer at the Economics and Business Faculty, Warmadewa University



BERITA LAINNYA

LIHAT ARSIP BERITA LAINNYA