Eric Chi Chong, Mou 

Abstract

　　With over 28M visitors (DSEDT 2024) visiting Macau in 2023, Macau is a famous gaming and tourist destination in Asia. If the tourism sector wants to attract more business and be sustainable, it may need to invest more to fulfil this goal. More investment in social responsibilities means more focus on local markets and more expenditure. However, climate change effects have emerged dramatically in recent years; the tourism sector has to face more challenges in terms of weather and environmental issues. The United Nations Global Compact noted, “By committing to sustainability, business can take shared responsibility for achieving a better world”. The ideal situation is that the tourism business can bring tremendous income to Macau and benefit the local community. Still, the COVID-19 pandemic in Macau^[1] and nearby cities has caused many SMEs to close down or find it hard to maintain their everyday operations. What do these owners think about continuing their business? Are there any traditional ethical practices or codes they are following? If so, what incentives do they have in this new economic paradigm?

Keywords: Business Ethics, Ethical Codes, Stewardship codes in Macau Tourism, Cooperate Social Responsibilities.

Introduction

　　The tourism sector is Macau’s primary industry; in 2023, tourist spending was MOP71.25 billion, an increase of 2.9 times compared to 2022 figures.^[2] With the gaming service export increase of 343.7% in 2023, tourism is heading toward leading economic growth again. Besides the six gaming operators, the SMEs in Macau also contribute a lot to the economy as they provide services to visitors and support to the gaming operators. SME stands for Small to Medium Enterprises. Different countries have different standards for defining SME businesses. Although the Government Census Service does not have a particular definition for SMEs in Macau, according to the Macau SAR Government SME Aid Scheme,^[3] SMEs should have less than 100 personnel. Macau’s economic scale is not massive. The six gaming operators and large resorts or hotels generate most of the tourism income. The rest of the industry is SME businesses like restaurants and attractions. These companies serve tourists directly and support the gaming operators in Macau simultaneously. Therefore, it plays a significant role in Macau’s economic structure.

　　“Our challenge in drawing together concepts and ideals for the New Economic Paradigm and sustainable models of economy was to ground thoughts in the realities of our time and to identify thought and action towards the goal of economic transformation. We identify three thematic platforms for action by all who have the influence to support those without influence”.^[4] The Macau Ricci Institute (MRI) proposed a Manifesto in their 2020 symposium, “The Macau Manifesto” to face the challenges in the new paradigm. The Manifesto offers a vision for businessmen to set a new standard or target for doing business for everyday goods. This platform also serves as a chance for the Tourism sector of Macau to think more about the future.

　　Pope Francis, in his encyclical letter “Laudato Si’”,^[5] pointed out our challenges with the environment in this new paradigm, and he urgently appeals for a new dialogue about how we can improve the future of our planet. We need a conversation which includes everyone since the environmental challenge we are undergoing and its human roots concern and affect us all (Pope Francis 2015). In another encyclical letter, “Fratelli Tutti”^[6], he urges people to develop certain habits that might appear as moral values: fortitude, sobriety, hard work and similar virtues (Pope Francis 2020). The decisions of industry stakeholders are essential to setting a sustainable and ethical development path. Tourism is the primary and benchmark industry in Macau; there is a need to research the industry’s understanding of ethical codes in the investment decision-making process and which moral values can bring people together to develop the common good.

Ethical Codes for Tourism Business in Macau

　　Besides the law of prevention and suppression of bribery in the private sector^[7] and several laws related to money laundering, Tourist businesses must follow no specific statutes or compulsory industry guidelines. If specific licenses apply to companies like Hotels and Travel Agencies, companies must follow some standards to obtain the licenses; however, even though monitoring authorities, like MGTO, will issue the warmest reminder to the industry during specific high-season periods, these regulations are not related to business ethics issues. Even though Macau does not have specific ethical regulations, the industry and the SAR Government suggest different channels to promote ethical business environments for the industry to develop. Below are some references.

Industry Self-Regulations and Government policies

　　The Macau Government Tourist Office (MGTO) is the relevant governing body for Macau. It regulates the tourism sector, which includes issuing hotel licenses, travel agencies, bars and restaurant licenses, etc., and promoting Macau as a world leisure tourism centre. MGTO monitors and inspects the industry and provides necessary training and schemes to help tourists understand the industry’s performance.

　　All six gaming operators, or their holding companies, are listed companies in Hong Kong; therefore, they must follow the requirements of producing finance reports and ESG (Environmental, Social and Governance) policies. Some international brand hotels have their own internal regulations or guidelines for managing the environment and responsibilities. However, besides these, the license regulations by MGTO and industry associations are more focused on operational issues, with not much concern about morals or business ethics. Examples like Articles 3 and 4 of the Macau SAR Law 42/2004 state which type of business a travel agency can and cannot do but do not mention its price range. Thus, as a result, some agencies may use a lower price or even zero price to bid for their business. This will create a negative impact to the industry and create ethical issues.

Quality Tourism Services Accreditation Scheme by Macau Government Tourist Office

　　The Macao Government Tourism Office launched the “Quality Tourism Services Accreditation Scheme” in 2014 to define service quality standards for the tourism industry, encourage and support the sector to enhance service culture and recognize tourism merchants and practitioners who provide outstanding services and implement excellent service management. (MGTO 2022). The voluntary scheme includes food and beverage, travel agencies, and retail sections. The scheme allows the industry to show the public that they can and are willing to provide quality services to their customers. However, quality services are insufficient to face the new economic paradigm; like the zero or low tour cost mentioned above, the industry is fiercely competitive. Tourists demand not only quality but also reasonable prices. The sector now faces more ethical challenges than ever, so it needs a sustainable and ethical environment.

Certified Shop by Macau SAR Government Consumer Council

　　The above quality scheme can only include businesses under MGTO’s government; however, the tourism sector still includes many SMEs that do business for tourists. Another scheme that helps the industry is the Certified Shop program by the Macau SAR Government Consumer Council. The program includes several significant sectors like retail, gold and jewelry and outbound tours; each certified shop must follow the industry guidelines provided by the council, and should there be any abuse, both can choose to do arbitration at the Macao Consumer Mediation and Arbitration Centre. Businesses joining the “Adherent” scheme are obliged to resolve consumer disputes, and this obligation gives consumers confidence. This program can let the consumer easily understand which outlets can provide quality customer service and protect their rights within the territory of Macau.

Traditional Chinese Morals and Confucian Entrepreneurship in Macau

　　Macau is full of Chinese culture; therefore, traditional Chinese practices are still the main guidelines for local enterprises. Moreover, Macau is not a huge city, and connections between populations are tight; business people will take more time and ethical concerns during decision-making. Besides traditional Chinese moral practices, Confucian entrepreneurship is also a topic that has influenced many Chinese entrepreneurs. It has been argued that business activity in China is often influenced by values and norms that go back to classical Confucianism (Chen et al. 2018; Ip 2009; Leung et al. 2011; Wang et al. 2008). This traditional practice is crucial to decision-makers, and Confucian culture deeply affects most Chinese people. There are two types of corporate environmental governance systems: informal and formal. …The informal system refers to the code of conduct that societies have gradually developed, including values, beliefs, customs, culture, traditions, ethics, and ideology. (Xiancong Wu (a), Meng Hao (a), Di Wu (a), Richard Skolnik (b) 2024). These values profoundly impact the business decision-making process. This can also be a major influence factor for the business.

　　In Macau, Banco Delta Asia is one of the local companies that publicly advertise their business vision based on Confucian Entrepreneurship. It shows that even without compulsory laws or regulations, some entrepreneurs still prefer to conduct their business based on their ethical beliefs. It should be admitted that the above example is a minority. Still, through further studies, it is possible to find more examples of Confucian entrepreneurship.

Stewardship Codes

　　Stewardship has been defined as the responsible use of resources that considers the interest of society, future generations, and other species, as well as accepting significant accountability on the part of citizens to society (Worrell & Appleby, 2020). The Macau Manifesto (Macau Ricci Institute, 2020) raised three platforms that resonate with the need for Stewardship Codes. One of these is “Well-being for all.” It proposed that the first step for a business enterprise is to become a Progressive Social Institute. The platform awakens the business people’s focus on social sustainability, which may help them to deal with challenges like the pandemic in more ethically appropriate ways. Macau’s economic structure is less diverse than nearby regions like Hong Kong and Singapore. Revenue turnover from the gaming and tourism sector is swift and rapid. There is a concern about dependence on a single industry – Gaming (Bingqin Li, Zhonglu Zeng 2015). It depends on the investor’s willingness to invest, either focusing on money-oriented or well-being-oriented outcomes.

Implementing background and situation

　　Here comes the question of which stakeholders must take these actions—the employees or the management team. Traditional agency theory views corporate governance as a mechanism to resolve the separation of ownership and control (Klettner 2021). It shows that the owner or the management agency must focus on corporate governance, which is their responsibility. On the other hand, Stewardship Codes, as soft law documents, represent a collective framing process by a mixed group of actors (Klettner, 2021). Whether you are an owner or an employee, your decisions can also affect the decision-makers to be more responsible for the enterprise.

　　All stakeholders need to be responsible in doing business. Pope Francis supports this in the encyclical “Laudato Si”^[8], stating that we are all creatures and suggests that human life is grounded in three fundamental and closely intertwined relationships: with God, our neighbour, and the earth itself. The encyclical clarified the relations among all creatures. We have an urgent responsibility to manage the resources.

　　We define responsibility in the above paragraph, but to what extent can it be considered a good management model? As the culture evolves and becomes more apparent, others in the organization can determine whether their personal and organizational values align (Ann Skeet, 2017). Good leaders must balance all the values of each stakeholder in the organization and comply with ethical standards. One of the significant purposes of business is to create value. Profit is one of the management’s significant concerns regarding their values. Wolfgang Grassl and Andre’ Habisch (2011) argue that once profit becomes the exclusive goal, if produced improperly and without the common good as its ultimate end, it risks destroying wealth and creating poverty. If you do not balance the values well, it will destroy your organization and create problems for others.

　　There are common thoughts shared by the encyclical “Fratelli Tutti”^[9] and Confucian Entrepreneurship; they both request that businesses look deeper into the community they serve, not only focusing on profit as the sole motivation but also striving for harmony in society. Ren is the fundamental virtue of loving others, aligned with reciprocity (Chuang, 2005). It is a solid collective concept that describes the relationship between individuals and the norms of society (Warner & Zhu, 2002). Profit is essential to business, but it would be better to profit from behaviour that cares for others. More and more voices urge Western entrepreneurs to listen to their employees, and this Confucian concept can be added to their agenda.

　　Dialogue is another focus; Pope Francis encourages us to create a different culture in which we resolve our conflicts and care for one another. Love exudes compassion and dignity (Pope Francis, 2020). This gives us a clear motivation that an effective dialogue can lead to a better outcome for everyone. On the other hand, Confucianism can be described as a code of conduct that sets out guidelines on how to live life (Ci, 1994, p. 104). In this case, if we can include these core virtues, Ren and dialogue into a set of codes and promote them to every entrepreneur in this community, like proposing more industry workshops and seminars to let the industry know more about their responsibilities, the platform of creating the well-being of all can be fulfilled.

　　No matter the reason, over 1800 shops have joined the “Certified Shop” scheme. The companies that joined the scheme recognized that they needed to obey the industry regulations implemented by the SAR Government. This shows that the industry understands the importance of an ethical environment and regulations. All the tourism-related industry associations have maintained a good and healthy environment; gaming operators and SMEs can compete and support each other to make Macau a better destination for global tourists.

Conclusion

　　The tourism industry includes many sectors, such as hospitality and retail services; all these businesses serve tourists and the local community at the same time. Each company has its mission and vision; it is hard for stakeholders to choose between different ethical codes. With the increase in tourists to Macau, more moral or competitive cases will be brought to society, such as price competition for inbound group tours; operators will focus more on the price and easily ignore some ethical pitfalls which may affect the international image. Maintaining a highly moral and responsible environment is crucial for the business to be more sustainable.

　　From the above review, we can see both industry schemes, traditional culture and religion also pushing entrepreneurship to become more reliable. The above schemes by the government are not compulsory except for the company rules for listed companies in Hong Kong. A certain number of businesses participate, but specific stakeholders are still willing to join these schemes and maintain a relatively healthy business environment to promote their business. However, the recovery from COVID-19 is stable and directional; we can see that business challenges are also increasing in this new paradigm. To prepare for the new paradigm, there is a need for further study if any incentive schemes or compulsory regulations can motivate the industry to be a more ethical, healthy and sustainable business environment for the future.

^[1]The first COVID-19 case was reported in late January 2020.

^[2]Figures from the 2023 Macau Economy Introduction by Macau SAR Government Economic and Technology Development Bureau.

^[3]SME Aid Scheme by Macau Government Economic and Technological Development Bureau.

^[4]Macau Ricci Institute Editorial team, “The Macau Manifesto”, Executive Summary, 2020.

^[5]Pope Francis, Laudato Si, Point 14, 2015.

^[6]Pope Francis, Fratelli Tutti, Point 91, 2020.

^[7]Macau SAR Law No 19/2009.

^[8]Pope Francis, Laudato Si, 2015, Point 66.

^[9]Pope Francis, Fratelli tutti, 2020, Point 99.

Eric Chi Chong, Mou, is PhD. Student, University of Saint Joseph Macau.

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