For the capstone course we are supposed to do research which consists of research proposal, research diary and final report, which should include finally all the facts, knowledge of research question, final report is the result of the project. I was always interested in cigarette industry, I mean how do cigarette corporations like Philip Morris or British American Tobacco, for instance, promote and sell production even it is so harmful for our health. Therefore, my research question is the Cigarette industry and Corporate Social Responsibility. I have decided to base my research on Philip Morris International, because last term we were visiting its factory in Neuchatel and I had got a lot of knowledge about this multinational company.
First of all, I want to start with the definition of Corporate Social responsibility. According to EU definiton: CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Basically, the tobacco industry has used corporate social responsibility tactics to improve its corporate image with the public, press, and regulators who increasingly have grown to view it as a merchant of death.
There is, however, an intractable problem that corporate social responsibility efforts can mask but not resolve: the tobacco industry’s products are lethal when used as directed, and there is no amount of corporate social responsibility activity which can adjust that fundamental contradiction with ethical corporate citizenship. This study’s focus is to better understand the tobacco industry’s corporate social responsibility efforts and to assess whether there has been any substantive change in the way it does business with regard to the issue of exposure to secondhand smoke. The results show that the industry has made no substantial changes and in fact has continued with business as usual.
The tobacco industry is a very unethical industry, due to the long term effects of tobacco on humans. The industry also does not assess the ethical and social responsibility the best way that it should. There are many factors that make the industry unethical; some of the reasons are the way the cigarette companies around the world advertise, the way governments and cigarette companies make a huge profit from the sales of cigarettes, and the labeling health risks. I do believe however that there is something that the tobacco companies can do to better their strategy as far as their ethics go. I think that they should, always be looking for the best interest on their consumers, as well as advertise strictly on the effects that the cigarettes and what the people are getting for their money.
As an example I took PMI (Philip Morris International). Philip Morris International Inc. is an American global cigarette and tobacco company, with products sold in over 200 countries with 15.6% of the international cigarette market outside the United States. Because tobacco, the main constituent of cigarettes, is the single greatest cause of preventable death globally and is addictive, the company’s operations are highly controversial and are increasingly the subject of litigation and restrictive legislation from governments concerned about the health impacts of its products. In 2007, PMI sold 831 billion cigarettes, or the biggest non-government tobacco company in the world by volume. PMI has a large research and development program, and declares its priority to be “developing products with the potential to reduce the risks of smoking-related diseases.” They explain the focus of the R&D program is reducing the levels of toxic chemical compounds produced during the process of burning tobacco within a cigarette with what they describe as «new, next generation products.»
In 1999, Philip Morris (PM) launched the industry’s most ambitious and visible CSR program, which it internally labeled “PM21”. In confidential documents, PM described the program as “a multi-faceted, cross functional effort to change the public’s perception of Philip Morris and to improve the public’s attitudes toward the company and the people who work for it”. Using paid advertisements and a dedicated website, PM21 highlighted the company’s charitable contributions to causes including homelessness, domestic abuse, and the arts. This continued a previous strategy to co-opt interest groups that might oppose tobacco industry programs. While the PM21 campaign improved outlooks among the small segment of the public that had no pre-existing opinions about the company, the campaign hardened the opinions of the large majority who already held negative views of PM and the tobacco industry.
PM21 was far from Big Tobacco’s only CSR effort. The tobacco companies also launched CSR activities to protect areas of perceived vulnerability, which included regulation, litigation, and future threats to their bottom line, such as declining social acceptability, youth smoking and concern over secondhand smoke exposure. In response to the prevalence of underage smoking, all of the major tobacco companies instituted “youth smoking prevention” programs to avert increased regulation.
For instance, PM distributed to students book covers emblazoned with the corporate name, and Lorillard employed the slogan “Tobacco Is Whacko If You’re a Teen,” which emphasized the forbidden fruit aspect of youth smoking. Public officials, advocates, teachers, and students opposed these programs, which backfired because they were perceived as cynically employing reverse psychology to encourage youth smoking. Through denormalization tactics that publicly exposed the tobacco industry’s bad corporate behavior, tobacco control advocates joined with educators and elected officials to pressure the tobacco companies to drop their disingenuous “youth smoking prevention” programs.
It is quite evident that the tobacco industries are in the best interests of making money. Companies like Phillip Morris even state that their mission is to promote products used responsibly by adults. Long after the U.S. Surgeon General’s findings of tobacco causing cancer, advertising and sales still soared within this industry. Until this release was issued by the U.S. government did only the tobacco companies put warning labels on their products. But consumers wanting a tobacco product are more than likely gazing at the image of cigarettes and not necessarily the dangerous slow harm it can do to one’s body.
The tobacco businesses have no choice nowadays but to make certain that the social responsibility of this product is in favor of the consumer. Litigation and media slander will impersonate these businesses as greedy pawns if the companies are not careful with how they market these products. New anti-smoking groups and organizations utilize public service announcements in magazines and on television to make certain that U.S. policies stay in effect. These policies will not only help reduce the use of cigarette use among baby boomers, but the new generation as well. Children are exposed to cigarettes in all kinds of environments. It is up to tobacco companies to stop glorifying this product amongst the youth here in the U.S.
It is almost quite daring to want to expand the tobacco market overseas but it has already been that way for years. Due to impulsive trading which of course boils down to one thing, money, many markets in other countries are willing to allow cigarette imports from the U.S. In the event that I was exporting tobacco overseas, I would most certainly want to let people know the dangerous slow side effects that smoking can do to a person. An “at your own risk” label, along with information on the company’s website in regards to what cigarettes can do to a person would be issued due to the fact that I would not want to lose business or show that my company was unethical. I also do not want to perceive foreign markets that I was not simply trying to make money for the business. This may or may not alleviate economical issues, but ethically other countries will see that my particular company did look out for the consumer’s interest while of course making a profit.
Respecting cultural values in this market is not as easy as it seems. It becomes more complex when this industry targets females in other countries simply stating that there is little done to prevent the uproar of female smokers overseas. In fact, in Asia, women are displayed on billboard ads and are wear clothing that promotes certain brands of cigarettes. In Asia, there is little respect or value of the female population. Selling tobacco products to Asian men is becoming more difficult since they are seen as great importance over the women there in their country.
U.S. tobacco industries that import their products overseas should look at the fact as with any other market that although there are certain restrictions when it comes to selling to Asian men, they should not only utilize the female Asian population to make a profit. Young Asian women who do not know any better will soon ignore the warnings and look at the increase of their counterparts smoking so why not so to speak. I believe that if you are going to make a profit with a product that in fact has legal narcotics in it, then it should be targeted amongst all of the people. If there are certain restrictions within that country’s government that will not allow it, then I do not see why it should be marketed at all. Both the male and female Asian populations are potential markets for consuming cigarettes and the importing should be distributed ethically and perhaps equally.
Whether or not U.S. tobacco firms would lose out on profits if foreign markets do not want to rehash their restrictions is a gamble the firms would have to risk. With the tobacco industry paying over two billion dollars a year in advertising alone, I do not foresee them losing out on any money if a certain foreign group is limited from buying these products. What tobacco industries should worry about are the groups that are forming to help cease the sudden rise of smoking among foreign women. Then not only will they have U.S. groups here trying to stop the formality of cigarette consuming, but overseas as well.
Nowadays, PMI has the Code of Conduct which explains all the company’s and its employees duties, rights and also describes how PMI is operating; moreover, this official document pays attention to environment and health hazard. According to PMI Code of Conduct, «Our goal is to develop methods to assess whether a product is likely to reduce the risk of smoking-related diseases without waiting decades – the time that many smoking-related diseases take to develop. To do so, we plan to combine the strengths of classical scientific methods—non-clinical and clinical studies—with systems biology, state-of-the-art computational science, and disease modeling.»
Furthermore, PMI provides information that smoking causes serious, fatal diseases such as lung cancer, cardiovascular disease (heart disease), chronic obstructive lung diseases (emphysema and bronchitis). They also mention in this official document that over the past half-century, classical scientific methods, including non-clinical, clinical, and epidemiological studies, have provided data and information about smoking and disease. But unfortunately, the precise mechanisms by which smoking triggers disease in human systems remain poorly understood.
Recent achievements in biological and medical research have dramatically changed the understanding of the human body. The human body is a highly complex system of delicately balanced networks. Exposure to cigarette smoke can alter the chemistry or biology of individual molecules, causing a malfunction within one or more of these networks, which ultimately leads to disease. Today, advanced technologies may allow to use existing data to explore this question from an entirely new angle—that of how individual tissues, cells, or even particular proteins respond to smoke exposure. These technologies may also help cigarette production to identify gaps in knowledge, and design new research projects to address such gaps.
An interesting part of tobacco industry is exactly how these pleasurable leafs are produced, it all starts with soil. Tobacco leaves grow best in nice, well drained soil. With the right mixture of warm air and dry ground, the conditions are near perfect. Next the tobacco seeds are planted-usually by machine and occasionally by hand – and sprayed with up to sixteen different pesticides. Once the leaves have fully matured, they are plucked, packaged, and sent to Tobacco factories where there cut up and put into several different tobacco products, including cigarettes, cigars, and chewing tobacco. For one Tobacco is a type of plant that needs more nutrients than other crops, this causes the soil to degrade and saps that nutrients from the land.
The production of Cigarettes and other tobacco products also uses more than its fair share of wood. Nearly 600 million trees are cut down a year to provide wood for drying Tobacco. Modern cigarette machines even use 3.7 miles of paper an hour. The production process is not the only thing that causes damage to the environment. Also we have to worry about the butts; cigarette butts that are made of plastic and can take up to 15 years to break down, butts that are full of toxic residue that is released into the environment once the cigarettes have been used.
On top of the trouble that tobacco causes to the environment it also causes issues for the social growth of the United States and other countries. About 87% of tobacco is currently grown in developing countries. This causes complications in the future development of these countries and the economic situations between them and developed countries like the United States. A person who smokes just 1 pack each day will end up spending $150 a month and about $1800 a year.
While there are many government policies that are supposed to keep tobacco in sustainable practices not all of them are commonly regarded, the tobacco industry is just too big. The tobacco industry has a large influence over the government- not so much the other way around. One Government agency that does attempt to keep the tobacco industry under ropes is The Framework Convention of Tobacco Control-adopted in May 2003. Some of the things that this group requires are that countries impose restrictions on tobacco advertising, sponsorship, and promotion.
They also require countries to establish new packaging and labeling practices for tobacco, no false information like low tar or light. There are more regulations that are attempted to be enforced by other agencies as well: but it has been found that many are not followed. Around 40% of countries still allow smoking in schools and hospitals. Tobacco companies constantly try to fight back against bans of promotion and advertising they try and minimize the damage to the sale of their products and their profit margins.
Also, I would like to say that there are many ways to help make the Tobacco industry much more sustainable. They can start by attempting biodegradable cigarette butts. It is possible that, with the right paper type and the right chemicals, those nasty butts can be thrown to the ground and absorbed for nutrients instead of rotting away. Also, growing the products needed for being biodegradable would cut down on the health risks and even free up the land that was used to grow the previous poison that would be replaced. As for another tactic, companies could stop selling cardboard boxes and start selling products by the pound while customers use their own containers. Companies could start advertising more reusable containers and boxes by selling more of their own. Not to mention the profit that could be made by doing this. Cutting out the price of making the cardboard boxes would bring down the prices of cigarettes, giving customers the allusion of spend more, pay less. When in reality they would be purchasing more while spending more.
All in all, nowadays tobacco industry is still not sustainable and ethical enough even the cigarette production companies like PMI are making attempts to become more corporate, social responsible. Unfortunately, cigarette corporations are trying to be ethical, sustainable and corporate social reponsible by reason of not losing consumers, not getting government restrictions to sell and produce. I do not think that tobacco industry does not provide anything to be ethical, I think it is not enough. I believe such big and multinational companies as British American Tobacco and Philip Morris International will regain consciousness and will not be thinking only about the profits and will be providing the truthful information about their products for society, will pay attention to the environment and in collaboration with government and mass-media will try to decrease the amount of youth smokers and smokers in general even it is the person’s own choise to smoke or not to smoke.
In the end of my research project I would like to share some statistics. According to CDCP (Centers for Disease Control and Prevention), cigarettes represent the leading market segment with revenue exceeding $681 billion, which accounts for almost 95% of the overall market. The yearly rate of market growth is expected to accelerate to be 4.5% until 2015, bringing the market to almost $890 billion. There are currently around 1.3 billion smokers in the world; this figure is expected to climb at a rate of almost 4% per year. Tobacco is grown in over 120 countries worldwide, using close to 4 million hectares of total agricultural land available globally. Around 12 million cigarettes are smoked every minute around the world. Around 35% of men in developed nations smoke, compared with 50% of men in developing nations.
About 22% of women smoke in developed nations, compared with less than 10% in developing nations. The cigarette industry spends billions each year on advertising and promotions; $9.94 billion total spent in 2008. Worldwide, tobacco use causes more than 5 million deaths per year, and current trends show that tobacco use will cause more than 8 million deaths annually by 2030. In the United States, tobacco use is responsible for about one in five deaths annually (i.e., about 443,000 deaths per year, and an estimated 49,000 of these smoking-related deaths are the result of secondhand smoke exposure). Each day, more than 3,800 persons younger than 18 years of age smoke their first cigarette. Each day, about 1,000 persons younger than 18 years of age begin smoking on a daily basis.
PMI Research & Development, http://www.pmi.com/eng/research_and_development/r_and_d_at_pmi/pages/r_and_d_at_pmi.aspx accessed on 11.11.12
Centers for Disease Control and Prevention, http://www.cdc.gov/tobacco/index.htm accessed on 20.11.12
PMI Code of Conduct, http://www.pmi.com/eng/about_us/how_we_operate/compliance/pages/code_of_conduct.aspx accessed on 27.11.12
Ferrel, OC & Thorne, Debbie & Ferrell, Linda (2011), Social Responsibility & Business 4th edition, (2011, 2008) South-Western, Cengage Learning Corporate Affairs PMP SA (2009), Presenting brochure of PMP SA, English edition, Philip Morris Products SA MHCInternational Ltd, Definition of CSR, http://mhcinternational.com/articles/definition-of-csr accessed on 01.12.12
McDaniel, Malone, American Journal of Public Health, October 2012, Vol. 102, No.10, «The Big Why: Philip Morris’s Failed Search for Corporate Social Value», retrieved from https://www.proquest.com/trials/trialSummary.action?view=subject&trialBean.token=BJ7CJC1YC54SI0SM25ZM accessed on 03.12.12