Corporate Social Responsibility At British American Tobacco Management Essay
The business world has moral that to survive in this industry you have to make money and gain a face value and thus increase their share value, and in order to do that several companies are striking towards it. In order to gain that respect in the business world all the corporations takes on a responsibility to assure the people of a country that this particular company not just sells several products but also does something for the nation in return. This corporate self-regulation is known as the Corporate Social Responsibility (CSR). CSR is a method for the organizations to manage business with social benefits. CRS helps business to embrace their social responsibilities for the impacts on the consumers, employers, environment, communities and the nation. In the last 10 years, corporate responsibilities has congregate impetus and has taken hold for the environment, for local communities,
Within the world of business, the main “responsibility” for corporations has historically been to make money and increase shareholder value. In other words, corporate financial responsibility has been the sole bottom line driving force. However, in the 10 years, a bold movement defining corporate responsibilities has and taken hold- for the environment, for local communities, for working conditions, and for ethical practices. This new driving force is known as Corporate Social Responsibility (CSR). CSR is also defined as the corporate “triple bottom line” the whole of corporation’s financial, social and environmental performance in conducting its business. In general words Corporate Social Responsibility is the process by which businesses should deal with the society. It is about how businesses fix their values and behaviour with the expectations and needs of stakeholders, not just customers and investors, but also employees, suppliers, communities, regulators, special interest groups and society as a whole. CSR allows businesses to manage the economic, social and environmental effect of their operations to maximise the benefits and minimise the problems. Vital CSR issues include governance, environmental management, stakeholder engagement, labour standards, employee and community relations, social equity, responsible sourcing and human rights.CSR is not only about executing a duty to society; it also gives an organisation competitive edge. Through an effective CSR programme, a company can sharpen its decision making, improve its opportunities and reduce risks. It enhances brand image and uncovers previously commercial opportunities including new markets. It also reduces costs and attracts, retains and motivates employees. (http://www.rhcatalyst.org/site/DocServer/CSRQ_A.pdf?docID=103)
The Importance of CSR
Corporate Social Responsibility plays major roles in the accomplishment and collapse of the business. CSR plays a vital role in forecasting and decisions making. According to Kitzmueller (2008) focusing on the CSR is a crucial edifice mass of the firm’s strategy. The research not only shows that investors investment decisions is not based on financial but also on social and environmental performance criterion. The significance of CSR is progressively increasing day by day and common people are more aware on this issue.
CSR is important because businesses are based on trust and foresight. Establishing and keeping trust with customers, communities and regulators isn’t simple and can be easily damaged or lost. To be successful in the long-term, companies need to think beyond what’s affecting them today to what’s going to happen tomorrow. This isn’t just about addressing changes to technology or the needs of customers, but also taking into account alterations in social, environmental and governance issues.
There are scores of CSR organizations and business associations promoting corporate social responsibility, with a collective membership of thousands of companies-big, small, and medium-sized – in diverse industries. In the United States, San Francisco-based Business for Social Responsibility alone has 1,400 corporate members that globally employ more than six million workers, and account for a total annual revenue of US$1.5 trillion. In Europe, the London-based International Business Leaders Forum counts 60 major global companies as members, and has established affiliate resource centers in emerging market economies where there is a demand for corporate involvement in social causes. In developing countries such as India, Indonesia, Brazil, Egypt, and the Philippines, business associations dedicated to CSR exist. It can be said that there are as many variations of CSR activities as there are CSR advocate companies and organizations.
The perception is quite vague for some who did not see its disparity from corporate
generosity. The concluding is the most accepted as it is easy to figure out and execute.
Other would try to implement the concept but due to their limited involvement it hampers their core business. This is comprehensible, because it is easier for companies to devise
interventions on the perception that they can easily comprehend and which are lucrative to the firm. Example, a food manufacturing organization would usually prefer to execute
interventions that are related to nutrition, and entitle this as their CSR development, but in reality
is still parallel to corporate generosity.
First, is that, CSR is performance of business over and above permissible necessities, voluntarily adopted because the business deems to be their long-term interest. Second, CSR is
essentially linked to the perception of sustainable development: businesses need to
amalgamate the economic, social and environmental impact in their operations. Third, CSR
is not an optional “add-on” to business core activities – but it is about the way how
business is managed.
According to the above statement, CSR could not be equated to generosity. It is a comprehensive
business approach that aims to ensure the long-term feasibility of the business, by assuming
a dynamic role in the development of the community, the economy, and the environment
through good trade practices.
Hypothesis of CSR is base on the idea of the communal accord; this ropes that CSR is a job of requisites of broad union among trade and people. These conditions have undergone essential modification in recently, connecting a better business binder to the bordering group of people. (Dunfeeetal.,1999).
The abundant of studies and research works shows that the organizations and politicians are optimistic towards the CSR. They are obligatory to adopt the policies of CSR for cynical reason in order to be safe in the business. CSR clearly impacts corporations, society, and educational organizations. It provides an influential driver for persistent competence across the national boundaries. The company should take initiative of such effects and work for the communal benefits of the two parties (1998, cited Zappla 2003).
British American Tobacco (BAT) adopting the concept CSR
CSR (Corporate Social responsibility) has been declared to pursue its implementation around the world, and organizations have taken the initiative to do so. There are few organizations around the world who actually proclaim to follow the CSR. According to British American Tobacco ‘when it comes to my choice on picking up an organization for the discussion about the topic, I have chosen the British American Tobacco plc. The British American Tobacco was formed in 1902 and it has been in the business for 108 years, including the recent year. This business was started as a joint endeavor between the American Tobacco Company and the UK’s Imperial Tobacco Company by James Buchanan Duke. They are the world’s second leading cited tobacco group by international market share, with brands sold in more than 180 markets through more than 15 million retail outlets. They have 50 cigarette factories in 41 countries around the world, which make 720 billion cigarettes per annum. They have around 300 brands in their portfolio. They also make cigarillos; roll your own cigarette, pipe tobacco and smokeless sinus. The company today employs more than 60000 employers all over the world. Also they are the only company, who has engrossment in growing tobacco leaf, giving thousands of farmers to work for them internationally’ ( www.bat.com)
The British American Tobacco’s perspicacity is to achieve leadership of the universal tobacco industry to create long-term shareholder value. Their strategy for delivering their astuteness is based on Growth, Productivity, Responsibility and building a Winning Organization. All these four blocks are related to each other, and is imperative for carrying the profit growth and long term business sustainability. According to BAT ‘although the product they sell is very harmful, and we all know it, but still people tend to buy it. As their product causes real risk to health, the company tries to keep people away from smoking, by writing a quote in the packet, here we can say that they show their social responsibility in the socio-economic view, which means they will be selling the product and as well tell the people to stay away from it’ (www.bat.com).
The tobacco industry adds largely to the economies of over 150 countries, and there are more than 100 million people all over the world dependent on them for employment, which is more than the populations of Canada, South Africa and Australia combined. Taxes for the tobacco industry are the main foundation of revenue for almost every government in the world. This revenue gathered from the tobacco company is then used by the government of several countries for better infrastructure and other internal as well as external development. In 2008 they paid the government for taxes around £22 billion, which is more than eight times the group’s profit after tax. In a year the companies purchases around 400,000 tons of tobacco, which is about 80 percent of the farmers and suppliers volume in rising economies.
Here I have just outlined what the British American Tobacco does, how they work, and how they. From the information that I have given above, we can see that the British American Tobacco is successful in adopting the concept of CSR. This is because the British American Tobacco is one of the leading tobacco industries, which produces harmful product and also is aware of it. They are doing the business by selling the product as well as making the consumers aware of the harmful ingredients the product contains. Therefore, they are taking their initiative of letting consumers know about their harmful products, but still consumers of tobacco tends to buy the product. British American Tobacco did adopt the concept of CSR ( Corporate Social Responsibility) for the welfare of the consumers of their tobacco products.
In the modern era CSR is put into consideration due to societal behavior. It allows biased and corporate community to attain the targeted result rapidly. It has become the tool for future protrusion of diverse groups that smooth the progress of receiving the distinction in close proximity to future.
CSR has been prevalent for the growth of developing and developed countries in recent times. In spite of the controversies, the political leaders of the world are raising the issue of CSR stating the significant implications for economic activities although they fall short themselves.
Corporate Social Responsibility is the latest buzz word to which increasingly more and more companies are getting attentive. Moreover, the governments are keen that companies take to CSR route as social welfare is becoming both public and private sector responsibility. The companies too are realizing the hidden costs of failing to meet this crucial social responsibility that is more ethically and morally binding than legal necessity. It entails going beyond just the legal responsibilities. There are, however, issues of labeling and standardization associated with CSR. Nonetheless, it is expected that a level playing field will emerge as the number of stakeholders will also go on increasing. Corporate Social Responsibility must be seen by the companies as a responsibility not imposed by outside forces but guided by conscience and the best practices of giving back to society, people, communities, and environment what they took from them. What are even more important, companies have begun to realize the criticality of CSR as value addition that might offer them competitive advantage in business.
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