1. ALLIANCE_UNIVERSITY, BANGALORE
SUBJECT NAME & CODE:
BATCH :
DSA ASSIGNMENT
TITLE: Corporate Social Responsibility (CSR) the
Tobacco Industry
Submitted To: Dr Soumen Mukherjee
Associate Professor
Alliance Business School
Submitted by: kumar kartikey
Course & Section: mba(marketing)
Roll No.: 21
Date of Submission: 10.09.2014
2. Corporate Social Responsibility (CSR) is defined as an obligation which every company should
pursue in the form of long term goals to do some good to the society and these obligations are
beyond the regulations of law and economics . Which means the business conducted by any
organization should be in completely ethical manner and should consider the interest of wider
community, respond in a positive manner towards the upcoming societal expectations and
priorities and an obligation towards all the stakeholders, not juts the shareholders.
Ethics are defined as the process of differentiating the good and right from the bad and wrong
and in order to do that we need moral or social responsibility to pursue the good and right. This
is the reason why social responsibility in case of corporate , which is defined as corporate social
responsibility goes hand in hand with the business ethics. The tobacco industry has been the
worst impacted due to their unethical image in the past as they have been facing many lawsuits,
bad image and causing harm to the environment and society. That is why 8 governing ethical
principles have been brought together to create and evaluate the Code of Conduct and are called
Global Business Standards Codex .
The Transparency Principle of the Global Business Standards Codex (GBSC) specifies that any
organisation should depict truthfulness, avoid deception with proper disclosure and should have
candour and objectivity in their goals. But if we see the case of tobacco companies they
developed CSR as a concept from the realisation that they need to redress their adverse impact
on the society mainly on the issues like human rights, environment and labour practices . The
development of CSR through examination of internal documents of transnational tobacco
company Phillip Morris it is evident that they realise marketing tobacco is antithetical in the light
of social responsibility. Although they follow the Transparency Principle of GBSC but the
proper disclosure and truthfulness part is found missing in the internal documents which is
unethical on the part of the company.
Moreover the CSR concept is just a tool to deceive their stakeholders by devoting resources and
attention to the CSR, but fundamentally they remain the same by improperly influencing the
scientific studies commissioned by them and also silencing the scientists who were of different
3. opinion, depicting the tobacco companies in bad light and indicates unethical behaviour which
they are doing by hiding under the umbrella of CSR.
Another ethical Code of Conduct of GBSC that is The Dignity Principle says that the ethical
company should show respect for individual, privacy and confidentiality, learning and
development, concern towards health and safety and employment security. But in case of
tobacco industry their internal documents show that they are merely trying to rehabilitate their
corporate image using the activities related to CSR and on the other hand they are trying to carry
on with their traditional business practices of combating regulations and litigations by improper
and unethical manipulation of scientific studies, influencing the press coverage’s and giving their
best shot to convince the regulators and the public that the regulation of their product should not
be further warranted, mainly on the issues of second hand smoke (Freidman, 2009). The judge’s
conclusion in a litigation case against tobacco company mentioned that the tobacco defendants
publically denied whatever they acknowledged internally: that second-hand smoke is hazardous
to the non-smokers, shows how much concerned the tobacco companies are towards the health
and safety of the community or society’. This clearly shows that they are trying to hide the health
and safety aspects of tobacco products and merely using CSR as a sword and a shield to protect
their image, which is completely unethical as per GBSC’s Dignity Principle.
The Fiduciary Principle of GBSC states that the corporate should follow the code of conduct and
be ethical in their practices by being diligent and loyal towards their consumers. The tobacco
industries worldwide incorporated the social responsibility factors in their tobacco production by
using the green supply chains and it was mentioned on the websites and tried to clear their image
in front of their consumers due to growing public awareness regarding the issues related to
tobacco farming. Whereas, the picture is totally different, the millions of hectares of tobacco
farms cause environmental damage like soil depletion, deforestation and soil erosion, pesticide
and nicotine poisoning of workers, water table pollution and child labour mainly in developing
countries (Otanez and Glantz, 2012). On top of these concerns the profit maximising tobacco
companies in order to gain maximum benefits negotiate very low prices which promotes
indirectly child labour and enhances debt servitudes. These unethical practices followed by them
clearly indicate that they are totally disloyal towards their customer and do not follow the
Fiduciary principle of GBSC.
Initiative taken by ITC
1. E-Choupal
4. 2. Social & Farm Forestry
3. Watershed Development
4. Agricultural Productivity
5. Women’s Empowerment
6. Livestock Development
7. Primary Education
1. Every year, the CSR and Sustainability Committee will place for the Board's approval, a
CSR Plan delineating the CSR Programmes to be carried out during the financial year
and the specified budgets thereof. The Board will consider and approve the CSR Plan
with any modification that may be deemed necessary.
2. The Corporate Management Committee (CMC) will assign the task of implementation of
the CSR Plan within specified budgets and timeframes to such persons or bodies as it
may deem fit.
3. The persons/bodies to which the implementation is assigned will carry out such CSR
Programmes as determined by the CMC within the specified budgets and timeframes and
report back to the CMC on the progress thereon at such frequency as the CMC may
direct.
4. The CMC shall review the implementation of the CSR Programmes once a quarter and
issue necessary directions from time to time to ensure orderly and efficient execution of
the CSR Programmes in accordance with this Policy.
5. Once every six months the CMC will provide a status update to the CSR and
Sustainability Committee on the progress of implementation of the approved CSR
Programmes carried out during the six month period. It shall be the responsibility of the
CSR and Sustainability Committee to review such reports and keep the Board apprised of
the status of implementation of the same.
6. At the end of every financial year, the CSR and Sustainability Committee will submit its
report to the Board.
5. In conclusion, it has been proved that corporate social responsibility is just definitely trying to
change their unethical image by publically accepting that tobacco smoking is injurious to health
and on their website too they have accepted and mentioned the hazards which occur due to
smoking, but from the evidence and their actions of hiding the true and real information from
their stakeholders (Palazzo and Richter, 2005) , they are not following the codes of conduct as
mentioned in Global Business Standards Codex. This is the reason why their actions are
considered unethical from the perspective of the Transparency Principle, Dignity principle and
Fiduciary Principle of GBSC. Finally their unethical steps of incorporating green supply chains
in CSR, hiding the real consequences of second-hand smoke and trying to hide the facts by
manipulating the scientific studies also point that fundamentally the tobacco companies have not
changed. It is just to clear their image they are using CSR as a camouflage to hide their true
picture which is completely unethical as per the GBSC standards (Joyner and Payne, 2002).
Moreover the basic fact which every citizen very well knows that tobacco kills cannot be denied,
so whatever their efforts might be towards doing good to the society in the form of CSR, it will
take time for tobacco companies to clean their unethical image.
