Companies In Controversial Companies Management Essay

Is it easy for companies in controversial industries to be socially liable if their products are harmful to human beings and the surroundings. Many case it is impossible to allow them to be socially dependable because their CSR will always be an inherent contradiction since their business goal reaches odds with the goals of open public health procedures. However as these businesses already have a terrible reputation, they have no need to be associated with doing good in order to boost sales. Hence when they take part in CSR, it could mean that these are genuine CSR practitioners. This paper examines CSR of organizations in alcohol, cigarette and gambling sectors and determines if they can be socially responsible through their CSR implementation by using Porter and Kramer's concept of "shared value". However while examining any motives companies may need to determine whether they are genuinely thinking about CSR, it may be presumptuous or even unjust to these companies to presume their motives based on the consequences of the actions. Also, the approach used to determine if the companies have been socially responsible may be too thin. Nonetheless, companies do not need to contain the best intentions for the culture to be socially accountable.


At the reference to controversial industries such as alcohol and tobacco establishments, some may be quick to conclude these industries can't be socially responsible since they are producing goods that are damaging to humans and the surroundings. Even when organizations in these business practice Corporate Social Responsibility (CSR), some may still find it difficult to start out regarding them as being socially accountable.

The purpose behind these companies for practicing CSR is also often disputed over. As these firms already have a bad reputation, they need not be associated with doing best for consumers to demand for his or her products, unlike inherently good companies. When these organizations practice CSR, does it then imply that they obviously have the society's welfare at heart? Or could they be doing CSR as a way of obscuring their questionable business and gaining social popularity?

Keeping these arguments in mind, we will now check out specific organizations in alcohol, cigarette and gambling industries and their CSR techniques in particular to judge the possible bonuses behind their CSR initiatives as well concerning determine if they can be socially dependable through their CSR implementation. In thought of the controversies of CSR, in particular, the view that CSR should be conducted in such as a way that this benefits both the world and the owners of the organization, rather than only 1 aspect of the parties, we are using Porter and Kramer's concept of "shared value" to choose whether a company is socially in charge. This requires organizations to adopt CSR tactics that concurrently profit the society and the owners of the firm, by responding to societal weaknesses or harms while increasing the financial performance of the organization, to be socially dependable.


Alcohol can be an important risk factor for disease. It has implications in birth defects, circumstances of assault and family violence, alcoholism-related mistreatment, traffic mishaps, reduced workplace productivity and lower life span (Collins & Lapsley, 2008; WHO, 2011). Ingestion of alcoholic beverages is approximated to cost the American society a staggering $223. 5 billion/calendar year in healthcare, road-related mishaps, reduced workplace output, violence and crime in 2007 (Centers for Disease Control and Prevention). In comparison, federal alcohol taxes income only amounted to $9. 3 billion/season in 2007 (Congressional Budget Office).

Case Study

Take Diageo for case. It is the world's largest producer of spirits and an important producer of beverage and wine. It has 59 brands including Johnnie Walker and Guinness, two of the best-known brands of alcoholic beverages, under its profile. It creates $25 billion in sales revenue yearly.

Diageo uses general public awareness campaigns as part of its CSR effort. It creates advertising that educate drinking alcohol responsibly, including those aimed at discouraging excessive taking in, drink travelling as well as underage drinking alcohol. However, these may have been the company's simple efforts at bypassing rules to market its alcoholic beverages to consumers.

In Diageo's "the choice is yours" campaign in 2008, it has additionally conveyed the subject matter that overdrinking would inevitably lead to sociable disapproval, including the embarrassing consequences to be thrown out of clubs. However, the School of Shower has discovered that such incidents are in reality regarded as 'fun' by youths (EUCAM, 2009), placing the intended effect of the campaign into question. Furthermore, the web site of the marketing campaign highlights the logos of Diageo beverages, casting questions on whether it could have been aimed at advertising the business's alcohol consumption to the consumers.

The company also has campaigns that are aimed at reaching out to minors in academic institutions. By claiming that they are contributing solutions to alcohol-related problems, the business is able to reach out to a market that they might otherwise not be able to reach due to alcohol marketing regulations. By using CSR as marketing gimmicks to make higher profits, the company has failed to manifest itself as an authentic CSR practitioner who does not need the society's best interests in mind when carrying out CSR techniques.

However, Diageo is making improvements to its corporate and business governance and has created a multi-prong technique to look after the interests of all its stakeholders. This year, it has reduced 9. 4% of carbon emission in spite of its increased creation and has increased drinking water efficiency by 20% in Uganda through its implementation of better drinking water recovery systems. Furthermore, it has sorted out interior DRINKiQ workshops to teach employees on responsible drinking. It also conducts unbiased audits on its suppliers with issues relating to health, security and cleanliness, working hours and wages. It also provides a private whistleblowing service, SpeakUp, to permit whoever has come across a breach of its Code to report it. This means that Diageo's Code of Carry out is strictly adhered to.

Looking at the many Diageo's CSR initiatives and going back to Porter and Kramer's concept of "shared value", Diageo would be considered a socially accountable company. Through its general public awareness campaigns that concurrently discourage unnecessary drinking and advertise its brand of alcoholic beverages, the business is able to decrease the societal damage of its products and enhance the profitability of the firm at exactly the same time, although the performance and the designed effect of the campaigns may be questionable. The execution of better drinking water recovery systems could also help the business save cost. These show that Diageo is a socially responsible company.


The health effects of tobacco have always been known. Smoking in particular is a major risk factor for center attacks, strokes, chronic obstructive pulmonary heart disease, hypertension, peripheral vascular disease and tumor. Every year, 6 million fatalities are caused by the inhalation of cigarette smoke. The irony becomes salient when tobacco becomes the solitary greatest reason behind preventable death internationally. With products regarded universally unsafe allowed for sale, can tobacco companies be socially accountable?

Case Study

Altria Group Inc. is one of the largest tobacco companies on earth. It really is a pioneer of the tobacco corporate responsibility movements in the past due 1990s. Recently, it has turn out tops in social responsibility rankings, positioning 15th on CR Magazine's 100 best corporate people list and 4th in Fortune magazine.

Altria has executed a thorough "corporate responsibility" program focusing on nine specific issues: cigarette product management, marketing practices, combating illegal trade, environmental management, lasting agriculture, supply chain responsibility, employees, buying companies and governance and compliance. Regardless of the multi-faceted approach, its CSR techniques have been a subject of continuous criticism, with critics questioning their motivations behind the acts of responsibility. Most debate centers on cigarette product management and marketing methods.

Over the years, Altria has wanted to control its tobacco product issues and marketing practices as ethically as you possibly can. They voluntarily converse health results with transparency, including health warnings on all its packages and websites. They embark on research and development in developing products with lower hazards and also positively spouse and collaborate with governments in support of cessation. In marketing tactics, they voluntarily limit their reach of marketing to unintended audiences. Predicated on their actions, we can easily see the moral obligation that Altria has performed as a firm.

Critics however claim against the motivation of these CSR, likening it to the washing of "blood money". Some even argue that it is utilized as a sword and shield against product issues (Friedman, 2009). Yet it can be viewed as an "atonement of sin". The term "blood money" appears to convey a kind of coercion or illegal means to gain, yet from how Altria procedures its CSR, we can evidently see their admittance to responsibility, transparency and the lack of coercion. Ironically, Altria has been getting into initiatives to discourage people from smoking, which is counterintuitive of a profit-oriented business model. This appears to highlight the effort Altria has undertaken as a "moral duty" to doing right what it did wrong, clearly fulfilling Kantian and even virtue ethics, and it is a display of your ethical practice of social responsibility.

Critics also dispute that CSR allows tobacco companies to boost their image, leveraging CSR to include value to the otherwise "evil" company, thus concluding that such a determination may be of a selfish cause. However, unlike other organizations with the liberty of liberal marketing routines, tobacco companies including Altria undergo a few of the strictest laws on marketing and advertising. In fact, the business is creating advertisements that devalue its products, essentially lessening the business's value further. There appears to be no tangible benefit for their important thing with the execution of CSR; instead, a larger amount of deficits are being incurred. This thus further support the moral desire behind their CSR procedures, as very little value can be leveraged off CSR for the advantage of the business's overall bottom-line.

It is noticeable a tobacco company's CSR will match Porter and Kramer's concept of "shared value" for both the company and world. However, it is more of your transactional value rather than transformational one (Palazzo & Richter, 2005), after all if tobacco companies actually want to change society, the greatest impact should come from its voluntary demise. Therefore, it is justified for tobacco companies to do CSR, but it will never have the ability to enhance or "make good" itself.


Casinos, like tobacco and alcohol, have added to a variety of communal and monetary harms to the population (Hancock, Schellinck & Schrans, 2008), with the most apparent cultural impact being the upsurge in problem gambling. It's been projected that 1. 2% of U. S. adults are pathological gamblers and another 1. 5% are problem gamblers sooner or later of the lives, with the likelihood doubling for individuals living within 50 kilometers of a casino (Community Research Lovers, 2010). Problem playing impacts people's lives in many negative and consequential ways; this consists of unemployment, poor physical and mental health, risked cultural romantic relationships as well as increased crimes (Community Research Partners, 2010). Large sums of communal costs, including those spent on bankruptcies, imprisonments and divorces; have to be spent each year therefore of these influences.

Case Study

Caesars Entertainment Corporation is the major gaming company on earth with $8. 83 billion in income in 2011. The company has carried out CSR thoroughly. It launched its extensive sustainability program, the "CodeGreen", in 2004 and has viewed a strong determination to achieving an extensive group of sustainability goals for carbon emissions reduction, energy conservation, drinking water consumption as well as waste products recycling. Harrah's Lake Tahoe Internet casino and Harveys Lake Tahoe Modern casino, two of the business's casinos, have received the prestigious Gold Qualification from Travelife, a documentation body that recognizes companies within the travel and leisure industry that take up sustainable techniques. Only four U. S. -structured hotels out of 400 worldwide are Gold Certified in 2013 and three of these are Caesars properties (Stevens, 2013).

Besides their commitment to accountable stewardship of the environment, the company also has codes of determination to treat almost all their employees with admiration and to provide them with good career opportunities, to promote responsible gaming as well concerning help make all their neighborhoods healthy and vivid places to live a life and work. To foster dependable gaming, the business only allows individuals to visit their casinos, trains their workers on how to offer help to customers who may need it and toll-free helpline statistics for problem gaming. They also have adopted an insurance plan to donate area of the company income to community and charitable causes (Caesars Entertainment).

As casinos fundamentally offer products which may have adverse interpersonal and economic consequences, it may be unneeded or even irrelevant for the business to perform CSR to seem altruistic to the general public. This might therefore imply that any CSR attempts from such companies could only be genuine. However, companies nowadays are progressively expected to accept wider tasks and tasks and stick to greater honest, legal and sensible expectations. Companies that neglect to do so are found to receive weakened general population support and less positive views from the marketing (Yani-de-Soriano, Javed & Yousafzai, 2012). Therefore, it remains unclear as to whether Caesars Entertainment Firm is an authentic CSR specialist, or they have conducted CSR to gain social approval.

Caesars Entertainment's "CodeGreen" sustainability program is a superb example of creating a "shared value" through CSR. Through investing in responsible stewardship of the environment, the company aims to save energy, save drinking water and recycle waste products. These are environmental-friendly practices that also create cost-savings for the company. While not all the business's CSR initiatives, such as those directed at promoting responsible game playing, directly lead to economic benefits to the stockholders of the business, they can help to gain social approval of the general public, increasing sales and in doing so giving rise to indirect economic benefits. Since Caesars Entertainment's CSR methods create "shared value" for both culture and the owners of the company in line with the Porter and Kramer's model, this can be a socially liable company.


In analyzing the individual companies on if they are genuine professionals of CSR given that there do not seem to be to be always a need for them to seem socially responsible, we've viewed how conducting CSR could gain them to evaluate the motives that they might have in performing their CSR initiatives. However, it may be presumptuous or even unjust to these companies to assume their motives predicated on the consequences of the actions. The firms may indeed have been genuine professionals of CSR, even if their CSR initiatives turn out to benefit the business as well.

The approach that has been used to establish whether the specific companies have been socially accountable may also have been too narrow. In applying Porter and Kramer's concept of "shared value", our criteria for determining whether the companies are socially sensible only is placed on if the company's CSR initiatives advantage both stockholders and the other stakeholders of the organization; however, we did not apply the model to take into consideration the inherent character of the company - that their products are damaging to the contemporary society - in deciding if they are socially responsible. As a result, all the three organizations examined can certainly be classified as being socially responsible. Alternatively, to consider the inherent nature of the business, that could only create value for the owners of the companies at best, means that these companies could never be socially in charge so long as they continue to operate, regarding to Porter and Kramer's model of "shared value".


Corporate interpersonal responsibility is a complex and contentious subject that many businesses have to handle and commit their resources to put into action. When companies whose products are detrimental to the population practice CSR, their motives are often questioned and their capability to be socially responsible may be contested. However, as have been talked about and elaborated on above, companies need not have best motives for the population to be socially in charge. Actually, companies who are not genuine professionals of CSR, but have both organization and the contemporary society at heart when rehearsing CSR will be the ones who are the most socially dependable. Finally, we conclude that companies whose products are harmful to the contemporary society can be socially in charge companies.

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