The Mandate of Stakeholders in Influencing Industry Dynamics

Part A

Question 1

There is an obvious performance-expectation gap in the Coca-Cola (TCCC) case study. Stakeholders, including shareholders and customers, had high expectations on a company with a rich reputation of producing good quality beverages and which had grown to be the largest beverage company in the world. However, the company’s detrimental corporate impact on water quality, availability, and access around the world went against the core values that helped TCCC to become a global brand (Lawrence & Weber, 2014). Stakeholders had grown to expect that the water used in the company’s beverages met the highest possible quality standards. They also expected that, just like the company had been committed to sustaining the availability of water in its primary market in America, it would carry on doing so in international markets. These expectations would be heightened by the company’s CEO’s bold claim that the company would not have a business unless the communities where the company operated had access to water.

The revelation that the company’s Indian operation was depriving locals of water for drinking and irrigation went against the stakeholders’ expectations (Lawrence & Weber, 2014). The performance-expectation gap would be widened by the expose which revealed that the beverage drinks sold in India contained dangerous levels of pesticide residue (Lawrence & Weber, 2014). These revelations came at a time when more and more people were facing acute water shortage. Clearly, the company had come short of meeting the expectations of stakeholders.

Question 2

The strategic radar screens model recognizes 8 forces that shape business including – the legal, political, social, technological, economic, competition, customer, and geophysical (Albrecht, 1999). Of these forces, the legal, customer, and geophysical factors are the most significant to this case. The legal force is relevant because the company violated existing laws on the safety of its beverage products. The customer force is relevant because the company fell short of providing customers with the safest and best possible product, in line with its corporate values. The geophysical force, on the other hand, is relevant because the company used a natural resource (water) in an unsustainable manner for profitable gain.

Question 3

In my opinion, TCCC did not respond appropriately to the public issue. Although the company engaged multiple stakeholders in the effort to minimize its negative impact on communities and the environment, I feel that more could be done to address the issue while avoiding a repeat of the issues in future. The company ought to have closed down many of its bottling plants until it came up with solutions for impacting the environmentally positively. By setting a time-based target, the company gave itself the leverage to continue operating in an unsustainable manner until predetermined date arrived.

 

 

Part B

 Section 1

Since the 1920s, the tobacco industry has been tailoring marketing and advertising campaigns at women. In the early days, the tobacco industry used explicit imagery to associate smoking with slimming among women. It is no surprise, therefore, that tobacco companies continue to produce “slim line” cigarettes for women, who constitute a significant market proportion of their client base. Although the targeting of women by the tobacco industry is nothing new, it has significantly gained momentum in the Twenty First Century. This happens at a time when the rate of cigarette smoking among men has declined, while that of women has increased significantly (McDaniel & Malone, 2009). In western nations, the decline in smoking tendencies among men has been attributed to the growing awareness of the dangers associated with the habit. The aggressive campaigns by health organizations, coupled by law enforcement efforts aimed at regulating the tobacco industry, have, however, failed to reduce the rate of smoking among women. The same case applies in developing nations and middle-income nations outside Europe and the United States. According to Lee et al. (2009), trade liberalization was all it took for the rates of smoking among South Korean to increase from 1.6% to 13% between 1988 and 1998. This occurred in a country where the social stigma against female smoking was strong and the government had attempted to enforce strict restrictions on tobacco marketing aimed at women.

The idea behind targeting women has been pushed by necessity. In the 20th Century, it was not uncommon for the tobacco industry to rely on visual cues, such as depicting superheroes in movies smoking, to increase the appeal of cigarette brands (Bergamini, Demidenko & Sargent, 2013). With various governments prohibiting the tobacco industry from engaging in explicit and implicit advertising campaigns, the appeal of cigarettes on men is steadily declining (Jamal et al., 2014). This, coupled by aggressive campaigns by health organizations and banning of smoking in public spaces, has seen more and more people seeking to cease smoking, not just for their own good, but also to protect others from the effects of secondary smoke (Jamal et al., 2014). As this has been happening, the tobacco industry has found a way to appeal to women. Other than the traditional, tried-and-tested method of selling the myth that smoking facilitates slimming, the tobacco industry has also sold to its female clientele the idea that smoking is luxurious and sophisticated and that it shows confidence and style. Taking advantage of the wave of radical feminism that has gained prominence in contemporary times, the tobacco industry seeks to convince women that smoking adds a sense of sophistication and confidence to the already empowered woman.

According to Amanda Amos (1990), the type of advertising campaign used by a cigarette campaign trying to reach the female clientele is determined by a range of factors, including the country and its culture, the set of tobacco restrictions in place, and the subgroup of women being targeted by the marketing campaign. These factors imply that women in countries with minimal regulations are particularly vulnerable to being influenced by the tobacco industry. Other noteworthy strategies have included the use of promotional images designed for female consumers; producing new cigarette brands exclusively for women; and using women magazines as a marketing platform. In a further effort to appeal to the female clientele, particularly in the youthful subgroup, the tobacco industry also assumes an active role in the community, providing employment opportunities and engaging in socially responsible activities, particularly in underdeveloped regions. According to Richard (1997), however, the minimal economic gains are outweighed by the long-term costs of cigarette usage due to the preventable diseases associated with smoking.

Section 2

The issue of tailoring marketing campaigns of tobacco products to women is significant to my family. This is largely due to the large number of young and vulnerable female individuals within the family. I am privileged to have a good number of female cousins and nieces below 18 years. While the senior members of the family might do everything in their capacity to provide the best possible quality of life for these young individuals, they have little influence over the decisions that the young females make along the way. With the tobacco industry investing billions of dollars in marketing campaigns, a large number of which are tailored for women, my youthful family members might find themselves being persuaded to try smoking. In the event of such a scenario, the young person would most likely keep the experiment a secret. If this continues, the young person might end up getting hooked to the habit or worse, developing nicotine addiction. To avoid this and similar incidences, the key stakeholders of my family engage every possible effort to edify young persons on the harmful effects of tobacco and alcohol, among other drugs that are generally accepted in society. These efforts are, however, reasonably meaningless as long as the government and other institutions charged with the health of the public do not play their part in regulating the tobacco industry.

In the past, my family has hailed efforts by the government to enforce legislations aimed at minimizing the influence of the tobacco industry. The most notable among these are – the move to abolish smoking in public spaces; the legislation restricting tobacco companies from advertising their products through publicly accessible media platforms; and the requirement that tobacco companies label their products with images showing the adverse impacts of using the products. These efforts have significantly reduced the accessibility of cigarette products, something that has benefited a number of my family members in their effort to quit smoking. Those who have benefited are male individuals in the extended family because my family does not have a history of female smokers. With the tobacco industry using aggressive measures to bring the clientele on board, the female members of the family, particularly those entering college are at great risk.

Further regulations by the government to restrict the tobacco industry from targeting women would be greatly beneficial to my family. In the effort to protect the existing youthful population and future generations from nicotine dependency, the government ought to enforce firm restrictions prohibiting tobacco companies from targeting women. This would mean prohibiting tobacco companies from manufacturing cigarettes for women, stopping the tobacco industry from engaging in CSR activities which help women to identify positively with the industry, and prohibiting the industry from marketing products to women through magazines and other media platforms.

Section 3

As an executive in the tobacco industry, I admit that the industry has been impacting women negatively. The industry has taken advantage of changing societal dynamics to get women to use cigarettes (products that were traditionally associated with masculinity) (Bergamini, Demidenko & Sargent, 2013). There is urgent need to address this situation. Not only should the tobacco industry stop tailoring marketing campaigns for the female clientele, it should halt all marketing efforts altogether. Instead, the industry should focus upon reversing the negative influence it has had on society over the years. This would mean putting up health facilities to assist individuals whose health has been negatively affected by cigarette smoking; introducing self-help programs to assist individuals seeking to quit smoking; and making alternatives to smoking (such as nicotine patches) readily available to the public (Fiore et al., 1994).

By introducing health facilities to assist victims of long-term nicotine dependency, the industry would contribute significantly in reducing cases of cancer and respiratory conditions caused by cigarette smoking. In regions where this move is unfeasible, the industry will offer health insurance cover for individuals suffering the adverse effects of cigarette smoking. The industry will also offer a helping hand to individuals who have fallen victim of secondary smoke. Such a program would be targeted at women and children sharing a habitat with a smoker. Self-help programs, on the other hand, would be aimed at the millions of cigarette smokers attempting to quit the habit. I acknowledge that, in the past, the industry has done little to help individuals who desire to quit smoking. Rather than helping these individuals, the industry has exposed cigarette smokers to marketing imagery which has undermined their efforts to quit. Going forward, the industry will halt all marketing campaigns and introduce self-help programs with the aim of reversing the damage. Finally, the industry seeks to help women to abandon the habit by making alternatives to smoking readily available. The most viable alternative is the use of nicotine patches. Fiore et al. (1994) establish that nicotine patches are highly effective in helping individuals to quit smoking.

By enforcing these strategies, the industry will be well-equipped to deal with the issue of smoking among women. I intend to use my influence in the industry to see to it that the tobacco industries no longer undermine the health of the public (and specifically that of women). Instead, the industry will cease marketing tobacco products to the public with the hope of achieving a population free of the avoidable health impacts of tobacco usage.

Section 4

The government has played a significant role in escalating the issue of widespread usage of tobacco products among women. Rather than taking a proactive role in regulating the tobacco industry in light of the marketing campaigns targeting the female clientele, the government has assumed a spectator role (Frohlich et al., 2012). By doing so, the government has made it possible for the tobacco industry to use its financial capacity to influence the tastes of the female client base. The government has a mandate to protect the wellbeing of its citizens. However, by failing to regulate the tobacco industry, the government has effectively weakened the influence of health organizations seeking to improve public health by cutting down on cigarette smoking, among other forms of drug abuse. As such, the government has failed its people, leaving them vulnerable to the influence of the tobacco industry and similar industries like the alcohol industry. In turn, high rates of alcoholism and nicotine dependency are reported in the country.

Reducing the influence of the tobacco industry, particularly on the female client base, would have wide-ranging and long-term positive impacts on the health of women. Considering the prospect of reducing cigarette usage among pregnant women, such a regulation would also be greatly beneficial to unborn children. It is worth noting that cigarette smoking among pregnant women increases incidences of stillbirths and mental impairment of the fetuses (Behnke et al., 2013). Other than regulating the tobacco industry by enforcing strict regulations, the government should also play a proactive role in informing women on the adverse health impacts of cigarette smoking. This would be helpful in neutralizing the effect of the marketing efforts by the tobacco industry while ensuring that youthful populations are protected from nicotine addiction.

Section 5

The media has played a crucial role in misrepresenting the issue to the public. The media is mandated to report on issues that affect the public in an indiscriminate manner. It is ethically obligated to report on current issues and to share useful information that should benefit the public. However, revelations of the tobacco industry influencing the media and the messages it transmits to the public on tobacco products are not uncommon (Davis, 2008). By using its financial capability, the tobacco industry has ensured that the media neglects the negatives associated with the usage of tobacco products. Instead, the media has been used to market tobacco products for their supposed benefits, at the expense of the health of the public. By complying with the demands and interests of the tobacco industry, the media has acted as a servant of the tobacco industry while falling short of serving its duty to the public.

Evidence of the media being used by the tobacco industry to transmit industry-appropriate communication to the public can be traced in British American Tobacco’s social media activities. Based on Freeman and Chapman’s (2010) observations, the company has historically used the social media platform to post images of its corporate events, products, and promotional items. This is in violation of the World Health Organization’s Framework Convention on Tobacco Control (Freeman & Chapman, 2010).

While heeding to the influence of the tobacco industry, the media has been reluctant to air government-sponsored messages concerning the negative effects of tobacco on the health of users. In a perfect illustration of ‘highest-bidder-takes-all’, the media has strategically avoided sharing of information that contradicts the messages shared by the tobacco industry. Evidence to this can be seen in a public campaign whereby the media helped the tobacco industry to transmit anti-excise tax messages, effectively undermining former U.S. President Bill Clinton’s health plan (Tesler & Malone, 2010).

In order to realize the hoped-for change, it will be necessary for the media to join in the effort to reduce the influence of the tobacco industry. Stakeholders in the media industry ought to agree to deny the tobacco industry a platform for marketing their products, especially with women being the target of such campaigns. Doing so will significantly improve the health of the female population while protecting its future and that of the unborn children of the world.

 

 

References

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Behnke, M., Smith, V. C., & Committee on Substance Abuse. (2013). Prenatal substance abuse: short-and long-term effects on the exposed fetus. Pediatrics131(3), e1009-e1024.

Bergamini, E., Demidenko, E., & Sargent, J. D. (2013). Trends in tobacco and alcohol brand placements in popular US movies, 1996 through 2009. JAMA pediatrics167(7), 634-639.

Davis, R. M. (2008). The Role of the Media in Promoting and Reducing Tobacco Use: Executive Summary (No. 19). US Department of Health and Human Services, National Institutes of Health, National Cancer Institute.

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Jamal, A., Agaku, I. T., O’Connor, E., King, B. A., Kenemer, J. B., & Neff, L. (2014). Current cigarette smoking among adults—United States, 2005–2013. MMWR. Morbidity and mortality weekly report63(47), 1108.

Lawrence, A. T., & Weber, J. (2014). Business and Society: Stakeholders, Ethics, Public Policy (Fifteenth ed.). New York, NY: McGraw‐Hill Education.

Lee, K., Carpenter, C., Challa, C., Lee, S., Connolly, G. N., & Koh, H. K. (2009). The strategic targeting of females by transnational tobacco companies in South Korea following trade liberalisation. Globalization and health5(1), 2.

McDaniel, P. A & Malone, R. E. (October 21, 2009). “Creating the ‘Desired Mindset’: Philip Morris’s Efforts to Improve Its Corporate Image Among Women,” Women & Health [published online].

Richmond, R. L. (1997). How women and youth are targeted by the tobacco industry. Monaldi archives for chest disease= Archivio Monaldi per le malattie del torace52(4), 384-389.

Tesler, L. E., & Malone, R. E. (2010). “Our reach is wide by any corporate standard”: how the tobacco industry helped defeat the Clinton health plan and why it matters now. American journal of public health100(7), 1174-1188.