Corporate Social Responsibility

In today's blog we are going to access the corporate social responsibilities(CSR) of organizations. CSR is a way companies regulate themselves. The aim is to be responsible towards society and to generally get people to "like" your organization. You might be asking why would a company want to do something like that it would just cost them more and reduce profits thus creating a conflict with the stakeholders. That is not always the case. Improving an organization's CSR results in more access to capital, it enhances the brand image, it can be a tool for marketing and more importantly result in a lower staff turnover. The staff could feel more loyal towards a company that gives back to the community. This could be a key factor for motivation and it would result in less replacement costs for staff. 

Various ways to access CSR

The aim in this blog is to assess whether CSR is important or not and what happens if companies don't maintain it. Some companies claim to be socially responsible but the reality varies. Phillip Morris is a leading American Tobacco company. It sells tobacco in over 200 countries. Philip morris suggests that it is very responsible and very firmly states that it does not target its advertisements towards children. However this is not the case. Philip Morris has been known to target children. They make special offers on their cigarettes such as buy one get one free, they give out free mini radios with cigarette pack and they have been known to distribute their cigarettes at concerts. These are things that youths are attracted to. Mostly teenagers attend concerts and want cheap rates. In country like America it is difficult for them to so this but what about Indonesia. Which has almost little to no laws regarding tobacco. According to an official spokesman of a special commission set up to protect children's rights (KPAI) and evolve regulations to prevent children getting addicted to smoking, "The future of 80 million Indonesian children is at stake as the cigarette producers were intentionally aiming children as their future market through massive TV advertisements and sponsorships on activities in which teenagers involved the most." Almost 30% of all indonesians try a cigarette before the age of 10. Cigarette kiosks sponsored by Marlboro are located near schools. They even sell individual cigarettes thus making it more accessible to teenagers and children. 

ABC news coverage of child smoking in Indonesia

A few pictures to illustrate the condition:

Buy 1 get 1 free offer

As a result of poor CSR, Philip Morris had face a string of protests and lawsuits. This caused the government to further restrict the marketing practices of Tobacco companies. Philip Morris itself faces a adverse net income from 2008 to 2009. Recently Philip Morris reported a decline in the volume of cigarettes shipped abroad because of the stricter legal requirements. 

Decline in Sales Volume of PM Cigarettes 

If Philip Morris maintained the CSR image it had stated it may have been in a better market position. CSR are not only good for the environment and society but may also result in improvements of profits and revenue. Therefore I believe it is an essential practice. Cheers!