Question 1: Suncal's primary (market) stakeholders are their shareholders, their employees, vendors and potential home buyers and below market renters. The shareholders benefit from revenues which show up as dividends, The employees benefit from the company’s ability to generate income, and its vendors in turn benefit from a continued source of sales revenue, but also, potential Suncal home buyers, and below market renters.
Secondary or non-market stakeholders include The Disney Resort Group. Although The Disney Resort Group “Disney” is not involved in direct monetary exchanges with Suncal, they, as well as residents in the city of Anaheim could be affected by Suncal's projects. They both could benefit from an increase in new homes opening up in the market or from a slight decrease in traffic congestion and smog; but who could also be adversely affected by an economic slowdown should the tourism industry begin to falter.
Question 2: Suncal's shareholders are in favour of the project because they stand to gain financially whenever new properties are developed and sold. This is due to the value added and then realized once the properties are sold to home buyers. Suncal's employees are in favour of the project as they continue to receive pay cheques so long as Suncal continues to develop properties, as are Suncal's vendors who can continue to supply their products and services to Suncal so long as Suncal continues to develop properties. Those who are seeking to buy a new condominium in the resort district are in favour of the project, as are renters seeking access to below market rental condominiums in the resort district.
Disney is opposed to Suncal's development plans because Disney's vision of development in the designated resort district does not match Suncal's vision. Disney stakeholders believe that residential development in that area would have a detrimental impact upon the product that they sell, which is to give their customers an “other-worldly” experience; one that is completely disconnected from the usual routines of daily living. Having a residential area, including schools, grocery stores, and an increased police, fire department, and ambulance presence in the tourist resort district would not fit Disney’s vision. Disney feels having a residential community in the heart of the resort district, which up until now catered completely to the tourist's Disney experience, would have a negative impact on tourist satisfaction and revenues. Despite the fact that Disney is a non-market stakeholder in Suncal's project, they have the most power in this dispute due to their economic strength and business sense. Very little information is available regarding the position of other business owners in the resort district so it is assumed that similar secondary stakeholders are in line with Disney's purposes as they are also dependent upon tourist dollars to stay in business. It is safe to assume that some of secondary stakeholders may have entertained the idea of purchasing a Suncal condominium close to work, saving time, vehicle expense, and travelling risk on a daily basis.
Question 3: Suncal was probably aware of the possibility of having their re-zoning requests denied but the property in question was prime real estate for Suncal's purposes. Suncal did their best regarding the rezoning requests, instigating the organization of a coalition comprised of the Anaheim subsidized-rental community, affordable housing advocacy group, Disney employee union, and city council to go against Disney. Suncal may have been hoping for more support from business owners in the resort district as well.
The City council appears to have been supporting whoever came out on top. However, the city of Anaheim received large tax revenues from the resort district, including Disney, properties. A portion of these revenues were spent on public services for the resort district and some were used to subsidize housing for Disney employees. Because the cost of renting an apartment in Anaheim remains unaffordable for a person working in the resort district, Disney employees may never gain financial success. They might never have a savings account to save for a down-payment on a house, or become a business/home owner/investor, which means their job is dead-end, but, it is just about the only gig in town. Furthermore, jobs at Disney are seasonal which means that for part of the year Disney and resort workers are unemployed. Rather than Disney employees receiving realistic wage increases from Disney, or even Disney-subsidized rental units, the city of Anaheim instead pay for subsidized housing for Disney employees which in effect drains the local economy. With up to 20,000 Disneyland employees seeking possible rent subsidies of $700 per month (a 50% subsidy on wages), the city could potentially pay out $3.5 million per month to subsidize Disney employees for rent alone. The city may receive large revenues from property taxes from the resort district; however some of this money is spent supporting Disney business activities. The question, since all things change over time, is whether the Disney experience is still an asset to the community or if it potentially costs more than it is worth.
Suncal's offer to build condominiums and below-market rental units in the resort area was almost timely. Disney seemed to be on its way out of favour in the local community but the beauty of the resort area is still an asset to the community; as are the property taxes realized. Convincing the stakeholders of this is another thing. Some of the stakeholders were very aware of it, some not. Disney especially was not. They opposed Suncal's project in every possible way that money could buy. Instead of supporting community needs and concerns, Disney caused more animosity. Suncal backed out of the project in the process, which was good business sense, and built at another location in Anaheim.
During the process of this dispute nothing was getting resolved, city stakeholders were simply poking at the elephant in the room. The city of Anaheim has been completely dependent on Disneyland for their city's economic success for decades. If the city of Anaheim had any other ways to support themselves apart from Disney, they have not made anyone aware.
Suncal's project fell through but since then, Disney requested a re-evaluation of its property and consequently their tax payments to the city have decreased. Disney subsidized transportation for employees and tourists travelling to and from the resort area into Anaheim have decreased, and the city continues to provide subsidized rent to Disney employees who still do not receive wages that support them in the local economy.
In my opinion, Suncal's best solution to this dispute, had they the time and resources to address this problem, would have been to prepare a presentation on Anaheim's property tax income from Disney and the real expense of supporting Disney. This report would be shared with stakeholders via the media, undermining the fabrication of income security produced by the Disney experience, with a proposal that shows how Suncal's development would benefit the city of Anaheim more than Disney.
Suncal may have lost the battle for a development property in the resort area this time but they may see another possibility to develop there in the future; as the community continues to transition away from Disney's view of Anaheim.
Part B: The Tobacco Industry
Section 1. Context: Cigarette Filters in our Environment
After the USA Surgeon General announced that there was a link between cigarette “tar” and a rise in lung cancer rates back in the 1950's, cigarette companies introduced the filtered cigarette in an effort to keep their customers and stay in business. The filters were made of plastic filaments only microns thick and were (theoretically) biodegradable within 15 to 20 years. But, almost 5 trillion plastic filters are disposed of every day on planet Earth. Using the statistics from the World Health Organization Atlas, approximately 240 trillion cigarettes have been smoked in the past 60 years and assuming, as stated, that 90% of these were filtered cigarettes, then approximately 200 trillion filters were discarded worldwide over the past 60 years. Obviously most people put their garbage in a garbage receptacle which then goes into a landfill but recent studies have determined that cigarette filters are a hazardous waste. Even in a landfill, a cigarette filter, with or without the remaining tobacco product, leaches toxins into aquifers and nearby waterways. These toxins are known to kill aquatic life. Cigarette butts are a common sight alongside curbs and it is common for them to be washed down storm drains during a rainfall or swept into the gutter by a street cleaner. We only have to view the percentages of cigarette filters ((about 30%), to other materials found during cleanups along our waterways to get a vision of the possibility that many of these filters are in the rivers, lakes, and oceans of the world. There are a staggering number of cigarette filters on this earth and it's anyone's guess what these filters are doing to our fish stocks. Studies have shown that one cigarette butt placed in four gallons of water for 24 hours was enough to kill different types of aquatic life within 48 hours. Recently, the first cigarette filter recycling program in the world was introduced to Canada. Some communities were imposing a return deposit on every package of filtered cigarettes to ensure filter recycling. But presently the majority of smokers in the world are not recycling their filters. Meanwhile it is likely another reason that cigarette bans are being imposed in various cities and one could be coming to a city near you as well.
The primary stakeholders in this scenario are the cigarette manufacturers, owners, CEO's, boards of directors and shareholders who obviously want to stay in business and who have used various tactics to do so. Additional primary stakeholders includes distribution chains, vendors, and employees who may or may not be attentive to the dangers associated with products that they handle, but which keeps them gainfully employed nonetheless. Nicknamed “Big tobacco”, meaning “too big to fail”, the industry employs a lot of people, from tobacco growers worldwide filter manufacturers, packaging producers, advertising and marketing personnel, sales teams, transporters of the product warehouses, cashiers, tax accountants, tax departments and government employees, a long chain of workers are supported by the tobacco industry. Another primary stakeholder in this is the filtered cigarette smoker, the cigarette addict, who pays a 75% federal tax on the cigarette product and may soon find himself paying an additional fee per package of cigarettes for filter recovery.
Secondary or non-market stakeholders would include the fisheries industry if it is realized that fish stocks are indeed being killed off through the leeching of toxins from trillions of cigarette butts into fish habitat. Filter recycling programs such as the one emerging in the Canadian market called Cigarette Waste Brigade® through a company named TerraCycle, will collect and arrange for recycling of cigarette filters into plastic pallets. Additional secondary stakeholders includes community volunteers/clean-up crews who take on the dirty job of cleaning up discarded cigarette butts left behind by smokers, the health industry who provide care to children who have ingested discarded cigarette butts, and smoking ban enthusiasts who would prefer an end to cigarette production, distribution, and sales completely.
Section 2. What does this mean to my family?
It upsets me to see cigarette “butts” on the ground. It is irresponsible and disrespectful behavior; making a mess and expecting that someone else will clean it up. It sets a bad example for the younger generation that may see this kind of behaviour as normal. If that is normal behaviour, we are in big trouble as a species. Seeing cigarette butts on the street makes me think that people don't care about the world around them, and that people cannot be trusted to care. It seems that even in these times when people are so much more aware of environmental concerns that so many are still uninformed as a whole. While doing this project, I was amazed to find out how many smokers there are in the world and at the trillions of plastic filters dumped in our environment every day. The decision tobacco companies made back in the last century to make cheap plastic filters for their product may have caused an environmental disaster. And, until now I never knew that cigarette filters were hazardous to the smoker, that the carcinogenic plastic filter filaments could be inhaled into the lungs. Nor was I aware that filters and nicotine were toxic to aquatic animals and that these toxins were finding their way into the aquatic environment. I feel misled by the cigarette manufacturers and advertisers. I feel that it is about time that all companies step up to the plate to be brutally honest about their products, about the environmental concerns brought by their products, and about the cleanup required because of their product. Therefore, I am very much in support of imposing a practical return deposit on every package of filtered cigarettes to encourage the return of every filter sold to a recycling depot in exchange for the deposit. I really believe that this is the answer to the filter problem, to make people aware. If we put a price on it, and inform the purchaser at the point of sale why there is an additional fee, people will start to pay attention to this issue.
Section 3. What does this mean to my company?
As a tobacco industry executive, I have been dreading the day that smokers wake up and see the vast numbers of plastic filters entering landfills, waterways and littering the streets. I am very aware that filters were added to cigarettes as a marketing scheme that saved the tobacco industry sixty years ago. When the Surgeon General announced a link between cigarette “tar” and lung cancer our mission was to protect the company and shareholders, relatively few people successfully opposed that mission. But things are changing in the world. Lawsuits and multimillion dollar settlements have begun to plague our industry. We never wanted to take responsibility for other people's life choices. Who am I to tell other people what to do? We, in the tobacco industry, tried not to admit the definitive proof that smoking causes cancer. If we could convince smokers to keep buying cigarettes, then we are simply doing as the law directed us to do which is to protect the shareholders’ investment. So we support the local sports teams, museums, the arts, and environmental programs to keep a good public image. That seems to matter more to the public than making cigarettes less harmful. The governments however keep pushing us in that direction. My greatest concern is that smoking will be banned everywhere and that my industry will die, however, being one of the largest contributors to the global economy, that is unlikely to happen. Too many people depend on us for a living. Plus, cigarette addicts will always want their product. We believe that we are too big to fail and, besides, we spend more on lobbying the governments than any other organization. This issue regarding filters may mean we will have to change our product to a “green” cigarette using organic tobacco and filters, to keep the western market. All of these costs to the company have caused our stocks to falter. The “green” investor is emerging, but any way you look at it, we are not presently a “green” product. There are alternative “green” filter technologies available to us, if necessary, but for now we will bide our time and continue our public relations initiatives, such as putting our name alongside filter recycling programs. TerraCycle Canada Corporation has partnered with Imperial Tobacco Canada in their filter recycling program Cigarette Waste Brigade®. These recycling programs are where our customers, volunteer cleanup crews or government-paid workers collect and package tobacco waste and send it in to be recycled into plastic pallets in exchange for a complimentary donation to their favorite charity, all of which makes us look good while turning a huge profit for TerraCycle. Our largest consumer base is not in the developed countries anyway, but are in countries such as India and Africa where we have considerably more time before people there care as much about the issue as the western nations. We survived the crisis back in the fifties; in fact our industry is several times larger now, so we can survive this too.
Section 4. What does this mean to my country?
Health Canada states, in no uncertain terms, links between tobacco, disease, and burdens to government systems. Governments at all levels pressure for a decrease in the use of cigarettes and have supported policies to protect the rights of non-smokers by making it illegal to smoke in certain outdoor public places. These areas include but are not limited to: public entrances, confined spaces, such as homes, vehicles, and other interiors where vulnerable people were exposed to smoke in the recent past, such as children. Cigarettes in the terrestrial and aquatic environments also affect non-smokers, in that formaldehyde and other hazardous waste are collected in cigarette butts which then leach into the water supply. Costs to the public regarding cigarette “butt” disposal relates to landfill burdens, collection, and disposal due to the fact that cigarette butts are a toxic, hazardous waste and also due to the volume of cigarette litter that does not go to landfills. Extended producer responsibility (EPR) is a current proposal in some government agencies where the costs for disposal are required of the cigarette manufacturer. Recently in Canada, a cigarette recycling program has opened up that will place the burden of recycling back onto the consumer, mainly, and on volunteer cleanup crews and city workers. The move is geared toward educating the public of the issues and hazards of cigarette “butts” in the natural environment with the goal of ending the disposal of cigarette butts in landfills and public places. By pressuring tobacco manufacturers with EPR we are seeing a response, such as with Imperial Tobacco Canada partnered with TerraCycle in the Cigarette Waste Brigade® program.
Section 5. Media Impact:
In the previous century, tobacco companies enjoyed relative freedom to promote their product in virtually every medium, from newspapers to movies, television, radio, magazines, and billboards and to say whatever it took to do so. Over the decades, governments have placed increasing restrictions on tobacco-related advertisements. Media plays a significant role in the education and opinions of the public due to the fact that media coverage is the main source of information for the average person. The tobacco industry has been very aware that media coverage can be “framed” or manipulated to deliver a desired outcome. A US District Court found the tobacco industry guilty of engaging in deceptive marketing practices in order to sell their product. Documents made public as a result of the Master Settlement Agreement, in which several of the states in USA sued the tobacco industry for costs to the health care industry directly related to the effects of tobacco products on the health of citizens, have heightened news media (and therefore the general public's) awareness of these practices which has, in turn, threatened the reputations of tobacco manufacturers. But “Big Tobacco” can afford to hire the public relations industry to build a positive corporate image and it was found that the best way to do that is through sponsorship (investment in a cause or event that has public appeal), essentially a marketing ploy because even though the tobacco industry is restricted by law from advertising their product, they are allowed to put their name in the news headlines along with the cause or event that they are sponsoring. It is a form of advertisement with all of the merits of advertising such as brand awareness, media attention, and market targeting. The memory associations that the tobacco industry are attempting to instill in the public mind is that the tobacco industry is one of fun and excitement (sponsoring a sports event) or of compassion and social responsibility (partnering with a filter recycling program). This ploy has been proven to work in other industries where being socially responsible affects the opinions of the public favorably. Meanwhile, governments and anti-tobacco non-governmental agencies continue to fight to inform the public of dangers related to the tobacco industry. On a positive note, polls indicate that the public majority, including school children, are increasingly distrustful of the tobacco industry. But more needs to be done because tobacco usage/addiction continues in obscene numbers worldwide. Studies have shown that the problem of anti-tobacco solidarity may be a media literacy problem. It's a matter of attracting a significant amount of media attention to a specific issue until a change of policy can come into effect. In the issue of the vast amount of cigarette filters causing untold harm to the environment, the public needs to be made aware. Starting a recycling program is only part of the process. Media attention is by far the most significant.
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