ITC Ltd.
ITC Ltd.
Introduction
ITC limited is a major organization in the Indian market as it employs more than 29,000 workers in 60 locations throughout the country. As of the year 2011, ITC was the biggest tobacco company in the Indian market, controlling a 75 percent of the market share (Ojha 1). The impact of ITC is both positive and negative on the Indian economy. ITC has been participant in several social responsibility activities, which are part of ITC’s obligation to serve the community from where it makes money. The negatives of ITC are the health related problems caused by tobacco use, such as respiratory trouble, cancer, and in some cases deaths (Gold et al, 1996, p. 931-937). ITC’s plan is to ensure that growth and sustainability in the tobacco industry are experienced in the near future.
Analysis of Social Responsibility and Ethical Decision-Making
ITC has been making great strides towards changing the company’s outlook through a modified strategy plan that are aligned with their social responsibilities. ITC has been working to diversify their investments through new industries, which can help them enhance the quality of life in the community. For supporting their vision, ITC limited has developed several social responsibility programs in several business sectors like education services, hospitality services, and self-help services. Through these changes in ITC’s activities, society has started to consider them as an environmentally and socially sustainable company. ITC has taken initiatives for the construction of green buildings, has been considered as a water positive organization, and a carbon positive company. In the Indian tobacco market, ITC is the market leader and the company provides jobs to several farmers and decreasing production of tobacco would lead to increase in unemployment. ITC has started to transition and become a more socially responsible organization by using a triple bottom line method for making ethical decisions and by employing sustainable initiatives for showing the progression.
ITC needs to maintain its investments in social several avenues that the company has been using to build a reputation as a socially sustainable organization. In addition, ITC also needs to remain carbon positive and water positive to conserve the society it serves. It would be advisable is ITC starts to increase investment towards creation of more jobs and reduce unemployment through increased production. Finally, ITC needs to keep communicating with customers through their social programs and ensure they serve the community with innovative ways.
In comparison to Phillip Morris, who also maintain investments to ensure that their carbon footprint is reduced and ensure employment to many farmers in more than 30 countries (PMI, 2016). ITC is doing much more in terms of role in sustainable development. The social responsibility role played by ITC is greater as the company is investing heavily in other sectors to build better future opportunities for the company and provides several support services to the society in general.
The external influences have played a greater role in enforcing ITC to comply with social responsibility. Pressure from the Indian government, contraband cigarettes and tobacco control laws has forced ITC limited to take measures and work on their identity as customers are heavily influenced by the negative coverage received by the company. ITC has invested a significant amount of money to develop a positive image and sustainable business. Internal influences have been the leadership that has been concerned with the challenges presented in front of them to run ITC efficiently.
The current strategy plan could cost ITC in terms of profit margin as they are investing a significant amount of money to develop alternate industries. Also, the company stands at a risk of facing greater competition from smuggled cigarettes in the industry that can take advantage of the external pressure on ITC. Philip Morris International also faces the same risks as they need to develop an image of a sustainable business and have to invest by maintaining a low carbon footprint.
Revised Strategy Plan
The revised strategy plan would need to take into consideration the challenges faced by ITC in terms of performing their social responsibility. ITC is expected to follow the rules in the form of increased taxes and regulations against consumption of tobacco. While, at the same time they need to manage the reputation of selling a health risk product and face significant threat from contraband cigar rates. The strategy plan needs to view ITC’s market position for long term perspective and place itself the industry leader and an organization that others need to follow. By following the social responsibility measures, it is expected that ITC will be able to retain its market share as a society would view the company in a positive light.
ITC should take steps in communicating with the society that they are providing thousands of jobs all over the country and contraband cigarettes can become a threat to these jobs and greater risk as they are not regulated.
The revised plan has been developed after considering the market position of ITC and the challenges it faced in the current market. The new plan maintains most of the practices, but adds the dimension of developing relationship with the society by regularly communicating the role ITC is playing in uplifting the society and investments in improving the standard of living.
The external forces played a major role as they have the direct role in impacting ITC and the tobacco industry. The government, legal system, and contraband cigarettes are each making it tougher for ITC to run their business and remain profitable.
The issues of ethics were considered by appealing to the emotions of cigarette smokers as the plan would also communicate to the society that ITC is job provider for several tobacco farmers and taking care of the community through investments in alternative industries and social programs to uplift the society.
References
CDC. (2015) “Smoking and Tobacco Use. Retrieved 29 May 2016 from, http://www.cdc.gov/tobacco/data_statistics/fact_sheets/fast_facts/
Gold, D. R., Wang, X., Wypij, D., Speizer, F. E., Ware, J. H., & Dockery, D. W. (1996). Effects of Cigarette Smoking on Lung Function in Adolescent Boys and Girls. New England Journal of Medicine, 335(13), 931-937. doi:10.1056/nejm199609263351304
Ojha., A.K. (2010). ITC Ltd: Towards a Triple Bottom Line Performance. Retrieved 29 May 2016 from, https://hbr.org//itc-ltd-toward-a-triple-bottom-line-performance/IMB339-PDF-ENG
PMI. (2016). Sustainability. Retrieved 29 may 2016 from, http://www.pmi.com/eng/sustainability/pages/sustainability.aspx
