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Research Paper: Tobacco Industry

Though this has not yet occurred, constant regulations on the industry and the use of the plant has been put in place. This paper will discuss the history of the tobacco industry, its corporate stakeholders and response to their issues, the role of the industry in its social, economic, and political setting, domestic and international ethics, ecological and natural resources, and social issues. The paper will conclude with my ratings of the industry pertaining to its overall social responsiveness and its accomplishments and this area, and of the industry in relation to the Saint

Leo University core values. History Tobacco is a plant that can only be grown in warmer climates; it is naturally only grown in the Americas (both South and North). After harvesting it is picked, dried, and ground. Afterwards, it can be used in a number of ways. For recreational purposes, it can be smoked, chewed, or sniffed. Traditionally, tobacco was known to have many medicinal purposes. For example, tooth aches were eased by chewing tobacco. Also, tobacco leaves were placed on open wounds in order to heal them.

It was also used in religious practices amongst the Native Americans; they smoked it together in what was known s a peace pipe as a communal practice (Hussein, 2003). As demonstrated, the tobacco plant was a highly sacred and valuable crop. When the settlers began to arrive in North America, Native Americans would give the settlers tobacco as peace Dixon 3 offerings. Not only did the settlers use the tobacco, but they also sent some back to Europe. From there, the settlers began to grow tobacco for profit. In fact, it was the first crop to be grown for money in North America.

The proceeds helped pay for the American Revolution against England which started in 1775 (History of Tobacco, 2012). Slowly, tobacco went from being the sacred, religious, and healing plant that it was intended to be into becoming a habit. People were using tobacco more and more for recreational purposes. “[P]people smoked about 40 cigarettes a year. The first commercial cigarettes were made in 1 865 by Washington Duke on his 300-acre farm in Raleigh, North Carolina. His hand-rolled cigarettes were sold to soldiers at the end of the Civil War” (History of Tobacco, 2012).

About two decades after Washington Duke’s commercial cigarettes, James Bonsais invented a machine that made 120,000 commercial cigarettes per day. Cigarette smoking took off from there. Bonsais partnered with Washington Duke’s son, James “Buck” Duke and they built a factory for cigarette production. “The first brand of cigarettes was packaged in a box with baseball cards and was called Duke of Durham. Buck Duke and his father started the first tobacco company in the U. S. They named it the American Tobacco Company” (History of Tobacco, 2012).

Several other tobacco companies followed suit including Marlboro in 1902 and collectively, the tobacco industry had begun. Corporate Stakeholders Before diving into corporate stakeholders, who they are, and the response o their issues, it is important to define the difference between the stakeholder and the shareholder. Stakeholders and shareholders closely relate to one another and are often misunderstood. Shareholders invest Dixon 4 money into corporations through stocks. Stakeholders are those that stand to lose or gain depending on the corporation’s actions; they are the employees, Customers, suppliers, the government, the community, etc.

Shareholders are stakeholders, but stakeholders are only shareholders if they own stock. According to the Organization for Economic Cooperation and Development COED), corporate stakeholders have a very important role, not only within the business for the community as well. “Good corporate governance helps… To ensure that corporations take into account the interests of a wide range of constituencies, as well as the communities within which they operate, and that their boards are accountable to the company and the shareholders.

This, in turn, helps to assure that corporations operate for the benefit of society as a whole” (1999). Health concerns are the primary issue for nearly all of the stakeholders. Employees care about their job security and integrity for their occupations. The government is responsible for ensuring the safety and overall welfare of its community. If tobacco is known as a health hazard to the citizens, then it is the responsibility of the government to act on it. The customers of the tobacco industry are another huge factor. Of course, they care about their health, the ingredients of the product, the quality, the cost, etc.

Then there are the owners and shareholders who, while they may also care about the reputation of the business, they are mainly concerned with the continuation of the corporation and the profits from it. The interests and actions of each f these stakeholders affect the other. For example, the government is constantly pressured by the community to take action to further safeguard their health. Cigarettes are known to cause birth defects, cancers, respiratory problems, and other Dixon 5 illnesses. The harmful effects even extend to those who do not smoke but are victims of secondhand smoke.

Therefore, the government has created a number of laws including the Federal Cigarette Labeling and Advertising Act of 1 965 and the Public Health Cigarette Smoking Act of 1969. “These laws required a health warning on cigarette packages, banned cigarette advertising n the broadcasting media, [and] called for an annual report on the health consequences of smoking” (CDC, 2012). The response of the tobacco industry to these issues was exactly what was requested of them. All tobacco products from that point on consisted of a Surgeon General’s warning on the packaging.

In addition, there were no longer any television or radio ads for tobacco products and annual reports on the health consequences of smoking. Although ads are no longer seen on TV or radio, they are still present in magazines and direct mailings. Another example would be the spreading of knowledge that smoking cigarettes causes lung cancer. The community was nearly outraged. Customers were fearful, sales were down, warning ads were everywhere, and shareholders were upset. The tobacco industry had to respond to this new information and wave of fear.

One of the results was the creation of the filtered cigarette. Once the truth that filters offered no real protection, then further action had to be taken. Then, “light”, “mild”, and “low tar” tobacco products were created to give pacify the stakeholders that safer alternatives were available. All stakeholders are interconnected. The more “noise” that the community sakes in regards to the health hazards of tobacco, the more action that the government has to take. This Dixon 6 action is considered public policy and in order to implement these policies, regulations are put in place. Regulation is a primary way of accomplishing public policy… Because government operates at so many levels (federal, state, local), modern businesses face complex webs of regulations” (Lawrence & Weber, 2011). Every time the government raises the taxes and regulations on tobacco products, the corporation loses customers. If too many customers are lost, hen the shareholders and owners are upset, and employees have a greater chance of losing their job. Role of the tobacco industry in its social, economic, and political setting The tobacco industry’s role in its social setting is very difficult.

It is a company that sells harmful products and is expected to be socially responsible. One element of this role consists of being careful so as not to mislead consumers. They are expected to be honest and thorough in their annual updates as to the harmful effects of smoking cigarettes. They are also responsible for doing all that they can to keep cigarettes out of the hands of minors. There is also an economic role that is played and according to the U. S. Department of Agriculture, it is a very important and controversial one. In 1998, consumers spent an estimated $59. Billion on tobacco products, chiefly on cigarettes ($55. 7 billion). Much less is spent on cigars (SSL . 0 billion), smoking tobacco, chewing tobacco, and snuff ($2. 5 billion combined), but these are also important industries. These consumer expenditures support thousands of Dixon 7 businesses that support thousands of businesses that manufacture, transport, market, and sell these products, as well as son 90,000 farms that grow tobacco leaf. Tobacco products are also an important source of tax revenue for Federal, State, and local governments.

Controversy arises in that more jobs and thus, more money could be made and kept here in the united States if the production of tobacco could be kept here. However, tobacco companies have set up shop in countries such as Brazil, Zanzibar, Malawi, etc. The country is importing more tobacco products than it is exporting meaning that we are paying more, but profiting less; economically, this is a serious issue. The political arena can be especially tricky. As known, money is, unfortunately, a powerful influencer in politics. While the tobacco industry is constantly being regulated upon (warning labels, taxation’s, advertising bans, etc. They are also fighting back and finding maneuvers or loopholes in the system in order to get their desired results. An infamous method of doing this is by underhandedly funding politicians. An example of this occurred in 1 991 and 1992. The tobacco industry funded a California politician, Willie Brown, $221, 367 within this time frame. In turn, he looked out for their interests. In 1991, it was discovered that he had met with official from Phillip Morris (leading tobacco company) to discuss the gassing of pro-tobacco legislation by disguising it to voters as anti-tobacco measures.

Another example was a few years prior in 1988 when California voters passed Proposition 99 which was intended to add 25 cents of tax to every pack Of cigarettes. “Twenty percent of the new revenues were specified by voters to go toward community and Dixon 8 school-based tobacco education and prevention programs. While that specification was made by the voters, the implementation of the Proposition was still up to the California state government. After Proposition 99 was passed, however, tobacco industry political spending increased tenfold.

As a exult, only 14. 7 percent of Proposition ass’s revenues went to tobacco education. The tobacco industry had successfully lobbied the California government to enact the legislation in a way that would benefit them” (Simms, 1999). More recently, as of 2010 and 2011, top recipients of the tobacco industry are politicians from Ohio and Virginia that all advocate ways to limit the Food and Drug Administration. Domestic and International Ethics There is nothing ethical pertaining to the tobacco industry. They are making a profit off of killing people.

None of their products are healthy or aim at countering the harmful effects of tobacco. Therefore, as far as domestic and international ethics, it is nearly impossible to outline a position for this industry. The first change that need be made would be to begin with politics. All of the backroom deals must cease to be made. Any legislation that they seek to be passed must be done the right way and if possible, compromise would be made considering the tax dollars that the industry brings in. It has already been made evident that the government has no plan of completely ridding the legalization of tobacco.

There are some things internationally which could be done to boost ethics, however. For example, here in the U. S. , tobacco companies are legally required to warn consumers on the labels and to not advertise over broadcasting systems such as television and radio. These requirements, however, are not required in all countries overseas. Therefore, the tobacco industry could stand to gain more respect if they implemented these same practices in other countries. Dixon 9 Ecological and Natural Resources Tobacco is both an ecological and natural resource.

It is a plant that grows from the earth when In its natural state (an alternative is synthetic tobacco). It is naturally grown in warmer, humid climates mainly in the Americas. For example, here in the United States, tobacco is grown in Virginia, Tennessee, Kentucky, and some parts of North Carolina. Though tobacco is natural, the problem with it lies in the nicotine that is found in tobacco. It releases a chemical to the brain which makes the user feel a sense of euphoria. Nicotine is what causes most of the health problems related to cigarettes and is also what makes tobacco products addictive.

According to research, it will be much more difficult for smokers in present day times to quit than it was for those in the past. “The amount of nicotine in most cigarettes rose an average of almost 10 percent… Boxes of Doral lights, a low-tar brand had the biggest increase in yield, 36 percent… The nicotine in Marlboro products, preferred by two-thirds Of high school smokers, increased 12 percent. Cool lights increased 30 percent” (Brown, 2006). In addition to nicotine, menthol is another dangerous chemical found in some cigarettes. The way that legislation works in the U. S. Congress must approve of a law before it can be implemented. There have been attempts at banning the addition of nicotine and menthol and cigarettes, but to no avail. They are, however, working towards mandating a reduction in how much cootie and menthol can be used. “Health advocates predicted that the new FDA standards could eventually reduce some of the 60 cancer-causing carcinogens and 4,000 harmful toxins in cigarette smoke or make cigarettes taste so bad they deterred users” (Lawrence & Weber, 201 1). Dixon 10 Social Issues Social issues are those which the community sees as a problem.

The community views the harmful effects of cigarettes as a major problem within society. The government’s response to these social issues has been by creating social regulations. One of the purposes of social regulations is to rote consumers and the environment (Lawrence & Weber, 201 1). A recent social regulation pertaining to the subject at hand was the Family Smoking Prevention and Tobacco Control Act of 2009. This Act empowered the FDA with the authority to tell the tobacco industry what ads would not be tolerated and that consisted pathos targeting children (Lawrence & Weber, 2011 President Obama signed this law into effect.

It is very possible that the next president, especially if that president is more conservative in views, could deregulate this Acts against the tobacco industry. Rating of Social Responsiveness When looking at the surface, it appears that the tobacco industry has done everything in its willpower to adequately respond to the social issues related to tobacco, but it has not. Instead, they follow all laws necessary to stay in business, but works very unethically especially in politics.

They pay crooked politicians to do what they cannot and fool the public Into believing that acts are being passed in favor of the community when it is not. Therefore, the tobacco industry rates extremely low in terms of social responsiveness. The accomplishments in this area are by working with the government. All ads have been removed from and radio, the warning labels are consistently added to the packages, and currently they are discussing adding the necessity of the industry removing the color from its current ads so as not to attract young people.

They are also accomplished in the area of paying Dixon 11 for ads that demonstrate the harmful effects of tobacco. This is simply not enough though especially when they turn around and increase the amount of the addicting element of cigarettes in their products. Rating in relation to the Saint Leo Core Values Saint Oleo’s core values consist of excellence, community, respect, personal velveteen, responsible stewardship, and integrity. Excellence consists of living up to one’s potential and being morally responsible leaders.

Community calls for “a spirit of belonging, unity, and interdependence based on mutual trust and respect to create socially responsible environments that challenge all of us to listen, to learn, to change, and to serve”. Respect is just that, being able to commune with others that are unlike us in a peaceful manner. Personal development holds that by being the best you can be, you can better contribute to the community. Responsible stewardship calls for us to employ our resources to university and community development… Be resourceful. Integrity is to be consistently fair and honest in words and actions. As it currently stands, the tobacco industry is far from being in line with the core values of SST. Leo. They have failed to be morally responsible leaders, have failed to create a socially responsible community, does not respect the welfare of the people, and do not practice responsible stewardship or integrity. The changes necessary for the alignment with the values are very drastic. That is, to cease selling tobacco products. All of them are unhealthy in more ways than one.


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