Tobacco Industry in the Present Times - Term Paper Example

Tobacco Industry al affiliation: Table of Contents History 2 Corporate Stakeholders and Response to Their Issues 4 Economic settings5 Employment 6 Social settings 6 Political Settings 7 Domestic and International Ethics 7 Ecological and Natural Resources 9 Tobacco Farming and Use of Pesticides 9 Deforestation 10 Social Issues 10 Review of Tobacco Industry 11 References 12 History Herbal and medicinal values of tobacco plant were significant to the ancient communities throughout the world. Study reveals that tobacco was mainly used in ceremonies and tribal rituals long time ago, probably 3000BC. Native Americans were consumers of tobacco in 15th century according to Columbus, later it was introduced to Spain 1519 by Columbus. England tasted tobacco for the first time in 1573 after it was introduced by Sir John Hawkins after he returned from Florida. The use of pipe to smoke tobacco was brought by Sir Walter Raleigh to the people of Great Britain in 1583 century after his return from North America (Yeargin, 2008). Many people enjoyed tobacco after introduction in 15th century. However, use of tobacco was seen as a sign of disrespect to the public. Research reveals that tobacco users suffered extremely leading to introduction of warning statements. King James was the victim of tobacco in 1604 and so he was prompted to issue warnings against tobacco use. The first industry of tobacco was started in early 17th century by John Rolf in North America. His industry was boosted by high demand from England. Study reveals that John exported his tobacco products from his firm to England. Approximately two hundred pounds of tobacco were shipped to England by John’s firm due to the demand from tobacco users in England. The demand was increased by high price imposed by Spanish sellers to the people of England (Yeargin, 2008). High competition between John Rolf and Spanish traders forced John to smuggle the sweetest seeds of tobacco from Varina firms and started producing more desirable products. The sweetness of his products led to high demand from England. Later he named his firm Varina farms. Study shows that the farm in still in existence to date despite that it is not growing tobacco anymore (Yeargin, 2008). The high demand of tobacco in England increased the requirement of labor force. African slaves were used as labor force in tobacco farms in early 17th century. Satcher (1998) point out that Jamestown in Virginia was the most profitable tobacco firms due to high demand for tobacco in England and other European countries. Study by the author reveals that the colonies wealth was from tobacco trade in early 17th century. Other cash crops such as cotton were not common but it was later introduced in 1793. The profitability of tobacco led increase in a number of farms in North America and later spread Southern part. Though it was profitable crop, it was later planted with other crops in southern part of America. However, it remained as the main cash crop in many parts of North America such as North Carolina, Kentucky, Georgia and southern Carolina. The introduction of slaves as a force of labor was led by changes in prices of tobacco in parts of Europe. Satcher (1998) explains that whites were previously the main cultivators of tobacco. Whites being the cultivators pushed the cost of production to higher level. Whites thought of other ways of reducing the cost of production, slaves was the only option of bringing the cost of production down. Corporate Stakeholders and Response to Their Issues Tobacco industry is a controversial industry because of many social, economic and health issue the company is thought to bring to the community. Many questions have been brought to the company by the stakeholders. For example, some have been asking if it is true that the company is responsible because of their view that their products cause harm to the society. Others view that tobacco industries exploit farmers and takes advantage of poor regulated markets. Furthermore, the industry is thought to be a destroyer of natural forest for their own benefits. Such questions make it tough to operate in tobacco industry. However, tobacco industries are doing their best to make sure that stakeholders have trust on the firm. British American Tobacco is a rebuttable company that has been engaging well with its shareholders. Some of the stakeholders have been working together with the company are employees, investors, Non-governmental organizations and local communities (Boyle, 2010). It has not been easy for British American tobacco to engage its stakeholders because of the view of the business by the stakeholders. Tobacco industry is thought to pose serious health risks to the population. Based on such views, tobacco industry especially British American Industry has had to strategies on ways to engage stakeholders. It has not been simple task for tobacco industries to engage its stakeholder because quit a number of stakeholders have had doubts and mistrust on the company. Despite the difficulties faced by tobacco industries especially British American tobacco during the dialog with stakeholders, the firm have benefited immensely because it has assisted the company to develop initiatives. Economic settings Tobacco industry has grown since its inceptions in early 17th century as the biggest industry in advanced economies like the U.S. Research reveals that consumption of tobacco products in the U.S. in 1998 was estimated to be $58.9 billion. Expenditure on other tobacco products such as cigars and snuff were $1 million and $2.5 million respectively. The expenses listed above go a long way to cover the cost of transport, storage, marketing and sale of the products. Additionally, close to 90, 000 farmers gain from the cost of consumption pointed out above in the United States. Government is also the advantaged from the sell or consumption of tobacco products. Government benefits from tax revenue (Gale et al. 2008). Despite the immense benefits listed above from consumption of tobacco products, the rate of consumption in the U.S. has been dropping significantly. The decrease in rate of consumption is attributed to health related issues of tobacco products. A study of the United States trend of consumption revealed that the rate of consumption fell by 44% from 1964 to date. Prior 1964, the per capita rate of tobacco consumption was at 4,345. Thirty years later, per capita rate was 2,226. The cause of such change in consumption rate is health issues of tobacco use. According to Surgeon Generals theory in 1964, tobacco consumption is closely related to cancer development. It was this theory that forced many consumers to abandon smoking and other use of tobacco (Gale et al. 2008). Employment Tobacco is a large industry that can support different types of people at different levels in an economy. Tobacco industry does not only create job opportunities for farmers and industry workers but also it can avail jobs in other firms such as warehouses, wholesale and retail stores. Advertising, transportation and litigation services of the tobacco products create job opportunities. Social settings Expectations from any multinational company are huge, they are not only expected by the managers, employees, and consumers to package, advertise, promote and sell their products but they are suppose to support the society to which resources are drawn from. Companies are currently setting aside funds to sponsor educational programs, music, art festivals and environmental protection. Additionally, firms are creating and sponsoring projects and programs that go beyond supporting and improving health standards of the society. Tobacco industry is one of the firms that have created programs that help the society deal with social issues such as crime and poverty. The company has sponsors business in developing countries like Kenya and prevention of crime in South Africa. Other initiatives by the company include sponsorship of entrepreneurial programs in China and support of health programs and flood relief in Pakistan (WHO, 2003). Political Settings It is pointed earlier above from this paper that Tobacco industry or tobacco consumption is beneficial to the economy. The fact is that they contribute significantly to countries gross domestic products. Tobacco industry provides taxes and revenues to the government and job opportunities to the population. On the other hand, tobacco is tied to health implications to consumers. For the last few decades, tobacco consumption has is associated to development of chronic diseases such as cancer and death of consumers. Studies reveals tobacco use causes close to 3 million deaths annually throughout the world. Research reveals that despites the high number of deaths or health related issues caused by tobacco consumption, tobacco has endured in the industry for a long time. This attributed to what is call shortsightedness effect. Based on this effect, the politician sees on the short term effect of tobacco consumption such as revenue, employment benefits. However, longtime effects such as development of chronic diseases are not considered (Simms, ). Domestic and International Ethics Every company operating locally or internationally has to maintain ethical standards. Consumers do expect firms to consider ethics; they often buy products from companies that offer their products in a right manner. Consideration of ethics by the consumers is due the exposure of companies that consider ethics and the ones that operate in unethical manner by news media and consumer activist. Consumers and stakeholders are likely to respond to businesses that operate in unethical manner. Their reaction can affect the firm’s profitability, reputation and future operation of the company (Sundaram & Kaushik, 2007). Unethical practices are common in approximately all parts of businesses with field of marketing accounting to a larger number of unethical practices. For example, unethical practices are common in marketing research, promotion and advertising. For example, unethical standards that are reported in research centers are infringement of person’s anonymity. Firms have been moving their operations to international markets; this is because domestic markets cannot provide them with enough revenues to grow further. Additionally, domestic markets might be too competitive for such firms. Furthermore, a company will want to make a difference in various markets with different economic and political settings. It is beneficial for a firm expanding to international markets because such markets can give them high profits because of less cost of production. International markets provide cheap labor and raw materials. Additionally, international markets do not have tight regulations in international markets as compared to domestic markets. The case of tobacco industry is not different from other multinational companies. Tight regulations in the U.S. have forced tobacco industries to explore international markets such as China, Japan, Hungary and Russia and Eastern Europe. Health related regulations are tight in the U.S. and countries in Western Europe. Health risks associated with tobacco have not halted the movement of tobacco industries to international markets. For example, Marlboro operates largely in Hungary because the country has few market and health regulations as compared to the United States. Cigarettes from Marlboro Company in Hungary are at times given to the young people during promotional tours. Japanese television advertises tobacco products anytime, even in the middle of kids programs. Research reveals that tobacco products in Japan are advertised more as compared to other products (Lamb et al. 2011). Ecological and Natural Resources The number of deaths as a result of tobacco consumption and exposure in the U.S. are approximately 440,000 annually. In addition, twenty first century has had a significant number of deaths, close to 1 billion people reported death as a result of direct use of tobacco products. These are just issues resulting from direct and indirect exposure of tobacco products such as cigarettes. However, it must also be noted that production of tobacco is risky to the environment. Research reveals that tobacco production, packaging, consumption and disposal of its product has brought huge loses to the environment (Mangora, 2012). Tobacco Farming and Use of Pesticides Tobacco plant just like any other cash crop requires fungicides, pesticides and herbicides so as to grow well. Such chemicals are normally added throughout the time of growth. Research shows that a variety of tobacco crops requires multiple applications of chemicals, close to 16 applications throughout their growing season. Pesticides are harmful to the living things within that environment such as birds. In addition, chemicals used in farms cause ozone layer and soil depletion. The U.S. tobacco farms alone consume close to 27 million pounds of chemicals such pesticides, fungicides and herbicides. Additionally, tobacco farming requires high content of pesticides making it among the top six crops in the U.S. that requires chemicals spraying. Workers are also at risks of developing chronic disease such as cancer because they are exposed to chemicals used in tobacco farms. Pesticides and other chemicals used in tobacco firms are risky to human health. Additionally, it is pointed out above that tobacco companies moved some of their manufacturing firms to international countries. However, such international countries are still developing and health related policies do not exist. Furthermore, farmers in such countries do not have equipment that they can use while spraying their crops. Workers are said to expose to green tobacco sickness. This happens when a person is directly exposed to wet tobacco leaves. The wet leaves contain nicotine that can make a person dizzy, vomit or experience headache. Deforestation Forests are cleared to provide land for growing tobacco, tress cleared are used to cure the leaves of tobacco. Large track of arable lands have been turned to tobacco farms. They could have been used for other consumable goods. Deforestation is not good for environment because it contributes highly to global warming, soil erosion, and loss of animals (Mangora, 2012). Social Issues Tobacco kills! That is the notion that everyone in the society knows. It can be evidenced from statistics that shows that in only 21st century alone close to 1 billion people have because of tobacco. Tobacco production is blamed for decreasing production of food crops such as vegetables, rice, sugarcane and other food stuffs. Additionally, it is pointed out above that tobacco farming requires large track of land. Forests have been destroyed to pave way for tobacco plants. Farmers use trees to cure tobacco, such trees are obtained in a forest. Cigarette smoking is dangerous to the smoker and someone within because of chemicals exposed to the atmosphere which at the end will pollute environment (Lamb et al. 2012). Review of Tobacco Industry My rating of tobacco industry is 7 out of 10 because they use social responsibility programs to improve their image that has been tarnished by the view of many that tobacco kills. The fact still remains that tobacco kills based on various research conducted by physicians. Additionally, many people have died and some have developed chronic diseases such as cancer as a result of tobacco consumption. However, tobacco firms have done its best to encourage farmers to produce continuously. For example, British American tobacco provide farmers with programs that can teach them ways of operating without causing environmental degradation. The programs outlined by the firm guide farmers to operate in a manner that result to positive environmental management. British American tobacco is one among many tobacco industries that is socially responsible. The company availed a program that will see support of the society, the program also address social issues in the society such as environmental degradation. The program set by the company is known as social responsibility tobacco production. The program addresses the best agricultural practices that can be applied by farmers. The aim of such practices is to promote environmental management. References Boyle, P. (2010).Tobacco: Science, Policy and Public Health. UK: Oxford University Press Gale, F. H., Foreman, L. and Capehart, T. (2008).Tobacco and the Economy: Farms, Jobs, and Communities, Economic Research Service, U.S. Department of Agriculture, Agricultural Economic Report No. 789. Lamb, C., Hair, J. & McDaniel, C. (2011). Essentials of Marketing. Ohio:Cengage Learning. Mangora, M.M. (2012). Shifting Cultivation, Wood Use and Deforestation Attributes of Tobacco Farming in Urambo District, Tanzania. Current Research Journal of Social Sciences, 4(2): 135-140. Satcher, D.(1998). Tobacco Use Among U. S. Racial Ethnic Minority Groups: Alaska Natives, Asian Americans & Pacific Islanders, Hispanics. New York: DIANE Publishing. Sundaram, D.S. and Kaushik, M.(2007). Ethical evaluation of marketing practices in tobacco industry. International Journal of Business Research, 7(2). W.H.O. (2003).Tobacco industry and corporate responsibility…an inherent contradiction. World Health Organization. Yeargin, B. (2008). North Carolina Tobacco: A History. UK: The History Press. Read More