Managerial Proposal for Corporate Image Building for Phillip Morris Australia - Case Study Example

Name : Course Module : Tutor Name : Date : Managerial Proposal for Corporate Image Building for Phillip Morris Australia 1. Introduction Major players in the tobacco industry around the world constantly struggle to maintain a proper and acceptable public image, although the health hazards associated with the product makes this a difficult process. In Australia, this situation is even worse than in countries like America where the unfavorable opinion that companies are being less than truthful with regards to the risks of smoking and addictions. Phillip Morris (British American Tobacco (Australia) Company), a global giant in the tobacco industry and a leading player in the Australian tobacco industry too is suffering from such adverse public image. Especially with industry activists putting pressure on the company image and a mounting number of litigation cases, the company has been compelled to take actions in building up its corporate image. This report provides a management action plan being proposed for implementation to support the corporate image building process of the company. 2. Organisational and Community Background Tobacco industry in Australia has a poor image compared to other countries such as USA, mainly due to the low activity levels targeted at corporate image building (Durkin, Germain and Wakefield, 2005). In a survey commissioned by Phillip Morris in 1993, the results indicated that a majority of up to 77% having an unfavourable image of the company. In later years, this situation has not improved but aggravated with over 80% of the people holding the perception that the Tobacco companies including Phillip Morris are not truthful about the repercussions of smoking and its addictive nature. A trial in 2002 which involved the Rolah McCabe a 51 year old woman who died of lung cancer from Victoria, Phillip Morris has to award damages of $ 700,000 (The Insider…, 2003). The company’s corporate image was damaged with the findings that Phillip Morris, along with other tobacco companies are subverting the possible discovery of information that can be damaging to the company in a court case scenario. To achieve this, the company was found to have destroyed thousands of documents. In this light, there is much damage control to be done to restore the corporate image of the organisation. 3. Corporate Image Building Objectives Following objectives are set for the corporate image building plan being proposed. Alter the adverse image of Phillip Morris in state of Victoria where the after effects of Rolah McCabe trial is still reverberating in the community. Establish Phillip Morris as a socially sensitive, environmentally responsible corporate citizen, regardless of the industry in which operates. 4. Proposed Corporate Image Building Activities The above objectives to be achieved through a number of corporate image building strategies and tactics which includes the following: a. Smoking repercussion awareness programs in schools and colleges which can increase the company’s social responsibility scoring, as youth and children should certainly be spared from smoking hazards, regardless of economic benefits to the tobacco industry. b. Extensive involvement in environmental conservation projects to counter the negative social costs of health hazards from the product. c. Planned and committed community building projects at grass root level, reaching across small communities such as scholarships for youths, facilitation of education in out back reaches and setting up of sports facilities and other sponsorships for promoting education and sports, strictly refraining from aiming to capitalize from available brand exposure. These corporate image building strategies are in close alignment with the company’s commitment to environmental preservation and philanthropic stance ( Phillip Morris International, 2011). 5. Benefits to the Stakeholders A restored corporate image is beneficial for all stake holders of the organisation. The employees and managers would enjoy working for a company which as a high public respect. For instance, it is fulfilling to work in a company that has a high corporate social responsibility track record. A good corporate image translate to better corporate and brand good will. This is very beneficial to the share holders of the company. Similarly, other stake holders such as suppliers and creditors will also be happy to be associated with a corporate client who has a high profile. The customers and community too will benefit from increased corporate image building activities of the company. 6. Participation of Team Members To successfully implement these corporate image building strategies, the participation of the entire team is a pre requisite. The participation should include rest of the marketing team as well as the sales and distribution team’s involvement so that the benefits can be reaped from grass root levels of the community. The team will be divided in to task forces that are in charge of different territories in Australia and each team will be allocated the responsibility of handling awareness programs, sponsorship assessments and other public relations activities. All these should flow from an integrated promotional plan. 7. A risk assessment While these planned corporate image building activities hold potential to help Phillip Morris surmount the current low profile they are having in terms of being responsible corporate citizens, there is also the potential risk of a public outcry accusing that the company is attempting to white wash their negative social contributions. Such risks have been experienced by companies such as Chevron has had similar experiences ( Jennings, 2007). 8. Management Role in Proposal Implementation Effective implementation of any business proposal involves effective management and leadership role. In implementing a Corporate Image development plan to improve a problem situation can be even more challenging. The management role here would be to communicate the objectives and proposal clearly and gain the support of the team members. Secondly, it is important to organize the resources required for various image building actions. Management responsibilities also include coaching, guiding, and contingency management issues. It is also important to play a role of appraisal, monitoring and evaluation of the effectiveness of the proposal to be implemented. 9. Identification of key Performance indicators Key performance indicators for measuring the effectiveness of this corporate image development program would be the public mind set change that can be gauged with a perception survey after a certain period of time. The target is set to reduce the percentage of people thinking that Phillips Morris always or most of the time is not telling the truth from current 80% to 70% or less within 1 year. Furthermore, a low level of litigation cases can be another KPI. In addition, the Corporate Social Responsibility (CSR) ratings in various national polls will also be a good KPI of the effectiveness of the plan to be implemented. 10. Implementation plan for the proposal See attached Appendix 1 for the proposed implementation plan for the various territories of Australia. 11. Feedback gathering To assess the effectiveness of an strategy or a proposal, it is important to have feedback gathering measures in place. In case of the Phillip Morris Corporate Image building campaign, the public attitude is the targeted change to be achieved. See Appendix II for feedback gathering questionnaire. 12. Promotional Material Used in the Image Building Campaign Appendix III contain a number of promotional material used in the smoking hazard awareness campaign targeting school children and youth. While the information is very close to the content which is used in an Anti-tobacco campaign, the justification of using this is that the health of the younger generation of any society is much more valuable that the commercial and economic gains of a corporate entity. It is only by acknowledging the true health hazards of smoking that the adverse image of “tobacco companies not being truthful about the health hazards associated with smoking” can be reversed. 13. Conclusion In conclusion, this proposal presents a national level Corporate Image building exercise for Phillip Morris in Australia. The support team will be grouped in to territorial wise action teams and entrusted with the achievement targets as well as endowed with resources required. Manager has a key role to play in implementing a change program of this nature by playing a catalyst role. As the measure of introducing health hazard awareness program for tobacco usage can sound counterproductive for a tobacco company, the manager will need to rally support by justifying the bigger picture involved and the greater benefits of an enhanced corporate social responsibility score for the company. References: Durkin, S J, Germain, D and Wakefield, M (2005) Adult’s Perceptions About Whether Tobacco Companies Tell The Truth In Relation To Issues About Smoking. Centre for Behavioral Research in Cancer, The Cancer Council Victoria, Australia. http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1748132/pdf/v014p00429.pdf Jennings, G. (2007) “Green Washing What is it, how to spot it, and does it work?” Seminar on Sustainable and Responsible Business GSM - Graduate School of Management - University of California, Davis Prof. Richard Dorf. Retrieved from: http://netimpact.gsm.ucdavis.edu/Research/2007Q3_SeminarReports/Greenwashing_Jennings.pdf Phillip Morris International. Web Site Home Page. 2011. Accessible at http://www.pmi.com/marketpages/pages/market_en_au.aspx “The insider and the ghost of Rolah McCabe” (2003). The Age. Com. July 13. Accessible at http://www.theage.com.au/articles/2003/07/18/1058035197454.html Appendix – I Implementation Plans for Corporate Image Building Campaign Northern Australia Queensland Western Australia Team New South Whales South Australia Victoria Tasmania Activity Planned Targeted Smoking repercussion awareness programs in schools and colleges. 1000 schools and colleges across the country by end of year 1 Increase the use of renewable energy to be 40% of the total energy consumption Increase recycling water usage by 50% by end of year 1 of the program Sponsorship of scholarships to college students worth over $ 500,000 each, to promote education among youth. 100 Donation of sports facilities to outback reaches. 20 Other philanthropic activities $ 5 million fund Appendix – II Survey Questionnaire – British American Tobacco (Australia) Company This questionnaire is in your hand, because we are genuinely interested in finding out the perceptions held by our customers and general public. During last year, we have involved ourselves in renewed efforts in increasing our Corporate Responsibility to the communities we exist in. We would like to know the impact of these activities to further our work in these areas. Please take few moments to provide your response for the following: 1. Are you aware of British American Tobacco (Australia) Company? 2. Are you aware of what products we produce? 3. If yes for question # 2, what is our main product ………………………… 4. Do you perceive the company to be doing its fair share of Corporate Social Responsibility activities? a. Yes b. No c. Yes but Not sufficient d. Not aware of 5. What is your perception of the company transparency with regards to truthfulness of health hazards of smoking? a. Not transparent at all b. Not sufficiently transparent c. Sufficiently transparent d. Very Transparent Thank you for your time. Your responses are extremely valuable to us. Appendix III Sample Promotional and Communicational Material - Smoke Hazard Awareness Campaign Smoking carries health hazards are long term. Tobacco smoking is the largest preventable cause of premature death and diseases in many parts of the world. Not initiating a smoking habit is not only benefits the smoker's health but improves the health of the family as well, since secondary smoking is an equally lethal killer of those who are exposed to it continually. The benefits of quitting a smoking habit bring monetary savings in the range of $ 4000-6000 and more, which most smokers are astounded at when informed of. Heavy smokers are often unaware of the financial loss it brings to the family. Though many people are aware of the detrimental effects of smoking, the majority are unable to stop it. This is because nicotine contained in the cigarettes is an addictive substance which makes the quitting of smoking a tough process. Be in Control of Your Life Although many people think that smoking cigarettes is something within their control and that if they want, they can quit the habit. Most are also under the belief that they can quit it without much effort in a future date, when they finally decide to do so. But unfortunately, a fully ingrained smoking habit is no longer under a person’s own control, but under the control of the unconscious mind. It is true that smoking for the first time or the initial couple of times is done consciously, but later on, as it becomes a habitual act, the unconscious mind is responsible for the act. This contributes to the difficulties which people face in quitting this life threatening habit. A Community Service Message from British American Tobacco (Australia) Company Read More