An Analysis of CSR Initiatives of Tobacco Companies: UK Perspective

This report delves into the Corporate Social Responsibility (CSR) initiatives of prominent UK-based tobacco companies, specifically British American Tobacco and Phillip Morris. Employing a qualitative research approach, the study examines the contradictions inherent in CSR within an industry producing harmful products. Secondary data from credible sources is analyzed using triangulation to ensure data validity. A case study approach, informed by Carroll's Pyramid model of CSR, evaluates how Phillip Morris addresses its legal, economic, ethical, and philanthropic responsibilities. The findings reveal significant criticisms, particularly concerning the companies' efforts to inform consumers about product ingredients while continuing to sell them. The report argues that the companies' CSR initiatives have often failed to prioritize consumer welfare effectively. Recommendations are offered to enhance CSR within the UK tobacco industry, focusing on directing marketing efforts towards promoting responsible smoking behaviors, discouraging irresponsible product use, and developing campaigns that consider public health. The report concludes with suggestions for future research in this complex area, highlighting the challenges and opportunities for tobacco companies seeking to balance their business interests with their social responsibilities.

Running head: CSR INITIATIVES OF TOBACCO COMPANIES
CSR Initiatives of Tobacco Companies Such as British American Tobacco and Phillip Morris
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1CSR INITIATIVES OF TOBACCO COMPANIES
Executive Summary
The study focused on carrying out research on the analysis of the CSR initiatives employed by
selected UK based tobacco companies British American Tobacco and Phillip Morris through
exploring the contradictions considering that this organization as manufacture harmful products.
Qualitative data collection method has been used in which secondary data has been collected
from authentic sources. Moreover, credibility or internal validity of such collected data has been
sued through using the strategy of triangulation as this strategy is focused to make use of several
data sources, methods and theories to a great extent in offering collaborative evidences. The case
study analysis also revealed that Carroll’s Pyramid model of CSR has been employed in
evaluating the ways in which Phillip Morris has made attempts in fulfilling its legal, economic,
ethical as well as philanthropic responsibilities. Case study findings revealed that both the
tobacco companies faced criticism regarding the fact that it has taken initiative of letting its
consumers become aware of the harmful ingredients of its products but still the consumers of
tobacco are purchasing them. Considering same, it is claimed that the company failed to adopt
the CSR concept for their consumers’ welfare. British American Tobacco and Phillip Morris can
improve its CSR initiatives further in attaining competitive advantages within the UK tobacco
industry through directing their marketing efforts towards promoting responsible smoking. They
must develop promotional campaigns that can discourage its consumers from using their
products irresponsibly in the form of smoking within public places and expositing their children
to such products.

2CSR INITIATIVES OF TOBACCO COMPANIES
Acknowledgement
It is a great pleasure for me to acknowledge the assistance and contributions of many individuals
in making this dissertation a success.
First and foremost, I would like to thank my supervisor, for her assistance, ideas, and feedbacks
during the process in doing this dissertation. Without her guidance and support, this dissertation
cannot be completed on time.
Lastly, I wish to express my sincere gratitude to my family for their encouragement and moral
support.

3CSR INITIATIVES OF TOBACCO COMPANIES
Table of Contents
Chapter 1: Introduction....................................................................................................................5
1.1. Research Background.......................................................................................................5
1.2. Research Problem and Significance..................................................................................6
1.3. Research Aim and Objectives...............................................................................................8
1.4. Research Questions...............................................................................................................9
Chapter 2: Literature Review...........................................................................................................9
2.1. Introduction...........................................................................................................................9
2.2. Concept of CSR..................................................................................................................10
2.3. CSR Theories Employed by Companies and Related Competitive Advantages................11
2.4. CSR Initiatives Used in Tobacco Industry.........................................................................17
2.5. Existing CSR Initiatives of British American Tobacco and Phillip Morris.......................21
2.6. Research Gap......................................................................................................................26
2.7. Summary.............................................................................................................................27
Chapter 3: Research Methodology................................................................................................27
3.1. Introduction.........................................................................................................................27
3.2. Research Design.................................................................................................................28
3.3. Research Approach.............................................................................................................29
3.4. Research Philosophy...........................................................................................................30

4CSR INITIATIVES OF TOBACCO COMPANIES
3.5. Data Collection Methods....................................................................................................30
3.6. Research Analysis Method.................................................................................................31
3.7. Research Limitations..........................................................................................................32
3.8. Summary.............................................................................................................................33
Chapter 4: Results and Discussion................................................................................................33
4.1. Case Study Analysis of British American Tobacco CSR Initiatives..................................33
4.1.1. CSR Initiatives used by British American Tobacco Company...................................33
4.1.2. CSR Model Used by British American Tobacco Company........................................36
4.1.3. CSR Concerns and Criticism Faced by British American Tobacco Company...........38
4.2. Case Study Analysis of Phillip Morris CSR Initiatives......................................................40
4.2.1. CSR Initiatives used by Phillip Morris Company.......................................................40
4.2.2. CSR Model Used by Phillip Morris Company............................................................42
4.2.3. CSR Concerns and Criticism Faced by Phillip Morris Company...............................45
Chapter 5: Conclusion, Recommendations and Future Research..................................................47
5.1. Conclusion..........................................................................................................................47
5.2. Recommendations...............................................................................................................50
5.3. Future Research..................................................................................................................53
References......................................................................................................................................54

5CSR INITIATIVES OF TOBACCO COMPANIES
Chapter 1: Introduction
1.1. Research Background
The CSR (Corporate Social Responsibility) concept has turned out to be prevalent over
years. Relied on the realization of company’s business impact on the society, stakeholders
greatly require companies to actively take part in the societies within which they have their
business through being socially responsible (Morton and Greenland 2018). It is not deemed to be
enough for companies to aim for profit maximization and it is claimed that the companies must
indicate their social, ethical and moral responsibilities by means of their corporate undertakings.
Moreover, it has also been evidenced that in the current years almost all the industries and more
specifically the Tobacco companies of UK has become highly aware regarding the competitive
advantages elated with a stakeholder focus through establishing open communicate approach of
CSR. In addition, it is also evidence that CSR must be considered as an effective tool y means of
which community within which the companies are operating their business can be nurtured
(Weiger, Heley and Moran 2017). Moreover, the tobacco companies of UK considers
implementing CSR initiatives in the form of Public Relations (PR) activities as PR is focused on
developing mutually beneficial relationships with the company’s stakeholders. CSR as an
organizational function has came into existence as a response to changing expectations on
organizations from the surroundings. To a great extent, the tobacco companies of UK are
anticipated to exhibit ethical behavior along with moral management in order to deal with their
impact on the societal concerns through focusing on maximizing certain positive contributions
along with decreasing negative impacts of the company’s business actions (Shim and Yang
2016).

6CSR INITIATIVES OF TOBACCO COMPANIES
Most of the tobacco companies in UK are beginning to observe the advantages from
developing CSR agendas. Considering same, a wide range of CSR methods and frameworks
have been developed by these tobacco companies in order to attain their business development
goals. In order to attain such goals, it is vital to realize the major issues related with their
implemented CSR initiatives and the effective manners in which the selected tobacco companies
of UK are monitoring their CSR processes. Most of the definitions related with CSR explain it as
a concept where the tobacco companies are observed to make attempts in integrating social along
with environmental issues within their business operations by means of their interaction wit the
stakeholders on a voluntary basis. The “New Companies Act” has made it necessary for all the
corporate organizations to spend at least 2% of their profit on the CSR activities. Such laws
majorly apply on certain tobacco companies it has developed a tricky situation as social welfare
conducts of such organizations can offer an impression regarding tobacco use promotional
strategies related with youth smoking preventions. It has been observed that the major tobacco
companies in UK are focused on investing within the publicity efforts in enhancing their
corporate image through promoting youth smoking prevention programmers. Tobacco
companies are also making great efforts in ensuring price and tax increases of the tobacco
products. In addition, the tobacco companies of UK are centered on investing a lot in activities
that can make their businesses socially responsible to a certain extent.
1.2. Research Problem and Significance
The focus on the CSR communication within the tobacco industry is focused on the interest
regarding analysis of CSR that can be communicated within the industry that is critical to the
stakeholders critical for organizational success (Liu, Li and Opara 2018). For this reason it is
deemed important to ensure that whether it is possible to combine the interest of creating profit

7CSR INITIATIVES OF TOBACCO COMPANIES
with the objective of acting responsibly in the environmentally and socially along with
maintaining credibility. Considering such issues excessive development of strategies for dealing
with the CSR issues took place. Several organizations are beginning to observe advantages from
setting certain CSR agendas and the CSR movement is spreading within these tobacco industry
(Lock and Seele 2016). Tobacco companies are facing issues related with positioning themselves
as good corporate citizens. Moreover, the effort towards CSR engagement within the tobacco
industry is not only greatly criticized by the anti-tobacco NGOS. Certain opponents such as the
World Health Organization have been questioned the likability of social responsibility within the
tobacco industry of UK. The deep distrust towards these tobacco companies is deemed to be
associated with the lethal characteristics of their offerings along with dubious characteristics of
representatives in the current years (Joshua 2017).
Considering the problem of increased pressure from the non-governmental organizations,
government and United Nations in efficiently addressing the adverse impact their businesses
have on the local community, CSR initiates are being developed by the tobacco companies to
manage the negative force in the realm of public health. To address such research problem it is
deemed necessary by the tobacco companies to promote CSR for creating goodwill and
consumer loyalty. Moreover, the cigarette companies are also considering the needs to support
the anti-smoking campaigns among youth in an attempt to improve their band images along with
developing favorable relationships with the smoking and maturity (Grougiou, Dedoulis and
Leventis 2016). A large number of tobacco companies in UK are realizing the need to view such
campaigns to be successful in developing good corporate images. The significance of the current
research is to explain through the case study analysis of British American Tobacco and Phillip
Morris that the social responsibility of the tobacco companies is to use their resources and get

8CSR INITIATIVES OF TOBACCO COMPANIES
involved in activities developed to enhance profit through emphasizing on improving standard of
living of the community (Crane, Matten and Spence 2019). The current study also has great
significance in explaining the manners in which CSR approaches can be used by the tobacco
companies in an attempt of decreasing risks along with adverse effects of their business
offerings. The research will also offer useful implications on explaining advantages of
maximized social and economic benefits through establishing relationships relied on trust in
promoting business progress in accordance with moral values along with ethical principles.
1.3. Research Aim and Objectives
The aim of the current study is to analyze the effectiveness of the CSR initiatives
implemented by the tobacco companies of UK through analyzing the case study of British
American Tobacco and Phillip Morris.
The objectives that are to be addressed through completion of the research are indicated
below:
 To analyze the CSR initiatives implemented by British American Tobacco and Phillip
Morris
 To evaluate the competitive advantages have been attained by British American Tobacco
and Phillip Morris through their implemented CSR practices and theories
 To analyze all the core issues of CSR and its implementation in British American
Tobacco and Phillip Morris
 To provided significant recommendations to British American Tobacco and Phillip
Morris in UK regarding better CSR management in the companies

9CSR INITIATIVES OF TOBACCO COMPANIES
1.4. Research Questions
The research questions that are to be answered through completion of the current research on
analysis of CSR initiatives of tobacco companies are indicated below:
 What are the CSR initiatives implemented by British American Tobacco and Phillip
Morris?
 What competitive advantages have been attained by British American Tobacco and
Phillip Morris through their implemented CSR practices and theories?
 What are the core issues of CSR and its implementation in British American Tobacco and
Phillip Morris?
 What are the recommendations offered to British American Tobacco and Phillip Morris
in UK regarding better CSR management in the companies?
Chapter 2: Literature Review
2.1. Introduction
The second chapter is focused on analyzing previous researches on various concepts and
theories related with CSR. In addition this literature review also evaluated past researches on the
CSR initiatives that are commonly used in companies and more specifically within the tobacco
industry of UK. The literature review section also provided detailed arguments on several CSR
initiatives implemented by the companies in UK tobacco industry in attaining competitive
advantages (Stoian and Gilman 2017).
2.2. Concept of CSR
Grougiou, Dedoulis and Leventis (2016) stated that corporate social responsibility (CSR)
has turned out to be a potential path for ensuring legitimacy along with enhanced public relations

10CSR INITIATIVES OF TOBACCO COMPANIES
for the companies which manufactures mainstream products such as like the tobacco industry.
There exist numerous literatures in the area of CSR another aspect of CSR is also focused on
increasing awareness regarding the social responsibility within the business community.
Grougiou, Dedoulis and Leventis (2016) agreed that the CSR concept is well-established in
several nations and it is also agreed that the companies are highly socially responsible. CSR is
also defined as a self-regulating business model which facilitates an organization to be socially
responsible to itself, stakeholders and the common show. Thigh practicing CSR approaches as a
form of corporate citizenship it is important for the organizations to be conscious regarding the
type of impact they are having on every aspect of the society such as social, economic along with
environmental. Grougiou, Dedoulis and Leventis (2016) indicated that for engaging successfully
in the CSR means the companies are operating in manners that can improve the society and the
environment rather than negatively contributing to them. CSR is deemed to be a broad concept
which can take several forms depending on the company along with the industry.
By means of suitable CSR programs, philanthropy along with the volunteer efforts
businesses can benefit the society along with boosting their own brands. CSR initiatives of the
companies are deemed to be important for the community it is also equally valuable for
competitive advantages for the company. Grougiou, Dedoulis and Leventis (2016) added that
CSR activities can support in forging a stronger bond among the employee and company as it
can boost morale and can also facilitate the employees and employers feel highly connected. In
order for an organization to be highly socially responsible, it requires to be highly responsible to
its business along with its shareholders. These researchers also revealed that the companies that
implement effective CSR programs have gown their business operations for establishing itself as
a visible and successful corporation though establishing its responsibility of setting ethical

11CSR INITIATIVES OF TOBACCO COMPANIES
standards and behaviors. Grougiou, Dedoulis and Leventis (2016) also added that in the year
2010, the International Organization for Standardization (ISO) released a set of voluntary
standards focused on helping companies to successfully implement corporate social
responsibilities. Such CSR standards were also developed in offering guidance in comparison to
the requirements for the reason that the nature of CSR is highly qualitative for which its
standards could not be certified.
2.3. CSR Theories Employed by Companies and Related Competitive Advantages
The term corporate social responsibility (CSR) basically refers to a self-regulating
business model that helps any organisation or company to be socially accountable to the public,
to its stakeholders and also to the company itself. Therefore, by practicing corporate social
responsibility, organisations and companies can have ideas or the companies can be conscious of
the kind of impact they are having on all aspects of society including economic, social and
environmental (Lins, Servaes and Tamayo 2017). To practice CSR means that, in the very
normal course of business, an organisation is working in ways that enhance society, culture and
the environment, instead of contributing negatively to them.
The term corporate social responsibility (CSR) has been developed during the last few
decades and there is a continuous discussion or debate on whether firms should be concerned
about activities or the firms should focus on its business in the area of creating profit or going
beyond the economic aspects of the company (Lins, Servaes and Tamayo 2017). Even though
there are a lot of initiatives for an increased role of a caring business, several organisations seem
to get lost in their focus on Corporate Social Responsibility. By having a large CSR focus, a lot
of companies and firms combine the need for creating profit along with the need for social
responsible behaviour.