Altria, the parent company of the three Philip Morris companies, is one of the most well known cigarette manufacturing companies in the world. While the group in its present form is only about 20 years old, some of the group operating units can trace their origins to the mid 1800s. The company is well known for its modern management methods, its culture of openness and integrity, its commitment to integrity and the many initiatives it has taken to establish a multicultural environment and bring in diversity into the workplace. The only problem with the company is its product, the nature of which tends to overshadow the otherwise splendid achievements of the company and its commitment to society.
Cigarettes, the company’s chief product, are widely accepted to be among the most harmful products of modern day society. Smoking cigarettes, it has been medically established, can lead to cancer and a host of other ailments including hypertension, and cardiac arrest. Smoking kills thousands of people all over the world and is the object of worldwide censure. Apart from being a major cause of enormous human suffering, smoking also involves the production of tobacco, an industry that uses thousands of children all over the world, preventing them from going to school and exposing them to tobacco fumes. (Sims, 2003)
While the company is constrained because of its membership of a widely decried industry, there is no reason to question its commitment to the environment. The company has factories around the globe and has implemented numerous measures, not only to track the environmental impact of its operations, including air emissions, waste generation and water consumption, but also to implement systems aimed at reducing environmental damage. The company has developed into a model for the tobacco industry, works extensively with tobacco farmers, to help their children both with extra curricular activity and studies, has prescribed minimum age levels for its employees, and forbids forced labor in all its establishments. (Principles and Strategy, 2007)
The company is seriously committed to environmental protection and sustainability. While social activists and anti smoking lobbies can undoubtedly question the basic business of the company, there is no reason to question its exemplary environmental policy.
2. Altria’s Environmental Issues and its Commitment to the Environment
The primary problem with dealing with companies like Altria is the basically harmful nature of their products and the enormously damaging effects that its products can cause. (Wit and Meyer, 2004) Most reactions to the activities of such companies tend to become judgemental because the harmful effects of the company’s products tend to overshadow the positive work that the company may otherwise be doing. Very similarly, in the case of Altria, the basic environmental effects caused by production (not sale) of tobacco are not very grave, and just need to be handled carefully. Hordes of industries, particularly in the chemical industry, deal in intermediates and products that can be harmful to workers if appropriate safety measures are not taken. Child labor is not restricted to the tobacco industry and is an undesirable but actually existing reality in many parts of the developing world. Most factories belch smoke and burn fossil fuels that increase global warming. Altria also faces these issues in its production units and works on many fronts to reduce environmental damage, particularly in the case of air emission, waste management, and water pollution, the three areas where its production processes can damage the environment. As far as these issues are concerned, as well as the industry practice of using child labor, the efforts of the company to control the environmental effects of its production activities are normal, socially responsible and, to a large extent, do reduce the environmental damage caused by cigarette production. (Principles and Strategy, 2007)
Unfortunately Altria does not address the broader issue, namely the harmful effect of cigarette smoke, not just upon the actual smoker but also upon non smokers who are present in its vicinity. Environmental tobacco smoke (ETS) is a particularly harmful substance.
ETS contains more than 4,000 chemicals and at least 40 known carcinogens. Nicotine, the addictive drug contained in tobacco, leads to acute increases in heart rate and blood pressure. Cigarette smoking also increases platelet aggregation, or blood clotting. It also damages the endothelium, the layer of cells that lines all blood vessels, including the coronary arteries. Also, nonsmokers who have high blood pressure or high blood cholesterol are at even greater risk of developing heart diseases from exposure to ETS. (Environmental Tobacco Smoke, 2007)
Cigarette companies have, in past years, incurred enormous legal expenses to disprove these assertions in order to be able to continue their business. The law, in most countries of the world, allows cigarette companies to continue their business, even as it ironically penalises smokers, a fact that no doubt stems from the organised political and economic strength of cigarette manufacturers and their strategy for managing the political, environmental and legal environment. Compared to the enormous strength of the cigarette lobby, ordinary smokers could not really be any more vulnerable, a major reason behind the continuously increasing restrictions on their smoking activity.
In these circumstances the environmental strategy of Altria and its commitment to the environment becomes redundant, hypocritical and something of a joke when compared with the amount of environmental damage its activities cause.
3. Altria’s Real Strategic Reasons behind Environmental Initiatives
Strategy, as a concept can be described in many ways. While it broadly consists of the diverse approaches, which organisations choose to follow, in order to achieve success or a competitive advantage, it can be more comprehensively defined as “the direction and scope of an organisation over the long term, which achieves advantage for the organisation through its configuration of resources within a changing environment, to meet the needs of markets and fulfil stakeholder expectations.” (Johnson and Scholes, 1997)
Strategy determines the broad direction of the company, and works towards the achievement of its primary objectives. It involves the achievement of some long-term benefit, or advantage, for the organisation. Factors like environmental forces, availability of resources, and the values and expectations of the stakeholders in an organisation, often influence organisational strategy. Strategic decisions often need to deal with political, environmental and economic issues that can directly influence the operations of a firm. In some respects, strategy is also an indicator of the beliefs of those stakeholders who have the most influence in the organisation. (Sidorowicz, 2006) Altria’s chief strategic objective, as enunciated in its website, is “to deliver superior returns to our shareholders over the long term by continuing to improve each of our operating companies”. The company’s strategic initiatives focus on increasing shareholder return, while working within the parameters of law, governmental regulations, and general social conduct. The company’s actions in environmental areas can thus be looked at in two different ways. Cynics might wish to just put its environmental management initiatives down to hypocrisy and the company’s need to pose as a corporate Samaritan, even while it continues to produce poisonous and damaging products. The other way to look at the issue is to consider that the company, knowing fully well about the public and social activist opposition to its products, will try to neutralise the environmental and political constraints through legal actions, and, as a responsible corporation will also strive to reduce the environmental damage created from its processing and manufacturing activity, through the application of specific processes, and through appropriate decisions.
It would be appropriate in such circumstances to take the company at face value and look at its environmental commitment as flowing from the strategic objective of the company to work towards sustainability and environmental protection and not confuse the issue with the broader harm caused by its manufacturing and sale of cigarettes.
