This paper examines the environment around the business of Diageo. Moreover, a stake
holder analysis is conducted, investigating the main issue affecting Diageo’s corporation.
Diageo’s Stakeholders analysis:
1. Management angle: Present and future CSR and marketing strategies
2. Consumers’ perspective: culture and behavior
3. Shareholders’ perspectives
4. Competitors’ strategies and policies2
5. Government perspective: Present and future policies and practices, legislation
framework, taxation and new advertising regulations.
In recent years, many MNE have repositioned themselves as ethical, by implementing CSR
strategies, changing their mission statements and promoting their responsibility. However
there are many corporations who fail to apply it, with disastrous consequences (Hill and
Jones, 1998). The Ethics of business using corporate social responsibility as a vehicle is a
booming strategy.
1.2.2 The Alcohol issues
Alcohol has played a vital role in all human cultures since about 4000 BC (Lucia, 1963).
When used responsibly, it can be a part of a balanced social life (ICAP, 2008). However,
when misused, it can cause harm.
The alcohol industry in the UK has come under increased pressure for failing to tackle bingedrinking
(MacAvoy and Mackenzie, 2005). In 2008 Slack reported that the incidents of
violence as a result of excessive drinking have increased by 11 per cent. Moreover,
according to BBC (2008), research has proved that heavy alcohol consumers have
developed a range of diseases (strokes, cirrhosis of the liver, brain and nervous system
damages) and abnormal behavior, (arrests for drunkenness, road traffic accidents and#p#分页标题#e#
arrests for driving while under the influence of alcohol. etc.).
Research by the Prime Minister’s Strategy Unit estimated that 17million working days each
year have been lost because of alcohol consumption. With a total cost of 6.4 billion GP and
to the National Health department 1.7 billion GP (Alcohol Harm Reduction Strategy for
England, 2004).
Midford and McBride (2001) reviewed alcohol education projects in schools,: these projects
either failed or, at best, have produced very small effect. Therefore there is a need for an
overall approach in order to tackle the alcohol issue.
In 2005 Peele emphasized that more than 140 million people suffering from alcohol
dependence and Mason (2003) presented alcohol consumption in the UK as directly
responsible for 4,000 deaths per year and indirect, for more than 28,000. Therefore alcohol
misuse in the UK is a main issue for society.
1.3 Motivation for the study
The research motivation derives from the researcher’s awareness and access to information
through his working experience within the hospitality industry. There is an increase in the
number of businesses using CSR as a strategy to increase market share. The responsible
marketing strategy has been identified as a future need for many businesses in the alcohol
(and not only) industry.
1.4 Research scope and aim
The scope of this paper is to examine the level of understanding, interest and practice of
corporate social responsibility as an ethical marketing and management strategy within the
alcohol industry.
This dissertation thus will study the parameters which should be taken into account when
developing CSR policies and practices. More over this study will analyze CSR and how it is
3
defined and implemented in the alcohol industry. Then it will explore the industry structure
with emphasis on Diageo’s marketing strategy, and finally will measure the value of
implementing CRS on Diageo.
1.5 Research Objectives
Consequently, the aim of this dissertation is to explore the role and the importance of
Diageo’s Corporate Social Responsibility as an overall marketing strategy. Accordingly, this
research comprises four specific objectives.
1. To analyze Corporate Social Responsibility and how it is defined in the Alcohol Industry.
2. To explore the Alcohol industry structure with emphasis on Diageo’s marketing strategy.
3. To measure the value of implementing CSR on Diageo: a stakeholder’s analysis with
emphasis on management, customers, shareholders and the government.
4. To recommend the future strategy of Diageo’s within the alcohol industry.
1.6 Structure of the Study
This dissertation project is divided into five chapters.
The first chapter presents the research area, the background, the main issues and the topic#p#分页标题#e#
analysis. Furthermore, this chapter discusses the motivation, the aim, the research
objectives and the structure of this study.
The second chapter presents an overview of the existing literature which is related to Ethical
英国留学生工商管理硕士论文Strategies and Corporate Social Responsibility in the alcohol industry. Moreover the
literature review analyzes successful marketing and management practices on corporate
social responsibility, in relation to the overall business of Diageo.
The third chapter clarifies the methodology of this study, as well as the research rational and
approach including secondary and primary data. This chapter also includes the data analysis
method that has been used and finally discusses the limitations and the alternative
approaches to research.
Chapter four presents the findings of the research in order to tackle the objectives and refers
in detail to the limitations and problematic areas.
The fifth Chapter presents the findings and the practical implications of CSR in the Alcohol
Industry, from marketing and management perspectives.
Finally, Chapter six presents the conclusions and recommendations of this study, as well as
suggestions for further study.4
Chapter 2 Literature Review
2.1 Introduction
The aim of this chapter is to deliver a critical account of previously published work on the
subject of ethical strategies in the alcohol industry. This chapter begins with an analysis of
the concept of CSR as an ethical strategy, and then builds on this, analyzing the structure of
the alcohol industry in the UK. More over this chapter focuses on the corporation of Diageo
analyzing its CSR and its marketing strategy from a stakeholder angle. Therefore the
literature review is based on the objectives of the dissertation exploring carefully all previous
research areas.
2.2 Ethical Strategies
Society is no longer a passive actor in relationship to businesses (Messina, 2007). Ethical
issues are making society, consumers, and the political agenda to exert increased pressure
on large and powerful organizations to become more active. Thompson and Martin (2005)
believed that firms can be socially responsible (proactive) or socially responsive (reactive to
pressure). Therefore corporations can fulfill obligations to society following a proactive
ethical strategy, targeting than the standards.
Maon et al (2008) presented ethical strategies as an opportunity for change and
development. This change brings together the business and society, creating a long term
beneficial relationship. At the same time, Lynch (2003) emphasized that both profit and notfor-
profit organizations can exercise significant power both inside and outside their
organization when they adapt business ethics strategies. Therefore MNE should focus on#p#分页标题#e#
issues that are related to society.
Thomson and Martin (2005) underlined that business ethics is an important issue for all
MNEs which requires strategic decisions and long term planning. At the same time, in 1998
Key and Popkin noticed the importance of integrating ethics into the strategic management
process for all MNEs. Therefore ethical strategies require long term planning and should be
integrated into the firm’s decision making process.
Porter and Kramer (2007) pointed out that Ethical Strategy is a unique strategic drift. Fitting
into the market with a unique selling proposition creating a deferential business proposition.
In 2002 Whetten et al, claimed that corporations with strong ethical values create and
maintain a clear positioning of business differentiation from their competitors. Stanwick and
Stanwick (2007) recognize that an ethical strategy creates a strategic human resource
competitive advantage for its employees. Thus firms could gain the competitive advantage
through setting higher ethical regulatory standards on the industry or by encouraging harder
regulation of their competitors. Therefore an ethical strategy could lead to leadership
positioning within the its operating market or the industry.
Key (1998) believes that ethics have to be integrated into the decision making process,
focusing on the moral, social and legal obligations of a corporation. Planning and decision
making can focus on corporate strategies to meet these interests, in order to maximize a
firm’s profits and improve strategy development and implementation. Therefore MNEs
should consider the ethical implications of strategic decisions in a systematic way.
Hill and Jones (1998) point out that firms must make decisions thinking ethically and weigh
the ethical implications before proceeding with into action. According to Lynch (2003) in a
5
strategy development three issues must be taken into consideration: The extent of ethical
considerations, the cost and the recipient of the responsibility. These considerations should
be communicated through the mission statement and the CSR policy. Therefore ethical
strategies use CSR as a tool to communicate firm’s values and principles to the public.
2.3 Corporate Social Responsibility
Every corporation operates in a competitive environment which drastically affects its ability to
accomplish its strategy. According to Whetten et al (2002), a corporation’s CSR should focus
beyond society’s expectations, because that provides competitive advantage over social
“slackers”.
Thomsen (2006) defined CSR as a way to define a firm’s values and behavior in society.
Drucker (1974) supported that Corporations should operate always in parallel with society
and Caroll (1979) noted that CSR is a decision made by society. Moreover Caroll defined#p#分页标题#e#
four CSR approaches: Economical1, legal2, ethical3 and social4.
In 2006 Porter and Kramer highlighted that “CSR can be more than a cost and a barrier, it
can be a basis of opportunity, innovation and competitive advantage”. Therefore, Porter
proposes a new approach between business and society and indicates the need to integrate
social considerations into core business operations and strategy.
From a different perspective Milton Friedman (1970) believed that a Corporation’s decision
making process should not take into consideration social responsibility issues. MNE’s should
use resources in order to increase profits. Friedman presents the corporations as
transactional institutions with their only goal to increase shareholders’ dividends.
1 Maximize Shareholder wealth.
2 Obey in Laws and Regulations
3 Moral: Discharge moral duties
4 Social: Go beyond fulfilling basic obligations to society40
6.3 Direction for Future Research
Future researchers could investigate Diageo’s main competitors, Bacardi-Martini and
Pernod-Richard Plc. through a strategic management angle. Furthermore, the researchers
could focus on possible future collaborations, mergers, acquisitions within the alcohol
industry.
41
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