UNIVERSITY OF STIRLING
Master in Business Administration
Department of Management
2007-2008
“Ethical Strategies in the UK Alcohol Industry,
focusing on Diageo Corporate Social Responsibility:
A Stakeholder analysis”
By
Alexandros V. Papaioannou
UNIVERSITY OF STIRLING
Master in Business Administration
Department of Management
2007-2008
i
Declaration
This work has not previously been accepted in substance for any degree and it is notbeing concurrently submitted for any other degree.
This dissertation is the result of my own independent work and investigation exceptwhere otherwise stated.
All verbatim extracts have been distinguished by quotation marks and the sources ofmy information have been specifically acknowledged.Signature:
Date: 29 August, 2008
Abstract
Corporate Social Responsibility can be seen as a sophisticated communication toolin the alcohol industry. Due to the nature of products, the alcohol industry operatesin a consumer led environment. CSR 英国留学生工商管理硕士dissertationpractices and policies are challengingtraditional strategic management by offering opportunities to approach consumers
and society in a more “enlightened” way.Diageo’s strategy is based on the concept of Corporate Social Responsibilitypromoting “sensible drinking”. Diageo is operating in a sensitive and rapidly changingenvironment influenced by dynamic forces.
The alcohol industry is self regulated and in the near future, dramatic changes areexpected to take place in the alcohol industry.
The corporation of Diageo has to plan and find a balanced solution between thegovernments’ new restricted strategy, the shareholder financial expectations and theconsumer purchasing behaviour when considering increases on prices.
The research project involved qualitative research interviewing “key informers” fromwithin Diageo’s stakeholder team. The investigation involved further analysis with theuse of various management models.
The research concluded that the main stakeholders that affect Diageo’s CSRstrategies are management, government, consumers and shareholders.
CSR is a learning process though scanning the company’s environment for gaps &problems which might have been generated by the company’s actions.
The research has shown that Diageo holds a leadership position into the alcoholindustry. This fact supports the enhancement of its brand image and adds value tothe business, increasing the shareholder dividends value. However, there arecontradicting voices within the firm which challenge Diageo’s Management and CSRmission.
The CSR communication channels should be integrated, sensitive and relationshipmarketing oriented, when targeting consumers and shareholders.
Table of Contents
Title..................................................................................................................... i#p#分页标题#e#
Declaration ......................................................................................................... i
Abstract ............................................................................................................. ii
Table of Contents ..............................................................................................iii
List of Tables ..................................................................................................... v
List of Figures................................................................................................... vi
List of Apendices ..............................................................................................vii
List of Abbreviations........................................................................................viii
Acknowledgments ...........................................................................................ixv
Dedication ......................................................................................................... x
Chapter 1 Introduction.................................................................................... 1
1.1 Introduction ......................................................................................... 1
1.2 Research area .................................................................................... 1
1.2.1 Background……………………………..……………………………....1
1.2.2 The Alcohol issues ........................................................................2
1.3 Motivation for the study....................................................................... 2
1.4 Research scope and aim.................................................................... 2
1.5 Research Objectives........................................................................... 3
1.6 Structure of the Study......................................................................... 3
Chapter 2 Literature Review……………………………………………………..4
2.1 Introduction ......................................................................................... 4
2.2 Ethic Strategies................................................................................... 4
2.3 Corporate Social Responsibility.......................................................... 5
2.3.1 Corporate Social Responsibility – Definition................................. 6
2.3.2 Corporate Social Responsibility in the Alcohol Industry ............. 12
2.4 The Alcohol Spirit Industry in the UK.................................................. 7
2.5 Diageo’s Corporate Social Responsibility .......................................... 7#p#分页标题#e#
2.6 Diageo’s Marketing Strategy .............................................................. 8
2.7 Diageo’s Stakeholder Analysis ........................................................... 9
2.7.1 Government, CSR & Alcohol.......................................................10
2.7.2 Consumers ..................................................................................10
2.7.3 Shareholders Perspective ...........................................................11
2.8 Conclusions on literature .................................................................. 12
2.9 Choice of the Literature .................................................................... 12
2.10 Nature of the authors........................................................................ 13
2.11 Nature of the Literature..................................................................... 13
2.12 Conclusions on previous academic research................................... 13
Chapter 3 Methodology…...…………………………………………………….14
3.1 Introduction .......................................................................................14
3.2 Research purpose and objectives .................................................... 14
3.3 Research approach ..........................................................................14
3.3.1 Secondary research ....................................................................14
3.3.2 Primary research .........................................................................15
3.4 Sample design ..................................................................................15iv
3.5 Target population..............................................................................15
3.6 Research Territory ............................................................................16
3.7 Research Design ..............................................................................16
3.8 Pilot Research ..................................................................................16
3.9 Data Collection Methods .................................................................. 16
3.9.1 The choice of the method............................................................ 17
3.9.2 The interviews .............................................................................18
3.9.3 The interview guides ................................................................... 18
3.9.4 Data Collection Instruments ........................................................18
3.10 Data Analysis....................................................................................19
3.11 Alternative Research ........................................................................19
3.12 Research Limitations ........................................................................19#p#分页标题#e#
3.13 Research Conclusions...................................................................... 19
Chapter 4 Research Findings…………………………………………………..20
4.1 Introduction .......................................................................................20
4.2 Structure of the findings.................................................................... 20
4.3 Interviewees – key informers............................................................ 20
4.4 Diageo’s Stakeholders’ Analysis ...................................................... 20
4.4.1 Diageo’s Management perspective.............................................20
4.4.1.1 Diageo's Future CSR Strategy………………………..20
4.4.1.2 Diageo’s Future CSR Marketing Strategy..........................22
4.4.2 Government Perspective……………………………………………..23
4.4.3 Consumers Perspective………………………………………………24
4.4.3.1 Consumers’ CSR definition................................................25
4.4.3.2 Consumers’ perspective on CSR strategies......................25
4.4.4 Shareholders Perspective ...........................................................27
4.4.4.1 Shareholders’ CSR definition..….......................................27
4.4.4.2 Shareholders perspectves on Diageo’s CSR.…………….27
Chapter 5 Discussion - An Overall approach……………………………29
5.1 Introduction..………………………………………………………………29
5.2 Discussion an overall approach………………………………………...29
5.2.1 Management…………………………………………………………..30
5.2.2 Government……………………………………………………………32
5.2.3 Consumers…………………………………………………………….33
5.2.4 Shareholders ...............................................................................35#p#分页标题#e#
Chapter 6 Conclusions & Recommendations...……………………….…..38
6.1 Final Conclusions............................................................................. 38
6.2 Recommendations…..…….……………………………………………...39
6.3 Direction for Future Research...…………………………………………40
Bibliography………….……………………………………………………………41
Appendix 1 ……………………………………………………………………….47
Appendix 2 ……………………………………………………………………….48
Appendix 3 ……………………………………………………………………….49
Appendix 4 ……………………………………………………………………….58
v
List of Tables
Table 1: DataAnalysis ..................................................................................... 47
Table 2: Pilot Research................................................................................... 47
vi
List of Figures
Figure 1: CSR Pyramid, Caroll (1979)………………………………………….....5
Figure 2: Stakeholder Map, Freeman (2002)…………………..………………...9
Figure 3: Ethical stance, Johnson et al. (2006) ……………………….………..12
Figure 4: Stakeholders Power Index matrix, Johnson et al. (2006).…….……....
Figure 5: Stakeholders Mapping, Johnson et al. (2006)……………….………30
Figure 6: Drivers for Diageo’s CSR: Diageo’s Stakeholders…………..………31
Figure 7: Diageo’s Future Strategy…………………………………....…………32#p#分页标题#e#
Figure 8: Initiatives in CSR: Government & Diageo, Albareda et al. (2005)…33
Figure 9: Alcohol Consumers……………………….…………………………….34
Figure 10: Diageo’s Ethical Stance, Johnson et al. (2006)……………………36
Figure 11: Initiatives in CSR…………………………………………………………
vii
List of Appendices
Appendix 1: Tables………………………………………………………………...47
Appendix 2: Figures………………………………………………………………..49
Appendix 3: Research Initial Message and Question Guides………..……….51
Appendix 4: Data Analysis………………………………………..………………53
x
Dedication
This is for my brother
Michael the great
1
Chapter 1 Introduction
1.1 Introduction
This chapter gives an overall outline of the study. The research area, background historyand issues of the study are analyzed and discussed in the following chapters. Furthermore,the motivation, the aim, the objectives and the structure of the study are presented andexplained.
1.2 Research area
The research area of the dissertation is strategic management, focusing on business ethicsin the alcohol industry in the UK. This dissertation focuses on Diageo’s ethical strategy in theUK. Diageo’s strategy is based on the concept of Corporate Social Responsibility promoting“sensible drinking”. According to Kotler (2005), Corporate Social Responsibility is “an
enlightened strategy for change and development”. However, there are many parameterswhich should be taken into consideration. The study will evaluate the value of implementingCSR in Diageo, in order to maintain and increase its market share, brand image and brandvalue. At the same time, this paper will research the main stake holder’s businessperspectives that influence the industry (Government, consumers, shareholders).
1.2.1 Background
Today the alcohol industry is operating in a sensitive and rapidly changing environment. TheAlcohol industry should take into consideration all different aspects before designing any
http://www.ukthesis.org/dissertation_writing/MBA/#p#分页标题#e#strategies. The United Kingdom government has decided to support stricter rules and newbarriers to the industry by pushing all TV and cinema ads for alcoholic drink brands to run
with end frame promoting responsible drinking (Charles, 2008).At the same time consumers and society are aware of the problems of the abuse of alcoholand excessive drinking. Consumers and society as whole are asking for a solution to theproblems arising from the misuse of alcohol.
Today the alcohol industry is also coming under increasing pressure from regulators andlobby groups (Alarcon, 2008). Diageo has introduced the new strategy promoting “sensibledrinking” to youth and adult_ audiences. However, there are many issues which need furtherinvestigation.
According to Tech (1996) 2500 years ago the great Chinese commander Sun Tzu in his
book the Art of War recognized the dangers inherent in slow response to environmental
changes and competitive threats.
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