Ethical Analysis Of Investment Into The Alcohol Industry Commerce Essay

Ethical abridgment Of Investment Into The Alcohol industriousness Commerce EssayVirginia technical school invests in multiple initiatives each year, universe ethical in doing so is a job of its own. Analyzing all aspects of the investment and how it pass on impact fiscally, socially, environmentally, and ethically argon extremely pertinent.Virginia technical school receives donations of every(prenominal) size, daily. Virginia techs total endowment value as of September 30, 2012 was $610,035,977.00, most options ar get down outless for technical school. The mission of the Virginia tech mental home ultimately states that the foundation draw a bead ons the funding and manages the assets to service of process supplement funds. The foundation withal offers funding for standing initiatives as well as new initiatives put across by the university. They state that this is all eon being a collective citizen, so for interests that non only affect the university (Virginia Tech Foundation, 2011).Virginia Tech construeing themselves as a corporate citizen, is an important note to stop on. be ethically and socially trusty for(p) for all their actions, Virginia Tech must experience how each investment will affect their reputation and profits. These two characteristics, being ethical and socially prudent fecal librate affect Virginia Tech for age to come with authorisation students and the impact they name on the environment.Researching the current investments Virginia Tech conducts as well as the potential for Virginia Tech to invest in the alcoholic beverageic beverage effort themselves has brought up umpteen ethical bits and pres certain(predicate)s.Virginia Techs current policies on alcohol stands, that students and guests everywhere the age of 21 may possess alcohol on campus and inwardly their dorms. Students under the age caught with possession of alcohol are subject to a Conduct Review and strikes against their record. If get on ac tion is unavoidable a formal charge from the Virginia Tech police bed be homecomingd.Virginia Tech does although permit ABC Approved parking lots for the Virginia Tech Football games, which are monitored by Virginia Tech and Town of Blacksburg Police. Here, umteen students and guests can be ticketed for breaching the open container or public intoxication laws. Investment in the Alcohol Industry could ca handling most students and guests to con military positionr a mental image standard between them and Virginia Tech.Ethical standards and social accountability must counterfeit together in the decision factor.Ethical IssuesDue to the nature of the alcohol assiduity there are several ethical issues involving both the products and the selling practices implemented by companies within the industry. Two main ethical issues appertain marketing to those who are underage and wellness related issues.Many present that marketing practices of alcohol companies target those who are und erage and encourage them to infix in il sanctionedly devour alcohol. Others argue that so far if marketing efforts arent flat targeting those who are underage they are still exposed to alcohol related advertisements which could function to them to consume alcohol eyepatch underage. It has been reported that 45% of commercials teens see are somehow related to alcohol, which is a tremendous amount of motion picture to products which they are not yet allowed to consume. One kick the bucket argument for this issue is that there is no way to differentiate marketing efforts attempting to target those who are 21-30 from likewise challengeing to those who are under 21. There are many similarities of what appeals to those who are any of these ages.Many liquor companies have developed bright colored labels, creative names, and a vast number of flavors all argued to appeal to a younger crowd. In many forms of advertising tipsiness alcohol is made to look fun, exciting, and creates an atmosphere that viewers wouldnt want to be go forth out of. Many advertisements create a sense of unity and fitted in and that give outicipating in drinking alcohol can accomplish that.Many companies attempt to counteract these claims by adhering to marketing regulations and running responsible drinking endures that advocate sensible drinking for recreational purposes only. These campaigns aim to help pr heretoforet alcoholism, drunk driving, and underage consumption. Marketing efforts implemented by companies within the alcohol industry are heavily regulated at to the lowest degree 70% of the target audience must be over the legal drinking, the ad cannot be designed to appeal to those who are underage, and no part of the advertising can encourage irresponsible drinking.The second ethical issue contact the alcohol industry concerns with public health. Alcohol provides no health related benefit but can instead harm the consistency and empower slew to harm others. Not ever yone is capable of self-control and consuming alcohol in moderation. In the United States there are s turn only 17.6 million adults who live with alcoholism, which not only affects them, but their families and anyone close to them as well.Consuming enough alcohol can cause judgment to be impair and might cause a person to make a decision that they would not regularly make. Decisions can include, but are for certain not limited to, drunk driving. Three out of ten people will be involved in an alcohol related railway car crash at some point in their lives. Also, in 2009 a person died every 48 minutes due to an alcohol impaired driver. Many ask the question if the number of fatalities is really worth the top executive to consume alcohol, at any age.An important element to take into considerateness is that ethical issues regarding the alcohol industry can and will vary from demesne to country depending upon how alcohol consumption is viewed. For example, there is quite a contrast in opinion and normality between drinking behavior in Ireland versus the attitude of drinking in the United States. Certain events in crabby countries are not allowed to have alcohol companies be sponsors, and even in some countries all forms of advertising are banned.Pressures Facing the Alcohol IndustryWhen it comes to the alcohol industry there are many barriers and pressures that limit the industrys success. The mass of problems come from activist faces that negatively portray alcohol and bring to light the harmful cause alcohol can cause. There are organizations such(prenominal) as the Robert Wood Johnson Foundation, that attempt to stigmatize alcohol, de-legitimize drinking, marginalize drinkers, and create a de facto quasi-prohibition of the legal product.(Hanson). This organization has dedicated itself to limiting the alcohol industry in America. The Robert Wood Johnson Foundation spent over a quarter of a billion dollars ($265,000,000.00) in just four years alone furt her developing and funding a nation-wide network of anti-alcohol organizations, centers, activist leaders, and opinion writers to conjure its long-term goal (Hanson). Although the Robert Wood Foundation may not be well know by the public, nearly every study derogative adult beverages in the mass media, every legislative push to limit alcohol marketing or increase taxes, and every supposedly grassroots anti-alcohol organization is funded by the Robert Wood Johnson Foundation (RWJF). One of the well-known organizations back up by the Robert Wood Johnson Foundation is the Mothers Against Drunk brainish (MADD). Mothers Against Drunk capricious points out the most severe effect that is related to alcohol, death. Founded by a mother whose daughter was killed by a drunk driver, Mothers Against Drunk Driving is the nations largest nonprofit organization that works towards stopping alcohol related harms (MADD). done testimonies and videos Mothers Against Drunk Driving attempts to educat e teens about the dangers of driving under the see as well as underage drinking. MADD publicly exposes the alcohol industry in a way that persuades individuals to think negatively about it. This creates a pressure on the alcohol industry, as they must fight to coordinate the publics eye away from the negativity and more than towards the positive and fat side of the industry.Although the pressures approach the alcohol industry seem severe, we rely the profitability and shareholder value will not be affected. The alcohol industry is a vital element in the American economy and no matter how negatively activist organizations portray it, the alcohol industry will stay on profitable. Pressures from these organizations may slow the alcohol industry slightly, but with the superior influence alcohol has on the American people the alcohol industry will always persevere.Corporate complaisant ResponsibilityTo address the pressures that are facing the alcohol industry, companies have co me up with several initiatives to promote responsible drinking, address sustainability issues, and other charitable programs important to each specific accompany.The supranational Center for Alcohol Policies, ICAP, is an organization that promotes understanding of responsible drinking and helps stamp down the abusive behaviors associated to drinking. Their policy approach is based on drinking patterns, targeted interventions, and partnerships. The organization provides the current alcohol policies countries, worldwide. ICAP has partnered up with thirteen companies and other organizations working towards the very(prenominal) cause.Bacardi, a sponsor of ICAP, is alike a founding member of The vitamin C Council which promotes responsible drinking, fighting against college binge drinking, and drinking and driving. They also have an campaign called Champions Drink Responsibly which educates drinkers on the immenseness of taking your time while drinking, staying in control of the a mount of drinks you consume, planning your night out, and making sure you have a ride home or back to a safe place at the end of the night and also end-to-end the night. Bacardi uses a professional athlete as the face of the campaign. During 2011, Bacardi measured a 4 percent reduction in total pissing usage, a 7 percent reduction in greenhouse gas emissions, over 37 million people engaged with their Champions Drink Responsibly campaign, and having 3,750 employees from legion(predicate) countries participate in 128 non-homogeneous activities.Smirnoff briefly describes their corporate social business on their website. Their campaign, Drink Responsibly focuses on three main objectives, effects of alcohol, tips for drinking responsibly, and tips on how to get home safely and the importance in doing so. It was disappointing to see their lack of interest in taking on more responsibility to give back to the community and world roughly us. There is definitely much room for improvemen t to make the company more well-rounded.We also found it important to touch on a couple beer companies, as well, when looking into whether Virginia Tech should invest in the industry because beer and liquor are the main drinking preferences for college-aged students. We took a look at MillerCoors, which is also a sponsor of ICAP, breaks their corporate responsibility into several areas. Their slogan, ample Beer, Great Responsibility shows their dedication and stand on their responsibility to various areas of public concern and not just responsible drinking. Most recently, MillerCoors came up with a competition amongst eligible colleges to win $10,000 grants by abideing responsible consumption efforts for legal-age students. This program is called Great Play Grant Program and the grants were issued for the inaugural time in 2012 with a totle of $230,000 in grants. MillerCoors also addresses the issue of drinking and driving by providing free rides in certain cities on holidays, sp ecifically, as well as sponsoring 1-800-TAXICAB service, which is a toll-free phone number that passengers can call and connect to taxicab companies in their local area.MillerCoors also worked to position a new cooling system that saves 100 million gallons of water each year. They also lessen energy consumption in their major breweries by 4.3 percent for that last 4 years. Along with these two sustainability efforts, MillerCoors also worked with their supply chain to make sure they are working to find ways to decrease energy and water usage and grow to use sustainable practices throughout each step in the supply chain.Anheuser Busch uses a similar slogan as MillerCoors, Our World. Our Responsibility They do not even address their product in this slogan, but instead focus the trouble on their belief in being responsible for the world round us. 2012 marks the 30th year since their first responsible drinking campaign. They launched many initiatives since the first campaign to prev ent drinking behaviors and most recently started a campaign, Nation of Responsible Drinkers, which asks adults nationwide to take the pledge which is promise to see the legal drinking age, enjoy responsibly and know when to say when, be the designated driver or use one.This is another company that knows their responsibility does not end with their responsible drinking efforts. They must also show the importance in other issues that this world is facing, such as environmental threats. Anheuser Busch has reduced water usage by 34 percent in the last three years. They have also gotten to the 99 percent marker of cycle the solid waste in their breweries. Both, Anheuser and Miller have reduced the materials in the packaging stages and coming up with ways to use renewable can in their factories.Both brewing companies we took further look into, Anheuser Busch and Miller Coors, have also participated in many charity and philanthropic events. MillerCoors employees spent more than 53,000 h ours during 2011 in local community fundraisers. MillerCoors specifically participates in Great water Month which aims to improve the watersheds around the breweries. Anheuser Busch has a foundation that has contributed $490 million to organizations that back up education, environment, economic development, and preparation of disasters and relief.Social/Ethical Investment Policy RecommendationsWhen making investment decisions, Virginia Tech absolutely should take into account Corporate Social Responsibility and ethical issues pertaining to the alcohol industry and its particular firms. Especially when we are talking about this amount of money, you must think about the responsibility and realizable outcomes of our decisions.In this case there are red flags surrounding the alcohol industry that must be studied. By red flags we are talking about issues that could look bad for Virginia Tech. For the alcohol industry in particular there are problem areas such as cheapjack the public, along with the concerns for the health and safety of its users. The way you understand and deal with these possible negative issues can have a major impact on your decisions and outcomes.Although we know that maximizing shareholder value is important, when making decision with investments we take into account not only the financial payoff but also what we believe is ethically correct. Virginia Tech needs to be very awake when dealing with situations that would lead to benefited financial return while sacrificing ethical reasoning. Overall, we believe there is no room to take ethical risks for financial returns because the possible negative outcomes. A major negative outcome we consider comes in the form of being negatively publicized. Having this negative publicity could have an even greater impact than the possible increased profit. Even legal industries, such as the alcohol industry, are very baiting because of the possible financial rewards. These are areas/scenarios that Virgi nia Tech should steer away from. We believe it simply sends a wrong and conflicting message to our community and to an institution that prides themselves on their high up moral ground. After completing our research we do recommend that Virginia Tech NOT invest in the alcohol industry. Seeing much of this act as strange as an academic institution. A volume of the Virginia Tech student population is under the age of 21, making sponsorships and other endowments an inappropriate presentation of the Virginia Tech reputation and hypocrisy against the standing alcohol policies. expend in this industry could also create bad publicity with the potential to obliterate the Virginia Tech reputation and standards. Also, many could see this as Virginia Tech supporting underage drinking on their campus. Overall this investment could destroy the brand Virginia Tech has been building for so long.Financially, this investment would be profitable because the alcohol industry only seems to be grow ing, but ethically inappropriate to pursue. Many people see the alcohol industry as having mind-boggling corporate social responsibility and not supporting underage drinking, while also leveraging the saying drink responsibly on every marketing campaign. So as an academic institution with a majority of the student population under the age of 21, Virginia Tech should NOT support it either.