Group O2

Background
ITC Ltd. is the leading tobacco manufacturer in India
Market share of over 75% Tremendous growth potential in the industry Highly regulated industry Diversification into other sectors to lower emphasis on

tobacco business The company is aiming to achieve a triple bottom line performance

Money spinner
The industry contributed over 70 billion rupees to government

earnings

Rs. 3383 crore worth of exports Provides employment to 10 million people Tremendous growth potential

Health Hazard
In 2010, 8.8% of all global deaths and 4.2% of disabilities due to

tobacco 5.4 million people died prematurely owing to tobacco related illness Men smoking BIDIS lost 6 years of life ,Women smoking BIDIS lost 8 years Men smoking Cigarettes lost 10 years .Non-educated individuals having low standard of index were more likely to consume tobacco NATIONAL THREAT 70% of tobacco smoked in India in the form of BIDIS BIDIS killed 6,00,000 people in India every year 2% of the people were inclined to quit smoking According to Indian government tobacco consumption killed about 0.9 million people every year.

Participants
ITC and other tobacco manufacturers The consumers and affected non users The government Farmers and dependent labour Retailers and sellers

Ethical dilemma
ITCs primary source of income comes from tobacco
Income from other sources contributes to less than 25% of the

revenue Considerable emphasis on the government to act

Altruism Utilitarianism Pragmatic ethics

Definitions
Ethical Egoism: One has an obligation to pursue solely what is best

for oneself. Ethical Altruism: One has an obligation to pursue the interests of others one may even be required to sacrifice ones own interests for the welfare of others. Utilitarian View :Always act to produce the greatest possible balance of good over bad for everyone affected by our action Consequentialism : The consequences of one's conduct are the ultimate basis for any judgment about the rightness of that conduct.

Triple Bottom Line - ITC

Ethical Altruism
ITC grew more sensitive towards : 1. Impact of operations on the environment 2. How important it is to look beyond the objective of wealth maximization 3. How to achieve sustainable growth without affecting the future generation The triple bottom line captures an expanded spectrum of values and criteria for measuring organizational success: economic, environmental and social. Economic perspective-ITC 1. Growing portfolio spanning from the FMCG, agriculture, food business to hotels and Information technology sectors. 2. A remarkable turn over of US $6 billion and a market capitalization of over US $30 billion 3. Provides employment to more than 28,000 people

Environmental perspective
Carbon positive by storing twice the amount emitted for 5 years in a row 2. Water positive by harvesting three times the water consumed for 8 consecutive ye 3. 31% of the energy consumed generated from the renewable resources 4. Best green building awards for ITC royal gardenia &ITC green centre
1.

Social Perspective
Generates direct and indirect employment to over 5 million people 2. E-Choupal benefitted over 4 million farmers 3. Greened over 107000 hec of land and its watershed initiatives helped provide water to 54000 hec of dry lands. 4. Programs for womens empowerment, supplementary education and integrated animal husbandry also initiated.
1.

Theory of Utilitarianism
Utilitarian View

Always act to produce the greatest possible balance of good over bad for everyone affected by our action. Good consequence : Happiness or pleasure. People Positively affected in the tobacco industry were lawyers, employees, executives, marketing, farmers, and the receivers of the taxes placed on the product. Bad consequence : Millions of people dying & affected by the illnesses, deaths, and addictions to tobacco. Implications Relatively small number of total people benefit when compared to the .5 million a year expected to die, and the countless millions who become sick, because 5 million die in a year right now. BOTTOM LINE More people become unhappy when encountering cigarettes and tobacco than become happy."

Ethical Theories
CONCERN FOR ITC VS CONCERN FOR SOCIETY/GOVERNMENT

Recommendations
Pragmatic approach to ethics should be adopted
ITC should look to sell only low nicotine cigarettes Taxes on cigarettes should be lowered to prevent people

from migrating to more harmful forms of tobacco

Education drastically reduces the incidence of death in

addicts, hence ITC and the government should focus on it to reduce impact of their actions