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Ethical Analysis Of Investment Into The Alcohol Industry Commerce Essay

Virginia Tech invests in multiple initiatives each year, being ethical in doing so is employment of its own. Analyzing all areas of the investment and how it'll impact financially, socially, environmentally, and ethically are really pertinent.

Virginia Tech receives donations of every size, daily. Virginia Tech's total endowment value by September 30, 2012 was $610, 035, 977. 00, most options are limitless for Tech. The mission of the Virginia Tech foundation finally states that the foundation takes the funding and manages the assets to help supplement funds. The building blocks also offers funding for standing initiatives as well as new initiatives 'requested by the university. ' They say that is all while being a "corporate citizen, " so for interests that not only affect the university (Virginia Tech Foundation, 2011).

Virginia Tech seeing themselves as a 'corporate citizen, ' is an important note to avoid on. Being ethically and socially responsible for almost all their actions, Virginia Tech must regulate how each investment will affect their reputation and profits. These two characteristics, being ethical and socially responsible make a difference Virginia Tech for a long time to come with potential students and the impact they have got on the environment.

Researching the existing investments Virginia Tech conducts as well as the potential for Virginia Tech to purchase the alcohol industry themselves has taken up many ethical issues and pressures.

Virginia Tech's current policies on alcohol stands, that students and guests older than 21 may own alcohol on campus and within their dorms. Students under the age caught with possession of alcohol are subject to a Conduct Review and "strikes" against their record. If further action is necessary a formal charge from the Virginia Tech police can be issued.

Virginia Tech does although permit "ABC Approved" parking lots for the Virginia Tech Football games, that happen to be monitored by Virginia Tech and Town of Blacksburg Police. Here, many students and guests can be ticketed for breaching the 'open container' or 'public intoxication' laws. Investment in the Alcohol Industry might lead to most students and guests to look at a double standard between them and Virginia Tech.

Ethical standards and social responsibility must work together in your choice factor.

Ethical Issues

Due to the type of the alcohol industry there are several ethical issues involving both products and the marketing practices implemented by companies within the industry. Two main ethical issues concern marketing to those who find themselves underage and medical issues.

Many argue that marketing practices of alcohol companies target those who find themselves underage and encourage them to participate in illegally consuming alcohol. Others argue that even if marketing efforts aren't directly targeting those who find themselves underage they are still subjected to alcohol related advertisements which could influence to them to consume alcohol while underage. It has been reported that 45% of commercials teens see are somehow related to alcohol, which really is a boat load of exposure to products which they aren't yet permitted to consume. One last argument for this issue is that there surely is no chance to differentiate marketing efforts wanting to target those who are 21-30 from also appealing to those who find themselves under 21. There are plenty of similarities of what attracts those who are any of these ages.

Many liquor companies have developed brightly colored labels, creative names, and a multitude of flavors; all argued to appeal to a younger crowd. In lots of kinds of advertising drinking alcohol is made to look fun, exciting, and creates an atmosphere that viewers wouldn't desire to be overlooked of. Many advertisements create a feeling of unity and fitting in which participating in drinking alcohol can accomplish that.

Many companies attempt to counteract these claims by adhering to marketing regulations and running responsible drinking campaigns that advocate sensible drinking for recreational purposes only. These campaigns aim to assist in preventing alcoholism, drunk driving, and underage consumption. Marketing efforts implemented by companies within the alcohol industry are heavily regulated; at least 70% of the prospective audience must be above the legal drinking, the ad cannot be made to appeal to those who are underage, no part of the advertising can encourage irresponsible drinking.

The second ethical issue surrounding the alcohol industry concerns with public health. Alcohol provides no medical benefit but can instead harm the body and empower people to harm others. Not everyone is with the capacity of self-control and consuming alcohol in moderation. In america there are approximately 17. 6 million adults who live with alcoholism, which not only influences them, but their own families and anyone close to them as well.

Consuming enough alcohol can cause judgment to be impaired and might result in a person to produce a decision that they would not regularly make. Decisions can include, but aren't limited to, drunk driving. Three out of ten people will be involved in an alcohol related motor vehicle accident at some point in their lives. Also, in 2009 2009 a person died every 48 minutes due with an alcohol impaired driver. Many ask the question if the amount of fatalities is actually worth the capability to consume alcohol, at any age.

An important factor to consider is the fact ethical issues about the alcohol industry can and will change from country to country depending upon how alcohol consumption is viewed. For instance, there is a significant difference in judgment and normality between drinking behavior in Ireland versus the attitude of drinking in the United States. Certain events in particular countries aren't allowed to have alcohol companies be sponsors, and even in a few countries all kinds of advertising are banned.

Pressures Facing the Alcohol Industry

When it comes to the alcohol industry there are many barriers and pressures that limit the industry's success. The majority of problems come from activist organizations that negatively portray alcohol and bring to light the harmful effects alcohol can cause. You can find organizations including the Robert Wood Johnson Foundation, that "try to stigmatize alcohol, de-legitimize drinking, marginalize drinkers, and produce a de facto quasi-prohibition of the legal product. "(Hanson). This organization has dedicated itself to limiting the alcohol industry in the us. "The Robert Wood Johnson Foundation spent over 25 % of your billion dollars ($265, 000, 000. 00) in only four years alone further developing and funding a nation-wide network of anti-alcohol organizations, centers, activist leaders, and thoughts and opinions writers to promote its long-term goal" (Hanson). Although Robert Wood Foundation may not be well know by the general public, "nearly every study disparaging 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). Among the well-known organizations supported by the Robert Wood Johnson Foundation is the Mothers Against DUI (MADD). Mothers Against DUI points out the most severe effect that is related to alcohol, death. "Founded by the mother whose daughter was killed by a drunk driver, Mothers Against Drunk Driving is the country's major nonprofit organization that works towards stopping alcohol related harms" (MADD). Through testimonies and videos Mothers Against Drunk Driving attempts to teach teens about the dangers of driving while impaired 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 strain on the alcohol industry, as they need to fight to direct the public's eye away from the negativity and even more towards positive and profitable side of the industry.

Although the pressures facing the alcohol industry appear severe, we believe the profitability and shareholder value will not be affected. The alcohol industry is a vital component in the American economy no matter how negatively activist organizations portray it, the alcohol industry will remain profitable. Pressures from these organizations may slow the alcohol industry slightly, but with the superior influence alcohol is wearing the American people the alcohol industry will always persevere.

Corporate Social Responsibility

To address the pressures that are facing the alcohol industry, companies attended up with several initiatives to promote responsible drinking, address sustainability issues, and other charitable programs important to each specific company.

The International Center for Alcohol Policies, ICAP, can be an organization that promotes knowledge of responsible drinking and helps reduce the abusive behaviors associated to drinking. Their policy approach is dependant on drinking patterns, targeted interventions, and partnerships. The business provides the current alcohol policies countries, worldwide. ICAP has partnered up with thirteen companies and other organizations working towards the same cause.

Bacardi, a sponsor of ICAP, is also a founding person in The Century Council which promotes responsible drinking, fighting against school binge drinking, and drinking and driving. There is also an campaign called "Champions Drink Responsibly" which educates drinkers on the importance of taking your time while drinking, staying in control of the amount of drinks you consume, planning your night out, and ensuring you have a ride home or back to a safe place by the end of the night time and also throughout the night. Bacardi uses a professional athlete as the facial skin of the campaign. During 2011, Bacardi measured a 4 percent decrease in total water usage, a 7 percent decrease in greenhouse gas emissions, over 37 million people engaged using their "Champions Drink Responsibly" campaign, and having 3, 750 employees from numerous countries participate in 128 various activities.

Smirnoff briefly describes their corporate social responsibility on their website. Their campaign, "Drink Responsibly" targets three main objectives, ramifications of alcohol, tricks for drinking responsibly, and tips about the way to get home safely and the value in doing so. It had been disappointing to see their lack of interest in taking on more responsibility to give back to the city and world all around us. There is certainly much room for improvement to help 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 spend money on the industry because beer and liquor are the key 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, "Great Beer, Great Responsibility" shows their dedication and stand on the responsibility to various areas of public concern and not just responsible drinking. Most recently, MillerCoors developed a competition between eligible colleges to win $10, 000 grants by supporting responsible consumption efforts for legal-age students. This program is called Great Play Grant Program and the grants were issued for the very first 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, specifically, as well as sponsoring 1-800-TAXICAB service, which is a toll-free phone number that passengers can call and hook up to taxicab companies in their local area.

MillerCoors also worked to install a new coolant system that saves 100 million gallons of water every year. In addition they reduced energy consumption in their major breweries by 4. 3 percent for the 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 use and grow to use sustainable practices throughout each step in the supply chain.

Anheuser Busch runs on the similar slogan as MillerCoors, "THE WORLD. Our Responsibility" They do not even address their product in this slogan, but instead focus the attention on their belief in being accountable for the world all around us. 2012 marks the 30th year since their first responsible drinking campaign. They launched many initiatives because the first campaign to avoid drinking behaviors and most recently started a campaign, Nation of Responsible Drinkers, which asks adults nationwide to have the pledge which is promise to respect the legal drinking age, enjoy responsibly and know when to state when, be the designated driver or use one.

This is another company that knows their responsibility does not end with the 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 consumption by 34 percent within the last 3 years. They also have gotten to the 99 percent marker of recycling the solid waste in their breweries. Both, Anheuser and Miller have reduced the materials in the packaging stages and discovering ways to work with renewable fuel 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 hours during 2011 in local community fundraisers. MillerCoors specifically participates in Great Water Month which aims to increase the watersheds surrounding the breweries. Anheuser Busch has a foundation that has contributed $490 million to organizations that support education, environment, economical development, and preparation of disasters and relief.

Social/Ethical Investment Policy Recommendations

When making investment decisions, Virginia Tech absolutely should consider Corporate Social Responsibility and ethical issues pertaining to the alcohol industry and its own firms. Especially when we are discussing this amount of money, you must think about the responsibility and possible outcomes of our own decisions.

In this case there are warning flag surrounding the alcohol industry that must be studied. By red flags we are discussing conditions that could look harmful to Virginia Tech. For the alcohol industry specifically there are problem areas such as; misleading the general public, combined with the concerns for medical and safety of its users. The way you understand and deal with these possible negative issues can have a significant effect on your decisions and outcomes.

Although we know that maximizing shareholder value is important, when coming up with decision with investments we consider not only the financial payoff but also whatever we believe is ethically correct. Virginia Tech needs to be very careful when dealing with situations that would lead to benefited financial return while sacrificing ethical reasoning. Overall, we believe there is absolutely no room for taking ethical risks for financial returns because the possible negative outcomes. A major negative outcome we consider comes in the form to be negatively publicized. Having this negative publicity might have an even greater impact than the possible increased profit. Even legal industries, such as the alcohol industry, are very baiting as a result of possible financial rewards. They are areas/scenarios that Virginia Tech should steer from. We believe it simply sends an incorrect and conflicting message to your community also to an institution that prides themselves on their high moral ground.

After completing our research we do recommend that Virginia Tech NOT spend money on the alcohol industry. Seeing a lot of this activity as inappropriate as an academic institution. A majority of the Virginia Tech student population is under age 21, making sponsorships and other endowments an inappropriate presentation of the Virginia Tech reputation and hypocrisy up against the standing alcohol policies.

Investing in this industry could also create bad publicity with the to destroy the Virginia Tech reputation and standards. Also, many could see this as Virginia Tech supporting underage drinking on the campus. Overall this investment could destroy the brand Virginia Tech has been building for such a long time.

Financially, this investment would be profitable because the alcohol industry only seems to be growing, but ethically inappropriate to pursue. Many people start to see the alcohol industry as having impressive corporate social responsibility rather than supporting underage drinking, while also leveraging the saying "drink responsibly" on every advertising campaign. In order an academic institution with a majority of the student population under the age of 21, Virginia Tech shouldn't support it either.

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