Abstract
This is a very interesting ‘case study’, in which the two important issues are addressed:
Use of case study has an effective tool for training managers for effective decision-making (Freire, 1970, 1974; Sharon, 2007). Importance of focussing on triple bottom line by organizations (profit, people and planet).
The case tries to inculcate in the students the importance of (a) ‘respect for diversity, social justice and concern for the environment’ and (b) simultaneously focus on all the components of the triple bottom line (profit, people and planet).
The case effectively brings out the dilemma that the protagonist, Varun, is trying to solve when deciding whether a tobacco major like ITC should not only focus on profit but also on people and the planet too.
The author very interestingly brings out the fact that a tobacco major like ITC is faced with the following challenges: (a) introduction of GST (b) falling stock prices, (c) effective-ness of the spending of their CSR funds to address issues related to ‘health and sanitation, drinking water, poverty eradication, education, livestock development, environment sustainability through soil and moisture conservation and watershed development and agriculture development’, and Swachh Bharat initiative, and skilling of youths. ITC through their focus on social projects has ensured that the organization is: (a) carbon positive for 12 years, (b) water positive for 15 years and (c) solid waste recycling positive for 10 years.
The author also points out the problem that ITC, a tobacco major, earns around 61 per cent of revenues and 81 per cent of operating profits from the cigarette industry, while the remaining 39 per cent is earned from the paper and hotel industry. But, there is intense pressure from the Government of India (GoI) and global bodies such as WHO to sensitize citizens about the ill effects of consumption of cigarettes. Also, there are secondary challenges such as the impact of (a) passive smoking, (b) green tobacco sickness, (c) pesticide use, (d) emission of greenhouse gases and (e) cigarette butts’ disposal. In this context, ITC’s top management is faced with the challenge to decide (a) whether they should aim for shareholders’ wealth maximization or stakeholders’ value creation and (b) how to spend their CSR fund to take care of the society and the planet as well.
In summary, the case brings out clearly the dilemma that ITC is trying to solve by striking a balance between economic, social and environmental objectives. It also tries to check whether the introduction of GST by GoI will have to solve the problem or the management of ITC has proactively taken more steps to address the social objectives for the citizens of India.