Diageo Plc. is a beverage alcohol company that is multinational. Its headquarters are in London, and it operates in more than 180 countries producing more than 140 sites around the globe (Diageo Plc., 2022). It sells most of the world’s recognizable alcoholic drink brands, including everything from wine to beer to hard liquor (Diageo Plc., 2022). It is also known for producing, brewing, distilling, packaging, bottling, and distributing. Its brand lineup includes Captain Morgan, Johnnie Walker, Crown Royal, and Smirnoff (Diageo Plc., 2022). The company’s net worth as of July 2022 was $103.18 billion (Diageo Plc., 2022). The products are not the healthiest for consumers though people choose to have them. The organization does not also have a good record in Corporate Social Responsibility (CSR). Accordingly, Diageo Plc.’s failure to channel 10% of its revenues to social projects like most other players in the sector implies CSR passivity.
Every company, including Diageo, has some policies that limit their participation in society. For instance, shareholders own businesses, and the managers’ money spent on CSR is stolen from the property owners. Most of the objectives sought by conventional views about social responsibility are unclear. Though not all aspects of CSR are guilty of this, the argument states that any corporation should expect ordinary honesty, decency, and fairness. In many cases, the assumption is that through this activity, money is given away, which rightfully belongs to other people (Parast, 2021). The process helps in managing relationships with influential and political stakeholders who can affect their operating license. Thus, the CSR is all about attracting and retaining talented staff, building relationships with clients, assuring reputation, and managing risk.
Many companies that report on their social responsibility are experiencing financial difficulties. The most effective leaders in businesses do not waste time with CSR. This does not prove that real men do not do CSR, though. Leading companies also carry out social responsibility and are equally successful. For instance, Motorola Company is strongly associated with the CSR movement and was ranked among the top companies in one of the ‘most respected Surveys’ (Saxena et al., 2021). Thus, its success is attributed to their good CSR record over time.
Diageo’s inability to give part of its income to the community through donations to social projects, such as scholarships to bright but needy learners, makes the firm socially irresponsible. Averagely, about 99% of the U.K.’s firms operating in the alcoholic beverage sector give 10% of their annual income to the local communities in the form of donations for education and other social needs, such as health facilities’ development in remote areas (Hoe et al., 2022). Diego forgoes the other companies’ social responsibility efforts by mainly focusing on making more money, leading to the deliberate neglect of society’s needs. It is a big organization with a lot of resources at its disposal, but it is unnecessary to spend money on those frills. It is a stable organization that can afford to share its profits with a community and motivate its employees who feel cynical about the company’s operations.
Social responsibility is viewed as politicians’ obligation to deal with it. It is not the role of firms to get involved because the business has traditionally been beyond public policy and morality. Governments are expected to provide the legal framework that guides what the society will put up with without private businesses interruption. For instance, the government should not impose high taxes on alcohol, yet drinking remains legal in the country. It should be made illegal if it thinks that it is so dreadful.
However, things could be done to change this behavior and engage the company in social responsibilities. In this process, the companies seek ways to create environmental and social benefits, including maximizing shareholder value and revenue growth while pursuing their organizational goals. Diageo should invest in both environmental and social initiatives. It can support national and local organizations by holding events in honor of the cause or donating directly to the community (Parast, 2021). Some of these initiatives encourage the most paid employees to donate a portion of their paycheck to address their society’s health, income, and education challenges.
Potential job applicants look for companies that practice what they preach; therefore, the organization should exercise ethical labor. To ensure that the best talent is hired and high morale maintained, a firm should find opportunities to improve its brand confidence. It can also provide a comfortable workstation, offer competitive perks, and other ways that engage workers (De Stefano et al., 2018). Diageo should be environmentally conscious since consumers are looking for ways to better their environment. For instance, it should increase its recycling process and involve the community in doing the same. It should decrease energy and water consumption hence reducing waste. Additionally, it should introduce paperless technologies, use recycled bottles and reduce plastic.
CSR is important to companies as it demonstrates that the business values the interests in wider social issues rather than profits. These activities attract and maintain customers who share the same values. This makes business sense to sustainably operate with high sales returns. The company earns a positive reputation and creates better brand recognition. It also enhances the ability to attract qualified personnel that is greatly engaged and able to deliver the best in the marketplace.
References
De Stefano, F., Bagdadli, S., & Camuffo, A. (2018). The HR role in corporate social responsibility and sustainability: A boundary‐shifting literature review. Human Resource Management, 57(2), 549-566.
Diageo Plc. (2022). SEC.report.
Hoe, C., Weiger, C., Minosa, M. K. R., Alonso, F., Koon, A. D., & Cohen, J. E. (2022). Strategies to expand corporate autonomy by the tobacco, alcohol and sugar-sweetened beverage industry: a scoping review of reviews. Globalization and Health, 18(1), 1-13.
Parast, M. M. (2021). An assessment of the impact of corporate social responsibility on organizational quality performance: Empirical evidence from the petroleum industry.Operations Management Research, 14(1), 138-151.
Saxena, K., Balani, S., & Srivastava, P. (2021). The relationship among corporate social responsibility, sustainability and organizational performance in pharmaceutical sector: A literature review. International Journal of Pharmaceutical and Healthcare Marketing.