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Lipton Tea Company’s Sustainable Management Essay

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Updated: Apr 22nd, 2021

Introduction

Incorporation of sustainable management is one of the issues that organizations in different economic environment are increasingly being concerned with (Rendtorff, 2009, p. 151). Sustainable management entails combining corporate social responsibility with ethics. According to Salzmann, (2008, p.12), incorporating the concept of sustainable management in a firm’s strategic management processes contributes to its long-term success. This is due to the fact that it enables a firm to achieve its social, economic and environmental goals (Salzmann, 2008, p. 13).

Business ethics is one of the social obligations that organizations in different economic sectors have to take into consideration in their operation (Maheshwari, p. 45). According to Maheshwari (1997, p.45), integration of business ethics can contribute towards attainment of sustainable development. Brown (2005, p.40) further asserts that business ethics are more than a legal requirement that an organization have to observe. However, they are self-imposed and require an organization to be fair in dealing with the various stakeholders such as suppliers, consumers, the government, competitors, employees and the society in which a firm operates (Carroll & Buchholtz, 2011, p. 45).

Within the business environment, ethical theories legitimize incorporation of various practices in the operation of firms (Brooks & Dunn, 2010, p. 19). Additionally, they also emphasize on the importance of establishing an honest and long term relationship with the stakeholders.

There are numerous benefits that a firm can attain as a result of integrating effective ethical foundations in its strategic management. For example, adoption of strong business ethics enables an organization to incorporate effective self-regulation policies. The result is that a firm is able to avoid possible external controls for example by the regulatory agencies (Maheshwari, 1997, p. 45).

Maheshwari (p.46) further asserts that incorporation of ethical practices within an organization enhances its brand equity. Additionally, integration of strong ethics within an organization can result into increment in the level of productivity, creativity and motivation amongst the employees. The resultant effect is that the firm’s long-term success and prosperity is increased (Maheshwari, 1997, p.46).

Trevino and Nelson (2010, p.3) are of the opinion that the success of a particular business organization and its profitability cannot be separated from the values and ideals that it has integrated. By divorcing business operations from ethical values, an organization runs into the risk of failing (Trevino & Nelson, 2010, p. 3). Therefore, it is difficult for a firm to succeed into the long term within integration of good ethical foundations.

Lipton Tea is a private limited company that was established in 1890 by Thomas Lipton. The firm operates within the tea industry in the United Kingdom as a subsidiary of Unilever Company. Over the years that it has been in operation, Lipton Tea has been very successful. This is evidenced by the extensive distribution network that the firm has developed. Its Lipton tea brand has attained market leadership within the global tea industry (Unilever, 2007, para. 7). One of the factors that have led to the firm’s success relates to the effectiveness with which it has developed its ethical foundations. This paper is aimed at evaluating the ethical foundations incorporated by Lipton Tea Company in an effort to attain sustainable management.

Ethical foundations of Lipton Tea Company

In its operation, Lipton Tea Company has incorporated a number of ethical foundations that have significantly enhanced its success. Additionally, the ethical foundations incorporated have enabled the firm to conduct its operations social responsibly. Some of the firm’s ethical foundations are discussed below.

Bowie and Schneider (2011, p.43) are of the opinion that most business organizations consider their main ethical obligation towards the environment to be stipulated by the various environmental laws. However, some businesses have formulated a number of theories to illustrate the impact of protecting the environment in attaining sustainable development. Bowie and Schneider (2011, p.43) further opine that businesses are charged with the responsibility of ensuring that their operations do not destroy the environment within which they operate thus making it inhospitable for human life. As a result, it is a requirement for organizations to integrate human-centered ethics in their effort to attain sustainable management (Bowie & Schneider, 2011, p. 43). Organizations are also charged with the responsibility of protecting animal rights. Finally, businesses are required to protect the environment irrespective of whether their actions will harm human beings, animals or cause any environmental damage.

In its operation, Lipton Tea Company has attained an optimal market position as a result of its commitment towards environmental conservation (Lipton, 2010, para. 1). The company has integrated environmental protection as one of its ethical foundations. Additionally, the firm has appreciated the importance of taking care of its employees. In an effort to ensure that it produces high quality tea, the company has incorporated sustainable farming practices in all its tea plantations in different parts of the globe. Additionally, the firm’s commitment towards conservation of the environment is evidenced by the recent tree planting program that it developed. The program which is referred to as ‘Trees 2000’ is aimed at curbing the high rate of deforestation in the third world countries where it operates (Uniliver, 2009, para. 3).

As a result of its commitment towards environmental protection, Lipton Tea Company received the Rainforest Alliance Certification which is an award that recognizes companies that are committed towards creation of sustainable livelihood and conservation of biodiversity around the world (Lipton, 2010, para. 1).

As a sign of its commitment towards environmental protection, Lipton Tea Company ceased from using animals to test the quality of its tea products on January 2011 (Ulibarri, 2011, para. 1). From 2004, the firm has been committed towards development of alternative methods of testing the quality of its tea products. This decision was arrived after the firm faced intense pressure from People for the Ethical Treatment of Animals which is a body that fights for the rights of animals (Ulibarri, 2011, para. 3).

According to Webb, Cohen, Nath and Wood (2005, p.17), most manufacturing firms have incorporated consumer safety as one of their ethical practices in their operation. This trend has arisen from the fact that the consumers are increasingly becoming health conscious in their consumption patterns (Webb, Cohen, Nath & Wood, 2005, p. 17). In its operation, Lipton Tea Company is committed at ensuring that its products are of high quality. One of the ways through which the firm achieves this is by incorporating a strong value chain. The value chain is aimed at ensuring that its tea products meet the predetermined standards. The value chain stipulates how its tea products should be produced right from the farm to when the final product is developed. Additionally, the firm has integrated sustainable agricultural practices in an effort to improve its profitability (Lipton, 2011, para. 1).

The company ensures that it produces an optimal quantity of tea that is of high quality per unit area. In its tea plantations, Lipton ensures that no unacceptable pesticide is present in the tea leaves harvested (Lipton, 2011, para. 1). Additionally, when harvesting its tea product, Lipton has incorporated both mechanical and semi-mechanical harvesting methods. In all these methods, the firm ensures that the quality of the tea leaves is not negatively impacted (Lipton, 2011, para. 4). To meet the market demand, the firm also sources its tea leaves from the local tea farmers. To ensure that the tea leaves collected from the local farms are safe for its customers, the firm has formulated a policy that outlines that all its tea leaves should be bought from ethical and sustainable sources (Unilever, 2011, para. 1). The firm’s commitment to customer safety is also evidenced by the fact that it has incorporated certification of its tea products by Rainforest Alliance Company (Unilever, 2007, para. 2).

To improve the quality of its final product, the company has incorporated good manufacturing practices in its tea process (Stanwick & Stanwick, 2008, p. 45). Additionally, the firm has also incorporated the concept of value addition in an effort to maximize the value of its product. Its tea products are well packaged so as to ensure product safety (Lipton, 2011, para. 7). The resultant effect is that the firm has been able to develop a high level of satisfaction amongst the consumers.

To ensure that its customers are satisfied, the company has incorporated the concept of continuous product improvement. This has significantly enhanced the firm’s competitive advantage. In an effort to ensure that the firm survives in the long term, Lipton Tea is continuously improving its plant breeding processes. The objective is to develop planting materials that are efficient and of high quality hence improving the safety of its products (Reidenbach 2009, p.645).

Ethical strategies that the company may incorporate to guide its ethical behavior

One of the major challenges facing the world today relates to high rate of climate change which has arisen from global warming. Global warming has arisen from an increment in the amount of greenhouse gases that are being emitted into the atmosphere. In their operation, firms in different economic sectors contribute to global warming through the gases that they emit. However, firms are required to operate in an ethical manner; for example, they should not emit greenhouse gases into the atmosphere (Paul, 2004, p.103). In order to limit the amount of greenhouse gases that emanate from its operation, Lipton Tea Company should consider incorporating the concept of carbon-neutrality. This entails ensuring that the firm emits zero amounts of greenhouse gases into the atmosphere (Collins, 2009, p. 255). One of the ways through which a firm can attain carbon neutrality is by purchasing carbon offsets which are equal to the amount of their carbon footprint.

Some of the carbon offsets that Lipton Tea should consider integrating include planting trees and other forestry projects. Investing in tree planting projects will aid in extracting a significant proportion of carbon dioxide emitted from the firm’s operations from the environment (Collins, 2009, p. 255). To attain carbon neutrality, it is critical for Lipton Tea to consider integrating the concept of carbon foot printing. Carbon foot printing strategy enables an organization to determine the amount of greenhouse gases emits into the atmosphere as a result of its operation.

According to Wilhelm (2009, p.12), carbon foot printing enables an organization to make adjustments to its corporate strategies. This arises from the fact that it enables a firm’s management team develop a concrete understanding of the business operations that are carbon contributors As a result, the firm will be able to minimize its carbon emissions. Additionally, integration of carbon foot printing contributes towards an organization improving the efficiency of its operation. This arises from the fact that the management team is able to identify organizational areas which are characterized by inefficiencies (Wilhelm, 2009, p. 12). To be effective in its carbon footprinting process, Lipton Tea Company should develop an effective carbon foot printing process that is composed of the following steps and activities.

Ethical strategies that the company may incorporate to guide its ethical behavior
Source: (Wilhelm, 2009, p. 254).

Taiyab (2006, p.3) asserts that carbon offsets enables an organization to neutralize an equivalent amount of carbon dioxide emitted into the atmosphere. For example, if one ton of carbon dioxide is emitted in the firm’s operation, carbon offset neutralizes an equivalent amount. In order to limit its contribution towards climate change, Lipton Company should consider purchasing a number of carbon offsets. Some of these offsets that the firm should integrate include incorporating a tree planting program. By planting trees, the firm will be able to extract a significant proportion of carbon dioxide from the atmosphere. Additionally, integration of a tree planting program will enable the firm to protect the environment from deforestation. The resultant effect is that the firm will be able to curb the adverse effects of climate change.

Lipton Tea should consider integrating alternative forms of energy (Cowton, 2010, p.60). One of the most important forms of energy that the firm should consider incorporating is renewable energy. Some of the renewable forms of energy that the firm should consider using include solar energy, nuclear energy, wind energy and bio fuel. The solar, nuclear and wind energy should be used in running its machines (McDaniel, 2004, p.67). On the other hand, the bio fuel energy should be used in its transportation processes.

Conclusion

The analysis above has shown the importance of integrating effective sustainable management practices in firms strategic management processes. One of the ways through which a firm can attain sustainable management is by integrating ethics and corporate social responsibility. Through integration of effective ethical foundations, a firm’s long term success is enhanced. This arises from the fact that its public image is enhanced which results into improvement in the level of customer satisfaction. Additionally, integration of ethical foundations results into elimination of external controls by the government.

In its operation, Lipton Tea Company has been very successful. One of the factors that have contributed to its success relates to integration of effective ethical foundations. Some of the main ethical foundations that the firm has incorporated in an effort to attain sustainability relate environmental protection and customer safety. As a part of its ethical foundations, Lipton Tea is committed at ensuring that its operations do not result into environmental degradation. For example, in all its tea plantations, the firm has integrated sustainable agricultural practices. Additionally, the firm has also incorporated a tree planting program which is aimed at curbing deforestation. The firm’s commitment towards the environment is also evidenced by its recent abandonment of using animals to test the quality of its tea. This illustrates the firm’s commitment towards animal rights. The resultant effect is that the firm has attained environmental sustainability.

The firm is also committed towards customer safety. One of the ways through which the firm attains this is by ensuring that the tea produced is of high quality. In order to achieve this, the firm has incorporated effective agricultural practices in its tea plantations in an effort to improve the quality of its tea. For example, the firm has integrated an effective value chain that is aimed at ensuring the entire tea production process is safe. In an effort to improve the level of customer safety and satisfaction, Lipton Tea Company has also integrated the concept of value addition and continuous product improvement.

The analysis has also illustrated some of the strategies that Lipton Tea Company may incorporate in an effort to guide ethical behavior within the firm. One of these strategies relate to attainment of carbon neutrality. This strategy will entail ensuring that all the operations by the firm result into zero emission of greenhouse gases. The resultant effect is that the firm will be able to limit the amount of emissions that contribute to global warming and hence the climate change being experienced.

Recommendation

In order to achieve sustainable management hence growth in its operation, it is paramount for the management team of Lipton Tea Company to improve its ethical foundations. To achieve this, the firm should consider the following.

  1. Lipton Tea should enhance its environmental protection strategies by incorporating the opinion of the various stakeholders in its quest to attain environmental sustainability. To achieve this, the firm should not only focus on its effect on human life. However, its environmental protection policy should be comprehensive by incorporating its impact on animal life and the ecology.
  2. In its quest to ensure that it produces high quality products, Lipton Tea Company should incorporate the concept of internal quality control. This will ensure that all its operations are in line with the stipulated quality standards.
  3. To minimize its contribution towards climate change, Lipton Tea Company should integrate the concept of carbon neutrality. One of the ways through which the firm can attain this is by developing an effective carbon foot printing process so as to determine the amount of carbon it emits into the atmosphere. The resultant effect is that the firm will be able to incorporate effective carbon offsets.
  4. To attain carbon neutrality, the firm should consider using renewable sources of energy in addition to integrating tree planting programs.

Reference List

Bowie, N., & Schnieder, M., 2011. Business ethics for dummies. New York: John Wiley.

Brooks, L. & Dunn, P., 2010. Business and professional ethics for directors, executives and accountants. Mason: Cengage.

Brown, M.T., 2005. Corporate integrity: Rethinking organizational ethics and leadership. New York: Cambridge University Press

Carroll, A. & Buchholtz, A., 2011. Business and society: Ethics, sustainability and stakeholder management. Mason: Cengage.

Collins, D., 2009. Essentials of business ethics: Creating an organization of high integrity and superior performance. New York: John Wiley.

Cowton, C., 2010. Business ethics: A European Review. Journal Of Business Ethics Review. 6(2), pp.60-64.

Lipton. 2011. Promoting people: Value chain. Web.

Maheshwari, R., 1997. Principles of business studies. London: Pita bar Publishing.

McDaniel, C., 2004. Organizational ethics: research and ethical environments. New York: Ash gate publishing.

Paul. K., 2004. Business and society and business ethics journals. A citation and impact analysis. Journal Of Scholarly Publishing. Vol. 35, issue 2, pp. 103-105.

Rendtorff, J., 2009. Responsibility, ethics and legitimacy of corporations. Germany: Copenhagen Business School Press.

Reidenbach, R. E., 1990. Towards the development of multidimensional scale for improving evaluations of business ethics. Journal Of Business Ethics. Vol. 9, issue 8, pp. 639-653.

Salzmanann, O., 2008. Corporate sustainability management in the energy sector: An empirical contingency approach. Weisbaden: Verglar Gabler.

Stanwick, P., & Stanwick, S., 2008. Understanding business ethics. New York, Prentice Hall.

Taiyab, N. (2006). Exploring the market for voluntary carbon offsets. New York: IIED.

Trevino, L. K and Nelson, K. A., 2010. Managing business ethics: straight talk about how to do it right (5th Ed.). New York: John Wiley and sons Inc.

Ulibarri, S., 2011. Unilever eliminates animal testing for Lipton Teas. Web.

Unilever. 2007. Unilever commits to sourcing all its tea from sustainable ethical sources. Web.

Unilever. 2009. Lipton rainforest alliance certified tea. Web.

Wilhelm, K., 2009. Return on sustainability. New Jersey: Dog Ear Publishing.

Webb, L., Cohen, J., & Nath, L., & Wood, D. 2005. The supply of corporate social responsibility among US firms. Boston: Boston College.

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