CIGARETTE INDUSTRYS STRATEGY IN DEALING WITH THE DANGERS OF CIGARETTE

Yuliyanti
Executive 16/10K16016

MAGISTER OF BUSINESS ADMINISTRATION GADJAH MADA UNIVERSITY

2010

CIGARETTE INDUSTRYS STRATEGY IN DEALING WITH THE DANGERS OF CIGARETTE

Abstract The presence of domestic cigarette industries is really a dilemma. On the one hand, the cigarette industry is expected to provide vast employment opportunities and become one source of financing for the government because cigarette tax is having an important role in state revenue. While on the other hand, cigarette is not healthy. Coronary heart disease and blood vessels (stroke) play a major role as the causes of death worldwide. This is why more and more people oppose the existence of cigarette industries in Indonesia. Introduction There are more than 70.000 publications from the results of medical research, which prove the negative effects caused by smoking. Cigarettes contain more than four thousand substances and two thousand of them have been declared to be unhealthy. Tar, Nicotine and Carbon Monoxide are substances in cigarettes that are harmful to human health. According to WHO, there were more than 12 annoyances caused by smoking. It starts from the head to the toe. Coronary heart and vascular disease are the major causes of death in the world. Plenty of ways has been done especially by the government to lessen the danger of smoking in Indonesia, either through health campaign or small groups of anti cigarette movements. The government created regulations where people are not allowed to smoke in public places such as office, bus and train stations, airports, etc. As a result of this, tobacco industries changed their strategy in approaching the public, governments and

institutions so their products can still be accepted and consumed. This paper discusses the tobacco industries strategies in facing the tobacco extermination and the new government regulations.

Main One of the three main causes of death in the world related to heart and vein sickness and it is mostly affected by cigarettes. Every year, more than a million people in developing countries and 600.000 in developed countries died because of heart attack. Various studies proves smoking to fasten the heartbeat and boosts up blood pressure (causing increases hypertension risk) and corks vein that is finally leads to heart attack and stroke. In the smoke itself, there are 4000 dangerous chemistry matters for health in a cigarette. Two of the substances are nicotine which has an additive character and tar which has carcinogenic character. The danger of cigarette is not only suffered by the person who is smoking (active smoker), but also dangerous for the others as a passive smoker, since they also inhale the smoke. Activists of anti-tobacco organizations and government both local and national are trying very hard to reduce the amount of cigarettes. Their efforts can be seen from the age restriction for smoking thus prohibiting underage smokers, limiting cigarette advertisements, prohibiting smoking in public areas, increasing cigarette tax, health campaign, and even obligating the cigarette producer to mention the danger of smoking in their products. Furthermore, one of the Muslim organizations forbids smoking. These efforts are expected to lower the number of smoker as well as its risks while at the same time protecting the non-smoker. Nonstop anti-smoking campaigns by activists and increasing

regulations made by the government have made the tobacco industry plan 3

new strategies to keep its existence. Various strategies have been used so that cigarettes are considered to be a legal product and can be consumed continuously and are accepted by the community regardless the health impact. The tobacco industry uses several strategies, i.e: Advertising

promotion, Sponsorship and Corporate Social Responsibility (CSR). CSR is an appropriate strategy to be used in developing countries like Indonesia. CSR is a concept where organizations, especially companies are having a responsibility towards customers, employees, shareholders, communities and the environment in all aspects of company operations. CSR programs can be one of the media for the company to place itself in the middle of the society. CSR is usually carried out by the division of human resource development or public relations. CSR can also be done by a foundation that is formed separately from the parent organization but still be responsible to the CEO or the board of directors. Cigarette industry in Indonesia has been widely adopted CSR strategies. Among them are PT. Djarum and PT. HM Sampoerna TBK. In this time, PT. Djarum successfully provides scholarships through the Bakti Education program. The recipients of this scholarship are called Beswan Djarum. Since it was launched, the program has awarded scholarships to more than 5.000 students. PT. HM Sampoerna is also actively providing scholarships through the establishment of institutions called the Sampoerna Foundation (SF). SF is a not-profit organization dedicated to improving the quality of and access to education in Indonesia. SF which was founded in 2001 by the shareholders of PT. HM Sampoerna currently provides scholarships to more than 32,000 students in Indonesia and abroad. Conclusion The implementation of CSR strategy in Indonesia is considered to be

quite successful. This is proven by the increasing tobacco consumers in Indonesia. Based on the world health organization (WHO) in 2008, Indonesia was in the third rank after China and India which has the largest number of smokers, i.e. 65 million people or 28% of the total population.

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