Negative and Positive Performance of Diageo (Research Paper Sample)

Analysis of DIAGEO PLC
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July 12, 2012.
Introduction
DIAGEO PLC is a company that deals with drinks. It was formed through the merging of Guinness and Grand Metropolitan in 1977. It is the11th largest company in the U.K. It is a successful company that supplies a wide range of brands to its customers. It operates in the branded beverage alcohol industry. Its operation is at a world wide level. It is a world’s greatest producer and distributor of wines, beer and branded premium spirits. The premium brands that it produces include Guinness stout, Johnnie Walker scotch, Captain Morgan rum, Smirnoff Vodka, Tanqueray gin and Baileys Original Irish Cream Liquer.scotch whisky. It has a lot of markets all over the world, with North America as the main source of market. The company carries out many activities, which affect their stakeholders both directly and indirectly. These factors and activities have extensively discussed in the essay.
Social Intangible
There are many social effects that come as a result of existence of this company. For example, the acts that the company engages in effect the general perception of the public. This is because the success of the company causes it to be emulated by many people. Therefore, any social impact by the company’s action occurs in large scale. To start with alcohol is a product that directly affects the social well being of a society. Therefore, a company as large as DIAGEO PLC this one must have social implications on its consumers. These effects raise different views from people all over the world. Some have a negative thought and perception of the company while for others; there is the positive side of the same. This creates a wide range of views of the company with regards to the social lives of people. Therefore, this is a topic that is worth discussion.
There is a negative impact on the society as a result of alcohol consumption. This is because alcohol consumption is associated with immorality and loss of values by its victims. Most of the people who take alcohol end up with health, as well as social issues. Recent research shows that about 2.5 million people die every year as a result of alcohol consumption. The weakening of the immune systems of most individuals is also associated with the consumption of alcohol. Once an individual has excess alcohol in his/her system, it impairs their judgment. This causes their decisions to be irrational. For example, the spread of HIV and AIDS is propelled by the use of alcohol. This is because it causes people to engage in irresponsible sexual behavior. This is the main cause of the fast spread of the disease.
The company has suffered criticism from all many groups of people due to its continuous supply of alcohol. However, this is a business institution like any other. Therefore, its main aim is profit maximization. The issues of moral values are secondary to such companies. However, such actions are considered unethical by the members of the society. This is because any business should strive to make sure that it takes care of the well being of the members of the society.
Examples of Negative and Positive Performance
DIAGEO PLC fulfils a wised range of social needs for people all over the world. One of the social needs that the company has satisfied is the need to have fun and get entertained. The demand for alcohol in the society has continually increased with the increase in the number of stressful activities going on in the everyday life.
There are numerous time consuming and difficult jobs which cause the people in the society to suffer from fatigue and stress. Therefore, these people need relaxation. It mostly occurs during the weekends. This enhances socialization between people of different areas. In most celebrations, especially in the festive season, wines and beer from the company is used s a source of fun. This also applies to national and international executive meetings. People use wine as they have talks with each other on various areas of employment. Some societies also need wine for religious purposes. All this demand for alcohol is fulfilled by this company every other day. This is an enormous success on the company’s part in the satisfaction of consumers. The company has about 80 offices all over the world. It supplies the alcoholic beverages to over 180 countries. This shows the extent to which the company has gone in satisfying the consumer needs.
In the company, there are other areas that are required to make improvements. To start with, their product is not well distributed all over the world. It only covers 180 countries in of the world. A lot of its products are supplied to North America. This can cause excessive consumption of alcohol in the regions that are covered with the supply. Therefore, the management of the company should consider restructuring their distribution patterns. They should make sure that they supply as many countries as possible. Also, they need to establish more offices in the countries that do not have them. This shall ensure that the company is represented in as many countries as possible.
There have also been a number of irresponsible decisions by the management of the company. The making of such reckless decisions can cause the loss of numerous potential customers, as well as supporters. For example, it had been rumored that the company was restructuring in order to evade taxes. This is quite a wrong motive in the restructuring of a company. Restructuring should only be based on what is best for the company, but in the right path. Therefore, this was a wrong decision on the management and should not be repeated. The other reckless decision was made in 2012.
DIAGEO PLC had threatened to withdraw their funding from BII Scotland’s annual awards if Brew dog was named as the winner of the award of the best bar operator. This is a wrong way to combat competition by a large company. The management should only focus on doing the right things. These include consumer satisfaction, compliance with government rules, monitoring its activities, as well as many other activities. About the competition for awards, the decision should be left to the right people to make the decision. This decision should not be affected by threats of any kind. Therefore, this was a wrong move on the management part of the company. Recently, the company was involved in issues of bribery. It had been accused with bribing of officials from India, Korea and Thailand. They agreed to pay more than 16 million dollars to US authorities for the settlement of these allegations. These are some of the activities which create a negative impact and tarnish the name of any company which has had an excellent reputation in the past. There have also been recent claims by shareholders about the management decisions. For example, the shareholders recently complained of the executive pay. They did not support the drink’s compensation plans for the top executives in the group.
Impact of the Company on Stakeholders
Every action carried out by the company has an impact on the stakeholders. These stakeholders include people such as consumers of alcohol, the families of these consumers, as well as the people working for the company. Therefore, any company should consider all these stakeholders before making any decision. To start with, this is a company that employs thousands of workers. Therefore, it can create a lot of employment opportunities, as well as render a lot of people unemployed. For example, in 2009, the company announced that it would be closing Johnnie Walker. Estimates showed that this would render about 700 workers unemployed. This decision’s impact was immediately felt judging from the reactions that were exhibited by people all over the U.K. The complaints came from the press, politicians, and the local people. It even caused campaigns against the decision by the labor MP, as well as other locals. These were workers who were initially waiting for a salary on a regular basis. Therefore, such an act would have an adverse effect on the social lives of these employees, as well as the people surrounding them.
On the same employment point, the employing of many workers prevents them from engaging in unscrupulous ways of living in the cities. This is because it ensures that numerous people are busy and have a source of income. However, when poor management occurs and forces the closure of some branches, as well as brand production, many people are rendered unemployed. This results to alternative ways of earning a living. Some of these alternative ways could be morally unacceptable in the society. Therefore, this creates a negative social impact on the people.
The other stake holder that can be affected by the activities of the company is the government. This is a large scale company whose operations take place at a world wide level. Therefore, its actions have enormous effects on the economy of a country. When the aim of a government is creating more employment, it is companies like these that make it happen. However, these large companies have the potential to affect the government negatively. The revenue of a government is largely boosted by this company. This is mainly through taxation. However, the company may sometimes forget its social, economic and moral obligation, as a result, on focusing so much on the profit. For example, in the year 2009, it was reported that the company had restructured itself to avoid the payment ...