Corporate social responsibility (CSR) initiatives have become an increasingly visible part of tobacco companies’ public self-presentation. While CSR’s overall value remains questionable, with some critics suggesting that it often represents attempts to avoid regulation, distract from structural considerations and co-opt the meaning of ethics,1 public health advocates have noted the fundamental contradictions between tobacco companies’ claims of responsibility and their continuing promotion of deadly products.2 3 Tobacco companies, in turn, claim that they can act responsibly while acknowledging that cigarettes cause disease.4^–6 What constitutes acting responsibly as a tobacco company, therefore, is highly contested.

Among tobacco companies, Philip Morris (PM) has been a leader in attempting to reposition itself through CSR. Its name change,7 attempts at partnership with selected tobacco control advocates,8 support for government regulation of tobacco,9 and corporate philanthropy10 (a longstanding PM program reconfigured as a strategic component of CSR) are all parts of a long-term effort to position PM as a “reasonable and responsible” company.3 Special efforts were needed, according to PM, because the company had fallen “out of step with society”.11 We describe development and implementation of PM’s “societal alignment” strategy, a key element in PM’s ongoing efforts to appear responsible.

METHODS

A total of 8 million previously undisclosed internal tobacco industry documents have been made public as a result of litigation against the tobacco industry.12 Between August 2007 and January 2008, we conducted full-text searches within the Legacy Tobacco Documents Library13 for documents related to societal alignment, beginning through an inquiry into how PM developed public defences of its operating companies. Using a snowball sampling approach, we began with broad search terms (“corporate image”) and used retrieved documents to identify more specific search terms (“societal alignment”). This process produced nearly 2500 documents; after excluding duplicates and unrelated documents, the final sample on which this analysis is based was approximately 375 documents, spanning the years 1994–2004. We also conducted searches of the newspaper database LexisNexis for coverage of PM corporate affairs activities. We analysed materials by reviewing them iteratively, discussing themes and assembling a chronologically constructed case study focusing on how the company characterised and implemented “societal alignment”.

Our study has limitations. The sheer size of the databases means that we may not have retrieved every relevant document. Some may have been destroyed or concealed by tobacco companies;14others may have never been obtained in the legal discovery process. The Global Corporate Affairs Council, discussed below, was convened by PM in 1999 after the 1998 legal agreements that made these documents public. Thus, for most of the project’s proposed lifespan, PM executives were aware that related documents might eventually become public, which could have contributed to more circumspection or reduced documentation of later activities.

RESULTS

Rethinking corporate affairs in a changing environment

In a 3-year period beginning in 1994, more lawsuits were filed against American tobacco firms than in the previous 30 years.15 Most significant was a series of lawsuits brought against the tobacco industry by state attorneys general to recover Medicaid costs incurred by states to treat smoking-related diseases. More than 30 states had filed suits by the spring of 1997.15 With the changing legal environment and growing political support for tobacco control measures, PM CEO Michael Miles suggested to top company executives in March 1994 that PM should rethink its corporate affairs strategy, moving from a position of “passive defence” to “ferocious defence”.16 Miles asserted that although PM had previously defended its products against “new competition” and “category shrinkage”,17 the company had not publicly defended itself as a corporate entity from attacks by tobacco control advocates. Instead, PM had utilised the Tobacco Institute (TI), a lobbying group supported by multiple US tobacco companies18 and INFOTAB (International Tobacco Information Center) and its successors on the global level19 to defend the industry as a whole. But the TI, which Miles viewed as “never really effective”, was “now… even less so” because of a dwindling budget and disagreements among its sponsors,16 and INFOTAB had been dissolved into smaller organisations.19

PM did not change its corporate affairs strategy, however, until 2 years later. In response to a changing legal and regulatory environment and the mounting legal challenges from state lawsuits,15 PM consultant Jim Lindheim suggested in March 1996 to Vic Han and Steve Parrish, two senior PM corporate affairs executives, a new approach to the company’s image.20 Lindheim suggested positioning PM as “responsible and reasonable” to counter portrayals of the company as “greedy and uncaring”. Lindheim followed up with a detailed public relations plan,21 which was presented to the Board of Directors.22

That summer, a core group of “public relations and communications experts” met to redesign PM’s corporate affairs strategy.23 The new strategy was designed to “change core attitudes” toward PM and impact how “people view our company, so we can be more effective at protecting our business interests”.22 The aim was to “create the political environment for policies which give us the freedom to prosper”.23

Five elements constituted the new approach: creating “reasonable solutions” so that PM would “not just be against things” but “for things”;23 an “organized, systematic effort to be more visible” and to “break through the wall of isolation” the company found itself behind;22 corporate responsibility initiatives leveraging charitable programs and political contributions;10 improved stakeholder communications to keep employees and business allies “more comfortable with the issues affecting our business”;22 and new strategies to isolate tobacco control advocates, showcasing their “extremism” and using it against them, as in PM’s earlier “Project Sunrise”.8

PM’s primary CSR campaign in the US was called “Philip Morris in the 21st Century”, or PM21.10 Begun in 1997, PM21 was an effort to improve public perceptions of the company by repositioning it as trustworthy, credible and sincere.10 The development of ”societal alignment„ as a central global corporate affairs operating principle overlapped with the implementation of the PM21 campaign with respect to time and content. PM21 provided lessons learned from the US for international societal alignment campaigns,24 while achieving societal alignment became a goal of PM21.25 The two differed in that PM21 was a discrete program with specific components, while societal alignment was intended as a guiding principle to be adapted strategically to specific local contexts. We first discuss the process that led to societal alignment as an operating principle, then its implementation, first in the US and then internationally.26

Globalising the new strategy

In 1998, after new CEO Geoff Bible restructured the company, Parrish formed an advisory group to take the new corporate affairs strategy global. Parrish created the Global Corporate Affairs Council (GCAC), consisting of 16 senior corporate affairs executives from Europe, Asia, Mexico, North America and 4 senior executives from the tobacco, food and alcohol companies.27 The group was to develop an overarching plan to coordinate activities in each geographical area.

In GCAC meetings in February and May 1999, GCAC developed the Global Corporate Affairs Plan (GCAP), defining goals and operating principles. For 2000, GCAP included four goals (table 1), the first of which was “societal alignment”.24 Societal alignment in its simplest form was defined as “strategies and programs to ensure that our operations and activities respond to societal expectations of a responsible company”.28 This goal stemmed from the feeling among the GCAC that the tobacco industry was out of step with changing societal values, having “clung to old stances while society has moved on to new beliefs and new language about tobacco and smoking”.29

Between 2000–2001, the GCAC continued to develop implementation strategies. In early 2001, however, a GCAC member survey suggested that the group was losing focus;30 it was downsized after the May 2001 meeting to achieve greater “strategic coherence”.31 The number of members was reduced to eight executives and three consultants by October 2001.32 We located no additional record of GCAC meetings after October 2001, and found only two documents33 34 mentioning its existence after that date. The absence of later documentation could suggest either that the group was renamed, or that the GCAC had devolved into an informal consultative group.

Societal alignment

Of the GCAP goals, “societal alignment” was the most emphasised by Parrish, described as “our overall objective”.35 Being perceived as responsible was “a business imperative”.36 PM focused initial societal alignment activities on “those general public audiences that influence… decision makers, to make it more politically and socially acceptable for them to actively support our point of view”.22 Being perceived as responsible was the key to gaining the “social and political trust”36 needed to ensure favourable political environments. Achieving societal alignment would, therefore, allow PM “to be seen as a normal corporation… with challenges that are manageable and do not threaten the legitimacy of the company”.37

Societal alignment was presented by Parrish as originating from a “social contract” PM had with “every society in which we operate”.38 According to Parrish, every corporation had such a social contract.35 But for PM particularly, “the risks with our products” and “their sometimes controversial nature”39 magnified its importance.38

Achieving societal alignment included conducting research to systematically identify “what… people expect of us”, what PM would “have to be, do and say to be seen as responsible business people”.38 The research would be used to “carefully determine—market by market—the actions we must take to be seen” as responsible.39 Locally-conducted research would allow the company to consider geographic variations in attitudes about corporate responsibility.40

Societal alignment next required “taking action to align our practices and programs with society’s expectations”.39 Alignment, however, was not merely meeting identified expectations. It also included “working to shape what society’s expectations of us should be”, and then aligning “our conduct with those reasonable expectations”.39 Thus, societal expectations were seen as mutable and had to be considered “reasonable” to warrant “alignment”. Societal alignment was a “long-term strategy”38 intended to touch on every aspect of corporate activity, not an isolated programmatic feature. The GCAC was to provide the “clear, consistent positions on key ‘global’ issues”.24

The GCAC worked to integrate societal alignment into PM’s corporate lexicon for 2 years before the concept of corporate social responsibility began to emerge, creating some uncertainty about the meaning and utility of societal alignment as an operating principle. Among GCAC members, the relationship of societal alignment to corporate social responsibility (which PM USA had created a taskforce to explore in greater detail41) was unclear.42 By 2002, however, the GCAC had taken the position of “sponsoring” two “cross-company practice sharing groups” designed to link the “societal alignment goal… to CSR principles”.43 This effort attempted to merge the company’s growing preoccupation with CSR into its existing societal alignment efforts.

Achieving buy-in for societal alignment

The GCAP and societal alignment were driven by Corporate Affairs, and “cooperation and involvement of WRA [Worldwide Regulatory Affairs] and Legal” were regarded as essential.24 To maintain consistency about the goal of societal alignment and the tools to achieve it, a standardised slide presentation was created to explain the concept internally.44 Speeches,45 46 company intranet,47 48 and internal publications 49 50 were geared toward multiple audiences throughout the company.

The strategies used by the GCAC to promote employee uptake of societal alignment, however, were unsuccessful. A year after the first GCAP was introduced, a corporate affairs employee survey showed that many “do not feel there is full ‘buy-in’ from managers and employees to core concepts of societal alignment”.51 Only 3% of corporate affairs professionals felt their colleagues outside corporate affairs understood very well the need for societal alignment, compared to 53% who felt their colleagues did not.52 Among the challenges identified were confusion about how to cultivate a “positive, open stance” when addressing “core issues (eg, tax, product regulation, litigation, etc) that require a more classic ‘resistance stance’”.53 In addition, some geographic regions had resources constraints, and for PM International (PMI), “convincing employees that we are not just ‘rolling over’” was an issue.53

In response, a select group of corporate affairs leaders from across PM’s domestic and international operations was tasked with analysing how to increase internal uptake of societal alignment practices. The group, named Arden 13, identified several internal obstacles. These included lack of dialogue within the company about societal alignment, a culture of denial and cynicism and lack of a process for integrating societal alignment goals with business operations.54 The Arden 13 group proposed that a “business case” needed to be made for the GCAP operating principles. Further, concepts needed to be translated and “customized for specific businesses, markets and functions”.54 Arden 13 met with a mixed reception from the GCAC.42 But the 2002 GCAP adopted some of their recommendations, with Parrish urging more “message delivery” through “a higher level of conversation” to obtain “true understanding” of societal alignment outside of Corporate Affairs,55 indicating that the GCAC continued to have a difficult time promoting adoption, or even understanding, of societal alignment within PM companies.

Societal alignment fund

The publicising of societal alignment goals was supported by an internal grant-making program, the Societal Alignment Fund. Beginning in 1999, it provided support for societal alignment efforts “aimed at supporting the development, launching and testing of a program of research” with societal alignment as its goal.40 One such project was the Miller Electronic Age Verification Program, which proposed testing electronic age verification machines to prevent illegal sales to minors of alcohol and tobacco.56 The project proposed to work with state attorneys general, public health departments and retail associations to test the technology with alcohol. We were unable to locate further details about projects funded under this initiative. For the 2000 funding cycle, however, 16 of 26 proposed projects were reportedly funded.57 The program apparently continued at least through 2001;58 no documents related to Societal Alignment Fund projects past 2002 were found.59

(Selectively) meeting expectations: US societal alignment

Implementation of societal alignment relied on the twin strategies of “constructive engagement”, defined as “proactively engag[ing] in dialogue to seek reasonable solutions to the important issues that affect our products and operations”,24 and “management of key relationships” with outside groups.60 Research and public opinion data were used to identify critical areas. This was followed by strategic development of positions in some areas.

An early study used to shape PM’s societal alignment agenda was the Responsible Manufacturer Focus Groups Study. Focus groups in Chicago, Illinois, Fort Lee, New Jersey and Boston, Massachusetts considered characteristics associated with a “responsible” tobacco manufacturer.61 Findings yielded five things a “responsible” tobacco company would do: “come clean” about knowledge of tobacco’s disease impacts and addictiveness, support aggressive youth antismoking programs, launch public education campaigns about the dangers of smoking, make amends for past behaviour by settling financial health care claims and donating to research, and develop new, less harmful products. Group respondents also mentioned treating employees well, making charitable contributions, community involvement and environmental responsibility. The groups suggested that should these conditions be met, tobacco companies could be regarded as responsible, even though they manufactured and sold deadly products.61

PM translated these expectations into societal alignment objectives focused on youth smoking, responsible marketing, communicating the health effects of tobacco products, developing reduced harm products, support of “reasonable” regulation, compliance with legal and regulatory requirements, valuing employees, engaging with business partners, reducing environmental impacts, community development and ensuring returns to investors.62 The specific positions and plans developed, however, were often weak alternatives to effective tobacco control policies, as with PM’s youth smoking prevention program and Options, its program to promote ventilation solutions instead of smoke-free policies.63 64 Two public campaigns, one publicising the Master Settlement Agreement (MSA) and one focused on the company’s “changing positions” on tobacco’s health effects, highlight how meeting societal expectations and creating linkages, real or not, with legitimate organisations were used to reframe PM as responsible.

Master settlement agreement

The MSA negotiated between state attorneys general and the tobacco industry included youth marketing and brand name sponsorship restrictions. Within its societal alignment framework, PM characterised MSA compliance as indicative of its evolution into a responsible tobacco company. Internally, the MSA was seen as having already accomplished much of what the public “wanted changed”.65 PM began airing commercials in July 2000 publicising the MSA, with one, called “Date”, ending with a voice-over announcing, “Because things are changing. And at Philip Morris, we wanted you to know”.66 Another, “Facts”, began: “No matter what you think of America’s tobacco companies, the fact is, at Philip Morris, we’re changing the way we do business”,67 and highlighted the state attorneys general enforcement responsibilities. PM was portrayed as “working to change for the better“68 by agreeing to the MSA stipulations (though at least one subsequent study showed that, post MSA, it continued to target youth in magazine advertising).69 By linking its name with a respected group, the state attorneys general, PM enhanced its message of compliance and responsibility.

Health effects of smoking

PM’s website language changes also figured in societal alignment. On October 11, 2000 PM USA and PMI updated their websites to “agree with the overwhelming medical and scientific consensus that smoking is addictive and causes serious disease”.70 PM USA CEO Mike Szymanczyk told employees that the change resulted from realising “that we should pay close attention to the concerns and criticisms of public health authorities… the public expects that from us” (emphasis added).71 Jack Nelson, PMI CEO, conveyed a similar message.72 Both asserted that this action would allow PM to “fully participate in future important public policy discussions”.71 72 A question and answer sheet suggested that company spokespersons should say that PM’s decision to “agree with the judgment” of medical authorities arose from concerns about “society’s expectations”.73 Changing its public position on health effects was PM’s response to the focus group findings that it had to “come clean”61 in order to be considered responsible. However, it did so without admitting its previous deceptions18 or changing its legal position.74

Community development

Denver, Colorado, USA was one of three test markets where PM piloted “community development activities” as part of societal alignment. From January to June 1999, PM targeted the area with grant-making, corporate sponsorship, a speaker’s bureau and media outreach. Grants were made to civic organisations,75^–77 a women’s shelter,78 and an organisation focused on agricultural practices.79 PM provided sponsorship and speakers for a Chamber of Commerce breakfast,80^–82 Hispanic Chamber of Commerce reception,83 84 and a luncheon for Colorado AgInsights, an agriculture education organisation.85 State political representatives were present at several events.83 85

These alignment events provided “a platform”85 for communicating the new “reasonable and responsible” message.81^–83 PM’s local marketing firm ensured maximal media attention. After a press conference announcing a $50 000 donation to Volunteers of America for its Meals on Wheels program, six major media outlets ran the story,86 while the Hispanic Chamber of Commerce reception was covered by two English-language newspapers and one Spanish-language newspaper.83 The Speaker’s Bureau was considered effective enough to expand nationwide.87

Implementing international societal alignment

Societal alignment was also pursued outside the US.88 Notably, PM set out to “strategically manage the WHO process as a societal alignment… opportunity”,88 which may explain PM’s desire to be involved in the Framework Convention on Tobacco Control (FCTC) process.89 90 Societal alignment research was carried out in Central America,91 92 South America,93 Asia,94 and Australia.95

The first international societal alignment data collection, however, focused on the Central Europe, the Middle East and Africa (CEMA) market region in a project called CEMA 2000. CEMA 2000 gathered public opinion data in Central and Eastern Europe on issues including the social acceptability of smoking, characteristics of a responsible manufacturer, attitudes towards smoking and the image of Philip Morris and its local affiliate. KRC Research and Consulting (Washington, DC, USA) conducted the study.

CEMA accounted for 19% of PMI’s volume in 1999 and was a growing market.96 Seven markets (the Czech Republic, Hungary, Israel, Poland, Romania, Switzerland, Turkey) were included in CEMA 2000.97 Two phases of research were conducted. First, a qualitative component included country briefings prepared for David Sylvia, Director of Public Policy and Research for Philip Morris Management Corporation,98 who oversaw societal alignment opinion research.

Country briefings for the Czech Republic and Hungary reported, for example, that real GDP in the Czech Republic had fallen in 1999, suggesting a decline in Czech purchasing power.99 Few marketing restrictions existed, and limited smoking restrictions were not enforced. Key corporate affairs goals included increasing the spread of youth smoking prevention programs, convincing the Czech government to introduce a gradual alignment to the European Union’s tobacco tax, and promotion of a voluntary advertising code, considered preferable to the threat of mandatory restrictions. In contrast, the economy in Hungary was growing,100 few marketing restrictions were in place and as of 1998, there were no public smoking restrictions. Key issues there included a rising cigarette tax, a proposed advertising ban and a planned increase in the size of health warning labels.

Focus groups were held in each country. In Prague groups conducted in 1998, the prevailing attitude was a dislike for smoking, though participants also expressed the need for tolerance of smokers.101 Tabak, PM’s Czech affiliate, was known for good business practices but least associated with youth smoking prevention. In Hungary, respondents felt most strongly that tobacco companies needed to do more than other industries to be “good and responsible” because of the harmful nature of cigarettes.102

Second, a quantitative component of CEMA 2000 provided numerical parameters for many of these topics101^–104 (table 2). Cross-country comparisons showed little support for litigation to recover health care costs. However, over two-thirds of respondents in all countries supported government control of tar and nicotine levels in cigarettes, larger health warnings, a minimum age to purchase tobacco and increasing taxes to pay for health care costs. Wider variation among countries existed in support for public smoking bans, level of concern over health risks and second-hand smoke and the social acceptability of smoking.

Recommendations for action

Despite PM’s emphasis on addressing geographic variations, the societal alignment approaches recommended and implemented in the Czech Republic, Hungary, Romania and Switzerland were remarkably similar (table 3). Youth smoking prevention programs were recommended for all four countries. Though public attitudes toward second-hand smoke and smoke-free policies varied, accommodation policies and resistance to smoking bans were recommended in three of the four countries. Engaging and promoting corporate sponsorship was also recommended in three of the four countries. However, some specificity in societal alignment approaches was apparent. For instance, greater ingredient disclosure was recommended only in Switzerland. Advocating for lenient tax policy toward tobacco products was specific to Romania, as was industry self-regulation. There was also similarity across countries with respect to what was not to be addressed by societal alignment. Though there was strong public support for indoor smoking bans, government regulation of tar and nicotine, larger warning labels and increasing taxation to cover health care costs, none of these measures was recommended.

Data on the Czech Republic showed that among most urgent concerns for Czechs were the health effects of smoking and exposure to second-hand smoke.

However, none of the suggested societal alignment initiatives addressed the health effects of smoking, nor the belief among Czechs (60% of smokers and 84% of non-smokers) that tobacco companies should pay a tax to offset the medical costs incurred through smoking and exposure to second-hand smoke.101 This was also true in Hungary and Switzerland, where taxation for medical costs had popular support. Support for workplace smoking bans in the Czech Republic and Hungary and restaurant smoking bans in Hungary also went unheeded.

Impact of societal alignment

PM tracked the effectiveness of its societal alignment efforts through public opinion research. Data from 1999–2001 suggest that the impact in the US was mixed.105 From the first half of 1999 to 2001, there was a 5% increase (26% to 31%) in the percentage of people who felt that all cigarettes should be made illegal and a 9% increase in the percentage of people who felt that all cigarette advertising should be banned. From 2000–2001, there was a 7% increase in the percentage of people who disagreed that the tobacco industry was undertaking efforts to help reduce youth smoking. However measures of the social acceptability of smoking in various venues showed an increase from the end of 1999 to mid-2001. During this period, there was an increase in the percentage of people who felt that smoking was generally accepted in bars or clubs (5% increase), restaurants (14% increase) and around non-smokers (6% increase), even if respondents did not personally find it acceptable. Though the perceived general social acceptability of smoking appeared to be increasing, a growing percentage felt personally that smoking should not be allowed at all in airports (5% increase), restaurants (7% increase), hotel rooms (10% increase) and bars (5% increase), with a decline in the percentage that felt that there should be no restrictions.105

By 2004, US societal expectations were stacked against tobacco companies. While 64% of people in a public opinion survey agreed that a company could be in the “cigarette business responsibly” if it was honest about its products, did research on less hazardous cigarettes and didn’t advertise toward children,34 68% wished “there were some way to eliminate cigarettes” and 75% wished “there were some way to eliminate my exposure to cigarettes”.34 In all, 62% felt that all cigarette advertising should be banned, and 59% felt that “the right and responsible thing for cigarette companies to do would be to phase out of the cigarette business”. However, PM continued to selectively align with only those public expectations that met its business objectives, seeking legitimacy through an appearance of responsibility.

Similar evaluation data for the CEMA region were not found.

DISCUSSION

This analysis shows that despite PM’s rhetoric, societal alignment did not simply entail identifying and responding to societal expectations about responsible business behaviour. Societal alignment in practice represented public relations opportunities to appear responsible, while largely reinforcing or slightly modifying the company’s already-held positions on key issues. When its assessments of public opinion revealed expectations it apparently did not regard as “reasonable”, PM simply ignored those in favour of others not regarded as serious threats to the cigarette business.

Though PM USA and PM International are now separate entities, the principle of societal alignment continues to be represented in various forms in current assertions of responsibility by Altria (PMs parent corporation), PM USA and PM International. One of the goals supporting Altria’s mission is to “align with society”.106 PM USA says on its website that its leaders are “responsible for understanding the public’s expectations of a responsible company, and determining how to respond to those expectations”,4 while PM International “strives to… honor our global commitment to address society’s expectations of us as a business, as employers and citizens” in its corporate Code of Conduct.107 PM appears to hope that by publicising its partial and selective “alignment” with societal expectations, it can succeed in being regarded as responsible.

In 2002, Kenneth Warner listed 10 things tobacco companies could do to show genuine responsibility: end all forms of advertising and promotion; cooperate to raise cigarette prices; get serious about youth smoking prevention, including giving up its own weak, disingenuous and counterproductive campaigns; stop opposing smoke-free policies; cease hard- and soft-money political contributions; fund an independent organisation to assist smokers to quit; stop trying to buy silence through research funding; adopt plain packaging and graphic warnings; voluntarily comply with all restrictions sought by the US Department of Justice; and facilitate genuinely effective federal tobacco regulation.108 These measures would address many of the “societal expectations” PM’s own research uncovered. To date, however, no tobacco company has addressed them.

Some might argue that PM’s actions, while not addressing Warner’s indicators, may have been better for public health than doing nothing at all. However, PM’s own public opinion data showed that its societal alignment efforts began to improve the social acceptability of smoking and perception of tobacco companies, reversing the strides made by tobacco control advocates to denormalise both. This suggests that the “alignment” was primarily intended to move social norms back into a comfort zone within which tobacco companies could continue business as usual.

As implementation of the FCTC proceeds, tobacco control advocates should monitor development of tobacco company societal alignment initiatives and expose their motivations and contradictions. Voluntary programs, corporate advertising, industry youth smoking prevention programs, philanthropy, sponsorships, support for weak policies and other forms of “alignment” may undermine countries’ ability to pass strong tobacco control measures, especially in countries with limited tobacco control infrastructure, little experience dealing with the multinational tobacco industry and tepid political support for tobacco control. Within this context, “aligning” with PM can only have deleterious effects on public health.