1. Describe the background of an organization of your choice We choose tobacco industry for our assignment is because of the simplicity of the nature of its product and its global reach. Tobacco is an agricultural commodity product which is also a widely-used addictive substance. The tobacco industry is one of the most powerful international commercial industries in the world. The price of tobacco varies by the total quantity on the market ready for sale, the area where it grows and the quality of products. It is often heavily taxed to gain revenues for governments and as an incentive for people not to smoke. British American Tobacco (BAT) formed in 1902 as a joint venture between the UK’s Imperial Tobacco Company and the American Tobacco Company founded by James ‘Buck’ Duke. The business has operated for more than 100 years it is the world’s second largest quoted tobacco group by global market share (Earthwatch). It holds robust market positions in each of its regions and has leadership in more than 15 million retail outlets throughout the world. Yet, Philip Morris is the main competitor of BAT. The Chairman of BAT is, Richard Burrows on 1 November 2009. Then, the Chief Executive Officer, Nicandro Durante in March 2011 and John Daly was appointed to the role of Chief Operating Officer in September 2010. Ben Stevens was appointed Finance Director in April 2008. In September 2010, he took on the additional role of Chief Information Officer (British American Tobacco). One of the reasons that BAT to be able to achieve fast growth is that their business starts with creating value for their business and consumers by meeting their needs and offering appropriate quality effectively. BAT works to understand the preferences of adult consumers and to design cigarettes to meet them. It also aims for excellence in every step of manufacturing and to ensure that these grades are available long-term to keep the tastes of their products consistent.
Besides that, the fast growth of BAT is driven by the development of product innovations. Kent, Lucky Strike and Pall Mall are the four Global Drive Brands of BAT. These innovations vary across their brands and the approach enables their companies to adapt their offers flexibly to local preferences. The company has tried to serve a wide range of consumer segments from low-cost to premium with its multitudes of brands. BAT aims to build business partnership nationwide and therefore, they work with retail partners to ensure that they can meet the expectations and demand of stakeholders. They continuously review the routes to market to ensure they remain competitive and this includes the implementation of direct to store sales (DSS) which allows them to create shared value throughout the sales and distribution process globally. As well as hundreds of regional and local customers, BAT has ten key customers managed at a global level. These are 7-Eleven, Ahold, BP, Carrefour, Chevron Texaco, Couchetard, Exxon Mobil, Shell, Tesco and Walmart. Furthermore, BAT also worked on decentralizing their subsidiaries in other countries such as China (BAT China Ltd.) in the form of allowing local participation and management to run the business as the company believed that local autonomy would have better understanding of the nation’s culture and environment. This was also a good step as local participation would reduce the problem of having national culture vs. organizational culture. By implementing this, BAT Company avoided being in the centre of controversy especially regarding culture and religion of that nation. Cigarette smuggling is a major public health issue, stimulating increased tobacco consumption and undermining tobacco control measures. China is a key market for BAT because of the size of its population, high smoking prevalence, and rapidly growing economy. (PLOS Medicine, 2006) The development of effective tobacco control policy in China constitutes one of the greatest opportunities to advance global health. However, BAT business model is designed to deliver sustainable growth in earning profits and thus lead to the business expansion. The companies work to ensure that their costs are globally competitive and that they use the resources effectively. Therefore, globalization is a way that offers more investment opportunities for their business, and also opportunities to many countries to develop their economy by acquiring companies’ capital and expertise.

2. Describe the key persons involved and their roles in the organization.

The key person involved in smuggling is John Ticehurst, senior British American Tobacco (BAT) executive (British American Tobacco).As a senior executive, his role is responsibility to provide the leadership and necessary for him to meet its business objectives within the framework of its internal controls to its shareholders. He also need to reserve itself certain key matter which need him to make decision which include business strategy, budget, dividends and major corporate activities.
John Ticehurst representing BAT’s middleman for smuggling into West Africa in the 1980s through the early 1990s with a company called Sorepex Anstatt. He need to purchased cigarettes from Batuke and supplied them to transiteers (refer to those parties that physically transport contraband across borders). He also needs to insulate BAT from direct contact with transiteers to reducing the risk of detection and prosecution. Sorepex provided organization and logistical support for BAT smuggling and let people begin to scrutinize smuggling activity in West Africa. The main function of Sorepex was to allow BAT to keep at arm’s length from transit customers. For an example, Soropex provide cover for BAT in some fairly shady business in Cameroon (Tobacco-Free Kids, 2012). However, BAT remained the party in firm that control the smuggling operation and the objective is to preserve the “façade” that Sorepex represents BAT and the sensitive markets of Togo, Benin, Niger, and Equatorial Africa and enable BAT field force to take over the management of this important business. John Ticehurst dealing with contraband sales departing from Malabo to Northern Cameroon and Chad is an example that how BATS exercised control (Tobacco-Free Kids, 2012). He described the primary dry-season smuggling route as trucking BAT’s contraband cigarettes through northern Cameroon and then smuggling them into Chad by crossing the border. Level of BAT’s oversight of routes is suggested by the fact that John Ticehurst monitored the prices of the smuggled cigarettes. They would be sold to transiteers by pack or sold to vendors or smokers. He also had the knowledge and assistance of the smuggling activities at the highest levels within the cigarette company. He need to coordination of the smuggling activity with other middleman with meetings to discuss about the operations including brands, quantities and prices (Tobacco-Free Kids, 2012).