Tobacco Companies and Product Safety - Coursework Example

? Tobacco Companies and Product Safety Introduction In the contemporary world, the degrees of economic activities practiced by the modern corporations have significantly increased. Ethics and moral factors were valued by the philosophers since a long time in history. It is believed by the contemporary economists that without the essence of ethics and moral values in business dealings, the firms can never deliver complete satisfaction to the individuals. Each and every business concern should realize that the net social marginal cost of their business dealings must be lower than that of the social marginal benefits. The Traditional theories of ethics look into the aspects in terms of an absolutist view. Under this regime, the theories are either claimed to be right or wrong. On the other hand, the Contemporary theories that are framed on ethics concentrates on the relativist positional views. The correctness of a given situation is determined by the Normative ethical theories (Warren, 2011). According to the views of Richard D. George, on the basis of Pluralism, the ethical theories can be conveyed in terms of two opposing patterns, Ethical Absolutism and Ethical Relativism. There are also other types of theories related to ethics, they are: Theory of Egoism Theory of Utilitarianism Theory of Egalitarianism (on basis of rights and justice) Theory of Non-Egalitarianism On the basis of the contemporary view, the ethical theories can be on: Virtue Ethics Feminist Ethics Discourse Ethics Post Modern Ethics The theories of morality and ethics are somewhat similar to each other. Some of the morality theories are: Moral Subjectivism Cultural Relativism Ethical Egoism Devine Command Theory Kantian Theory Contractarianism The case deals with the consciousness of the U.S. government over the health hazards caused due to cigarette smoking. It claims that the Gladys Kessler (U.S. District Judge) would claim a penalty of $280 billion from the famous tobacco companies such as, Philip Morris, Liggett and Reynolds. These companies would be penalized if they are found to knowingly deceive the public regarding the addictive nature and risks associated with smoking. It was noted that about 400000 Americans die yearly due to the health issues caused from cigarettes manufactured by these companies. This paper would concentrate on an aspect that deals with the duties that the modern organizations cater to their customers. In the later stage, the essay would focus on the different theories of business ethics and morality. The theories in the course of the discussion would be related to the case study of the paper. The Duties to Customers from Companies In the contemporary world, the organizations are supposed to suffice three primary business goals. When describing about the duties of a company it is essential to shed light on the theories of business ethics. In simple terms, business ethics is often dubbed as the form of professional ethics or applied ethics which examines the ethical principles within a business environment. Moreover, it also appeals to every business aspect and is highly pertinent to the organization as well as the individuals. Business ethics encompasses both descriptive and normative dimensions. Hence, business ethics plays a crucial role in shaping the duties and activities of the consumers towards the company. Similarly, the theory of stakeholder holds high relevance in the field of business ethics. It states that a company has equal real responsibilities towards its stakeholders, but the activities differ from one group to the other. (Source: Elkington, 1999) As stated in the above diagram, the organizations must try to improve the state of environment, economy and society. This is as per the theory of Triple Bottom Line stated by John Elkington in 1999. This theory also states that the organization, by uplifting the societies, must try to bridge the gap between the poor and rich customers (Wright, 1995). However, catering to the social justice is the most essential factor that must be addressed by the organizations in the course of society improvement. By social justice, it means that the organizations must abide by the principle of equality in terms of catering ethical and moral values of its customers, which is why today many of the giant business organizations like, Procter and Gamble and Coca Cola, try to invest heavy sums of money in purposes related to the improvement of the Corporate Social Responsibilities. Modern companies should understand that utility of the individuals often does not abide by the basic norms of ethics and moral. There are products like, alcohol, the consumption of which can provide great utility to the consumers, but they are not beneficial for their health. Thus, if some companies engage in the production of goods and services with harmful effects on the health of the consumers, they must openly inform so to the buyers (McIntosh, et al., 1998). Descriptive Ethical Theory Figure 1: Steps Associated with the Theory (Source: PPT) Based on the normative ethical theories, the companies must undertake their business decisions. However, in order to understand the basic decisions undertaken by individuals in an organization, one has to understand the descriptive ethical theories. Figure 2: Structure to be followed by the Organization (Source: PPT) The above graph explains the various individual factors that an organization must consider to render the situational affairs of its business offerings as ethical while delivering them to its customers. According to the feminist theory, the organizations while delivering their services must not distinguish between the male and female customers or be gender biased. The concept of “ethics of care” states that the ethics delivered by the organizations must always be equitable to both genders; for example, the organizations should not add more ethical values to the female customers than the male ones. In the modern era of ‘consumerism’, the business firms should realize that buyers are the most important stakeholders of an organization. Thus, the organizations must try to restore maximum ethics and cater moral services to its customers. The marketing mix tasks adopted by the firms must be ethical (Bates, 1997). The companies should hold relativist view of ethics and understand that their business decisions would substantially influence the welfare of the consumers. Thus, activities of the business firms must not harm the physical or economic interests of the consumers. Following the Egoistic view, the companies must look into their profits after taking care of the benefits of the environment. According to the Utilitarianism view, the actions of the business firms must cater to common welfare of their consumers. The ethical theorists state that “good things come out of good people”, thus by rendering business services (to consumers), ethically and morally, the companies can easily augment their brand value in the market. Finally, as per the norms of the Post Modern ethical views, the companies should place ethics and moral above rationality in business (Thorpe, 2000). However, the concerned case explains that the three tobacco companies in U.S. have violated the ethical principles in business. They seem to have assumed that ethics should be only abided by through the actions of the individuals and not through the non-living business organizations. They had not made the individuals aware of the fact that smoking of cigarettes can generate fatal outcomes like, death, in future. Unlike the Utilitarianism view of ethics, their actions did not abide by the norms of society welfare maximization. They have placed the rationality of business profit in a far more superior position than the factors relating to ethics and morality. The nicotine in the cigarettes negatively affects health and causes death of more than 400000 Americans annually. Theories to the related Topic This assignment is related to the business of Tobacco Companies and their product safety. Many civil questions arise if the state intervenes in any of the issues related to the individuals or the organizations. It has been proved scientifically that tobacco in the cigarettes is harmful for the health of the individuals and may also entail death. Therefore, governments in almost all the countries across the world have ceased all kinds of advertisement, promotional or sponsorship activities undertaken by the tobacco companies. The civil liberties advocate theoretical aspects that state that tobacco promotional activities must be severely banned in the organizations. The civil authorities also claim that the products delivered by a company should be safe and enhance the utility value of the consumers. It is believed that cigarettes are unsafe products in the market. Thus, before selling any unsafe products, the companies must abide by certain principles. By respecting the norms of knowing the truth, the government authorities of U.S. have elaborated that companies can only sell cigarettes if they can openly mention its harmful impacts on the consumers (Jones and George, 2003). This means that the purchasers and consumers of cigarettes would do so, after realizing its consumption negativities. The companies must mention clearly that smoking cigarettes can cause severe diseases to the consumers like, cancer, heart problems, lung diseases or addiction. Some of the theories of ethics state that individuals have the complete liberty to undertake the decision according to their own will. However, liberty generates the problem of addiction in case of smoking. Despite all these activities, it is a matter of concern to note that the marketing, distribution and sales of tobacco products in many countries worldwide are still subjected to very scarce regulations. The question arises concerning the underlying ethical and moral values related to the sales and marketing of cigarettes. However, it should be noted that the degree of tobacco related health hazards are more in the developing nations than that in the developed ones (Quinn, Mujtaba and Cavico, 2011). The following context of the paper would explain the business of tobacco and its safety issues on the basis of certain theories of ethics. Ethical Relativism On the basis of this theory, there are no such universal morality rules. The righteousness (or the lack of it) of the factors depends on the society’s judgement regarding the issue. For instance, the consumption of tobacco (in form of cigarettes) was a matter of glory and style since long in the U.S (Jones and George, 2003). The different authorities of the nation did not consider tobacco consumption as bad for the health. Thus, considering the relativistic approach, the consumption of tobacco was not unethical earlier in U.S. However, over time, the perspectives of the individuals have changed as many scientific studies have elaborated that consumption of tobacco is harmful for health. Thus, its consumption and production is severely unethical. So, according to the Ethical Relativist approach, the business dealings of the tobacco companies are unethical as they are against the norms of the society’s thinking perspectives (Dibb and Simkin, 2001). Ethical Egoism On the basis of this theory, a person or an institution makes a decision with maximum importance to his own benefits. This means that an egoistic entity can maximize his power, knowledge, comfort, prestige, success or money. On the basis of this analysis, the business firms that engage in the production of tobacco related products are “merchants of death”. They indulge into the selfish interest of profit making without providing much interest to the health hazards created by the same. Utilitarianism This is an ethical theory of the western civilization, which explains the fact that the actions of an individual or an organization must be moral and maximize the welfare of the society. Presently, the health risks and problems associated with the consumption of tobacco are known to every society. Thus, the business dealings of the tobacco companies are unethical as per this view. They produce products that are not useful to the society. However, there exists a brief controversy on this matter. The companies may often claim that the individuals derive great pleasure and satisfaction (utility) from the consumption of cigarettes. Therefore, in this sense, the companies are ethically correct as they serve utility to the smokers. Kantian Ethics This is another theory of the western civilization that claims the principle of ethics as the most absolute and the supreme test of morality. It can be claimed that the companies who engage in the production of tobacco simply produces products that kills individuals. This is irrelevant according to the Kantian Theory because if everyone dies after the consumption of cigarettes then eventually, there would be no customers left in the market for the company. On the other hand, the companies state that moderate consumption of cigarettes would never cause death to the individuals. Thus, according to the Kantian ethics on this view of the companies, cigarette production is not unethical. The companies claim that a rational individual is not a gambler and he would understand the extent to which cigarettes should be consumed (Fisher and Lovell, 2003). All the above theories of ethics have explained that tobacco consumption is not good for the health of the individuals. The theories have also claimed that production of tobacco is harmful as they create health hazards to the consumers. However, the companies, in their marketing or promotion activities, must elaborate the adverse impacts of cigarette consumption to these consumers. In this case, the three companies, Philip Morris, Reynolds and Liggett, were found not to make the customers aware about the health hazards created by their manufactured cigarettes. These companies did not abide by the general principles of ethics in their business and neglected the interests of their business stakeholders (Crane and Matten, 2003). The U.S. District Judge, Gladys Kessler, had charged the three companies against their business ethics, thereby imposing a heavy penalty on the firms worth US $280 billion. According to the Kantian Theory of ethics, the companies that engage in the manufacture of tobacco products can always continue with their marketing activities, only if they openly declare the possible health consequences on the individuals (Bosshardt, 2006). Thus, the three companies could easily surpass all the legal restrictions if they could claim that cigarette smoking may cause health problems to them. In 1950, the published research results in U.S. had claimed that cigarette consumption causes lung diseases and other health concerns. Even then, these companies had advertised and stated that there was no real evidence for the fatality entailed with cigarette consumption. The companies were also charged for targeting young children through their marketing activities. Therefore, the actions of the companies did not follow the norms of the ethical Relativism theory. The society always claims that addictive products must never be sold to the children, even if the harmful health consequences of a product are openly claimed as minors are not able to realize the hazardous impact of the same. However, the companies could fight with the government on the basis of the Utilitarian theory. The firms could state that the products produced by them had given high utility to the consumers and hence, were beneficial. The case clearly explains the Egoistic behaviour of the firms. The firms did not pay any attention towards the welfare of the society and only took care of their own vested interest of profit making. Thus, their long-term conducted activity was unethical and deserved heavy penalty (Bosshardt, 2006). Conclusion and Findings It can be concluded that strong profit making intensions often tend to make the contemporary business firms ethical. It is the duty of the state authorities to check the degree of morality and ethics conveyed by the companies. The business firms extract productive resources from the society that are always scarce. It should be scrutinized that these productive resources are utilized to generate the most fruitful products in the market that would enhance the health and economic status of the individuals. The various theories of ethics related to Relativism, Utilitarianism, Feminism and Pluralism have helped to understand the harmful impacts that can be caused by cigarettes. The Kantian Theory and the Egoistic Theory have helped to understand the selfish attitude of the tobacco producing firms in the modern days as they do not look into the utility of the stakeholders. Therefore, the companies in the case should be penalized as it is the ultimate duty of the government of U.S. to monitor the ethical practices of these firms (Bell, 2013). Reference List Bates, C., 1997. Banning Tobacco Promotion: Ethical and Civil Liberties Issues. [pdf] ASH. Available at: [Accessed 14 December 2013]. Bell, K., 2013. Tobacco control, harm reduction and the problem of pleasure. Drugs and Alcohol Today, 13(2), pp. 111 – 118. Bosshardt, W., 2006. Focus: Globalization. New York: Council for Economic Educat. Crane, A. and Matten, D., 2003. Business Ethics: European Perspective. Oxford University Press Oxford. Dibb, S. and Simkin, L., 2001. The Marketing Casebook: Cases and Concepts. Connecticut: Cengage Learning EMEA. Fisher, C. and Lovell A., 2003. Business Ethics and Values. Financial Times/Prentice Hall Harlow. Jones, G. and George, J., 2003. Contemporary Management. New York City: McGraw-Hill. McIntosh, M., Leipzigger, D., Jones, K. and Coleman, G., 1998. Corporate Citizenship: Successful Strategies for Responsible Companies. Financial Times. Quinn, M. J., Mujtaba, B. G. and Cavico, F. J., 2011. Global Tobacco Sales Dilemmas: The Clash of Freedom and Markets with Morality and Ethics. Journal of Business Studies Quarterly, 2(2), pp. 107-124. Thorpe, S., 2000. Litigation against US tobacco companies. Reference Services Review, 28(1), pp. 24 – 30. Warren, R. C., 2011. Are we making progress in international business ethics? Humanomics, 27 (3), pp. 212 – 224. Wright, M., 1995. Can moral judgement and ethical behaviour be learned? : A review of the literature. Management Decision, 33(10), pp. 17 – 28. Read More