Contemporary Management of Tobacco Producing Companies - Coursework Example

? Contemporary Management Issue Introduction The branch of philosophy deals with addressing issues associated with various concepts of right or wrong. It deals with the systematization, protection and recommendations related to such concepts. It addresses various issues that are occurring in moral diversity. It is totally based upon the set of belief regarding what is correct and what is not. Thus, it is very closely related to the concept of morality. Morality includes what is good or bad, right or wrong and is associated with justice and values. In other words, it involves the systematic process of determining correct or incorrect conduct. Moral theory represents theories associated with ethics and morality. A theory generally represents a set of structured statements with a set of concepts. It represents a framework based on which individuals act in a reasonable manner. In other words, moral theories provide appropriate framework for thinking, discussing and finally, evaluating the moral issues in a specific and reasonable manner. It has been found in the past few decades that investigations related to marketing and business ethics have been incrementing significantly. The findings of such investigations state that administrative ethics in the entire marketing process of any organization is a significant issue. Marketing itself involves one vast picture. So, there are chances of loopholes that might lead to various unethical activities conducted by the organizations. It is essential for the businesses to maintain a standard code of ethics for avoiding arousal of any unethical activity in their operations. It is applicable in each and every aspect of the business including sale of products or services where the behaviour of a salesman is taken into consideration (Carroll and Buchholtz, 2009). Deregulation of the standard code of ethics in various industries has resulted in commitment of various unethical activities, which in turn have resulted in the increase of rivalry among the existing firms within the industry. The competitive pressure within industry, along with the uncertainty of business existence, has led to deregulation of business ethics by managers in organizations (Barnett, 2007; Boatright, 2000). A series of evidences show that many companies have deviated from their standard ethical conducts within last few decades. It is not possible for one buyer to identify all the purchasing criteria or purchasing variables, which gives scope to the marketers to conduct unethical activities at high rate (Carroll and Shabana, 2010). The organizations look for short-term profit and opt for unethical activities. However, in long-term perspective, these activities severely affect their reputation. The organizations, which were being suspected of conducting their business operations in unethical manner, were suffering in legal terms. As already stated earlier, the businesses conduct these unethical activities in order to achieve short-term profit, whereas in long-term aspect, their reputation declines badly. The unethical activities are conducted by organizations in various manners. These unethical activities are conducted sometimes in order to mislead the customers and persuade them in their buying decisions (Curwen and Whalley, 2005). There are various other examples of carrying out unethical activities by the organizations such as, keeping the prices of the products high where the quality is inferior. This helps them in making short-term profit but the ultimate consequence is that the reputation of organizations gets hampered and they lose loyal customers (Friedman, 2004). The case study deals with unethical activities conducted by the tobacco producing companies in United States. It represents how companies had neglected the standards set by the department of justice i.e. DOJ in United States. According to the district judge, if DOJ could prove that the big tobacco producing companies are performing deceptive activities for their short-term profit seeking purpose, then they would be strictly penalized and have to pay a heavy amount of money. The paper aims at highlighting the ethical issues associated with product or service selling operations in the market. The responsibilities of the companies towards their customers are highly significant as it determines the success associated with them in the market. In this particular context, the paper would reflect various moral issues and relate them with the events in the case study. Literatures or theories would be reviewed in order to strengthen the arguments even further. The summary of the case study would also be considered. The paper would also highlight key issues that have been found while analyzing the case study. The objectives of this paper are: Representing the ethical issues associated with the product selling operations of the organizations. Highlighting duties of the organizations towards their consumers. Relating the ethical issues of modern organizations with key issues in the case study. Organization’s duties to the customers The entire procedure of selling a product or service in the market involves a chain of activities. The organization performs a large number of activities in order to deal with stakeholders in the market. An organization cannot maintain its business operations and achieve success without the existence of customers. In order to achieve competitive advantage in the market, it is very important for all organizations to retain their existing customers (Valor, 2008). The success of a business enterprise is very closely associated with the satisfaction level of all the customers. It is only because of this reason that the businesses should employ effective measures in order to identify the demands or choices of their customers in an effective manner. In order to do so, every business should maintain some corporate social responsibilities from their side in order to keep the faith of these customers for longer period of time (Mahoney, et al., 2013; Merkl-Davies and Brennan, 2011). Being loyal to the customers, by means of providing those with accurate information, would increase their trust and bonding with the organization and help in retraining them for long span of time. The organizations must engage themselves in various corporate social operations in order to fulfil their duties towards the society. There have been various arguments made both in favour and against the aforementioned statement. Some researchers state that companies only aim at earning high revenues in order to achieve success in the market, whereas the other research scholars argue that the organizations perform their ethical functioning in effective manner for remaining in compliance with the standard code of business ethics. It is due to this reason that every organization, which is operating within the market, has to perform various responsibilities in order to carry out their business transactions in a successful manner. As already mentioned above, providing exact information to customers is the primary responsibility of organizations. Another duty of the organizations is offering high quality products to all its customers. Moreover, the pricing of products should be done in a justified manner so that it matches with the quality of such offering (Waddock, 2002). It is the duty of organizations to follow the standards set by the government in order to maintain their business operations without any barriers. The companies must perform their corporate social activities in highly responsible manner so as to ensure that it promotes their reputation in the market (Samy, Odmelin and Bampton, 2010; Moir, 2001). There are various other duties that are required to be performed by the organizations for satisfying the customers: Delivery of accurate information: It is the duty of organizations to provide exact information about the products and other related details, so that they are able to make their purchasing decisions accordingly. The customers require detailed information related to the product and service offerings of organizations in order to help them in taking appropriate purchasing decisions. Every organization should give information with facts and figures to their customers for making their buying decision much easier. It is the duty of organizations to not misguide the customers by providing vague information in order to influence them in their purchasing decision (O. Ferrell, Fraedrich and L. Ferrell, 2011). Adapting safety measures: This is another area where companies must be careful about adopting safety measures for ensuring that the customers remain safe. Many products might have some sort of harmful effects where adapting precautionary measures is very important. It is essential for organizations to provide every detail, associated with the products, to customers. It is very important that these organizations follow the standards set by the regulatory authority. Maintaining the pricing strategy in justified manner: The organizations must plan for the pricing strategy in such a manner that customers do not get deceived. They should not charge high prices for low quality products. It would develop a negative impression on customers about the company, which might result in losing valuable customers. It is due to this reason that the pricing strategy must be planned and implemented in a justified manner. Offering quality customer services: After buying the products, the customers might face problems in handling them because of complicated technology or other factors. Generally, most organizations make themselves free from all such liabilities as soon as they sell the products to customers. They must bear the responsibility of providing customer services, even after sales, in order to assist the customers in their problems (Frederick, 2006; Gyves, 2008). Conducting effective training programs to train the consumers about the company’s products: The organizations must plan for conducting various training programs for training customers about the products and ways of handling them (Muller and Whiteman, 2009). Theories of Business Ethics The significance of business ethics is found in every stage of the organizational cycle. Most organizations fail to remain in compliance with the ethical standards that are set by the regulatory authority. It becomes essential for businesses to implement ethical decision making in their operational activities for achieving success over a long period of time (Laszlo, 2003). Ethical decision making is described as the procedure consisting of a number of stages where each stage is impacted by the environmental, situational or individualistic behaviour. Ethical decision making follows a four component model, where the four steps involved are recognition of moral issues, planning for the moral judgment, placing them in a manner to uphold their importance and finally, take actions accordingly. Decision making takes place by the combined effort of a group of individuals involved within the business. Thus, it becomes very important to consider the fact that the decisions are taken in an ethical manner. As business ethics helps in distinguishing between what is correct or incorrect, maintenance of ethical standards would help in the sustainment of businesses over a long period of time (Pivato, Misani and Tencati, 2008). In this context, the stakeholder’s theory holds much relevance in the subject of discussion. This theory is related to business ethics and organizational management. It principally addresses the issue of values and morals in managing an organization. The theory was detailed by R. Edward Freeman, where he argues that there are several parties involved with an organization and any activities undertaken by the organization somehow impact these groups. Some of the key stakeholder groups are trade associations, government, financial institutions etc. Sometime, competitors are even classified as stakeholders of a firm as their activities play noticeable roles in shaping operations of the firm. Hence, any activities undertaken by the organization should be taken after careful consideration of the interests of these group members. The case study deals with the decline of controversial issues associated with unethical behavioural activities conducted by various organizations. The district judge of United States stated that most of the big tobacco manufacturing organizations like, Reynolds, Philip Morris and Liggett, are performing their business operations in an unethical manner. It was decided that if these companies are proven to have committed unethical activities for increasing the sales, then they would have to pay an amount of $280 billion, a total amount of profit that they have incurred in fifty years of their business operations. According to the Department of Justice, a conference in 1950 had revealed the adverse effects of tobacco consumption. The tobacco manufacturing organizations were asked to reveal the outcomes of the research to the consumers. These companies did not reveal the consequences of consuming tobacco. Instead of warning the customers, they had increased the production and targeted even the young generation in the market for increasing their sales. It has been found from the data collection that more than 400000 people in the country smoke cigarette in a year. Thus, the case study clearly reveals how organizations conduct unethical activities for earning high profit margin from the short-term perspective. In spite of knowing that selling the products would have an adverse impact on the consumers, these companies went on selling their products targeting the young generation for increasing overall turnover. It is due to this reason that it becomes important to set and maintain a certain ethical code of conduct for all organizations, where abiding by these standards would be a compulsion. Failure to maintain such standards would result in penalization for the organizations. It is the organizational culture that has the ability of increasing or decreasing the number of unethical operations within a particular business (Robinson and Dechant, 1997). The organizations need to conduct their business operations in a transparent manner by becoming socially responsible (Hooghiemstra, 2000). They should not only focus on profit margins, but also, maintain and enhance their awareness towards consumer safety. It has been evident from the abovementioned case study that the managers or employees of an organization carry out unethical activities in a regular manner for incurring short-term profits which mostly impacts their reputation over long period of time. Therefore, the organizations should make plan to decrease these occurrences remarkably. Conclusion and Findings The importance of business ethics exists in every aspect of the organizational cycle. Business ethics deals with moral principles guiding the businesses for performing their activities in ethical way, so as to sustain for long period of time and achieve competitive advantage. As stated earlier, it gives ways to recognize what is correct or incorrect and aids the organizations in making ethical decisions. The paper has already reflected on how organizations neglect the ethical standards and deceive customers for incurring high profit figures. It is essential to convey the positive outcomes of conducting business operations in an ethical manner and by becoming socially responsible. One of the examples is that conducting operational activities by maintaining the standard code of ethics would result in good reputation in the market place. Moreover, the high customer satisfaction level would result in increased loyalty towards the organizations, thereby automatically increasing the profit figures. One of the negative aspects of conducting business operations in an unethical manner would be declining reputation for such companies. It becomes important for organizations to operate in accordance with the code of ethics for carrying out their operations in a fair manner. Based on the above findings, there are certain recommendations that have been provided to the organizations so that they can stay ethical and continue fair business operations. They are: The companies must create a work culture for the employees, which display a culture of sincerity or honesty, thereby ensuring transparency in every aspect of the business activities. In the context of case study, the tobacco manufacturing organizations must develop awareness about the adverse affects of tobacco consumptions and associated health issues, by means of providing statutory warnings. These companies should manufacture their products in such a way that it reduces the negative impacts to some extent. Reference List Barnett, M. L., 2007. Stakeholder Influence Capacity and the Variability of Financial Returns to Corporate Social Responsibility. Academy of Management Review, 32, pp. 794–816. Boatright, J. R., 2000. Globalization and the ethics of business. Business Ethics Quarterly, 10(1), pp. 1 - 6. Carroll, A. B. and Buchholtz, A. K., 2009. Business and society: Ethics and stakeholder management. Connecticut: Cengage Learning. Carroll, A. B. and Shabana, K. M., 2010. 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