The Tobacco Companies and Product Safety - Case Study Example

RРОRАTЕ RЕSРОNSIBILITY Case Study: The Tobacco Companies and Product Safety Customer Inserts His/her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 10, 03, 2013 The Tobacco Companies and Product Safety Responsibilities are only associated to a person. However it is important to mention that every firm is a person in itself, hence, should be responsible, for an enterprise the individuals responsible are the business men (Velasquez 1997). Corporate social responsibility is the integration of a system of regulations in the business strategy to govern, reconcile, and balance the conflicting goals of profit incentive and duty to the environment which includes the community at large (Blowfield & Murray 2008). Every business operates in an environment consisting of the ethical, social and economic factors which have to be integrated for its success. The corporate social responsibility of the cigarette companies which was supposed to be a relationship between them and the society was not ethical since the company did more harm to the society than good by maximizing profits at the expense of their health. In-order to understand how the corporate social responsibility policy of the cigarette companies was supposed to work and how it failed, it is important to look at the three views of corporate social responsibility; the classical economic view, the socio-economic view, and the broad social view. It is also important to note that other than being the relationship between a firm and society, corporate social responsibility is also mechanism where a business monitors its activities in regard to laws, moral standards and universally accepted virtues (Kotler & Lee 2005). The purpose of social responsibility is to cultivate an accountability attitude to their employees and other members of the public who are considered stakeholders. Corporate social responsibility provides a way for managers resolve needs of existence their moral obligation. Every manager requires skills for the successful practice of business a factor that was misused by the managers of the cigarette companies who sacrificed the ethical values to ensure the success of the companies. Capabilities which entail making out the consequences of an act were not put into use by the managers of the cigarette companies (Miles, Munilla & Darroch 2006). One of the main issues emerging from corporate social responsibility of the cigarette companies was the need to identify and explore a new way of integrating the conflicting goals in business bearing in mind the tradeoff between market provision of cigarettes which could cause health problems and public protection against any harm through regulations. In regards to the case study of U. S. v. Philip Morrie et al., public protection was not observed by the cigarette smoking companies which had conspired to deceive the public about the risks of smoking (Orlitzky, Siegel & Waldman 2007). The three viewpoints on corporate responsibility seem to contradict and this might have been the reason for the rapture of the moral and ethical values in the cigarette companies. It is however important to understand that the responsibility was in the hands of all the departments since an examination the firm’s duty shows the distribution channel which embraces many departments of an organization is considered (Wood 1991). The absence of accountability all through the distribution channel which can be said to have had the research department under its blanket is what brought the cigarette companies to this action of deceiving the public for a long period (Chan 2008). The classical economic view also known as neoclassical economic position has the view that the duty of the firm to the community is realized by satisfying the welfare of the company’s investors as the primary goal of the firm.When a company is uninhibited to work for profits and efficacy, all the stakeholders realize the payback and the welfare of all is provided for. In this light this view seeks to argue that by maximizing the shareholders interest the business has adhered to the corporate social responsibility. Although the cigarette companies had maximized the interest of the shareholders through increased profits, by deceiving the public on the risks of smoking by denying that smoking caused diseases they had failed on their duty to protect other stakeholders mainly the public who were coerced to start the addictive habit unaware of the risks associated with smoking. Even though it had to continue earning profits for its continuity, it also had a duty to warn those undertaking the habit of smoking about the dangers. The inputs of a firm are later transformed into beneficiaries of the corporate social responsibility through the ethical conduct of the companies. These inputs include investors, employees, customers, and suppliers. Despite the fact that legislations on corporate social responsibility exist, the practice of social responsibility is almost non-existent and may transform from time to time. (Daugherty 2001). Thus, the criteria of the cigarette companies might vary depending on the context or situation. A community that watches over its ethical values seriously will not be the same in terms of providing labor or immediate market as a society whose culture is associated with smoking as a social activity (DesJardins 1998). The social economic view has the opinion that firms exist and transact outside a community and it has duty to prevent harm to the society. Every organization is fully reliant on their immediate environment. A business can exist just in perfectly organized environment in which the population is not in a position to satisfy each and every requirement they need without the help of organization (Masaka 2008). If the society is fully self-reliant then the purpose in which the firm exists is of no use to the society. The business thus operates in a variety of sociological, economical and political transformation taking part in the global field, that have an effect on local regulation. Cigarette manufacturers were supposed to consider the safety of the public first before their economic goals. The managers believed that they were defending free enterprise by not abiding to the claim the primary goal of the firm is to look for profit other than enhance societal welfare and that the firm has a sense of right and wrong which puts in consideration the duty of employing, being non-partisan and being environment friendly. Following the Kew Garden Principle of proximity, since the companies was aware of the danger that smoking posed to the society it had a moral obligation to remedy the situation. Awareness of the dangers of smoking is the need that the society was lacking, a need that could have been availed to them through a warning to the intended consumer. Still the company would have to correct the self caused injury according to the Kew Garden Principles. A narrative perspective is what the companies needed to understand the degree to which their organizations established shared knowledge of history, culture, biography or character with the society to deter it from causing harm to the public (Fisher & Lovell 2003). Broad social view seeks to embrace all the norms of the social environment ranging from the immediate physical environment through avoiding pollution to the social welfare of the public through delivery of quality products. While still maximizing the shareholders value the cigarette companies ought to have warned of the effects of smoking and used the Tobacco Industry research Committee (TIRC) to do research on the methods of reducing the risk of health complications while at the same time ensuring that a quality product with a maximum utility is delivered to the consumer. Instead the committee targeted an extra market of children a norm that is not acceptable in the modern business environment. The committee whom their position is supposed to be taken into consideration in carrying out research was biased to one goal only, profit maximization. A comprehensive point of view ought to have been applied while conducting the study (Wicks, Freeman, Werhane & Martin 2010). A third party according to the Kew Garden Principles has the duty to act in aid of the one in need, in this case the U. S. Department of Justice was contributing to society by seeking to rectify the situation that the cigarette companies had imposed on the society by forcing them to warn the public of the health risks and addictive nature of smoking. The idea is that businesses are supposed to be rationally anticipated to provide for the community welfare afar form their duty goals (Beauchamp, Bowie & Arnold 2009). From any of the three views the main argument is the measure of social responsibility in a broader field of employee activities, corporate governance, societal welfare and the effects of the firm’s operations on the ecosystem. Moreover the positive correlation among corporate social responsibility programs with long-term economic attainement exists where the ethical values are given the first priority (Post, Preston & Sachs 2002). In this light the cigarette companies should have at-least compensated the society for misleading them by adhering to the rules and regulations as stipulated by the Racketeer-Influenced and Corrupt Organizations Act (RICO) and disgorged a part of the profits they had earned. The operation of any organization is not about what is right but it is a prediction based on an agreement with the community that in response to authorization to do business, the community demands duty and responsibilities from the enterprise (Bowie 1999). Organizations are started by the communities in which they exist to provide for the welfare of those communities not only to satisfy the shareholders. They have a duty to prevent catastrophes, protect the ecosystem and reduce degradation of the environment in their activities (Scholtens & Dam 2007). Therefore, the conclusion is that the significance and meaning of this universal idea is to seek support from firms to realize profits on the long-term as well as meeting societal needs and mitigating harm on the environment. Corporate social responsibility is a durable tool for ensuring profits which might not be quantified but is indispensable as it has a potential to ensure business success and societal development (Caroll 1999). The long run benefits of the companies were not set on ethical grounds of safeguarding the society by education of the community. Business activities that satisfy the welfare of the majority will make companies to realize profits in the long-term (Dentchev 2005). All corporate organizations are supposed to put in place CSR programs in all their undertakings instead of being coerced to do so (Caroll 1999). Reference List Beauchamp, T, Bowie, NE & Arnold, DG 2009, Ethical theory and business, 8th edn, Prentice Hall, Upper Saddle River, New Jersey. Blowfield, M & Murray, A 2008, Corporate responsibility a critical introduction, Oxford, Oxford, UK. Bowie, NE 1999, Business ethics a kantian perspective, Blackwell Publishers, Malden, MA. Caroll, AB 1999, Corporate social responsibility, Business and society, South-Western Publishing Co., Cincinnati Ohio. Chan, G 2008, ‘The Relevance and Value of Confucianism in Contemporary Business Ethics’, Journal of Business Ethics, vol. 77, no. 3, pp. 347 – 360. Daugherty, EL 2001, “Public Relations and Social Responsibility”, in Handbook of Public Relations, ed RL Heath, Sage Publications, London, pp. 389-401. Dentchev, N 2005, Integrating Corporate Social Responsibility in Business Models, Ghent University, Hoveniersberg. DesJardins, J 1998, ‘Corporate Environmental Responsibility’, Journal of Business Ethics, vol. 17, pp. 825-838. Fisher, C & Lovell, A 2003, Business Ethics and Values, Pearson, London. Kotler, P & Lee, N 2005, Corporate Social Responsibility: Doing the Most Good for Your Company and Your Cause, Wiley & Sons Ltd, New Jersey. Masaka, D 2008, ‘Why Enforcing Corporate Social Responsibility (CSR) is Morally Questionable’, Journal of business ethics, vol. 13, no. 1. Available from: < http://ejbo.jyu.fi/pdf/ejbo_vol13_no1.pdf >. [22 March 2013]. Miles, M, Munilla, L & Darroch, J 2006, ‘The Role of Strategic Conversations with Stakeholders in the Formation of Corporate Social Responsibility Strategy’, Journal of Business Ethics, vol. 69, no.2, pp. 195 – 205. Orlitzky, M, Siegel, D & Waldman, D 2007, ‘Call for Papers for a Special Issue of Business & Society: Corporate Social Responsibility and Environmental Sustainability’, Business & Society, vol. 48, no.1, pp. 133 – 136. Post, JE, Preston, LE & Sachs, S 2002, ‘Managing the extended enterprise: the new stakeholder view’, California Management Review, vol. 45, no. 1, pp.6–28. Scholtens, B & Dam, L 2007, ‘Cultural Values and International Differences in Business Ethics’, Journal of Business Ethics, vol. 75, no. 3, pp. 273 – 284. Velasquez, MG 1997, “Ethical Principles in Business”, in Business, Ethics and Society, ed KA Getz, Simon & Schuster Education Group, Needham Heights, pp. 19-72. Wicks, AC, Freeman, RE, Werhane, PH & Martin, K 2010, Business Ethics A Managerial Approach, Prentice Hall, Boston, MA. Wood, D 1991, ‘Corporate Social Performance Revisited’, The Academy of Management Review, vol. 16, no. 4, pp. 691 – 718. Read More