Analyzing Business Ethics of Tobacco Companies

This essay analyzes the ethical issues surrounding tobacco companies promoting their products in public and the consequences it has on stakeholders and society.

Running head: ANALYSING BUSINESS ETHICS OF TOBACCCO COMPANIES
ANALYSING BUSINESS ETHICS OF TOBACCO COMPANIES
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1ANALYSING BUSINESS ETHICS OF TOBACCO COMPANIES
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Analysing business ethics of tobacco companies
Introduction
Business and corporate ethics is a vital part in any business operation. A business is
indebted to the community and environment where it operates and therefore, has the
obligation to function ethically without harming the interests of the society or any of the
stakeholders associated with it. Sometimes, a business could simply be in an ethical dilemma
or be practicing unethical business without deliberation. These cases form the base for ethical
decision making. The purpose of this essay is to assess the ethical issues pertaining to the
tobacco companies denying the harms and addictiveness of cigarettes and other tobacco
products, as tobacco ads have started to surface in the streets once again, after a long time.
Why is this an ethical issue
To answer the first step, it is important to note down the facts.
WHO- Companies in the tobacco industry have been putting up ads on their products on a
regular basis, once again after more than a decade.
WHAT- The ads have been vividly portrayed to the public, which includes people of all ages,
including minors.
WHERE- These ads have been mostly found in the recent years in Canada and USA (Pierce
et al.).

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WHEN- The news of this particular practice came to prominently surface in the year 2016.
WHY- The tobacco industry has been known to produce a high amount of revenue
generation, and is highly profitable in the market. Which is why, to garner more sales ad to
put up ads by letting the public know that they are still in the market, the companies have
been a virtual battle to capture the highest possible market share in the industry (Kirchner et
al.).
Utilitarianism: The consequences
The consequences for this unethical sales practice is vast. Firstly, it could lead to the
tarnished brand image of the brand with the customers subsequently turning their backs on
the company due to the news. Secondly, the company could be charged a hefty amount by
law as a result of the unethical practice. Thirdly, and most importantly, the consequence
involves the betrayal to the public. These ads could be deceptive in a sense that the public
would fall for these ads and take action to buy the harmful products. Advertisements are put
up in order to increase sales by convincing customers to buy a product or a service.
Therefore, with the harms of tobacco being widely known to the public, it is only viable that
with increased consumption of tobacco pertaining to the ads, diseases like lung cancer, and
heart diseases, which is already the leading cause of death across the world, will escalate in
numbers and kill more people every year as a result.
Violation of universal human rights
According to UN’s universal declaration of human rights, the first thing which the
unethical sales practice violates is the Right To A Fair And Free World. This right states that
every individual in the world has the right to be treated fairly, and with transparency
("Universal Declaration Of Human Rights"). The companies putting up tobacco ads are

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deceptive in nature and compelling to youths and minors, as they hardly have any proper idea
about the harms which tobacco products bring to the health of the consumers.
Secondly, the declaration also states that people across the world should be
responsible to one another, pertaining to the decisions they make. The company has violated
this too, since they have not complied with the responsibility they are supposed to take of
caring about the society in which they operate their businesses.
Principles: Violation of commitment
Commitments as far as tobacco companies are concerned, are negligible since they
anyway sell products which are harmful to the health of the society and to the environment.
Therefore, their violation to their commitment cannot be assessed since they do not have any
commitment to the society.
Virtue
In virtuous terms, this is a highly unethical practice for any tobacco company to
undertake. This is because tobacco companies extract a lot from the society in terms of
energy to run the factories, and also agricultural fields from farmers to grow tobacco plants.
Smokers who smoke will anyway resort to buying the products of these companies. However,
promoting those products despite knowing the harms of the product, in public, is an
irresponsible act, and would mean that the industry is prompting to harm the same society in
which they have been operating their business.
How the stakeholders are affected
The consequences for the stakeholders in this scenario are:
Public: According to Bunnel et al., minors are the most affected by this act since the main
concern about promoting tobacco products is the youth falling for these promotional ads and
trying out the products, thereby doing significant damage to their health.

4ANALYSING BUSINESS ETHICS OF TOBACCO COMPANIES
Investors: They have been investing in a company to help the company grow, and because of
the company’s credibility. Ethically, they have been betrayed too, since the company has
betrayed the public by indirectly denying the harms of their products through the promotions,
and thereby, the trust of the investors as well.
Government: The government faces the threats of public accusations on the basis of not
investing deep into the matter of regulating harmful ads related to tobacco.
Administration: The CEO of the concerned companies may have to resign.
Possible alternative actions
1. Labelling the ads with the warning signs of how they are harmful to the health of the
public. This would be beneficial to the society since the main concern is the youth and
minors not knowing about the hazards of smoking cigarettes.
2. Taking down the ads, and behaving responsibly in the society, and depending on
smokers by nature for the sales of the products. This would ensure that the tobacco
companies will be acting responsibly in the society since they will not be promoting a
product which has been proven to cause health damages to those who consume the
tobacco products.
Implementing the newspaper test, the first alternative would mean that the reputation of
the company would still go down since it would indicate a promotional activity by the
companies, despite the warning labels present to warn the public about the harms of the
products.
The second alternative would indicate that the company has been acting responsibly
in the society in terms of ethics, without promoting a product that causes harms to the society.
This would significantly build up the image and reputation of the tobacco companies.

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Finalizing the decision and monitoring the outcomes
Keeping in mind the feasibility and ethical concerns, the second alternative should be
adopted for the purpose. This is because it would be most beneficial to the society as they
will not be shown about a product which has proven health hazards, and would also spare the
companies of spending huge amount of money in order to promote their products, alongside
other costs if the government decides to impose penalties on them for the act.
Monitoring should be done with regular inspections on the number of ads circulating
in the market which promotes tobacco products, and also taking feedbacks from the public
about how they feel about the ethical initiative taken by the tobacco companies.
Impact on stakeholders
The public will have justice by being ensured that the harmful ads would not compel
the younger generation in the society to take up smoking, and damage the future of the
society.
The investors of the company might have their returns decreased by a few margins, as
a result of falling sales after taking the ads down.
The government will not be receiving the high amounts of revenue from the
expenditure on promoting tobacco products, as well as the potential revenue which could
have resulted if sales of the products had gone up as a result of the promotions.
The CEO’s of the companies would regain their lost image in the society, and would
no longer face the threats of having to resign from their companies.
Conclusion
From the above discussion, it can be concluded that the tobacco companies promoting
their products in open public, is a highly unethical act, as it poses the threat of compelling the

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youth to try out and consume the products, thereby doing significant damage to their health.
The report suggests that the best ethical alternative would be to make sure that the tobacco
companies do not put up the ads in open public and take them down, since it would spare the
risks of the younger generation being badly affected, and subsequently, the future of the
society as well.

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References
"Universal Declaration Of Human Rights". Un.Org, 2019, http://www.un.org/en/universal-
declaration-human-rights/.
Pierce, John P., et al. "Receptivity to tobacco advertising and susceptibility to tobacco
products." Pediatrics 139.6 (2017): e20163353.
Bunnell, Rebecca E., et al. "Intentions to smoke cigarettes among never-smoking US middle
and high school electronic cigarette users: National Youth Tobacco Survey, 2011–2013."
Nicotine & Tobacco Research 17.2 (2015): 228-235.
Kirchner, Thomas R., et al. "Tobacco retail outlet advertising practices and proximity to
schools, parks and public housing affect Synar underage sales violations in Washington, DC."
Tobacco control 24.e1 (2015): e52-e58.