CSR, Ethical Issues, and Business Challenges for Philip Morris Intl

This report provides a comprehensive analysis of Philip Morris International (PMI), focusing on its Corporate Social Responsibility (CSR), ethical issues, and business challenges. It begins by defining CSR and exploring Carroll's Pyramid of CSR, outlining PMI's economic, legal, ethical, and philanthropic responsibilities. The report then delves into ethical theories, specifically the Virtue Ethical Theory, and identifies key ethical issues faced by PMI, such as child labor and deceptive practices. Furthermore, it examines the business ethical challenges PMI encounters in its international operations, including ethical marketing, human rights concerns, and government regulations. The analysis incorporates the Moral-rights approach to evaluate the challenges. The report highlights the importance of CSR for PMI's reputation, customer loyalty, and sustainable development, underscoring the need for ethical practices to navigate the complexities of the tobacco industry and global markets.

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TABLE OF CONTENTS
PART 1 ...........................................................................................................................................1
1. Carrol's pyramid of CSR, corporate social responsibilities of Philip Morris International
Company and importance of these responsibilities.....................................................................1
2. Theory of Ethics and key ethical issues...................................................................................3
3. Business ethical challenges does Phillip Morris international face in the context of
translation operations...................................................................................................................5
PART 2............................................................................................................................................6
1. Aid of Learning activity in the development of particular skills, knowledge and/or
understanding...............................................................................................................................6
2. The Strongest impact of one point...........................................................................................6
REFERENCES................................................................................................................................8

PART 1
1. Carrol's pyramid of CSR, corporate social responsibilities of Philip Morris International
Company and importance of these responsibilities
Corporate Social Responsibility
Corporate Social Responsibility (CSR) is an important term using by the company. It can
be defined as the part of responsibilities which is required to be upheld by the companies in the
societies where it is operating its business (Unit, 2015). In other words, CSR can be said as the
business policy of the organization which helps company to fulfil their responsibilities towards
the societies and environment from whom business take resources to achieve its organizational
goals. The reason behind this policy is to operate the business in a way through which not only
business, but also society and environment get benefits.
Carroll's Pyramid of CSR
Carroll's Pyramid of Corporate Social Responsibility (CSR) is a model of CSR which
was propounded by Carroll Archie B. According to this pyramid, Company has four major
responsibilities which must be look by the company for the future sustainability of the
organization (Crane, Matten and Spence, 2019).
Corporate Social Responsibilities of Philip Morris International Company
The four key responsibilities of Philip Morris International which is displaying in the
pyramid are as follows -
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(Illustration 1: Pyramid of CSR
Source: Carroll's corporate social responsibility
pyramid, 2019)

Economic Responsibilities — Economic responsibility concerns with the main objective of the
organization. It states that company's main objective is to maximize their profits. This should be
done by providing required goods and services to the customers.
Economic responsibility of the Philip Morris International is that it should provide proper
wages to the employees in order to provide them safe and fair paid job.
Legal Responsibilities — Legal responsibility of the company is that company should comply
with all the laws, legislations, rules, regulations and guidelines which is imposed by the
government on them.
Legal responsibility of the Company is that it should take care of the health and safety of
the employees. Thus, company should not assign the tasks to the children labour which is related
to the plucking of tobacco plants.
Ethical Responsibilities — Ethical responsibility demonstrate that company should operate its
business in a morally and ethically framework. Thus, company should follow the right things for
their society whether it has to go beyond their legal requirements.
Company's ethical responsibility is that it should inform to the labour authorities about
the child labour who comes to it for the jobs.
Philanthropic Responsibilities — Philanthropic responsibility states that company should help
the society by giving back something to them. It can be in the form of monetary or non
monetary. It is basically deals with the society involvement (Carroll's corporate social
responsibility pyramid, 2019).
Philanthropic responsibility of the Philip Morris International Company is that it should
provide child proper education in order to make their life better.
Importance of Responsibilities for the company
Economical responsibility is the important for the Philip Morris international because it
indicates that business must generate economic profit to make huge profit add continue to exist.
If Philip Morris is not generated huge profit so they cannot purchase any materiel for run the
business. If business will not have the resources so they cannot deal with the other
responsibilities (O'Connor and Myers, 2018). Thus, enterprise need to take Economic
responsibilities as they should be aware about how to compete in the marketing and make strong
competitive position To enhance advanced level of operating efficiency. Thus, huge and
continue profitability defined a successful firm.
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Another responsibility is Legal responsibility it is essential for the Philip Morris as The basic
principles which have been constituted by legislators of federal, state, and local governments
under which a Philip Morris operate is essential that business follow this rules. If firm cannot
follow the laws and regulation its effect the brand reputation (Wright and Schultz, 2018).
According to the case study it indicates that firm hire the child labour which is legally unethical
so. Firm can concentrate that they follow all the laws and regulation such as employment law,
environmental law, and health and safety regulations etc. On the other side, the main importance
of follow the legal responsibility is that it helps to building relationships with customers and
change the buying decisions of customers(Greenwood and Freeman,2018).
Ethical responsibility is also important because it helps to business for entering in new
emerging market. Henceforth, Corporate social investment aids to Philip Morris in building a
reputation as a trustworthy business, which can, in turn, advantage to competitive lead. On the
other side, supplier also favor those Companies who are responsible for their performance. Thus,
it directly impacts on their customers that how they judge and see them (Martí, 2018).
Thus, Philip Morris take all the responsibility as it important for their business. It helps to reduce
waste and money as firm take initiatives and follow proper CSR responsibility, firm may be able
to get down your utility bills and attain monetary fund for your business.
Henceforth, these all actors are important for the company which an Philip Morris operate
under. Philip Morris as it manufactures a Tabacoo which harm the health of people. So, firm
need to take all the CSR responsibility which helps to creating a better public image and it is
essential because it builds the customer loyalty. Hence, many poles who not like the those
companies who harm the health like Non-smokers might be think negative about tobacco
companies, but by adopting the CSR activities Philip Morris represented as sympathetic of
responsible administration.
2. Theory of Ethics and key ethical issues
Ethics
Ethics refers to the branch of philosophy which is basically deals with the human values
and teach them what is right and what is wrong. It can be understood as moral principles (Isaak,
2017).
Theory of Ethics
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There are various theories of ethics which is propounded by various philosophers. One of
the most important ethical theory is “Virtue Ethical Theory”. Virtue ethics is considered to be
normative ethics which is basically deals with the actions done by the human or business.
Application of Ethical theory
Under the virtue ethical theory, there are three types of ethics which are as follows -
Individual Character Ethics
Individual character ethics states that the individuality and development of a good person
attributes help in determination of the instrumental and intrinsic value of the ethical interactions.
Traits under this ethics are such as self-discipline, gratitude, understanding, wisdom, courage and
prudence etc.
Work Character Ethics
Work character ethics refers to the ethics which help professional to identify and develop
those traits which determine the intrinsic and instrumental ethical quality of work life. Examples
of attributes under this ethics are as follows — trustworthiness, empathy, loyalty, honesty,
dependability and honour etc. (Isaak, 2017).
Professional Character Ethics
Professional character ethics means the ethics which helps individual to identify and
develop those traits which determine the intrinsic and instrumental ethical quality of individual
who is associate with the cUnit, B., 2015Crane, A., Matten, D. and Spence, L. eds.,
2019ommunity. Illustration of traits under the professional character ethics are altruism, self-
regulation, impartial judgement, truthfulness etc.
Key ethical issues in Philip Morris International Company
There are various key ethical issues which is facing by the Philip Morris International
Company. These key ethical issues are as follows -
Company knows that child labour is banned in the Tobacco Industry, but still due to low
labour wages, Firm is still hiring employees who are below 16 years old. Along with that, they
assign them the tasks which is related to the tobacco plants which is dangerous for them.
Another key ethical issue is that there are so many employees who are below 16 years old
but still lie about their age to the company (Vardy, 2016).
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3. Business ethical challenges does Phillip Morris international face in the context of translation
operations.
Ethical challenges is affects the business performance. If business not follow all the rules
and regulation regarding to the corporate social responsibility its affects the decision making
power of business. Thu, at the time of expansion of the firm at the international level the ethical
marketing decision must be taken and that must meet and suit out the needs of the customers,
suppliers and business partners (Rooney, and Qiu, 2019). On the other hand, unethical behaviour
as price wars, selective advertising and deceptive marketing can have major impact on the
relationship of the company. On the other, at the time when the business expand at the
international level they do not only needs to understands an enterprise mission, vision, goals and
policies but they also needs to framed out the strategies that can lead to have long term
expansion in the foreign countries. On the other hand, there are some of the common ethical
issues in international business that is inclusive of the outsourcing, supervisory oversight, human
rights, religion, the political arena, working standards , conditions, workplace diversity and equal
opportunity, child labour, trust and integrity, the environment, bribery and corruption
(Greenwood, and Freeman, 2018).
Thus, for identify the ethical challenges Moral-rights approach is suitable because it helps
to analyse that which types of challenges Phillip Morris face in the context of translation
operations. In addition to this, ethical behaviour at the business level comprised of skills and
professionalism that needs to ensure about the sustainable development. In the different
countries, there are different employment practices, human rights, moral obligation of the
international corporation and this leads to have wide impact on the working of the enterprise
(Ethical Considerations in International Business, 2016).
Moral right approach is described that how company behaviour as respecting and
protecting fundamental human rights, equal treatment under law. Thu, many internationalist
countries follow this Moral right approach to protect their human and people from unhealthy and
harmful product. Thus, Phillip Morris face many challenges when they operate their business in
international market as many countries banned this types of products. So, due to this condition
firm cannot able to expend their business in new market. On the other side, many people criticise
the product as international and national citizen have a fundamental right to reject the product
which harm their body. Thus, Individuals have the right to object and reject on the product and
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also make comments. This challenges reduce the demand of product. In current scenario the
customer more focus on their health and they reject this types of product which affect the body.
So, this is the biggest reason which reduce the demand of product in international market.
Hence, the another challenges is government rules and regulation this is highly
influenced the performance of Phillip Morris. If Phillip Morris enter in the international market
they follow all the rules and regulations of different government and many governments cannot
support the tabacoo product due to harm full product (Wright and Schultz, 2018). On the other
side, In Colombia, a Philip Morris subsidiary is suing a local government for protecting kids and
vulnerable populations by banning sales of cigarette and other tobacco products around schools
and health facilities, among other sales restrictions. Thus, the active action by government it
affects the performance and decision making power.
Hence, The another challenge which face by the Phillip Morris it is that there many other
counties who purchase the product of Phillip Morris charge the high tax due to different
categorized of product (Greenwood and Freeman,2018). Thus, this high tax is affects the
performance and production activity. Du to high tax charge the prices of product is increase and
many buyers who want to purchase the product cannot easily purchase as this condition is
reduces the demand of product. On the other side, firm cannot able to expand their business in
international market due to high restriction by the government.
PART 2
1. Aid of Learning activity in the development of particular skills, knowledge and/or
understanding
Learning activity has helped in learning various things about the child labour as it is
considered to be one of the most sensitive issues in social culture and environment. Learning
activity has helped me in improving my various skill sets, knowledge and understanding about
child labour. It has also helped in enhancing my current knowledge of child labour. I have also
understood the depth of this issue and in how much depth this issue is affect our country. It has
also helped me to easily get comfortable around people and talk to them. So, that I can
understand the problems or issues that is being faced by them.
2. The Strongest impact of one point
One point that is likely to have the strongest impact on my carrier and learning journey is
CSR i.e. Corporate asocial responsibility. Corporate social responsibility increase my job
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satisfaction level, helped in understanding purpose of my work, my responsibilities towards the
company and ways in which I can fulfil those responsibilities. Proper and good corporate social
responsibility gave me a purpose within the organization. It was one of the main factor which
impacted by carrier in a positive manner. Corporate social responsibility of Philip Morris
International enhanced by knowledge and learning and also helped me in enhancing my learning
journey within the organization. It also helped me in enhancing my current skill set and also
helped in learning new skills that can boost my carrier and my learning journey. Not only this I
have also learned the way in which I can improve the CSR level of my organization.
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REFERENCES
Books and journals
Crane, A., Matten, D. and Spence, L. eds., 2019. Corporate social responsibility: Readings and
cases in a global context. Routledge.
Greenwood, M. and Freeman, R.E., 2018. Deepening ethical analysis in business ethics. Journal
of Business Ethics. 147(1). pp.1-4.
Isaak, R., 2017. Green logic: Ecopreneurship, theory and ethics. Routledge.
Martí, I., 2018. Transformational business models, grand challenges, and social impact. Journal
of Business Ethics. 152(4). pp.965-976.
O'Connor, D. and Myers, J., 2018. Ignatian values in business and accounting education:
Towards the formation of ethical leadership. Journal of Business and Educational
Leadership. 7(1). pp.124-136.
Rooney, D. and Qiu, J., 2019. Addressing Unintended Ethical Challenges of Workplace
Mindfulness: A Four-Stage Mindfulness Development Model.
Unit, B., 2015. Corporate social responsibility.
Vardy, P., 2016. The puzzle of ethics. Routledge.
Wright, S.A. and Schultz, A.E., 2018. The rising tide of artificial intelligence and business
automation: Developing an ethical framework. Business Horizons. 61(6). pp.823-832.
Online
Carroll's corporate social responsibility pyramid. 2019. [Online]. Available through:
<https://www.aqa.org.uk/resources/business/as-and-a-level/business-7131-7132/teach/
teaching-guide-carrolls-corporate-social-responsibility-pyramid>
Ethical Considerations in International Business. 2016. [Online] Available
through:<https://online.uttyler.edu/articles/ethical-considerations-in-international-
business.aspx>
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