Marketing Case Study
CASE 46 Making Socially Responsible and Ethical
Strategic decisions move a company toward its stated goals and perceived success. Strategic decisions also reflect the firm’s social responsibility and the ethical values on which such decisions are made. They reflect what is considered important and what a company wants to achieve. Mark Pastin, writing on the function of ethics in business decisions, observes: There are fundamental principles, or ground rules, by which organizations act. Like the ground rules of individuals, organizational ground rules determine which actions are possible for the organization and what the actions mean. Buried beneath the charts of organizational responsibility, the arcane strategies, the crunched numbers, and the political intrigue of every firm are sound rules by which the game unfolds. The following situations reflect different decisions made by multinational firms and governments and also reflect the social responsibility and ethical values underpinning the decisions. Study the following situations in the global cigarette marketplace carefully and assess the ground rules that guided the decisions of firms and governments.
Marketing Decisions: Selling Tobacco to Third World Countries expanding market. As an example, Indonesia’s per capita cigarette consumption quadrupled in less than ten years. Increasingly, cigarette advertising on radio and television is being restricted in some countries, but other means of promotion, especially to young people, are not controlled. China, with more than 300 million smokers, produces and consumes about 1.4 trillion cigarettes per year, more than any other country in the world. Estimates are that China has more smokers than the United States has people. Just 1 percent of that 1.4 trillion cigarette market would increase a tobacco company’s overseas sales by 15 percent and would be worth as much as $300 million in added revenue. American cigarette companies have received a warm welcome in Russia,
Strategic decisions move a company toward its stated goals and perceived success. Strategic decisions also reflect the firm’s social responsibility and the ethical values on which such decisions are made. They reflect what is considered important and what a company wants to achieve. Mark Pastin, writing on the function of ethics in business decisions, observes: There are fundamental principles, or ground rules, by which organizations act. Like the ground rules of individuals, organizational ground rules determine which actions are possible for the organization and what the actions mean. Buried beneath the charts of organizational responsibility, the arcane strategies, the crunched numbers, and the political intrigue of every firm are sound rules by which the game unfolds. The following situations reflect different decisions made by multinational firms and governments and also reflect the social responsibility and ethical values underpinning the decisions. Study the following situations in the global cigarette marketplace carefully and assess the ground rules that guided the decisions of firms and governments.
Marketing Decisions: Selling Tobacco to Third World Countries expanding market. As an example, Indonesia’s per capita cigarette consumption quadrupled in less than ten years. Increasingly, cigarette advertising on radio and television is being restricted in some countries, but other means of promotion, especially to young people, are not controlled. China, with more than 300 million smokers, produces and consumes about 1.4 trillion cigarettes per year, more than any other country in the world. Estimates are that China has more smokers than the United States has people. Just 1 percent of that 1.4 trillion cigarette market would increase a tobacco company’s overseas sales by 15 percent and would be worth as much as $300 million in added revenue. American cigarette companies have received a warm welcome in Russia,