Altria: Business Ethics Case Study

Altria: Business Ethics Case Study

Introduction

Business ethics entails a form of applied or professional ethics that looks into ethical values or moral ethical problems arising in a business setting. (Chryssides, Kaler, 1993) It is a decision of choosing the right among wrong and right. Business ethics are that functions which leads to choosing right decision at the right time which leads for the welfare of not only business owners but also society, consumers, stakeholders and its employees. Business ethics now days have become so important that no business can survive in the market without following them.

The concept of Business Ethics is critically liked to Social Responsibility. Social responsibility is the responsibility of an organization for the impacts of its decisions and activities on society and the environment through transparent and ethical behaviour that is consistent with sustainable development and the welfare of society.

The tobacco industry is an industry that has raised many ethical issues in the business environment today. One big and worldwide recognized name of Tobacco industry, The Altria Group, since its establishment till now has seen many court cases on the issue of ethics and morals. Altria Group is the name of the parent company of Kraft Foods, Philip Morris USA, Philip Morris International, and Philip Morris Capital Corporation. This company has been on the spotlight for many human rights movements for the last five years and has faced accusations all over the world (The Altria group of Companies 2011).

This paper will discuss the case study of Altria Group's unethical practice. Further, alternative solutions for the unethical behaviour will be highlighted followed by the critical evaluation of the solutions.

Discussion

Case Study

On May 22, 2009, Altria faced the court for involving in unethical conduct. The court, in its ruling, outlined that the company undertook its activities against the code of ethics. The company had lied to the public about the health hazards associated with smoking. Some of the misleading labels that the Company used on cigarettes packs included statements like 'low tar', 'light', and 'ultra-light'. (Anne, 2009) The Altria Code of Conduct (2012) provides that the company should warn the users of the cigarettes on the impending health hazards that they are subjected to when they smoke.

According to (Friedman, 1970), the only stakeholders a business should worry about were the owners However, now all businesses have broadened their definition of stakeholders to include not just stockholders, but customers, employees, and suppliers as well. For national and multinational corporations, the stakeholder list also includes governmental agencies. The key stakeholders that were involved in this unethical conduct included legislators, board of directors, consumers, and suppliers. The legislators were not able to instigate stringent regulations on the advertisements and the labels indicated on the cigarette packs until when it was late. The board of directors knew that what they were undertaking were against the code of ethics, but they focused on increasing the revenue outlay for the company. Further, the suppliers of the cigarettes ...