Ethical Dilemma - Tobacco Industry

In: Business and Management

Submitted By everton
Words 1518
Pages 7
A. What stakeholders are affected by the U.S. tobacco industry's production and marketing of cigarettes? What stakeholder interests are impacted? How does the tobacco industry prioritize these stakeholders? Do you agree with the tobacco industry's prioritization? Why or why not? According to Wikipedia, a stakeholder is defined as a person, group, organization, member or system who affects or can be affected by an organization’s actions. There are several stakeholders that have been affected by the U.S. tobacco industry’s production and marketing of cigarettes. The retail tobacco companies are one such group that is undoubtedly affected by the developments affecting the production and marketing of cigarettes. Companies like Phillip Morris USA, Inc., RJ Reynolds Tobacco Company and British American Tobacco Limited who are interesting in profit maximization and return on investment felt that they were unfairly targeted by the imposition of restricted marketing activities and efforts to reduce the consumption of cigarettes. The tobacco companies believe that the law is excessive and will result in an increase in the cost of modifying packages and inversely, a reduction in net profit. The state (government) is also affected by the issues surrounding the tobacco industry. The government is faced with a slight dilemma because they are the regulator of the industry and the product is a legal product which is known to be harmful to both smokers and non-smokers. The industry also contributes significant tax revenue to the government coffers. On the flip side, the government has to find several millions yearly to deal with the health issues associated with smoking cigarettes. The effect of the decision to limit the production and marketing of tobacco will affect the employees of the retail companies adversely. A decline in cigarette sale will ultimately result in a…...

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