Business Ethics: CVS Caremark Vows to Quit Selling Tobacco

http://www.nytimes.com/2014/02/06/business/cvs-plans-to-end-sales-of-tobacco-products-by-october.html?_r=0

This article about CVS Caremark discontinuing the sales of tobacco products in their stores directly correlates to the ‘Stakehold Theory.’ Edward Freeman states that each company has a moral obligation to make sure the interests of all are met. The company CVS Caremark announced that they plan to stop selling tobacco products by October. The company did this with the goal of becoming more like a health care provider and less like a large retail business. Although by removing the sales of these products they would lose an estimated $2 billion dollars, CVS have decided, “cigarettes and providing health care just don’t go together in the same setting.”

What CVS is doing is a stark example of the ‘Stakehold Theory’ that Freeman was talking about. By limiting the sale of these products, CVS hopes to please the general public by doing what they believe is morally correct. However by taking this action, they also affect their profit. As a result of this it could in turn affect the company’s stockholders, which is what Milton Friedman was referring to in his writing. By doing this it prevents the company from making more profit. By doing the right thing they lose money, whether or not this is a beneficial business decision will only be discovered as time progresses.