Stephanie Strom’s story in the New York Times regarding CVS Caremark and it’s decision to halt it’s sales of tobacco products brings into question the role of ethics in the world of business. Connecting this decision to Edward Freeman’s stakeholder theory, it may be determined that this company seeks to cease it’s tobacco sales in order to improve their brand name and become more appealing to the majority of their clients. Despite the fact that CVS Caremark would be losing profit initially, the company seeks to better their reputation so as to appeal to more potential clients. Consistency is an important attribute of any company, and so with this course of action, CVS Caremark seeks to appeal to their non-smoker clients as opposed to their smoking clients. In stopping their tobacco sales, CVS Caremark is encouraging their market to be healthy, which is consistent with their pharmaceutical nature. Connecting this situation to Milton Friedman’s essay, The Social Responsibility of Business is to Increase its Profits, encouraging healthy living at the companies own expense could be considered a mistake; however, if one analyses the long term effects of this action it may be beneficial. The tobacco sales did not represent a significant percentage of profit for the company, and improving their brand name and reputation among the general public could prove to aid CVS Caremark in the future.

Sources:

http://site.ebrary.com/lib/ubc/reader.action?docID=10187339&page=171