“The stakeholder theory is a theory of organizational management and business ethics that addresses morals and values in managing an organization.” (Source 2) Many companies promote being “health conscious”, when in fact, many sell products that contradict the message they are advertising. The consumer’s values are compromised, as are the values of the stakeholders. CVS, one of the largest drugstores in the United States, recently announced the discontinuing of sales of tobacco. While the company earns a considerable profit from tobacco sales, their medical clinics in stores help patients directly affected by smoking (and other such problems) This “conflict of interest” is what lead to the company’s ethical decision of stopping the sale of tobacco products.
This decision was an admirable one, as it has caused other big name companies to assess the messages they are sending to consumers, and act accordingly. CVS is a stepping stone in the right direction to businesses being more aware of what they are selling. Many companies do not take into consideration the effects their products have on one’s health, which is unethical. CVS has done a good deed by promoting health care and discouraging the sales of products that cause health problems. This decision arguably enhanced their competitive edge as customers may be more inclined to support a business that 100% believes in providing health care. In addition, tobacco sales have been rapidly decreasing while health care has been increasing. It was a wise move on CVS’s part to scrap the sale of tobacco and focus on a more lucrative part of their store.
Companies like CVS must critically assess the products they are selling and the ethics behind what they are trying to promote. In order to send a positive message about the products they are promoting, companies should make wise decisions and take health risks seriously into consideration when looking to make a profit. Companies such as CVS are on the right track.
Source 2: http://en.wikipedia.org/wiki/Stakeholder_theory
Photo: One Page News
Also check out http://www.forbes.com/sites/barbarathau/2014/09/09/walmart-and-walgreens-wont-stop-selling-smokes-but-will-the-decision-backfire/ to see if Walmart and Walgreen’s decision to continue selling tobacco with backfire on them.