business ethic case study

The

Copyright @ Carmen, David, Joe, Jessica, Stella, Sean, Tony

Tobacco Charit

yin China

Background of tobacco charity in China

• The largest producer of tobacco in the world and has the largest population of smoking

• Generated RMB717 billion profits in 2013, and donated 4.7 billion to charity

Social welfare 17%

Schools 27%

Sports events 4%

Relieve poverty 52%

China tobacco

Shall we accept tobacco charity? Is it ethical?

Theory IntroductionMorality

Pre-conventional

• Individual interest

• Short-term punishment

Conventional

• Interpersonal• Social

argument

Development

Theory IntroductionMorality

Development

Pre-conventional

• Individual interest• Short-term punishment

Government

Company

Consumer

Donee

• No anxieties about daily life

• No concerns about economically disadvantaged family burdens

• No worry about dropping out school

The view ofdonee

• Positive image

• Social recognition

• Current market retention

• Potential market acquirement

The view ofconsumer

Tobacco might be bad, but the tobacco company is not bad

Tobacco companyPerspective of

Tobacco companyPerspective of

“We don’t sell a cigarette to customer withhiding its harmfulness. And we do not presscustomers to buy it.”

“We don’t sell a cigarette to customer withhiding its harmfulness. And we do not presscustomers to buy it.”

We should not be barred from donation,Simply because the cigarettes were harmful.

Tobacco companyPerspective of

Campaign of quitting smoking Smoking of adolescence

WE CAN PREVENT IT

Education Improvement

Youth Smoking

Dilemma

üü

Potential Risk

Long-run Benefit

We can diminish the potential risk of youth smokingBy expanding supply of education.

Tobacco companyPerspective of

Shall we…X

The charity is unethical!

Egoism One ought to act in his or her

own self interest.

Maximize personal interest.

Egoism

The charity of tobacco

Higher sales

More hurt

Good reputation

Unethical Forbid

CSR Approach • Philanthropy

Target • Extra activities

Expected benefits

• Image improvement & reputation impact

Charity donation

Charity donation

Brand, Potential consumer, Revenue……

Other approaches: CSR Innovation, CSR integration……

Not easy.

Can we

eliminate Tobacco charity?

Each Party shall, in accordance with its constitution or constitutional principles, undertake a comprehensive ban of all tobacco advertising, promotion and sponsorship. This shall include, subject to the legal environment and technical means available to that Party, a comprehensive ban on cross-border advertising, promotion and sponsorship originating from its territory.

WHO FRAMEWORK CONVENTION ON TOBACCO CONTROLArticle 13

The tobacco industry is lEGAL in most of countries.

STATE TOBACCO MONOPOLY ADMINISTRATION

China Tobacco Corporation

It has abundant resources, even political power.

Regulated its charity behavior.Instead of simply banning it.

Promoting

behaviors should

be banned and

punished.

Regulated its charity behavior.Instead of simply banning it.

Motivate tobacco

company to

donate under

regulation.

No matter how we judge tobacco charity, we could hardly expect its disappearance from China in near future. Instead of trying to eliminate this phenomenon, we’d better try to guide and regulate this kind of charity.

Q&A