Discussion 2
As an international firm dealing with cigarettes, The Philip Morris International company has failed in the provision of Corporate Social Responsibility (CSR). That is the company does feel the need to give back to society; thus, omitting the principle of corporation’s cooperating with other corporations. The primary aim of the company is to generate profits for the shareholders. As a result, the Philip Morris International Company has considered the agency theory to be the most significant aspect I the firm. Managers believe that social responsibility is the way to gain the company’s competitive advantage. Therefore, Philip Morris International’s management intends to provide reports for corporate social responsibility. Sadly, the owners (shareholders) do trigger the agency problems as they feel that the corporate social responsibility reports are theft by the management and not significant (Savedoff, 2017). Instead, the funds offered to society should be plowed back to the firms to gain back profit.
Corporate Social Responsibility (CSR) is considered a smokescreen by such a firm. Owners only believe in their right to earn profit from the firm but fail when it comes to concern for the community. Although Philip Morris International company can boost the morale of workers. The shareholders have no interest in such an initiative. They believe the company’s brand is already improved and the firm is operating in a blue ocean space. However, the current executives have been advertising on the company’s intention to involve in the CSR. That is by moving from child forced labor to renewing energy of the firm (Savedoff, 2017). The firm even pleads with the community that smoking is a harm to the health of individuals. Surprisingly, the firm still distributes its products despite being harmful to the health of humans. Presumably, Philip Morris International is not ready to offer Corporate Social Responsibility (CSR).
Reference
Savedoff, W. (2017). Tobacco Companies Fail the Corporate Social Responsibility Test of a Free-Market Advocate. Retrieved from https://www.cgdev.org/blog/tobacco-companies-fail-corporate-social-responsibility-test-free-market-advocate