Saturday, February 15, 2014

CVS Bans Tobacco Products (2014)

CVS drugstore/pharmacy

CVS is an extremely well-known and one of the largest drugstore chairs in the United States. The popular and well-trusted company announced in early February 2014 that the drugstores would no longer carry any tobacco products, including cigarettes, by October 2014. This is a very brave move for the CVS stores.
It is reported that this ban of tobacco products would cause a two billion dollar loss in revenues a year for the company as a whole. One of the main reasons that the firm is doing this, is to show the public that it really does care about the health and well-being of its customers and the nation. This proves that the company cares more about improving the healthcare of customers than its potential profits. Hopefully, this new change will help to put people on a path to a more healthful future. CVS is growing into an even more reliable health care provider than it already is. The stores seemed to have changed into more of a retail business, instead of strictly health services, which was the purpose of the start of the company. The firm hopes to create more mini-clinics and strongly encourage and aid customers to visit the pharmacies. The hope is to put more emphasis on the pharmacy aspect of the drugstores, and less on the convenience store element. The entire checkout counter at most stores is covered with unhealthy snacks, gum, mints, and candies that are high in sugars and fats. Behind these junk food littered counters are mountains of cigarettes and other forms of harmful tobacco products. Some consumers have mentioned that it is unfair to ban tobacco products because they cause cancers and diseases, but not to ban the impulsive sugar rushes that can cause similar diseases. However, that would be extremely risky for CVS to get rid of tobacco products and all sweets that are available at the stores. The company will already be taking a significant revenue cut, and that would cause an even larger loss in revenues. The stockholders could lose a significant amount of money from this new change, and they would not be happy if they lost even more. The CEOs and managers of CVS had a huge decision to make could have upset a large number of customers and employees. The decision has already been made to eliminate tobacco, but the question is should more unhealthy options be banned too. This has been a very recent controversy that is spreading across the United States right now.

Milton Friedman is a Nobel Prize-winning economist. He earned this prize for being the best-known defender of the economic model of corporate social responsibility. He is also known for the ideas of individualism. He mentions that there is only one single goal for businesses in the economy. This singular common goal is to make a profit for the business. Therefore, the only responsibility that the management or people involved in the business have, is to maximize profits. This means that the company will succeed, and therefore the owners and the stockholders each will be successful. Individualism is a principle of being independent and relying only on oneself. It favors freedom of action for separate individuals, rather than for a collective group of people. CVS has always been a company with a very successful financial position and a strong positive public opinion. It is a trusted company by many people in the United States. However, instead of following the theory of individualism and only focusing on maximizing profits for the company, it goes against the ideas. CVS is giving up two billion dollars in revenue from tobacco products to maintain a positive image in its customers' minds and to the public. However, when should the company stop? Some people think that it is unethical to ban tobacco, but not sodas, candies, and unhealthy snacks. These people think that CVS is being selfish by not considering these other dangerous products and leaving them in the stores still. CVS is using the ideas of individualism by keeping sugary treats in stores to keep a decent sales revenue for the company. CVS is partially avoiding individualism by trying to benefit society, but it is not using the ideas to the full extent that is possible. It seems as if this is the best possible thing for CVS to do though because this will help gain confidence and trust in the company, while also being able to fully function as a thriving company still. This seems to be the best possible option for the company's profitability and social ethical responsibilities. 

Overhead view of a CVS pharmacy pick-up & drop-off station
Utilitarianism is an important topic when it comes to business ethics. It is defined as "an ethical tradition that directs us to make decisions based on the overall consequences of our acts" (DesJardins 24). This basically means that it is an idea that is useful for the good for all people, instead of just an individual. It also means that there is a consideration for the right conduct that should be used while keeping all possible consequences in mind. It is used to chose the greatest amount of happiness for the largest number of people possible. There are some major costs and benefits that can be analyzed for the stakeholders of CVS. The managers and executives, who have a major input in how the company operates, would greatly benefit by removing tobacco products from all CVS stores in the United States. The general public would be impressed that they are focusing on people's overall well-being. Trust and confidence would be maintained and may even increase in the company. However, a major cost of this ban would be a large loss in revenues. This could mean a loss of some potential jobs and a decrease in salaries for the managers and executives. Some of the employees may be in danger of losing a job. The stockholders could be in danger of losing profits and shares of stock because of price decreases. These are all the possible costs of banning all tobacco products from CVS stores. However, the benefit that the company would receive of trust and confidence would be worth the risk of losing money. By removing all sweets from the stores as well, the company would have to reevaluate how the company is run and where their income is coming from. The company might not be able to survive, which would a worse outcome than a just comparatively minor loss in revenue. This would have a significant long-term negative effect on the company and it would not benefit the majority of people. Both customers and employees would lose. Even though it may not seem ethical to leave sweets in stores, the company is still promoting health by removing tobacco.

KantianismImmanuel Kant was a German philosopher who explained that a person's ethical duties are based on principles and duties, rather than determining consequences. According to Kant, a person's primary duty is to only act in the way the maxim of a person's actions could be made a universal law. A person is also required to treat other humans as subjects, rather than objects. This means that a person will perform an act, instead of having something acted on him or her. It also explains that a person should treat another person as an end, not as a means of getting to the end. The formula for humanity explains that people need to have an understanding of each other. It also explains that one person should not take advantage of another person or do something without the person's full comprehension and permission. A person needs someone's complete and rational consent for this to happen. Some people may argue that it was not ethical for CVS to sell tobacco products in stores because they are harmful to everyone's health. However, the people who bought them fully understood the products they were purchasing and they were aware of the health risks that are involved in using the products. On the other hand, some people may argue that everyone has the right to do whatever they chose. Another argument is that it is unethical for CVS to remove the tobacco products because the company should not be making it more difficult for someone to purchase these products. CVS would need to make sure that all of its customers feel welcome and important when in the stores, no matter what products are sold, to conform to the ideas of the Kantian theory. The company needs to focus on the customers themselves when they are in the stores, rather than how to get them into the store to make profits. CVS needs to put a center of attention on creating success for the company as a whole, rather than a small aspect of the company that is just a means of making profits to conform with the Kantian views.

Virtue Theory
Larry Merlot, CEO of CVS/pharmacy
The great Greek philosopher, Aristotle, had his own set of ethics and theories, such as the virtue theory. This explains that in order for an idea or thing to be successful, it has to be able to carry out its duties in a successful fashion. This means that both the theory and the ideas behind it need to thrive for any type of achievement. It also mentions that everyone has to behave rationally for this to happen. This is the only way for them to truly become happy. When it comes to the CVS case, the company was and is continuing to follow the virtue theory. The company has always functioned well with good ratings in customers service and with high-profit margins. Even with a ban on tobacco in the near future, the company is still one of the leading pharmacies in the United States. The managers and executives have a solid plan of how to operate the company and all of the stores. With a good grasp on operations, they are able to have a successful business. Since it is such a large company, this will be ongoing, even with a small portion of people against the stores, unless there is another major change to products in the near future. However, this change may not make everyone in society happy. A number of people believe that this ban is unfair and unethical, but most people at the company thought that it was the right move to make for the business. Because of this decision, the company will gain trust from its customers, which will result in a more successful firm, and overall will lead to most people being very happy with CVS. This virtue theory, along with Kantianism, utilitarianism, and individualism all help to explain the decision to ban tobacco products by CVS pharmacy stores.


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