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BUS 603 Ethics and Social Responsibility

Instructor: Dr. Don Dickerson
(402) 770-1149
DrD1@cox.net
HTU UTH

COURSE DESCRIPTION
A more diverse, technologically changing society produces differing ethical standards
that must be examined by managers for their application to decisions made about tasks
and people within the workplace. This course examines the relationship between
business (both for-profit and not-for-profit) organizations and society as a whole, and
specifically, the responsibility of business to society. Students will focus on learning how
to think ethically and critically in planning, decision-making, evaluating, and problem
solving. (Required core course).
READINGS
Required Text: Business Ethics: Concepts and Cases, 6th ed., Manuel G. Velasquez.
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Prentice Hall, 2006.

COURSE OBJECTIVES. This course encourages the application of ethics to many
important issues that arise in the business and professional world. Upon completion of
this course, students will:
1. demonstrate competency in analyzing and evaluating case studies/scenarios.
2. apply ethical principles and theories to arrive at socially responsible solutions;
3. understand the importance of utilizing ethical principles in the workplace;
4. have a clear understanding of their own view of ethics, the foundation upon
which that view is based, and why it is crucial in explaining and justifying what
they value.
COURSE REQUIREMENTS
This course will be conducted on the World Wide Web. Students will complete a total of
four assignments designed to meet the stated objectives of the course.

To enroll for the course, you must have an e-mail address and access to the Internet.
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Your computer must have Microsoft Word.

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For this course, students will complete a total of four (4) assignments. Each completed
assignment will be e-mailed to the instructor no later than the due date listed below.
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Upon receipt of a completed assignment, the next assignment will be e-mailed to the
student. Students may submit assignments earlier than the due date.
Assignment #1 due Monday, 06 November 2006 P = 25 points P P P

Assignment #2 due Monday, 20 November 2006 = 25 points

Assignment #3 due Monday, 04 December 2006 = 25 points
Assignment #4 due Monday, 18 December 2006 = 25 points

Letter grade and numerical values

A+ = 98-100 B+ = 89-91 C+ = 80-82 D+ = 71-73 F = 64 and below
A = 95-97 B = 86-88 C = 77-79 D = 68-70
A- = 92-94 B- = 83-85 C- = 74-76 D- = 65-67

ACADEMIC INTEGRITY POLICY: (continued next page)

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This policy requires that you immediately and cheerfully offer the benefit of your
knowledge and skills to any fellow student who needs your help. If someone helps you,
whether a fellow student, the author of a book/article, a family member, a pastor or priest,
a coworker, a child, a pet, or anyone else, say that they helped you. That’s called citing a
source. Always show respect for the ideas or words of others by giving them the credit.
Failure to show respect will result in an “F”.
ELABORATION OF COURSE DESCRIPTION
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Purpose of this class: To learn standards or principles which can help us make more
enlightened and sound decisions. These standards can assist us in critically thinking
through the right course of action to take in decision making whether it be in planning,
problem-solving or anything affecting the stakeholders of an organization which benefits
from the public by its service or product.
Ethics is the search to find the most responsible way to act in any situation. Sometimes it
takes time to determine what the best way is, especially when multiple factors must be
considered; or when new information is obtained. Ethics is the “light” to guide us on the
right path. It provides us with good questions and considerations as we try to discern the
best course of action.
Some Assumptions:
• Businesses cannot survive without stakeholders (including employees locally,
nationally and internationally; stockholders; clients; people in the general area, and
others).
• Since business (for profit or not for profit) benefits from stakeholders it has a
responsibility to give back to the community a share of its profits, time and talents.
• Good ethical decision making is enriched by a broad spectrum of input.
Therefore diverse opinions should be considered. The more complex the
decision, the more important it is to weigh the information gathered through
many points of view.
• People can learn to work together even in difficult circumstances in order to act in a
way that shows they are socially responsible.
• Social responsibility includes acting in the best interests of society. From a business
perspective, this means contributing directly to the general welfare of a community
(particularly in the area of the business itself); exercising due care with respect to
employees no matter where they work (at home or abroad), by creating a safe
environment--physically and emotionally--in which to work, providing just wages
and creating an atmosphere which does not cause duress by overwork or other undue
hardships; serving the best interest of clients; respecting the quality of the
environment in which the business resides; showing leadership in promoting the
general welfare of the local community and whatever other communities served.
• For profit businesses must be concerned about making a profit for their stockholders.
But making profit alone is not acting in a socially responsible manner.
• There are many good ways of demonstrating social responsibility, but there are
always better ways, and it is the business of business to work always to find better
ways to act in the best interest of its stakeholders (as defined above), doing good
critical thinking.
• Not for profit businesses or organizations are typically funded in a variety of ways.
They, too, must exercise social responsibility towards all their stakeholders
(as defined above) in a similar matter in all the areas mentioned.
You are taking BUS 603 Ethics and Social Responsibility on line with me this term. Attached is
your first assignment.

For this course, there are a total of four assignments. You should save the Assignment #1
attachment, which is a Word document, to your computer, and then open it. Simply read the
instructions and do what they say. You will do all of your writing on the documents I send
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you. Do not send them in a separate format.

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Even when we are using a case from the text, I have reproduced the questions following the
case onto the assignment document in order to avoid confusion. Simply insert your cursor
after a question, space down, and began to type. You will type your answers directly on this
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document in some color other than black. Please use a color OTHER THAN RED. I will use
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red for my feedback. Please be sure it is dark enough to read easily, such as this blue. Use
Times New Roman 12 pt., which is what this document is.

When you are asked to take a position on an issue, I want you to take the time to think critically about
each issue - from all sides - and make the argument both for and against. However, after you
have done that, I want you to decide your position and defend it. Be sure to discuss issues from
the perspective of all of the stakeholders. Two or three sentences is NOT an adequate
response to these questions.

Continue in this manner until you have done all that is requested for this assignment.

When you have completed all of the work for the assignment, save the document as:
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YourlastnameBUS603_1.doc and send it back to me as an e-mail attachment. I will respond

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to your message with "Got it. Here's #2." If you don't hear from me within 24 hours, send
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me another e-mail message asking if I received your first one. Sometimes e-mail gets lost
(who knows where) and does not arrive at its destination. Or I could be away for a day or
two. If all that fails, call me at 402-770-1149.

After I receive your assignments, I will review them with comments on the documents and return
them to you. The due dates for the assignments are as follows:
Assignment #1 due Monday, 06 November 2006 = 25 points
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Assignment #2 due Monday, 20 November 2006 = 25 points

Assignment #3 due Monday, 04 December 2006 = 25 points
Assignment #4 due Monday, 18 December 2006 = 25 points

When can you expect your grade for an assignment you submit?
The procedure I follow is to make Monday the assignment due date for all the students I have
this in this class. In reality, students send in various assignments from other courses on different
dates. I make every effort to grade assignments within 8-10 days. Each time you send an
assignment, I will acknowledge it and send you the next one. I will not send you the next
assignment until I get the one that is due. Begin working on #2 as soon as you get it. But
don’t send it to me until you get feedback from Assignment 1. That way you will know if
your are on track.

(Continued on next page)

When you think about it, if you were completing this course as an in-class course, and you
turned in an assignment at one class meeting, the earliest you could expect the return of that
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assignment graded would be the next class meeting, one week later. Sometimes I have more
assignments than I can get graded within a week. Unless something drastic and unforeseen
happens, the longest you should ever have to wait to know your grade is two weeks. Meantime,
you will already be working on the next assignment, as I work on the most recent one you sent.

Any questions or problems you may have, I will happily respond to them. So please do not
hesitate to contact me.

I am confident that you will make an excellent effort as you move through this course, and that
you will benefit significantly in both your professional and personal life. Additionally, I think
you will enjoy the experience.

Best wishes!

Don Dickerson

DrD1@cox.net
HTU UTH

(402) 770-1149
DrD1@cox.net
HTU UTH

Note the numeral one after DrD. It is not the letter l (el)!!! The only period is after cox.
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Send as a Word document attachment to the e-mail

 BUS 603 Ethics and Social Responsibility
Instructor: Dr. Don Dickerson
(402) 770-1149
DrD1@cox.net
HTU UTH

Note the numeral one after DrD. It is not the letter l (el)!!! The only period is after cox.
Send as a Word document attachment to the e-mail

TEXT: Business Ethics, Concepts and Cases, 6th ed., Manuel G. Velasquez,
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Prentice Hall, 2006.

ASSIGNMENT #1 (Due date Monday, 04 Nov 2006)

The first thing I want you to do is to get a “feel” for your ethical orientation. Go to
http://www.ethicsandbusiness.org/stylequiz.htm There you will find the Ethical Orientation
HTU UTH

Questionnaire. Complete the questionnaire, identify your orientation, and go on to read what
that orientation means. Write a couple of paragraphs below telling me the orientation the
instrument has identified as yours. Do you agree? Can you think of decisions you have made
that seem inevitable based on your ethical orientation?

__________________________________________________________
Values Profile
Adapted from: The Art of Leadership, 2nd ed.,
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George Manning and Kent Curtis. McGraw-Hill, 2006.

The following is a values clarification exercise. The purpose is to increase self-understanding

and examine current behaviors in light of personal values. Use the questions below to construct
a brief profile of you. Answer with words, and short statements as directed.

Write four words that represent your most cherished values in life.
1.

2.

3.

4.

5. Use a sentence or two to answer the question, Who am I?

6. State three peak experiences in your life (most exhilarating).

7. State your three best skills or aptitudes.

8. State your two best physical characteristics or attributes.

9. When most people think of you, what do they say?

10. What three things about yourself would you like to improve?

11. Use a sentence or two to describe your occupational goals.

12. Who have been the three same-sex individuals who have had the most influence on your life?

13. Who have been the three opposite-sex individuals who have had the most influence on your
life?

14. What are your three biggest fears?

15. What are your three greatest accomplishments to this point in your life?

16. What are your three highest priority life goals?

17. What is the personal motto by which you try to live?

____________________________________________________________________________

Now that you have examined your most valuable resource – yourself, let’s see how your
orientation to ethics and your value system lead you to make judgments. Begin by reading
chapter I, Ethics and Business, chapter 2, Ethical Principles in Business, and chapter 3, The
Business System: Government, Markets, and International Trade.

Now it is time to tell me what you think.

1. In chapter I, Carol Gilligan offers a powerful critique of Kohlberg's views of moral
development. Discuss her theory, and evaluate it in comparison to Kohlberg's theory. Which
theory seems more helpful in describing how humans develop their moral judgment?

2. Read the Case, Napster's, Grokster’s, and StreamCast’s Revolution, pp. 148-149. Then,
answer these questions:

a. What are the legal issues involved in this case, and what are the moral issues? How are the
two different kinds of issues different from each other, and how are they related to each other?
Identify and distinguish the "systematic, corporate, and individual issues" involved in this case.

b. In your judgement, was it morally wrong for Shawn Fanning to develop and release his
technology to the world given its possible uses? Was it morally wrong for an individual to use
Napster's website and software to copy for free the copyrighted music on another person's hard
drive? If you believe it was not morally wrong, how would you defend your views against the
claim that such copying is stealing? Assume that it was not illegal for an individual to copy
music using Napster. Would there then be anything immoral with doing so? Explain.

c.. Assume that it is morally wrong for a person to use Napster's website and software to make a
copy of copyrighted music. Who, then, would be morally responsible for this person's wrong-
doing? Would only the person himself be morally responsible? Would Napster, the company
who made the copying possible, be morally responsible? Would Shawn Fanning be morally
responsible? Would any employee of Napster be morally responsible? Would the operator of
the server of that portion of the Internet used for the copying be morally responsible? What if
the person did not know that the music was copyrighted or did not think it was illegal to copy
copyrighted music?

d. Do the music companies share any of the moral responsibility for what has happened? How
do you think technology like Napster is likely to change the music industry? In you judgement,
are these changes ethically good or ethically bad?

3. Now, read the short Case for Discussion, Publius, pp. 118-119, and answer these questions:

a. Analyze the ethics of marketing Publius using utilitarianism, rights, justice, and caring. In
you judgement, is it ethical to market Publius? Explain your answer.

b. Are the creators of Publius in any way morally responsible for any criminal acts that criminals
are able to carry out and keep secret by relying on Publius? Is AT&T in any way morally
responsible for these criminal acts? Explain your answers.

c. In your judgement, should governments allow the implementation of Publius? Why or why
not?

4. Read the following Case, Phillip Morris" Troubles. Then answer the questions that follow
the case:

Philip Morris’s Troubles

Financially speaking, 1995 was an outstanding year for Philip Morris, a combination
tobacco, food, and beer company. Total company profits before taxes increased by 15 percent
over the previous year; in the tobacco segment of the company worldwide profits rose by 16
percent; profits in its food segment increased by 7 percent and the beer segment’s profits
increased by 8 percent.1 Yet all was not well. As of the end of 1995 there were 125 lawsuits
pending against the company for recovery of damages to health alleged to have been caused by
the company’s tobacco products. Its beer segment was under attack by several consumer groups
claiming that alcoholic beverages imposed heavy costs on society including numerous deaths
attributable to drunk driving. And activists were accusing the company of laundering the “dirty
money” it had made in the cigarette business by using it to buy up clean food businesses, in
effect protecting these funds from any potential liability that might strike its tobacco business.
Philip Morris, with 1995 revenues of $53 billion, profits of $5.45 billion, and 151,000
employees, is both the nation’s largest cigarette manufacturer and its largest food company.
Philip Morris was already the largest tobacco company in the United States by the late
1960s when virtually all of its revenues were derived from tobacco sales. Then, accelerating a
long-term strategy of diversifying away from the tobacco industry, (a strategy that would become
common in the tobacco industry) Philip Morris used the huge cash flows streaming from its
tobacco businesses to acquire Miller Brewing Company in 1970. In 1985 it bought General
Foods for $5.6 billion, setting a record for the biggest non-oil merger in history. Three
years later Philip Morris paid $12.9 billion for Kraft, then the largest food company in the United
States. In 1990 the company acquired Suchard, a Swiss coffee and confectionery company, for
$3.8 billion—making it the world’s largest food company—and in 1993 it purchased Freia
Marabou, a Scandinavian candy company, for $1.3 billion. Among the company’s well known
cigarette brands are Benson & Hedges, Marlboro, and Virginia Slims. Its beer brands include
Miller Genuine Draft, High Life, Lowenbrau, Miller Lite, and Milwaukee’s Best. Food brands
include Post Cereals, Kraft Jell-O, Birds Eye, Maxwell House, Velveeta, and Oscar Mayer. In
1995 the company’s tobacco operations accounted for 50 percent of the company’s revenues and
63 percent of its profits while food products accounted for 42 percent of revenues and 32 percent
of profits. Beer brewing provided 7 percent of revenues and 4 percent of profits. The company’s
financial and real estate ventures accounted for the remaining 1 percent of revenues and profits.2
Philip Morris’s Marlboro brand, the world’s best-selling cigarette, held 31 percent of the U.S.
market in 1995 and the company’s other tobacco products held an additional 16 percent of the
U.S. market, for a total U.S. market share of 47 percent. The company had captured 12 percent
of the market outside the United States and in some regions such as Germany, Western Europe,
and Latin America, its market share was well over 20 percent. Total world sales of Marlboro
cigarettes were estimated to be well over $10 billion. International sales accounted for 50 percent
of the company’s total revenues and 40 percent of its operating profits in 1995.
The domestic beer market had been in the doldrums since going into decline in the early
1980s. In spite of a continuing overall contraction in the market from 180 million barrels in
1994, to 171 million in 1995, however, Philip Morris’ Miller had managed to increase its market
share, doing so at the expense of Coors, Stroh, Heilman, and some smaller regional brewers.
Hurt by the recession of the early 1990s, the food industry had also not been doing well.
Nevertheless, by reducing its workforce, implementing cost reductions, and pushing aggressively
into new international markets, Philip Morris had managed to raise its food income per employee
by 43 percent between 1991 and 1995, raise food income margins to 15.3 percent in 1995, and
increase 1995 food income by 7.5 percent.
In 1991 Michael Miles became CEO of the company, the first nonsmoker to run the
company. Under Miles the company continued to increase its share of the cigarette market in
spite of a decline both in the number of cigarettes sold each year and in the number of Americans
smoking. The average adult smoker in 1994 had consumed 2470 cigarettes, down 26 percent
from 3370 in 1985. In 1995 U.S. consumers smoked 1.7 percent fewer cigarettes than in 1994.
Nevertheless, although U.S. consumption of cigarettes had declined since the early 1960s, Philip
Morris continued to increase both its sales and its market share. By 1994 Philip Morris held 45
percent of the market, followed by R. J. Reynolds with 27 percent, Brown & Williamson with 11
percent, Lorillard with 7 percent, American with 2 percent, and Liggett with 2 percent.
Competition in the contracting industry was now extremely intense. Competition, however, was
not Philip Morris’ main headache.
In 1995, the Federal Drug Administration (FDA) had intensified its attacks on the industry
with the announcement that 400,000 Americans died of causes related to smoking each year,
more than 1000 deaths a day. An average of five and a half minutes of life are lost for each
cigarette smoked. While smoking among adult men had been declining, smoking among children
was rising rapidly. So many adult women had taken up smoking that lung cancer now killed
more women than breast cancer. The FDA claimed that smoking illnesses accounted for 11
percent of the aggregate costs of all illnesses in the United States. For men between 45 and 64,
25 percent of disability days were associated with cigarette smoking. Indirect economic losses
from reduced productivity and lost earnings were estimated at $37 billion per year, and total
economic losses at $65 billion a year.
Since the 1950s the tobacco industry had been buffeted by studies linking smoking with
cancer. Large scale studies published in medical research journals in the early 1950s associated
repeated cigarette use with high rates of lung cancer. In 1954 the widely read magazine Reader’s
Digest published a popular article summarizing the medical research that linked smoking and
cancer intensifying the concern of the public. In spite of bitter protests from the industry, the
Surgeon General of the United States in 1964 released its own report linking cigarette smoking
to cancer. In 1966 Congress required health warnings to be placed on all cigarette packages, a
law that it amended in 1969 to require sterner warnings and again in 1985 to require rotating
health warnings indicating the relationship between cigarette smoking and lung cancer, heart
disease, emphysema, fetal injury, and premature births. A new concern had surfaced in 1986
when the Surgeon General of the United States and the National Academy of Sciences reported
that nonsmokers were at increased risk of lung cancer and respiratory illness when exposed to
environments containing second-hand smoke.
In 1994 the Food and Drug Administration turned its attention to the addictive nature of
cigarettes. The Surgeon General had already issued a report in 1988 summarizing research that
nicotine was addictive. The FDA now announced it was prepared to recommend that because of
their addictive nature, cigarettes—a “nicotine delivery device”—should be regulated like a drug
under the jurisdiction of the FDA.
In 1994 Congress held hearings on the question whether the nicotine in cigarettes is an
addictive drug and whether the cigarette industry was manipulating the nicotine levels of
cigarettes. The executives of all the tobacco companies were called to testify. At the hearings,
William Campbell, head of Philip Morris’s tobacco unit, in a sworn statement, denied that
nicotine was addictive and said that the company “does not manipulate nor independently control
the level of nicotine in our cigarettes. ... [N]icotine contributes to the taste of cigarettes and the
pleasures of smoking. The presence of nicotine, however, does not make cigarettes a drug or
smoking an addiction.”4 P P

On April 1, 1994, Congressman Henry A. Waxman announced that a committee he headed

had found evidence that Philip Morris had suppressed a 1983 study by Dr. Victor DeNoble that
had produced definitive evidence of the addictive qualities of tobacco in rats, and that Philip
Morris had, therefore, known since that time that tobacco was addictive. Waxman stated that the
discovery “goes to the basic question that was raised in our hearing: ‘Have the American people
been manipulated into thinking that smoking is a matter of choice, or in fact is it a choice denied
them because of the possible intentional manipulation of nicotine levels to keep them
addicted?’”5 Waxman’s findings were corroborated when, on March 19, 1996, the FDA released
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sworn statements from two Philip Morris research scientists and a Philip Morris plant manager
contradicting Campbell’s testimony.6 Jerome Rivers, the plant manager, outlined a sophisticated
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manufacturing process in which the levels of nicotine in tobacco were carefully monitored and
during which tobacco whose nicotine levels were “out of spec” was pulled out and reprocessed.
Ian Uydess, one of the research scientists testified that “Nicotine levels were routinely targeted
and adjusted by Philip Morris in its various products at least in part” and that “Dr. DeNoble’s
research on nicotine analogues” was known in the company where “there was a growing concern
among Philip Morris management” about the use of the term “addictive” and where “internal
reports were increasingly scrutinized by Philip Morris management.” Dr. W. Farone, former
director of the company’s applied research also testified to the company’s “sequestering of much
good science.” Earlier an internal Philip Morris document written about 1992 by a Philip Morris
employee had surfaced stating that people smoked mainly “to deliver nicotine into their bodies”
and comparing nicotine to “cocaine, atropine and morphine” in its effects on the brain.7P P

Jeffrey Wigand, a former manager for Brown & Williamson, one of Philip Morris’s main
competitors, had testified on November 29, 1995 that Brown and Williamson’s CEO had also
lied to Congress during the hearings when he had said “I believe nicotine is not addictive.”8 The
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U.S. government now initiated a criminal investigation of U.S. tobacco industry executives to
determine whether they had lied at the hearings and fraudulently concealed from the public the
addictive nature of smoking nicotine products. Several class action suits were filed against Philip
Morris alleging damages to health arising from the company’s failure to warn of the addictive
nature of smoking. The Food and Drug Administration announced in August 1995 that it was
considering sweeping new rules to regulate the advertising and sale of tobacco particularly to
minors. In addition, several states and two insurance companies had filed new suits seeking
reimbursement of the medical costs alleged to have resulted from caring for citizens who had
used the products of the tobacco companies. Philip Morris, together with the other cigarette
companies, had responded that states were already compensated for smokers’ health costs
through heavy excise taxes, that smoking imposes few costs on government and may save states
money when sick people die early, and that once tobacco’s contributions to the economy are
factored in tobacco makes a positive economic contribution to a state’s economy. A report
released in late January 1996 by the Centers for Disease Control, however, calculated
that the direct medical cost of smoking totals $50 billion a year, more than twice the $21 billion
in state revenues from tobacco growing and manufacturing.9 P P

On the other hand, an earlier 1993 report by the Office of Technology Assessment claimed
that in 1993 smokers paid $13.3 billion in excise and sales taxes but cost governments only $8.9
billion in health-care expenses. As of December 31, 1995, over 125 cases were pending against
the company seeking compensatory and, in some cases, punitive damages for cancer and other
health effects claimed to have resulted from cigarette smoking or exposure to cigarette smoking.
While previously sued more than 300 times in court, cigarette companies had never lost a case.
Among the defenses used in litigation by Philip Morris, was the argument that complying
with the 1965 Federal Cigarette Labeling and Advertising Act, particularly as amended in 1969,
protected the company from claims that it failed to warn smokers that cigarettes were
dangerous, a defense that five federal courts of appeal had upheld.10 Philip Morris also argued
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that the studies linking smoking to lung cancer were not conclusive. In particular, the company
claimed that since not all smokers got lung cancer, there was no demonstrable cause-effect
relationship between smoking and lung cancer. The company also argued that smoking was not
addictive and, consequently, smokers were free to quit smoking any time they wanted. Smoking,
the company claimed, was a matter of personal choice and all individuals should be left free to
exercise their personal right to smoke when, where, and as much as they choose. Moreover, even
if cigarette smoking were dangerous, the company claimed, the warnings on cigarettes required
by the federal government gave smokers a knowledge of the risks associated with smoking and
so it could not be argued that they did not willingly assume those risks.
While escalating health concerns were creating a declining market in the United States,
citizens of other countries who were not as educated about the risks of smoking were a rising
opportunity. The governments of many countries, especially in the Third World, did not spend
much money on antismoking campaigns, and many were reluctant to give up the tax revenues
associated with cigarettes. As U.S. markets declined, therefore, tobacco companies, particularly
Philip Morris, moved into foreign markets, especially into Third World and, more recently, into
East European markets. The company was one of the first American companies to sell its
cigarettes in China, and had expanded vigorously into Eastern Europe after the collapse of the
Soviet Union in 1990. While United States per capita consumption of cigarettes declined by 25
percent between 1985 and 1994, U.S. tobacco exports rose by 367 percent, from 64 billion to 235
billion cigarettes. Much of the rise in exports was the result of U.S. government pressures that
had forced the dropping of import barriers in Turkey, Japan, Taiwan, South Korea, Thailand, and
the members of the former Soviet Union, all countries where American-blend cigarettes,
especially Philip Morris’s Marlboro brand, were becoming highly popular. Turkey was
considered a key location since it borders the former Soviet Union and is a stepping stone to
Asia. Moreover, Turks are heavy smokers and Turkish cigarette consumption was expected to
grow 3 to 9 percent annually.
Philip Morris’s beer business was also under pressure. Growing awareness of the large
social costs associated with alcohol consumption and drunk driving had been spurring lawmakers
into passing a variety of alcohol regulations. The Alcoholic Beverage Labeling Act of 1988
already required all alcoholic beverages to carry warnings associating the consumption of
alcohol with health problems, the risk of birth defects, and a lowered ability to drive a car or
operate machinery. Even the company’s forays into the food industry were being assailed by
critics. Critics pointed out that Philip Morris was using the revenues being generated by its
tobacco units to buy food companies. The company, critics alleged was in effect “laundering” its
“tainted” cigarette money by transferring it into the food industry where it would be sheltered
from the litigation threatening its cigarette division.
NOTES
1. Philip Morris, Annual Report, 1995.
2. Philip Morris Companies, Inc., Securities and Exchange Commission Form
10-K, 1991, p. 1.
3. U.S. Department of Commerce, U.S. Industrial Outlook, 1994, (Washington: Government Printing
Office, 1994), pp. 34–11 to 34–21.
4. Alix M. Freedman, “Philip Morris Memo Likens Nicotine to Such Drugs as Cocaine, Morphine,” Wall
Street Journal, 8 December 1995.
5. Philip J. Hilts, “Philip Morris Blocked ’83 Paper Showing Tobacco Is Addictive, Panel Finds,” New York
Times, 1 April 1994, p. A21.
6. Tim Friend, “New Heat on Tobacco Firm,” USA Today, 19 March 1996, p. A1; “Tobacco Industry Under
Fire,” USA Today, 19 March 1996, p. B2; Dough Henry, “Whistleblowers Wreak Havoc,” USA Today, 19
March 1996, p. B2.
7. Ibid.
8. Alix Freedman, “Cigarette Defector Says CEO Lied to Congress About View of Nicotine,” Wall Street
Journal, 26 January, 1996, p. A1.
 9. “Does Tobacco Pay Its Way?” Business Week, 19 February, 1996, p. 89–90.
10. Philip Morris Companies, Inc., Securities and Exchange Commission Form
10-K, 1991, p. 4.

a. Identify all of the moral issues that are raised by Phillip Morris' activities in the tobacco, beer,
and food industries. Discuss these issues in terms of utilitarianism, rights, justice, and care.

b. Both the tobacco and beer industries have been characterized as "sin industries." Comment
on the extent to which virtue theory sheds light on the company's activities in these industries.

c. What, in your judgement, would be a morally appropriate course of action for the government
agencies involved in this case?

Remember to do all of your writing on the documents I send you. Do not send them in a
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separate format.

Even when we are using a case from the text, I have reproduced the questions following the
case onto the assignment document in order to avoid confusion. Simply insert your cursor
after a question, space down, and began to type. Type your answers directly on this
U

document in some color other than black, but not RED, because I will use RED for my
U

feedback. Blue is okay. Just pick a dark color. Bold is okay too.

When you have completed all of the work for this assignment, save this first document as:
U

YourlastnameBUS603_1.doc and send it back to me as an e-mail attachment.

U

Send to: DrD1@cox.net

HTU UTH

Note the numeral one after DrD. It is not the letter l (el)!!! The only period is after cox.
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Send as a Word document attachment to the e-mail

[This part if for those who may not know just how to do this]. Once you have finished all
this assignment, go to the top of your screen and click on FILE. Then click on SEND TO
(or e-mail to) MAIL RECIPIENT (as attachment). You should then have a regular e-mail
on your screen. All you do is address it and send it to me. Be sure to send a copy of it to
yourself. Check to see if it has the attachment!!!

Or you can go directly to your e-mail, address it to me and then click on ATTACHMENT.
Then you will have to locate where the document is and click on it. An icon should appear
on your screen indicating that it is indeed attached. Again, send yourself a copy. That way
you will know if what you sent has the attachment!!!

Once again, When you have completed all of the work for the assignment, save this first
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document as:
YourlastnameBUS603_1.doc and send it back to me as an e-mail attachment. It would look
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like this: DickersonBUS603 1.doc

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My e-mail address is DrD1@cox.net

HTU UTH