If the beneficial consequences
for a society or the world are what externally
validate corporations being socially responsible, does it really matter
whether or not such benefits serve as the validators within the corporations? In other words, how much does the motive
matter if stuff is getting done such that society is benefitting? To be sure,
the motive can influence how much is getting done and for how long, but if the
societal results are the same, would the nature of the motive really matter? I
lay to the side the perfectly valid point that providing goods and services of
value to customers benefits a society because consumers are, after all, a part
of society. The interesting cases tend to be those in which profits can be
expected to be negatively impacted from a socially responsible policy or
program. Of course, a corporate management may announce the expectation of reduced revenue even as the management
has carefully calculated how acting responsibly will be likely to be a
profit-oriented strategy in the long term (including the related enhancement of
reputational capital from appearing to
have been self-sacrificial. The case of Juul Labs, Inc., the vaping industry
leader in 2019 with a market share of 64 percent, shows just how difficult it
is to get to corporate motives, even though the beneficial consequences to a
society are arguably more important.
In 2019, Juul “voluntarily
pulled its sweet, fruity and mint-flavored refill pods from the U.S. market.”[1]
The company’s CEO pointed out in a meeting at the White House that flavors can
help adult cigarette smokers switch to a less harmful alternative, so the
company “would defer to the science-based approach of the Food and Drug
Administration.”[2]
President Trump had announced his intention to ban all flavors except that of
tobacco. In refusing to follow Juul’s lead, NJOY and Reynolds American, Inc.,
makers of the second and third most popular vapers, kept selling all of their
respective flavors, including those especially popular with teenagers.
Joseph Fragnito, a manager at
Reynolds, said at the meeting, “We believe we can market flavors responsibly.”[3]
At that meeting, President Trump, fearful of banned flavors being sold on the
street and thus unsafe, was coming to the same stance. So had Juul gone too far
in having taking kid flavors off the shelves if even those flavors could be
marketed responsibly? In other words, had Juul lost revenue when the company
could have changed how it marketed the inflammatory flavors? On the other hand,
can flavors so attractive to teenagers be marketed in such a way that teenagers
do not vape? In such a case, responsibly
market may be an oxymoron, especially given that NJOY and Reynolds
supported raising the minimum vaping age to 21. U.S. Sen. Mitt Romney, also at
the White House meeting, supported Juul’s ban on certain flavors. “Putting out
cotton-candy flavor and what is it, unicorn poop flavor?,” he said in reference
to Juul’s competitors. “Look, this is kid product,” he added. “We have to put
the kids first.”[4] Therefore,
I submit that Juul applied responsibility better in banning such “kid product”
than NJOY and Reynolds did in applying the concept to marketing the kid
flavors.
This does not, however,
absolve Juul with respect to its motive. At the White House meeting, the
company’s rivals claimed that Juul’s management had voluntarily pulled its
flavored products because it could sit out and wait for authorization from the
Federal Drug Administration (FDA) as smaller companies went out of business.
Then Juul would be able to come back with even more market share. Juul’s CEO
countered that the company had banned its flavored products to address the
problem of youth use. Whether or not the company’s socially responsible action
was ultimately designed to increase market share or reduce the youth use of
vaping—that is, to increase profits in the long-term or reduce teen vapers—the
question is: Does this make any difference if the benefit to society in terms
of less youth vaping is the same? I contend that the difference is ethical in
nature, except from a consequentialist standpoint. In other words, an ethical
basis exists—that of consequentialism—that essentially treats the question of
motive as a non-issue.
Of course, if the societal
benefits differ according to motive, the motive would matter even from a consequentialist
ethical basis. If the motive of Juul’s management was to increase market share
rather than see fewer kids vaping, then should the market-share strategy become
compromised or fail, the societal benefits could be expected to be less than
had the company’s management been intending to reduce youth vaping, which in
turn could be expected to result in less government intrusion and greater
reputational capital.
Regarding the market-share
strategy, could not young Juul customers simply start buying the sweet flavors
from the other companies? Although they would have to justify their flavors to
the FDA, the president was inclined to allow the flavors to be sold because
otherwise kids might get them on the street. Would not Juul eventually go back
to competing in those flavors? The other companies would not have gone out of
business because the FDA would have approved the flavors. Juul’s management had
pulled its flavors when President Trump was inclined to ban them industrywide.
The changed politics, likely influenced by industry pressure (and perhaps
campaign contributions), may have taken the wind out of the market-share
motive, in which case the societal benefit would be less than had the motive
been that of reducing youth vaping.
In conclusion, motive can matter even from a
consequentialist standpoint because the amount of benefit to society can
differ. In cases in which such benefits are the same even if the motive is one
thing or another, the motive does not matter from a consequentalist standpoint.
Even so, we want to think it does, ethically speaking. We want to assume that a
management acting in a socially responsible way values doing so, rather than
merely using social responsibility to earn more profit even in the long term.
The field of business and society looks at the degree of fit between societal
and company values, norms, or policies (as the corporate values may not matter),
whereas business ethics delves into the ethical basis of a management’s motive.
For example, is it enough that society benefits? Shouldn’t a company’s
management want that consequence even
if it comes with some financial loss (or opportunity cost)? These two fields
are typically conflated at this point of contact. To say that Juul’s motive was
in line with societal values is not to say what the motive should be. More than
description is needed to get to normativity: the matter of should. We want to believe that Juul’s motive was the right one, but this is an ethical
point that may not be relevant from a consequentialist standpoint. In terms of
the degree of fit between corporate policies and societal values, the extent to
which a society benefits is the litmus test.
1. Jennifer Maloney and Alex Leary, “Trump Warns of Dangers in Banning Vape
Flavors,” The Wall Street Journal,
November 22, 2019.
2. Ibid.
3. Ibid.
4. Ibid.
