ETHICS AND GOVERNANCE

Big Business Tobacco Co. Ltd (BBT) is a large Australian producer of tobacco products including a market-leader brand of cigarettes. With the continuing development or Asian countries such as China and its move to a market-based economy. The company has made the decision to sell its cigarettes in this large market from the beginning of next month. The cigarettes will be sold in packs of 40.

Mary Bender, marketing manager is discussing the design of the cigarette packet for the Asian market with Randall Hedges, the company's public relations manager. Having agreed on the basic design of the pack. Hedges raised the issue of whether to include the normal health warning on the pack, which has to be displayed under Australian law. He emphasized recent medical findings which predicted many hundreds of thousands of deaths from cigarette smoking in the next few years, particularly in the developing countries.

Mary Bender was strongly opposed to including a 'health hazard' warning on the packs destined for parts of the Asian market. She explained: In this business it is the bottom line (i.e. profits) which matters – we have to think of our shareholders. BBT stands to lose a considerable market share to competitors if it includes such a warning. Besides, it is not a legal requirement in many Asian countries to display a health warning on cigarette packs. If Asian law is subsequently amended then we will be one of the first to comply. Besides, the managing director supports me on this one.'

Hedges expressed a final opinion: 'The Company could be better off in the long term by being seen to be acting with corporate responsibility, and demonstrating some concern for its consumers. Besides, such warnings have not been detrimental to the company's performance in Australia, where health warnings have been common for many years.'

Required

A. Who are the major stakeholders in the debate on the health warnings on cigarette packs?

B. What are the main ethical issues involved in the debate?

C. If you were Randall Hedges, what would you do?

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