1. Phillip Morris
Implications of Unethical Behavior

2. Historical Summary
• Philip Morris International Inc. (PMI) is the leading international tobacco company, with seven
of the world’s top 15 international brands, including Marlboro, the world’s best-selling cigarette
brand.
• Our goals are to provide high quality and innovative products to adult smokers, generate superior
returns for shareholders, and reduce the harm caused by smoking while operating our business
sustainably and with integrity.
• Until March 28, 2008, PMI was a wholly owned subsidiary of Altria Group, Inc. “Altria”, since
that time the company has been independent and is listed on the New York Stock Exchange
(ticker symbol “PM”).
• Philip Morris Inc. is one of biggest tobacco companies, with 45% of the U.S. market and 12% of
the world market. Tobacco accounts for about 72% (1989 figure) of the company's profits.
• It's Marlboro brand alone (the world's best selling brand) was estimated to have killed 75,000
Americans in one year.

3. Unethical Behavior/Event Examined
• Tobacco companies have lured American smokers over the years through their
deceptive marketing practices, manipulated advertising campaigns ignoring the
health hazards due to smoking, and even indulged in political lobbying.
• Tobacco companies have grown into enormous multinational conglomerates.
• Tobacco causes to society, and also the growing concern among the public,
• The US government imposed certain restrictions on the advertising of tobacco-
related products in order to prevent children and teenagers from falling a prey to
the perils of smoking.
• The government's intervention forced the tobacco companies to try out new
techniques and strategies to sell their products.
• The imposition of restrictions on tobacco advertising did little to help the
government prevent these companies from selling their products to young people.

4. Reflection on Ethical Standards
• PM USA is guided by Altria Group’s Mission, as well as Altria's Code of
Conduct, and is committed to marketing our products
• To responsibly market products by building relationships between our brands
and adult smokers while taking steps designed to limit reach to unintended
audiences.
• We want adult smokers of our brands to purchase our brands consistently; and
compete for adult smokers of competitor brands to switch to our brands to grow
our market share.
• We have practices in place to focus our marketing activities toward adult
smokers while limiting reach to unintended audiences.
• Altria and its companies (Philip Morris) , reflects on commitment to protect
those who seek advice, raise concerns or report misconduct.
• PM USA does not tolerate retaliation by management or co-workers against
anyone who in good faith reports an actual or potential non-compliance concern.

5. Influence of Leadership
• There is nothing unethical about the corporation manufacturing those goods, selling
those goods, or marketing those goods to people who can legally purchase them.
• It IS unethical to market tobacco in a manner that exposes them to legal liability
(and risks losing lawsuits) or in a manner that is against the law (risking government
sanctions).
• Since it is legal to lobby the government, as long as it is a favorable return on
investment there is nothing unethical about the industry hiring individuals to push for
laws that lower their restrictions or increase their profits.
• This is what people learn these days in business school find every loophole and
exploit it because not only is it not wrong, but it's your obligation to the company
and investors.
• On a larger scale, it's your obligation to the nation and society since the more money
companies make, the better the economy is doing, right?
• These are the Regan era trickle-down economic policies - the free market will sort
everything else out because if it doesn't hurt your bottom line, it isn't bad

6. Social Responsibility
• Philip Morris USA and U.S. Smokeless Tobacco Company shared perspectives and
information with the Food and Drug Administration on important tobacco product
issues through written submissions, meetings and presentations.
• Altria Group adopted and communicated its Standards for Underage Tobacco
Prevention to its tobacco operating companies to guide their efforts to help re-duce
underage tobacco use.
• Altria’s tobacco companies provided grants to help kids avoid risky behaviors like
tobacco use in 2010. These grants are expected to reach approximately 1.3 million
kids and 829,000 adult influencers, primarily in the Southeast.
• Altria’s tobacco companies provided funding to support Search Institute’s launch of
ParentFurther.com, a new resource for parents and other caring adults. First-year visits
exceeded Search Institute's goal by 82 percent.
• Duke University completed its PM USA-funded evaluation of the QuitAssist® website

7. Cultural Environmental Legal Implications
• Scholarships for Education
• Charitable Contributions
• Leadership Programs
• Rural and Migrant Immigration Grants
• Hunger and Poverty
• Fight on Domestic Violence
• Cleaning Garbage and and Illegal Construction
• Disaster Relief

8. Impact on Stakeholders
• Identify and manage emerging issues
• Inform our business processes
• Including our annual strategic planning and risk management processes
• Continue our efforts to align with society
• Prioritize topics and issues for both business action and reporting
• Build a better understanding of Altria Group and its companies.

9. Impact on Stakeholders
• Increase our understanding of the views of others
• Enhance our ability to help resolve those issues
• Experience that external engagement
• Inform business decisions.
• Shareholders to tobacco growers, trade partners and public health organizations.

10. Outcome of Event with a Comparison of the Consequences
• Early tobacco industry divestment efforts,
• Rise of the socially responsible investment movement,
• Litigation against major tobacco companies,
• Emphasis on tobacco industry
• Tobacco control strategy created a climate within which tobacco divestment
• Divestment advocates framed the issue as one of responsible social policy,
• Focusing on the ethical disconnect involved in profiting from such a
health‐destroying product. Framing refusal to divest as a matter of responsible
fiscal policy,
• Advocates replied with arguments about the increasing lability of tobacco
industry finances
• Face ongoing litigation and proposed government regulation,
• Adopting the industry preferred framing while stressing a different solution.
• State attorneys general began suing the industry to recover smoking‐related
• Medicaid costs advocates enlarged their frame to highlight the contradictions
arising from state justice departments suing the industry, and state health
departments expanding tobacco control

11. Fairness of Punishment
• Media Fairness
• Fairness for the Power
• Fines for Plaintiffs
• Improve Corporate Responsibility
• Investor relationships enhanced

12. Recommendations for Action
• PM's income development has slightly outpaced the
commerce mean of 1.4%. Since the identical quarter one
year former, incomes slightly expanded by 0.1%.
development in the company's revenue appears to have
assisted boost the earnings per share
• Phillip Morris USA, they have ways to ensure that their
goods come to the adult cigarette users in a most
effective, responsible and a profitable way. This occurs
through one-on-one communication with the users
lawfully permitted to use cigarettes.

13. References
• Tang, M. (2001). The Marlboro Man's Secret versus the Public Health: Trade Secrets
and Unconstitutional Takings in Phillip Morris v. Reilly. Hastings Constitutional Law
Quarterly, 28829.
• Hodge, J., Collmer, V., Orenstein, D., Millea, C., & Van Buren, L. (2013).
Reconsidering the Legality of Cigarette Smoking Advertisements on Television Public
Health and the Law. Journal Of Law, Medicine & Ethics, 41(1), 369-373.
• Stoll, M. (2002). The Ethics of Marketing Good Corporate Conduct. Journal Of
Business Ethics, 41(1/2), 121.
• Tort Law - Proof of Harm in Tobacco Cases - Supreme Judicial Court of
Massachusetts Recognizes Cause of Action for Medical Monitoring of Tobacco Users.
- Donovan v. Philip Morris USA, Inc., 914 N.E.2d 891 (Mass. 2009). (2010). Harvard
Law Review, 1231771.
• Stucke, M. (2013). LOOKING AT THE MONOPSONY IN THE MIRROR. Emory Law Journal,
62(6), 1509-1562.
• Berman, M. L. (2008). 'SAFER' TOBACCO PRODUCTS: REDUCING HARM OR
GIVING FALSE HOPE? TOBACCO LITIGATION WITHOUT THE SMOKE?
CIGARETTE COMPANIES IN THE SMOKELESS TOBACCO INDUSTRY. Journal Of
Health Care Law & Policy, 117.