I attended Ed Freeman’s lecture this evening, and was captivated by his charisma, intelligence, and passion for stakeholderism. One question I thought of came to me when thinking about the great diversity of interests on the part of consumers as stakeholders, and how would the firm act with a value-creating mindset when the consumer desires something they shouldn’t. Therefore, my question is:
“How would you address a corporation in the business of selling harmful products, like cigarettes? By extension of the stakeholder theory, wouldn’t they have an obligation to not be in this in order to protecting the health interests of their customers?”
Freeman described stakeholderism as being driven by purpose. If a company, and even an industry, has already been fortified to market products that are damaging to the health of their consumers, and in fact were probably the ones who created the consumers’ desire for it in the first place, how can they restructure their business model to create value for their customers? I understand that the production of cigarettes, for example, is consumer-driven, so obviously a company can say that they are creating value for their customers by supplying them with the products they desire, but they also have full knowledge that by “creating value” for them in this way, they are, for lack of a better word, killing them. It’s a sort of purposeful, convenient ignorance. Does knowing a consumer’s true best interest is not the one you’ve chosen to utilize in your business model make the strategy unethical? I just wonder what Freeman would think or suggest.