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PHIL215 Lecture Notes - World Health Organization, Conditionality, Corporate Social Responsibility

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Brian Orend

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PHIL 215
Lecture #10
1. Remaining Schedule:
TODAY: see below
NEXT WEEK: International Business Issue & Globalization
LAST CLASS: Corporate Social Responsibility
2. Today:
A. Finish Advertising
B. Sales: Bribery & Gift-Giving
C. Equity / Diversity Issues
D. Ethic of Investing
A. Nestle Baby Formula Scandal
1970-90 (Continuing)
70% of world’s baby formula
$12 Billion / year
Fraud in the global south.
1. Deception / Fraud:
- Medical Testimony / Imagery: Paying actors to say they are doctors.
- Medical Claims: “Baby Formula is better than breastmilk” - FALSE!!! Main ingredient in
baby formula is ASH
2. Very Expensive
3. Mixing It with Dirty Water (because there is lack of clean water supply in global south)
4. Manipulation (Convinced “good mothers” to do this, even modern western women)
5. Damage (World Health Organization estimates 500,000 - 1 million children in the global
south dead due to this over a 20 year period)
Advertising efforts moved from the West to 3rd world countries due to lack of legal restrictions.
- Tobacco
- Asbestos
- Pharmaceuticals
Drug testing:
- The first version of birth control pill tested in Haiti. (At the time, it was 35 times more potent
than what it is currently - this is how drug testing strategy works)
Advertising Rules of T:
1. Obey laws
2. No fraud
3. Special care with children’s advertising
4. *No “misleading” advertising: average consumer standard
5. *Adhere to “community standards” of decency / propriety.
* - ethics quandries
Advertiser’s justification for 4 & 5 is to “cut through the clutter” - the only way to make
advertising stand out is to take risks and push the boundaries of community standards.
Is Advertising Wrong in General?
Vance Packard: “Hidden Persuaders”
J.K. Galbraith: “Affluent Society”
1. Advertising plays on & enhances people’s unhappiness, dissatisfaction, envy. This is not
virtuous + has bad consequences.
2. Wade: Advertising creates false wants & deliberately encourages confusion between
market goods (something that can be bought) & non-market goods (something that
cannot be bought).
3. Packard’s line: “Advertising is the suspension of intelligence long enough to suck money
out of it” - Creation of a false picture of reality that you want to believe it: fantasy.
4. Kantian Objection:
- Lying / deception
- Bad intentions: whatever buttons need to be pushed.
5. Waide: Focus on youth.
- Partly because youth is gullible
- Mostly because of brand loyalty: get them before 25
- Manipulative & exploitation
6. Galbraith: Advertising is designed to maximize aggregate demand by taking and
Defenders of Advertising:
1. Free speech
2. Encourages competition
3. Doesn’t create non-existent need, it just plays on what’s already there
4. You say “manipulation”, we say FUN! (Legitimate cut through the clutter)
5. What’s the alternative?
- Ban advertising?
- Government-only advertising?
6. Consumer has to take responsibility “Buyer Beware!”
“TIM” (RIM) example.
- Competitor against USA / EU companies
- Foreign government official says that he demands a $100,000 bribe just to move his
company’s product up the level of government for comparison.
- Research needed to decide if this is worth it; “Due Diligence”:
1. Bribery was legal in that country
2. Bribery was actually expected culturally
3. Bribery is illegal in Canada
4. Our share-holders won’t agree*
Policies on Bribery / Gift-Giving:
Prohibitive Mixed Approach Permissive
- Nothing
- No way!
- Toyota CDA
- Dollar Limit ($500)
- Durability of good /
- Most businesses will say:
If it’s a shared experience,
it doesn’t count as a bribe;
counts a legitimate business
- If it’s legal + advantageous,
do it!
Law in North America:
Bribery only applies to public officials, or those professionals possessing public trust:
- doctor, lawyer, accountant, etc
It is illegal for North American companies to bribe a public official anywhere in the world
Do Intentions Matter? Does Conditionality Matter?
Yes, morally, but only yes legally if evidence is given. (Hiden their intentions; conditions)