Case Study Question. Here is the CVS: Fired Up about Social Responsibility case

CVS made national news when it announced it was going to stop selling tobacco products, forgoing $2 billion in sales in the short run. CVS claimed it was making this decision because it wanted to position itself as a healthcare company, and it did not see tobacco product sales as being congruent with a company that should be known for health. While this will cost CVS in the short run, it is likely to positively impact future partnerships with healthcare companies. It could also give the firm a competitive advantage over rival firms Rite Aid and Walgreens.

This case discusses CVSs decision. However, students should be aware that even a firm striving to be socially responsible still has ethical lapses. For instance, two Florida CVS locations got into trouble for enabling oxycodone abuse among customers. A shoplifter was killed by a store manager after a scuffle, leading the mans family to file a civil lawsuit against the manager and claiming CVS should be held liable. The company itself has experienced problems with the HIPAA privacy law and potentially deceptive marketing practices.

How companies respond to their ethical lapses reveals whether they learned from their mistakes. After the ethical misconduct took place, CVS took measures to reduce risk areas and increase its positive influence among customers, employees, communities, etc. It has adopted a stakeholder orientation that considers the needs of a variety of stakeholders, including customers, employees, shareholders, communities, suppliers, and the environment. The companys recent acquisition of Targets pharmacies will help increase its reach in other states and solidify its reputation as a healthcare firm.

It has also implemented measures to try and prevent future issues. For instance, in West Virginia CVS voluntarily decided to stop selling some cold medications due to the rising abuse of methamphetamine use in the area. This shows the firm is proactively trying to address potential problems before they snowball into a major crisis.

Students should learn from this case that a company can emerge from past mistakes as a stronger firm. They should also realize that social responsibility is a continuous process requiring organizations to remain vigilant, identify risks, and proactively promote ethical behavior.

- identify the most important facts surrounding the case

- identify the key issue or issues

- specify alternative courses of action

- evaluate each course of action

- recommend the best course of action

- explain the next steps to implement the course of action chose above.