Chapter 8, Additional Exercise 5: On Second Thought, We Probably Shouldn't Have Said That

On July 26, 2001, Philip Morris, the cigarette manufacturer, issued an apology for an action taken by its Czech affiliate. The affiliate had issued a report claiming that, in 1999, cigarette smoking added more than $100 million to the Czech treasury through taxes and the premature deaths of Czech smokers. The report noted that the premature deaths saved the government money by reducing government pensions and housing costs. The Czech affiliate's report is on the Action on Smoking and Health site. Philip Morris's apology is reproduced here in its entirety. Study both documents, and in a 500-word memo to your instructor, analyze Philip Morris's response. Did the Czech affiliate violate ethical standards? Is the response adequate? If not, what else should the company do or say? (See Chapter 14 for a discussion of memos.)