Organization\'s Values Organizational Values: Philip

Organization's Values

Organizational Values: Philip Morris/Altria

Philip Morris/Altria has a kind of paradoxical role in modern commerce -- it is one of the leading producers of a vilified product, namely of cigarettes, but the product is still legal for consumers to use in the United States and abroad. Its official mission, according to the Altria website (2008) is that Altria will: "own and develop financially disciplined businesses that are leaders in responsibly providing adult tobacco consumers with superior branded products" and its values are vaguely defined as: "operating with integrity, trust and respect; demonstrating a passion to succeed; executing with quality; driving creativity; and sharing with others."

The Altria Group's tobacco companies' brands include Marlboro, Basic, Black & Mild, L&M, Parliament and Virginia Slims. Structurally, Altria is a kind of umbrella organization for four major divisions: Altria's parent company of Philip Morris USA; John Middleton, a purveyor of pipe tobacco; and the Philip Morris Capital Corporation, an investment company with a portfolio of leveraged and direct finance lease investments that finance the other major branches of Altria. Altria also has a 28.5% economic interest in SABMiller, the world's second-largest brewer. Thus, the majority of its operations involve potentially controversial products.

While amongst higher-level executives, behind closed doors there may be a 'devil-may-care' attitude towards human health, the public face of the corporation stresses tobacco cessation, given the controversial nature of its main product. Profit rather than ethical responsibility is the primary, driving force of Philip Morris. According to Philip Morris USA's official website, the organization has proved to be profitable: on the third-quarter of 2008, for example, despite the slowing economy, Philip Morris USA's net revenues increased 2.8% to $5.1 billion. Revenues net of excise taxes increased 4.6% to $4.2 billion, primarily driven by lower wholesale promotional allowance rates, partially offset by lower volume. Following the Philip Morris International Inc. (PMI) spin-off in March 2008, PM USA began reporting revenues and costs of sales for contract volume manufactured for PMI consistent with all other sales to third parties.

It is clear that the stress on the 'adult' nature of its product in Altria mission statement is a kind of a legal window-dressing: "Results reveal that brand choices among teenagers are significantly related to cigarette advertising and that the relationship between brand advertising and brand choice is significantly stronger among teenagers than adults...teenagers smoke the most heavily advertised cigarettes at a disproportionately higher rate than adults...the initiation of cigarette smoking among girls younger than eighteen years, as measured by National Health Interview Surveys, increased dramatically with the introduction and advertising of women's cigarettes" (Krugman & King, 200, p.187). Altria markets some of the most popular brand in the world, including Marlboro and Parliament and projecting a cool brand image, embodied in the Marlboro man's rugged, American demeanor, is critical to its success as a company.

The new shift to focusing on smoking cessation, including a 'quit line' advertised on the Philip Morris website, reflects the fallout from the publicity generated by high-profile lawsuits initiated by the States Attorneys General of forty-six states and others. "As a leader in the tobacco industry, Philip Morris was censured in the press with assertions and claims that tobacco companies were misleading the public about the hazards of cigarette smoking and knowingly marketing an addictive product to teenagers" (Glover 2008). To improve its public image and to prevent its stock price from spiraling, as well as to block calls for additional legislation regulating the industry, "the company initiated an advertising campaign that included commercials to prevent smoking among youth and a program to help retailers identify underage smokers. Restructuring itself for a better fit with its environment, the company established a Youth Prevention Department, staffed by a senior vice-president in Philip Morris, U.S.A. To look for ways to help reduce smoking among teenagers" (Glover 2008).

The relative lack of sincerity of these claims and the transparent dishonesty of Philip Morris' claim to stop youths from smoking is manifest in the fact that the company recently filed a suit in federal court to overturn a San Francisco ordinance that would ban the sale of tobacco products in convenience drug stores. It proclaims this proudly on a September 2008 press release on its website: "Philip Morris USA sues to overturn controversial San Francisco sales ban on tobacco products." However, teens are more likely than other consumers to use these venues to purchase cigarettes than other consumers. Philip Morris defends its actions as the promotion of freedom for adult consumers, given that tobacco is a legal product, along with the rhetoric of choice and a deregulated marketplace.