Case
Teaching Notes
Supplementary Resources
Abstract
This case is inspired by trends emerging in the marketing and distribution of cigarettes to African nations. The primary subject matter of this study involves the operation of a multinational cigarette company trying to increase market share in a relatively new and previously unregulated market. This case study describes several hypothetical dilemmas, both overt and subtle, that our fictitious employee Matt Leander, the international marketing director of the multinational cigarette corporation, Sigara, Inc., must navigate. Matt is charged with increasing Sigara’s market share and sales. He must complete this assignment and balance several ethically and legally questionable directives from his direct supervisor. Further, he must consider the fierce competition from other multinational cigarette organizations. Matt must balance the delicate equilibrium of law and ethics interests as he navigates this process.
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
Resources
Exhibit 1. Sigara’s Code of Conduct
Whenever we are confronted with a situation where the proper course of action is not clear, we should ask ourselves:
- Is it legal?
- Does it follow company policy?
- Is it the right thing to do?
- How would it look to those inside and outside the company?
Values
Our values guide our behavior as we pursue our mission and our business strategies.
| Integrity, trust, and respect | Passion to succeed | Executing with quality | Driving creativity into everything we do | Sharing with others |
Mission
Our mission is to own and develop financially disciplined businesses that are leaders in responsibly providing adult tobacco and wine consumers with superior branded products.
| Invest in people | Deliver superior products and brands | Drive positive change | Create substantial value |
Exhibit 2. Sigara Product Development
Making Cigarettes More Addictive
- Increased nicotine: control the delivery and amount of nicotine to create and sustain addiction.
- Ammonia: added ammonia compounds produce higher levels of “freebase” nicotine and increase the speed with which nicotine hits the brain.
- Sugars and acetaldehyde: added sugars make tobacco smoke easier to inhale and, when burned in cigarettes, form acetaldehyde, a cancer-causing chemical that enhances nicotine’s addictive effects.
Making Cigarettes More Attractive
Use chemical additives to make tobacco smoke smoother, less harsh, and more appealing to the young, novice smoker. These additives include:
- Levulinic acid: added organic acid salts, such as levulinic acid, reduce the harshness of nicotine and make the smoke smoother and less irritating.
- Flavorings: added flavors such as licorice or chocolate mask the harshness of the smoke and make tobacco products more appealing to young people (the 2009 Family Prevention and Tobacco Control Act prohibited cigarettes with “characterizing flavors” other than menthol, but did not prohibit the use of flavorings at levels not considered to be characterizing).
- Bronchodilators: these added chemicals expand the lungs’ airways, making it easier for tobacco smoke to pass into the lungs.
- Menthol: menthol cools and numbs the throat to reduce irritation and make the smoke feel smoother.
- Ventilated filters: ventilation holes in cigarette filters cause smokers to inhale more vigorously, drawing carcinogens deeper into the lungs. (Cigarettes with ventilated filters were introduced by tobacco companies because they produced lower levels of tar and nicotine in machine tests and were marketed as less hazardous. However, the evidence now shows that these cigarettes did not reduce health risks and likely increased smokers’ risk of lung cancer.)
Sources
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.
2023 Sage Publications, Inc. All Rights Reserved
