Introduction
Modern businesses operate in complex environments and are influenced by social, political, economic, legal, and technological forces. Unethical decision-making can lead enterprises to hurt their stakeholders and damage companies’ profitability in the long run. The present report will focus on Juul Labs, a company producing electronic tobacco products. The report will show how the company’s business and purpose-led to unethical decision-making and explore the influence of the company on its stakeholders. The text will also show how Juul Labs’ business activities were influenced by the recent scandal, thus illustrating the multi-faceted relationship between the company, society, and the government.
Juul Labs Business and Purpose
Juul Labs is an American company that develops, manufactures, and sells electronic cigarettes. The company’s products include electronic smoking devices, cartridges, and accessories (Bloomberg, 2020). The sale of these products is the primary line of revenue for the company. Juul Labs was founded in 2007 and is headquartered in San Francisco, California. The company is owned by shareholders, with the largest shareholder being Altria Group. The company’s profits are distributed to its shareholders, making it a for-profit business.
Consequently, profit maximization is the primary purpose of Juul Labs. The company engages in marketing efforts to improve the popularity of its products in the target market. The company also attempted to extend its usual adult audience and market its products to children, which resulted in significant backlash from schools, public officials, and parents (Turner, 2020). Hence, Juul Labs can be studied as an example of a for-profit company making unethical business decisions to generate more revenue.
Juul Labs Stakeholders
Exploring internal and external stakeholders is crucial to understanding the broader impact of a business. Juul Labs’ internal stakeholders include its employees, managers, and owners. These stakeholders have a personal interest in the company since they obtain income from its operations and sales. For instance, employees and managers need Juul Labs to remain stable and financially profitable to avoid staff cuts and earn a competitive salary with bonuses. In a similar manner, the company’s owners are interested in its financial performance since high sales allow them to make more profits. Consequently, owners, managers, and employees support Juul Labs’ business operations through their activities and decisions.
The external stakeholders of a company include suppliers, creditors, customers, society, shareholders, and the government. Suppliers, creditors, and shareholders are interested primarily in the company’s profitability because it influences their income. For example, creditors might lose their money if Juul Labs becomes bankrupt, and thus they want the company to stay stable financially. The government, customers, and society are interested in the company’s products, their quality, and their effects on people’s health.
Juul Labs has influenced these stakeholder groups in various ways. On the one hand, the continued growth and profitability of the company over the past years was beneficial for owners, suppliers, employees, managers, shareholders, and creditors. The government has also benefitted from Juul Labs’ profitability through taxes. On the other hand, the adverse effects of tobacco products on health and the growing popularity of vapes among children affected population health indicators and addiction levels. Thus, the influence of Juul Labs on stakeholders varied from positive to negative across different stakeholder groups.
Shaping of Juul Labs Business Activities
In the past year, the company has been experiencing legal and social pressure due to the rising incidence of vaping among children. According to Kosecki, Reichert, and Brown (2020), the vaping death toll has grown to over 60 people over the last few months, and many states sued Juul for the effects of its products. Moreover, Juul faced lawsuits from school districts for marketing its products to minors, thus driving teen vaping levels up (Turner, 2020). The criticism of Juul Labs is reflected in people’s attitude to the company and its products. This affected the company’s business activities by threatening the future success of Juul Labs and decreasing its profitability.
Business, Government and Society
The current issues with Juul Labs demonstrate the interrelatedness between business, government, and society. First of all, the case shows the wider impact of companies on society. For example, Juul Labs’ decision to market its products to children increased the rate of nicotine addiction among minors (Turner, 2020). This, in turn, affected the health of this population and necessitated action from the government to regulate the situation.
Secondly, the growing incidence of vaping-related illness and death suggests that the products manufactured and sold by Juul Labs are unsafe (Kosecki et al., 2020). This impacts population health outcomes, increasing government spending on healthcare as a result. Therefore, Juul Labs’ business activity affected both society and the government, and the company will be influenced by government regulations and social trends in return.
Conclusion
Overall, the purpose and business of Juul Labs mean that the management has made a number of unethical decisions to drive the sales of the company’s products. While this had a positive effect on some groups of stakeholders, the wider society and customers suffered due to the increased incidence of illness and addiction connected to Juul Labs’ products. The public outrage and legal action against the company damaged its business activity by reducing the popularity of its products and threatening its survival. Hence, the case illustrates the ways in which businesses are connected to their broader social and political contexts.
References
Bloomberg. (2020). JUUL Labs inc. Web.
Kosecki, D., Reichert, C., & Brown, S. (2020). Vaping: FDA to ban sale of flavored cartridge-based products. CNet. Web.
Turner, T. (2020). How Juul created a teen vaping epidemic. Drug Watch. Web.