Two (Healthy) Cheers for CVS!

Faculty member Brett Crawford

Faculty member Brett Crawford

Have you considered the idea that rationality is not exclusive to individuals?  Corporations, themselves, are equally rational, with the abilities and responsibilities to contribute to social change. I believe that corporations exist to create economic value and contribute to society in a manner that upholds their own tenets. The days of profits-first doctrines and revenue generation activities being a corporation’s sole purpose for existence have passed. The new model suggests that corporations and government should co-create social change.

Earlier this month, CVS Pharmacy announced that it will no longer sell cigarettes and tobacco products effective October 1, 2014. The company’s justification: because it “is the right thing to do.” The impact of such a decision spans far beyond generating press coverage and the economic realities of revenue declines. CVS is taking a proactive stance to prevent medical issues linked to the use of tobacco products. The irony is that pharmacies have traditionally leveraged a business model that embraces reactive medical care. Yet, the message runs much deeper. CVS is contributing to the broader healthcare discourse in this country. CVS is using their power to contribute to social change. In short, CVS is viewing their leadership as a responsibility.

CVS is not alone in its quest to cultivate social change. Last year, Starbucks asked customers to leave their firearms at home, representing a noble attempt to influence the national gun debate. Patagonia took an anti-Black Friday stance, requesting that customers repair old and worn clothing instead of purchasing new items, shedding light on excessive consumerism.

cvsWhether we agree with CVS or any other corporate stance is somewhat irrelevant. We live in a society where corporations have power and influence. Citizens United v. Federal Election Commission supported the right of corporations to contribute to political discourse as a legitimate activity. That being said, CVS, Starbucks, Patagonia, and many others are different. They are conductors of social change. They also happen to have the power to shape change in the direction they choose.

Nevertheless, there is a darker side to corporations wielding such influence. In an environment in which those with the most power make the rules, the American ideology of democracy is called into question. It is not unlike a game of Monopoly wherein the corporations that have more properties, more cash and more partners ultimately control the game. We can hope that the die fall in our favor. For example, those who consume the occasional soda or candy won’t be rooting for CVS to next take aim at American obesity.

In the end, taking heed of the irony of the recent death of the Marlboro Man, I give two healthy cheers to CVS. Their move deserves more than one for bravery. Three cheers you ask?  I consider that an applause reserved for a pharmacy industry-wide ban of cigarettes.

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5 thoughts on “Two (Healthy) Cheers for CVS!

  1. Kudos to CVS for their decision, which is right in line with their vision… “We strive to improve the quality of human life.” This decision won’t stop people from smoking, but it does demonstrate that CVS recognizes the irony of selling products that destroy qualify of human of life, not just for the people who use them, but for the public at large.

  2. I’m inclined to believe your proposition that businesses exist to both earn profits as well as uphold social values, however, I’m apprehensive to posit that CVS’s decision had anything to do with co-creating social change, or otherwise increasing societal value. Nationally, cigarette and tobacco use has been on the decline, and even steeper decline in regions where CVS operates. Cigarette margins are also particularly low compared to other health and beauty products, representing a significant opportunity cost for CVS – not to mention the additional costs associated with policing tobacco sales (see Target). Further, drugstores only account for ~5% of all tobacco sales. I think first, and foremost, CVS made the most economical decision for their long term profits. Adding value to society was a distant second.

  3. “We live in a society where corporations have power and influence.” — Through strategic execution and long-term successes, I feel these corporations have built enough clout to justify their ability to persuade. Individuals are more well informed than ever and should take responsibility for their actions and beliefs, no matter where the influence is coming from.

  4. Ridge, I appreciate your comments. Your stance that economic influence outweighed social impact, at its core, suggests that organizational decision-makers consider multiple consequences. If CVS would have taken this stance at the peak of tobacco consumption in the U.S., then I could make a case that calls into question the decision to alienate a significant revenue source. In today’s context, are there alternatives to reducing all business decisions to economic impact? Declining consumption of a product that is increasingly taboo in our society presented an opportunity for CVS to flex their social muscle, albeit low-hanging fruit.

    – Brett

  5. James – Thanks for your comment. You bring up an interesting point that not only do corporations have a sense of rationality, but they might also have rights. Surely, corporate contributions with the intention of shaping political discourse is one example of a corporation’s right to free speech. But is this a good thing? Should performance, age and size provide additional rights to corporations? While I do suggest that CVS’s decision relating to tobacco sales represents a socially productive move, I am not comfortable with the notion that corporations, who are far more powerful than I am, have the right to shape culture and policy in the ways they see fit. The volume of resources at their disposal indirectly gives them more than one vote.

    – Brett

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