Business Ethics and corporate social responsibility

Business ethics and corporate social responsibility go hand-in-hand. Corporate social responsibility supports the community through initiatives that involve stakeholders, such as customers, employees, investors, clients, suppliers, environmental groups, etc. Corporate social responsibility helps to make the community, and ultimately the world, a better place. For example, an organization might have a significant recycling initiative that helps to protect the environment. Another organization might work to build hospitals and clean water facilities in third world countries.
There are many ways that organizations might practice good citizenship and responsibility. 
Corporate stakeholder relationships include four levels of responsibilities:
Economic: Organizations should operate to stay in business and to provide job security to employees and a return on investment to investors. Example: The company has a board of directors that oversees operations. 
Legal: Organizations should comply with the law and any rules and regulations. Example: The company regularly examines policies and procedures to ensure compliance. 

Ethical: Organizations should follow ethical and moral principles. Example: The company offers a fair wage to all employees with opportunities for advancement. 

Philanthropic: Organizations provide money and/or services to promote human welfare and goodwill. Example: The company supports a green initiative to preserve the environment. 

For this CSR assignment, you will focus only on one of the last two levels: Ethical or Philanthropic.

SELECT AN ORGANIZATION

Select an organization or company that supports either an ethical or a philanthropic corporate responsibility initiative as described above.

Select an organization that interests you.

A good way to find a company’s social responsibility plan is on the company’s website. Look for the term “Social Responsibility” or “Sustainability.” For example, on the Coca-Cola site, under Sustainability, you will see several different initiatives involving the environment, clean water, women’s empowerment, and more.

IMPORTANT:  Most companies have several different plans or initiatives. You select only ONE plan for your report.  
RESOURCES
You must use at least 2 resources for this assignment.
One resource will be the organization’s website where you will find information about the company and about its CSR plan or initiative.
The second resource must be a credible resource about corporate social responsibility programs and the value they provide customers and organizations.
Use either the ECPI library or Google Scholar to find this second resource.

You may find it easier to use the Google Scholar sometimes requires you to buy articles.
TEMPLATE
Use the template that you have downloaded from the template link at the top of this page to write your report. The template is already formatted in APA style. You just need to add your content and your citations. 
The template has a cover page for you to insert your information.

The template has the headings and the information you need to provide under each heading. 
Be sure you provide in-text citations that show what information you are using from which resource. (Refer to the APA Lib Guide.) 
The References page is already formatted. Add your two references
2.3 Application POM case

This case introduces you to the company POM Wonderful. You most likely are already familiar with the company’s renowned hour-glass shaped bottles of pomegranate juice. POM Wonderful has a good reputation because of the pomegranate products it sells. Pomegranates are high in antioxidants and are thought to be helpful in combating some diseases. This case is unique because, despite POM Wonderful’s reputation as a company that sells healthy products, the Federal Trade Commission ruled that its advertising was deceptive. This case shows how companies that sell products beneficial to society must still be careful about how they advertise their products.

Before you begin, be sure to review the following resources:

After reading the case, respond to these questions listed below. Justify your responses, opinions, and conclusions with facts and details from the case. Your response to each question should be one paragraph. Copy and paste the questions into an MS Word document and submit your file using the Upload Instructions below. Remember to include your name, the course, and the assignment name at the top of your file. 

What is one difference in advertising deception between Coca-Cola’s advertisers and POM Wonderful’s advertisers? 
Why does the FTC want food makers to use clinical trials to support any claims to health benefits?   

In your opinion, should POM Wonderful be subjected to the same oversight as drug companies in order to make health claims about its product?  
What is your main takeaway or what important point from this case might influence your own professional code of ethics?
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility
Jonathan Darnell
ECPI University
CORPORATE SOCIAL RESPONSIBILITY
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You must use this template. Keep the headings you see in bold font. Key in your information
under each heading. You should have selected a company to use. Much of your information will
come from the company’s website, which you will need to cite.
Introduction and Organization Overview
Introduce your paper by giving the organization’s or company’s name and tell why you
selected this organization or company.
Description
Describe the company you selected. Give some general information about the company.
For example, I might write this sentence with a citation like this: Walmart, the biggest retail
chain in the world, is in 27 different countries and has about 11,500 stores (“About Us,” 2020).
Core Business
Identify and describe this company’s main core business and/or products and services.
Mission Statement
The mission statement is on the company’s website.
Explain what this mission statement means to you.
Corporate Social Responsibility (CSR) Initiative
Evaluation of the Initiative
CORPORATE SOCIAL RESPONSIBILITY
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Describe one of the company’s CSR plans/initiative. Most companies have several
different plans. You choose only ONE of the plans.
Is this plan ethical or philanthropic? Explain your answer.
Demonstration of CSR
How does this plan or initiative show CSR? (NOTE: Use a second resource from an ECPI
library database for this part and don’t forget to cite the resource. Look up how CSR plans help a
company.)
How does any CSR plan add value to a company?
How does the company’s plan you selected help the company? How do you think such a
plan helps employees?
How does this plan help the community, the world? Do such plans make you want to be
a customer or invest in the company?
Recommendations / Conclusion
What impact or what kind of effect does this CSR plan have?
Recommend at least one way this company can improve or expand its CSR plan. Think
about what you would do if you were the manager for this CSR plan. What would you add? What
would you do differently?
CORPORATE SOCIAL RESPONSIBILITY
References
References are on a separate page. Here are how two sample references would be set up. You
saw this first reference used in the sample information about Walmart. Double space each line.
Use Hanging Indent and put them in alphabetical order.
About us. (2020). Walmart corporate. https://corporate.walmart.com/our-story.
Fishman, C. (2007, December 19). The Wal-Mart you don’t know, Fast Company.
http://www.fastcompany.com/magazine/77/walmart.html
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Case 4. POM Wonderful: Crazy Healthy!
Introduction
The company POM Wonderful, LLC has become renowned for its hour-glass shaped bottles of
pomegranate juice. Founded in 2002, the mission of POM Wonderful “is to introduce and supply
consumers with the highest quality and best-tasting pomegranates and pomegranate food products.”
The pomegranate has become particularly popular for its exotic sensory appeal and high content of
antioxidants.
The company was founded by billionaire industrial agriculture couple Stewart and Lynda Rae Resnick.
Shortly after it was founded, the company’s pomegranate products took off with revenues for the
company growing from $12 million to $91 million. POM Wonderful has largely based its success on
marketing claims concerning its healthy attributes and its ability to help reduce chances for disease.
However, in the past few years it has been challenged by the government regarding the truthfulness of
its advertising claims. The Federal Trade Commission (FTC) determined that POM Wonderful had made
unsubstantiated claims about its products. Although an appeals court supported the FTC’s findings, it did
strike down one aspect of the FTC’s ruling, providing a partial victory to POM Wonderful and other
companies that make health claims about their products.
This case begins by giving some background information on POM Wonderful and the global market of
functional food and drinks. This market has shown significant growth during the past decade, as
superfruit (exotic fruit) as an ingredient has grown in popularity due to its value of combining health
benefits with a good taste profile. We examine POM Wonderful’s brand positioning in the market. Next,
this case describes some of POM Wonderful’s advertising claims and why they were challenged by the
FTC. It concludes with a discussion of the implications this ruling will have on the advertising claims of
POM Wonderful and similar companies
Background
POM Wonderful, headquartered in Los Angeles, California, produces a line of pomegranate juice and
other blended juice beverages, including pomegranate juice mixed with blueberry or cherry, as well as
tea of various flavors and 4.3-ounce containers of fresh pomegranate arils (the seed pods of the
pomegranate). The pomegranates are grown in the central and southern San Joaquin Valley of Central
California, both in the company’s own orchards as well as orchards in the surrounding area. The juice is
extracted mechanically from the fruit to create its famous lines of juices.
POM Wonderful currently has three main product categories:
Juices: Pomegranate, POM Blueberry, and POM Cherry.
Fresh Fruit: 4.3-ounce containers of fresh pomegranate arils. POM Wonderful is the largest grower of
the Wonderful Variety of pomegranates in the country, owning 18,000 acres of orchard and supplying
nearly 90 percent of fresh pomegranate fruit in the United States.
POM Tea, including Pomegranate Peach Passion White, Pomegranate Lemonade, Pomegranate Sweet,
and Pomegranate Honey Green.
Many have attributed the success of the growth of the exotic fruit segment on rising consumer interest
in the health benefits of these fruits, which is partly due to the well-marketed medical evidence of
relevant products. POM Wonderful’s advertising campaign is a good example of an organization that
uses health food claims to significantly promote its products. As a result, it is able to position its juices as
a premium product and price it higher.
The Market for Pomegranates
Due to the importance of a healthy diet, the global market of food and drink products that promote
health benefits has been expanding. The rising awareness of health food and drinks has driven relevant
products with considerable growth. Because consumers are showing more interest in their health in
both the short and long term, healthier foods such as exotic fruits are becoming more popular. A
healthier diet can reduce the risk of diseases and obesity.
Today’s global functional food and drinks market is led by the United States and Japan. It is estimated
that functional food and beverages make up 5 percent of the overall food market. Emerging markets
including China and India are also embracing western lifestyles and attitudes toward health. The aging of
the population is also playing its role in encouraging people to pay more attention to their health from a
younger age. The rising attention to fruit and vegetable intake has fueled the growth of juice drinks,
especially premium fruit juices.
The pomegranate has taken off in the American market in recent years, even though it has been used as
food, medicine, and a cultural icon for thousands of years in other parts of the world. The popularity of
the fruit has exploded in the United States due to its high content of natural polyphenols, noted to be a
powerful antioxidant. The medical acclaim it has obtained has been regarded as the biggest drive behind
its success. Previous research indicates that polyphenols are powerful antioxidants that are useful in a
variety of health problems, including premature aging, cardiovascular conditions, and certain types of
cancer.
Pom Wonderful versus Coca-Cola
POM Wonderful has secured a strong share of the market in the pomegranate beverage area. With the
success of any product comes rival brands that attempt to steal market share. As a result, market
leaders tend to be aggressive in protecting their market share and ensuring that competing brands are
not competing unfairly. This resulted in POM Wonderful challenging promotional claims made by CocaCola’s rival product, Minute Maid Pomegranate Blueberry Flavored Blend.
In 2007 Coca-Cola introduced its pomegranate–blueberry juice blend sold through its Minute Maid
division. However, despite its promotion of blueberry and pomegranate, 99.4 percent of the beverage
consisted of apple and grape juices. POM Wonderful believed this was deceptive advertising and filed a
lawsuit against Coca-Cola. The company claimed Coca-Cola’s promotional claims violated the Lanham
Act as the name, label, marketing, and advertising of Coca-Cola’s juice blend misled consumers as to its
actual content, thereby causing POM to lose sales. The case was dismissed by the Ninth U.S. Circuit
Court of Appeals, claiming that these allegations were the domain of the Food and Drug Administration
(FDA) and that competing firms are not authorized to sue one another for false labeling or advertising.
POM Wonderful appealed, and the case went all the way to the Supreme Court. In 2014 the Supreme
Court reversed the decision and decided that competitors can file Lanham Act claims dealing with false
promotion on food or beverage labels. Despite this initial victory, a California jury later sided with CocaCola. It believed that POM had not proven that Coca-Cola’s claims were misleading. In addition to its
failed lawsuit against Coca-Cola, POM Wonderful suffered another blow when it was accused of false
advertising by the FTC.
Pom Wonderful versus the FTC
On February 23, 2010, the FDA sent POM Wonderful a warning letter claiming that the firm was
promoting its juice products in ways similar to drug promotion. For instance, between 2003 and 2010
POM Wonderful claimed that its pomegranate ingredients could help combat erectile dysfunction,
prostate cancer, LDL cholesterol, and length and severity of colds, as well as promote a healthy heart
and prostate. The FDA determined that to make such claims, POM Wonderful must prove with the
scientific rigor of the drug-approval process that POM Wonderful juice could aid in the curing,
mitigation, treatment, or prevention of disease.
In addition, the FTC ruled that POM Wonderful used deceptive advertising because these claims were
not substantiated. According to the FTC, POM Wonderful based these claims on evidence that the
company distorted and which were eventually refuted. Nevertheless, POM Wonderful had maintained
that pomegranate juice lowers the risks of heart disease, erectile dysfunction, and prostate cancer. Its
advertisements included phrases such as “Amaze Your Cardiologist” and “Drink to Prostate Health” and
were placed in Parade, Fitness, and The New York Times. They were also placed on price tags and
websites including pomwonderful.com, pompills.com, and pomegranatetruth.com.
The FTC found POM Wonderful guilty of violating the Federal Trade Commission Act (FTCA) by making
deceptive claims in 36 advertisements and promotions. The FTC also accused the firm of making
unsubstantiated efficacy claims—or suggesting that the product works as advertised—as well as
establishment claims—claims that a product’s benefits and superiority have been scientifically
established. The FTC forbade the company from making any claims that its products were “effective in
the diagnosis, cure, mitigation, treatment, or prevention of any disease” unless substantiated by two
randomized and controlled human clinical trials. The goal of the FTC is to crack down on food and
dietary supplement manufacturers that make misleading claims upon which consumers depend. The FTC
desires to adopt the more stringent standards of the FDA in approving new drug products to hold food
and dietary supplement makers more accountable for the protection of consumers.
POM Wonderful appealed the ruling, and the case was taken to the U.S. Court of Appeals for the D.C.
Circuit. One of POM Wonderful’s claims is that it would be too burdensome to conduct clinical trials.
After examining the case, the court upheld most of the FTC’s ruling. It claimed that POM Wonderful
must have substantiation before making its disease-prevention claims.
However, POM Wonderful did achieve one partial victory. The court determined that the FTC’s
requirement of two randomized and controlled human clinical trials was excessive and that one clinical
trial was enough because it could provide valuable health information. The court based its decision on
the Central Hudson Scrutiny test, which requires “the government, when attempting to restrict
commercial speech, to prove that the interest it asserts in regulating the commercial speech is
substantial, that the means the government uses to regulate speech directly advance the governmental
interest asserted, and that those means are no more extensive than necessary to serve the interest.”
The court also ruled that these trials do not necessarily have to meet the same rigorous standards as
randomized and controlled human clinical trials and suggested that these stringent criteria might violate
POM Wonderful’s First Amendment rights.
Although it is important that companies maintain truthful and transparent communication, some
believe the lawsuit against POM Wonderful was excessive. Research suggests that pomegranates are
healthy, full of antioxidants, vitamin K, and potassium. Unlike drugs, which could have a harmful impact
and should be studied with multiple human clinical trials, there is no evidence that pomegranate juice is
potentially harmful. Therefore, critics say that the standard of going through human clinical trials should
not apply to companies like POM Wonderful. There is also some evidence that pomegranates can help
prevent heart disease. Nevertheless, the FTC believes it necessary to ensure that consumers are getting
truthful information regarding the health claims of the products they consume.
The decision has important implications for consumers and marketers. For marketers the POM
Wonderful decision highlights the type of evidence the FTC will accept in order to make health and
nutrition claims on its packaging. It might also impact consumer class-action lawsuits, which can allege
that a product’s health claims are misleading if not supported by substantiated studies.
Conclusion
A healthy diet is becoming increasingly important for consumers, especially women aged 25–35. As a
result, they are taking active steps to ensure they are eating healthy but are also looking for other traits,
including convenience, natural ingredients, and sensory appeals in order to achieve their nutritional
targets. This has created a market opportunity for POM Wonderful to sell an exotic product at a
premium price filled with antioxidants, potassium, and other healthy ingredients. Of course, the market
success of any product attracts more competitors to the market segment, either with products made
with active ingredients or products with added nutrients to help improve consumer health. POM
Wonderful has proactively guarded its market share. Its lawsuit against Coca-Cola’s Minute Maid
product also shows it is not willing to cede market share without a fight, particularly if POM Wonderful
believes the rival product is making misleading claims about its ingredients.
On the other hand, the FTC ruled that POM Wonderful was guilty of false advertising with its healthrelated claims. Because it did not conduct human trials, the claims that pomegranate juice can help fight
prostate cancer and prevent heart disease cannot be substantiated, according to the FTC. POM
Wonderful tried to appeal to the U.S. Supreme Court, but the Supreme Court refused to hear the case.
This ruling will have a broad impact on the food industry, and food companies will need to be more
careful with their product labeling. It remains to be seen how it will affect POM Wonderful now that it
cannot make these advertising claims without human trials. However, if the interest in pomegranates
continues to remain high, then POM Wonderful is likely to get past these challenges and persist in its
market success.