Harvard Business School Case Study Explores E-Cigarettes

Harvard Business School has recently announced a new MBA case study which will see business and public health students at the school analyzing the growing popularity of the electronic cigarette market as well as looking at the tension between public health and the marketing of such a product. The case will explore the ways in which tobacco companies and regulators are responding, while also considering how businesses can ensure corporate social responsibility and profit.

The new MBA case study, entitled ‘E-Cigarettes: Marketing Versus Public Health’, written by Harvard Business School associate Margaret L. Rodriguez, explores the seemingly innocent consumer market of the e-cigarette in addressing the worries of public health advocates, who assert that the so-called cure to harmful cigarette addiction is not a cure at all, enabling further addiction and acting as a gateway for new – as well as reformed – smokers.

While the benefits of e-cigarettes are clear – there are none of the harmful chemicals and toxins which can be found in normal cigarettes – the popularity of the e-cigarette, along with company takeovers from big tobacco firms, has meant there are definite issues to be examined, not only from health regulators, but also future business leaders who can learn much about corporate social responsibility in business and marketing, while all the while turning a profit.

Existing statistics indicate that electronic cigarettes have led to a net decrease in traditional smoking of 2.2 million in the US, or 5% of the smoking population. But these statistics only tell half of the story, failing to highlight the influence that the marketing of e-cigarettes has had. A crucial point made on the case in terms of corporate social responsibility is that the tobacco industry itself has profited hugely from the success of e-cigarettes, with the vast majority of e-cigarette companies now owned by big tobacco companies.

Corporate social responsibility becomes bigger focus in MBA case study and programs

John A. Quelch, a professor in business administration at Harvard Business School, who also holds a joint appointment with the Harvard School of Public Health, will be teaching the new MBA case study to all who enroll in the course, ‘Consumers, Corporations and Public Health’, debuting at the business school and the School of Public Health next year. Talking to Harvard Business School Working Knowledge about the value of learning about the issues surrounding the e-cigarette market, Quelch explains; “One of the themes in the course is the tension that exists, quite understandably, between regulators and commercial interests. Most people are used to hearing about that in the context of financial regulation, but similar issues apply in other sectors of the economy including health care.”

One of the many issues in play, says Quelch, is that health regulators are currently in a dilemma: Do they employ a light hand in an attempt to decrease the number of existing smokers, or do they apply stricter regulations in order to put a stop to new smokers picking up the habit. “Put crudely,” says Quelch, “how many nicotine addicts is it worth the risk of creating to have one tobacco smoker quit?”

Quelch’s overall aim on this specific MBA case study is for students to think more deeply about corporate social responsibility and how issues of public health impact business decisions. He hopes to do this by pointing out the dichotomies and consequences of opening up a new market which simultaneously tries to tackle and reinforce consumer addiction for commercial purposes.