Question 1: E&J Gallo
Social responsibility is an ethical ideology or theory that an entity, be it an organization or individual, has an obligation to act to benefit society at large. Social responsibility is a duty every individual or organization has to perform so as to maintain a balance between the economy and the ecosystem. A trade-off always exists between economic development, in the material sense, and the welfare of the society and environment. Social responsibility means sustaining the equilibrium between the two. It pertains not only to business organizations but also to everyone whose any action impacts the environment. This responsibility can be passive, by avoiding engaging in socially harmful acts, or active, by performing activities that directly advance social goals. Critics argue that corporate social responsibility distracts from the fundamental economic role of businesses. (Wikipedia, the free encyclopedia)
Ethical dilemma is a complex situation that will often involve an apparent mental conflict between moral imperatives, in which to obey one would result in transgressing another. (Wikipedia, the free encyclopedia)
E&J Gallo had a long history of producing cheap, low-grade wines (a.k.a. high-proof or fortified wines). These wines contained added alcohol to increase their potency and additional sugar or sweetener to enhance their taste. Many of the cheap fortified wine products were deliberately made and sold at the highest potency because they were the low-cost alcoholic beverage favored by people with low incomes and college students. In researching this case, I was able to find at least two separate occasions where E&J “conducted an experiment” to stop distributing the fortified wines. I can certainly understand why. Citizen groups and community organizations wanted the neighborhood cleaned-up. Between public drunkenness and binge-drinking, these groups insisted E&J become a better community leader by helping to eliminate this problem. Merchants, however, were concerned by the loss of revenue generated by the cheap wines. If the wine producers stopped overall productions, the merchants would see their profits drop and face having to close their stores. E&J ultimately continued production of the cheap-wine; after-all it was a large money maker for the company.
E&J’s ethical dilemma was who to placate; the community or the business owner. From a social responsibility aspect, E&J was seen as a company contributing to the drunkenness in low-income neighborhoods. But were they really? I believe that the problem of alcoholism is far more complex than E&J producing cheap wine. If E&J stopped its production, alcoholism would still exist in our society. Those who consume the cheap wine would find another brand. With the exception of doing nothing, the problem in the Tenderloin neighborhood is the fact that it is a low-income neighborhood where unfortunately alcohol consumption is high. This behavior is considered a custom within the neighborhood because it is longstanding, and known/observed by most people (The Legal, Ethical, and Regulatory Environment of Business; Eighth Edition, Fisher/Phillips, P. 22).
Who is responsible for cleaning up the neighborhood? The community activist would blame public drinking on the company who produces the cheap-wine. The company can state they are in business to make a profit, deliver product to their distributors, provide workers with jobs, and give owners a good return on their investment; and it’s not their business to interfere in the lives of the consumer. This dilemma is a never ending circle. Each group, organization, etc. will point fingers at the other to fix the problem. To correct the problem, the individual consuming the product needs to take responsibility for their own life. Once that happens, the never-ending circle is broken.