Ethical dilemma and business ethics- A case study of Merck and Co. and river blindness

Introduction

The main ethical dilemma in the article is a conflict of values especially profitability and ethical practices. For example, the company had to decide between profits that are the core of the company’s operations due to the shareholders wealth maximization objectives, and the company’s image from the corporate social responsibility perspective and the welfare of the community the external publics who are both the company’s customers and community. Therefore, the company is at cross roads because it has a responsibility to serve all these publics and meet the interest of all these public without compromising the interest of the others.

The ethical dilemma

Welfare vs. profit

The company has to take care of its customers just the same way it has to p operated profitably and meet its obligations to its shareholders. The nexus between these publics makes it a difficult balance because the company works to meets the needs of the customers. While offering the goods free will infringe its core values of maximizing shareholders wealth, the company risks losing its key market. Businesswise, the community compromises of customers to the company. As an externality, the company stands to gain from the publicity it will gain from its service to the community and humanity as a whole. However, by providing the drugs to the community free of charge, the company risk losing its residual profit.

While the company had an option of using its financial assets to develop the human version of the Ivermectin, it is clear that the funding would be costly to the company, but then is the corporate image that comes with seeing the community surfer while they could offer alternative solution to death (Bagenstos 2006, pp. 27–28).

The company has values that serve as its foundation for moral codes and ethical reflections. It is also important to note that the company has had history of charitable offerings to the community that later becomes the company foundation for driving growth and revenue. Considering the fact that the company has had a successfully operation in Japan following its free streptomycin when other companies were fleeing Japan, the company realizes the accruing benefit of such operations (Harsanyi, 1982, p. 42).

Moral Paradigm and shareholder’s wealth

The moral paradigm is to pursue an option that provides the most utility. Maximizing the shareholders wealth would only benefit the shareholders, but then providing the drugs to the community would benefit a large community. The utilitarian paradigm is therefore, a very important paradigm that can be used a basis for supporting the decision to provide the drugs to the community. Both utilitarianism and consequentialism support providing her drugs to the community because maximum happiness, while at the same time saving the comunity from extinction. The idea behind the decision is that the result justifies the means. In this case, the result is not merely the community, but also the company’s image as a socially responsible company (Hartman , 1997).

Turning he preliminary findings to the world health organization or another UN agency to fund it though charitable organization seemed like the most logical options that could help the company save on operational expenses, but still allow the company to participate in drug delivery. However, this options has its own downsides. For example, the company is a corporate entity, turning the preliminary findings to an NGO would mean losing contact with customers on the ground. The disease is an opportunity for the company to establish a connection through the contact points. The company stands to benefit direct contact with the customers (drug recipients) by offering the drugs directly. It can also strengthen its brand by proving its position about corporate social responsibility (Popper, 2002, p. 339).

Maximizing ethics ad profit

The goal of any business is to maximize ethics (maximize happiness) and to maximize profits. Therefore pursuing an option that maximizes these two proves the most logical options. All the above options either focus on maximizing the happiness of other parties. For example, selling the drugs to the community increases the company’s profits, offering the preliminary findings to the NGO helps the company save a lot in terms of capital and operational expenses, but does not offer guarantee of delivery of the drugs to the community. Additionally, it would take long for the NGO to provide the drugs to the community within such a short time.

Conclusion

The primacy of ethics is to maximize values (happiness, welfare and other moral paradigms). However, business ethics discourses are confounded by ethical dilemma involving values such profit maximization and community welfare. Never the less, business ethics has becomes an annex of the community and the company to the extent that business ethics has become an element of corporate social responsibility. Many proponents of relativism argues that the ethical answers should depend on the situation. Therefore, providing the drugs to the community free of charge and shouldering the budget maximizes utility.

References

Bagenstos R., (2006).The Structural Turn and the Limits of Antidiscrimination Law, 94

Calif. L. Rev. 1, 27–28

Hartman H, (1997). Perspectives in Business Ethics (i/m). Irwin Professional Publishing

Harsanyi, C., (1982). Morality and the theory of rational behaviour, reprinted inUtilitarianism and Beyond, Amartya Sen (Editor), Bernard Williams (Editor), Cambridge University Press, p. 42

Popper, K, (2002). The Open Society and Its Enemies: Volume 2. Routledge. p. 339.

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2 thoughts on “Ethical dilemma and business ethics- A case study of Merck and Co. and river blindness

  1. what about this .. 1. Why did the officials at Merck finally decide to produce the “river
    blindness” medicine, even though it seemed unlikely that they would recoup their investment? Should corporations be required to act as Merck did?

    Like

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