Every organization has to work on the principles of ethics and responsibility. Ethics make the foundation of every business and if ethics are not followed as such, then the functioning of the business suffers and it loses it image and reputation at a gradual pace. Sometimes, managers face ethical dilemmas where they are not able to decide whether to stick to the values of the company or opt for decisions which are better for the organization in the long run (Ford & Richardson, 2013). The given case is about the ethical dilemma being faced by George Cosgrove who is serving as the Senior Vice President for Quality Control for All-in-One Pharmaceutical, Inc.
It has been mentioned that George is one of the best performing employees in the company and due to his best performance, he has been working on some of the biggest projects of All-in-One Pharmaceutical, Inc. For him, every day gets better with more challenges and opportunities to showcase his skills and experience. George adheres to the principles of ethics and he feels lucky to work for All-in-One Pharmaceutical, Inc because the company has the strong ethical background and offers superior quality healthcare products to the customers. One of the very successful and most researched products of All-in-One Pharmaceutical, Inc is known as Shot-o-Vac which is used in emergency cases of allergic reactions. The product has been highly innovative and the company has invested huge amounts in research for bringing out this product into the market. In one of the recent meetings, it has been revealed that the U.S. Patent Office has extended five years for the intellectual property rights of the company and now the company can continue to produce and market Shot-o-Vac for five years without having any competitors in the market.
The great news is shared by the CEO of All-in-One Pharmaceutical, Inc named Perry Periwinkle when he invites George to his office over a toast. George gets really excited when he gets to hears the news about the product on which he has worked hard because this meant good and consistent profits for the organization as well as a stronger image of George at All-in-One Pharmaceutical, Inc.
But the excitement of George does not seem to last longer. He is informed by the CEO that since the company has decided to increase the price of the Shot-o-Vac, he must agree to it too and provide the approval for this step. George gets upset upon hearing this because according to him, the move of increasing price for this product has never been discussed. The CEO supports the decision by stating that all businesses exist for profit making and there is nothing wrong about it. George does not look pleased with it because he thinks that increase of pricing without any prior discussion is not right. He also believes that it is not right that the business opportunity offered by U.S. Office should be used for making profits by using the wrong approach.
It should be noted that this is the first time that George is facing this kind of ethical dilemma. The company has always worked in an ethical manner while researching, producing and marketing the healthcare products but this one time, the approach of All-in-One Pharmaceutical, Inc is not correct. His personal values and beliefs are stronger and established and he is stress because there exists a clear contradiction between what the company wants and what his values stand for.
Managers usually have to face ethical dilemmas in the real world because personal interests are rarely in line with the interests and objectives of the organization. If the situation is viewed from the perspective of George, it is right to feel bad about the price increase, This is because the price increase has never been discussed in earlier meetings and presentations sessions. Also, there has been no mention of price rise when the meeting took place with the representatives of the U.S Office. And U.S Office granted the five years extra on the intellectual property rights because they viewed All-in-One Pharmaceutical, Inc following the principles of ethics and responsibility in a religious manner. George believes that by increasing the price, not only All-in-One Pharmaceutical, Inc will lose its credibility and trust which customers and U.S office have placed in it but it would also lose its reputation of being an ethical organization. Moreover, if George approves of the idea, he would not be at peace because he believes that the price increase would be an unethical decision and he does not want to be a part of this unethical move. His personal values and beliefs would always haunt him and work with the company would be rather difficult for him. The CEO of the company tries to entice him for approval by mentioning that three of his kids go to college which means that he could make more money by signing the new strategy. This actually adds to the stress level being faced by George.
Conflict Theory
The conflict theory explains the ethical dilemma by George because the personal interests and values are not in line with the benefits of the company (LaFollette & Persson Eds, 2013). Managers usually face similar dilemmas, some are able to cope up with it by finding a balancing strategy but some often have to take serious steps such as signing up for being a part of the unethical practice or quitting the project because, for them, values are more important than warm and full pockets.
Utilitarian Ethical Theory
The second theory which explains George’s behavior would be Utilitarian Ethical Theory because here, the manager has to take the interests of stakeholders into account and not let his personal values pollute the process of decision making (Yazdani & Murad, 2015). George must adopt the approach of Utilitarian ethical decision making. He can view that if the price of the product is increased, it will bring more profits for the organization which would evidently, increase the compensation of all employees. It is obvious that increase of compensation results in loyalty and retention for employees and all organizations are concerned about having a motivated and loyal workforce.
Recommendation and Conclusion
In my point of view, George being at a strong position at the organization must exercise his right and convince the CEO that whatever he has in mind is not ethical. Although the idea that profit making will benefit the organization is correct but the approach he wishes to follow is not right. He should have disclosed about the price escalation policy during meetings and proposal sessions which took place prior to the stakeholders. Enforcing this policy after the five years have been extended for intellectual property rights cannot be regarded as ethical. George can convince the CEO to take into confidence the representatives of U.S Office as well as other influential members of the organization before implementing the price raise policy. This is important so that the company can maintain its ethical and responsible business standards.
References
Ford, R. C., & Richardson, W. D. (2013). Ethical decision making: A review of the empirical literature. In Citation classics from the Journal of Business Ethics (pp. 19-44). Springer Netherlands.
LaFollette, H., & Persson, I. (Eds.). (2013). The Blackwell guide to ethical theory. John Wiley & Sons.
Yazdani, N., & Murad, H. S. (2015). Toward an ethical theory of organizing. Journal of Business Ethics, 127(2), 399-417.
