1. Merck’s Stakeholders
Undeniably, at the heart of any business lies its stakeholders who play an indispensable role in the success of the firm. Stakeholders refer to any party that has an interest in a business. Merck has many stakeholders who include the victims of river blindness, the firm’s employees, its shareholders, the media, other healthcare firms, and the government. Ranking the stakeholders in their order of importance results to shareholders, victims, employees, media, and finally the government
2. Cost and benefits of the medical research
Investing in medical research, though costly, comes with a corresponding amount of benefits. As noted in the case, such an investment would require $ 200 million. Besides, the firm would incur costs due to the time involved in the research given that the research would take 12 years. The costs do not, however, come without a significant amount of benefits. First, it would wither the dilemma of river blindness. Second, it would lower the economic burden caused by the disease. Consequently, it would result in a reduction in the associated costs such as loss of working ability due to blindness and costs involved in taking care of the victims.
3. Deciding to invest
Merck’s chairman notes that a person’s health should rank before the company’s profit objective. As such, even if investing in the research would result in a loss; the firm may justify such an investment from its main vision. Besides, such an investment would play a crucial role in boosting the firm’s public image.
4. Deciding not to invest
Owing to the cost involved, Merck may decide not to conduct the research. Such a decision would favor the shareholder’s opinions. According to Trevino et al. (2010), the shareholders’ main motive is the maximization of shareholders’ wealth by vesting into profitable ventures. Merck may thus justify its position of not venturing into the research project by arguing that it negates the shareholders’ main objective.
5. Reputation of the firm
Being one of the Merck’s stakeholders, the media plays a significant role in the firm’s reputation. What is the interest of the media in the company? Is it not the social welfare of the general public and ethical operation of the firm? A decision to invest in the research would boost the reputation of the firms in the eyes of the public owing to the publicity from the media. On the other hand, a decision not to invest would cast the firms in a negative light due to negative publicity from the media. The latter would require the former to consider the social welfare of the society in all its operations.
6. The CSR pyramid
CSR roots from Archie Carroll’s CSR pyramid which outlines four main responsibilities of a corporation: economic responsibility, legal responsibility, ethical responsibility, and discretionary responsibilities otherwise known as philanthropic responsibilities. Given the responsibilities above, the firms owe the society an ethical obligation to proceed with the research. Although, the investment may appear as economically unviable thus negating the first responsibility of the business; Merck should proceed with the project irrespective of how close it was in achieving a cure. Arguably, such a decision would only consider the ethical and philanthropic objectives of a firm.
7. Merck’s Value system
Given the fact that Merck prioritizes people’s health over its profitability, investing in the “unprofitable’ venture would fit in the value system of the company. As such, were I the senior objective in the entity, I would invest in the project as it would directly reflect the value system of the firm.
8. Short case: Ethical dilemma in decision-making
An ethical dilemma implies a situation where an individual faces a choice between two competing and relatively significant alternatives. In the case in question, the product company is a key stakeholder and acting against its interest would jeopardize my interests. On the other hand, helping the company merge with the tobacco company would compromise my principles concerning tobacco. As such, I would facilitate the merger of the firms, and lobby for an intensive awareness program from the company to sensitize the public on the tobacco side effects. In such a case, I would have catered for both interest of my client and my interests.
9. Case 1: Conflict of interest in decision-making
A merger between the little company and Big Company would reflect the shareholders’ interest of wealth maximization. As such, I would eliminate all possible factors which may compromise little company after the merger. I would further orient the Little Company’s employees in the Big Company. I would include ethical standards that prohibit conflict of interest between the two companies. However, I would inform all Little’s employee that they remain a separate entity
10. Case 2: Product safety and the due care theory
Any firms owe the customers a social responsibility to maintain social welfare and its employee a responsibility to offer employment security. In a quest to enhance the welfare of all the parties in question, I would conduct further research on the product in question to prove the credibility of the Green Lab’s report. I would also opt to rejuvenate the product to improve its quality. However, I would still opt to issue the product with a consumer warning. I would base such decisions on the due care theory. The theory argues that producers are in a better position to appraise product risk than the customers and should, therefore, take the necessary steps to protect consumer interests.
11. Case 3: Advertising
Spring Water's stakeholders include its consumers, employees, shareholders, regulatory agencies, and the general public. Some of the stakeholders such as the employees and shareholders have more to lose as compared to the general public in case of a decline of the company’s reputation. As such, I would recall the contaminated water, given that such a decision would be the right thing to do and would protect the firm’s image. The financial strength of a firm plays a crucial role in determining how to handle ethical dilemmas. Arguably, a firm with a strong financial base would afford to lose some of its return for some more important stakeholders.
12. Case 4: product safety and advertising
The stakeholders, in this case, include the general public, the company’s customers, other companies in the industry, and the regulatory authorities among others. Gerald (2010) argues that any risk that may jeopardize the health of a person amounts to ‘huge risk’ and as such, the company should provide the necessary warning. Besides, the company should make a follow-up ensure that the customers understand such risks. The producers should always reveal the drug’s components to ease prescription and launch an intensive public campaign to sensitize the people on the drug use. Unlike the Tylenol situation, recalling the drug came too late since most users had been affected, as such, it is no wonder the management got such a surprise. However, recalling the drug earlier would have served as a better solution.
13. Case 5
I would lobby John to insist that the only alternative available is full disclosure because an alternative decision would not only compromise our moral principle but would also be illegal. It is veritable that the top management requires all the relevant information in making crucial decisions. As such, in the event of a disagreement, I would try to convince others to allow the senior management to make a decision.
14. Case 6
Similar to the spring water case, the CEO’s choices are limited. Should the firm decide to find sufficient capital for a cleanup, the contaminated water will have harmed a substantial number of people. As such, being the CEO, I would lobby the relevant authorities such the Environmental agencies to assist me in a cleanup after an intensive analysis of the situation. In such a case, I would have protected the company’s image.
References
Gerald. F. (2010). American Business Values: A Global Perspective. Pearson, Prentice.
Trevino. K., and Nelson, K. (2010). Managing Business Ethics. John Wiley & Sons
