Medicine
Stakeholders
Stakeholders in a business environment are not merely those who have a stake in the profitability of the business entity. Seen in the expanded framework of corporate social responsibility, stakeholders are all parties affected by the behavior of a corporation; this may include stockholders, employees, customers and the public at large (Shaw, 2014, p. 160).
Key Characteristics of Stakeholders
Stakeholders may be internal to the organization or may be outside it. The level of knowledge of stakeholders regarding the company policies may vary from minimal to comprehensive. Their attitude towards the organization may be positive, neutral or antagonistic. The stakeholder’s self-interest in the policy of the organization would have a role to play in their interaction with the organization. Stakeholders may be part of alliances and groupings to enhance their power. Stakeholders may have access to the company’s resources – financial, political, technological or human. Stakeholders vary in the power they can bring to bear in support of their causes with the company (Schmeer, n.d.).
Stakeholders within the PharmaCare Scenario
All parties affected by PharmaCare are stakeholders for PharmaCare. The stakeholders for PharmaCare would include its management, employees, investors, stockholders, consumers (including those from low income groups), environmental groups, the government, the government of Colberia and its citizens, the ‘healers’ of Colberia, and the Colberian employees.
Human Rights Issues Regarding Colberian Indigenous Population
PharmaCare is guilty of exploiting the indigenous population of Colberia in a number of ways.
Firstly, PharmaCare exploits the local healers of Colberia. PharmaCare does not pay them for their intellectual property, and robs them of traditional knowledge for corporate gain without giving anything in return.
Secondly, PharmaCare pays the locals abysmally low rates that would not pass muster in the home country. While payments need to be pitched at the level of the country where PharmaCare is working, the fact remains that the payment is not commensurate with the work done.
Thirdly, PharmaCare is exploiting the hardiness and physical toughness of the locals by making them carry huge loads of plants. PhramaCare should have decided upon a basic load that the locals would be required to carry in consonance with global labor standards. Making the locals carry larger loads is tantamount to exploitation.
Lastly, the ostentation displayed by PharmaCare’s executives in Colberia displays a sense of condescension and lack of respect for the local population. PharmaCare is giving the message that it has little respect for the concept of equity in emoluments. While the executives deserve greater salaries than the workers, the difference should not be so vast. The huge difference in the standards of living between the executives and the locals indicates the fact that PharmaCare is undercutting the locals from their well-deserved emoluments and is subsidizing the executives’ lifestyle with the difference.
Hypocrisy of PharmaCare’s Environmental Initiatives
PharmaCare has acted hypocritically with regard to its avowed care for the environment. PharmaCare seeks to spread the message to the world that it wishes to reduce its environmental footprint. In projecting this message, PharmaCare hopes that the public sees it as a responsible organization. The perception of responsibility would be likely to result in a perception that PharmaCare’s medical are of good quality and leave a small footprint on the environment.
While PharmaCare wishes to display a front of environmental responsibility, the company engages in diametrically opposite activities away from the public eye. The company lobbies with the government to stall environmental laws that might stymie its activities. The company also pays little heed to the ecological waste it is wreaking in Colberia. Therefore, PharmaCare is guilty of hypocrisy in its approach towards environmental responsibility.
PharmaCare’s Actions with Local Populations: Ethical Analysis
Utilitarianism vs Deontology
Utilitarianism advocates that an action is considered good if it brings benefits to more people than it brings loss (Rainbow, n.d.). The medicines of PharmaCare are sold around the world. Millions would benefit from the medical advances PharmaCare achieves by leveraging the local knowledge of Colberia. The advantage accrued to the consumers of PharmaCare products gets offset to a by the privations of the local population of Colberia. The number of people affected adversely in the wake of PharmaCare’s ‘progress’ is, by contrast, limited to the populace of Colberia. Therefore, if taking the net benefit into account, utilitarian ethics would determine that it was ethical to shortchange the Colberian population for the greater common good of health.
Deontology holds that right or wrong must be decided on the basis of deeper and more rigid standards. Something that is right does not become wrong and vice versa with a change in context. The duties and obligations of a person form a framework through which to assess whether an action is right or wrong (Stanford Encyclopedia of Philosophy, n.d.). In the context of PharmaCare, short-changing the people of Colberia goes against the moral principle of fairness. Exploiting the ignorance and economic condition of people is morally wrong, whatever the context, as per the framework of deontological ethics. Therefore, deontological ethics would dictate that PharmaCare is incorrect in exploiting the people of Colberia.
Virtue Ethics vs Ethics of Care
Virtue ethics seeks to assess a person or organization not on one act, but on the overall character. If the character is good, a stray negative action might be overlooked as an aberration or a result of adverse circumstance. Ethics of care, on the other hand, stipulates that it is ethical to care for the downtrodden and the weak, whatever the circumstance (Thomas, 2011).
PharmaCare is guilty of displaying bad faith through the framework of both – virtue ethics and ethics of care. PharmaCare has been exploiting the people of Colberia for a considerable period of time. Therefore, PharmaCare cannot hide behind the excuse that its actions in Colberia were the result of an over-enthusiastic employee, and that it would stop exploiting the Colberians and recompense them for their efforts. Because PharmaCare has been in business in Colberia for a long time, the otherwise good record of PharmaCare cannot absolve it for its errors and omissions in Colberia.
Under the framework of ethics of care, PharmaCare should have taken care of the weak and downtrodden persons in Colberia. PharmaCare would not have taken advantage of their ignorance in money matters. Therefore, PharmaCare is guilty when seen from the framework of ethics of care.
Moral/ Ethical Compass
While most of the ethical frameworks hold PharmaCare guilty over its exploitation of Colberians, I would tend to agree with the utilitarian viewpoint, according to which PharmaCare has brought about a net positive benefit to its environment. Further, the local economy of Colberia would need to be considered while deciding upon the extent of exploitation PharmaCare can be accused of. Colberia is a low-income economy. PharmaCare has paid the Colberians as per the local economy. If PharmaCare were to offer higher payments, the Colberian economy would have become imbalanced. In this regard, PharmaCare would be only guilty of not having paid for the traditional knowledge of the healers. The huge loads carried by the locals and the low wages were in sync with the realities of the local economy. It is no one’s case that PharmaCare has to reform the world and reduce its inequities. PharmaCare is a profit earning organization. Its ethical responsibility in a foreign country is to ensure equity. To that extent, PharmaCare’s omissions would amount only to not paying for the intellectual property of the locals.
Comparison with Real World Company
The question of how corporations should behave in the globalized world of markets and sources with reduced barriers has been a topic of debate. The case of Nike’s sweatshops in Malaysia closely resembles that of PharmaCare.
Nike became the largest athletic shoe producing company in the world after displacing Reebok and Adidas in the early 1990s. Nike began its journey as Blue Ribbon Sports in the 1960s. The company realized the advantage of outsourcing the production of shoes once it observed the high prices demanded by Adidas and Reebok, who were producing their shoes with the country of license. Blue Ribbon Sports initially contracted two Japanese firms for the production of shoes. Blue Ribbon Sports changed its name to Nike in the 1970s. Spurred by the success of its partnership with the Japanese firms, Nike began searching for alternative, low cost partners to manufacture its shoes. Korea offered incentives to Nike to produce its shoes in Korea. By 1982, Nike had shifted most of its production facilities from the USA and was sourcing its shoes from Korea and Taiwan. Over time, the cost of manufacturing shoes rose in Korea and Taiwan with their rising economies. Nike shifted its manufacturing base to other low-income countries – Indonesia, China and Vietnam. Nike placed its own employees to monitor production so that quality could be maintained, and expanded its model of outsourced production to an extensive network of footwear factories in South East Asia (Locke, 2002).
Nike’s relationship with its suppliers metamorphosed depending upon the product they were making. While Nike developed long term and stable relationships with Korean and Taiwanese firms who produced its shoes, the relationship was more opaque in the case of factories that produced apparel for Nike. Short fashion cycles and low volumes created a situation where Nike’s outsourced contracts were often sub-contracted to other firms, totally unrelated to Nike. Often, these sub-contracted firms produced apparel en masse for different companies; the brand recognition would only be established in the final stages by affixing the label (Locke, 2002).
Lack of monitoring and the pressures of the local economy soon created situations where workers producing Nike’s apparel were often slave-driven for long hours. Many contractors hired minors and held them captive in unhealthy conditions. Phil Knight, the co-founder of Nike, lamented that Nike had “become synonymous with slave wages, forced overtime and arbitrary abuse” (Locke, 2002).
Indonesia was a microcosm of Nike’s woes. Nike was accused of paying abysmally low wages to workers in Indonesia. NGOs reported that Nike’s sub-contracted factories were ‘rife with exploitation, poor working conditions, and a range of human rights violations.’ Nike’s suppliers were very stingy with wages. The wages paid by them covered only 70% of the daily needs of the workers. Nike initially absolved itself from the controversy regarding the wages on the plea that it was merely a designer and that the onus for wages lay with its sub-contractors. However, with increased pressure, Nike was forced to raise the wages of the workers in Indonesia (Locke, 2002).
Analysis
Nike’s experience in Indonesia is similar to PharmaCare’s practices in Colberia. The locals in both countries were being paid low wages. Both Nike and PharmaCare could argue that the wages reflected the local economy. The difference in the two cases was that while PharmaCare ran its own operation in Colberia, Nike ran its operations through sub-contractors. In that sense, the onus of responsibility for wages and working conditions lay to a greater extent with PharmaCare as compared to Nike.
The comparison of PharmaCare’s case with that of Nike indicates that a global company cannot follow local rules in foreign countries and become exploitative. If the wages are not exploitative, the lower wages in a foreign country would be justified on grounds of business interest. After all, a business would outsource its work to a foreign country only to take advantage of the wage differential. However, when the wages become exploitative, the company’s actions shift from being governed by business sense to being unethical and propelled by a desire for undeserved profits.
In the final analysis, the ethical responsibility of PharmaCare for Colberia’s populace should be established by keeping the wages paid to Colberians in the context of the Colberian economy. If the wages were adequate to support PharmaCare’s Colberian workers and also their families to a large extent, it could be argued that PharmaCare was guided by business sense and was not unethical. If the wages did not cover the basic needs of the workers, PharmaCare could be accused of being unethical in its dealings.
References
Locke, R.M. (2002). The promises and perils of globalization: The case of Nike. [Case Study] Sloan School of Management. Retrieved 18 Nov 2014, from http://mitsloan.mit.edu/50th/pdf/nikepaper.pdf
Rainbow, C. (n.d.). Descriptions of ethical theories and principles. Retrieved 17 Nov 2014, from http://www.bio.davidson.edu/people/kabernd/indep/carainbow/theories.htm
Shaw, W.H. (2014). Business ethics. Boston, MA: Cengage Learning.
Schmeer, K. (n.d.). Stakeholder analysis guidelines. Retrieved 17 Nov 2014, from http://www.eestum.eu/voorbeelden/Stakeholders_analysis_guidelines.pdf
Stanford Encyclopedia of Philosophy . (n.d.). Deontologican Ethics. Retrieved 17 Nov 2014, from http://plato.stanford.edu/entries/ethics-deontological/
Thomas, A. (2011). Virtue ethics and an ethics of care: Complementary or in conflict? Eidos 14, 132-151. Retrieved 18 Nov 2014, from http://www.scielo.org.co/scielo.php?pid=S1692-88572011000100006&script=sci_arttext
