Business Ethics and Social Responsibility
Q.1: It is possible to develop a universal set of ethical standards in business despite differences in culture and perceptions of right and wrong among societies across the world. This is because the basis of morality is human nature, rather than differences in culture and perceptions of right and wrong. In the two cases – Values in Tension by Donaldson (1996) and that on the Chiquita Brands in Lawrence and Weber (2016) – the central issue of focus concerns the significance of social and cultural differences across societies in the perceptions and values of morality, and in the legality of business actions. The article by Donaldson identifies the problem of a clash between the values and ethical standards in different societies and countries across the world because of differences in culture and their influence on the things that are right or wrong. The article identifies the problem of the set of values and ethical standards that should prevail in the operations of a business when these operations traverse the boundaries of societies or countries. The case in Lawrence and Weber (2016) shows how the clash in culture and values in individual societies can sponsor issues of the legality of business methods and ethics. It shows the problem of the legal applicability and relevance of particular aspects of business ethics and responsibility across international borders.
Nonetheless, it is possible to overcome the challenges that these differences in culture and perceptions of right and wrong across societies influence and develop a universal set of ethical standards in the business. Morality applies to all rational beings. Human beings, as rational agents, have the same consciousness and understanding of the principles of bad and good, and of right and wrong, such that these principles do not depend on culture, religion, race, gender, individuals, or other variables. Abun and Magallanez (2018) note that the understanding of what constitutes bad/good or right/wrong does not apply in one place, or to one culture or individual. Rather, the inherent nature of this understanding in human nature, based on conscience and reason, makes it possible to traverse cultural and national differences to institute a universal set of ethical standards in the business. To achieve this, societies and countries across the world need to unite and cooperate with one another to enable inclusivity, and hence effectiveness, in the enforcement of the universal set of ethical standards in the business. The problem with enforcing the universal set of ethics is the lack of cooperation and inclusivity among the world’s countries and societies, rather than the impossibility of developing it.
Q.2: Corporations have a right and responsibility to influence ethics in the countries of their operations. By extending their operations into these countries, these corporations become a part of their economies and societies, such that the ethics, culture, and other environments in these countries affect the operations of these corporations. By virtue of being a part of the environments in these countries, these corporations have a right and responsibility to influence ethics in them in an effort to improve the prevailing ethical environments in the countries. Nonetheless, it is also essential to note that this responsibility and right ought to feature the corporation’s sense of responsibility and sensitivity to the culture in the country of operation. This means that a corporation’s right and responsibility to influence the ethics in a country of operation ought to be accountable and respectful of the existing culture and environment in the country, with the aim of contributing positively to improve the ethics for both the corporation and the country and its culture and business environment. The corporation’s right and responsibility to influence the country’s ethics should aim at a mutual benefit for both the corporation and the country, rather than focusing on self-serving objectives.
The topic of focus in this section is the issue of pharmaceutical companies and the conflict over making drugs to manage HIV/AIDS available in poor countries. Pheage (2017) notes that over 1.5m Africans died from illnesses including HIV-related complications in 2015. This is a significant problem owing to the fact that HIV/AIDS is preventable and manageable with timely and consistent access and use of relevant and affordable medicines and other health services. Pheage (2017) observes that the production of less than 2% of the medicines that are necessary and in demand in Africa occurs on the continent. This assessment highlights the problem of inaccessibility of vital drugs in poor countries such as those in Africa. Without adequate and reliable access to medicine, people in poor countries and societies are highly susceptible to killer diseases such as HIV/AIDS.
The models and strategies of marketing and sales in pharmaceutical companies represent a significant part of the problem that undermines effective access to important, basic medicines among people in poor societies and countries. Access to medicine means having it continuously available and affordable at local health facilities. Access to essential drugs to treat chronic conditions such as HIV/AIDS is difficult for people who need them the most in poor countries, thereby undermining the realization of the right to health in these communities. Pharmaceutical companies and governments in industrialized countries, acting on behalf of the companies, have undermined the accessibility and affordability of these drugs through patenting, which makes drugs more expensive and accessible to fewer customers, and marketing-related targeting that ignores poor countries and societies. The primary objective of pharmaceutical corporations is profit-making, while governments in industrialized countries benefit from the tax incomes that these companies remit. These interests are in direct contradiction with those of public health, particularly in poor countries, owing to the inability of the poor to meet the prices/costs of these drugs (Leisinger, 2012; Cochrane, 2000). These companies and governments justify patents on medicines and the high prices by referring to the high costs of research and development. These actions serve to restrict the availability and undermine the affordability of essential drugs to prevent and manage HIV/AIDS in poor countries.
The important stakeholders in this issue are the pharmaceutical companies themselves, governments in industrialized countries where the production of essential drugs to manage HIV/AIDS occurs, poor HIV/AIDS patients in low-income countries, and governments and societies in poor countries. As discussed earlier, pharmaceutical companies have a direct interest in the issue because they are the ones who conduct relevant research and manufacture the drugs. They also have an interest in making profits from the sale of these products. Governments in industrialized countries that host pharmaceutical companies have an interest in the issue in terms of the tax incomes that the enterprises provide. Poor HIV/AIDS patients in low-income countries have an interest in the issue because of the value and utility of the drugs in the management of the disease. The unavailability and unaffordability of drugs to manage the condition have a direct effect on the health and wellbeing of these patients. Governments and societies in low-income countries, where poor HIV/AIDS patients are unable to access and afford essential drugs to manage the condition, have an interest in the issue because of its implications on the economy and public health. The unavailability and unaffordability of these drugs imply the inability of HIV/AIDS patients to manage the disease effectively, leading to health complications and chronic demand for healthcare. Societies and governments have to commit huge resources to meet the chronic demand for healthcare, and they also suffer from losses of economic productivity relating to the disease’s effects on the population. The chronic demand for healthcare among HIV/AIDS patients owing to ineffective management of the condition undermines the productivity of labor, increases dependency ratios in the economy, and strains the society’s healthcare resources.
The three aspects of reasoning in ethics – rights, utility, and justice – are applicable in this issue. The rights approach to ethics emphasizes on respect for the dignity of human beings. It places value on the capacities of human beings to choose freely the ways in which they lead their lives and their moral rights to respect for their choices as rational beings and equal and free members of the society (Brown, Suter, & Churchill, 2013). In regard to the conflict over making drugs to manage HIV/AIDS available in poor countries, this perspective relates to the capacities of individuals with HIV/AIDS in poor societies to gain the capacity to improve their health and the quality of their lives through utilization of the resources in their environment (drugs, in this case). The unavailability and unaffordability of these drugs has a direct impact on the rights of the patients, such that the inaction of pharmaceutical companies to ensure the availability and affordability of their products for the poor infringe on their rights.
The utility perspective focuses on the peace and happiness of individuals or society members. The right action is that which promotes peace and happiness, while the wrong one undermines these outcomes (Brown et al., 2013). The availability and affordability of drugs would promote the happiness and peace of poor patients in low-income countries and serve the interests of governments in these countries to boost economic productivity, prevent strain on healthcare resources, and promote population health. Nonetheless, at the same time, the availability and affordability of drugs would undermine the interests of pharmaceutical companies to maximize profits and governments in societies that host the companies to increase tax income. To assess the rightness/wrongness of pharmaceutical companies from the utility perspective, the assumption here is that poor HIV/AIDS patients and governments in low-income countries are more in number than the pharmaceutical companies that produce HIV/AIDS drugs and the governments that host them. Based on this assumption, the utility perspective would indicate that the action to ensure the availability and affordability of the drugs for the patients is the right one, rather than that aimed at boosting the profits and tax incomes of the companies and their host governments.
The justice perspective emphasizes the moral obligation to act in terms of fair adjudication between contradicting or competing claims. It relates closely to the principles of fairness, equality, and entitlement. From the perspective of healthcare, which is the area of concern in the chosen topic, the principle of justice concerns the elements of distributive justice (fair distribution of scarce resources), legal justice (respect for laws that are morally acceptable), and rights-based justice (respect for the rights of people) (Brown et al., 2013). In the issue of focus, the justice approach to ethics would emphasize fairness towards poor HIV/AIDS patients, equitable distribution of healthcare resources for the use of all, and respect for the rights of poor patients to a quality life and drugs to manage their health needs effectively. This means that this perspective would support efforts to ensure the availability and affordability of drugs for poor HIV/AIDS patients.
Impact at the Family Level
At a family level, the significance of this issue relates to the effect that the unavailability and unaffordability of drugs to manage HIV/AIDS have on family members and wellbeing at the family level. As noted earlier, drugs are important in the management of HIV/AIDS, implying that their unavailability and unaffordability are likely to affect the health, wellbeing, and quality of life of the patient adversely. These problems are likely to have huge adverse effects on the family and its resources, especially because of the potential of complications in the patient’s health and wellbeing. The family is likely to face heavy costs on their financial and psychological resources because of the need for chronic healthcare and the emotional torture of witnessing the suffering of a family member. These problems are likely to affect the peace and security of the family adversely. These are direct effects on the family because of the physical closeness of the patient to the family members and the sense of responsibility for the patient’s health and wellbeing among family members.
Impact on the Community
At the community level, the impact of unavailability and unaffordability of HIV/AIDS drugs concerns the heavy impact of potential health complications in the patient’s life on healthcare resources and economic productivity. The community is highly dependent on public services for their wellbeing and security. The government’s capacity to provide adequate and effective health and other public services for the wellbeing of community members is dependent on the abundance and sufficiency of the government’s resources. The adequacy of government finances enables it to invest adequate resources for the effective provision of health and other services in the community. The unavailability and unaffordability of drugs to manage HIV/AIDS is likely to promote health complications among patients, resulting in constant demand for more healthcare. This demand is likely to strain available healthcare resources and compel the government to commit more funds to the provision of chronic care, thereby using up the resources meant for the provision of other public services. This means that the unaffordability and unavailability of drugs to manage HIV/AIDS represents a risk for community health and wellbeing in the longer term.
At the same time, health complications among patients owing to the lack and unaffordability of drugs to manage HIV/AIDS are likely to cause a decline in economic productivity and promote dependency at the community level. This is because good health is an important precondition for human productivity. Health complications are likely to cause patients’ needs to be absent from work and reduce their commitment to productive activities, thereby promoting their dependence on others for housing, daily upkeep, healthcare, etc. In effect, the unavailability and unaffordability of the drugs are likely to spur adverse economic performance and wellbeing at the community level.
From an organizational perspective, particularly in societies that host pharmaceutical companies, the decision to lower the prices of drugs to make them affordable for poor patients is likely to lower the business performances and profits of these enterprises. This effect is likely to influence the companies’ desire to lay off employees in an effort to lower the costs of their operations and maintain profitability. Such action would avail negative effects on the community in terms of lowering the incomes of members.
Impact at Country Level
The impact of the issue under review at the country level is similar to that at the community level. The unavailability and unaffordability of drugs to manage HIV/AIDS would cause governments to increase their investments in the provision of chronic healthcare resources. Increased demand for chronic care among HIV/AIDS patients would force the government to rearrange its priorities in expenditure on the provision of government services, causing reduced budget allocations for other vital services. This trend would promote significant costs on the general well-being of the country and its citizens. The country is also likely to suffer from the heavy costs of health complications among HIV/AIDS patients on national productivity. This is because absences from work and reduced commitments of time and effort to economic production would undermine national productivity on aggregate and promote higher dependency ratios. These effects would undermine national productivity and promote poverty conditions.
From the perspectives of corporate social responsibility and ethics, the unavailability and unaffordability of HIV/AIDS drugs in poor countries would undermine the contributions of pharmaceutical companies and Canada, as a country, to societal goals. CSR and ethics demand self-regulation among businesses and other entities to contribute positively to societal goals, including human rights, environmental and social wellbeing, and health. Failing to take action to ensure the abilities of poor HIV/AIDS patients to access and afford essential drugs in the management of their conditions would undermine the performance of the responsibilities of the companies and Canada to contribute to these goals.
Abun, D., & Magallanez, T. (2018). Universal business ethics: A challenge to multinational companies. International Journal of Applied Research 4(9): 190-195.
Brown,T., Suter, T., & Churchill, G. (2013). Basic marketing research. Boston, MA: Cengage Learning
Cochrane, J. (2000). Narrowing the gap: Access to HIV treatments in developing countries. A pharmaceutical company’s perspective. Journal of Medical Ethics 26: 47-50.
Donaldson, T. (1996). Values in Tension. Harvard Business Review.
Lawrence, A., & Weber, J. (2016). Business and society: Stakeholders, ethics, and public policy. New York, US: Mc-Graw Hill Education
Leisinger, K. (2012). Poverty, disease, and medicines in low- and middle-income countries: The roles and responsibilities of pharmaceutical corporations. Business and Professional Ethics Journal 31(1): 135-185.
Pheage, T. (2017). Dying from lack of medicines. United Nations, Africa Renewal. Retrieved from: https://www.un.org/africarenewal/magazine/december-2016-march-2017/dying-lack-medicines