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Nature and concept of corporate social responsibility
Business Ethics in Today's Corporate World
Nature and concept of corporate social responsibility
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The term “ethical business” is seen, by many people, as an oxymoron. This is because a business’s main objective is to make as much money as possible. Making the most money possible, however, can often lead to unethical actions. Companies like Enron, WorldCom, and Satyam have been the posterchildren for how corporations’ greed lead to unethical practices. In recent times however, companies have been accused of being unethical based on, not how they manage their finances, but on how they treat the society that they operate in. People have started to realize that the damage companies have been doing to the world around them is more impactful and far worse than any financial fraud that these companies might be engaging in. Events like the BP oil …show more content…
Shkreli believes that this his decision is not only ethical but a decision that needed to happen. Shkreli argues that selling the drug at $13.50 puts Turing Pharmaceuticals at a loss, and that a price increase is necessary for Turing Pharmaceuticals to operate. Shkreli believes that if Turing Pharmaceuticals is profitable, it can use the money to do more research to develop more drugs that will help more people. In fact, in a new video, Shkreli claims that Turing Pharmaceuticals has created a drug that deals with a degenerative brain disease. He claims that only 300 people suffer from this disease and that if he didn’t raise the price on Daraprim, he would not have been able to produce the new drug. After …show more content…
A Utilitarian is a person that believes, if an action produces more good than harm, then that action is morally correct. Shkreli believes that if he raises the price Daraprim, Turing Pharmaceuticals will raise more profitable, and therefore is able to spend more money on research to help develop more drugs down the road. There are however, two types of Utilitarianism. There is Act Utilitarianism and Rule Utilitarianism. Act Utilitarianism believes that any action that produces more good than harm, it is the moral thing to do. While Rule Utilitarianism believes that any action that does not breaking the law and produces more good than harm, is the moral thing to do. Shkreli can even justify himself using Deontologist theory. Just like Utilitarianism, there are two type of Deontology. Those two types are called Act and Rule Deontology. Act Deontology believes that every decision should be made on the premise of not breaking the three perfect duties. The three perfect duties are never kill, never lie, and never break a promise. Shkreli can justify his decision by saying he didn’t kill anyone, he never lied, or broke a promise by raising the price of
It's difficult not to be cynical about how “big business” treats the subject of ethics in today's world. In many corporations, where the only important value is the bottom line, most executives merely give lip service to living and operating their corporations ethically.
Bernie Sanders Vermont Senator wrote in resentment: “Americans should not have to live in fear that they will die or go bankrupt because they cannot afford to take the life-saving medication they need.” CBS notes Hillary Clintons campaign on the gauging of life saving medications as she states: "Drug companies should not be allowed to reap excessive profits or spend unreasonable amounts on marketing if they want to receive support that is designed to encourage life- saving and health-improving treatments.” American"s are outraged, ideally majority of people who do
Many businesses that achieve great success become greedy and want more. Pharmaceutical companies, such as Turing, have been overpricing life-saving drugs since they’ve been discovered. Martin Shkreli, the CEO of the company that raised the price of the H.I.V medicine, was arrested because of wrongdoings involving his former hedge fund and a pharmaceutical company he previously headed. He has been charged with conspiracy to commit security fraud, wire fraud, and using his previous company to cover personal debts. U.S. Attorney Robert Capers says, “As alleged in the indictment, Shkreli essentially ran his companies like a Ponzi scheme, where he used each subsequent company to pay off the defrauded investors in the prior company” (Shkreli).
Pharmaceuticals are arguably one of the most contentious of all goods and services traded in the market. While medicines are as much a necessity as foods and water, they require more technical expertise and official approbation in the manufacture. Above all, they carry a moral weight that most market products do not (The Economist, 2014). This idea of moral can be linked to the recurring debate over whether a good health (which is represented by medicines, in this case) should be considered a basic human right, or just a normal commodity. A large portion of such controversy actually lies in an existence of drug patents: should we promote for longer-lasting patents or should we have their duration shortened?
Why are the prices so high? Some critics of the drug companies argue that the larger firms are ripping off the American public, are dishonest and, in some cases, unsafe. On the other hand, there are health care workers such as doctors and their supporters who claim that research and testing for drugs costs money. This supposedly justifies their prices for their products. Also, as an argument to their side, they say that their practice is a benefit to the improvement to mankind. It is a life saving business, but are these prices justified? As one can see, this is a very important issue in medicine today. It affects everyone involved with medicine, which is much of the American public. It also affects the physicians and drug makers.
Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the
CEO Martin Shkreli has recently come under fire after increasing the price of Daraprim, a drug that many people rely on, 5,000%, from $13.50 per pill to $750. Despite the incredible backlash from critics around the country, Shkreli believes that he was justified in doing so saying that it was to raise money to be able to create other pharmaceutical drugs. The question now becomes, can this 5,000% price increase be ethically justified? Through the use of Utilitarianism, I will argue that this price increase is not ethically justified.
Do you agree with Schmeltekopf that business schools are not preparing students well for the for the ethical challenges they will face in the workplace? Why or why not?
Explain the connection between the economic model of corporate social responsibility and “free market” or “neoclassical” economic theory.
Even before the medicine price increase, his business practices had come under scrutiny. He had acknowledged and has had criminal investigations and other claims of wrongdoing made against him. He has run into problems at both a hedge fund he once controlled and has also had other problems at a company called Retrophin another pharmaceutical company he ran and from which he was replaced and later sued by. He also lacked some of the essential qualities of a good leader those being empathy, humility, experience, and general interest in truly leading a company altogether. Martin Shkreli is the epitome of a bad leader. Firstly, he had a major lack of experience in both leadership and the basis of the company he was running. Most successful CEOs have a deep experience and truly understand the products that they are selling. However, Martin Shkreli had no such experience his major qualifications was a business degree and only major experience was running hedge funds which he had got in trouble with the law. Martin lack of experience and knowledge in the field medicine as well running business overall was a strong indicator of his poor leadership. Although he Shkreli is a minor part in a more major issue his ability to even do what he did and be able to be so morally bankrupt and inept at running company yet do so is even more
Ethical business practices include assuring that the highest legal and moral standards are observed in your relationships with the people in your business community. This includes the most important person in your business, your customer. Short term profit at the cost of losing a customer is long term death for your business.
Everyone in this world has experienced an ethical dilemma in different situations and this may arise between one or more individuals. Ethical dilemma is a situation where people have to make complex decisions and are influenced based on personal interest, social environment or norms, and religious beliefs (“Strategic Leadership”, n.d.). The leaders and managers in the company should set guidelines to ensure employees are aware and have a better chance to solve and make ethical decisions. Employees are also responsible in understanding their ethical obligations in order to maintain a positive work environment. The purpose of this case study is to identify the dilemma and analyze different decisions to find ways on how a person should act
Utilitarianism is defined to be “the view that right actions are those that result in the most beneficial balance of good over bad consequences for everyone involved” (Vaughn 64). In other words, for a utilitarian,
Business Ethics are much more than the buzz word stories on late night news. The Corporate Social Responsibility of a company goes well beyond that. “Business Ethics are moral guidelines for the conduct of business based on notions of what is right, wrong and fair.” (Bellow, 2012). Individual backgrounds play a huge role in person by person code of conduct can vary from employee to employer. To help solve some grey areas in what is ethically correct, companies now make a code of conduct that is over everyone in the company. This code of responsibility helps employees have better understanding of what is required of each and every one of them. “Corporate Social Responsibility is a business philosophy which stresses the need for
The Facts: Kermit Vandivier works for B.F. Goodrich. His job assignment was to write the qualifying report on the four disk brakes for LTV Aerospace Corporation. LTV purchased aircraft brakes from B.F. Goodrich for the Air Force. Goodrich desperately wanted the contract because it guaranteed a commitment from the Air Force on future brake purchases for the A7D from them, even if they lost money on the initial contract.