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Corp Responsibility

In: Business and Management

Submitted By mbaker12
Words 1704
Pages 7
February 21, 2016
Law, Ethics, and Corp. Governance

PharmaCARE (We CARE about YOUR health®) is one of the world’s most successful pharmaceutical companies, enjoying a reputation as a caring, ethical and well-run company that produces high-quality products that save millions of lives and enhance the quality of life for millions of others The company offers free and discounted drugs to low-income consumers, has a foundation that sponsors healthcare educational programs and scholarships, and its CEO serves on the PhRMA board. PharmaCARE recently launched a new initiative, We CARE about YOUR world®, pledging its commitment to the environment through recycling, packaging changes and other green initiatives, despite the fact that the company’s lobbying efforts and PAC have successfully defeated environmental laws and regulations, including extension of the Superfund tax, which was created by Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
Based in New Jersey, PharmaCARE maintains a large manufacturing facility in the African nation of Colberia, where the company has found several “healers” eager to freely share information about indigenous cures and an abundance of Colberians willing to work for $1.00 a day, harvesting plants by walking five (5) miles into and out of the jungle carrying baskets that, when full, weigh up to fifty (50) pounds. Due to the low standard of living in Colberia, much of the population lives in primitive huts with no electricity or running water. PharmaCARE’s executives, however, live in a luxury compound, complete with a swimming pool, tennis courts, and a golf course. PharmaCARE’s extensive activities in Colberia have destroyed habitat and endangered native species.
PharmaCARE has many stakeholders in the company, which impacts the way business is conducted within the company. A stakeholder is defined as anyone with an interest in the company (Halbert, 1990 p.387). Stakeholders can be anyone who is affected by decisions of a company such as owners, workers, the community, suppliers, and any other entity that is vested in the company (Halbert, 1990 p.387). There are both internal and external stakeholders in a company. Below is a chart that visually shows how the stakeholders are all connected to the company (BBC, "Stakeholders", 2014).
Each of these stakeholders has a different interest in the company’s activities. Owners are responsible for the funds that are brought into the company. They are responsible for the functions of the company and how much the company is worth for investors. The workers are responsible for the upkeep of the company and its daily functions. The workers are also vested because of the benefits that the company has to offer. Customers are interested in what the business has to offer. They are interested in prices and the quality of products that they are consuming. Managers are the heart of the company they are responsible for the everyday functions and always ensuring that the upper-level team is knowledgeable about everything going on in the company. Suppliers want the company to succeed so the products or services they are providing are purchased. The community is one of the most important external stakeholders to a company. The community could be a positive or negative entity to a company. The community aspect is responsible for the well being of neighborhoods, the environment, and the people and animals that reside there. PharmaCARE should have a pledge to the community stakeholders. In the case of PharmaCARE there are man human rights issues that are presented that include the treatment of Colberia’s population versus the living standards of those executives of PharmaCARE. The executives have been knows to live in luxury estates while the standard of living of the workers of the manufacturing company include living in huts with no electricity and little to no clean water. Beyond the issue of what is morally correct in these situations this happens not only in PharmaCARE but in major companies of the world. Many of the most lucrative companies in the United States have major gaps in the pay of chief executive compared to their median worker. “The pay gap between chief executives of major U.S. firms and their median workers is massive, according to a recent report from career review site Glassdoor, which looked at data from 2014. The average pay ratio of CEO to median worker was 204-to-1, the report found. At the top of the list, four CEOs earn more than 1,000 times the salary of their median worker (Huffington Post, 2015).”
This finding shows that not only is this happening because of the cost of living but because it is legal. Because this practice is legal does not mean it is morally or ethically correct. There are ways that PharmaCARE could make changes that could potentially make the practice more ethical going forward. PharmaCARE could:
Raise the pay for each of the workers to half of what the federal minimum wage is for the country that the company is based out of. Raising the pay would enable these workers to potentially afford better housing, food, and overall better living conditions for themselves and their families. Not only would this benefit the workers but it could potentially improve work performance for the workers. “If selected, implemented, and monitored correctly, incentive programs— with awards in the form of money or tangible awards—increase performance by an average of 22 percent. Team incentives can increase performance by as much as 44 percent (Incentive Research Foundation, 2016).” 1. Create an atmosphere of appreciation for these workers. For the labor that each of these employees endure during the day, they should have a sense of appreciation. With that comes changes such as the way harvesting plants are transferred for example, PharmaCARE should upgrade the company technologically to create a faster and easier way for this process to take place instead of the long hours of labor on their employees for $1.00 pay. 2. PharmaCARE could provide housing for their employees. With electricity and running water the employees would be able perform better at work because their standards of living will be raised. Not only would this be a positive change for the employee but PharmaCARE would be providing for the Coberians.
Along with supporting the Colberian people, PharmaCARE lobbied to be an environmental safe company. These efforts were clearly missed in African country while they destroyed habitat and endangered native species. The efforts that PharmaCARE made to become environmentally safe were tolerable in the sense that the purposes of these efforts were to provide for the greater good of society. While the company did shy away from its environmental lobbying efforts in Colberia it is providing free and discounted drugs to low-income consumers, this could possibly the a life saving effort by PharmaCARE for the people of this African nation.
PharmaCare’s actions could be held to each of the following ethical theories and each would hold true that in some instances the company could improve. In accordance with Utilitarianism, PharmaCARE is putting its best effort forward to utilize the people of Colberia for a lower pay, which in return profits would be higher in return. The overall effort to save money and give away free and discounted products would hold true while the executives that calculate the ideas are compensated. Deontology is based on action’s adherence to rules, PharmaCARE is not breaking any laws, they are only utilizing their external resources for a lower pay and another area not in the area they are based. In regards to virtue ethics the thinking of the companies executives show that they are profit minded and willing to do anything possible to make the company successful. The companies efforts at being environmentally friendly show that they are ethically sound and trying at an attempt to have a company that is seen as positive in the consumers eye. Personal values and ethics agree with PharmaCARE and their efforts at providing for a country with little to no standards of living while also providing for their own country with free and discounted drugs. There are things within the company that could be improved upon such as the efforts at providing for the Colberian people but overall PharmaCARE is making great strides as a company.
PharmaCARE could be compared to British Petroleum (BP) in regards to ethical, environmental, or workplace safety issues and financial loss. Despite BP’s large market share and high value on safety, it has been involved in major environmental and safety incidents, which have affected their own workers, the integrity of the company, their customers and also the ecosystems where oil spills have happened. BP has a long history of legal and ethical violations in which critics, judges, and Congress say depict the company having a tendency for putting profits ahead of everything else. The problems to be addressed in this work are BP’s upper management inability to adhere to safety regulations and their lack of attention to their effect on the environment. These two problems are disturbing and without immediate change in areas such as safety and respect for the environment the company will lose competitive position. If BP continues to allow these incidents to occur they not only jeopardize their companies overall efficiency and earning potential but also severely hurt the entire world’s natural resources. PharmaCARE has these same issues where they are providing for the consumer but also putting others at risk while doing so. These risk for BP have led to major financial loss due to payouts for settlements and other ethical issues. If PharmaCARE continues on a path of being anit-environmental they may end up with the same issues as BP or worse.
Halbert, T., & Ingulli, E. (1990). Law and ethics in the business environment. Here's How Outrageous The Pay Gap Between CEOs And Workers Is. (2015, August 27). Retrieved February 22, 2016, from
Incentives, Motivation and Workplace Performance: Research and Best Practices. (2016).
Retrieved February 22, 2016, from Stakeholders. (2014). Retrieved February 22, 2016, from

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