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Merck Case

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1. Think about the definition of stakeholders — any parties with a stake in the organization’s actions or performance. Who are the stakeholders in this situation? How many can you list? On what basis would you rank them in importance?

People suffering from the disease or those who potentially may be infected – would directly benefit from the cure
Merck employees at all levels – profitability and the economic health of the company affects current employees
Merck shareholders – inability to profit from the drug might have a negative effect on shareholder’s value, but taking the stand on “doing the right thing” might have a favorable effect on company’s reputation and increase the value of the stock
Various healthcare organizations – Merck is one of the leaders in the industry whose actions or inactions may affect the state of the industry as a whole

One way to rank stakeholders in importance is by their level of benefit from the drug putting people suffering from the disease in the first place as they would benefit the most from the invent of the cure. Then, employees and shareholders would share the second place, provided that the company would most likely not be able to recover funds invested in the long and expensive process of developing the drug which in turn would affect company’s profitability. Finally, various healthcare organizations would rank third; the effect on them would depend on the level of their involvement in the process. 2. What are the potential costs and benefits of such an investment?

Developing a drug to combat river blindness has substantial potential costs and befits. Merck discovered an opportunity to treat millions of affected people around the world but it knew that the drug would probably never see commercial use. Investing millions of dollars in research and knowing that the company would ne be able to profit from it were amplified by the risk of coming up empty handed. While research...

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