Ethics and Corporate Responsibility in the Workplace and the World
Characteristics of a stakeholder and determining stakeholders within the PharmaCARE scenario
In the organizational context, a stakeholder is an individual or a group of individuals affected in one way or the other by decisions, objectives, policies, or actions taken by an organization or its representatives (Alexander & Miesing, 2004). In most cases, organizational stakeholders include employees, top managers, creditors, suppliers, unions, owners of organizations, also known as shareholders, customers or clients, as well as the community from which an organization obtains its resources. Some of the key characteristics of the stakeholders are that they provide funding for projects in their organizations, participate directly in the projects, invest resources in the projects, are affected by project outputs or outcomes, and stand to lose or gain when the project either succeeds or fails (Alexander & Miesing, 2004).
In the PharmaCARE scenario, stakeholders involve people from the African nation of Colberia, its executives, customers, staff members, people in the community where the manufacturing facility is located in Colberia, members of the PhRMA board, community partners, wholesale and retail vendors, as well as shareholders. The mentioned individuals can be affected either positively or negatively by the actions taken by the organization or its representatives. These people can be affected from a monetary point of view, quality of their life or day-to-day activities, or how they interact, or are related to one another. For instance, people from Colberia are employees of PharmaCARE’s manufacturing plant, and the fact that they are paid one dollar a day means that they work for a low paycheck, and thus, they are affected negatively by the organization’s payment policy. The executives have access to better services and facilities courtesy of the organization, such as living in a luxurious compound complete with a swimming pool, a golf course, and a tennis court. As such, the executives are stakeholders who are impacted positively by the organization’s decisions and policies.
Analysis of human rights issues
There are numerous human rights issues presented by PharmaCARE employees’ treatment, especially the indigenous population in Colberia and that of its executives. One of the human rights issues presented in how PharmaCARE treats Colberia’s indigenous population is poor remuneration and work conditions. The company obtains information about indigenous cures from several healers in Colberia, but does not pay them for the same. Besides, the organization pays one dollar a day to Colberians, and this is not in any way proportional to the services they offer, which consist of carrying fifty-pound baskets for five miles from the harvesting plants into and out of the jungle. Inequality is evident in the PharmaCARE situation, because the Colberian population works under insufficient conditions and is paid poorly for services offered, whereas executives have access to luxurious facilities such as a compound with a swimming pool, a golf course, and tennis courts. Despite working for a renowned and successful organization, the population in Colberia lives in primitive huts with no electricity or running water whereas the organization’s executives have access to these facilities. The harsh treatment of the Colberian population is evident, and this is an illustration of how unethical PharmaCARE and its executives are (Halbert & Ingulli, 2012).
Addressing the presented human rights issues will be one of the important steps towards making PharmaCARE more ethical going forward. One of the recommended changes is that PharmaCARE should raise the daily wage from one dollar a day to a globally accepted daily minimum wage for employees. Second, being a renowned and successful organization, PharmaCARE should invest in the development of better houses for its employees in Colberia, which will make them move from the poor and low living standards to better standards with access to electricity and running water. Third, it is important for PharmaCARE to fill the socio-economic gap between its executives and employees in Colberia. By filling this gap, PharmaCARE will ensure that both employees and executives have access to luxurious facilities such as a golf course, swimming pool, and tennis courts. Equality in the workplace is important as it is not only a determinant of success in organizations, but it also indicates how ethical the stakeholders in an organization are. Filling the existing socio-economic gap between employees and executives of PharmaCARE would be one of the steps towards achieving equality, which would, in the long run, play a crucial role in the success of the company.
PharmaCARE’s environmental initiative
Recently, PharmaCARE launched a new initiative known as “We CARE about YOUR world®” through which it pledged its commitment to the environment through recycling, changes in its packaging process, and other green initiatives. However, this initiative largely contradicts its anti-environmental lobbying efforts and actions, especially in Colberia. With this initiative, it is expected that PharmaCARE should be at the forefront in protecting and conserving the environment and its components. Unfortunately, through its extensive activities in Colberia, the company is at the forefront when it comes to destroying habitat and endangered native species. The company’s slogan is “We CARE about YOUR health®” and with this, it ought to prioritize the health of its stakeholders, including employees, executives, and the general Colberian population. Caring about health entails taking care of the environment and protecting individuals from contracting critical illnesses. However, this slogan is contradictory to the organization’s day-to-day practices, policies, and actions, which is a reflection of the lack of ethics (Hunt & Hansen, 2007). First, PharmaCARE’s payment of one dollar a day to its Colberian employees is not proportional to the services they provide. The Colberian population harvests plants by walking five miles into and out of the jungle carrying baskets, which when full, weigh up to fifty pounds. Through this, PharmaCARE is endangering the lives of the Colberian employees despite having a slogan, which champions for taking care of the health of its stakeholders. By caring about health, it is expected that the company should make the environment conducive for living and ensure that such essential elements as electricity and water are availed to the Colberian population. However, the organization is at the forefront in destroying the environment, and it shows no concern for the poor living conditions of the Colberian population, which have primitive huts serving for their houses with no facilities in there. Despite having a good and commendable environmental initiative, the practices of PharmaCARE are not a reflection of the values it preaches. Other than paying the Colberian population poorly for their services and destroying the environment and endangered native species, PharmaCARE has succeeded in defeating environmental laws and regulations through its lobby efforts to get an extension of the Superfund tax, which was created by Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).
Ethicality of PharmaCARE’s actions
A lack of ethics is evident in PharmaCARE through its actions targeting stakeholders. On one hand, Colberians are paid one dollar a day for their services and their living conditions are not impressive. On the other hand, PharmaCARE’s executives live in a luxurious complex with access to all the amenities, including electricity, running water, tennis courts, a swimming pool, and a golf course. In the real sense, the company focuses more on making profits at the expense of its employees, who barely afford better living conditions. The ethical theory of utilitarianism argues that the best moral action is the one that maximizes utility, which in the case of PharmaCARE, is the well-being of the people in Colberia. However, in this case, PharmaCARE is more worried about making profits than about the welfare of the Colberian population (Halbert & Ingulli, 2012). Besides, despite the fact that the organization offers free and discounted drugs to low-income customers, it goes ahead to ignore the well-being of its employees, and thus, its actions are unethical. The deontology theory believes that morality or ethicality of an action is based on how people are treated equally with uttermost respect for fairness and life. This is contrary to the situation in PharmaCARE, where employees are not treated equally.
According to virtue ethics, the ethicality of actions is based on character, morals, and honesty and none of these factors is evident in the case of PharmaCARE. In line with virtue ethics, the organization’s actions are unethical, because it is lobbying against environmental laws and regulations, and it is not honest with healers when obtaining information about indigenous cures from them (Halbert & Ingulli, 2012). On the other hand, the ethics of care states that whether an action is morally right or wrong depends on the relationships between people and how valuable they are. In the case of PharmaCARE, its actions do not reflect morality or ethicality, because the relationship does not show the care or concern that the executives have for the Colberian population. If the executives showed care or concern, they would offer better salary to the Colberian employees, and this would enable them to access better houses and better-living conditions comparing to those they are in currently.
Comparison of PharmaCARE’s actions to a real-world company
The situation at PharmaCARE is similar to that at Walmart. Despite being one of the most successful retail companies in the US, Walmart is famous for the lack of ethics in its daylyroutines. Contrary to its slogans, visions, and missions that assure customers of high-quality products and services, Walmart sells low-quality merchandise and in recent years, it has pushed other retail businesses out of operation. Also, it has gone against its commitment to protect and conserve the environment as highlighted by the fact that it has been found guilty by the EPA of environmental crimes on numerous occasions. Moreover, despite its high profits, Walmart pays its employees as little as possible whereas its executives are paid highly. In 2013, employees of Walmart conducted demonstrations in which they demanded an improvement of their working conditions and an increase in their annual wages. Clearly, Walmart, just like PharmaCARE, shows little concern for its employees, who are the key determinants of its success or failure.
Alexander, C. S., & Miesing, P. (2004). How important are stakeholder relationships? In Allied Academies International Conference. Academy of Strategic Management. Proceedings (Vol. 3, No. 1, p. 1). Jordan Whitney Enterprises, Inc.
Halbert, T., & Ingulli, E. (2012). Law & ethics in the business environment. Mason, OH: South-Western Cengage Learning.
Hunt, S. D., & Hansen, J. M. (2007). Understanding ethical diversity in organizations. Organizational Dynamics, 36(2), 202-216.