Sample Business Studies Paper on Business Ethics and Social Responsibility


Ethics is a core value that enables humans to observe high moral standards in all their dealings. It helps organizations to understand their responsibilities to help it relate with customers. Merck had a tough decision to make regarding the drug. The decision would either save lives or lead to their death. The decision made could not fulfil both the economic purpose and ethical purpose. It would only satisfy one of them. Merck was tasked with the responsibility of ensuring that one


As a company, it was their responsibility to take all possible measures to reduce suffering. Merck had a role in ensuring that all the research they conduct was ethical and was acceptable by moral laws. Ethically, they had a responsibility to provide the drugs to the marginalized community. As a company they had their own bunch of principles that governed them. They dedicate their time to make human life better. They also aim to stand by the highest code of conduct and honour. ‘‘Our Values and Standards’’, (pp. 1-40) indicates that Merck emphasizes a code of conduct, aligning with ethical and philanthropic responsibilities and core values.

The company carries out their analysis and ventures to boost the health of humans. It has a responsibility to improving the life of humans and by giving out the drug it was fulfilling their commitment. The company is expected to do anything in its power to reduce the suffering of humans. They should use all their capabilities to make sure they achieve their goal of saving humankind. Madhavan (2009), Merck’s said that they should always remember that the drugs are for the society and not the returns

In a case where the drug failed after millions had been used to manufacture it, the company would be able to defend itself because it was done in an effort to make human life better. The intention for its manufacturing would curb any outcome. The company’s intention would have been sincere and meant to save mankind hence no bad reputation would accompany it. People would be proud because the company put effort in trying to save life.

Merck had the information that a large population was suffering from the disease. They also knew majority of those people lacked the funds to purchase the drug. With this information at their disposal, they had an ethical commitment to ensure they provide the drug. Lack of providing them with the drug would lead to deaths of thousands or millions of people. This would go against the company’s virtues and values. It would also paint a bad picture of the company to the public.

The public has an expectation that if a situation arises, companies should be able to rise up to the challenge. Research has proven that the decision helped the public due to reduction in the disease. Waters and Rehwinkel and Burnham, (2004) they should be able to help the people voluntary without expecting returns. By providing the drug to the community in need, Merck was giving back. The people suffering from River blindness were vulnerable and were in dire need of help. It was their role to stretch out a hand to them and help. According to the stakeholder’s theory, everyone is involved in the success of a company. All should be put into consideration while making decisions. Silverman, (2011) states that the reporting of pharmaceutical companies’ involvement in legal cases made the matter more severe.



The company does not have ethical responsibility to give out the drug. If the company gives out the drug without charges, it is going against its economic responsibility. According to the shareholder theory, the main responsibility of an organization is to maximize profits. The business should ensure the returns to the shareholders. As a company it has certain economic commitments. It ought to produce drugs and sell them to earn a profit. The cost of producing drugs is high. If it provides it for free it will be going at a loss. Investors would go at a loss and this is not ethical as not all investors are millionaires. Others, are average people who were planning to use the profits to help themselves. Giving the drug for free is not right as Merck has a commitment to their investors to behave in their best interest.

If they provided the drug they would earn nothing. Giving out the drug for free would mean no profits. This means there will be no money to invest in other drugs needed by the public. Some diseases lacked antibiotics and people relied on this companies to research to find a cure. It would be unethical for Merck to give out the drug for free as they would not be considering all the other diseases which were also killing people. It would be unfair to the people suffering from those illnesses.

Giving out this dug without cost meant loss for the company. When the company does not profit, there is shortage of money. This leads to cutting of people’s salary. This would be unethical to those people whose family depend on those salaries to survive. Loss of jobs would lead to people suffering as they were surviving on those jobs. This would not be right to them as they also have their own responsibilities.


The normative approach is based on the fact that everyone has a purpose. It implies that everyone wants to feel like they belong. Everyone wants to achieve success. In this approach everyone is important and valued. Here, everyone has their own responsibility. Onchocerciasis affected a lot of people hence the decision to eradicate it by giving drugs for free made them feel like they are valued by the company. By doing this, the company has stepped up to fulfil its responsibility of ensuring that humanity is safe.

According to the stakeholder’s theory, businesses should not worry about lost profit if they are fulfilling their moral and ethical obligations. The theory suggests that everyone contributes to the stakeholders. This includes the employees, the clients, the shareholders and many more. When Merck gave out the drug they were doing what was ethical to their clients who contribute to the stakeholders. The disease had affected millions of people who were poor hence could not afford the treatment. Hence, they reached out to the marginalized. This shows that Merck considered everyone as important, not only themselves but the public. This contrasts Friedman, (1970) that corporate social responsibility curbing is meant to lead to increase in profits.

The production of the drug together with the trials it had to undergo would be a costly investment. This means that the drug would have to be sold at a very high price in order for it to produce profits. At a high cost, the poor people would not be able to afford the drug. Giving out the drug for free was a social responsibility for the company. As the poor also belong to the stakeholders they were considered. The company had to put their needs in front as they from a big part of the stakeholders.

The decision made by Merck would have adverse effects on both the returns and investments. The main goal of a company is profits. By giving out the drug for free, the company was losing profits and investors. However, when the public sees the good that the drug is successful and that it has been of help to clients, the company’s reputation will flourish. This would attract other investors as they would love to invest in a company that takes corporate social responsibility seriously.  Porter, Kramer (2006) indicates that in addition to upgrading the brand reputation all over the world and drawing and retaining employees and investors, there are valuable financial advantages in achieving the higher social standards.

For corporate social responsibility, it entails with being a good citizen. Merck Company had the responsibility to formulate solutions to the health challenges that were occurring. As responsible citizens, they had a role to play during the crisis. Their response to the crisis reflects about their values. As a company that had ethical values, they had to provide the drug to fulfil their responsibility. Horton, (2004) indicates that Merck’s corporate social agenda moves from alleviating harm to strengthening strategic philanthropy tied with a social issue.

Access to health as a value to the Merck had to be accomplished. Considering the amount of money the drug would have cost, the company had a social commitment to step up to the challenge. The poor were also part of the shareholders. They formed part of the customers. Stepping up to save their lives shows how they are appreciated. They show them that they also contribute to the family of stakeholders. It was correct for the company to distribute the drugs to show them their importance. Conroy, (2007) Assuming the corporate social responsibilities is too expensive.

As a company giving out the drugs showed how they abided by ethics. In ethics, one is expected to do what is just and right. It should also be fair. The only way the company would have achieved this is by ensuring they do what is right. In the situation they had to give out the drug as the majority of those affected were the poor who could not afford the medication. They did what was just. They were fair to the poor population.

The company strived to meet the customers need and satisfaction. The clients needed the drugs even though they had no financial capability to purchase the drug. Therefore, the company gave out the drugs without cost to meet the customers need. It was their social responsibility to make sure that customers are satisfied regardless of the situation.

The company had a reputation. How the company responded to the situation had a big impact on their reputation. It could either tarnish it completely or build it up. The decision to give out the drugs made the reputation of the company go up. The public so its kindness in extending a hand to the poor. Good reputation enables a company to flourish more as they have the public’s confidence. This is a key aspect in the stakeholder’s theory as customers also form part the stakeholders and looking after their needs is very crucial.

Giving out the drug showed good leadership. It demonstrated how the company’s management was. It showed the public that their leaders were humane and could heed to the cries of the public. A company with good leadership always flourishes. This act also showed the employees that they were under the right leaders. Leaders who when confronted by a crisis, could step up and overcome it despite the challenges. The leadership demonstrated good leadership skills that a company should have in order to continue growing. They showed they are capable and most of all, they are just and fair to everyone.


As seen, profit is usually the main aim of companies. However, in certain situations companies have to see beyond profit making. They have to look at their moral and ethical responsibility both to themselves and the public. Companies should aim to do what is morally right even if it will cost them. It is their social responsibility to ensure that they fulfil their obligations to the public. In times of crisis, they should be able to step up and look beyond what they would gain. Rather, they should focus on what they can give.

References List

Conroy, M. E. (2007). Branded. New Society Publishers.

Friedman, M. 1970. The Social Responsibility of Business is to Increase its Profits. NY Times, September 13.

Horton, R. (2004). Vioxx, the implosion of Merck, and aftershocks at the FDA. The Lancet, 364:9450, pp. 1995-96

Silverman, E. 2011. Pharma Fraud Continues To Fill The US Treasury. (accessed March 3, 2012).

Madhavan, K. S. (2009) The secret of success of great visionary companies. (accessed March 3,2012)

Merck/MSD. Code of Conduct: Our values and standards: the basis of our success. of conduct.pdf. pp. 1-40. (accessed March 10, 2012).

Porter, M., Kramer, M. (2006). Strategy and Society: the Link between Competitive Advantage and Corporate Social Responsibility. Havard Business Review pp. 78-92.

Waters, H. R., Rehwinkel, J. A, and Burnham, G. (2004). Economic evaluation of Mectizan distribution, Tropical Medicine and International Health 9:4, pp. a16-a25