Sample Management Essays on Ethical and Social responsibility

Part A: Workplace Diversity

Question 1: Unauthorized Immigrants as a form of Workplace Diversity

Lawrence and Weber (2014) describe the different forms of workplace diversity without specific mention of unauthorized immigrants. These forms include gender diversity, ethnicity, lesbian, gay, bisexual, and transgender (LGBT), age, disabilities, military veterans and those with distinctive cognitive styles among others. A suitably diverse environment is that in which there is inclusion of all categories of members. The ethnicity/race type of workplace diversity entails the recruitment and maintenance of people from diverse racial and/or ethnic backgrounds. Research has shown that institutions that hire from diverse backgrounds have 35% higher chances of survival than those that are restricted to within a single racial or ethnic group (Allegis Group, 2019). Furthermore, the U.S. Census Bureau has in recent times begun acknowledging racial/ethnic diversity as a social construct rather than a biological component. Similarly, the concept of ethnicity has been recognized to be attributed mainly to the differences in geographical origins. The consideration of unauthorized immigrants as part of workplace diversity would be through its inclusion as part of the ethnic/racial diversity.

Each of the different types of workplace diversity is an innate characteristic that one cannot change or modify in any way. Even the ethnicity/racial diversity cannot be changed even in spite of the attempt to consider it as a result of the differences in geographical locations of residence. For the immigrants, being an unauthorized immigrant cannot be considered a form of workplace diversity in spite of the probability of looping it together with racial/ethnic diversity, since it is not part of the immigrant’s innate characteristics. Instead, it is a status that can easily be changed through the right paperwork.

Question 2: Stakeholder Involvement

Illegal immigrants pose a challenge to workplace management due to their impacts on stakeholder involvement at various stages of employment. For the employer, undocumented immigrants provide a cheap source of labor as they are vulnerable to less than minimum wage employment. The immigrants themselves however seldom feel the impacts of low wage payment since the wages they receive per hour, even under less than minimum wage employment, are relatively higher than what they would get in their countries. On the other hand, there has been research indicating that the employment of illegal immigrants places a strain on available employment opportunities, resulting in higher unemployment levels for the legal citizens of the nation. This finding has however been disputed by research done by other scholars such as Bloch and McKay (2015), who assert that the inclusion of illegal immigrants contributes positively to the labor market through integration and social capital accumulation. Albert (2017), also posits that despite the fears surrounding the pressure on employment opportunities for documented immigrants as a result of the undocumented immigrants, evidence shows that enforcing more stringent immigration rules also mutes job creation and decreases the expected match surplus in firms, thus reducing employment availability for all groups. It is thus deductible that the only stakeholder affected negatively by the employment of illegal immigrants is the government, mainly as a result of missed taxation opportunities, and lack of accurate labor planning data.

From the effects on different stakeholders, the implications of unauthorized immigrants in the workplace are clearly understood and undeniable. Several stakeholders incur losses that they would not have incurred without unauthorized immigrants. For this reason, employing illegal immigrants hurts the economy and should be addressed under labor regulations. The employers in those cases therefore have to be held liable for illegally employing others.

Part B

Section 1

The development and testing of Vioxx was done following the pre-set protocols used for the development and testing of other medications. Thomas (2017) sets out the protocol that pharmaceutical companies have to follow to ensure all drugs are developed and tested to be safe for humans. The Food and Drug Administration (FDA) also follows a set of stringent rules to ensure that every drug approved for marketing satisfies the conditions necessary for its safe use. The confirmation of a drug’s suitability and its approval should come only upon confirmation of the drug’s safety based on research and continuous testing by both the manufacturer and the FDA (Eaton, 2007). The company’s intentions in developing the drug, namely to give a solution that would block COX-2 while leaving COX-1 because of its beneficial effects, was noble (Lawrence & Weber, 2014). Similarly, the unintentional side effect of the drug cannot be blamed on the company’s development and testing protocol, especially given that there was no strange ingredient added knowingly with the awareness that it has the potential to cause cardiovascular effects.

Considering the protocol used in the development and testing of Vioxx, it can be said that Merck was socially and ethically responsible. Besides the intentional desire to develop a helpful drug and the unintended and unforeseen side effects, the company went through a series of tests to ensure that the drug was safe. The communications from the internal research team members during testing cannot be considered indications of safety concerns since in each instance, only a single member of the department raised concern following an independent study. Additionally, the FDA also conducted independent tests and followed their protocol without raising any concerns about safety issues in relation to the drug. The argument that the company was socially responsible during the drug development and testing phase therefore, can be linked to the report by Salvioni, Gennari, and Astori (2015), which showed that ethical and social responsibility are determined by the organizational ethical code of conduct, which in pharmaceutical companies, should be inspired by the protection and respect for all stakeholders.

Merck’s organizational culture and values further indemnifies the company of any ethically or socially irresponsible actions during the development of Vioxx. The company works with the principle that medication is meant to help people first before it can pursue the objective of profitability. Based on this principle, the company understands that any medication can only generate consistent profits if it is able to satisfy the needs for which it is marketed. In this regard, the company took the initiative to begin its own clinical trials, following the concerns raised by the individual members of staff. Had the company been unethical or socially irresponsible, the study APPROVe, would have come even after VIGOR (Lawrence & Weber, 2014). It can be said therefore that it was only unfortunate that the drug was approved before the conclusion of the APPROVe study, which took 3 years.

Section 2

After the drug approval, Merck acted in a socially responsible manner with its clients and shareholders. Social and ethical responsibility can be summed in the law of doing no harm. Consequently, the impacts that the drug had on the customers can be considered independent of the actions of Merck with respect to releasing Vioxx into the market, marketing the drug and even following up on the drug usage impacts. The company followed the set standards for product marketing in the pharmaceutical industry and only acted within allowable scope in marketing. Vioxx was marketed to doctors as well as through direct to consumer channels, with instructions that consumers should only get it as a prescription medicine. The actions of the company are in no way different from the conventional actions of other companies and/or for other drugs in the industry, hence they cannot be considered socially or ethically irresponsible.

Additionally, the company’s consideration of the doctors’ opinions regarding the drug in an effort to understand its action and side effects can also be considered an indication of social or ethical responsibility. Lorinczy and Formankova (2015) assert that in the pharmaceutical industry, the involvement of employees in major progress activities is one of the ways through which ethical responsibility can be attained. In most cases, the same employees conduct research and would be responsible for communication to doctors and consumers as well. As long as all these interactions are done within a regulated context, there should be no issues of ethical or social concern to the consumer. The communication across the teams at Merck is another indication of social and ethical responsibility that the company portrayed in the course of addressing concerns around Vioxx’s safety. Clear communication structures and standardized procedures that recognized the importance of collaboration in research, product development, and even at recall, enable the company to address its issues in a very short time.

Section 3

Unlike other products, pharmaceutical products have to follow stringent rules under marketing. There has to be clear understanding of the use of the product, the nature of the product, and the categorization of the product to ensure that prescription drugs are used for prescription purposes only. Additionally, Doctors may be allowed to prescribe any drug for whatever illness they feel it will address while the manufacturer is supposed to only market pharmaceutical products based on the actual application for which the product was made. Aside from these commonly cited rules in pharmaceuticals marketing, the only ethical issue of concern in the industry is whether there should be high standards for pharmaceutical marketing than the standards that are set for other industries. The companies have sufficient capacity to heal and to kill based on the characteristics of the drugs they produce, and effective testing can help in curbing any safety concerns before they escalate.

The manner in which Merck handled its marketing for Vioxx is no different from the approaches that other pharmaceutical companies use or even from those that Merck had used in the past. For instance, all marketing was done in accordance with the requirement to focus more on marketing to doctors than on direct to customer marketing. In Merck’s communication to customers, the company encouraged them to seek for doctors’ prescription and approval prior to using Vioxx, and there was no compulsion for the patients to use the drug. Moreover, the company gave patients the alternative of using other drugs and effectively declined to continue selling the drug with a warning. Within the allowable marketing practices however, Lawrence and Weber (2014) report that there was a lot of active marketing whereby Merck and Pfizer, its competitor, both actively sent out sales representatives to market their competing products. In line with this, there were also complaints by physicians on the argument that when patients came in with the drugs they wanted already in their minds, it was difficult to recommend other alternatives.

Vioxx marketing activities therefore, can be described to be on the borderline between abrasive and allowable, based on the admission of physicians about their impacts. Thomas (2017) also opines that for pharmaceutical companies, there is incessant public interest in the products, and any marketing activity is considered impactful. As such, marketing Vioxx actively in such a public interest oriented industry could be construed to be driven by the desire to make profits, which contradicts the company’s communicated core objective, which is to satisfy patient needs first.  At the same time, the prevalence of similar approaches to marketing among other pharmaceutical companies shows that it could probably be the only method that had been proven to work effectively within the industry. If Merck marketed its Vioxx the way it did based on market characteristics, the company cannot be blamed for being too abrasive in marketing as it was the only way to survive in the industry.

Section 4

The actions of Vioxx in regards to communications and consultations with the government and with regulatory policy makers are indications of the company’s law abiding nature and their social and ethical responsibility. Lawrence and Weber (2014) mention various concerns that have been raised around the FDA’s drug approval procedure, and none of these issues touch on the relationship between the FDA and its stakeholders, namely manufacturers. For instance, issues such as high turnarounds and limited workforce have been mentioned as potential drivers of probable unreliability during the drug approval process. However, there are still standard procedures that all drug manufacturers have to adhere to in order to attain drug approval. Furthermore, any funds paid to the regulatory body have to be within the scope of the mandatory statutory fees that all pharmaceutical companies.

Considering the actions of Merck within the context of the set standards and procedures, there is clear evidence that the company acted socially and ethically responsible in its interactions with both the government entities and the regulatory firms. According to Vernick, Mair, Teret, and Sapsin (2003), only about 25 percent of corporate lawsuits turn out in favor of the complainants. This is because most companies would not want to compensate customers who complain regarding their products. Merck went against this by cooperating with the judicial system as well, without corruption and by letting the rule of law take its course hence the conclusions made on the three cases that have proceeded to judgment. Additionally, the company has shown impeccable commitment to safety even through its collaboration with the authorities. Lawrence and Weber (2014) report that when the FDA had strong feelings about the VIGOR results, they had instructed Merck to keep the product on the market and instead accompany it with a strong warning of the side effects of prolonged use. The ethical and socially responsible company recognized the authority of the FDA yet made the decision to take Vioxx off the market completely rather than just introducing a warning to its marketing. The argument that the company always looks out for the patients’ safety is an affirmation of not only the commitment to good, but also the strong culture of social and ethical responsibility that the company has entrained in its people.

Section 5

Product recall procedures are developed by companies in the consumer goods and the pharmaceutical industries as a commitment to maintaining product safety and taking responsibility for any unprecedented outcomes associated with the product (Bortoli & Freundt, 2017). Accordingly, the recall procedure is initiated following certain activities including confirmation of the hazards posed by the product through research and product testing, approval from the company management for the recall procedure to be initiated and confirmation of the recall process. Accordingly, it can be concluded that any voluntarily initiated recall procedure is an indication of a company’s social and ethical responsibility. For Merck, the recall procedure began with a confirmation from the company’s management, notification of the responsible agency (FDA), and communication to distributors, and users of the drug through strong channels. Additionally, the company did not make any significant efforts to prove their innocence to the consumers but instead, focused on ensuring that all the Vioxx was out of the market, indicating sensibility to customer safety.

The actions of the company’s management upon awareness of the potential harm that Vioxx caused to the consumer are also pointers towards the company’s safety culture. Without a strong customer centered culture that focuses on the best outcomes for the customer, the company’s management would have made efforts to retain the product in the market despite its safety concerns. The suggestions made by different stakeholders including the FDA provided perfect opportunities for the company to leave a dangerous product in the market, but Merck declined this opportunity due to the company’s commitment to customer safety.

 

Reference

Albert, C. (2017). The labor market impact of undocumented immigrants: Job creation vs. job competition. CESifo Working Paper Series 6575, CESifo Group Munich. Retrieved from ideas.repec.org/p/ces/ceswps/_6575.html

Allegis Group (2019). 7 different types of workplace diversity. Allegis Group. Retrieved from www.allegisgroup.com/en/insights/blog/2018/april/workplace-diversity-types

Bloch, A., & McKay, S. (2015). Employment, social networks and undocumented migrants: The employer. Sociology, 49(1), 38-55. Retrieved from www.ncbi.nlm.nih.gov/pmc/articles/PMC4361484/

Bortoli, L.V., & Freundt, V. (2017). Effects of voluntary product recall on consumer’s trust. Brazilian Business Review, 14(2). Retrieved from www.scielo.br/scielo.php?script=sci_arttext&pid=S1808-23862017000200204

Eaton M.L. (2007). Ethical issues associated with pharmaceutical innovation. In: Hanekamp G., Wütscher F. (eds) Business ethics of innovation. Ethics of Science and Technology Assessment, 31. Retrieved from link.springer.com/chapter/10.1007/978-3-540-72310-3_4#citeas

Lawrence, A. T., & Weber, J. (2014). Case study: Merck, the FDA, and the Vioxx recall. Business and society: Stakeholders, ethics, public Policy (14th Ed.). New York, NY: McGraw‐Hill Education.

Lorinczy, M., & Formankova, S. (2015). Business ethics and CSR in pharmaceutical industry in the Czech Republic and Hungary. Acta Universitatis Agliculturae et Silvaculturae Mendelianae Brunensis, 63(6), 2011-2015. Retrieved from acta.mendelu.cz/media/pdf/actaun_2015063062011.pdf

Salvioni, D.M., Gennari, F., & Astori, R. (2015). Corporate responsibility and ethical culture in pharmaceutical industry. Journal of Business & Economic Policy, 2(2), 62-84. Retrieved from jbepnet.com/journals/Vol_2_No_2_June_2015/7.pdf

Thomas, R. (2017, January 19). Pharmaceutical industry ethics. Seven Pillars Institute. Retrieved from sevenpillarsinstitute.org/pharmaceutical-industry-ethics/

Vernick, J.S., Mair, J.S., Teret, S.P., & Sapsin, J.W. (2003). Role of litigation in preventing product related injuries. Epidemiological Reviews, 25(1), 90-98. Retrieved from academic.oup.com/epirev/article/25/1/90/718671