Ethics and Corporate Responsibility in the Workplace and the World

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.

In preparation for this assignment, use the Internet or Strayer Library to research companies that have recently experienced negative consequences as a result of the company’s corporate activities.

Write a three to four (3-4) page paper in which you:

  1. Describe the key characteristics of a stakeholder and determine all the stakeholders within the PharmaCARE scenario.
  2. Analyze the human rights issues presented by PharmaCARE’s treatment of the Colberia’s indigenous population versus that of its executives. Recommend at least three (3) changes PharmaCARE can make to be more ethical going forward.
  3. Assess PharmaCARE’s environmental initiative against the backdrop of its anti-environmental lobbying efforts and Colberian activities. Support the position.
  4. Decide whether or not PharmaCARE’s actions with respect to the indigenous people of Colberia would be ethical in accordance with each of the following ethical theories:
    1. Utilitarianism
    2. Deontology
    3. Virtue ethics
    4. Ethics of care
    5. Your own moral / ethical compass
  5. Compare PharmaCARE’s actions with those of at least one (1) real-world company, whose corporate activities led to ethical, environmental, or workplace safety issues and financial loss. Analyze the similarities and differences between PharmaCARE and the company that you chose.

Ethics and Corporate Responsibility in the Workplace and the World – PharmaCARE Scenario

The ethics and corporate responsibilities found in business organizations consist of similar elements to those found in the socio-economic context within which they operate. It is the responsibility of every company to develop aspirations and ethical levels that ensure maximum defense to the environment, human rights and social welfare of all the other stakeholders. This is only possible with the presence of a well coordinated system of management. Like any other organization, PharmaCARE has the responsibility of behaving ethically to its employees, the community and towards the natural environment (Amato, Henderson and Florence, 2009).

Stakeholders are those businesses or individuals who have developed interest in the operations of a company (Clarkson, 1995). They are important to PharmaCARE because they help the company realize its mission and vision through; provision of labor, financial assistance, purchase of products and formulation of important legislations. In this scenario, PharmaCARE’s stakeholders are; employees, customers, creditors, donors, the community and the government. Employees are the source of labor for PharmaCARE and they help the organization to achieve its objectives by producing quality products that meet consumer tastes and preferences. PharmaCARE must therefore handle its employees with a lot of respect if it wants to continue with its good performance in the pharmaceutical industry. Customers play a very important role in PharmaCARE because they determine continuity and profitability of the organization. Without them, the company will not be able to sell its pharmaceutical products and will eventually be unable to proper. Customers will continue to buy more of the organization’s products only if they are handled well (Cavalieri, 2007).

The government of Colberia is charged with the responsibility of formulating policies that regulate the activities of PharmaCARE in the country. The organization must either strive to abide by the set policies or face legal liability (Amato, Henderson and Florence, 2009). The community would wish to receive positive reputation about the company because it has the powers to request for removal of the company from their area. For example, when the company is causing tremendous environmental damage to the environment and does not participate in social development of the area. PharmaCARE ensure that it engages in activities that minimize environmental pollution and contribute to community development (Cavalieri, 2007). The other two stakeholders for PharmaCARE are its creditors and donors. This company must fight to lift up the status of it creditor by offering financial assistance to them whenever they are in need. The organization must also provide important operation information to it donors for verification. By developing positive business interraction with employees, customers, creditors, donors, the community and the government, PharmaCARE will be able to achieve its mission, vision and objectives, and will remain one of the world’s most successful pharmaceutical companies (Cavalieri, 2007).

Describing PharmaCARE as an ethical company is quite ironical because its treatment of the Colberia’s indigenous population and its rank-and-file workers versus that of its executives depicts a very unethical organization. Situated in Colberia, PharmaCARE is willing to pay the Colberia’s indigenous population only $ 1.0 a day. These workers have to walk very long distances of five miles daily while carrying heavy baskets weighing 50 pounds. Comparing the pay and the amount of work done, it is evident that PharmaCARE does not observe ethics in dealing with the Colberia’s indigenous population. The principles of corporate social responsibility require that the employer pay his or her employees based on the nature and quality of the work done (Cavalieri, 2007). In this scenario, the pay is too low to match the amount of work load that the employees are subjected to in a day. Employees are very important to an organization because if they fail to work, the company will not be able to get product to sell to customers. Ethically, they should be paid well and their working conditions modified to avoid putting much pressure on their health. Good pay helps to motivate workers, making them to deliver their best hence ensuring high quality of products and services. PharmaCARE should improve its management process by increasing pay for its employees from $ 1.0 to a higher value that matches the amount of work done in a day. In addition, it should consider purchasing trucks that can be used to transport the heavy baskets from the harvesting plants and for easy movement of employees (Amato, Henderson and Florence, 2009).

Another area where PharmaCARE has not demonstrated ethical behavior is handling it rank-and-file worker versus that of its executives. Much of the Colberia’s population live in primitive huts with no electricity or running water due to the low standards of living in the area. Conversely, PharmaCARE’s executives live in a luxury compound, complete with a swimming pool, tennis courts, and a golf course. It is clear in this case that the organization does not exercise fairness in managing its employees. Employees are normally motivated to continue working in an organization if their employers are able to meet their needs. Shelter is one of the most basic needs of employees that employers must consider fulfilling according to Maslow’s Hierarchy of needs (Amato, Henderson and Florence, 2009). Again, a responsible leader must see to provide uniform facilities to all its employees irrespective of their ranks in the organization (Clarkson, 1995). PharmaCARE does not behave ethically by allowing its rank-and-file workers to continue living in dilapidated houses while it executive live in luxurious residences. The organization must consider improving the status of residences of its rank-and-file workers if it wants to build and maintain a positive reputation in the community (Amato, Henderson and Florence, 2009)

PharmaCARE’s activities resulted into the nature of impact caused on air quality in the lab. The Director of Operations is not right by advising Allen to fire Donna, Tom and Ayesha because they have raised issues about their safety in the lab and about discrimination. Allen could not legally fire all the three employees; Donna, Tom and Ayesha. Donna and Tom are concerned about their health and safety in the lab. Donna, who currently suffers from chronic bronchial problem, has filed for worker’s compensation against PharmaCARE because she feels that the company was supposed to protect her from breathing unhealthy air. Tom also feels that PharmaCARE was supposed to take actions of cleaning the lab to protect the health of employees are recommended by OSHA. Employees have a right to health and safety and every organization must provide health and safe working environment to its employees. Allen will have therefore acted illegally by firing Donna and Tom because their moves are in line with the requirements of the Occupational Health and Safety Act (Young, 2012).

Allen will have acted illegally by firing Ayesha too. Ayesha feels that Allen failed to promote him to the supervisor position because he was a Muslim. This is a form of religious discrimination which is not allowed in the workplace. According to Schneiderman (2012), the state and federal laws of New Jersey outline that employers may not treat employee differently based on their religious backgrounds, in any area of employment including hiring, assignments, recruitment, promotion, benefits, and disciplines. According to Ayesha, Allen has violated this law requirement and has filed an EEOC complaint against the company. By firing Ayesha, Allen will face legal liability under the employment discrimination laws of New Jersey (Schneiderman (2012). In order to minimize risks to the department and the company, Allen should first ask the company to find a way of settling Donna’s medical bills and compensating her for the harm caused. He should then convince Tom that the lab will soon be cleaned and organize for immediate cleaning. He should them tell Ayesha that she was not promoted because her management skills did not match the requirements for the supervisory position, but not because of her religious background.

Allen could benefit greatly if only PharmaCARE could have well laid whistleblowing policies as the policies would prevent him from losing his job if he fails to fire Donna, Tom and Ayesha as required by the Director of Operations (Lester and Hall, 2004). The main protection that could benefit Allen is; the right to disclose dishonesty, incompetencies, corruption, or administrative failures without fear of retaliation. This includes unethical conduct that is likely to threaten public health and safety. Allen could benefit from this protection because he would present the complaints about air quality in the lab without facing any legal liability. The major whistleblower opportunity and obligation that would benefit Allen is that; every employee is required to make protected disclosures as soon as the employee becomes aware of the violation. This must be related to issues such as abuse of authority or danger to public health and safety. In this scenario, Allen could have nothing to fear by discussing the lab issues with the Director of Operations as he would not face any threats of losing his job when he fails to fire Donna, Tom and Ayesha (Gray, 2014).

PharmaCARE pledges its commitment to the environment through recycling, packaging changes and other green initiatives, and it has managed to defeat environmental laws with it lobbying efforts. At the same time, the company’s extensive activities in Colberia have destroyed habitat and endangered native species. This means that PharmaCARE operates against the required environmental laws. The low air quality in the lab indicates that PharmaCARE’s operations release very harmful emissions to the atmosphere which cause serious environmental damage when they accumulate in high concentrations. This renders the company’s purported environmental stewardship worse that it claim to be, and its public stance should not carry an obligation to be a leader in environmental matters. PharmaCARE has specifically failed to meet the standards of the Clean Air Act that require companies to observe the standards set by the Environmental Protection Agency (Bearden et al., 2013). These include ambient air quality standards, standards for new pollution sources, hazardous air pollutant emission, and the significant air deterioration requirements. If PharmaCARE would have observed these standards, no destruction of habitat and endangered native species would have resulted from its activities, and the air in the lab would not have been contaminated (Bearden et al., 2013). Consequently, the company should not carry on to be a leader in environmental protection matters.

The Comprehensive Environmental Response, Compensation, and Liability Act, (CERCLA), was created in 1980 in the United States of America to address neglected, uncontrollable hazardous waste site throughout the country (Bearden, 2012). This body produced regulatory framework for federal response to emissions of hazardous pollutants and contaminants. Originally, the objectives of the Superfund program included; identification of site where hazardous substances have already been released and posed serious threats to the environment or human health, taking appropriate action to remedy the releases, and forcing the responsible parties to pay for the clean-up actions (Bearden, 2012). Numerous changes have been made to CERCLA since 1995 in order to improve administrative efforts.  Examples of changes include; removal of sites from the federal inventory of hazardous waste sites, establishment of a pilot program, clarification of liability and clean-up issues and establishment of partnerships with stakeholders (Bearden, 2012). The main provision of CERCLA that applies to PharmaCARE in the scenario provided is section 107 (a)(4)(C) which states that a responsible party may be liable for damage for injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction or loss (Bearden, 2012). This provision can be used to recover the lost value of natural resources from PharmaCARE in the scenario provided.

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