Stakeholders are people or organizations who have an interest in or are affected by any policy or action of an organization. Stakeholders have a number of key characteristics. They may be characterized by their interest or stake in the company. They may also have the potential to contribute to the successful conduct of business for an organization. They can further be characterized by the decision making power they have on the activities of the company (Schmeer, 1999). Stakeholders in the case of PharmaCare are discussed in following paragraphs.
Shareholders. The shareholders in PharmaCare would be interested in profits, and would have the power to influence the management through their voting rights and through their decisions of holding on to PharmaCare shares, affecting its market capitalization and business interests.
Management. The management of PharmaCare takes all decisions as to how the company is to run. Therefore, the management is an important stakeholder.
Patients. Potential patients who would be cured by the drugs produced by PharmaCare are major stakeholders. They would be interested in genuine and effective drugs.
Colberian Employees. Colberian employees are paid by PharmaCare at the rate of #1 per day, and are affected by its payment policies.
Colberian Healers. Colberian healers provide their knowledge to PharmaCare, boosting its bottom-line for free, should PharmaCare use such knowledge.
PharmaCare Executives in Colberia. PharmaCare executives in Colberia are affected by the Company’s policies regarding accommodation and perks. Besides, they set up the local rules for hiring employees and paying healers.
Human Rights Issues Presented by PharmaCare’s Treatment of Colberian Population versus that of its Executives
PharmaCare’s treatment of the Colberian population raises a number of human rights issues.
Wages. The Colberian population is paid $1 per day. This wage is far below the subsistence wage, as it would not be possible for a Colberian to live a dignified life on this wage. A salary that covers basic needs is as much of a right as a right to life (Trujillo, 2000, p. 129).
Working Conditions. The Colberian workers hired by PharmaCare have to carry loads weighing 50 pounds over ten miles. Repetitively carrying such heavy loads in primitive baskets would lead to ergonomic stress on the vertebrae, ultimately affecting the health of the workers (Iowa State University, n.d.). As such, the present system of load carriage would qualify as a human right violation by way of inhuman working conditions (ILO, 2009).
Gross Disparity. The executive of PharmaCare live an affluent lifestyle in a luxury compound with swimming pool, golf course and tennis court, while the locals live poorly in huts without access to electricity and water. This disparity reflects an inhuman and imperialist attitude of PharmaCare, and shows that the company does not wish to give anything back to the local society. In terms of human rights violations, it could be argued that PharmaCare is usurping the resources of the locals (water and electricity) for its executives, without any compensation in return.
PharmaCare could make some changes to become more ethical in its treatment of the local employees. First, the working wage of Colberians could be enhanced to a level where they could live with a basic modicum of dignity. Second, to prevent physical damage to the vertebra of workers carrying heavy loads, PharmaCare could design special rucksacks that could distribute the load more evenly. Alternatively, it could hire more workers, reducing the load per worker. Third, PharmaCare could install a generator for its workers to provide them basic water and electricity supply, so that the gross disparity between the executives and workers is reduced. In addition, PharmaCare could incorporate green initiatives in the Executives’ compound, to reduce its environmental footprint.
PharmaCare has launched an environmental initiative, pledging commitment to the environment through recycling, packaging changes and other green initiatives. Critics argue that PharmaCare’s environmental initiative reflects hypocrisy, as the company also lobbies against environmental laws and regulations, including the extension of the Superfund tax that was created by the Comprehensive Environmental Response, Compensation and Liability Act (CERLA).
It is important to distinguish between the two activities of the company. PharmaCare’s environmental initiative definitely merits credit, as it reflects the company’s initiative to be responsible to the environment and to have a lighter environmental footprint.
At the same time, PharmaCare’s opposition to the extension of the Superfund tax cannot be underscored as an action that qualifies it as environmentally irresponsible. The Superfund tax, created to clean up the environment of chemical sites that have no current responsible owners, effectively penalizes current companies for the misdeeds of past wrongdoers, and makes current companies globally uncompetitive (ACC, 2016). Therefore, it would be in the interest of PharmaCare to avoid a liability of the past. At the same time, it is reiterating its commitment to the environment through its current green initiative.
Given the fact that PharmaCare is a commercial entity with responsibilities to its shareholders, its stance to remain environmentally responsible, while at the same time avoiding past liabilities of unknown entities, should be applauded as an instance of a company that is responsible both to the environment as well as to its shareholders.
Analysis Through Ethical Theories
Utilitarianism holds that an action is ethical so long as it achieves the most happiness to the maximum people (Shaw, 2014, p. 41). If any activity causes harm to a set of people and brings happiness or pleasure to another set of people, votaries of utilitarianism would assess the number of people benefiting from the activity versus the numbers adversely affected. If the number of people benefiting were more than the numbers adversely affected, the activity would be deemed to be ethically appropriate.
In the case of PharmaCare, the number of people adversely affected by its activities in Colberia would be limited to the locals. The number of people positively affected would include the shareholders who would benefit from profits, the executives and workers of the company who benefit from good pay, and the potential patients worldwide who would benefit from the drugs PharmaCare produces from Colberian knowledge and resources at a low price point. Therefore, the number of people benefiting from PharmaCare’s activities in Colberia would potentially far outstrip those adversely affected. Going by the tenets of utilitarianism, PharmaCare’s activities in Colberia would be deemed to be ethical.
Deontology is based on the categorical imperative propounded by Immanuel Kant. According to Kant, any activity is ethical if it can be universally applied. Any activity deemed to be ethical would have to be equally applied to all people. In addition, deontology holds that people are enjoined to act according to moral principles irrespective of the outcome (Shaw, 2014, p. 56).
For the treatment of Colberians to be deontologically ethical, it should be proper to pay everyone less than a dignified wage, load their bodies with unsafe loads and cheat them of their environmental riches. As is evident, the treatment meted out to the people of Colberia cannot be applied universally. Therefore, according to the principles of deontology, the treatment of Colberians is unethical.
Virtue ethics is built around the concept of the pursuit of virtues, which are taken to be the middle ground between contrary and excessive vices. For instance, courage would be a virtue straddling foolhardiness and cowardice. While there is no comprehensive list of virtues, a few virtues propounded by Greek philosophers are ‘courage, prudence, temperance and justice’ (Gardiner, 2003). For any act to pass the test of virtue ethics, the consequence is not the criterion; rather, it is the motivation for the act that is important.
In the case of the treatment of Colberian locals by PharmaCare, it is necessary to apply the prism of justice to the situation. While it is understood that medicines that are prepared in Colberia would benefit millions, the question that needs to be asked is whether the Colberians are being treated in a just manner. It would be seen that justice is not being meted out to the Colberians. They are not being paid fair wages. Their environment is being plundered. Their quality of life does not improve, while PharmaCare makes profits and millions of patients eventually get access to age-old Colberian medicinal knowledge. As Colberians are not getting justice, the prism of virtue ethics would deem the actions of PharmaCare unethical.
Ethics of Care
The ethics of care provides a feminist oriented framework, in which the focus is both on the party that cares for and the party that is cared for in any relationship. There is a relationship and reciprocity involved in the framework. According to the concept of the ethics of care, it is important to assess the outcome of the interaction between two parties in any interaction.
In the instance of the Colberians, it would emerge that they are hurt in the interaction with PharmaCare. Therefore, according to the ethics of care, PharmaCare’s treatment of the Colberians would be deemed to be unethical.
Own Ethical Compass
Large pharma companies have considerable resources at their disposal. When they work in third world countries, they attempt to gain the maximum leverage in terms of resources. In this effort, they invariably short-change the local population. This trend is true for most global business conglomerates, which tend to maximize profits at the expense of living and working conditions of employees in third world countries.
If equitability is to be established in the world, it is necessary that the gains of science and business be evenly distributed. I would, therefore, argue from the viewpoint of deontology, and the ethics of care, and contend that the treatment meted out to Colberians by PharmaCare is unethical.
Comparison with Real World Company
PharmaCare could be compared with Pfizer, a real pharma conglomerate that indulged in unethical practices in Nigeria. In 1996, Pfizer needed to conduct human trials on a broad-spectrum antibiotic. The company saw an opportunity in a meningitis epidemic that had occurred in Kano, a slum city in Nigeria. Pfizer sent its medical team in an ostensible humanitarian mission, which was actually a cover for unlicensed trial of its unapproved drug called Trovan. Pfizer picked 200 sick children and administered half with Trovan, while the rest were administered a proven antibiotic. Eleven of the children died, and more suffered serious side effects. Pfizer was ultimately fined $163 million in punitive damages. EU and USA subsequently banned the drug (Howden, 2009).
Pfizer’s case reflects that of PharmaCare, insofar as the exploitation of third world countries is concerned. In both cases, the target population was unaware of their rights and what could be legitimately demanded from the pharma companies. In the case of PharmaCare, the Colberians were not aware of what constituted a fair wage. They were happy to be merely given a chance to eke out a living. Similarly, in Nigeria, the people affected by the epidemic were happy to be part of Pfizer’s trial as it gave them a hope to survive. In both cases, the ethics of normative justice and care were violated.
The difference between Pfizer’s and PharmaCare’s cases would lie in the nature of wrongs committed. While Pfizer defrauded potential patients by not giving them full disclosure about its drug, PharmaCare was guilty of not extending equitability and justice to Colberians in they terms of engagement and labor.
American Chemistry Council (ACC). (2016). Superfund taxes. Retrieved May 15, 2016, from https://www.americanchemistry.com/Policy/Environment/Superfund
Gardiner, P. (2003). A virtue ethics approach to moral dilemmas in medicine. Journal of Medical Ethics 29: 297-302. DOI: 10.1136/jme.29.5.297. Retrieved May 15, 2016, from http://jme.bmj.com/content/29/5/297.full
Howden, D. (2009). Pfizer to pay $163.50 m after deaths of Nigerian children in drug trial experiment. Retrieved May 15, 2016, from http://www.independent.co.uk/news/world/africa/pfizer-to-pay-16350m-after-deaths-of-nigerian-children-in-drug-trial-experiment-1663402.html
International Labor Office (ILO). (2009). Health and life at work: a basic human right. Retrieved May 15, 2016, from http://www.ilo.org/public/portugue/region/eurpro/lisbon/pdf/28abril_09_en.pdf
Iowa State University. (n.d.). Risk factors. Retrieved May 15, 2016, from http://www.ehs.iastate.edu/occupational/ergonomics/risk-factors
Pettersen, T. (2011). The ethics of care: normative structures and empirical implications. Human Care Analysis 19/1: 51-64. DOI: 10.1007/s10728-010-0163-7. Retrieved May 15, 2016, from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3037474/#
Schmeer, K. (1999). Guidelines for conducting a stakeholder analysis. Retrieved May 15, 2016 from http://www.who.int/management/partnerships/overall/GuidelinesConductingStakeholderAnalysis.pdf
Shaw, W.H. (2014). Business ethics. Boston, MA: Wadsworth.
Trujillo, V. (2000). Adequate salaries in developing countries. In Leo V. Ryan, Wojciech W. Gasparski & Georges Enderle (Eds.) Business students focus on ethics (pp. 125-136). New Brunswick: Transaction,