Corporate Social Responsibility, also known as CSR in business management circles, is a newer facet of business in most developed markets. Unlike previous generations of businesspeople and businesses that tended to put profit before all else, businesses in the modern world are more likely to put other concerns on an equal footing with profits; sometimes this is referred to as a “triple bottom line” (Carroll & Buchholtz, 20114). The triple bottom line refers to the people, the planet, and the profits that a business makes; all three of these things must be a concern for businesses in the modern world.
CSR is the programming that a company implements to protect the people, planet, and community that the business is a part of. For some businesses, CSR programs are quite minimal; however, as the company grows in size, so too do their responsibilities to their communities and the world as a whole (Simpson & Taylor, 2013). There is no doubt that businesses that are quite large have a much more significant role to play in the business of CSR than companies that operate on a much smaller scale.
When discussing CSR and ethical behavior in the context of the pharmaceutical industry, it is important to note that there are lives at stake with every decision made by the industry and the individual companies within the industry. Decisions that require a significant understanding of ethics and ethical behavior are made on a regular basis, and many of these decisions have mixed positive and negative outcomes. This discussion of the decisions made by the PharmaCARE organization attempts to analyze the hypothetical decisions made by one such company, and determine whether these decisions can be considered ethical.
Stakeholders and Stakeholder Rights in the PharmaCARE Hypothetical
The definition of a stakeholder has developed along with the business world in countries like the United States. Stakeholders are not limited to the executives of the company; stakeholders are anyone who is invested in the potential outcome, success, or failure of an organization. Because stakeholders can be so varied, it is important to note that not all stakeholders hold the same stake in an organization—nor do all stakeholders control the organization that they have a stake in. For instance, a stakeholder for an industrial plant might be a family downstream from that plant; however, they are less powerful as stakeholders than the CEO of that same industrial plant.
The stakeholders for PharmaCARE are their existing customers, as well as their employees and the Board of Directors. However, the citizens of Colberia, where PharmaCARE tested their products without any kind of restriction or regulation, are also stakeholders in the organization. There are also stakeholders in the communities in which this particular company operates; however, these stakeholders are all significantly less invested than the individuals who were subject to testing in Colberia.
Recommendations for the PharmaCARE Situation
The primary thing that PharmaCARE needs to do is to stop using deceptive practices in their testing facilities and programs. This does not mean that the company cannot use the developing world to test their drugs and pharmaceuticals—however, the company should regulate this process, providing transparency to potential subjects of the testing and making this testing information available to their customers and clients in the United States and elsewhere. Transparency is almost always one of the best ways to increase CSR and build trust with the customer: customers are quite savvy in the modern market, and many have an excellent sense of when to distrust a company (Carroll & Buchholtz, 20114). Providing more transparency in the process is the first step.
The second step for the company is to begin to support environmental policies that are good for the international community as a whole. This will protect the environment for generations to come, but it will also serve as an excellent CSR program to build a better rapport with the international community. Finally, the company must cease its interference in political matters in Colberia. There is nothing positive that can occur when a company begins to be involved in the local government; corrupt governments are excellent for building profits in the short term, but often result in poor long-term prognoses for the economy of a developing nation. Beginning to do the right thing by the people of Colberia is likely to build support for the organization in the international community.
The Ethics of PharmaCARE
According to utilitarianism, PharmaCARE would be in ethical; utilitarianism, in its most basic form, supports the greatest good for the greatest number of people. When PharmaCARE implemented testing in the developing world, they did so so they could minimize expenditures on testing. This means that they had to deal with less governmental restriction and fewer costs in terms of testing. The company would be able to design, test, and introduce a new—potentially life-saving—drug to the market in every country after doing testing in this manner. This does not mean that there would not be individuals harmed by these actions—on the contrary, unfettered testing of drugs can be quite dangerous. However, if the drug is indeed found to be useful and effective, there could be unbridled benefits for the global community. Utilitarianism weights the overall outcome of better health for all against the potential detriments of testing a drug in an unrestricted environment.
Deontology takes an opposite view of the potential ethical questions regarding PharmaCARE’s actions in Colberia. Deontology is a form of ethical thought that focuses entirely on the ethics of a particular action, rather than focusing on the consequences of that action. In many ways, deontological thought is the precise opposite of utilitarianism, which is only concerned with the potential outcomes associated with an action. Deontology, however, is quite restrictive as well; it forbids actions based only on the consequence, even when making the ethical decision based on the potential outcome of a situation makes significantly more sense than choosing based on a particular action.
Both deontology and utilitarianism are restrictive in their own ways, which is important because they are essentially opposites of each other. They are reactionary in many was; while deontology solves many of the problems associated with utilitarian thought, it poses a number of new problems and questions for the ethicist. These are absolute philosophical views, and leave little ambiguity available in ethical decisions.
Virtue ethics, yet again, provides a different structural understanding of the ethical choice that PharmaCARE had to make—although with the information given in the hypothetical, it is difficult to determine whether PharmaCARE would be in adherence with virtue ethics priciples. Virtue ethics suggests that the rightness or wrongness of the action depends on the character and the intention of the actor. However, PharmaCARE is an institution, and the individuals who made the decision to test their drugs on a vulnerable population probably had a number of intentions—some ethical, and some particularly less so. It would be easy for the company to couch their decision-making process in the language of ethics; however, it is quite difficult to know whether the intention was truly virtuous or it was merely lip service paid to the idea of virtuosity to glean public support.
Ethics of care would certainly not support the decision made by PharmaCARE, however; this ethical structure suggests that an ethicist should think in terms of caring and concern, rather than in terms of the greatest good. For ethicists who subscribe to this school of thought, PharmaCARE failed to care for the individuals and families under their care; they have instead chosen to think in terms of more masculine ideals like expansion and financial success.
After some consideration, it was still difficult to come to an appropriate understanding of my own moral compass. I truly believe that PharmaCARE’s actions were immoral in this case; interfering with a vulnerable population and failing to educate that population on the risks associated with drug testing is completely unacceptable. There is no excuse for this kind of behavior, but it is also important to note that the pharmaceutical industry, particularly a company like PharmaCARE which provides relatively cheap drugs, spends immense amounts of money developing new drugs and is then often unable to recoup the costs. While the solution chosen by the company is unacceptable, it is also easy to see why a company like PharmaCARE would choose to cut costs when and how they can: they are driven to do so by the current economic climate. The demands on the pharmaceutical giants is quite severe, and something should indeed be done about the problems in this industry that are forcing these kinds of ethical questions on companies (Kirk & Hutter, 2013; Nussbaum, 2009). There must be some alternative to the current profit-cutting strategy for the organization.
PharmaCARE and the “Real World”
There are many companies that are doing testing in the developing world. These companies are also introducing drugs that have not been approved in their home countries as a way of establishing enough data to get these drugs through the approval process in their own countries; in some cases, this is successful, but in others, the data is not valid. Indeed, The Economists (2001) notes that this is particularly ineffective when China is used for testing, because there are significant genetic differences between Caucasian individuals and East Asian individuals—sometimes these testing processes are largely useless, and the company must continue testing regardless (The Economist, 2001). One of the companies doing a significant amount of testing abroad in India and Africa is GlaxoSmithKline—this manufacturer is responsible for creating a significant number of HIV and AIDS medications, and these medications were tested extensively on the South African population (The Economist, 2001). Although this particular company failed to have any significant side effects with their testing, the possibility of significant side effects with this kind of testing is very high, due to the low levels of control and regulation in these developing economies.
Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. Nelson Education.
Kirk, S., & Hutter, P. (2013). Ethics and Corporate Responsibility in the Workplace and the World.
Nussbaum, A. S. K. (2009). Ethical corporate social responsibility (CSR) and the pharmaceutical industry: A happy couple?. Journal of Medical Marketing: Device, Diagnostic and Pharmaceutical Marketing, 9(1), 67-76.
Simpson, J., & Taylor, J. R. (2013). Corporate Governance Ethics and CSR. Kogan Page Publishers.
The Economist,. (2001). Drugs, patents and poor people. Retrieved 13 February 2016, from http://www.economist.com/node/576903