In order to be accepted and respected by the present-day global business community, a company has to meet the requirements of corporate social ethics. Unethical conduct can often improve short-term financial bottom-line results, which is tempting. In the long run, however, such a company will lose credibility and face a lot of bad publicity or even lawsuits. This paper analyzes PharmaCARE’s ethical and environmental transgressions in relation to their activities in Colbert.
The key characteristic feature of stakeholders is their ability to influence the project or to be influenced by it. According to De Mascia (2012, p. 73), there are several categories of stakeholders. PharmaCARE’s employees and customers, as well as investors and shareholders, are the most affected by the company’s activities; thus, they fall into the primary category. Secondary stakeholders are the indigenous population of Colbert, whose lives are influenced by the large manufacturing facility, situated there. The local government can be defined as a tertiary stakeholder. The key stakeholders are PharmaCARE’s senior executives and board members, who have a significant impact on its activities. Pointing out all the stakeholders within the Colberia situation helps understand the advantages and disadvantages of the company’s strategy regarding the issue. For example, it outlines the dichotomy between the two groups of primary stakeholders. The underpaid Colberian workers are negatively influenced by the low wages and difficult working conditions. On the other hand, the same factors result in the low prices for PharmaCARE-produced medicine, which is an advantage for the customers.
There are two sides to every coin, and while Colberia does not receive the development it deserves, the key stakeholders receive much profit due to exploiting its resources. The allure of low prices is weakened for people who are aware that the Colberians’ human rights are continuously violated. As an attempt to gain some good publicity, PharmaCARE launches new environmental-friendly initiatives. In the age of public concern about the world’s ecological problems, going green is an effective advertising technique. Nevertheless, in the context of PharmaCARE’s previous environmental policy, it seems somewhat hypocritical.
PharmaCARE has opposed the proposed environmental laws and regulations, the introduction of which would have reduced the company’s immediate profit. In particular, it was a vivid opponent of the Superfund tax extension. It can be argued that the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), which introduced the tax, is often criticized “as a rigorously strict system that hinders economic growth and penalizes individual companies by requiring them to perform extensive and costly cleanups without regard to when the original disposal took place or the fact that a company may have exercised due care in handling hazardous materials” (Bell et al., 2014, pp. 557-58). In any case, it should be taken into account that a pharmaceutical company deals with chemical elements and dangerous substances that are bound to affect the environment. Therefore, openly refusing to contribute to the program, aimed at countering the existing and potential negative influence, proves that PharmaCARE’s primary concern is making as much profit as possible, and not preserving the planet. A lot of effort was put into defeating the proposals, making eco-packaging and the other new green initiatives insufficient by comparison.
In addition to the inconsistent environmental policy, PharmaCARE is notorious for its mistreatment of indigenous workers. Indeed, the company exploits African natural resources and workforce to an extent where it constitutes a violation of basic human rights. According to The Universal Declaration of Human Rights (n.d.), everyone should be guaranteed “just and favorable conditions of work” (Article 23, para. 1). Therefore, making workers walk long distances carrying heavy objects is a breach of their rights. This and other transgressions endanger workers’ health, which is protected by the Occupational Safety and Health Act. Besides unfavorable working conditions, African employees of the Colberian PharmaCARE facility are not ensured their right to an adequate standard of living, stated in Article 25 of the UDHR (The Universal Declaration of Human Rights, n.d., Article 25, para. 1).
Moreover, according to the UDHR, “Everyone, without any discrimination, has the right to equal pay for equal work” (The Universal Declaration of Human Rights, n.d., Article 23, para. 2). People in Alberta are content with a measly pay of $1 a day because the country is poor and for many, this is the only way to get any money at all. Without PharmaCARE, they face unemployment; therefore, providing workplaces for the indigenous population can be considered a good impact on the nation. However, the fact that the Colberians are willing to work despite being underpaid does not justify paying them less than their work is worth. In a developed country, a worker performing such duties would get a higher wage, so this is an example of nationality-based discrimination.
To avoid the disapproval of the international community, PharmaCARE should change its course to a more ethical behavior toward the indigenous population of Africa. Firstly, they should increase the payment to the Colberians. While it may be true that the cost of living in Africa is lower than in the USA, $1 a day is still not enough for workers to provide for themselves and their families. On the other hand, a sudden increase in income can pose different problems for people, used always be in need. Having money to spend may lead to an upsurge in drinking, debauchery, and crime. The rise should be gradual and well-thought-out. Moreover, it should be combined with helping develop the country, since raising the individual income of the workers does not guarantee that the living conditions in their community would improve. Providing electricity and running water, as well as building better accommodations requires an organized effort and cannot be done by the Colberians or their local government without outside support and sponsoring. Therefore, getting a higher income is not the ultimate solution for their problems.
According to Scriven and Hodgins (2012), the company that has production sites in other countries should take their peculiarities into account, since they “require specific approaches to health protection and promotion” (p. 209), such as improving the workers’ living conditions. Volkswagen is referred to as a positive example of a “future-oriented” company that contributes to the development of the countries where its products are manufactured (Scriven & Hodgins, 2012, p. 209). Following suit, PharmaCARE should nurture its employees and reimburse the nation whose resources and intellectual property it exploits.
The third change that should be implemented concerns the improvement of the working conditions. The workers should not be forced to work unreasonable hours and carry weights that can harm their health. Instead, they should be able to transport them with the help of the simplest lifting devices of trolleys. Regular breaks should be provided, as well as all-time access to clean drinking water and protection from heat and the sun at the production sites. Specially-equipped places should be allotted to employees for rest; if necessary, they should be given sunscreen, appropriate headwear, and uniforms.
As it is, the current treatment of the Colberians by PharmaCARE can be evaluated differently based on diverse ethical theories. For example, Halbert and Ingulli (2014) note that utilitarianism “will accept harm – even severe harm – to a small number of stakeholders if this can arguably be outweighed by the overall benefit to the majority” (p. 20). Thus, this theory justifies the exploitation of Colberia as a necessary evil, as a means to a beneficial end – manufacturing of low-price drugs and financial prosperity of PharmaCARE.
In contrast, deontology is “marked by steadfastness to universal principles” (Halbert & Ingulli, 2014, p. 20). From this perspective, PharmaCARE’s actions are unethical. According to virtue ethics, despite the claims of caring about customers’ health and cutting production costs for the greater good of manufacturing affordable medicine, the company’s corporate culture falls short of moral. The ethic of care, which stems from the principle of helping others and supporting working relationships, also frowns upon PharmaCARE’s line of behavior.
Although there is no doubt that the utilitarian perspective is the more pragmatic one, my personal belief is that other approaches should not be discarded, either. Their principles may seem idealistic, but they are not devoid of practicality. The choices a company makes influence the way it is perceived by customers and potential business partners. PharmaCARE’s exploitation of the Colberians and hypocritical environmental initiatives are morally wrong and will be seen as such by customers all over the world. As the public awareness of global social and environmental problems increases, many would prefer to pay a bit more to help solve these issues, instead of supporting the company that chooses to ignore them. Thus, PharmaCARE will lose a significant part of its market. Besides, its deceitful conduct toward WellCO, which was forced to deal with the aftermath of the AD23 scandal, has damaged PharmaCARE’s reputation in the international business arena.
Unfortunately, PharmaCARE is not the only company willing to sacrifice moral integrity for instant financial gratification. Another example is Chevron, the company that deals with oil and gas. This sphere of activity holds a plethora of environmental hazards, and Chevron does not manage the issue conscientiously. Like PharmaCARE, it has production sites in different locations. The site in Ecuador is the most notorious one in connection with its pollution of the area due to improper treatment of waste. The damage done to the locals was not sufficiently reimbursed. In Nigeria, the “agreement to provide jobs and development for the local community in which [Chevron] operated” was allegedly broken (Wettstein, 2012, p. 45), adding ethical issues to the environmental ones. In both cases, the company used any means possible to avoid the consequences of its actions, from obstruction of justice to using armed forces to crack down on the protests. The latter resulted in several deaths among the indigenous population. As to the former, the company is still facing lawsuits and court procedures, which can lead to significant fines.
All in all, violation of business ethics has many consequences for all stakeholders. Although the temptation to cut production costs is hard to resist, a company must remain ethical and respectful of the environment and human rights. Otherwise, its reputation will be ruined, and it may face persecution in court.
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De Mascia, S. (2012). Project Psychology: Using Psychological Models and Techniques to Create a Successful Project. Burlington: Ashgate Publishing.
Halbert, T., & Ingulli, E. (2014). Law and Ethics in the Business Environment. Boston: Cengage Learning.
Scriven, A., & Hodgins, M. (2012). Health Promotion Settings: Principles and Practice. Thousand Oaks: SAGE Publications.
The Universal Declaration of Human Rights. (n.d.). Web.
Wettstein, F. (2012). Silence as Complicity: Elements of a Corporate Duty to Speak Out Against the Violation of Human Rights. Business Ethics Quarterly, 22(1), 37-61.