Business and Corporate Law
Businesses owe a duty of care to the societies within their environments. In this paper, an analysis is made regarding various issues of law, ethics, and corporate governance concerning a company called PharmaCARE. The company is ranked amongst the most prominent pharmaceutical organizations in the industry. It enjoys a reputation of being a caring, well-run, ethical, and morally run company. PharmaCARE is said to produce high-quality products intended to improve the life quality and save millions of people from health-related ailments. It is further reported that PharmaCARE offers discounted and free drugs to low-income customers. In addition, it operates a foundation that subsidizes healthcare educational scholarships and programs.
Recently, PharmaCARE launched a program dubbed We CARE about Your World. It pledged a commitment towards sustainable environment through measures that curb pollution. However, notwithstanding all the positive initiatives, the company is said to be behind lobbying that prevented the passing of environmental conservation laws in the past. The laws include extension of the Superfund Tax created by CERCLA. The company’s operation activities in Colberia are also contrary to environmental practices of conservation and sustainability. Local residents are exploited under the disguise of employment. They work for $1.00 a day, being forced to carry heavy luggage and trek for long distances as they deliver supplies to the company. The residents of Colberia live in abject poverty. Despite the deplorable conditions of the natives, the executives of PharmaCARE live in luxurious homes equipped with swimming pools, golf courses, and other amenities.
- A stakeholder is a person or party who has an interest in the activities of another (Lane, 2013). Such a person stands to gain or lose something of value depending on the outcome of the operations of a particular party. In this case, PharmaCARE has a duty to cater for various parties who have an interest in its operations. These are its stakeholders. They include its customers or those who require products from the company, its external environment including the residents of Colberia, and its employees. Customers rely on the company’s products. They use them to treat ailments and contain suffering. Consumers expect the products of the company to be of appropriate quality in order to meet their expectations. The locals of Colberia have a stake in the activities of the company too. Production related operations that contribute to environmental degradation lead to harmful health and economic consequences for the society (Lafollette, 2014). The employees of the company would benefit from sustainable and favorable working terms and conditions.
- Several human rights issues arise in the treatment of Colberia residents by PharmaCARE. The company exploits local residents. Those who offer their services to the organization are paid $1.00 per day as remuneration. The workers trek long distances through the jungle to harvest plants. It is said to be a distance of approximately 5 miles. The luggages they carry during the journeys weigh about 50 pounds. A combination of the above facts indicates flagrant injustice experienced by innocent citizens of Colberia. The living conditions in Colberia are deplorable; there is no electricity and running water. In contrast, the executives of PharmaCARE live in serviced luxurious residences. The company’s extensive activities in the region are also reported to have destroyed the habitat and endangered native species.
The foregoing scenario represents a state of negligence from the side of the pharmaceutical company. The rights of the indigenous people have been violated. To remedy the wrongs, PharmaCARE is advised to implement the following in a bid to embrace ethical operations. In the first instance, the company should pay fair remuneration in wages and salaries for the labor accomplished by the local populace. Secondly, the company should also initiate operations that take into consideration environmental conservation measures. Lastly, corporate social responsibility should be embraced. PharmaCARE can afford to fund the supply of the area with water and electricity as an initiative aimed at enhancing the life level of Colberia residents.
- PharmaCARE’s programs on environmental conservation include recycling, packaging changes and other green initiatives. On paper, the measures seem to be noble. It is commendable that the company realizes the need to conserve the environment. Where the guidelines are implemented as presented, the community would make substantial gains. The welfare of the society will be improved along with the reduced environmental pollution (Lane, 2013). A good rapport between the company and its external environment would be created. This has an effect to reduce chances of the former being embroiled in legal disputes with other parties.
The above initiatives seem to be a public relations gimmick. PharmaCARE does not practice what it says are its commitments. Due to the company’s influence, it successfully lobbied for the failure in several environmental regulations being passed into law. Its activities in Colberia promote environmental degradation. They have destroyed the habitat and endangered the indigenous species. Such facts disappoint, given that the CEO of the pharmaceutical company is a member of the PhRMA board.
PharmaCARE aims at depicting itself as an ethical company. However, it does not act ethically. It seeks to earn profits without any due regard to the welfare of the local communities. Such a strategy defeats justice. In good corporate governance, such a practice compromises ethical considerations involved. The plight of other stakeholders is sacrificed for the selfish gain of the few. PharmaCARE should embrace ethics and good corporate governance in its quest to offer its products to the market.
- The ethics of PharmaCARE’s actions with respect to the Colberian people are discussed as follows. The analysis is done based on such ethical theories as deontology, utilitarianism, ethics of care, and virtue of ethics. Utilitarianism is a theory that holds that identification of an act as being right or wrong is based on the utility or benefits gained by the greatest number of people. Negative effects are to be minimized in such a case. The activities of PharmaCARE bring benefit to only few owners. The majority of Colberian people anguish in poverty. Based on the theory, the activities of the company are held to be unethical.
Deontology is another theory of normative ethics. An action is judged as being ethical or contrary based on observance to set laws (Harris, 2010). PharmaCARE is reported to have influenced the failure in passing the environmental laws. Nowhere has it been indicated that the company failed to adhere to the established procedures of law. Based on this normative theory, the actions of PharmaCARE should be considered ethical.
Virtue of ethics holds that an individual’s character plays a role in the determination of ethical actions or unethical behaviors (Lafollette, 2014). The company portrays itself as being sensitive to the plight of the community through its initiatives on environmental conservation. However, the Colberian habitat is said to have been destroyed by the operations of PharmaCARE. Therefore, based on the theory, its actions are unethical.
Ethics of care is another theory concerned with determination of actions as either being ethical or unethical. It puts emphasis on the kind of response that is made in a bid to cope with a crisis (Mill, 2009). In the case of PharmaCARE and the residents of Colberia, despite the sufferings of the latter, the company has neglected them and instead continued their practices of exploitation. In ordinary circumstances, it would be expected that the company would take reasonable steps to address the plight of the external environment. On the basis of the theory, the actions of PharmaCARE are considered unethical.
There is no doubt that the company exploits the residents of Colberia. They are paid meager wages and forced to walk long distances carrying heavy supplies. These are acts of human rights violation. The living conditions are unfit for human habitation. The habitat is also degraded and native species are endangered. These actions are an injustice to the Colberian people. Such unfair practices are unethical.
- The actions of PharmaCARE are compared to and contrasted with those of another company whose corporate activities led to environmental/workplace safety issues, ethical issues and financial losses. The other company that has been selected for comparison is BP. It extracts, processes, refines and sells petroleum products. In April 2010, a wellhead blowout occurred in the Gulf of Mexico on the Deepwater Horizon oil drilling platform. BP indicated that the spill would have minimal impact. However, it turned out to be the greatest in the history of the United States of America. Several questions have remained unanswered. Surprisingly, the extent of the spill remains unclear. BP by then refused to allow the media and independent experts to access the site to evaluate the impact of the spill.
Based on the events surrounding the oil spill, legal questions concerning the rights of wildlife and aquatic life arise. Many parties whose livelihood depends on the coastline are also considered. It is noted that the actions of BP in response to the crisis bring out certain ethical issues related to their corporate governance. Denying the media and independent experts the access required to gauge the extent of the spill illuminates the unethical decisions that the company made. Below is a discussion on the similarities and differences between BP and PharmaCARE.
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Both companies seem to be keen on maintaining a favorable public image. They deny any accusations of breach of their duties to the society. Moreover, the organizations refuse to allow an objective analysis of affairs that pertain to their operations. However, both companies strive to maintain their profit streams or even scale them to higher levels. Nonetheless, there are differences between the two companies. While BP is involved in oil and petroleum processing, PharmaCARE deals in drugs (Mill, 2009). The case involving the former was an instance that can be assumed as an ‘accident’ while the other case entails a continuous exercise where the rights of the indigenous community are constantly infringed. The activities of both companies have a negative impact on their operations.
Operations that cause environmental degradation would face opposition from various quarters. Stakeholders become skeptical when trading with questionable entities, an aspect which would result in reduced revenues to the companies. Ethics, law and good corporate governance are important aspects for the success of a corporate body’s operations. A balanced undertaking of social corporate responsibility improves the welfare of the society. Compliance with the law minimizes instances where the company would be in dispute with the authorities. Fewer resources would be used to fend off legal challenges. Therefore, embracing ethics, legal considerations, and good corporate governance would improve the environment for carrying out business operations.