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The role of ethics and social responsibility are vital to the success of business. This also is very important to the stakeholders and should be even more important to management executives who have to make the decisions on whether to be ethical or unethical. This seems like a no brainer, but top level officials have the daunting task of making difficult decisions that affects groups involved in the success of the company. This paper will bring into focus the ethics and social responsibility in creating a strategic plan while taking in consideration stakeholder needs and agendas.
Business Ethics is a form of ethics, which examines the ethical principles, and moral problems that occur in a business today. Ethics plays an important role in business today by establishing policies, procedures, and practices when creating a strategic plan. One such policy to have as a driving force for the company is a code of ethics, which outlines how an employee should behave while on the job. Having a code of ethics in place will not only help employee’s behavior, but the implementation of strategic plan of guidelines that will take in consideration for stakeholder needs and agendas.
Social responsibilities are the responsibilities of private corporations to society that goes beyond that of making a profit. When implementing a new strategic plan you have to take in account the affects it will have on society as well as the organization. Strategic decisions influence other entities internally and externally. For instance, a decision to down size by closing some distribution centers and discontinuing manufactured goods, affects not only the employees, but also the neighborhoods where the plants are located. This also hinders the consumers and suppliers with having no other source for the discontinued products (Wheelen & Hunger, 2010).
These types of decisions bring forth questions as to regarding, the appropriateness of certain missions, objectives, and strategies of businesses. Management must be able to come to compromise the difference in interests in an ethical manner to formulate a realistic strategic plan to meet the needs of the stakeholders. To answer this question, the corporation may need to engineer a strategy, which can explicitly articulate the organization with the role of ethics with stakeholders. This requires not only that management a clear picture of the organization key ethical approach but also that it understands the organization societal context, and undertakes stakeholder analysis to identify the issues and duties of each stakeholder (Wheelen & Hunger, 2010, pg.76).
While researching an industry that continues to overstep it’s boundaries for stakeholder agendas. Pfizer, the world largest pharmaceutical company has been continually marketing and selling drugs with unapproved uses. In 2004 Pfizer plead guilty to two felony counts of marketing a drug for unapproved uses and paid 430 million in fines and penalties (Evans, 2009). United States attorney’s office was assured by Pfizer lawyers that they will stop promoting drugs for unauthorized purposes. Five years later Pfizer plead guilty again for directing over 100 salespeople to promote Bextra, another unapproved medication. The fine this time was an America’s highest recorded fine ever of 1.19 billion. Since May 2004, Pfizer, Eli Lilly & Co., Bristol-Myers Squibb Co. and four other pharmaceutical companies have paid a total of $7 billion in fines and penalties for marketing drug for unapproved uses (Evans, 2009).
This shows that not only Pfizer, but other pharmaceutical companies are taking the approach of maximizing profits for the sake of stakeholders. In the readings it states that shareholders were unmoved by the actions of the company because each time the company had to pay out billions in penalties the share price went up (Evans, 2009).
This practice of marketing and selling unapproved medications have shown how irresponsible, unethical, and socially unaware these companies are. Lives are being lost or changed forever because of some of the side effects of these medications that are being push by these organizations for a buck. To prevent such heinous acts we need only one of the pharmaceutical giants to step up and implement a strategic plan using more of an ethical approach in producing new drugs to the market. This can be attain by having the research done well in advance, publically documenting their finding, have more transparent marketing strategies, and making sure that all medications are FDA approve first before any distribution of a single pill. Another strategy to improving the industry is by using the input of the stakeholders which can give other alternatives to what route can the industry can use to maximize the benefits for all.
In conclusion we can clearly see the importance of roles of ethics and social responsibilities are within an organization’s strategic plans. Once a company has put itself in a position to use ethics and society to govern it duties to make sure business is held to a standard higher values. Only then will organizations such as Pfizer will understand that it’s more about the people than the profit. Stakeholders have a pivotal role in the advance of business because each company that have taken notice continues to thrive today even in a recession.