Ethics in Business
Ethics are the principles and value an organization use to govern their activities and decisions. Code of ethics is a set of principles that guide its programs, policies, and decisions. An ethical philosophy is what organizations use to conduct business, this can affect the reputation, productivity and the company financially.
The leaders in an organization use ethics to manage employees. The code of ethics determines discipline procedures and the acceptable behavior. When there is a high ethical standards it encourages employees in the company to meet the same standard. Ethical leadership not only enriches a company’s financial market and the integrity in the community, it also helps to improve the business.
Ethical behavior
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The Ford Pinto was manufactured in the 70’s. If this car was hit from behind, it would cause the gasoline to leak and the car would burst into flames. The Ford Company finally issued a recall on this automobile, only after more than a dozen of people where either killed or injured. The few of the executives involved in this decision, felt this was an unethical choice. This feeling was mainly because this was a business decision more so than it was an ethical one. The executives in charge of the Pinto were not knowingly unethical, or they intentionally authorized unethical behavior by employees further down the chain of command. It is evident that these patterns continue to recur in other …show more content…
After hearing of several people dying in the Chicago area, they all had taken extra-strength Tylenol. Even though they were not directly responsible for the contamination of the product, they chose to follow their guidelines of people first and property second.
“In the 1980’s poisoning incidents, Johnson & Johnson responded quickly and forcefully to protect public health. Its reaction is noteworthy because the problem was not specifically related to Tylenol. But, their response was in keep with the high social awareness and has become a role model for other manufacturers” (Trinkhaus, Nathan, Beane, Meltzer, 1997). Tylenol took the right steps in this case, whether the existence of the company was at stake or not. Some companies probably would have been looking at the bottom line and recalled only the affected areas. Tylenol removed over 30 million bottles worldwide. Now if they had not done that not only would the customer loyalty be gone but consumers would consider them untrustworthy. As well as the detrimental consequence it would have had on the company. Knowing that consumer’s and medical professionals using the product, the company felt that safety to the consumer and the company’s survival was crucial. This is why their response was so quick and in manner in which it captured the focus of the principle – “We believe our first
Dr. John Abramson’s book Overdosed America debunks the myths about the excellence of American medicine. Abramson backs up this claim by closely examining research about medicine, closely examining the unpublished details submitted by drug manufacturers to the FDA, and discovering that the unpublished data does not coincide with the claims made about the safety and effectiveness of commonly used medicines. Abramsons purpose is to point out the flaws of the pharmaceutical industry in order to warn the readers about the credibility of the drugs they are buying. Given the critical yet technical language of the book, Abramson is writing to an audience that may include academic physicians as well as those who want to learn about the corruption of the pharmaceutical industry.
Economic responsibility requires a company to remain profitable in order to appease stakeholders and risk management and sound business practices play a large role in acceptable economic responsibility. Johnson and Johnson may have tried too hard to increase its profits, which resulted in mediocre production rather than timely inspection to ensure the products are safe for distribution. A halt in production may decrease profits temporarily, but in the long run, products distributed will be safer and revenue would resume to a normal amount. Instead, trying to be profitable and avoid loss in the short run made Johnson and Johnson less profitable in the long run. Failure in legal responsibility may have caused Johnson and Johnson to fail. The Food and Drug Administration (FDA) regulates drug distribution and has several criteria to pass in order to allow Johnson and Johnson to administer its premier medicines such as Tylenol. Not adhering to those laws allowed the distribution of unsafe medicines, subsequently leading to recalls and damaging the company financially. Johnson and Johnson tried covering up prior recalls of Motrin by hiring contractors to buy every packet (Kimes). Ethical responsibility requires companies do not perform questionable practices such as that described. The secret recall bought attention to Johnson and Johnson that it makes shoddy products out of the public’s view, which is wrong on many ethical bases. In the recent occurrence with Tylenol, Johnson and Johnson slacked on its labeling and tarnished the company’s
Tylenol is part of the Johnson & Johnson Company. Once they made the connection between the report and the Tylenol they put customer safety first, before they worried about the company’s profit. The company immediately informed customers not to consume any type of Tylenol product. To throw away what they had until the extent of the tampering could be determined. Johnson and Johnson stopped all production and advertising. The recall included approximately 31 million bottles of Tylenol.
Doctors work under intense pressure, and if a pill could fix a patient’s problems than many saw nothing wrong with that. What exacerbated the problem was that many hospitals also changed their modus operandi with regards to treatment. In some hospitals, “doctors were told they could be sued if they did not treat pain aggressively, which meant with opiates (95). However once the patient became addicted and could no longer get their prescription legally refilled, the drug dealers saw their chance. What is surprising is the fact that pharmaceutical companies acted in the same manner as drug dealers. Both sides did not care about the end user, and the problems they would have to deal with after using what was given to them. Their motive was purely to profit as much as possible, and they did not care about who would get hurt as a result of their
Although cyanide-laced Tylenol deaths are still a mystery to this day, this mass murder has been uncertain for over two decades. The 29th of September in 1982, seven Chicago locals died after taking Extra-Strength Tylenol (“Cyanide-Laced Tylenol Kills Seven”). Astonishingly, all of the deaths were reported in “24 hours”
Corporate executives like Kenneth Lay and Martha Stewart were taken before the court for poor ethical practices. Leaders of pharmaceutical companies have been found knowing about distribution of unsafe products. Leaders at Coke Cola were found guilty of racial discrimination and leaders of cruise ships fined for dumping waste in the ocean. News reports exposed Wall Street analysts who created phony reports, made profits, and pushing worthless stocks, left citizens questioning if they should invest their money. Leaders of the world’s largest retailer, Wal-Mart, were cited for practices of employee abuses and gender discrimination.
During the 1900's, the McNeil company developed and established Tylenol into a well known and recommended analgesic. It has become recognized world wide as a safe brand of acetaminophen. The name Tylenol has become identified as a trusted, safe drug that people can easily purchase over the counter for their ailments. Tylenol is still recommended by doctors even though there was a cyanide scare in the history of the company. It has been discovered by my independent survey that consumers use Tylenol for their pet's needs also.
When we consider the case of the Ford Pinto, and its relative controversy, through the varied scope of ethical viewpoints, the results might surprise us. From a personal standpoint, as a consumer, the idea of selling a vehicle to the masses with such a potentially devastating flaw is completely unethical. When we consider the case from other directions and other ethical viewpoints, however, it makes it clear that often ethics are a matter of perspective and philosophy. It’s also clear that there are cases where more information will muddy the waters, rather than clear them.
In 2011, the media reported that in US prisons a sedative used for death penalty purposes was not being used as intended by the pharmaceutical company Lundbeck. The drug Nembutal as well as others were mixed into a cocktail and administered to prisoners undergoing the death penalty. Lundbeck got word of this from
Tylenol's 1982 ordeal has become a classic example of a successful crisis management. Johnson & Johnson faced a major crisis when their leading pain-killer medicine, extra-strength Tylenol, was found to have caused the fatalities of seven people in Chicago, Illinois. It was reported that unknown suspect or suspects took the product off store shelves, tampered it with deadly cyanide and returned to the shelves. As a result, seven people died and consumers lost confidence and panicked over hearing the news of this incident. Tylenol received massive media coverage which led to an expeditious communication of event to the public. Johnson & Johnson (J & J) took a huge financial hit when it had to recall and destroy approximately $100 million dollars worth of inventory in addition to the loss incurred by the company when the public reacted to the incident (Campbell et. al., n.d.). Tylenol's approach was to pull off the products as quickly as possible, stopped production, cooperated with the investigation and the media and halted all forms of advertisement or marketing of the product. Furthermore, Johnson's & Johnson's took the initiative to protect and improve their product packaging which allowed them to regain the public's confidence and paved the way for improved tamper-resistant packaging now used by myriad of manufacturing companies. The fatalities occurred between September 29th to October 1st of the year 1982 and by November, Tylenol had already reintroduced the product with improved tamper-resistant packaging. To regain the public's attention and confidence, Johnson's & Johnson's launched a dynamic marketing campaign to put the product's name before the public.
[1] Ethics is defined as “the code of moral principles and values that governs the behaviour of a person or a group with respect to what is right or wrong” (Samson and Daft, 2005, p.158)
A code of ethics is a formal document in which is used to assist members of an organization, to know what’s ‘right’ and what is ‘wrong’ in the work place and applying it to their decisions. A code of ethics is a written set of rules or guidelines to help the workers and management ‘conduct’ or direct their actions with its primary values and ethical standards. A code of ethics is important because without it, employees and management wouldn’t have guidelines and the establishment would resemble a crazy house. Consider the establishment, Dunkin Donuts. Dunkin Donuts is a food establishment well-known for their famous donuts, coffee and their slogan “America runs on Dunkin”. Without a code of ethics, the industry would most likely be extremely hard to control.
Ethics is the responsibility of each individual person, but starts with the CEO and the Board of Directors, setting the right tone at the top and moves down through the organization, including setting the tone in the middle. A company’s culture and ethic standards start at the top, not from the bottom. Employees will almost always behave in the manner that they think management expects them, and it is foolish for management to pretend otherwise (Scudder). One of the CEO’s most important jobs is to create, foster, and communicate the culture of the organization. Wrongdoings or improper behavior rarely occurs in a void, leaders typically know when someone is compromising the company
Ethics is simply doing the right thing. In the business situation ethics are the moral concept of a firm getting through it organizational duties ethically.
Ethics are moral principles or values that govern the conduct of an individual or a group.It is not a burden to bear, but a prudent and effective guide which furthers life and success. Ethics are important not only in business but in academics and society as well because it is an essential part of the foundation on which a civilized society is built.