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Ethics and Corporate Responsibility in the Workplace and the World

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Ethics and Corporate Responsibility in the Workplace and the World

Ethics and Corporate Responsibility in the Workplace and the World
In recent 0years, most companies are striving to become a benefit corporation (B-corporation). This legal form of corporation is to provide legal protection to management that want to both maximize shareholder income and pursue a social or environmental agenda (Andre, 2012). This paradigm shift is due to consumer’s awareness, global warming and globalization in the business world. All global companies have developed ethical, environmental and sustainability policies for their employees, suppliers, contractors and other stakeholders to follow. This paper will examine PharmaCare’s ethical and social responsibility around its operations, products, and obligation to stakeholders. PharmaCare, a renowned fortune 500 pharmaceutical company listed on the NASDAQ is one of the companies that have all these initiatives in place. It is considered one of the most ethical and social responsible companies in the world due to many initiatives it takes to commit to its responsibility to protect the environment and enhance the quality of life for millions around the world.
The stakeholders in PharmaCare’s global operation are employee, suppliers, shareholders, government, communities, consumers, physicians, healthcare facilities, and the African nation of Colberia. PharmaCare has a legal obligation to all of these stakeholders. Below are some of the reasons why PharmaCare has a responsibility to these parties: The Company needs the employees to carry out its day-to-day operation in so doing; they may offer many incentives to keep the best employees. The suppliers are one of the main factors to this chain because they have to provide the machinery or raw material because employees can produce a product. The shareholders, investors and creditors are the parties providing funding for PharmaCare to operate. They are a big part of the company’s decision. They have the ability to change the company’s direction and decisions on almost all aspects of the company. The consumers which include physicians and healthcare facilitates are the main factor in the hierarchy of stakeholders because the company rely on the consumers to purchase its products for it to be viable and profitable. The United States (US) government and Colberia affect PharmaCare’s operations through regulations but they receive taxes from the company. The countries benefit because the company provides employment to its citizens, which encourage economic growth. Local communities and, more generally, civil society and future generations has broaden the concept of stakeholders given corporations the responsibility to these communities and to create sustainable programs for future generations (Frémond, 2000).
In November 1996, the International Labour Organization (ILO) held a meeting in Geneva, Switzerland on the effects of globalization of the textile, clothing and footwear industries (TCF). The delegates representing employers, workers and governments from over 30 nations were concern with the emergence of "sweatshops" and of occupational health problems in some countries. A sweatshop is defined as a workplace, often a factory in which employees work long hours at low wages under poor conditions. According to Myers (2004), the “sweatshop” label does not only apply to factories, it can be applied to difficult job with long hours that pays very little and have poor working conditions. Delegates were warned that if the treatment of these employees cannot be improved and accompanied by social justice they wouldn’t be able to sustain growth. The members concluded that fighting against this type of treatment nationally and internationally should help improve wages and general working conditions and unfair competition created by enterprises which do not comply with fiscal and legal obligations, which exploit workers and disrupt markets (ILO, 1996). The treatment of the Colberian employees and its regular members is of direct relationship to this type of injustice. PharmaCare, a US company is unethical in the way it conducts business in Colberia, how it treats its rank-and-file versus its executives. The US is a leading member of ILO and it has signed all initiatives of this organization including the resolution in November 1996 to fight against sweatshops. Although Colberia is not a member of the ILO and does not have similar regulations as the US, PharmaCARE still has an ethical responsibility as a US company and as one of the leaders in social and ethical responsibility to abide by the organization’s initiative of better working conditions and wages. The working condition in the facility is absurd. Why the ranks and files are working in a mold-infested facility and the Colberians are working in deplorable conditions, the executives who are receiving the humongous compensation live in the best condition allocated to humankind. Some may argue that the Colberian employees are getting good wages as compare to others in the country, especially when the citizens are willing to work $1.00 a day. The wages in developing countries often do not correlate to their productivity. According to surveys by Kurt Salmon Associates, Inc. “in Mexico apparel workers are 70% as productive as their U.S. counterparts, yet they earn just 10% as much per hour (ECO360 Trust, n.d.). The wage could be good in that part of the world; however, PharmaCARE has an ethical responsibility to provide adequate equipment, basic services and incentives for the type of output they receive from these employees and the destruction to the country’s habitat. They could create roads in the forest to accommodate the transport of plants instead of having the employees walk 10 miles, provide adequate drinking water and housing. Another issue I see unethical is that PharmaCARE is exploiting the intellectual property of the indigenous healers without any incentive. They are using the information receive from these healers to create the drugs and do not give credence to these healers. I see this as intellectual plagiarism. The competition for cheaper labor costs, as well as the liberalization of trade barriers, has cause workers to have little bargaining power, especially in countries with authoritarian governments (ECO360 Trust, n.d.) so PharmaCARE is using this to exploit employees in Colberia and the US facility.
New Jersey is an employment-at-will, so since PharmaCARE is incorporated in that state, they can terminate an employee for any reason except exemption to the law that includes the public policy exemption, which provides employees the right to serve on a jury, filing claims for workplace injuries, refusing to get involve in employer’s illegal practices, sexual harassment, etc. Other exceptions introduced were implied contracts, which include the handbook or policy manual rule, implied covenant of good faith and fair dealing, illegal discrimination, and retaliation (General Counsel, P.C., n.d.) Donna, Tom and Ayesha are protected under these public policy exemptions and OSHA. They have their right to complain to OSHA because it is the agency responsible for workplace safety. Donna has the right to file for worker’s compensation because her claim is due to the mold-infested facility. She can prove that until the mold issue, she had never missed a day; therefore, her chronic bronchial problem was a direct result of the mold. PharmaCARE has a horrible working environment and implemented many illegal practices; including the creation of CompCare as a compounding pharmacy to market the reformulated drug directly to hospitals, clinics and physician offices and these pharmacies are not to sell in bulk. They circumvented this policy by allowing doctors to fax bogus patient lists to generate sales. They also continue to manufacture and distribute AD23 after it was discovered to be linked to a high rate of people suffering from heart attacks.Tom has a right to complain to agency that enforces the Occupational Safety and Health Act OSHA. If he does not complain or report this issue, more employees will fall sick due to this condition and because he received huge bonuses as the executives, he will be liable because he is the direct supervisor to these employees. For Ayesha, I believe she could be fired because I do not see any proof of discrimination in her complaint of being a Muslim that is why she is not being promoted. Allen believes that she does not have the management or people skills to become a supervisor although she is a good worker. It is management responsibility to select the best candidate for a managerial position, being a good worker does not qualify you as a manager. If Ayesha believes that the sole purpose of her not being promoted is because of her religious affiliation, she will have to prove that with documentation and other facts when the Equal Employment Opportunity Commission (EEOC) does its investigation.
Tom has the responsibility to listen to his employees, a report issues to senior management as he did; however, when his boss threatened him, he was to take the complaints to senior management for redress. If senior management refuses to address the issue, which I believe they would not due to the profits and the damage to the company’s reputation. He has two positive alternatives, either to quit the job or report the issues to the appropriate regulatory organizations. He will be protected under the New Jersey Conscientious Employee Protection Act. Under the Act, an employer cannot retaliate against any employee who discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer, or another employer, with whom there is a business relationship, that the employee reasonably believes: is in violation of a law, the company is involved in fraudulent or criminal activities, misrepresentation or deception of information to shareholders, investors, patients, employees or other stakeholders and/or is incompatible with a clear mandate of public policy concerning the public health, safety or welfare or protection of the environment (The state of New Jersey, n.d.). If he does not report the information to the appropriate agencies; he, the executives and the company could be liable for damages to these employees.
PharmaCARE has launched many initiatives to proud itself as one of the most caring and social responsible companies. The company used monikers like “We CARE about YOUR health” and “We CARE about YOUR World”. They offer free/discounted drugs, healthcare programs and scholarships to the underserve communities and has initiated “green” programs in commitment to the environment. The company was able to carry out these initiatives because their cost for production was minimal to what they spent for these programs. I believe all the programs were a farce and manipulation of the public trust so that they can cover-up the destruction to the Colberian habitat, the treatment of their employees and the deplorable conditions of their facilities. The company is unethical, has no social responsibility platform and due to the many inconsistencies to their belief, they should be closed. They successfully lobbied against environmental laws and regulations; their operation in Colberia has destroyed habitats and endangered native species. These activities show how negatively they affected many communities for profits. The consumers, activists, and the media should get involved to lobby for a change through the ILO and the U.S regulatory agencies. PharmaCARE is rated as a company who cares for the environment and health of consumers. They should be the primary supporter of corporate social responsibility (CSR). In 2010, the state of New Jersey introduced the New Jersey Business Corporation Act1 which creates the ability for corporations to operate in way that have a positive impact on society and the environment while maintaining healthy profits and satisfaction to its shareholders and consumers. If PharmaCARE wants to continue as one of the leaders in its industry, it has a fiduciary duty to its stakeholders to protect their non-financial interest as well as financial interests. They have to revamp their ethic and social responsibility procedures to align with national and international regulations. They have to invite a third-party organization that is credible, transparent and independent to assist in this change. After the implementation, a comprehensive report of its overall social and environmental performance can be provided to the public. This will show that the company is transparent and accountable to its shareholders, the community, and the environment.
The Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) is a law passed in 1980 to protect the environment in case of hazardous materials releases, commonly known as Superfund. This law gives the EPA the initiate responsibility to cleanup these materials and to force parties responsible for environmental contamination to clean it up or to reimburse the Superfund for response or remediation costs incurred by EPA. The law created a tax on the chemical and petroleum industries. Over five years, $1.6 billion was collected and the tax went to a trust fund for cleaning up abandoned or uncontrolled hazardous waste sites. An amendment to the law called The Superfund Amendments and Reauthorization Act (SARA) of 1986 revised various sections of CERCLA, extended the taxing authority for the Superfund, and created a freestanding law. This amendment stressed the importance of permanent remedies and innovative treatment technologies in cleaning up hazardous waste sites; * required Superfund actions to consider the standards and requirements found in other State and Federal environmental laws and regulations; * provided new enforcement authorities and settlement tools; * increased State involvement in every phase of the Superfund program; * increased the focus on human health problems posed by hazardous waste sites; * encouraged greater citizen participation in making decisions on how sites should be cleaned up; and * increased the size of the trust fund to $8.5 billion (EPA, n.d.)
PharmaCARE is pharmaceutical company so they are involved with the use of chemicals and other hazardous materials. Although, the mold in the building is not a chemical but it has environmental and health effects as in the case of Donna who is now unable to work due to chronic bronchial issues. I believe that the mold was created due to the accumulation of chemicals used in producing or reformulating the AD23. There is an assertion that if these chemicals are creating mold in the facility, they may also be contaminating the community around the facility and the water through the waste products. A bigger human health problem is the report that people who received the AD23 seemed to be suffering from heart attack. Along with the EPA getting involved with the contamination at the facility, the Federal Drug Administration (FDA) may also be involved to investigate about the findings in the report.
The United Nations is working with countries and multinational conglomerates to assist in reaching its Millennium Development Goals to end poverty. One of the United Nations goals for this endeavor is its seventh goal to end poverty. It is to ensure environmental sustainability. Below are their targets for beyond 2015: 1. Integrate the principles of sustainable development into country policies and programs and reverse the loss of environmental resources
2. Reduce biodiversity loss, achieving, by 2010, a significant reduction in the rate of loss
3. Halve, by 2015, the proportion of the population without sustainable access to safe drinking water and basic sanitation
4. Achieve, by 2020, a significant improvement in the lives of at least
100 million slum dwellers (UN Department of Public Information, 2013).
As a leading pharmaceutical company in the world and the United States a leader at the United Nations, PharmaCARE as a US company should take the primary initiative to assist the United Nations in effecting this environmental sustainability in Colberia. They should provide programs to protect the endangered species and the forest. The basic services like water and good sanitation should be a priority to enhance the livelihood of their employees in Colberia. This way their reputation as a leading company will be recognized nationally and internationally.

References
André, R. (2012). Assessing the Accountability of the Benefit Corporation: Will This New Gray Sector Organization Enhance Corporate Social Responsibility?. Journal Of Business Ethics, 110(1), 133-150. doi:10.1007/s10551-012-1254-1
ECO360 Trust, (n.d). Cheap Labor. http://www.sustainablecommunication.org/eco360/what-is-eco360s-causes/cheap-labor
Fremond, O. (2000). The Role of Stakeholders. Retrieved from http://www.oecd.org/daf/ca/corporategovernanceprinciples/1930657.pdf
General Counsel, P.C., (n.d.). At-Will Employment. Retrieved from http://www.generalcounsellaw.com/practice-areas/labor-and-employment-law/regulatory-law/at-will-employment/
International Labour Organization (ILO), (1996). ILO Meeting Targets Sweatshops in Footwear, Textiles and Clothing; Adopts Resolution on Child Labour. Retrieved from http://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_008077/lang--en/index.htm
Meyers, C. (2004). Wrongful Beneficence: Exploitation and Third World Sweatshops. Journal of Social Science, 35(3), 319 – 333. Retrieved from http://www.econ.upf.edu/~lemenestrel/IMG/pdf/meyers_jsp_2004.pdf

The State of New Jersey, (n.d.). TITLE 34. Labor And Workers' Compensation
Chapter 19. Conscientious Employee Protection Act. Retrieved from http://www.state.nj.us/health/irb/documents/cepa.pdf
United States Environment Protection Agency (EPS), (n.d.) . Superfund. Laws, Policy and Guidance. Retrieved from http://www.epa.gov/superfund/policy/index.htm
UN Department of Public Information, (2013). Ensure environmental sustainability. We can End Poverty. Millenium Development goals Beyond 2015. Retrieved from http://www.un.org/millenniumgoals/pdf/Goal_7_fs.pdf…...

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...Ethics and corporate Responsibility in the Workplace and the World Mary May Professor Christina Williams Ethic, Law and Compliace August 25, 2014 Ethics and Corporate Responsibility In the Workplace and World Key Characteristics of Stakeholders A stakeholder is a person, group, or an organization that has an interest or concern in an organization or a company. A person who is directly or indirectly affected by the functioning of a company is a stakeholder. Stakeholders are directors, employees, creditors, government and its agencies, shareholders, owners, unions, suppliers, and the community from which the business draws its resources. Stakeholders can be affected by the organization’s objectives, policies and actions. A company’s customers are entitled to fair trading policies; they are not entitled to the same consideration as the company employees. Key characteristics of stakeholders include knowledge of the business or policy, interest related to the policy or business, position for or against the business policy, and potential alliance with other stakeholders, and the ability to affect the policy process (through power and/or leadership). The stakeholders in the PharmaCARE scenario are the healers in the African nation of Colberia, PharmaCARE’s executives, and Colberians who work in the manufacturing company. Human Rights Issues by PharmaCARE Human rights are rights inherent to all human beings, whatever our nationality,......

Words: 1650 - Pages: 7

Premium Essay

Ethics and Corporate Responsibility in the Workplace and the World

...success or failure could be the difference between prosperity or poverty for Colberia. This is also true of PharmaCare’s regular employees and management; success or failure could mean loss wages, or bonuses. Human Rights Issues One of the areas that PharmaCARE should address immediately is the human rights issues associated with their work force in Colberia. They currently treat their indigenous works with little regard, low pay and harsh working and living conditions; while catering to their executives with luxury billeting, and other recreational luxuries. Not addressing these issues immediately will ruin PharmaCARE’s reputation globally, leave room for competitors to capitalize Phar maCARE’s shortcomings, and eventually cut into corporate profits if lawsuits from human rights violation come into play. The first recommendation is by far the easiest to tackle. PharmaCARE has paid indigenous workers’ wages based on what they were willing to accept. In this case they are only paying workers $1.00 per day; which is outrageous given the profits that they receive from the efforts of this labor pool. It is recommended that PharmaCARE increase salaries from the daily rate of $1.00, and move to an hourly rate of $0.45. This increases the daily rate by $2.60. While this is still very low in relative terms compared to wages in the U.S. it allows an increase without turning totally upsetting the current economy. Any increase higher than that amount would produce severe,......

Words: 1645 - Pages: 7