Loyalty, Ethics and Competence for Business

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Updated: Aug 18, 2023
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Business is operated by following the principles laid down during its formation and the laws prescribed by the respective government of the country. Every member of a company should ensure that the firm carries out its activities under the directives of the rules, ethics, and demands of its consumers. The responsibilities of a business encompass social, legal, economic, and philanthropic factors (Volkov, 2015). Each of these has a unique role in ensuring that the rights of every stakeholder are observed and maintained.

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This essay discusses the responsibilities of Merck, a pharmaceutical company faced with a production situation that requires ethical decision-making.

The first stakeholder in this situation is Merck & Company’s management. The management is responsible for various decisions, such as determining what drug to produce, setting the market price, deciding on the areas of distribution, and the volume of production among other things. The team is also involved in researching the most effective components of a particular drug as well as its side effects on users and the environment.

The second stakeholder is the World Health Organization. As global as this group may be, it is a primary determiner of the nature of production that pharmaceutical companies should undertake. The organization plays a role in evaluating the market and determining the affected regions. It also provides accurate data on the nature of diseases, the percentages of infection, the demographics of the susceptible areas, and other related factors. This information guides the research and production teams in their work.

Finally, the group of consumers targeted by every business also plays a crucial role. The infected, as well as those susceptible to the identified infection, are key to this situation’s development. The consumer determines the volume of production for any particular product. The pharmaceutical company uses this data to estimate the value and outcome of its activities before the start of production. Therefore, this stakeholder is essential to the process.

One identified role of any business or organization is on economic development. A firm needs to be economically stable to serve its potential consumers efficiently (Pineda, 2015). Merck needs to understand the economic impacts of its research and production as a way of maintaining the production pattern and supplying to the market. The challenge here is that the target market at this point is small and potentially unprofitable. Any investment into research and production will yield zero returns.

The ability to develop a safe and effective drug to tackle the disease of onchocerciasis solely depends on the financial strength of the company in conducting research and engaging in the production process. Governmental requirements for companies to pay taxes limit a firm’s activities towards unprofitable ventures (Vitez, 2018). If a safe or effective drug is developed, the company would see zero return. Merck would then be obliged to either justify or abandon the production process. It should be noted that the company has a legal and ethical duty to produce drugs. Therefore, it would justify the investment to the shareholders and use the ethics role as a reason for the decision, aiming to maintain consumer loyalty.

Every law concerning a business should assist in overall decision-making on matters affecting that firm’s operations. Merck’s duty is outlined in its legal system as a key component of its formation. Similarly, the government establishes various laws governing different forms of businesses. Such laws determine a company’s operations and the steps to be followed when deciding on a specific venture. Violations of these laws could result in heavy penalties, including fines to the affected sectors and potential company closure.

Merck’s failure to invest in R&D could result in penalties. Conversely, the investment would cost the company, potentially affecting its financial obligations. Thus, it is possible that the penalty might be overlooked, allowing the company to carry on with other duties without investing in this area. Additionally, the company would need to justify its decision to forgo further research since such an action could result in a loss.

The scientists at Merck must conduct research on the types of drugs needed to address a particular epidemic. If the management decided against continuing the research, they would have to use economic and logistical reasons to justify their decision to the scientists. Employee loyalty hinges on the company’s ability to efficiently meet their needs. Therefore, the failure to research the matter could be viewed as a neglect of duty, negatively impacting employee loyalty. Merck has an ethical obligation to develop drugs for various conditions. The production of any drug is determined by its margin of operation. Thus, finding a cure is the primary target. The value system determines whether to continue with production or to venture into other areas. Decisions are based on the operational code contained in the company’s system, which requires deliverables without considering profit margins.

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Loyalty, Ethics and Competence for Business. (2022, Nov 17). Retrieved from https://papersowl.com/examples/loyalty-ethics-and-competence-for-business/