Ethical Business Practice

Introduction

Definition of success and what it means to the organization

In organisations, success is considered the achievement of a particular action within a timeframe or under certain parameters. Success is also considered the completion or having met some objectives or reaching specific goals. Success can encompass a more extensive project or a single aspect of a big task or project. Success can be reached in the workplace in an organisation as a team or as an individual within the company (Babatunde, Perera and Zhou, 2016). Business dissertation help is sought after by students aiming to obtain academic success in their studies.

Role of ethics in success

In the modern world or company success, moral behaviour or ethics is a highly stressed principle which guides many organisation’s operations. To avert the challenge of ethics, organisations currently integrate ethical culture into their systems, which establishes smooth operations as well as the satisfaction of all involved parties. One of the main areas where ethics is essential is in leadership. Research shows that leadership is a critical characteristic that can be exhibited by an organisation (Michaelson, Prat, Grant and Dunn, 2014). These individuals claim that ethical activities can be felt more from the organisation’s top management as compared to subordinates. For example, when a choice is to be made between moral action and one which merely attracts profits for a company, the management should go for ethical decision-making. In this manner, they set a very high-minded organisational culture for the entire company (Michaelson, Prat, Grant and Dunn, 2014).

Case Study

The Sackler family possesses a pharmaceutical company known as Purdue Pharma, which deals in the manufacturing of OxyContin, an opioid substance that is very addictive. At different stages of the history of the company, Sackler's family members have occupied many seats on the organisation’s board. As of 2019 May, at least 45 states in the US, as well as 1,500 cities, sued the company for misconduct in sales and marketing of the substance, a much profitable drug. The manufacturing company was accused of creating false claims concerning the substance through their branding “Hope in a Bottle” of the substance. The firm was also accused of misleading medical professionals and the public about the substance concerning its effectiveness while disregarding its addictive nature. The organisation’s marketing approach has also received criticism for being manipulative and aggressive.

In the mid-90s, when the drug was launched, many medical experts received special treatment where all the expenses they incurred for conferences held in resorts were paid for in full. It is claimed that this strategy had a massive impact on the professional’s prescribing decisions. For instance, it was discovered that a high-level of pain killers were given to individuals suffering from chronic pain. The drug led to high financial success to the company, even becoming one of the most prescribed medications in the United States, especially because it was addictive, which meant it continued to be prescribed to the addicts. It was concluded that the company made reckless decisions and as such, created deceptions, which led to extensive addiction to the substance and even death in several instances.

Aim of this report

In this report, it will be determined if an organisation can be described as successful if it is not ethical using the above case study. Additionally, recommendations will be provided on how Sackler family businesses can protect itself against unethical behaviour.

Analysis of the case study

The above case study demonstrates an incident of achieving success in terms of revenue under unethical circumstances. Sackler family businesses continued to promote, that is, market and sell OxyContin, a highly addictive drug, even luring medical professionals to continue prescribing the medication to people despite the substance being highly addictive, thereby increasing their sales. This is not a rare case as research shows that most organisations have some elements ‘malefactors’ who do not fear and are not ashamed of engaging in dishonesty (McMurrian and Matulich, 2016). In these situations, such people ignore the negative impacts of unethical behaviour both on people and the potential effect it will have on the company. Some organisations are also not reluctant to take part in activities that are damaging or harmful to others as long as they will optimise profits. Purdue Pharma is an excellent example of such a company. As a result, they become stronger and build more associations with the main aim of gaining more profits, whatever the cost or means. However, with time, the impact of such disregard start to show, for instance, how people became addicted to OxyContin with some even dying. People eventually become angry with the organisation’s dishonesty leading to serious legal action against the unethical criminal behaviour demonstrated by the organisation either against the top leadership or the people responsible for the immoral practices.

Research shows that unethical practices and behaviour may succeed for a while but are usually found out sooner or later. The companies and persons found guilty of those malpractices are then passed through public shaming or scrutiny. The behaviour may lead to loss of license to continue operating or a severe damage to the organisation’s reputation besides some heavy legal actions (Harvey, 2018). The case study demonstrates the disregard by shareholders in the company to follow the law and conduct business in a morally upright manner. It appears that shareholders were happy with the profits and did not care about the harm the company’s actions were causing. Research shows that there is a myth going around in organisations that the main organisational goal is to maximise the shareholder value. The myth insists that the main consideration for investors is stock price and not the effect the organisation’s actions have on society. This myth could have been behind Purdue Pharma's decision to sell a highly addictive and much profitable drug by not laying all the facts about the side effects of the medication on the table. This ignorance shown by the shareholders or the disregard for ethical business practice led to the lawsuits that were directed towards the company, which clearly shows that unethical behaviour can also damage share value.

According to Hussain, Rigoni and Orij (2018), managers should consider what is regarded as the “triple bottom line,” which not only considers profit as important but also the planet and people. Corporations not only need to care for shareholders’ demands for improving earnings but also must look after the rest of the stakeholders like employees and respect to the environment (Hussain, Rigoni and Orij,2018). Business leaders should, therefore, focus on the organisation’s shareholders as well as on the planet and society. Such an alignment will make sure that the economy is sustainable, healthy, and balanced. The Sackler family businesses paid more attention to short-term profits.

They did not perceive the long-term impacts of their decisions on the organisations health and brand, the environment, or its customers. Research shows that financial sustainability is more about resilience. And businesses that embrace sustainability can not only survive shocks, both natural disasters, and financial crises. Evidence shows that this resilience can be acquired from establishing a good relationship with the environment, the communities, and the employees. Sustainable organisations work with systems which ensure long-term success. Sackler family business represents sustainability antithesis. It is unimaginable how Purdue Pharma’s top leadership could take such actions that harmed its customers and how they consciously deceived medical professionals and consumers about OxyContin, even holding back important information about its addictive nature.

The Sackler family business’ board also took part in ignoring the unethical behaviour in the company as it made a profit from the harmful substance. Research shows that an appropriate or the right kind of corporate governance should be the one which ensures that there is a good relationship between the company, all shareholders, and the society by promoting accountability, transparency, and fairness. Furthermore, the organisation should put in place mechanisms which will help ensure that managers and the top leadership take actions or make decisions which are consistent are in the interest of all stakeholders. The main points to consider when making important decisions, especially in corporate governance, should include taking care of accountability, transparency, regulatory environment and legal issues, appropriate measures for risk management, information flows as well as the responsibility of the board members and senior management. It is important for the board to look past the letters inscribed in the law and be mindful of the spirit of sustainability and reforms. They should determine what constitutes the moral DNA in an organisation and develop a culture which puts accountability and ethics first (Boda and Zsolnai, 2016).

An organisation and its board are strong and less likely to make mistakes concerning compliance if they understand what is legally and morally acceptable behaviour as well as how to avoid areas that can temper with their dedication to reform and uprightness. It is clear that Purdue Pharma's board cared less concerning the decisions the organisation made to sell the highly addictive substance to its clients. The board was money-oriented and only looked for profit rather than accountability and sustainability. The public, on the other hand, became concerned about the addictive nature of the substance. Despite public concerns, the company continued to make plans on how they could profit off the rising epidemic. They planned to sell OxyContin to treat pain in clients and later treat the addiction with another substance known as suboxone. As a result, OxyContin was highly prescribed by medical professionals to help manage pain. But due to the addiction, the company made a lot of profit.

Records show that from 2007 to 2017, the Sackler family business members on the organisation’s board voted to award themselves a sum of 4.2 billion US dollars from the profits the company made from the drug sales. It is clear that this unethical practice and behaviour succeeded for sometimes. However, due to the addiction, the company and the people involved started to be scrutinised by the public, which held protests, thereby damaging the company’s reputation. Additionally, a lawsuit was filed against the organisation and its board for brushing off major concerns about opioid addiction. Research shows that even if an organisation is not found out immediately, customers and other whistle-blowers usually begin to see the unethical behaviour and, as a result, stop conducting business with the dishonest company. Such customers would then raise the alarm and make other people know about what is going on, leading them away from the company, and damaging the company’s chances further. As a result, maintaining a long-relationship between the company and its customers becomes hard, and it eventually fails, losing all its profits in unending lawsuits and compensation to affected people (Keefe, 2017). This is the fate that befell Purdue Pharma for unethical decision making and practices.

Conclusion

Accountability and sustainability cannot be ignored if a business wishes to stay longer in the market. It is clear that with unethical decisions and business practices, companies can run for a short period of time and make immense profits. However, the immoral practices start to show, and people, mostly customers, become aware of the practice which shows either through innocent people who suffer the consequences of the bad decisions made by the company or through other effects such as harm to the environment. For instance, the company and the board’s decision to continue profiting from OxyContin started to show in its customers who became addicted to the substance leading to more suffering instead of alleviating the pain, which was the main intention for the treatment. The continued addiction and death in some instances came to light leading to protests and lawsuits against the company bringing Purdue Pharma down.

Recommendations

Unethical behaviour and practices in the company can result in an unhealthy work environment and can lead to spite and mistrust. However, this can be avoided by employees, managers, and the public in the following manner.

The organisation can create practices and policies to help define and identify as well as report any ethics violation. Everyone should follow such policies in the organisation, including the board of directors, employees, and all shareholders to avoid engaging in unethical behaviour. Furthermore, such policies will ensure that the company is in a position to punish any employee that does not follow them. That is, it is easier to enforce a written policy that just an implied one. Well-developed policies and practices are the best way to ensure that ethics violation are tracked and punished.

The organisation should develop a culture of communication, openness, and transparency to make sure they are obtaining genuine success based on ethical business practices. This culture will also help people to feel comfortable working in the company and customers doing business with them and speak out when they see unethical behaviour. Therefore, how to communicate, be open, and transparent should also be documented to ensure that everyone feels comfortable when doing so, and that it should be clear that victimisation of those who are open is not entertained. That is, each individual should be allowed in all fairness and completeness to exercise their freedom of speech in as far as enjoying their other individual rights is concerned.

The leaders should also lead by example and should behave ethically. After creating policies to ensure that ethics are followed, the leaders themselves must follow them and show directions as to what should be done to ensure that the business practices are genuine. That is, employees of lower levels, as research shows, are always inclined to do more of what their leaders do rather than just say. That is, it should be clear that everyone within the organisation is bound to act the same way as far as being ethical is concerned.

References

Babatunde, S.O., Perera, S. and Zhou, L., 2016. Methodology for developing capability maturity levels for PPP stakeholder organisations using critical success factors. Construction Innovation, 16(1), pp.81-110.

Boda, Z. and Zsolnai, L., 2016. The failure of business ethics. Society and Business Review, 11(1), pp.93-104.

Harvey, M., 2018. Ethics: Why it starts at the top in business. Governance Directions, 70(5), p.258.

Hussain, N., Rigoni, U. and Orij, R.P., 2018. Corporate governance and sustainability performance: Analysis of triple bottom line performance. Journal of Business Ethics, 149(2), pp.411-432.

Keefe, P.R., 2017. The family that built an empire of pain. The New Yorker, 30.

McMurrian, R.C. and Matulich, E., 2016. Building customer value and profitability with business ethics. Journal of Business & Economics Research (JBER), 14(3), pp.83-90.

Michaelson, C., Pratt, M.G., Grant, A.M. and Dunn, C.P., 2014. Meaningful work: Connecting business ethics and organization studies. Journal of Business Ethics, 121(1), pp.77-90.

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