Ethics and Corporate Responsibility in the Workplace
PharmaCARE’s motto is “We CARE about YOUR health” — and this assertion should be born out in the firm’s actions and not just in its words. To understand the actual impact of the organization’s actions, it is necessary to acknowledge its stakeholders and see how each is affected. By doing so, a better system of corporate social responsibility (CSR) can be implemented that will address the issues that face PharmaCARE in Colberia. By examining how other firms and multinationals have addressed CSR issues and comparing them to the situation that PharmaCARE faces, a detailed proposition based on the appropriate philosophical/ethical perspective can be generated. This paper will provide an overview of the stakeholders in the firm, how they are impacted by the organization’s actions, how the firm can better itself ethically and responsibly regarding stakeholders, and how PharmaCARE compares to another company of a similar situation.
A stakeholder is one who is directly or indirectly impacted by the conduct of the company. Thus, a stakeholder can be a manager within the firm or a customer of the firm. It can be a political activist who receives donations from the firm and looks after its interests, or it can be a politician who represents a community where the firm does business. Stakeholders are in some way involved in and/or touched by the activities of the company. The stakeholders in PharamCARE consist of employees (both Western and Colberian), consumers/clients, and directors, as well as the recipients of its sponsored programs, including PAC fund recipients, scholarship recipients, and environmental lobby groups. The issue that the firm faces is that its commitment to health evidenced in its motto and mission is at odds with its actions in both the environmental realm and in the socio-political realm. For example, instead of committing itself to environmental protection, it has lobbied to overturn environmental regulations show that it can avoid being hampered by laws and regulations that are detrimental to its ability to turn a profit. This is an example of a company that puts profits before people, when the core of CSR should be putting people before profits, as it is the former that underlines the ability to produce the latter.
CSR is a way for firms to have a direct effect on the “social, environmental and economic environment in which” the corporation functions (Castka, Bamber, Sharp, 2005, p. vii). By devising good CSR policies, companies can be seen as being willing to commit to the actual health of the planet and the cultures/communities with which the companies interact, in a united effort to create a better place for all (Friedman, Miles, 2002). In order to appropriately structure the CSR policy, a firm should effect an adequate ethical foundation for itself, which serves as a guideline for how the company should address all issues that come up in its line of work (Pearce, Doh, 2005; AnyangoOoko, 2014). For instance, with PharmaCARE the company expresses its intent to help improve the health of people, but if it is opposing legislation that will help to protect the environment, then it is not living up to its motto, because if an environment is negatively impacted so too will be the people in that environment. PharmaCARE’s outlook therefore is not currently being guided by an ethical framework that allows it to apply a systematic and ethical formula to every occasion. In order for it to succeed, it needs to do just this.
Another issue that the firm faces is its use of labor in Africa which consists of the exploitation of workers in Colberia, who are employed for slave wages ($1 per day) and are required to do heavy manual lifting and labor. This is not a caring practice and does not show concern for the workers of the company within that country (though Western employees are treated much better, having lavish accommodations, including swimming pool access and places of rest and living quarters that are quite different from those of the average African worker. Thus, there is a system of inequality evident within the firm and its operations.
Apple is one example of a company that has taken its business to other countries in order to profit from labor there. Apple has used Chinese labor, which it pays a similar rate for, and it has also dealt with the controversial issue of worker suicide by erecting nets outside its factories, so that workers cannot kill themselves by jumping out windows or from the rooftops (Copper, 2013). Apple’s “sweatshop” factories, as they are described by Cooper (2013) show that the company is not dedicated to human rights and equality in a manner that is consistent with sound CSR. In fact, Apple CEO Tim Cook has denied that the company exploits Chinese labor for the sake of boosting profits, asserting that the skill level of the Chinese is just so much better than anywhere else in the world and that that is the reason the company hires Chinese workers instead of other workers in the West, for example (Sharwood, 2015; Langlois, 2015). Despite Cook’s attempt to put a clean face on the company’s activities in China, Apple faces serious human rights violations allegations and should adopt a CSR policy that is more strategically aligned with the ideals of modern society.
PharmaCARE’s human rights issues in Colberia are related to its slave wage payments to African laborers, who are required to walk many miles carrying heavy loads. The company does not look after its African laborers in the same way that it does its corporate Western workers and does not provide a standard of living that is in keeping with its Western culture. Instead, it exploits the low standard of living among the native Colberians and symbolizes essentially a new era of colonialism. This is a human rights issue because PharmaCARE is hypocritically engaging in activity that it pledges to help fight — and the same is true with its environmental policy: it claims to support environmental cleanup and protection but when it comes to passing legislation to ensure such protection, the company fights against it.
Three changes that PharmaCARE could make to better itself in terms of adopting an adequate CSR policy and ethical standard for itself and for its workers and stakeholders are the following:
First, the firm should increase the wages of its African laborers.
Second, the firm should ease the burden of its laboerers.
Third, it should support legislative efforts to protect the environment.
These three recommendations, when implemented, would show that the company is dedicated to helping everyone and that it is putting people before profits. It would be evidence of it actually having a sense of corporate social responsibility — in action — rather than just paying lip service to ideals that it does not actually attempt to bear out in practice.
PharmaCARE’s environmental initiatives when judged in the light of its anti-environmental lobbying efforts shows that the company is not really committed to environmental safety and protection. Were it actually concerned about the environment, it would not engage in efforts to lobby politicians to vote against legislation designed to protect the environment. This gives the firm a false face and a bad public image, and it also undermines the company’s intentions in so far as it aims to help preserve the environment.
In terms of Utilitarian principles, the actions of the company could be assessed as being in conformity with this set of philosophical guidelines, as the essence of this philosophy is that the greatest common good should be achieved: and from the company’s perspective it may argue that the greatest good is achieved through the hiring of low wage employees in Colberia and through the defeating of environmental laws for reasons related to profit and the company’s ability to grow. Without growth, there can be no product, so the company could argue. The problem with this system of ethics is that it is very subjective and open to interpretation — so what is viewed as good by the company may not be viewed as good by other stakeholders and thus there could be a difference of opinion as to whether the firm is acting ethically or not. What is needed is a more objective and clearly defined approach to ethical practices.
This could be achieved through a deontology system of ethics, which obliges one to perform one’s duty according to a set parameter of rules. In the case of PharmaCARE, the rules would be outlined in its mission statement and would relate to treating employees fairly and justly and to helping the environment and to improve people’s lives. Following these rules and guides, the company would be obliged to support legislation protecting the environment (even if it cuts into the company’s profits) and it would be obliged to boost the standard of living of its workers in Colberia (and not just its corporate workers).
With a system of virtue ethics, the corporation could be even more firmly placed within a framework that would ensure that it provides for both employees and the environment. Virtue ethics is a system that defines ethical behavior according to the principles of virtue, which ultimately guides the firm towards putting people before profits — the core driver of good CSR policies.
In terms of an Ethics of Care system, the same principled orientation would also be apparent: the corporation would place the care and well-being of its employees and of the environment before the acceptance of profits within its system of workplace ethics. The ethics of care system guides the core principles of a corporation towards adopting strategies and plans that provide care for laborers and ensure that they are not being exploited or abused. A care system is designed in order to see that everyone has what he or she needs and/or requires.
My own moral/ethical compass would suggest that the company work towards adopting a strategy that is based on helping the culture of Colberia to become more prosperous and to ensure that the people are well taken care of. It may turn out that the people do not want lavish golf courses or big buildings and that they prefer their simple way of life. Some study should be made into their culture and what they prefer — because it is not always the case that all peoples want large homes or expensive fineries. Some cultures prefer simplicity over modernity. Understanding the culture is important. However, it is also important that the firm take care of the people within its own nation. Based in New Jersey as it is, the firm has a duty and responsibility to look after its own citizens at home and to offer them jobs. By exporting jobs to other countries in order to take advantage of cheap labor, the company sends an insincere message and does not help to grow the foundation of its success at home — which is people: it expects people to be able to buy its products, but if those people do not have jobs because the companies are all looking to hire only cheap labor elsewhere, there will be no one left to buy the products they produce: it is a self-defeating system.
In comparison with Apple, PharmaCARE is in a similar boat. Apple has seen its stock collapse in recent weeks as a result of the end of growth in the consumer market: the company is finding fewer consumers to buy its products. Part of the reason for this could be that the company does not employ people at home and so fewer people at home are willing to buy the latest products (if people are not working, they are not having extra money to spend). If Apple were to close its shops in China and open them at home in the U.S., it would create jobs in countries where sales are declining; creating jobs has a wealth effect and sales would likely pick up. The problem is that the company does not want to shrink its profit margins by paying a fair wage to Western workers. PharmaCARE may be in the same boat, as it is following the same exploitation playbook as Apple. This is very likely to end badly for PharmaCARE, just as it will for Apple, because once there are no more buyers because there are no more workers who can afford the products, the company will go out of business. PharmaCARE could avoid this pitfall by returning jobs to the U.S. and taking care of its own people at home rather than seeking to exploit others in foreign lands.
In conclusion, PharmaCARE is in need of an ethical system/foundation that it can use to create and implement a solid CSR policy that can save it from its hypocritical methods of exploiting laborers and not following through on its promise to protect and help the environment. By adopting a CSR policy that is in accordance with a system of ethics like deontology system or Virtue Ethics, the firm could be better situated to save itself from the problems that are now being seen in other companies like Apple which seek to exploit people for profits. The key to success is not putting profits before people, but putting people before profits. When people are put first, profits come naturally.
References
AnyangoOoko, G. (2014). The environmental factors that influence implementation of corporate social responsibility (CSR) in an organization. Journal of Humanities and Social Science, 19(12): 95-102.
Castka, P., Bamber, C., Sharp, J. (2005). Implementing Effective Corporate Social
Responsibility and Corporate Governance: A Framework. UK: British Standards Institution.
Cooper, R. (2013). Inside Apple’s Chinese ‘sweatshop’ factory where workers are paid just 1.12 per hour to produce iPhones and iPads for the West. Daily Mail. Retrieved from http://www.dailymail.co.uk/news/article-2103798/Revealed-Inside-Apples-Chinese-sweatshop-factory-workers-paid-just-1-12-hour.html
Friedman, A., Miles, S. (2002). Developing Stakeholder Theory. Journal of Management Studies, 39(1): 1-21.
Langlois, S. (2015). Tim Cook says this is the real reason Apple products are made in China. MarketWatch. Retrieved from http://www.marketwatch.com/story/tim-cook-apple-doesnt-make-its-products-in-china-because-its-cheaper-2015-12-20
Pearce, J., Doh, J. (2005). The high impact of collaborative social initiatives. MIT Sloan
Management Review, 46(3): 30-38.
Sharwood, S. (2015). Skilled workers, not cost, lured Apple to China says Tim Cook.
The Register. Retrieved from http://www.theregister.co.uk/2015/12/21/apple_60_minutes_interview/
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