1.0 Executive Summary
Ethics is a code of conduct that controls someone or an organization towards doing something correctly. Organizational ethics can advantageously or disapprovingly affect efficiency, self-esteem, and society, to mention but a few. Organizational ethics can be defined as the primary and standards under which the company operates. Organizational ethics has an infinite variety of organisational policies, operations, and duties that can be categorized into the ethical category. Among the ethical categories involves fraud, sustainability, diversity, and exploitation. The case of “The Sackler Family Business” has failed to offer satisfactory services to its clients despite being seen as a successful organization. Understanding how the business code of ethics works and seeing how the Pardue Phrama is executing the business operations leaves the clients with lots of questions with no answers. This case study helps comprehend whether an organization can be seen as successful irrespective of not being ethical.
Ethics is a code of conduct that controls someone or an organization towards doing something right (Wolcott, 2014). When it comes to businesses, business ethics has turned out to be an essential portion of thriving organizations. Contrary to the past, business ethics are treasured and measured on interior and exterior stages. For an organization to be successful, business ethics must go through the company’s organisational performance to be operational. Hence, comprehending the manner in which the organizational performance operates is essential for certifying an ethical background (Wolcott, 2014). Both the organizational performance and business ethics work simultaneously in different ways. An organization’s ethics are created and then applied to the entire organization. Organizational ethics are the outside pointers used to ascertain an organization acting ethically. The basis of an organization’s ethics is beached within the inside tradition of the organization. Organizational ethics can advantageously or disapprovingly affect efficiency, self-esteem, and society, to mention but a few. As it is the case of “The Sackler Family Business,” the company has been subjected to criticism as not being able to uphold the set code of business ethics (Warren, 2019). Being a pharmaceutical company, the organization has faced condemnation for being hostile and manipulative to its employees. Based on the case “The Sackler Family Business,” it is clear that such a scenario, if not tackled ethically; the various stages can be detrimental to the society and the organization at large (Warren, 2019). It is relevant to consider the manner in which each person within a company can have an effect on the organization’s status. Setting up a code of ethics and teaching the stuff to comprehend the significance of making principled verdicts is significant to a successful organization. Therefore, this case study helps in comprehending whether an organization can be seen as being successful irrespective of not being ethical.
The role of this analysis segment is to state some of the unethical operations that can hinder a business from attaining its success. An organization can never become successful without considering or following business ethics. In cases where businesses have become successful despite being unethical, some laws and regulations must be bent to suit them.
Several aspects affect the normal functioning of organizations. Based on the case study, some of the aspects to be considered are the aggressive marketing, credibility of the company, and the bad handling of clients.
The issue of aggressive marketing affects how the client will perceive the authenticity of their products. As it is with the case of the Purdue Pharma, customers began to question why the government was not doing anything concerning the issue addiction despite that the company had been reported to the concerned authorities. Organizational ethics can be defined as the primary and standards under which the company operates (Wolcott, 2014). Organizational ethics are better expressed by means of operations if honesty, love, reliability, respects, and accountability. The principal for the organization owners and management is making sure that the entire stuff comprehends the ethics. The case of “The Sackler Family Business” has failed to offer satisfactory services to its clients despite being seen as a successful organization (Warren, 2019). Understanding how the business code of ethics works and seeing how the Pardue Phrama is executing the business operations leaves the clients with many questions and no answers. According to the Pardue Pharma, they offer addictive opioids OxyContin to its clients. The manner in which the board has hired its board members does not follow business ethics since all the members are family related (Warren, 2019).
According to Wolcott (2014), organizational ethics involves different ethical problems. Organizational ethics has an infinite variety of organization policies, operations, and duties that can be categorized into the ethical category. Among the ethical categories involves fraud, sustainability, diversity, and exploitation. Going by the case of the “Pardue Pharma,” the company was charged with misconduct in how they were marketing their products. Their aim was to generate high income, demanding them to sell addictive drugs.
There are set government agencies that are responsible for coming up with laws that help organizations or companies to operate their businesses smoothly. As seen in the case of the Purdue Pharma regarding the Iowa Attorney General, Tom Miller, organizations that fail to stick to the centralized and state rules and regulations are frequently subjected to hefty fines and other punishments. As it is the case of Purdue Pharma, going against the rules and regulations implemented seems to be giving them more profit (Warren, 2019). To the company, they would instead prefer to pay for the penalties since it is in smaller amounts as compared to the profits being made. Despite that Iowa Attorney General, Tom Miller, acknowledges that their drugs are addictive and has caused deaths, it shows that higher authorities might cover Purdue Pharma since no action has been taken against them (Warren, 2019).
The issue of credibility is evident with the fact that despite being a reputable company in producing pharmaceutical drugs, the report recorded by the affected clients based on addiction has made the company lose respect with their clients. Therefore, it has led the clients to look for companies that are offering the same services. It is a fact that a company might become successful despite not following the code of ethics in as far as business ethics is concerned. However, it will affect the manner that employees or workers perform their duties. The need for ethics contains a negative impact on the worker’s performance (Brusoni and Vaccaro, 2016). Workers are determined to go forward and to make money, forcing them not to pay attention to the rules and code of behaviour. Lack of business ethics in an organization can result in additional paperwork and lackadaisical mistakes that may lead to the operation being finished once more. The workers who believe to be acting ethically right and heeding to the laws fail to perform their duties because of lack of morale, hence resulting in a decline in performance.
Poor organizational ethics affects the relationship between the employer and the employee. In the case of the Purdue Pharma, given that the workers would have heeded the cries from the 45 U.S. states and the 1,500 cities, the company would have been closed (Warren, 2019). To maintain the excellent relationship between the workers of the Purdue Pharma and the employer, they had to blend-in and turn a blind eye to the issues from the complaining clients. This is experienced out there in different organizations where the executive of an organization shows a need for ethical character. The lack of organizational ethics may result in such executive loosing respect from his/her employees. It is hard to have a flourishing organization without the presence of respectable leaders (Wolcott, 2014). The need for ethical performance can as well result in anxiety between workers, given that some workers may dislike the other workers who fail to act according to the regulations. Unethical performances in organizations have the possibility to result in need of honesty among workers, which is harmful to an organization that depends on partnership and a sense of society (Brusoni and Vaccaro, 2016).
In every business conducted around the world, a customer is the determinant of the organization on whether it will operate on profits or losses. Therefore, it is the duty of every company to maintain good rapport with their clients. As it is with the case of the Purdue Pharma, the inability to provide satisfying services to their clients is the causative reason to why they were taken to court. As seen through the case of Purdue Pharma, the company has lost trust with its clients, given the fact that most of the clients see their drugs as fatal (Warren, 2019). Therefore, it could be easy to argue that the company has lost credibility. Given that a need for ethics in an organization reaches the public awareness, the company loses credibility as it is with the Purdue Phrama. Whereas some organizations flourish the public acquaintance of the need for ethics by rebranding and marketing advertisements, the majority lose the leading client platform (Paliwal, 2006). In scenarios where the organization heals from the news regarding the lack of ethics, it will need more time and capital to pickup to where it was before. Definitely, the clients who are not satisfied with the products being offered by the company tend to find organizations offering the same product and services as a replacement.
Passion leads to success in an organization. However, how can one expect to have a successful organization or company without following the code of ethics? They always say that “charity begins at home,” and therefore, it is the duty of every manager to ensure that all their employees have passion based on what they are doing (Frederick, 1999). A scenario like the Purdue Pharma case could have led to many workers losing focus on their employment due to lack of ethics (Warren, 2019). Workers will always persist if only the organization they are working for follows the code of ethics or business ethics. Irrespective of whether the company is generating losses or profits, they will always be persistent in ensuring that the organization gains its grounds. It is better to work in a morally upright company than in an organisation with questionable ethical standards (Frederick, 1999).
An organization will not be successful if their products and services are not directly focused on customers. The production of the OxyContin drug by Purdue Pharma did not consider their client’s reactions (Warren, 2019). Despite that the majority of their clients lamented on the side effects of the drug, they still went ahead to manufacture more since they were more focused on money. When it comes to business, any organization without clients has no foundations (Malachowski, 2001). When an organization pays attention to the customer’s needs, it strengthens the accountability they have as an organization to the market. Whatever the outcome, an organization makes will either affect the client positively or negatively. To maintain that success in business, an organization should be result-oriented. One would not be an entrepreneur if their concentration was not on the result, however ethics aspect into outcomes as well. It is the duty of the organization to operate on attaining the outcomes within the organization’s values (Tejpal, 2010). The outcomes should be achieved through the perspective of advancing a product or service needed by clients.
Being the case of Purdue Pharma, operating a business based on ethics leads to productive and lucrative business operations. Lack of ethics emerges due to the deprived strategy and fault around the organization (Tejpal, 2010). An organization should be able to set some factual objectives for the workers to do away with the unethical performances. Bearing in mind the scenario of the Purdue Pharma, such organizations should always make the customer’s requests a priority (Warren, 2019). The organization should be focused on offering products and services which are satisfactory to the client (Frederick, 1999). For an organization to become successful, there must be mutual respect between employers and the employees. Any lack of ethics may result in other workers treating their fellow workers or employers unprofessionally. When it comes to regions like the United States, it may lead to racial job discrimination. In the connection between the case of Purdue Pharma and Organizational Ethics, maintaining good business ethics leads to smooth operation and functioning of an organization hence becomes successful.
After going through the case of Purdue Pharma and the notes or the research on business ethics, one can easily recommend a number of things to help an organization in protecting itself against unethical behaviour.
- First, every organization irrespective of whether it belongs to a family or not should have one or two board members who have got no relation to them. Through including such members to the board, it gives the board with different ideas on how to operate the organization. In addition, it minimizes the overspending of funds from the company hence making a profit in a positive way.
- The company should be strict on the rules and regulations set that govern the organization to maintain an ethical kind of standard in an organization. Having leant through the case of Purdue Pharma, the products and services being produced should have no effect on the customer.
- It should adhere to the set of laws that control the production of services in the market. Organizations should avoid neglecting higher authorities as they were the case Purdue Pharma.
- Being an organization, it is the duty of the entrepreneur to respect the employee and the policies set to govern the company. As an organization, employing people with good morals acts as a critical portion of good ethics, and they act as ambassadors to the organization.
- The organization should focus on strong performers in addition to the workers who demonstrate the policies and sprit of the organization.
- As a way to maintain good organizational ethics, the company should find ways to compensate the workers who have shown outstanding performances through their duties. By compensating the outstanding workers, it gives them motivation hence create the art of competition among themselves hence improving job efficacy in an organization.
Brusoni, S., and Vaccaro, A., 2016. Ethics, Technology, and Organizational Innovation. Journal of Business Ethics, 143(2), pp.223-226.
Frederick, R., 1999. A companion to business ethics. Malden, Mass, Blackwell Publishers. http://www.blackwellreference.com/subscriber/uid=3/book?show=all&id=g9780631201304_9780631201304.
Malachowski, A. R., 2001. Business ethics: critical perspectives on business and management. Volume II, Volume II. London, Routledge.
Paliwal, M., 2006. Business ethics. New Delhi, New Age International. http://site.ebrary.com/id/10323318.
Tejpal, S. C. S., 2010. Business ethics & communication. [Place of publication not identified], S Chand & Co Ltd.
Wolcott, G., 2014. Business Ethics and Ideals. Business Ethics Journal Review, pp.36-41.
Warren, K., 2019. Meet the Sacklers, one of the richest families in America, who built their $14 billion fortune off of controversial prescription drug OxyContin. Business Insider: Pulse. https://www.pulse.ng/bi/lifestyle/meet-the-sacklers-one-of-the-richest-families-in-america-who-built-their-dollar14/8res2dz
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