MGT610 Business Ethics Assignment 2 Solution Spring 2013

Alpha pharmaceutical started locally producing a drug for the treatment of lungs cancer in the human body. The disease spread relatively quickly within the last one decade mainly due to the pollution of industrial smoke and traffic pollution in urban areas. The drug is a precious one and falls in the category of life saving drugs. Only a few firms are supplying the drug of this disease category in the market. Alpha pharmaceutical was already an established brand in the pharmaceutical market and this new drug of cancer was only a line extension for them. In the present situation, this company was in a better position to launch this drug at much higher price than the cost of production.

Alpha pharmaceutical was the pioneer for introducing this new locally manufactured drug of cancer. The company had the option of skimming pricing strategy (a high price) for this new product because a potential market segment was desperately waiting for a better treatment option. Other companies who were providing such a drug for lungs cancer patients were importing this drug from the developed countries. The additional cost of import and governmental deregulation of prices for cancer medicine suppliers, allowed the other pharmaceutical companies to charge heavy prices for their lungs’

cancer treatment drug. This expensive treatment option further added to the misery in the life of cancer patients. But the managers of Alpha pharmaceutical are convinced that it is the right time to act with corporate social responsibility and make this new drug available in the market at an affordable price for the cancer patients who already had the limited purchasing power. They thought that this will give the long term repute to the company in the market. But the managers of this company are also in a dilemma of spoiling strong relations with other marker operators because they were supplying the similar imported drug at a much higher price with a better profit margin. Another question in their mind is that they will lose the chance of making a huge profit.


Carefully considering the above mentioned scenario, answer the following questions, 

1.   What strategic benefits this organization may gain by following communitarian ethics and corporate social responsibility?


The  following are the strategic benefits of communitarian ethics and corporate social responsibilty

1. Establishing good will,

2. ethics of care

3. retaining the customers and customers satisfaction

4. market share

2.   What may be the different reasons for Alpha pharmaceutical to avoid business profit on ethical basis for such a rare drug? Mention it with reference to different principles of business ethics that support ethical practices in business operations.

7 Principles of Support ethical practices in business operations.

1. Be Trustful: Recognize customers want to do business with a company they can trust; when trust is at the core of a company, it’s easy to recognize. Trust defined, is assured reliance on the character, ability, strength, and truth of a business.

2. Keep An Open Mind: For continuous improvement of a company, the leader of an organization must be open to new ideas. Ask for opinions and feedback from both customers and team members and your company will continue to grow.

3. Meet Obligations: Regardless of the circumstances, do everything in your power to gain the trust of past customer’s and clients, particularly if something has gone awry. Reclaim any lost business by honoring all commitments and obligations.

4. Have Clear Documents: Re-evaluate all print materials including small business advertising, brochures, and other business documents making sure they are clear, precise and professional. Most important, make sure they do not misrepresent or misinterpret.

5. Become Community Involved: Remain involved in community-related issues and activities, thereby demonstrating that your business is a responsible community contributor. In other words, stay involved.

6. Maintain Accounting Control: Take a hands-on approach to accounting and record keeping, not only as a means of gaining a better feel for the progress of your company, but as a resource for any “questionable ” activities. Gaining control of accounting and record keeping allows you to end any dubious activities promptly.

7. Be Respectful: Treat others with the utmost of respect. Regardless of differences, positions, titles, ages, or other types of distinctions, always treat others with professional respect and courtesy.


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