Impact of Unethical Behavior on Business Success

This report analyzes the case study of The Sackler Family Business and the impact of unethical behavior on its success and reputation. It examines the effects on revenue, shareholders, the board, and public confidence. Recommendations for ethical practices are provided.

Academic and professional
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EXECUTIVE SUMMARY
A business can be successful only if it follows ethical behaviour in its work culture.
Present study have analysed the case study of The Sackler family Business and the unethical
behaviour that organization was going with. Report have analysed the different reason of
business success with respect to revenue, shareholders and also board of the business and the
way unethical behaviour affect them as well as the reputation of the business. The respective
analyses helped in finding the recommendations that The Sackler family can use in its near
future so that the mistakes and the unethical practices and behaviour that they followed
previously, do not get repeated and different strategies they can adapt to have ethical behaviour
in the organization. The respective analyses and recommendation are beneficial to the Sackler
family and other organization also can have their focus on these organizational practices to
improve their business performance and can have effective reputation in the market.

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
ANALYSIS......................................................................................................................................1
Success with respect to revenue of the business and the way unethical behaviour affect it.......1
Success in perspective of shareholders of business and the way unethical behaviour affect it. .2
Success with respect to board of the business and the way it is affected by unethical behaviour
of the firm....................................................................................................................................3
Success from the perspective of public confidence and the way unethical behaviour affect it. .3
CONCLUSION................................................................................................................................4
RECOMMENDATION...................................................................................................................4
REFERENCES................................................................................................................................6

INTRODUCTION
Success is basically measured by analysing where the respective goals and mission are
achieved or not(Rowden, 2017). For organizations, the success means where a business
empowers the respective employees, customers and community as a whole. A successful
business is where an organization works to have sustainability and achieve the goals and mission
of the business. Ethics play a key role to have success of the business as it set effective
objectives of the organization and make the focus of the employees towards the assigned task,
and they have better focus that results in productivity of the organization. Present study is based
on the case of The Sackler Family business that is case based on Pharmaceutical company The
Sackler family who own the company of Purdue Pharma who manufactured an addictive opioid
OxyContin. In the respective case The Sackler family misconduct with respect to marketing of
this highly profitable drug(Van Dijk, 2019). With the consumption of this medicine thousands of
customers died and many people claimed that this brand is misleading the public as well as
medical professionals. Organization used to promote this drug at a higher level that other
comparable drugs. The prescribing decision went wrong and it resulted in many unethical
business practices of The Sackler family. Report will include an analysis with respect to the
given case that is to analyse the success with respect to revenue of the organization and the way
revenue is affected with unethical behaviour of the firm. Further report will analyse the success
of business in perspective of stakeholders, the board and also public confidence on business
offerings and the way unethical behaviour of firm affects it.
ANALYSIS
An organization can never be success for long run, if it is following unethical behaviour.
The aim of this report is to analyse whether The Sackler Family is following ethical practices and
the way success of the business get affected by unethical behaviour of the organization.
Success with respect to revenue of the business and the way unethical behaviour affect it
Increased revenue usually results in business success. However, if this revenue is
generated by the organization with its unethical behaviour, it is only for short period. From the
case study of The Sackler Family, it is seen that the business generated huge profit by its
marketing strategy and increased its sale by offering OxyContin as a pain killer. But as the
organization was following unethical behaviour, it resulted to loss of may lives. Though the
business revenue increased for short period, but with the death of so many customers, it
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decreased immediately and affected the reputation of the organization. There was a time, when
this drug was among the highly prescribed drugs in US market and it becomes addictive for the
customers(Vadastreanu, Maier and Maier, 2015). As a result it affected health of many
customers. There were customers that also died due to the addiction of this drug and this resulted
in protest against the company supplying this drug. This finally affected the reputation of the
organization and its revenue decreased. From the case it was seen that, following unethical
behaviour in the organization can never result in increase in revenue and may affect the
reputation of the organization in long run of its business. Unethical behaviour that The Sackler
Family followed affected the long term relationship of customers and drop in business
productivity was seen. It also resulted in low morale of the working staff that resulted in
downfall of the organization and the credibility of the business was lost(McMurrian and
Matulich, 2016). There were many financial losses of its business and organization also paid
penalty for affecting so many lives in UK. In order to keep a positive reputation in market and to
have huge revenue in hand, it is very important for the organization to have ethical behaviour
and work culture.
Success in perspective of shareholders of business and the way unethical behaviour affect it
An organisation is successful if its respective stakeholders are happy and satisfied with
respect offerings and work culture. Unethical business behaviour not only affect the business
profitability, but also affects the trust that the stakeholders are having on its business. From the
case of The Sackler Family it is been seen that, there were many customers that were trusting the
organisation blindly and used OxyContin as a pain killer. Gradually these people get addicted to
this drug and many of them died. As a result, many customers as well their supporters protested
against this drug and organisation. This affected the reputation of The Sackler Family and made
many of its stakeholders unhappy(Li, 2018). Many of the stakeholders like the working
employees, government regulators and partners become unhappy and lost the trust that they were
having on the organisation. As the unethical behaviour of the organization takes the stakeholders
at extreme risk, and they gradually lose their trust on the business(Reducing risk, 2019). With the
respective practices of The Sackler Family, all the stakeholders were unhappy and this decreased
the reputation of the brand in eyes of the customers as well as other stakeholders. The employees'
performance also get decreased as they get demotivated to work for such organization. Business
looses credibility and also its key customers. It takes huge time for the business to develop trust
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of customers and also employees. There are many substitutes available in market and customers
switch the offerings that The Sackler Family offers. It is therefore very important for the
organization to have ethical behaviour in order to have happy stakeholders and to have effective
reputation in the market of UK.
Success with respect to board of the business and the way it is affected by unethical behaviour of
the firm
Having ethical behaviour of the business is all depended on the board of the business.
Board of The Sackler Family helps in setting vision and mission of the organization and also
works to have ethical practices in its work environment. During this respective case of The
Sackler Family, Board did not work effectively to implement ethical behaviour of the
organization(Peters and Maniam, 2016). As a result the reputation of the organization went down
and affected the business profitability. It is the responsibility of the board to establish ethical
standards in the organization and develop strategic plans that leads to business profitability and
effective reputation in market. The ethical standards of The Sackler Family determine the
behaviour of its boards and also the true values that this business considers. In this case, the
board played a key role and affected the organisation's reputation as they did not take ant strict
action against the unethical behaviour of the firm and that resulted in loss of their business and
also reputation in market. In order to bring the right practices, board of The Sackler Family have
not taken the right path and during the death of different customers who got addicted to use
OxyContin as a pain killer, they just paid the penalty amount. For the respective business
practices, it was very important for the board to take strict actions against these activities and
marketing strategies so that they can regain the trust of its customers as well as other
stakeholders(Shanahan and Seele, 2016). Actions of the business usually bring success for the
business, but only in the case that the Board is following ethical actions in order to have
sustainable business practices that do not harm the people that have trust on the organizational
products and offerings. Not following the same results in down fall of the business reputation.
Success from the perspective of public confidence and the way unethical behaviour affect it
With respect to the given case study, the public do not see the organization as unethical
because many people become addicted to use OxyContin as a pain killer and there were many
who died due to its addiction. As a result in eyes of the public, the business is unethical and does
not succeed in any way. It is very important for the business to have effective image in market so
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that they can profit from the business. But in the case of The Sackler Family, they adopted
marketing strategies that was unethical for their business. This resulted in poor reputation of its
business as many customers were affected and the organization lose trust of many potential
customers. If an organization is able to develop positive Public confidence on the products and
services that they offer, it results in reputation of the organization in market. However, if an
organization is not able to make its customers satisfy and its offerings affect the health of the
customer, then it usually down fall the reputation of organization in market. It is therefore
important for the business to make its customers satisfy by offering the products that are good for
their health and do not affect them negatively(Kuznetsova, Kuznetsov and Kuznetsov, 2019).
Without telling the actual effect of OxyContin drug on the body, business was selling its offering
and the customers become addictive to this pain clear. At last, it resulted in loss of many lives
and negatively impacted the reputation of the organization.
CONCLUSION
From the above analysis it is been concluded that it is very important for the organization
to have ethical behaviour and it results in effective reputation of the firm. With the help of these
ethical behaviour, organization is able to generate huge revenue of its business in long run. It is
also very important for the business to make its shareholders satisfied by following ethical
business practices and not following the same affects the trust that they have on organization.
Losing the trust of the shareholders affects the business reputation and profitability. Report also
concluded that the board of the organisation also play a key role in brining ethical practices in
the organisation and if the board is not able to take the organisation on its right path, then it will
affect its reputation as customers will not have trust on the firm. Report also analysed and
concluded that having public confidence makes the business run smoothly and all this is possible
if organisation is working ethically.
RECOMMENDATION
It is very important for the organization to have ethical behaviour as it helps the business
to grow in market and have positive reputation. From the above analysis it is been recommended
that the organization have to follow three major aspects in order to have ethical behaviour in the
firm. These recommendations are as following:-
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 Create effective policies and procedures:- It is very important for The Sackler Family
to create effective policies that the employees as well as different department of
organisation follows. As the organisation is a Pharmaceutical company and is offering
different drugs and medicines, it is very important for its business to make the customers
aware about its positive and negative effects. The marketing strategies of The Sackler
Family have to be people oriented. Organization have to make effective policies that do
not harm the customers as well as working employees.
 Build a culture of transparency and openness:- In order to ensure organizational
success, it is very important for the business to follow ethics and all this is possible in an
organization if culture is build transparent. As organization was not having transparency,
it resulted in death of many customers. It is therefore important for the business to have
openness where the respective offerings are having clarity with respect to their positive
and negative impact on human body. If the customers are prescribed in a right manner
than the respective drug will not harm them and organization will also have positive
image in market.
 Put controls in place:- Another important aspect is that the organisation have to put
control in place by reducing the opportunity to act ethically in the organisation. The
policies have to be set in such manner that it become easy for The Sackler Family to
catch the respective issues and to mitigate the respective risks that are involved.
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REFERENCES
Books and Journals
Kuznetsova, S.A., Kuznetsov, K. and Kuznetsov, A., 2019. HOW TO INCREASE PUBLIC
CONFIDENCE IN UNDERSTANDING AND USE OF THE BANKING SYSTEM:
MARKETING MODEL ‘NETS FOR TRUST’. Financial and credit activity: problems of
theory and practice. 2(29). pp.13-20.
Li, F., 2018. EFFECT OF SHAREHOLDER VALUE PERSPECTIVES ON ETHICAL
DECISION IN EMERGING MARKET: THE ROLE OF EGOISM AND ETHICS OF
AUTONOMY. Northeastern Association of Business, Economics and Technology, p.201.
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.
Peters, S. and Maniam, B., 2016. Corporate fraud and employee theft: Impacts and costs on
business. Journal of Business and Behavioral Sciences. 28(2). p.104.
Rowden, M., 2017. The Art of Identity: Creating and Managing a Successful Corporate Identity:
Creating and Managing a Successful Corporate Identity. Routledge.
Shanahan, F. and Seele, P., 2016. Ethics and the Development of Reputation Risk at Goldman
Sachs 2008–2010. In Order Ethics: An Ethical Framework for the Social Market Economy
(pp. 329-347). Springer, Cham.
Vadastreanu, A.M., Maier, D. and Maier, A., 2015. Is the success possible in compliance with
ethics and deontology in business?. Procedia Economics and Finance. 26. pp.1068-1073.
Van Dijk, C.N., 2019. From painkiller to killer: the ‘oxy’case.
Online
Reducing risk. 2019. [Online]. Available. Through<https://www.ethics.org/resources/free-
toolkit/reducing-risk/>
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