Nature of Ethical Issues and Significance of Business in Society

This document discusses the nature of ethical issues and the significance of business in society through the Johnson & Johnson case study. It explores the impact of unethical practices on the company's productivity and performance, as well as the role of business in society. The document also provides advice and recommendations for ethical practices and discusses two ethical theories: Kant and Utilitarianism.

ENTREPRENEURSHIP
DEVELOPMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
PART 1............................................................................................................................................3
Nature of the ethical issues and significance of business in society............................................3
Determination of key stakeholder................................................................................................4
Advise & Recommendation.........................................................................................................6
B) Two ethical theories................................................................................................................7
PART 2............................................................................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Ethics are referred to the moral philosophy or codes of principles that are practiced by
individuals or group of individuals. it is practices by organization to build trust of the customer,
employees and other business partners on the company’s product and it’s policies. The brief
study provides understanding about the nature of ethical and role of the business in society
through Johnson & Johnson case study.
PART 1
Nature of the ethical issues and significance of business in society
Johnson & Johnson is an American multinational corporation which is headquartered in
new jersey, US. It was founded in 1886 which manufactures medical devices, pharmaceutical
and consumer packaged products around the world. company maintains a tradition of quality
and innovation of the products. Past few years company faces numerous ethical issues that
impacts on it’s productivity, operation and performance (Boiral and et.al., 2019). the ethical
dilemma for the organization is that company manufactures large quantity of the painkillers and
exports around the world to the public. In the case study of the Johnson & Johnson finds out that
organization have to pay huge penalty in Oklahoma this case happened in last years (Johnson &
Johnson to pay $572m for fueling Oklahoma opioid crisis, judge rules, 2019). The judge of the
Oklahoma ordered company to pay huge fine due to dealing with an opioid addiction crisis.
According to the Oklahoma’s government, company is responsible for opioid crisis as result gets
high ratio of death as well as addiction of the opioid on large scale in the youngsters. Even US
government accuses that estimates 1.7 million individuals are suffered from the substance
because they use it for the disorders that relates to prescription of the opioid pain relivers. While
lawyer of the Johnsons & Johansson proves that paracetamol is the main substance of the opioid
which use to relieve pain and does not produce any type of addiction (Ciulla, 2018). In addition,
organization stated that this substance use for treating number of chronic disease but does not
product any type drug abuse symptoms. Overall factors are considered by the government but
claimed that it provokes doctors to buy its products i.e. opioid drugs in high quantity through
marketing strategy or campaign. It is the main ethical dilemma that causes government unable to

take ethical decision effectively. There are various challenges that are recognised by senior
manager in the perspective of the company such as honesty, integrity, identification conflicts of
the interest and its impact on the stakeholder groups. Honesty is the major element of the ethical
thinking that helps an organization to portray brand image in the customer’s mind. Whereas
Johnson & Johnson builds trust of the customer on the organization and its pharmaceutical
products through questionable marketing campaign. But it is accused by government as a part of
opioid addiction crisis so it is considered in ethical dimension. In other word, the ethical issues
prove that company takes unethical practice to gain high profit that causes epidemic situation
occurs in the Oklahoma (Dentchev, Haezendonck and van Balen, 2017).
Business’s role in society
According to the manager perspectives, the main role of the business is to produce and
supply goods and services to fulfil public needs and expectation. whereas Corporate Social
responsibility (CSR) is a business practice that supports company to product such kind product
or goods which gives positive impact on the society. There is another way that company’s affects
society such as creates opportunities and influence innovations. To build trust of the society
applies CSR practices in it’s business such as product awareness campaign and others.
Organization also expects to maintain specific level of responsibility in the way whereas it
executes it’s operation. Johnson & Johnson also plays essential role in the society such as it
manufactures pharmaceutical products, medical items and others and distributes numerous
countries of the world. it manufactures painkillers so that can stay away society from the pain.
Generally, company play central role in the society because it has huge production of the
painkiller i.e. Tramadol, oxycodone, meperidine and paracetamol etc. In addition, company
practices corporate social responsibility so that can gain trust of the society on the organization
(Dierksmeier and Seele, 2018). Organization applies different marketing campaign strategy i.e.
pain relief champion for the cancer patients, drugs awareness campaign and opioid’s marketing
strategy etc. to build trust of doctors and public on it’s products. Thus, company plays central
role in the society which denotes that it does not have mean to generate high profit only. It
supports society or patients to live life pain free.

Determination of key stakeholder
In the context of case study identifies that senior managers, consumers, doctors,
employees and markers, governmental policies are the key stakeholders of the Johnson &
Johnson company. They are impacted by numerous ways in the company and society. For
example, senior manager who plays essential roles i.e. planning, organizing, controlling and
coordinating in the organization due to the ethical practices they have to change their strategy
and policies as well so they can comply with government policies. Employees also impacts by
the ethical issue because they unable to retail organization’s products to the customer due to high
criticism of the company about opioid addiction crisis. Doctors are the main stakeholder of the
company who helps business to generate high revenue on the medicine. Due to the crisis reduces
their buying behaviour as well as unable to prescribe painkillers to the patient (Gluchman,
2017). Government is external stakeholder that also affects by the company because there are
numerous cases of opioid addictions while others are death ratio. It causes government. creates
new policies for the painkiller so the epidemic can be controlled quickly. Thus, each and every
stakeholder are affected by the opioid addiction crisis. Due to the involvement of company in
the case breaks trust of the customer on the company and it’s products as result faces ethical
issue by the internal stakeholders.
Good choices benefits company and bad choices have negative impact
Good choices of ethical practices lead high benefits for the organization. For example,
when organization practices ethical practice in the business that helps managers to retain large
number of employees in the company. Managers of the company easy to build trust of the
customer on the company’s policy through fair treatment. By the ethical practice develops
healthy working environment for the staff which promotes them to give honest performance in
the workplace. managers easily attract new talented employee for the job perspective through
ethical practices. The good ethical employment practices i.e. transparency in decision-making
process, anti-discrimination and others are enough to attract, retains talented employees in the
organization. so HR of the company can practice employment policies to lead high productivity
of employees and pr9ofitability in the company (Hookerand Kim, 2019). Organization practices
CSR strategy as good ethical practices that helps to build trust of the customer on the products
and it’s brand as well. CSR supports company to offer such kind products or services to the

customer which improves their quality of life after consumption. CSR practices also assists to
give value to the customer by meeting their objectives. Negative ethical practices impact on
organization’s image such as organization follows marketing campaign or advertising strategy to
build trust of the customer. For example, Johnson and Johnson applies opioid marketing
campaign strategy which is bad choice of the company because it provokes doctors to prescribe
high amount opioid drugs to the patient, in addition, company portray good image of opioid
drugs in the doctors and customer’s mind like it is effective pain relief medicine which can cure
any type of chronic disorder. Organization applies the campaign strategy to lead high sales
volume in the Oklahoma, US and Indian country as well. Due to this, large number of doctors
starts to prescribe opioid in large amount as result epidemic and opioid addiction crisis in
Oklahoma. So, it can be demonstrated that it is unwise choices in advertising that affected
organization’s image in the numerous countries as a fraud, misleading company. It causes
another pharmaceutical company’s also affects because they have to change their marketing
strategy for regaining trust of the customer and government as well (Hsieh, 2017).
Advise & Recommendation
There are various issues i.e. unwise choice in advertisement strategy, transparency in decision-
making process, honesty etc. that causes impacts on the brand image of the company as well as
it’s brand image in the pharmaceutical industries. To regain trust of the customer and consumer
on the company must use ethical practices in it’s operations (Koris, Örtenblad and Ojala, 2017).
For example, company must apply CSR practices in the marketing campaign which supports to
give right information to the customer about the drugs instead of misleading them. By the ethical
practice must follow ethical governmental policies that directs company to build good image in
the customer’s mind.
 Senior manager of the company acquires each knowledge related to pharmaceutical
industries that helps to take ethical practices in the working environment.
 Company must follow corporate social responsibility (CSR) practices that helps senior
managers to develop ethical employment policy and assists to determine wrong and right
ethical practice. By the CSR strategy easy to improve quality of the products by the
company as result enables to give value to the customer.

 Manager of the Johnson and Johnson can implement customer awareness marketing
campaign in the market. whereas managers can train staff to use ethical practices in the
marketing campaign instead of misleading customers and consumers for the product. by
the training individuals learns significance of ethics and builds trust on company. When
the staff train through ethical practice can easily portray realistic image of the company
which improves loyalty of the customer on the organization’s products.
B) Two ethical theories
Kant
Kant’s theory is an example of deontological moral theory that is dependent on the wrongness or
rightness action not on their consequences. It is proposed by the German philosopher Immanuel
Kant. It advices actions that are good or bad through clear set of rules. There are some concept of
the ethics which are proposed by the Kant such as good will and duty. According to Kent, to
offer unqualified goods is not goodwill. The author quotes that goodwill broader concept that is
not come from the duty. It occurs by the ethical i.e. offers high quality products and portray
realist image in the customer’s mind (López-Alvarado, 2017). While duty comes by
responsibility when a person or organization keeps good intention and applies ethical practices in
their action to improve quality of the product as result raises goodwill of the company. The
theory implements on the Johnson and Johnson’s case study. According to the Kantian theory,
company does not show any ethical practice in their operation. In addition, Johnson states that it
performs it’s duty by offering high quantity opioid drugs to the customer on time, so that they
can diagnose large number of patients and stay away them from the pain. As per the Kantian
concept, it is not ethical duty to provoke doctors and patients to take temporary treatment. Even
company does not have any evidence to prove it’s duty in ethical practice. Unrealistic evidence
shows that company use the opioid marketing strategy to improves sales volume and raises
goodwill in the pharmaceutical industries. By the Kantian theory can be understood that Johnson
and Johnson do not choose good ethical practice which causes company is considered major
source of opioid addiction crisis as well death cases in the Oklahoma. The major drawback of the
ethical theory is this it is partly went against human nature. It is not dependent on the
consequences that is major drawback of the theory because most of the people does not do with
bad intention but it directly prove a person a criminal. So it can be understand by the Johnson’s

case study whereas company does not have any mean to lead drug abuse and death rate in the
people (Loreggia Rossi and Venable, 2017).
Utilitarianism
It is normative ethics that describes the morality of action. It is proposed by Jeremy Bentham and
Johan Stuart Mill. It is ethical theory that supports to identify right fact from wrong by accessing
on the result. The theory keeps more ethical choices which produces the greatest products for the
high number. It is reason-based approach to identify right and wrong. The main purpose of this
theory is to make life better of the people by promoting the greatest good things i.e. pleasure and
happiness and declines bad things i.e. pain and unhappiness (Skelton, 2017). It is a form of
consequentialism because it rests it ideas based on the lows. Policies and identify either it is right
or wrong. The theory can implement on the Johnson and Johnson whereas Oklahoma’s
government accuses that organization applies wrong ethical practice in the advertising as result
opioid addiction crisis takes place. While lawyer of the company states through the concept of
utilitarianism ethical theory is this, paracetamol is used to relive pain and it has multiple use in
numerous disorders i.e. joint pain, chronic disorders and others (Love, 2017). Company proves
that paracetamol does not produce any type of addiction. This medicine is used in the form of
painkiller and keeps individual stay away from the pain. Organization also highlights that opioids
is better carrier which controls the pain better but does not produce addiction in the small
amount. Organization gives another statement in it’s defence is that, opioid drugs are approved
by federal regulator and clarify that it is not tied directly to any death of Oklahoma. In addition,
it states that it has sympathy for all who suffers from the opioid abuse crisis in Oklahoma or
other counties but it does not interlink with the case. By the utilitarianism theory can be
illustrated that Johnson company does not have any bad intention to harm people. Organization
manufactures drugs i.e. opioid and paracetamol with good intention because it has aim to stay
away people from the pain so it uses the marketing strategy. Otherwise, company does not have
any bad intension to lead drug abuse crisis in the people. The major drawback of the ethical
theory is this it develops unrealistic perspective for the society. The theory is unpredictable
nature and makes people selfish. As same case happens with Johnson and Johnson who
provokes doctors and people to buy large volume painkillers to treat their acute and chronic
disorders so that it can generate high profit margin on each medicine (Markman and et.al., 2016).

It is ethical theory but wrong choice in ethical practice because it makes person or organization
selfish for the private gain.
PART 2
Qualities of Ethical Leader
I feel that ethical leaders always know what the right thing is that needs to be done in any
situation and is not afraid to do the right thing. In my personal opinion a leader can only be
considered ethical if he has certain qualities that help them to perform their functions in an
ethical manner. In my experience an ethical leader needs to be fair and just towards all, not
letting their personal biases and prejudices affect their decision making. In my opinion an ethical
leader also needs to be honest, humane and respect others from all cultures, backgrounds,
religions and races (Ciulla, 2018). I also feel that an ethical leader leads by example and
encourages initiative amongst their employees. In my opinion an ethical leader does not make
decisions that are against the values of the business organisation, instead all their decisions are in
accordance with organisational values.
Relationship Between Ethical Leader and Manager
In my opinion an ethical leader and manager have a direct productive relationship as they
both work towards achieving the same objectives through their own job descriptions (Azadegan,
2018). In my experience, an ethical manager effectively manages the employees of a business to
follow the strategies that an ethical leader creates for the improvement of the business.
Operations of Ethical Manager and Leader
In my view, an ethical Senior manager creates ethical practices and policies within a
business organisation that are implemented towards all employees irrespective of their position
within its structure, race, religion. prejudice or bias. I feel that the ethical manager enforces these
organisational practices on all employees and leaders, with the ethical leaders also following and
encouraging these initiatives of ethical Senior manager for all of their organisational employees.
Creation of ethical organization

A good ethical manager supports organization to create ethical organization so it
improves goodwill of the company in the business market. By the effective communication
ethical manager provides formal mechanisms so that individual can discuss about ethical
dilemma in the workplace and reports unethical behaviour without fear (Rawal, 2019). This
practice of the manager develops ethical organization and impacts individual performance
positively. Ethical manager organizes ethical training program to send message about a
organization’s ethical stance. With the ethical program clarify the types of behaviours that deems
permissible by the organization. Thus, ethical training program supports to develop ethical
organization and encourages individual to give honest performance in the company. Ethical
manager provides high standard ethical employment policy to the staff so that individual can
report unethical behaviours of other employees whether they have good position or staff
member. These type policies develop healthy ethical environment for the staff and attract others
towards company. Ethical manager empowers it’s employees at the workplace by fixing
punishment for the unethical behaviour as result improves confidence of the innocent employees.
There is some technology i.e. online platform that helps to create an ethical business culture. For
example, electronic platform is the ethical tool that is used for securely stores codes of conduct
policies, reports, investigations and others. it also supports to keep employee safe from the
unethical behaviour.
In the Johnson case study finds out that senior manager bit confuses in good choice of ethical
practice it causes company have to pay huge penalty to the government. So, senior manager can
apply all the ethical practice which are mentioned above that supports to create ethical
environment in the organization.
CONCLUSION
The brief study provided understanding about the nature of the ethical issues and
significance of business in society. Business’s role in society and it’s importance has been
summarized in the report. Ethical theories and it’s impact on the organization can be evaluated in
report. Role of ethical leadership and it’s importance for creating ethical organization can be
summarized in report.

REFERENCES
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Online
Johnson & Johnson to pay $572m for fueling Oklahoma opioid crisis, judge rules. 2019.
[Online]. Available Through:- <
https://www.theguardian.com/us-news/2019/aug/26/johnson-and-johnson-opioid-crisis-
ruling-responsibility-oklahoma-latest