Purdue Pharma: An Analysis of Unethical Behavior and Business Impact

This report provides an in-depth analysis of the unethical business practices of Purdue Pharma, focusing on the impact of their actions on revenue, stakeholders, board of directors, and public confidence. The report begins with an executive summary and an introduction that outlines the importance of work ethics in the pharmaceutical sector. The main body of the report analyzes how unethical behavior affects revenue, shareholder perspectives, the board's perspective, and public confidence. The analysis covers the company's misconduct in marketing and sales, the impact on stakeholders like shareholders and the board of directors, and the implications for public trust. The report concludes with recommendations for Purdue Pharma to regain its market position and emphasizes the importance of ethical behavior in the pharmaceutical industry. References are included to support the analysis.

The Sackler Family

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................1
MAIN-BODY..................................................................................................................................1
Analysing terms of revenue how this is affected by unethical behaviour..............................1
Analysing the perspective of shareholders and how such factors affect unethical behaviour. . .2
Analysing the perspective of board and how this affected by unethical behaviour..............3
Analysing the perspective of public confidence and how it will be affected by successful or
unethical.................................................................................................................................4
CONCLUSION................................................................................................................................5
RECOMMENDATION...................................................................................................................5
REFERENCES................................................................................................................................6

EXECUTIVE SUMMARY
Present study has been outlined the important aspect of the work ethics which has to be
very important to be considered in pharmaceutical sector. Study also has been discussed the case
which based on Purdue Pharma. Apart from this study outlined the major four section where it
has been analysed the affected perspective by board of members, stakeholders, public relation
etc.

INTRODUCTION
Organizations establish their empire with some specific objective just as to earn profit
and success in such a competitive market. For entrepreneurs success can mean anything from
making money and building the brand image in the market. Success brings stories of life,
experiences, struggles everything. Also these elements are the reason behind the success too.
Success is the most important aspect for the organizations to get encouragement to grow further.
On the other side, Work ethics also play a most essential role to sustain the business in long term.
Ethic makes company outcomes productive and efficient. On the same side, without handling the
work ethics properly it could might affect the company reputation and future sustainability
growth in the market such like as the present case which is based on the Purdue Pharma. The
company responsible for manufacturing highly addictive opioidContin drug. The Lowa Attorney
General, Tom Miller have said that this company manipulative people by providing high toxic
pain killers through performing wrong marketing activities which is ethically illegal (Aithal,
Shailashree and Kumar, 2015). This is a unethical behaviour which has been followed by the
organization currently. US states stated that Purdue Pharma misconduct in the marketing and
sales of opioids for the sack of gaining high profitable market. So it has been cleared that how
business ethics can be the worse statement for the company if they fails to follow them properly.
According to the work ethics of pharmaceutical industry, companies liable to promote social
goods but which instead create perverse incentives or fail to adequately incentivise. In this
sector, the distribution of drug has to be under the consideration of proper guidance without
supporting any wrongful activities. Also they are not eligible to charge high prices on the
products. Besides, pharma company are restricted to the marketing activities of the product or
services as well. In order to that, aim of the study is to analyse the business ethics and laws in the
pharma industry.
MAIN-BODY
Analysing terms of revenue how this is affected by unethical behaviour.
Companies who having strong relationship between ethics and working behaviour they
always need to concern about their public image too. They will never let down in front of
marketers (Buraimo, Migali and Simmons, 2016). In terms of that, it is very necessary for the
organization to be good in the market in order to gain the positive outcomes from the customers
& good revenues. Because all such process is directly affect the company goals and objectives.
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In order to maintained the revenue for the organization, Business should always considered the
factors that might affect all those conditions such as illegal activities, unethical behaviour. Like,
due to lack of trust with stakeholders Purdue Pharma might be getting low revenue outcomes.
For which, commitment towards the public interest is very necessary in front of the others. Also
it requires the high potential growth and high generating target performance (Dang, Umphress
and Mitchell, 2017). Other factor of ethics which might affect the revenue of the organisation,
Business ethics and legal issues. As US Stated and sue Purdue Pharma due to fraud and
misleading the customers for marketing the high profitable drug. This illegal activity impact the
company revenue generation growth and down the market image too. So it has been found that
unethical behaviour of the organization directly impact the decision making process of the
customers buying. Some other factors are business ethics and legal issues, that impacting
company profitability growth (Five more US states sue Purdue Pharma over its role in opioid
crisis, 2019). Due to unethical practices and breaking the product laws it directly affect the
business sales. The practice of offering OxyContin after which people got addictive to have those
pills. Company also misconduct the marketing activities by hiring high paid promoters. All such
illegal activities affect the revenue and heading business towards failure. Business ethics and
corporate culture can be the another reason which affect the revenue growth of the company
(Fleischman and Valentine, 2018). Corporations operate in ways that reflect their company
culture. Also they managed and directors consistently employ ethical standards to sustained the
position in the long term market. Like Purdue Pharma also committed the wring activities with
corporate principles which is also been given the negative impact on the business revenue all
such activities might be given the wrong impression against company development.
Analysing the perspective of shareholders and how such factors affect unethical behaviour.
Stakeholder are the major players for the organization success. Without happy
stakeholders company would not able to reach to their objectives. But on the same side, by
committed wrong activities stakeholders might be get unsatisfied and unhappy with the
organization (Galbreath, 2018). Many of the organization people got affected by the wrong
activities of the company. Also, they got demotivated due to unethical behaviour at workplace.
In other words, every individual having their own values, morale and beliefs. In workplace there
are both kind of people bad or good. Wrong people get always satisfied with the unethical
decisions. While on the other side, good people always get affected by unethical practices. This
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business practices will also affect the decision making process and also trying to make the
environment negative and positive accordingly. Like Board of directors are the key stakeholders
for the company which has to be happy with the company functions. But as per the present case
Purdue Pharma hurting people by offering the wrong pain killers. From such effect customers get
addicted to it and suffering from the chronic pain (Moghadam and Jalali, 2016). So such
unethical behaviour affect the shareholders interest. All such ethics affect the unethical
behaviour of the organization as well. CEO are the other most significant key players for the
organization, which helps company to maintained their competitive edge within the market by
developing strategic management strategies and new path to the company. For that, company has
to be very committed towards their values and needs. Along with that, it is also very necessary to
maintained the ethical environment for them. But as according to the Purdue Pharma case study
where company hire and promote marketing by providing the high wage to employees which is
ethically wrong. Such activities directly affect the behaviour of employees and provoke them to
quit the job. All such activities and targets affect the company decision making process.
Investors is the another potential shareholders which get affected by the decisions taking which
has been taken by the companies. Investors has always ensure the company reputation in the
market before investing on the company. So it is very important for the company to maintained
their reputation (Post and Byron, 2015). But on the same side, if in case company suffering from
several controversies investors get back their shares from the company. Overall, it has been
defines that how unethical behaviour of the organisation can affect the perspective of
stakeholders.
Analysing the perspective of board and how this affected by unethical behaviour
Conflict with board level is quite risky for the company sustainability. This relationship
between company or board might be affected for several reasons. One of the reason might be
unethical environment due to which the board of directors of the company is not happy. Like as
the case the board of directors of Purdue Pharma includes their family members. Organizations
signed up with boards for interest policy at the time of appointment. There has to be a integrity
among the board of directors to take the certain important decisions for the company. It certainly
gives the positive sign to maintained the company reputation and revenue generation
opportunities (Tamimi and Sebastianelli, 2017). Also, the effective board members are very
serious about the inside and outside integrity. But due to unethical behaviour of the organization
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this integrity might be loss. The integrity among members , performance commitments all such
process has been enhanced by ethical behaviour of the organization. In order to make and better
understand the target it will help to take the highest concern to perform the effective decision
making process. The board of directors plays a most important role in order to measuring the
best advantage and goals to deal with effective measurement task. Organizations evaluate
integrity performance through a number of qualitative and quantitative measures. In order to
make people satisfied and happy it is very required to be the effective task and also modifying
the effective generating goals. Financial misconduct fraud all such situations makes the things
improper and inefficient to dealing with the targets. Selecting and overseeing the activities of the
auditors (Tschakert, Needles Jr and Holtzblatt, 2016). Understanding and effective control
system is very necessary within the business level in order to put the effective control system in
effective manner. Along with this, board of directors of the company is very effective and
efficient in order to perform the different job roles and have responsible to sustained the business
results. Also, it is require to make and better understand the objective to be the most challenging
and leading business task. Also, due to misrepresentation and falsification it can be a simple as a
salesman who lies about this company products, or it can be false misleading advertising. Such
activities and task is very useful to determine the activities and task to be more useful and
productive (Wang, Cui and Liu, 2018). Otherwise it will be given negative impact on the
perception of board of directors.
Analysing the perspective of public confidence and how it will be affected by successful or
unethical.
Public relation is very crucial for the organization to create the potential results and
outcomes. Public relation is very necessary for the company to retained the buyers. Also, it
requires to have positive perspective of the company in front of the customers (Xu, Zhang and
Chen, 2018). Public relation is the most essential task for the organization to maintained the
company image also, it requires to be the competitive in the market as well. Due to unethical
issue this can affect the image of the company and harm to the business reputation. Unethical
behaviour also break the trust among public towards the company services which also might be
given negative image on the company reputation.
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CONCLUSION
On the basis of above section, it has been concluded that how unethical practices of the
company can affect the perspective of public, stakeholders and board of directors. Above
analysation has been concluded that the relationship between company and stakeholder is very
important and necessary for the company to understand. Otherwise, it has been given negative
impact on the overall behaviour of the organization. Study also has been described the fact which
is perspective of board of directors of the company. This point has been explained that, wrong
activities of the company could minimize the value in front of the potential boards. Therefore,
study also concluded that how much unethical practices can change the company market
reputation as well.
RECOMMENDATION
On the basis of observation, it has been recommended to the Purdue Pharma to regain
the market position back. In other words, pharmaceutical sector multinational industry which is
highly regulated by large research and development. It is highly responsible sector to create drug
for the people. They are also responsible for balancing the drug system and make sure the
consequences as well. In order to maintained the ethical behaviour around the organization.
Company should adopting the “Ever-greening” Practices where they liable to use patent laws and
minor drug modification to extend their monopoly privilege on the drug. Ever greening strategies
helps to control helps unethical activities. Such following measures come under the
consideration of this strategy such as defensive pricing strategies wherein the innovator
companies decrease the process of the product in line with the generic players for healthy
competition. Also, it requires the major considerable to manage the ethical issues in order to
sustained the business goals. It has been found that consequences of ever-greening strategy is
more influencing and systematic in order to consider the fast growing results. Also, it has been
recommend to the company that properly get the research on drugs and effectively manage the
public relation. The reason behind that effective using of techniques will better helps to represent
the public health.
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REFERENCES
Books & Journals
Aithal, P. S., Shailashree, V. and Kumar, P. M., 2015. Application of ABCD Analysis Model for
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Buraimo, B., Migali, G. and Simmons, R., 2016. An analysis of consumer response to
corruption: Italy's Calciopoli scandal. Oxford Bulletin of Economics and Statistics, 78(1),
pp.22-41.
Dang, C. T., Umphress, E. E. and Mitchell, M .S., 2017. Leader social accounts of subordinates’
unethical behavior: Examining observer reactions to leader social accounts with moral
disengagement language. Journal of Applied Psychology. 102(10). p.1448.
Fleischman, G. M. and Valentine, S. R., 2018. How Outcome Information Affects Ethical
Attitudes and Intentions to Behave. Behavioral Research in Accounting.
Galbreath, J., 2018. Is board gender diversity linked to financial performance? The mediating
mechanism of CSR. Business & Society. 57(5). pp.863-889.
Moghadam, M.D. and Jalali, B.T., 2016. THE INQUIRY IN TAXATION CULTURE AND
ANALYSIS OF THE REASONS FOR INSOLVENCY IN TAXPAYERS. IIOAB
JOURNAL. 7. pp.14-24.
Post, C. and Byron, K., 2015. Women on boards and firm financial performance: A meta-
analysis. Academy of Management Journal. 58(5). pp.1546-1571.
Tamimi, N. and Sebastianelli, R., 2017. Transparency among S&P 500 companies: An analysis
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Tschakert, N., Needles Jr, B. and Holtzblatt, M., 2016. The red flags of fraud: internal auditors'
knowledge of the business makes them ideal candidates to detect unethical
behaviors. Internal Auditor. 73(5). pp.60-65.
Wang, Y., Cui, P. and Liu, J., 2018. Analysis of the risk-sharing ratio in PPP projects based on
government minimum revenue guarantees. International Journal of Project
Management. 36(6). pp.899-909.
Xu, Y., Zhang, L. and Chen, H., 2018. Board age and corporate financial fraud: An interactionist
view. Long Range Planning. 51(6). pp.815-830.
Online
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Five more US states sue Purdue Pharma over its role in opioid crisis. 2019. [Online]. Available
through :<https://www.theguardian.com/us-news/2019/may/16/purdue-pharma-states-sue-
opioids-crisis-role>.
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