MGT301A: Ethics & Sustainability - Merck's Ethical River Blindness

This report examines Merck's ethical decision to provide Mectizan, a cure for river blindness, free of charge in developing countries. The analysis covers the background of the company, the ethical dilemma posed by the disease, and the impact of Merck's decision on its stakeholders and reputation. The report highlights how this action, driven by the company's core values, significantly enhanced its brand image and public trust, demonstrating that prioritizing social responsibility can lead to long-term sustainability. Recommendations are provided for other companies facing ethical dilemmas, emphasizing the importance of prioritizing societal welfare to improve public perception and achieve corporate social responsibility.

Running head: ETHICS IN BUSINESS
ETHICS IN BUSINESS
Name of the student
Name of the University
Author Note

1ETHICS IN BUSINESS
Executive Summary
This report is based on the concept of ethics is business place and sustainability. The chosen
organization for the study is Merck. Co. Inc. Merck had found the cure of the river blindness,
which was spread in the third world countries of that time. Due to the costly medication, no
one was able to afford it thus the company decided to give due respect to its core values and
give the medicine free. The impact of this decision was analyzed. Recommendations have
been made regarding the adoption of ethics in workplace.

2ETHICS IN BUSINESS
Table of Contents
Introduction................................................................................................................................3
About the company....................................................................................................................4
The case regarding River Blindness-The ethical dilemma........................................................4
Impact on stakeholders...............................................................................................................5
Impact on the reputation.............................................................................................................6
Recommendations......................................................................................................................6
Conclusion..................................................................................................................................6
References..................................................................................................................................8

3ETHICS IN BUSINESS
Introduction
The application of ethics in the domain of business can be referred as to business
ethics or corporate ethics (Cavanagh, 2012). Business ethics generally refers to the
contemporary organizational principle, sets of values, standards and norms which tend to rule
the behavior and actions of an individual in a corporate world (Noddings, 2013). The
corporate ethics has two dimensions namely normative or descriptive. In the corporate career,
the field is mainly normative.
With the help of this report, I plan to understand the concept of Business ethics and
how being ethical reflects in the long-term sustainability of the business. As per my
understanding of various texts and journals, Business ethics refers to `taking the correct
course`. It includes all the dimensions of the business from production to company`s
behaviour with the end users. Sustainability refers to a balanced approach to the economic
activity and societal benefit. It simply means meeting the needs of the future generation in the
same way the needs of the present generation are met (Carroll & Buchholtz, 2014). A
committed business often integrates its ethical behaviour with corporate social responsibility.
Through this report, I will be reflecting on the example of a certain business
organization, which was faced by an ethical dilemma and narrate its course of action thereby
making a critical analysis of their decision. A successful business is one, which not only
makes sufficient profits to satisfy its stakeholders but also shows ethicality in its business
practices by taking care of the society. The chosen company is Merck and Co., Inc, which is a
pharmaceutical giant based in America.

4ETHICS IN BUSINESS
I shall be analyzing their ethical practice with reference to the river blindness case and
how it affected its stakeholder’s and future operations. I will be describing the background of
the company and the scenario of the disease prevailing at that time.
About the company
Merck and Co. is a pharmaceutical company based in America. The company was
formed in 1891 as an American subsidiary of the German company named Merck found in
1668. It is one of the leading pharmaceutical brands in the world.
The case regarding River Blindness-The ethical dilemma
The case developed in 1978 when Merck was about to lose its patent protection on its
two main best selling drugs. These drugs were a significant source of income for Merck and
due to this, the company decided to invest a significant amount in the research and
development of new products (Crane & Matten, 2016). The company spent approximately $1
billion in the research, which was paid off when they discovered four new medicines. One
notable thing I have observed about the company is that Merck never bothered about profits.
Their motto has always been that Medicine is for people and not for profits. In my view, the
core value of the company has been very clear; they have wanted the welfare of the people
rather than large revenue.
The river blindness, which is caused by parasitic worms that live in small flies, which
breed in the rivers of the developing countries like Africa and Latin America. These countries
are home to the third world paper that greatly depends on these rivers as a source of
livelihood. Whenever a person is bitten by a fly, the larvae of the worm tend to enter the body
and reproduce within. This sensation is very intense and causes immense itching, which has
leaded to a certain group of people attempting suicides (Dewey, 2016). It was estimated in

5ETHICS IN BUSINESS
1978, by the world Health organization that more than 300000 were the victims of blindness
due to this disease and around 18 million were infected. There was no cure to heal this
disease.
This is where the role of Merck emerged. The scientists at Merck had found a cure for
the disease. It is my opinion that the disease was mainly present in the third world countries
and that they would not have been able to afford the medicine, which would have been
extremely costly due to the years of research, which Merck undertook to find a suitable cure.
In my opinion, had it been any other company it would have been easy for it to keep
the ideas aside and concentrate on profit making (Bowie, 2017). However, the company did
not do so.
The executives were worried about the welfare of the company as the beneficiaries of
the medicine would not be able to afford the medicine even if it was sold at cost (Durkheim,
2013). It was stated that a single dose of Mectizan-the name given to the drug, could kill both
the parasite as well as the fly.
Merck decided to explore third party payment options with organizations like World
Health Organization and the United States Agency for International Success but this resulted
in a failure.
According to me, had it been any other company, it would have aborted the idea and
carry on with their regular course of business. In today`s competitive environment, any
business firm is only considered about profits and I think if such a situation would have
arrived today another company would not have bothered about the scenario. Finally, for the
welfare of the society and the fact that the benefits of the medicine are greater than its costs,

6ETHICS IN BUSINESS
Merck decided to distribute the medicine free. Since that time, the company has sold more
than 700 million tablets.
This decision of the company was based on its core values, which are based on
perseverance and improvement of human life, maintaining high standards of ethics and
integrity, improving the quality of life and not being profit oriented (Carroll, 2013).
Impact on stakeholders
As per my research, the stakeholder’s theory states that the actions of the firm need to
be beneficial and create maximum value for the various stakeholders like the customers,
suppliers, public and government. The Merck case is justifiable as their main motive was to
improve the healthcare of the people in general. In my opinion, this move made by the
company raised the position of the company in the eyes of its stakeholders.
This move by Merck was highly praised by its stakeholders, which portrayed the
company as a company, which would go to any extent in order to help the society
Impact on the reputation
The reputation of the organization improved greatly as the people began to view the
organization as a people oriented organization who worked for the welfare of the people
rather than concentrating on earning profits (Weiss, 2014). I believe, though the firm lost out
its profits and financials in the process it won people`s trust as I feel that a company who
would go to any extent to do good for the citizens and not let anything come in its way of
social responsibility benefits greatly in the eyes of the stakeholders.

7ETHICS IN BUSINESS
Recommendations
Thus, in my opinion I can state that the Mectizan experience by Merck had showed us
a new path towards the achievement of corporate social responsibility and caring about the
society.
After analyzing the given case that the companies, I would suggest that whenever a
company is in an ethical dilemma, like that of Merck, the company should stress upon the
welfare of people. I have learnt from this case that, high profits and a good financial position
is a short-term benefit however, the image of the company in the eyes of the public goes a
long way.
According to me, the same approach should be adopted by other companies when
they are planning to improve their image in the eyes of public. It is stated that whenever a
company is stuck in an ethical dilemma it is always suggested to follow the ethical way.
Conclusion
Therefore, from the discussion I would like to conclude that ethics and business go
hand in hand. The business though is considered, as a profit making organization should
engage in ethical activities that benefits the society. When the company does so, it builds up
its brand image, which goes a long way in creating a sustainable future for the company. As
per my observation in the case of Merck, the directors and the company heads had formed the
core value as working for the betterment of the people. This is why when the river blindness
medicine was discovered the company decided to give it out free because they believed that
no one should be denied from the freedom to live a peaceful life and that since the companies
operate in the environment, it is their duty to contribute back to the society. This move by the
company, as per my opinion, has made it one of the best companies from the ethical point of
view.

8ETHICS IN BUSINESS

9ETHICS IN BUSINESS
References
Bowie, N. E. (2017). Business ethics: A Kantian perspective. Cambridge University Press.
Carroll, A. B. (2013). Business ethics: Brief readings on vital topics. Routledge.
Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and
stakeholder management. Nelson Education.
Cavanagh, G. F. (2012). American business values. Pearson Higher Ed
Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and
sustainability in the age of globalization. Oxford University Press.
Dewey, J. (2016). Ethics. Read Books Ltd.
Durkheim, E. (2013). Professional ethics and civic morals. Routledge.
Noddings, N. (2013). Caring: A relational approach to ethics and moral education. Univ of
California Press.
Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach.
Berrett-Koehler Publishers.