Corporate Responsibility at Pfizer - Case Study Example

Corporate Responsibility Name Institution Course Date Introduction Corporate Responsibility (CR) is a very crucial concept in enhancing the sustainability of a business. The need to uphold high professional standards remains a major challenge to many corporate organizations. Most organizations’ CR helps to enhance a business’ self regulation and ensure that accountability and responsiveness is enshrined in the business management process. For a business enterprise, local and international decisions need to be streamlined and be focused on addressing the specific needs of a business organization (Leisinger, 2005: 577-594). In the case of drug Company Monopolies and Profits, various critical issues emerge with regard to the role of CR and the implications of its different viewpoints. Implication of Three CR Viewpoints Socio-economic view refers to a business’ duty to prevent harm inline with the Kew Garden Principles. The pharmaceutical monopolies and long-term patent rights enjoyed by drug companies should not be construed to mean lack of their willingness to do good to the society. The justification of high profit rates with high cost of research for new drugs is a reflection of the socio-economic viewpoint of CR. In the case, the fact that the USA’s free trade agreements and patent rights engagements only favours it makes it a major threat to the operations of free trade (Hollander, 2000: 189-217). High prescription mark-up of drugs and exaggerated cost of manufacturing drugs in the developed world makes the socio-economic corporate concept to be difficult to either justify or implement. Ethical implications of the pharmaceutical companies are intertwined in the need to strike an economic, business, and moral balance between profit maximization and societal and environmental needs. As revealed from the concept of the wealth of nations, business approaches of pharmaceutical companies in the case reveals an intentional inclination to gain supernormal profits while disregarding the co-principles of Corporate Social Responsibility (CSR) (Iggy & Sheffrin, 2003: 297-384; Pinnington & Lafferty, 2002: 7). The socio-economic view of CSR refers to the duty to effectively contribute to the society and still operate within the KGP parameters. Failure by some pharmaceutical companies to offer affordable drugs to people in the developing countries portrays such organizations in bad light (Sekhri, 2006: 5-11). It is crucial for the companies to not only focus on the maximization of profit and offering high dividends to shareholders but instead strike a balance between societal and business demands. Patent rights should not be used by companies as an avenue of exploiting consumers as is the case in both developed and developing countries such as the United States, Australia, United Kingdom, and many European Union countries (Jackson & Nelson, 2004: 17-23; Kalinda, 2001: 19-35). As a supporting negative impact of the business to the business environment, corporate responsibility focuses on ensuring that it gives back to the society in which it operates. The manner in which the U.S has pursued its own free trade with many developing countries is a realistic reflection of diverse CR business strategies. Rather than to focus on enhancing profitability levels, CR in UK, Australia, EU, USA, and other developed countries should be targeted at including stakeholder in the business management process, supporting local communities, and reducing harm to the environment (George, 1999: 5-8). In the case study, while pharmaceutical corporations should focus on enhancing shareholder value, it is crucial that the concept of patent rights is not implemented in a biased and exploitative manner towards the developing countries. Corporate organizations must always strive to safeguard the common good of society in which it operate by ensuring trade sanctions are not used as threats and means of enforcing monopolistic business practices. Based on the socio-economic view of CR, Rossi (2001: 42-56) is of the opinion that affordable drugs should be available to people in both developed and developing markets at fair prices. It is also essential to ensure that a greater level of efficiency and accountability is enhanced in the manner in which the drugs are allocated to the poor and needy population. In line with the classical economic viewpoint, the fact that stakeholder opinion help to streamline business performance and create better working relationship with major economic players is not in doubt. A company must ensure that the interests of employees, unions, the marketplace, financial analysts, business environment, local communities, nongovernmental organizations, financial institutions, and shareholders among others are fully comprehended (Frank, 1991: 29-56). The benefits of CR viewpoints relates to business brand differentiation, streamlined business engagement plane, healthy relationship with clients and other stakeholders of the business, effective management of human resources, trust and enduring license to operate, and the ability to instil a work ethics. CR works best for most organizations due to the fact that the concept is system of leadership by example. Business social missions should not only be aligned to the need to enhance profitability but also ensure that the company’s mission is fully considered. Corporate social performance of an organisation needs to be in tandem with its financial performance. When under no external intervention, May, et al (2007: 28-35), explains that free markets develop mechanism of regulating themselves. Even with no regulations, pharmaceutical markets would strive to achieve their own points of equilibrium. It is however difficult to set flexible prices in such a case due to the tendency for the companies to reap supernormal profits from their unsuspecting clients. Patenting drugs act as a hindrance to free circulation and skyrocketing of the drugs. According to Iggy and Sheffrin (2003: 249-311), the classical economic view guides organisations in contributing to economic development and ensuring that the overall economic development of the business is enhanced. Patent rights on researched and invented drugs in most developed countries disregard the need to uphold business regulations and instead foster free markets. According to Leonard and McAdam (2009: 180-194), such a business approach provokes the businesses to set their own prices and exploit clients. The Broad social view of CR relates to various corporate strategies put in place with the view to solve various social challenges that the society face. Such problems may directly or indirectly be related to the operations of the organisation (Idowu & Filho, 2009: 54-62). The view focuses on ensuring that various corporate strategies are implemented so as to eliminate wide scope challenges that could otherwise hinder reliable and effective implementation of major business strategies (Iggy & Sheffrin, 2003; Leonard & McAdam, 2001: 180-194). Government policies and corporate institutions should focus on streamlining relevant policies and ensuring that organisations fully preserve the environment in which they operate (Hollander, 2000: 198-203). From this perspective, it is clear that CSR is a moral issue that should be undertaken by corporate organisations without any undue external pressure. While globalisation has empowered some countries, it has also placed others in very vulnerable circumstances. This has led to a high level of biasness in the manner and standards with which CSR is applied to both developed and developing countries. This partly explains the reason why a CSR policy for a multinational company operating in the USA would vary from that in Nigeria, Haiti, or Burundi (Jackson & Nelson, 2004: 16-22; Leonard & McAdam, 2009). The broad social view on CSR entails providing safe working conditions to employees, contributing towards various social groups and charity organisations, and preventing environmental degradation. Based on the understanding of the broad view of CSR, it is apparent that most pharmaceutical companies do not undertake their CR with due respect to CSR principles. The high drug company profit rates combined with high dividends offered to the shareholders are not a positive reflection of the pharmaceutical industry. Exorbitant and biased pricing strategies being implemented by the US as a result of its pursuant of its own free trade agreements is a reflection of lack of corporate social responsibility morals. Rather than to adopt biased and very generic pricing models that only favour the America population, Anand and Rosen (2008: 65-97) argue that it is crucial for patent rights implemented in the drug industry to be focused on enhancing the common good of the society. This means that unfair distribution of patterns should be eradicated. CR at Pfizer The ever changing needs of the modern society have continued to complicate the CR of many global pharmaceutical companies. Pfizer being a pharmaceutical company, its core corporate objective is to ensure that people easily access medicines. This is undertaken through various initiatives such as establishment of global health programs, offering grants and related development contributions, collaborating with healthcare and environmental conservation professionals, and enhancing workplace professionalism (Pinnington & Lafferty, 2002: 5-31). Responsible partnership is fundamental to the company’s effort to remain responsive, relevant, and focused on improving the overall social cohesion, health, and wellness in society. As a means of giving back to the society, Pfizer’s CR strategies focuses on ensuring that the business needs, customer needs and other interests of all stakeholders are addressed without compromising its effort to enhance good health at an affordable cost. Pfizer’s CR involves its major stakeholders that include patients, healthcare regulators, customers, investors, colleagues, and the communities where it undertakes its business and CSR. To ensure that its core goal of enhancing CR responsibility is not ignored, employee policies such as business conduct, sales and marketing standards, stem cell research, and political involvement have been put in place (George, 1999: 7-8; Iggy & Sheffrin, 2003: 299-362; Frank, 1991: 43-65). The company does not use CR initiatives at strategies of evading regulatory policies put in place to safeguard communities against unethical and exploitative strategies of most pharmaceutical companies. The company has continued to strive to reduce its negative impact on the environment in which it operates by upholding of high moral and ethical standards during the research, manufacturing, and disposal of waste products. The company’s website reveals that its patient Assistance Foundation is a crucial program that focuses on ensuring that both internal and external interests of all stakeholders are addressed. The programs help to eliminate any disconnect between the core business objectives and business operations aimed at ensuring proper planning and streamlining of its processes is achieved (May, et al., 2007: 8-16). The concept of patient assistance is evidently a Pfizer’s CR strategy that ensures that the interests of major shareholders are accorded due consideration and that the environment is effectively conserved. Sadly, the strategy it is undertaken as a public relations activity aimed at popularising the company products and endearing itself to local communities (Ahn, Herman, & Damonti, 2000: 65-72). Global health programs are other approaches employed by Pfizer in ensuring that efficiency and cost effectiveness in the access of medicines is enforced (Vian, et. Al., 2007: 30-35). No clear articulation of the exact manner in which the CSR endeavours are undertake has been made. This makes it difficult for any interested party to gauge or estimate the degree to which CSR activities should be undertaken (Idowu & Filho, 2009: 49-72). Although vital, most CR undertakings made by Pfizer tend to focus on enhancing its popularity and endearing itself to its strategic business markets. For instance, its innovative healthcare solutions in Ireland and other developing countries are not driven by its desire to enhance efficiency and be socially responsible but rather by its desire to adhere to national environmental standards. Conclusion Adherence to the ethical standards, national and international norms, and spirit of law are vital pillars of enhancing strategic and beneficial CR for the operations of most pharmaceutical companies. While its corporate strategies may never be perfect, it is evident that The Pfizer Global Health Fellows and CR international free-will plan presents vital instructive lessons on the crucial possible functions of corporate organizations. Although generally well intended, Pfizer’s CR aims to enhance its corporate domination and at times act as a defensive image management mechanism. The social responsibility of a business should be undertaken in a robust, transparent, ethical, and very cost effective manner and with due consideration to the interests of all stakeholders. References Ahn, M., Herman, A., & Damonti, J. (2000). Public-private partnerships in health care for developing countries: a new paradigm for change. Managed Care Quarterly, 8 (4), 65-72. Anand, V. & Rosen, C. C. (2008). The Ethics of Organizational Secrets. Journal of Management Inquiry 17 (2): 65-97. Frank, A. G. (1991). The Underdevelopment of Development. Scandinavian Journal of Development Alternatives (10), 5-72. George, W. (1999). Mission Driven, Values Centred, Executive Excellence, Magazine of Leadership Development, Managerial Effectiveness and Organizational Productivity, Vol. 16, No. 8, 5-8. Hollander, S. (2000). Sraffa and the Interpretation of Ricardo: The Marxian Dimension, "History of Political Economy, V. 32, N. 2, 187-232. Idowu, S. O. & Filho, W. L. ed. (2009). Professionals' Perspectives of Corporate Social Responsibility. Springer Publishers, United Kingdom, 49-73. Iggy, D. & Sheffrin, S. M. (2003). Economics: Principles in action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall, 297-384. Jackson, I. A. & Nelson, J. (2004). Profits with principles: Seven strategies for delivering value with values. New York, NY: Doubleday. Kalinda, B. ed. (2001). Social Responsibility and Organizational Ethics. Encyclopedia of Business and Finance (2nd ed., Vol. 1). New York: Macmillan Publishers. Leisinger, K. M. (2005). The corporate social responsibility of the pharmaceutical industry: idealism without illusion and realism without resignation. Business Ethics Quarterly, 15 (4), 577-594. Leonard, D. & McAdam, R. (2001). Grounded Theory Methodology and Practitioner Reflexivity in TQM Research, International Journal of Quality & Reliability Management, Vol. 18, Nos. 2 and 3, 180-194. Leonard, D. & McAdam, R. (2009). Corporate social responsibility in a global economy. Norwegian Ministry of Foreign Affairs, Report No. 10, 9-17. May, Steve, George Cheney, & Roper, J. (2007). The Debate over Corporate Social Responsibility. Oxford, England; New York, NY: Oxford University Press. Pinnington, A. H. & Lafferty, G. (2002). Human Resource Management in Australia. Melbourne: Oxford University Press. Rossi, A. S. (2001). Caring and Doing for Others: Social Responsibility in the Domains of Family, Work, and Community. Chicago, IL: University of Chicago Press. Sekhri, N. (2006). From Funding to Action: Strengthening Healthcare Systems in Sub-Saharan Africa. World Economic Forum White Paper. Geneva, Switzerland: Centre for Public-Private Partnership, Global Health Initiative, Journal of World Economic Forum. Vian, T., McCoy, K., Richards, S. C., Connelly, P., & Feeley, F. (2007). Corporate social responsibility in global health: the Pfizer Global Health Fellows international volunteering program, in the Human Resource Planning Journal, Boston University, 30(1), pp. 30-35. Read More