Social corporate responsibility (CRS) refers to the obligations that companies have not only to serve their own interests but also the interests of society. CRS encompasses one of the strategies that may aid in achieving PharmaCARE’s dream of becoming environmentally responsible through green initiatives, packaging changes, and recycling of any environmentally unfriendly materials. Unfortunately, the company’s practices in Colberia are inconsistent with the concerns of social corporate responsibility. This paper discusses PharmaCARE stakeholders. The aim is to analyze human issues that emerge due to the organization’s practices in Colberia. Besides, the paper discusses the necessary changes that need to be done to ensure that the organization becomes ethical. Are the organization’s practices consistent with the traditional practices of Colberian people? How are different organizational ethical theories applicable in explaining PharmaCARE’s actions in Colberia?
PharmaCARE’s Stakeholders and their Characteristics
CRS is essentially provided through an analysis of stakeholders. Stakeholders encompass all groups and specific individuals who either benefit or are harmed by the decisions that are made by an organization. At PharmaCARE, stakeholders include customers, employees, the environment, and the community. The principal aim of social mutual accountability rests on the idea that businesses have charitable, decent, and honorable errands to play while at the same time offering a recommendable return to the shareholders. The owners in conjunction with other people must hold such responsibilities.
The environment is one of the most valued PharmaCARE stakeholders. It is important in the sense that people work best in healthy environments (Caldwell, Hayes & Long, 2010). Additionally, organizations gain immensely when they treat the environment in which they are established with respect. Communities form another crucial stakeholder. By valuing the role of communities in enhancing organizational success, the company needs to commit its resources to secure good relationships. This move is important in ensuring that it becomes a responsible neighbor. It should participate in creating good partnerships since communities form the living places for all customers. Communities are crucial since organizations can only perform and achieve high results when they operate and interact with people who receive them positively.
Customers are the chief stakeholders who maintain the success of any business. Apart from ensuring that the clients are satisfied with the products that the company produces, it has other ethical and moral obligations towards them. The degree to which the reputation of an organization is maintained depends on their (clients) perceptions about the way PharmaCARE treats them. Treating customers with courtesy ensures a better reputation of the name of the business, and hence more sales, which implies more returns on investment to the shareholders.
Employees constitute PharmaCARE’s stakeholders who help in the process of conversion of raw materials into finished products and services through value addition. They are also involved in the collection of raw materials. Thus, they are central to PharmaCARE’s CRS program. The main issue lies in the CRS strategies that PharmaCARE has adopted. The company’s mode of operations and the manner it treats its stakeholders in the Colberia are inconsistent with the noted concerns of its stakeholders. This situation gives rise to various human rights issues.
Human Right Issues and the Necessary Changes in PharmaCARE
The principle of human rights holds that people need to be treated with dignity. International human rights convention does not have any legal imposition or obligation for organizations to comply with certain human rights provisions. However, national laws regulate the conduct of companies to guarantee the protection of individual rights. Just like any other non-state actors, enterprises influence the enjoyment of people’s human rights in a positive or negative manner. The goal of CSR is to ensure that organizations’ operations influence positively the implementation of human rights among organizational stakeholders (Ketz, 2006).
Management of Colberians’ Aboriginal groups in relation to PharmaCARE’s senior managers gives rise to some human rights issues. The right to Colberians’ dignity is hampered. Although the company relies on them to harvest herbs, it takes advantage of their economic situation to exploit them. They are only paid $1 per day after walking five miles to collect 50 pounds of herbs. This situation breaches their right to fair wages. The amount of remuneration does not measure up to the amount of effort that Colberian put in every day. It cannot permit them to live with the dignity that is appropriate for any working person. This treatment is an outright infringement of the human right to access a decent and worthwhile life.
The living conditions of the executives display a situation of the well-paid few people. The majority of workers, who are Colberians by origin, live in traditional huts without any electricity or water connectivity, yet their economic situations force them to continue working for PharmaCARE. On the other hand, the senior managers live in magnificent areas that have bathing lakes, tennis playgrounds, and golf classes. This situation evidences their access to a dignified life while the native Colberian population is denied it. This disparity erodes the human right to non-discrimination and the right to access clean drinking water.
Considering the human rights issues that arise from the operation of PharmaCARE, the organization needs to make some changes to comply with the concerns of social corporate responsibility. As a recommendation, the company should review its wages and salaries structures so that the difference between the amounts that are paid to the locals and the executives only reflects the professional expertise. Such structures should not be determined by the willingness of people to work on any offered amount. The wages and salaries that are paid to the locals need to enable them to live at least above the poverty levels. Secondly, the organization needs to invest in social corporate initiates such as housing programs for its employees. The houses should be complete with electricity and clean water connections. Swimming pools, tennis courts, or golf courses are not important to the locals since they are secondary wants, as opposed to water, housing, and lighting.
Thirdly, the organization needs to embark on initiatives for environmental sustainability. Specifically, it is recommended for PharmaCARE to consider withdrawing its position on environmental laws and regulations, including an extension of the superfund tax, compensation, and liability Acts. It needs to focus more on its commitment to its slogan, ‘We CARE about YOUR world.’ Although PharmaCARE can loosely interpret the three recommended changes to mean more expenditures in activities that lead to higher operational costs, conformity to human rights are essential in terms of fostering success in social, economic, and environmental corporate activities.
PharmaCARE’s Environmental Initiatives
Through its ‘We CARE about YOUR world’ strategy, PharmaCARE is committed to protecting the environment through recycling, packaging, and engaging in green activities. However, it has successfully defeated the environmental laws and regulations through its anti-environmental lobbies. This move shows its double standards of adopting social corporate initiatives to promote its success. While this move is inappropriate, researchers of social corporate responsibility such as Garriga and Mele (2009) and Caldwell et al. (2010) document an emerging scholarly claim on the need for organizations to balance their profit-making initiatives and commitments to social corporate responsibility activities such as environmental protection programs.
PharmaCARE’s initiatives portray empty commitments to environmental responsibility. They depict practical commitments to profit-making initiatives that do not mind the environment. Thus, its commitment to protecting people’s world is not accompanied by corporate actions. The fact that PharmaCARE’s operations hurt the Colberian natural environment supports this assertion. An organization’s operation needs not to alter the natural habitat as part of environmental sustainability aspects that form the social corporate responsibility (Garriga & Mele, 2009). Unfortunately, PharmaCARE’s operations have destroyed the Colberian habitat to the extent of posing major threats to the endangered native species.
To PharmaCARE, the Colberian environment stakeholder is taken with little relevance. However, it needs to understand that it is only through a reduction of negative the impacts that arise from the company’s operations that PharmaCARE can give a hand in conservation and preservation of natural resources. This way, PharmaCARE can contribute to the enhancement of the quality life for all people in the world since it claims in its environmental responsibility commitment slogan. Indeed, this move can help to reduce conflicts between the organization’s ecological programs and its anti-ecological actions.
Ethics in PharmaCARE’s Actions
Different ethical schools of thought may be utilized to analyze the appropriateness of PharmaCARE’s actions. This section only considers utilitarian, deontology, virtue ethics of care, and my own moral/ethical compass theories. Although Bentham is the founder of the utilitarian hypothesis, Stuart mill later refined it. The theory calls for people to look beyond their self-centric interests to enhance total good for all citizens who may be influenced by their actions. In the context of organizational ethics, it highlights the importance of evaluating the repercussions of an individual action so that an ethical action is the one that does not result to harm on any party who is subjected to its consequences. Unfortunately, PharmaCARE’s actions harm the organization’s stakeholders through environmental deterioration and the hindering of access to basic rights such as clean drinking water and housing.
Ketz (2006) asserts that the utilitarian theory appreciates that tradeoffs exist in decision-making processes. The concern of utilitarian theory in lowering harm on organizational stakeholders corresponds to the concerns of the concepts of corporate governance in the context of PharmaCARE. It addresses issues that relate to finance, regulations, and ownership systems to ensure optimal benefit to all stakeholders. Paying unfair wages to Colberian employee influences their financial capability so that they are unable to progress economically. Thus, it is unethical to pay locals low wages simply because they are willing to work akin to their low socio-economic status compared to the organization’s executives.
Alternatively called rule and duty or natural law, the deontological school of thought is associated with Immanuel Kant. It holds that conformity to the right set of rules and guidelines stands out as a better mechanism for determining the appropriate course of action, as opposed to overreliance on achieving the most-desired impacts (Ketz, 2006). PharmaCARE does not comply with human rights principles. It fails to foster access to clean drinking water or paying fair wages. This claim means that apart from its actions being unethical from the utilitarian theory, they are also inappropriate under the deontology theory. Guided by the deontological ethical perspectives, PharmaCARE might contend that ethical actions emanate from executing one’s duty, which is defined by rationality in the evaluation of the action. With reference to Kant’s assertions, duties are universal and owed to all people. Decent lifestyles are a right to all PharmaCARE’s stakeholders, not just the executives.
Virtue principles of care emphasize morality when determining ethical actions, as opposed to the observance of a set of rules (deontology) (Bennet, 2011). Under the school of thought, actions are ethical if one can anticipate another person acting in the same capacity towards him or her. It also insists that actions are ethical if they are helpful to their target. In the case of PharmaCARE, the executives do not expect to receive $1 per day for collecting 50 pounds of herbs. They do not anticipate living under the Colberians’ conditions.
From my ethical/moral school of thought, actions are ethical if they contribute to the overall good of people and/or when they result in positive social, economic, and cultural growth. From this view, PharmaCARE’s actions of exploiting Colberians, simply because they are willing to work for very low pay, is unethical. It leaves the organization as the only beneficiary. Other stakeholders such as the community and the environment do not receive any positive progression. Additionally, the company’s operations are not helpful to the locals. Their lives do not change even with an additional economic activity. In this context, change can be measured by increasing literacy levels and/or improving living standards by providing good housing and water services, which the organization neglects.
Comparing PharmaCARE’s Actions with Real-world Corporate Ethics Issues
Nike, Inc. has encountered criticism concerning its corporate ethics in foreign-based manufacturing businesses. While in the US, working conditions have incredibly improved. Manufacturing organizations, including Nike, Inc. are criticized for failing to monitor operations in their overseas manufacturing contracting organizations to curb child labor, overworking of employees, exposure of employees to dangerous chemicals, and poor pay (Powell, 2012). This situation has led to the emergence of a scholarly debate on the relevance and irreverence of sweatshops, especially in the developing nations where US and other developed nations outsource their manufacturing services. Nike, Inc. was caught up in this tussle within its Indonesia and other Asian-based manufacturing factories.
Similar to PharmaCARE, Nike, Inc. was accused of paying people poorly in its Asian-based manufacturing centers. Employees in manufacturing centers were paid salaries and wages that made it impossible for them to afford their basic needs. Although PharmaCARE does not defend its corporate responsibility approaches, Nike, Inc. was keen to defend it saying that it was not aware of such situations. The allegation for Nike, Inc. operating sweatshops compares with the situation in PharmaCARE. Powell (2012) asserts, “sweatshop workers often do not earn enough money to buy the products that they make, even though such items are often commonplace goods such as t-shirts, shoes, and toys” (p.460). This claim is perhaps well evidenced by the case of Honduran garment manufacturing factory.
In 2003, employees at the factory were paid only 0.24USD for every sweatshirt and 0.15USD for a long-sleeved t-shirt. Sweatshirts went for 50USD in the retail market. This situation implied that even if a worker made 100 sweatshirts in a day, he or she would still not afford a single sweatshirt that he or she made, with other daily needs notwithstanding. In both PharmaCARE and Nike, Inc., if the allegations are accurate, the payments cannot enable employees to live above the poverty level.
Reference List
Bennet, F. (2011). The Virtuoso Human: A Virtue Ethics Model Based on Care. Florida: University of Florida.
Caldwell, C., Hayes, A., & Long, D 2010. Leadership, Trustworthiness, and Ethical Stewardship. Journal of Business Ethics, 96(4), 497-512.
Garriga, E., & Mele, D. (2009). Corporate Social Responsibility Theories: Mapping the Territory. Journal of Business Ethics, 5(3), 51–71.
Ketz, E. (2006). Accounting Ethics: Theories of Accounting Ethics and Their Dissemination. New York, NY: Taylor & Francis US.
Powell, B. (2012). The Ethics and Economic Case Against Sweatshop Labour. Journal of Business Ethics, 107(4), 449-472.