Ethical Issues in Management

Case: Merck and River Blindness pp. 355-357

After reading the case and using the knowledge gained in the chapters, you must analytically address all 8 questions at the end of the case.

Think about the definitions of stakeholder – any parties with a stake in the organizations action’s or performance. Who are the stakeholder in this situation? How many can you list? On what basis would you rank then in importance?

What are the potential costs and benefits of such an investment?

If a safe and effective drug could be developed, the prospect of Merck’s recouping its investment was almost zero. Could Merck justify such an investment to shareholders and the financial community? What criteria would be needed to help them make such a decision?

If Merck decided not to conduct further research, how would it justify such a decision to its scientist? How might the decision to develop the drug or not to develop the drug affect employee loyalty ?

How would the media treat a decision to develop the drug? Not to develop the drug? How might either decision affect Merck’s reputation?

Think about the decision in terms of the CSR pyramid. Did Merck have an ethical obligation to proceed with development of the drug? Would it matter if the drug had only a small chance to cure river blindness? Does it depend on how close the company was to achieving a cure, or how sure they were that they could achieve it? Or does this decision become a question of philanthropy only?

How does Merck’s value system fit into this decision?

If you were the senior executive of Merck, what would you do?