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Making Ethical Business decisions to protect and enhance Brands Image (Part 3/3)

o    Consequentialist Analysis

Relationship Approach
Pfizer’s success strongly depends on its co-existence with its stakeholders. It is important to consider Pfizer’s relationship with its stakeholders before it takes the decision about off-labelling. The relationship approach should be able to provide an exact insight to see clearly and intuitively into the nature of this complex situation. Within this approach we attempt to rate the effects of the available solution on Pfizer’s relationship with its stakeholders on a scale of +/- 5 (Figure 4) (Clarkeburn, H, 2007).

Relationship Approach ratings

Relationship Approach ratings

Justification for ratings
Continued Off-labelling
–    Company-Consumers: As consumer awareness increases more and more consumer begin to portray hostility towards Pfizer. This could result in a slow death situation for the company.
–    Company-Shareholders: There will be no affect to the relationship between shareholders and company because Pfizer is already off-labelling and generating positive numbers off its activities.
–    Company-Itself: The company could continue to benefit from off-labelling in terms of its market share. Also, sustain share prices from falling to a very conservative extent.

Discontinued Off-labelling
–    Company-Consumers: Consumers don’t really care right now. But they will consider the good deeds of Pfizer when other competitors are accused of off-labelling and Pfizer comes out clean.
–    Company-Shareholders: There will be a substantial downgrade in relationship between the company and shareholders, because discontinuing would trigger a short-term loss for the company causing the shareholders to loose more confidence in Pfizer.
–    Company-Itself: The company would face short-term losses due to elimination of markets obtained via off-labelling. Also, it would have to put a lot of effort and administrative energy in developing new non-controversial markets.

Therefore through the above graphical representation and calculations of the relation approach we could conclude that Pfizer should Continue with its off-label marketing sighting too many disadvantageous factors affecting its relationship with its stakeholders (Figure 4).

o    Principled/ Rules Approach
Pharmaceutical companies produce drugs which directly affect the health of any suffering patient. If ethics are not applied to producing and selling of drugs, it could result in dire consequences. For this reason, all pharmaceutical companies are bound by ethical codes of conduct for running their businesses; Pfizer is no exceptions. While every company tries to recognise its own ethical code of conduct, there are certain rules that are universally applicable to businesses of almost all natures.

In the Rules Approach, compares these golden rules of running businesses with the alternative solutions to ethical problems, to analyse which of the available solutions comply with the golden ethical rules (Figure 5) (Clarkeburn, H, 2007).

Principal or Rules Approach

Principal or Rules Approach

Justifications
•    Do not cheat – Products are approved for one treatment, but Pfizer is selling the product for other usage. This is cheating.
•    Do not hide – Pfizer is hiding the side-effects of using off label treatments
•    Do not lie – The breach of the Ethical code of conduct is an evident to confidently conclude that Pfizer is lying indirectly by reverting from its own policy.
•    Do not prioritize profits over consumer health – By continuing to off-label on the cost its consumer’s health concerns, in order to retain its stock prices and shareholder trust, Pfizer does prioritize profits over consumer’s health.

From the above framework (Figure 5) and the justification, we can conclude that Pfizer should Discontinue with its off-labelling activities.

o    Virtue Approach
The virtue approach reflects the company’s quality of being morally right. This kind of an approach requires the decision maker to imagine oneself to have all the characteristics of a good person who would sacrifice self-benefits to care more about the betterment or welfare of the people around him. The decision-maker is then expected to imagine what the good person’s actions would be in such a situation and imitate the actions (Clarkeburn, H, 2007). This kind of approach can be satisfactorily performed taking the first person approach of thinking.

Defining a Good Person: Defining a good person is relatively tougher than one would think. It is difficult to pin down the exact characteristics of such a person, but we should try to define this person on general terms. Therefore, a good person could be defined as an individual, who believes in simple living which constitutes pride, culture, value and honesty. This person cannot be selfish and egoistic.

Describing the Good Person: I believe I want to be a person with solid value and respect for humanity. My conscience will not allow me to step on someone else’s loss to gain certain benefits, not even if it means heavy losses. To me everyone else around needs to be cared for in order to co-exist.

Reflecting the Actions: Imagining what a good person, as described above, would do in a situation like this is our next task. The person’s conscience and his characteristics would ‘probably’ strongly oppose off-labelling simply because it has a potential to harm someone at the cost of company’s profitability. Such a person would not be bothered about the monetary benefits which are resulted by causing impairment to someone else’s health. Also, it is important to consider that such a person ‘may not ideally think’ about the positive effects of off-labelling, which include cheaper alternatives to expensive treatment, because side effects are still a possibility in any case. I believe, the ‘person would most ideally try to think’ of other alternatives to off-labelling.

Imitate the Actions: Thus, adopting this hypothetical person’s action Pfizer should discontinue its off-labelling activities in view to demonstrate the truth and correctness of its way of conducting its business activities.

Choosing the final approach

The above ethical analysis shows varied results, a perfect example of the consequentialist approach pointing at one solution while the non-consequentialist pointing at another. The Relationship approach suggests continuing to off-label while the principled/rules and virtue approach suggests discontinuing off-label marketing.

Business decision, especially at the level of a largest pharmaceutical company (Pfizer), must be based on sheer analysis and exact decisions based on well defined analytical approach. The virtue approach uses words and phrases like, ‘probably’, ‘may not ideally think’, ‘person would most ideally try to think’, that may not justify the decisions primarily because the approach is based on assumptions of a hypothetical person’s reactions. The principled rules approach has somewhat similar concerns. As pointed out by Clarkeburn, H, in her paper ‘Making good decisions’, pg 12,

“Life is rarely as simple as the rules would let you hope and believe. It is very difficult to state absolute and universal rules. Most of us would agree that ‘do not kill’ is a worthwhile rule in the vast majority of situations, but possibly would allow killing for self-defence.”

, simply means we cannot make decisions on basis on simplistic and generalized ethical rules that are generally followed by most people around us. Therefore, in the best interest of Pfizer, the largest pharmaceutical company in the world, we must not follow the non-consequentialist arguments.

The relationship approach is criticized for being emotion-centric, but at the same time looking at relationships allows Pfizer to show sense of caring towards its immediate stakeholders rather than pretending to be rational and logical. Also the choice of not making any strong generic statements serves more as its strength than weakness (Clarkeburn, H, 2007). It must also be stressed that the very fact that Pfizer is involved in off-labelling is with a prime reason to maintain its relationship with its stakeholders. Therefore, Pfizer, in the best interest of its stakeholders should follow the relationship approach and Continue Off-labelling activities.

Conclusion
As every company grows in size, it gets attached and liable for the welfare of all entities connected to it. It is always difficult to make decisions that are comply all stakeholders’ interests. Pfizer seems to be in a similar dilemma. Therefore it is in the best interests of the company to act in accordance to the activity which conforms to the interests of the majority of its stake holders.

References

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That concludes our case study on Pfizer and its ethical dilemma which it may need to address to ensure a sustainable Brand Image. Please let us know what you think about this 3 part case study.

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