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Business Ethics and Responsible Management

PART 1A BUSINESS REPORT
Introduction

In the current world business scenario, the importance of ethical behavior in business organizations plays a very important role. Each and every organization whether big or small are required to be guided by certain ethical practices. Here the case of the global market Johnson & Johnson has been considered. The company is a major pharmaceutical products manufacturer, which has faced a major lawsuit against the same for producing and selling Opium pain reliever in the USA. The lawsuit went against the organization and the company faced a $572 million fine for the fatality of the dosage of the opium-based medicines (the Guardian. 2021). In the report, the main concerns and ethical issues, and performance of the organization called Johnson & Johnson would be discussed in detail. Each and every organization in the market performs according to a certain ethical code of conduct which shapes the business policy, stakeholder's relationship, and corporate values are created. Hence, the reasons and the detailed understanding of the failure of the organization to maintain ethical practices.

Opioid Use in the pain reliever
Ethical issues identified
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The company Johnson & Johnson has been performing and selling a wide range of medicated products, pharmaceutical goods, etc. However, it has been identified that the company has indulged in selling opioid based pain relievers, which are harmful to the health of the people that are consuming the products. An opioid is made of Opium which is known to be an addictive drug extracted from poppy seeds and in the earlier centuries it has been widely used for addiction and the fatality rate of the consumption of the drug has led to the banning of the same in the global market (the Guardian. 2021). Hence, from the particular case, it can be easily identified that there are certain issues related to Johnson & Johnson's operation or business mechanisms, which need to be discussed.

One of the major issues that can be identified from the case of opioid medicines case of Johnson & Johnson is that related to the health and safety of the consumers. The customer that buys and consumes the medicines that contain opioids may be lethal for their health and can be addictive as well which will lead to overconsumption of the same. Hence, this directly affects and threatens the consumer's health and safety.

Another major issue that has been identified is the data privacy-related area. The organization has been using the lethal drug in the painkillers that are sold by the company on a wide scale and it has managed to keep the information private and away from the customers who are buying them. Thus, the company has misused the privacy of data and the right to the same.

Reasons for being an ethical question

The organization is a medical service such as medicines, medical goods, such as surgery materials, transplantation goods, etc. therefore, the responsibility and accountability of the organization towards the people who are using it are much more massive as the products are related to the health and health-related matters. Hence, breaching ethics and accountability is a major ethical question. Using materials like opium in the medicines can be dangerous and harmful for the people, similarly, it is also very unethical to hide using a material in the medicines which can be lethal or dangerous for the health of the user.

Avoiding the accountability and responsibility that the company holds is a business organization as well as a pharmaceutical organization that has more ethical accountability in the market than any other sector or organization (Saloner,et al.,2018). That particular practice of using opioid medicines has risked the lives of the consumer sections of the market. This has questioned the legal as well as the ethical accountability of the company which should be the guiding principle of the organization.

Role of the business in the society

Johnson & Johnson is a big name in the global market, the baby products of the company are in high demand, similarly, the total sales of the company in the year 2019 has been 82,059 million USD. The company is considered as one of the most reliable baby products and medicine producers in the world, therefore, the company has a huge responsibility of ensuring the wellness and health of the people in the society (Rosen,et al.,2019). The company is also the producer of sanitary pads and many other medical products which are essential for the regular use of people, hence, a company with such an overwhelming brand value and brand equity has the position for providing the best service for people so that the health and the safety of the same are well kept and not compromised in any way. Thus, it can be said that the company had the role to ensure good health and safety of society.

Key Stakeholders

Johnson & Johnson has some major stakeholders in the market, such as the business partners who are shareholders, or with whom the company has collaborated. Apart from that the main and the most important stakeholder are the customers, the total brand value of the company defines the wide range of consumer circles of the company who are the main key stakeholders. Also, the employee and staff of the company are some of the important stakeholders of the organization. Hence, there are mainly 3 different sections of consumers.

Impact of the ethical choices

Ethical practice determines the performance of an organization and its accountability to the public. The company Johnson & Johnson has a great market base which trusts on the goodwill of the organization for the previously done ethical choices, however, the wrongdoings of the organization pr making the unethical choice of using the opioid medicines have made it risky and lethal for the long-term health of the public. The choice of the organization in using materials that may help in mitigating the effect of pain but at the same time it can create addiction amongst the users which is not beneficial for the health and the overdose of the medicines or opioid can lead to death (Baker,et al., 2019). Thus, the ethical choice that has been made by the organization has put the health of the people at stake, and at the same time, it has deteriorated the brand equity and goodwill. The company has also lost a great amount of money to the court as it has to pay compensation to the Oklahoma government for the fatal and lethal effect of the medicine. Hence, the company and its wrong ethical choice not only affected the society but it has impacted the performance, public image, and business value in the market.

Recommendations

It can be suggested from the above case of the organization Johnson & Johnson, it can be said that the organization should have taken a few steps to avoid such an issue in the business process, which are mentioned below,

  • The company should have been clear about the ingredients and materials it is using in the medicines rather than hiding the same from the market.
  • Using the ingredients properly with testing how they work, the impact or side effect of the same on the public, etc. before launching the medicines in the market.
  • The health and safety of the people should be considered as the foremost priority while conducting business operations.
Conclusion

The above report has highlighted the ethical issues that have been identified in the case of the medical and pharmaceutical organization Johnson & Johnson. It has been identified that the company has faced a fine of $572 million as it has used Opioid based pain reliever which is highly addictive and also harmful in long-term consumption. Also, the overdose of the same can lead to death. The organization has breached the ethical practice in business which is negative for the wellbeing of society and also bad for the future of the company as a whole.

PART 1B DISCUSSION ON TWO ETHICAL THEORIES

There are different sorts of ethical theories that can be followed in the case of Johnson & Johnson. The company has performed an unethical practice in terms of business and social context, it has failed in maintaining the corporate social responsibility that it is equipped with, therefore, a set of theories and their application process are required to be discussed in this part of the paper, to ensure that the proper maintenance or management of ethics can be done in organizations like J&J. Thus, the theories are mentioned below,

Duty Based Ethics

The idea of Duty Based ethics has been developed by the German philosopher Immanuel Kant, according to which each and every individual is equipped with certain ethics or ethical duty from which they can not back off. It has been identified that the organization Johnson & Johnson is a global marketer and produce or sell medicines and medical products. According to the theorist, there is a certain moral law that is universal or similar for each individual or each perspective (Laczniak, and Murphy, 2019). The moral value in one makes them suitable to reside in the human society, the society and the societal order is bind by the moral value, and therefore, each individual or organization are also obligated to respect and maintain the ethical or moral value, and therefore, it is duty-based ethics and not optional process or understanding. The theory is also known as Abolitionist theory as it is absolute for each individual or each organization. Here the discussion is mainly based on an organization that works for manufacturing medicines and medical products for society, hence, it is absolute for such an organization to understand what is morally right and wrong and act accordingly (Tutorialspoint.com. 2021). An organization of such kind should have their stakeholders, the customers are their first priority as they are consuming medicine or a similar product to get away from illness, when the products directly deal with the health and safety of people, it should also be absolute for the producer to act according to the ethics which comes with their duty to provide wellbeing of the customers.

The theory is also guided by four principles which create the base or main concerned key area for the better understanding and maintenance of the duty and ethical rules. The four principles are, Prudence, Temperance, Fortitude, and Justice. The company Johnson & Johnson has failed in overcoming the principal or following the virtual guidelines for which it has used Opioid in the painkillers so that the sales of the medicines increase but they have not considered the health and safety of the people who are consuming the medicines in the first place. Hence, it can be stated from the discussion that the Duty based ethics highlights the basic moral values that should have been maintained when an organization is performing in the market as they are absolute in any context and in many cases, and the company lacks in identifying or differentiating the moral duties they are obligated to serve to their own consumers.

Utilitarian Ethics

Utilitarianism theory has been developed by John Stuart Mill who believes in the betterment of the society which comes from overall happiness. The theory emphasizes the collective good or collective happiness rather than individual happiness. Here, happiness refers to the wellbeing and betterment of the society through ethical practice of medicine production. The company has failed in producing medicines that are better for society as a whole or brings long-term good and wellbeing to the people (Udoudom,et al.,2018). The theory focuses on the greater good of the society rather than the individual goods, so in terms of the same it can be seen that in the case of Johnson & Johnson the usage of opioid medicines can only bring better profit to the company but at the same time it compromises with the greater good or greater wellbeing, the health and safety of the people of the society have been compromised which must be changed so that the people and the company both can get profit or both of the sides can achieve happiness. Corporate social responsibility has certain stages, and there the societal welfare and legal compliances must be maintained(Tutorialspoint.com. 2021). The stakeholders and their wellbeing must be considered as a very important area of concern and through the ideology of utilitarian ethics, the company can focus on the greater and societal goods through ethical choices.

Understanding the happiness and wellbeing or safety of the customers, the employees and the organization itself must be considered as the most important area of obligation. The ethical choices of what must be done and what must not be done should be the first and the foremost priority of the organization according to the theory, therefore, the company must understand and identify which is right for the stakeholders of the company and what is not and the formulation of the medicines or the medical goods must be done as per the same. The company should be guided by the utilitarian rule of ethics and ensure that the safety and health of the consumer are not compromised as that is the main area of interest as it connects the company with the people or the consumers.

Thus, it can be stated from both the ideas and theories of ethics that the organization Johnson & Johnson has failed in managing or implementing the theories of ethics into practice, as consumer health has been compromised. Hence, the idea or the concept of ethics must be applied in the organizational policy and the Corporate Social Responsibility area of the company to overcome the legal setback which the company has gone through in 2019 from Oklahoma court.

PART 2 ETHICAL LEADERSHIP
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The idea of ethical leadership is a system of leadership approach that is guided by the basic ethical values, morality, and right attitude towards the people that can help in creating an ethical environment within an organizational framework or in a team management process. Ethical leadership is not only guided by the principle of ethics but it also tends to serve an ethical environment within the working area or creates an ethical environment(Zuraidahmuda.blogspot.com. 2021.). Ethical leadership and its application depend on the leader's approach and belief or morality. Thus, the personal idea of ethics and value creates the bedrock of ethical leadership practice. In the current market scenario, it is also practiced with the peer pressure of the corporate culture. Hence, there are certain basic ideas or principles that are the base of the pillars of the concept of ethical leadership and the lack of the usage of the same can lead to an unethical environment of leadership.

Ethical Leadership

As it can be seen in the above picture, there are mainly five different principles that define a good and ethical leadership practice. The areas or principles are Respect for others, serves others, shows justice, manifests honesty, build community.

Respect Others

It is the basic duty of the leaders to respect the subordinate who works under them. A leader that is guided by ethical behavior should have an understanding of the importance and respect of the people that work for him or her. Not only the employee but they also understand and respect the needs and requirement of the customers who they serve. Hence, respecting others leads to better practice of ethical leadership.

Serves Others

The customers are the basic area of concern of an organization, therefore, the leader should also have the same urge or tendency to serve them. Apart from the consumers, the employees and the organization itself shall be the concern of the leader (Kabeyi, 2018). The leader must have the zeal in them to serve others and not themselves. This can create an ethical environment or ambiance within the organizational framework.

Shows Justice

Treating the subordinates that work under a team or the customers should be treated with justice and equality if one is required to set an ethical leadership ambiance. Treating everyone under the organization with the same respect, opportunity and equality makes a leader more of an ethical leader, similarly, serving justice to the consumers shall also be the concern of the leader of such kind.

Manifests Honesty

In an ethical leadership process manifestation of honesty is essential. The leader must have the ability to manifest or incorporate honesty within the organizational framework. A leader sets the organizational culture, the approach of the leader creates the pathway how the entire organization and the people within the same are likely to act (Ko,et al.2018). The leaders are, therefore, must manifest the idea of honesty in the operations and performance to ensure that honesty can be served and provided at every stage and every level of the organizational practice. Following the path of honesty will help out the leader to serve honesty and creating a socially responsible ethical and honest culture in the organization.

Build Community

Building up a community within the organization and the workers or the team members is essential. An ethical leader must ensure that the team that works under him or her work as a community or they work for the same goal and work together. The leaders that treat the employees equally and creates an honest environment can easily ensure that the employee also works as a community and not as individual performers (Engelbrecht,et al.,2017). Not only the employees but the leader must take the consumers and the other stakeholders as part of the community and work as a team or a community for the collective welfare of the organization they are working in. Hence, the objective of the ethical leadership approach is to build up a community that is equal, honest and works together for the betterment of the organization as a whole.

When a leader fails to maintain all the principles of the ethical leadership ideas and misuse the power or breach any of the mentioned areas in their leadership behavior and practice, that can be considered unethical leadership. With an ethical leadership style, the Corporate social responsibilities can be successfully achieved. Not only that it can also help in establishing an ethical business environment in the market and the long-term feasibility of the same can also be determined by the ethical leadership process or approach.

REFERENCES

Baker, B., Derfler-Rozin, R., Pitesa, M. and Johnson, M., 2019. Stock Market Responses to Unethical Behavior in Organizations: An Organizational Context Model. Organization Science, 30(2), pp.319-336.

Engelbrecht, A.S., Heine, G. and Mahembe, B., 2017. Integrity, ethical leadership, trust and work engagement. Leadership & Organization Development Journal.

Kabeyi, M.J., 2018. Ethical and unethical leadership issues, cases, and dilemmas with case studies. International Journal of Applied Research, 4(8), pp.373-379.

Ko, C., Ma, J., Bartnik, R., Haney, M.H. and Kang, M., 2018. Ethical leadership: An integrative review and future research agenda. Ethics & Behavior, 28(2), pp.104-132.

Laczniak, G.R. and Murphy, P.E., 2019. The role of normative marketing ethics. Journal of Business Research, 95, pp.401-407.

Rosen, I.M., Aurora, R.N., Kirsch, D.B., Carden, K.A., Malhotra, R.K., Ramar, K., Abbasi-Feinberg, F., Kristo, D.A., Martin, J.L., Olson, E.J. and Rosen, C.L., 2019. Chronic opioid therapy and sleep: an American Academy of sleep medicine position statement. Journal of Clinical Sleep Medicine, 15(11), pp.1671-1673.

Saloner, B., Levin, J., Chang, H.Y., Jones, C. and Alexander, G.C., 2018. Changes in buprenorphine-naloxone and opioid pain reliever prescriptions after the Affordable Care Act Medicaid expansion. JAMA network open, 1(4), pp.e181588-e181588.

the Guardian. 2021. Capitalism Gone Wrong: How Big Pharma Created America's Opioid Carnage. [online] Available at: [Accessed 2 January 2021].

the Guardian. 2021. Johnson & Johnson To Pay $572M For Fueling Oklahoma Opioid Crisis, Judge Rules. [online] Available at: [Accessed 2 January 2021].

Tutorialspoint.com. 2021. Engineering Ethics - Ethical Theories - Tutorialspoint. [online] Available at: [Accessed 2 January 2021].

Udoudom, M.D., Idagu, U.A. and Nwoye, L., 2018. Kantian and Utilitarian Ethics on Capital Punishment. Journal of Sustainable Society, 7(1), pp.5-11.

Zuraidahmuda.blogspot.com. 2021. ETHICAL LEADERSHIP. [online] Available at: [Accessed 2 January 2021].


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