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Business Ethics - GlaxoWellcome

Business ethics is an issue that enjoys increasing importance during the last decades. The advancing society has created a complicated market for organizations to operate in and succeed. The changing conditions have forced organizations to comply with regulations and societal pressures that demand their practices to demonstrate ethical basis and reasoning. As a result, ninety per cent of the companies on the Fortune 500 Index have introduced codes of conduct concerning ethical practices. (Havers: 1999).

However, there is a significant number of especially large corporations that have attracted media attention because of their involvement in unethical practices. Organisations such as Aventis CropScience, British American Tobacco plc, BP Amoco, Ford Motor Co, Bridgestone/Firestone Inc. Lockheed Martin Corp, Phillips Petroleum Co, Titan International Inc have been in the 'ten worst organisation for year 2000', not to mention previous years and other companies that have also been accused for misconduct (Mokhiber and Weissman: 2001). Paradoxically, the same organisations are proud for their implemented systems to monitor their codes of conduct and their involvement in community action.


In August 2000, Glaxo Wellcome threatened an Indian drug producer (Cipla) objecting to Cipla's distribution of a small amount of Anti-Aids drugs for which Glaxo Wellcome claims that holds their patent rights. As a result, in November 2000, Cipla announced it would stop exporting the particular medicine, even though it contested Glaxo's patent claims (Mokhiber and Weissman: 2001). Furthermore, the South-African government faced on court the drug industry (including Glaxo Wellcome) for importing generic medicine as its local legislation allowed to do so.

The issue is that Glaxo Wellcome should have foreseen the result of such a movement for the following reason. When the patent rules were made, some safeguards were included. Countries could cite a national emergency as a reason to infringe the agreement. I do not think that there are many situations, including a vast majority of people infected by a deadly decease, that could be called emergency situations (Elliot: 2001). Also, Cipla offered to pay a royalty of five per cent of sales to the five drug companies, including Glaxo Wellcome, a move that met no serious response. (www.hindubusinessline.com/2001/04/03/stones/12035jg.htm).

The main stakeholders are as follows:

Adam Smith's famous statement that "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest is a statement is greatly favoured by shareholders". Therefore, in this case scenario, shareholders and potential funding sources would be more confident on their choice as long as a considerable return on investment was achieved.



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Approximate Word count = 3188
Approximate Pages = 13 (250 words per page double spaced)


  

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