Consequences of ethical decision-making
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The Price of Doing Good: Consequences of Ethical Decision Making.
Consider the following two scenarios:
Scenario 1:
James works in the accounting department of a large firm. While going over the books for the past
several months, James notices that someone has altered the figures to increase earnings by several
thousands of dollars. He suspects that the errors, which are in the company�s favor, are too
consistent to have been honest mistakes. He knows that he should report his findings through the
company�s ethics hotline. However, he worries that doing so will jeopardize his security and
reputation with the company.
Scenario 2:
Mary owns a small toy manufacturing company. One of her employees has noticed that one of the
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CONSEQUENCES OF ETHICAL DECISION MAKING
pieces on the most popular toy can detach from the toy. This could pose a potential choking hazard to
young children who play with the toy. No customers have yet reported problems with the toy. Mary
wonders if she should report the potential hazard before anyone gets hurt. However, the recall would
cost her company money and result in loss of sales during the busy Christmas season.
As the scenarios illustrate, making ethical decisions often requires a trade-off for an organization or
individual. After a scandal results from ethical wrongdoing, the proper course of action seems clear.
Even so, organizations continue to struggle with making ethical decisions on a day-to-day basis as
they weigh the cost of making such decisions.
Consequences of ethical decision-making
A major responsibility of leaders in business organizations is to act in an ethical way,
promote ethics in the company, and make decisions that are ethical. Ethical decisions are
essentially understood as decisions, which are in agreement with one’s individual or
organizational value system (Salvador & Folger, 2009). In this essay, the purpose is to
provide a description of an ethical decision making in a firm whose leaders acted in an ethical
manner when they faced an ethical dilemma. The analysis includes an explanation of the
ethical framework that the organization applied to make its decision, as well as an
investigation of both the positive and negative consequences of the decision and the tradeoffs
that the company’s leadership made. A leader should be mindful of the messages that he/she
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CONSEQUENCES OF ETHICAL DECISION MAKING
is sending when making decisions. Ethical business practices basically include observing the
highest moral and legal standards in one’s relationships with the entities in the organization’s
business community, most importantly the customer of the business. It is notable that short-
term profit for the organization at the cost of losing clients is certainly long-term death for the
company (Brenkert, 2010).
The selected company is Lundbeck Inc., which is a pharmaceutical firm based in
Denmark and is the only manufacturer of pentobarbital drugs for sale in the United States. In
the year 2011, the company faced an ethical dilemma regarding the usage of its medications
in capital punishments. Pentobarbital medicines are progressively more being utilized in the
United States in place of sodium thiopental for fatal injections (Brockway, 2012). The drug
was most recently utilized in capital punishments in Mississippi, South Carolina and Texas.
According to Lundbeck’s spokesman, Andrew Schroll, the corporation has prided itself in
manufacturing drugs that improve the lives of people. The company is officially opposed to
capital punishment and disagrees with the way the drug is being utilized.
Andrew Schroll stated that how the medication is being used constitutes wrong usage
of Lundbeck’s product. He added that Lundbeck is in an ethical dilemma whereby it is
opposed to the usage of its products for the death penalty whilst at the same time the
organization’s leaders want to ensure that patients who benefit from Lundbeck’s medicines
get access to it (Death Penalty Information Center, 2014). The company’s top management
sent letters to the penitentiaries in 11 states insisting that they should discontinue utilizing
pentobarbital in their lethal injection protocols. Nonetheless, none of these penitentiaries
responded. In fact, even more states have shown intentions of using the medication, and this
includes Virginia. Pentobarbital is also utilized in treating seizures in human beings as well as
in euthanasia and anesthesia of animals. Lundbeck is the only manufacturer of this drug for
purchase in the United States. Accordingly, a lot of physicians have written to Lundbeck
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CONSEQUENCES OF ETHICAL DECISION MAKING
asking the company’s leaders not to suspend distribution of the medication (Death Penalty
Information Center, 2014).
The company’s top management found itself in this precarious situation primarily as a
result of a deficiency of sodium thiopental, the anesthetic that for long had been used as an
ingredient in lethal injections in 35 of the 36 states that still apply capital punishment.
Denmark and all other members of the European Union have abolished the death penalty. In
essence, Lundbeck does not want to be involved in the execution business; however, it also
does not want to lose its lucrative American pentobarbital market, which is crucial to the
company’s revenue and profitability (Buhmann, 2012). Lundbeck’s top management acted
ethically in this ethical dilemma by attempting to take some action since it called on the
prisons to stop using its product in executions given that such behavior would be against the
company’s mission of providing the world with life saving technologies. Ethics in business
consists of actions of people within a company, and the company’s positions and actions on
ethical matters (Death Penalty Information Center, 2014).
Lundbeck’s leaders are clear that the firm’s products should be utilized for healing
and not for killing. There are several positive and negative consequences of Lundbeck’s
decision to prevent the use of its pentobarbital drugs in capital punishments. The positive
consequence is as follows: first, the company will prevent its major investors including
Denmark’s largest pension investor, ATP, from unloading shares worth millions of Euros. If
the company were committed to preventing the use of its products for executions in the
United States, its reputation especially as viewed by investors would improve considerably.
In turn, this would result in good, positive relations with the Lundbeck’s investors. It is
noteworthy that an organization’s reputation is basically one of its most important assets.
Business ethics creates goodwill within the market given that an organization that is famous
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CONSEQUENCES OF ETHICAL DECISION MAKING
for its ethical practices will create goodwill for itself within the marketplace (Salvador &
Folger, 2009).
The negative consequence of the decision to prevent the use of the product to carryout
executions in the United States is that the move would result in reduced sales and revenue,
and more importantly reduced profitability. This is as a result of the fact that the prisons in
the United States are a major customer-base which is crucial to the company’s bottom line.
Business or organizational ethics is vital given that it influences and contributes to an
organization’s performance, revenue and profit; image and reputation; and the ability to build
relationships with the company’s investors. In addition, it influences and contributes to
customer satisfaction; legal problems and penalties; investor and customer loyalty and
confidence; as well as employee commitment (Brenkert, 2010).
Given that Lundbeck’s leaders acted ethically, the company’s long-term profitability
is assured. It is of note that businesses that follow certain organizational ethics have better
probabilities of survival relative to the companies whose sole goal is profit making, though
they have to compromise on many things for that (Buhmann, 2012). Business ethics is
important to organizations since ethical companies have the tendency of making much more
profits relative to other companies. This is owing to the fact that customers of ethical
organizations are loyal and contented with the product/service offerings of such organizations
(Brockway, 2012). Moreover, organizational ethics helps to ensure efficient utilization of
business resources since employees will emulate the company’s ethical leaders and follow
ethical business practices. As such, employees will also desist from misusing company
resources or property.
Conclusion
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CONSEQUENCES OF ETHICAL DECISION MAKING
In conclusion, the selected firm whose leaders acted in an ethical manner is Lundbeck
Inc., a pharmaceutical firm based in Denmark and is the only manufacturer of pentobarbital
drugs for purchase in the United States. The company faced an ethical dilemma regarding the
usage of its medications in capital punishments. Lundbeck does not want to be involved in
the execution business, but at the same time, it does not want to lose its profitable American
pentobarbital market which is crucial to the company’s revenue and profitability. Lundbeck’s
leaders acted ethically in this ethical dilemma by trying to stop the usage of its products for
the death penalty; the company’s leaders maintain that Lundbeck makes drugs to heal and not
to kill.
References
Brenkert, G. G. (2010). The Limits and Prospects of Business Ethics. Business Ethics
Quarterly, 20(4), 703-709.
Brockway, J. (2012). Danish Drug-Maker’s Death Penalty Dilemma. Crescent City, CA:
CRC Press.
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Buhmann, K. (2012). Damned If You Do, Damned If You Don’t? The Lundbeck Case.
National Center for Biotechnology Information.
Death Penalty Information Center. (2014). Sole Provider of New Drug for U.S. Executions
Faces Ethical Dilemma.
