Question

The company has developed a new weight-loss drug that is available only with a doctor’s prescription.The drug has some significant side effects, but is quite effective for helping people lose weight. Because of the side effects, the drug is intended only for persons who are severely overweight. The company advertises the drug to the public, emphasizing the happiness and beauty that can result when one is slender. All of the advertisements state at the end “Available only by prescription.” Large numbers of people contact their doctors for the drug. The company makes a huge profit from the drug. However, many doctors over prescribe the drug and people who have suffered from the side effects begin suing their doctors and the company.

Analyze and evaluate whether the company is acting in a socially responsible manner based on each of the following theories:

(a) maximizing profits,

(b) moral minimum and

(c) stakeholder interest.

Discuss each theory give me couple examples! thank you!

Answer 1

a) Maximizing Profits : As per this,company is intended to maximize its profits year after year. In order to attain this, company can try any measures to maximixe its sales revenue and reduce its operating costs. As per the case, company has developed a useful product, advertising aggressively and trying all the measures in order to reach to the target customers and thus maximising its sales revnue and ultimately profits. Thus company is acting in a socially responsible manner.

2) Stakeholder Interest

Stakeholder comprises of people directly or indirectly involved with the company. As per the stakeholder interest, company is not behaving in a responsible manner.

It should be the responsibility of the company to launch aproduct, which doesnt harm the common public, customers, employees and suppliers. Company has developed adrug which is harming the consumers and is showing side effects. Company should have mentioned the side effects on the packaging itself about the usage of the drug. Thus the company is not behaving in a socially responsible manner towards the stakeholders

3) Moral Minimum

Company should be moral enough, not to harm the society and behave in a socially responsible manner. Here company has developed a product for the severely overweight people and state at the end of the advertisement that the "drug is available only by prescription.' Thus it is behaving in a socially responsible manner.