Question

An ethical issue is one with an identifiable problem, situation or opportunity requiring an individual or organization to choose from among several actions that must be evaluated in terms of right and wrong. Ethics is therefore the study of right and wrong. You are asked therefore to consider the following scenario.

South Africa has one the highest AIDS population in the world and the great majority of the South African population is unable to pay for the viral drugs to combat the AIDS virus and the Government resources are stretched to the limit and they are unable to pay for drugs to make it available to the poor people of South Africa where the highest percent of the AIDS population exist.

In South Africa there is a company that manufactures the drugs to combat the AIDS virus. This company is a public company and raises its funds from shareholders who invest their money and is seeking a return on their investment. The company has had the experience in the past on one occasion where it did not perform well and their shareholders did not get a good return on investment causing many investors threatening to pull their investments, which would in turn cause the company to experience heavy financial losses and perhaps threaten its very existence.

The South African government has approached the South African company that manufacturers the drugs requesting that they sell the drugs below cost as well as donate some of the drugs to those who cannot afford the viral drugs because they are poor (which is by far the greater portion of the AIDS population). Without these drugs those people are almost guaranteed death.

The company has turned down the request of the South African government.

you are to present arguments supporting the position of the company.

Answer 1

This condition in South Africa is critical and implementation of a a strong structure of drugs is required. As the company operating in the respective environment and producing these drugs, providing subsidy or any other specific benefit to the the specific location is very hard.

Argument supporting the position of the company are as follows

Company is already operating in laws and implementing its ervices in South Africa by providing drugs in the respective markets. If the company reduces the prices of their drugs below the cost of manufacturing Then there would be a very negative effect on the overall profit generated by the organisation and it would lead the organisation to bankruptcy. As the organisation is a for profit organisation that is directly creating revenues by selling drugs in the respective environment, implementation of such a specific suggestion given by the government would not be appropriate.
Alternatively, company should implement a structure of volunteerism as well as providing medicines to the the poor people at a specific subsidy which is held by the government in the respective environment would be appropriate. As government is the entity that is consistently receiving the taxes and work for the betterment of the people, providing subsidy is an essential task for the government in the respective environment as it would increase the overall adaptability of the government to provide adequate level of support and to increase the overall effectiveness of the company in African environment. Hence providing medicine below cost would not be appropriate as it would badly affect the overall business structure of a company and create a huge problem in maintaining financials.