Assignment 1 – Management Ethics Case Study

About this Assignment Whether they realize it or not, managers make many decisions every day that can directly or indirectly impact their customers, employees, stakeholders, shareholders, and the company\’s reputation. When making these decisions, managers need to be aware of the legal and ethical implications their decisions may have on others. Some decisions have an obvious impact, such as bribing a government official to secure a contract or falsifying financial documents to make the company appear to be more profitable to shareholders. Other decisions are less obvious, such as hiring one person over another simply based on a \’gut feeling\’ or ignoring a problem on the team in the hopes that it will work itself out. For this assignment, you will examine a real-life ethical dilemma managers have faced in the past. Please write a 1,500 to 2,000-word paper that addresses one of the following dilemmas. In 2012, Dan Cathy, the president and COO of fast-food chain Chick-fil-A, made public statements about his personal beliefs on marriage, which brought attention to the company\’s support and funding of many groups that opposed same-sex marriage. Examine the chain of events kicked off by Cathy\’s statement, the repercussions for Chick-fil-A, and their response to the controversy. Since acquiring the rights to distribute the drug in 2007, pharmaceutical company Mylan has increased the price for EpiPens by approximately 400%. This has increased profits and performance for the company, but has also sparked immense backlash and accusations of price gouging. Examine Mylan\’s decision to increase the price of the drug so drastically and the consequences of that decision. For each situation, please address the following: Discuss the decision-making process employed by management to address the ethical dilemma, if it was in fact addressed. Show how management decisions impacted employees, leaders, stakeholders, and shareholders of the organization Explain the public relations and media strategy the organization used to address the ethical dilemma. Using Sources You may refer to the course material for supporting evidence, but you must also use at least three resources and cite them using APA format. Please include a mix of both primary and secondary sources, with at least one source from a scholarly peer-reviewed journal. If you use any Study.com lessons as sources, please also cite them in APA format, including the lesson title and instructor\’s name. Primary sources are first-hand accounts such as interviews, advertisements, speeches, company documents, statements, and press releases published by the company in question. Secondary sources come from peer-reviewed scholarly journals, such as the Journal of Management Ethics, the Journal of Management Studies, or the Harvard Business Review. You may use sources like JSTOR, Google Scholar, and EBSCO to find articles from these journals. Secondary sources may also come from reputable websites with .gov, .edu, or .org in the domain. (Wikipedia is not a reputable source, though the sources listed in Wikipedia articles may be acceptable.) Assignment 1 – Management Ethics Case Study.

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Management Ethics: Assignment 1 – Management Ethics Case Study

Chick-fil-A

It is unusual for a leader of a huge business to step into a national debate that can easily offend its customers. However, Dan Cathy the president of renowned fast food chain Chick-fil-A did that in 2012 and condemned those who contravened the biblical perspective of marriages (Kim & Reid, 2017). Despite attracting a backlash, admitted to be as guilty as charged and highlighted of his support to the family unit and more so the biblical definition of the unit. Although the company experienced fierce and immediate reactions, with celebrities vowing to boycott it, Dan remained unshaken and stood his feet regarding his view on same sex marriages.

The approach used in decision making by this company was a value-based leadership. The values and ethics of the company are widely known.  However, in the present progressive society, it is difficult to run and sustain a business while upholding conservative values.  For an organization to accommodate all the stakeholders, it is limiting to use a conservative approach (Kim & Reid, 2017).  This is because, as a conservative company grows exponentially, they are faced by the problem of having to please and accommodate a broad range of stakeholders with varying values.  Hus, causing the Chick-Fil –A become a controversial company in the past years with people questioning its ethical decisions concerning gay rights.

It is important to note that the company is family owned and for more than forty years, it grew in sales and innovation as well as new products. One of their innovations has been their approach to the venues where the food is served (Kim & Reid, 2017). Essentially, they have different locations such as mall restaurants, drive-thru, and stand –alone restaurants. They have managed to successfully differentiate themselves as a way to remain ahead of their competitors. Assignment 1 – Management Ethics Case Study.  One way the management differentiates itself is through their robust commitment to community service.  The company has over the years served its customers, communities as well as team members (Kim & Reid, 2017).  Similarly, their website highlights their commitment to serve every person with dignity, respect and honor. The company has instilled these values and mentality on its employees and is always expected to uphold these standards in their career.  They enforce positive treatment of all the stakeholders in spite of how long they have served at the company. Also, the company has a foundation that promotes education and youth development.

Dan Cathy has biblical and specific values concerning family values in the organization which were the same values held by his father. Dan’s committed to these values led to the conflicting responses after he declared his stance regarding gay marriages (Kim & Reid, 2017).  Nonetheless, he understood that not all of his stakeholders would support his leadership style but was grateful of his ability to operate on the way he thought best.

Dan Cathy’s situation can be analyzed through the lens of consequentialism which states that whether an act is ethically right, it depends on its implications as opposed to the intrinsic nature of the act.  The form of consequentialism that strongly relates to Dan Cathy’s issue is the utilitarism which demands for the largest amount of utility according to John Stuart Mills (Vaidyanathan, 2020). Essentially, the concept highlights that the best way to respond to an ethical problem is to consider that which offers the greatest good for the greatest number. Where utility is defined as pleasure or the absence of pain.  The two sides of the case at hand are: Cathy’s statement limited the number of stakeholders since it discriminated about 55% of the United States population who are in support of gay marriage. However, his stance, choice and statement do not translate to Cathy not valuing every stakeholder who has an interest in the company.

The people who supported felt targeted by Cathy’s statement and felt unwelcome at the restaurants. Further, some people felt uncomfortable giving business to a company that did not support or value gay marriage (Vaidyanathan, 2020). While before, the controversy the company donated funds to organizations that were against gay marriages, post the controversy, the company did not donate any funds thus indicating that Cathy had made a poor business decision and did not desire to upset many people. Obviously, using the utilitarian lens, his decisions did not bring the greatest amount of good to many people. Assignment 1 – Management Ethics Case Study.

The second side of the ethical issue is that it is upon the listener or the reader of any information to judge its authenticity. However, Cathy makes statements where he acknowledges his stakeholders to be equal.  He stated, the company appreciates everyone and all were welcome to the various restaurants.  On this, he does not convey any signs of discriminatory attitude (Slaughter, 2020). Although he has a personal opinion regarding gay marriages, it does not affect how the company will treat those who are in support of the same. The fact that Cathy stopped giving donations to anti-gay organizations is a clear indication of his willingness to change.  The change was required as he realized there was need to create more greatness for stakeholders that in 2012 after he had expressed his opinion on gay marriage.

Mylan Pharmaceutical Company

Mylan has monopoly on the Epipens after their competitor’s problem of dosage competitors.  There is cost trickery in the delivery system.  The drug has been around since 1977 and it used to cost $57 but by 2007, patients had to pay 400% more to acquire the lifesaving drug (Hughes, 2020). Sadly, the market has to bear with this problem thus causing patients to have limited access to Epipens due to the costs and this could lead to death. According to research, Mylan made about $1.2 billion in profits (Hughes, 2020)..

The company tried to save face by offering a free school program where students accessed the pens for free.  Therefore, the uninsured patients have the choice of applying to receive Epipens for free through the program offered by the company (Hughes, 2020).. However, those who are insured and tend to have high deductibles fall between two categories. One, most of them cannot afford white glove that will offer full coverage. Therefore, they are forced to buy what is regarded as high deductible plans during emergencies and as a result tend to spend from their pockets for the Epipens.

The customers who used to use the Epipens voiced their concerns regarding the affordability of the drug for those with severe allergic reactions (Hughes, 2020).. As a result, an investigation was launched by the congress due to the price hike. The CEO defended the increase in prices by stating it was justified since the product had gone through some major improvement. She highlight that new version of the drug was more ergonomic and had a lower chance of causing an injury on the patient (Hughes, 2020).. Assignment 1 – Management Ethics Case Study.  Further, they opted to offer coupons for some patients as a way of responding to the ethical issues that were raised.  Moreover, the company introduced a generic version of the drug which half the cost of the branded one.

The leadership strategy they used was to extend the public awareness of the importance of the Epipens and offered free pens to schools. Further, hey offered special discounts to schools in New York that purchased the pens in bulk as long these schools did not purchase competing products (Hughes, 2020).  However, his response provoked an antitrust investigation from the Attorney General.  However, Mylan blamed the insurance plans for causing an increase in price. However, many people stated that Mylanhad failed to remain transparent in their drug pricing.  According to a Journalist named Olga Khazan, many employers are slowly moving to higher-deductible plans since they are reacting to increased insurance costs which keep rising as a result of companies like Mylan (Lively, 2020). The costs are ridiculous considering the pens expire eighteen months after manufacturing and many patients require using more than one in a cycle or requiring serval Epipens in various locations for ease of access.

The customers concern is, they spend a lot of money on product that they many never need but they do not have a choice since they have to eat and sometimes may get allergic reactions from food consumed from restaurants unknowingly (Lively, 2020). Sadly, the company did not admit any wrongdoing and instead of reducing the prices, they reclassified the Epipens as a branded instead of generic and they paid the rebates to Medicaid program.

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References

Hughes, R. C. (2020). Pricing Medicine Fairly. Philosophy of Management, 19, 369-385. Assignment 1 – Management Ethics Case Study.

Kim, K., Kim, J., & Reid, L. N. (2017). Experiencing motivational conflict on social media in a crisis situation: The case of the Chick-fil-A same-sex marriage controversy. Computers in Human Behavior, 71, 32-41.

Lively, C. (2020). The Dual Role of the Medical Device Representative: Supporting the Surgeon and Selling the Product, Which Role Takes Priority?. Voices in Bioethics, 6.

Slaughter, J. P. The Virginia Company to Chick-fil-A: Christian Business in America, 1600–2000. Seattle University Law Review, 44(2), 421.

Vaidyanathan, B. (2020). Spirituality, Corporate Culture, and American Business: The Neoliberal Ethic and the Spirit of Global Capital. By James Dennis LoRusso.

Assignment 1 – Management Ethics Case Study