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MGMT3016 Business Ethics

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  • Course Code: MGMT3016
  • University: Australian National University
  • Country: Australia

Question

Myron had just graduated from West Coast University with both chemistry–pharmacy and business degrees and was excited to work for Producto International (PI). He loved having the opportunity to discover medicinal products around the world. His wife, Quan, was also enthusiastic about her job as an import–export agent for a subsidiary of PI.

Producto International was the industry leader, with headquarters in Paris. Worldwide, hundreds of small  firms were competing with PI; however, only six had equivalent magnitude. These six had cornered 75 percent of world sales. So many interrelationships had developed that competition had become “managed.” However, this did not constitute any illegal form of monopolistic behavior as de ned by the European Union. Myron’s first assignment was in India and concerned exporting betel nuts to South and perhaps North America.

It is estimated that more than 20 million people chew betel nuts in India alone. The betel nut is one of the world’s most popular plants, and its leaf is used as a paper for rolling tobacco. The betel nut is also mashed or powdered with other ingredients and rolled up in a leaf and sold as candy. Myron quickly found that regular use of the betel nut, in time, stains the mouth, gums, and teeth a deep red, which in Asia is a positive quality. As Myron was learning more about the betel nut, he came across the following report from the People’s Republic of China: “Studies show that the chewing of the spiced betel nut can lead to oral cancer. According to research, 88 percent of China’s oral cancer patients are betel nut chewers. Also, people who chew betel nuts and smoke are 90 times more likely to develop oral cancer than nonusers.” Myron found that the betel nut primarily affects the central nervous system. It increases respiration while decreasing the workload on the heart (a mild high). Myron also found that demand for it was starting to emerge in the United States as well as in other developed countries.

While Myron was working on the betel nut, David, Myron’s boss, also wanted him to work on introducing khat (pronounced “cot”) into Asia. Khat is a natural stimulant from a plant grown in East Africa and southern Arabia. Fresh khat leaves, which typically are chewed like tobacco, produce a mild cocaine- or amphetamine-like euphoria. However, the effect is much less intense than that produced by either of those substances, with no reports of a rush sensation or paranoia, for example. Chewing khat produces a strong aroma and generates intense thirst. Casual users claim that khat lifts spirits, sharpens thinking, and, when its effects wear off, generates mild lapses into depression similar to those observed among cocaine users. The body appears to have a physical intolerance to khat due in part to limitations in how much can be ingested by chewing. As a result, reports suggest that there are no physical symptoms accompanying withdrawal. Advocates of khat use claim that it eases symptoms of diabetes, asthma, and disorders of the stomach and the intestinal tract. Opponents claim that khat damages health, suppresses appetite, and prevents sleep. In the United States, khat has been classified as a schedule IV substance by the Drug Enforcement Agency (DEA): freshly picked khat leaves (that is, within 48 hours of harvest) are classified as a schedule I narcotic, the most restrictive category used by the DEA.

After doing his research, Myron delivered his report to David and said, “I really think that, given the right marketing to some of the big pharmaceutical companies, we should have two huge revenue makers.” “That’s great, Myron, but the pharmaceutical market is only secondary to our primary market— the two billion consumers to whom we can introduce these products.” “What do you mean, David?” Myron asked. “I mean these products are grown legally around the world, and the countries that we are targeting have no restrictions on these substances,” David explained. “Why not tailor the delivery of the product by country? For example, we find out which flavors people want the betel nut in, in North and South America or the Middle East. The packaging will have to change by country as well as branding. Pricing strategies will need to be developed relative to our branding decisions, and of course quantity usages will have to be calculated. For example, single, multiple, and super value sizes need to be explored. The same can be done for khat. Because of your research and your business background, I’m putting you on the marketing team for both. Of course, this means that you’re going to have to be promoted and at least for a while live in Hong Kong. I know Quan will be excited. In fact, I told her the news this morning that she would be working on the same project in Hong Kong. Producto International tries to be sensitive to the dual-career family problems that can occur. Plus, you’ll be closer to relatives.

I told Quan that with living allowances and all of the other things that go with international placement, you two should almost triple your salaries! You don’t have to thank me, Myron. You’ve worked hard on these projects, and now you deserve to have some of the benefits.”

Myron went back to his office to think about his and Quan’s future. He had heard of another employee who had rejected a similar offer, and that person’s career had languished at PI. Eventually, that individual left the industry, never to be heard from again.

Question

  1. Identify the social responsibility issues in this scenario.
  2. Discuss the advantages and disadvantages of each decision that Myron could make.
  3. Discuss the issue of marketing products that are legal but have addictive properties associated with them.
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