Business: Bayer Business Ethics, Case Study Example

There are many different definitions of operations management. One is design, operation, and improvement of the systems that create and deliver an operations products and services. It may also regard the transformation of raw material and labor into finished goods and products fit for public consumption.  Basically, it’s a targeted attempt to consistently manage and improve operation within an organization to meet consumer needs. This is the basic tenet a firm must use to build a solid reputation and have enough solvency to compete in any given marketplace.

In the aftermath of the terrorist scare in 2001, Bayer had to make many ethical decisions pertaining to their supply chain during this crisis. This was a situation where it behooved the Bayer firm to temporarily give up their quest for profitability in the interest of the public. Operations management within the pharmaceutical industry have to decide which scenarios are most critical and each and every capacity constraint they may encounter to be certain their products are available in accordance with consumer demands. Also, moral considerations are paramount during critical times if people are suffering or dying because of a shortage.

I believe they followed their credo and made an attempt not to exploit Cipro as their product, although it was in such high demand. They could have easily capitalized on the anthrax scare but chose not to until other companies became a financial threat by producing generic forms of the product. By the same token, Bayer should have been more forthcoming about information pertaining to Cipro production during the global anthrax crisis. It is because of their tight lipped method in dealing with questions from the United States and Canada, they even had their patent revoked in the first place.

The Health and Human Services Bureau had every right to intervene if they felt that the price for Cipro was too prohibitive for the general public. Plenty of drug companies will manufacture huge quantities using similar resources and equipment of that of the original patent holder. Operations managers of multiple pharmaceutical companies must keep a production schedule on an equal par with the needs of the public. It is only fair that companies outside of the provider of the patent, are able to produce large quantities during public crisis. If a drug shortage occurs, ethical decisions have to be made in regards to the supply chain management. The ethics only come into question when it regards the limited production of one drug in order to increase production of another.

The main ethical problem that many pharmaceutical companies, including Bayer, face, is the production of certain drugs known as “orphan drugs,” or those that are seldom used by the general public. Sales are usually low because only a small percentage of the overall population need to use them. Even though they help these few people, any business model would dictate a decrease or cease in production because they are not profitable for the company. In the case of Bayer’s Cipro, the public was scared and they were stockpiling the drug. Even though they had clear warnings not to use the drug without medical supervision, this crisis was unknown to us at the time. An International Code of Ethics would have been beneficial during the anthrax scare. Even if it was not specifically spelled out as this, any global crisis reaching the scale it did in 2001, should require a code for which every pharmaceutical company and individual must follow.

As The Pendulum Swings

The proverbial pendulum swing is one that is derived from a series of causes; law, ethics and politics are all intertwined with one another and no single catalyst is responsible for that pendulum movement. The recent recession of the previous 5 years cannot be ascertained by blaming only one facet of business operations. They all work together, however, I will attempt to break down each as succinctly as possible.

Ethical business practices are expected in our society, therefore there must always be laws. Society is not only a compilation of human beings, it is a composite of all governing bodies. All businesses serve society in some way, shape or form and this creates interaction with other people. Just like individuals, businesses are bestowed a set of responsibilities and privileges within a society. These are recognized within the society and through behaviors voluntary to humans and businesses, we are guided by ethics. However, when a person or persons within this realm are not guided by ethics, forces of authority must intervene and this constitutes our laws.

The case for politics molds easily into the cause of the pendulum to swing. Politicians represent citizens of a society. They are supposed to represent a certain constituency or group of people and their only agenda is to serve these people. A capable politician is one who unconditionally serves a class of people at the highest level, understands what people want and what they need, stands up for their rights and can empathize with their constituents.

Unfortunately, there are daily media outlets reporting on greedy, self-serving individuals within the business and political realms. It is for this reason that law should be the primary catalyst for the pendulum to swing. It is impossible to expect that every politician and every business will function under a code of ethics that benefit all of society; there will always be those who abuse the power given to them. Therefore, law must be the primary component to keep order within society.

The home mortgage crisis, as well as the banking crisis, originated almost 6 years ago within the most affluent country on earth. Most any catastrophe that occurs within United States borders will have a detrimental effect on other economies throughout the world. As one of the world super powers, we do have an ethical responsibility to fix this mess we created. Many regions on earth simply do not have the resources the U.S. has, and it is our duty to help others in need.

The root cause of this crisis was the sub-prime lending market, coupled with sheer Wall Street greed. We are a capitalist society, but this crisis is a symptom of this mindset. Many predatory lenders took advantage of the notion of the “American Dream” of home ownership, causing many buyers to be over-extended and eventually lost their homes. They forced borrowers to pay excessive loan origination and settlement fees, as well as many other outlandish service fees. Most borrowers end up defaulting on mortgage payments, forced to refinance or incur foreclosure. This where law must prevail. Sadly, there was the government bailout which was necessary in order for our entire economy to avoid total collapse. Many saw banks and insurance companies as too big to fail, and they were recompensed for their subprime lending practices. Many banks and lending institutions have tightened their guidelines for extending credit. However, the FBI does continue to investigate and prosecute any cases of mortgage fraud or predatory lending as it sees fit.