Ethics Case Study
Evaluating life-saving opportunities from an entrepreneurial or economic lens could present ethical issues. When presented with life and death situations, is it ethical for people or companies to maximize profit at the expense of those desperate to live? This case study examines two life and death scenarios in which a life-saving product is sold at a high cost. Through the application of Utilitarianism and Deontological theory, and further analysis of each scenario, an ethicist could argue that both cases demonstrated ethical decision-making.
Issue
In the first scenario, a cabin owner has the resources to provide assistance to hikers in desperate need of heat, food, clothing, etc. The cabin owner is willing to provide this assistance but only at a significant cost to the hikers from which he earns a large profit. In scenario # 2, a pharmaceutical company has developed a significantly better treatment to Malaria. Despite the initial high cost to research and develop the treatment, the pharmaceutical company is able to produce the treatment at a very low cost, yet charges patients a large sum for the treatment.
In both cases, assuming those in need of the life-saving products want to keep living, they will be more desperate to obtain the life-saving product than other potential consumers not in a life-threatening situation. Those in need are more likely to prioritize purchasing the life-saving product over any other products sold by other companies or persons and thus spend the money. The moral dilemma stems from the cost of the life-saving product and whether those in need are exploited by the owners of said product.
All people must work to make a living. Businesses must produce products to generate revenue to employ people. Therefore, products all over the world are sold at a profit to cover production costs and generate additional revenue. The ethical issues in both scenarios is the same. Is a company or owner that sells a life-saving product obligated to give-away said product or sell at a much lower cost as compared to other companies and products on the market, or should they act similar to other businesses and competitors taking advantage of the supply and demand and aiming to generate profit?
Stakeholders
In both cases, the first set of major stakeholders significantly affected by the ethical decision, are the “owners” of the life-saving product, or the cabin owner and the pharmaceutical company. The second set of major stakeholders are those most in need of the life-saving product, or the hikers seeking refuge and the malaria patients in need of medicine. Minor stakeholders are also affected by the ethical decision but not to the same degree as the major stakeholders and in a more indirect capacity. In this case study, the minor stakeholders could be the pharmaceutical market competitors, the families of both the malaria patients and hikers, and potentially future malaria patients.
Theory
This case study will analyze both issues using the Utilitarianism and Deontological theory to determine whether the actions of the major stakeholders were ethical or unethical.
Utilitarianism seeks to maximize the overall happiness for all those affected by the action or decision. Utilitarianism can be broken into two related theories: act-utilitarianism and rule-utilitarianism. Act-utilitarianism stipulates that “the morally right act is the one that produces at least as much overall happiness in the circumstances as any alternative act,” (Rowan & Ziniach, 2003, p. 14). Rule-utilitarianism is like act-utilitarianism in seeking overall maximum happiness in the current circumstance, however, rule-utilitarianism examines the long-term consequences of the act that could be generated in relatively similar situations,” (Rowan & Ziniach, 2003, p. 19). In rule-utilitarianism, an ethical action would conform to a rule which when followed, produces at least as much happiness over the long run as any alternative rule. In other words, basic utilitarianism calls for the action resulting in the greatest good for the greatest number of people. Depending on the circumstance, potential consequences and the length of time considered, a utilitarianist might apply the act-utilitarian theory or the rule-utilitarian theory to determine ethicality.
Deontological theory states that “a person is morally good if he acts from a morally good intention, and an intention is morally good if the motive is duty itself, meaning respect for the moral law” (Rowan & Zinaich, 2003, p. 23). This begs the question “what is moral?” Deontologists determine what’s right, or moral, on broad, abstract universal ethical principles or values such as honesty, fairness, loyalty, justice, compassion and respect for human beings (Trevino & Nelson, 2013). Some actions that result in positive consequences are not always ethical in the eyes of a deontologist if the motive did not originate from a moral law. In other words, according to deontological theory, if the intent of the action or decision was morally sound based on universal ethical principles, the action or decision can be considered ethical, regardless of the resulting consequences.
Analysis
Using the act-utilitarian theory, an ethicist would examine alternative actions and all potential outcomes to determine the action that maximizes overall happiness for the most people. In the case of the cabin and hikers, the hikers could either use the cabin for a high fee or decline. If the hikers decline to use the cabin, and with no alternative options for refuge, they would likely perish, result in unhappiness for the hikers, their families, and potentially the cabin owner. If the hikers accept the offer, even if at a high cost, the result is the maximum happiness for the most people overall. The cabin owner has deeper pockets, the hikers are alive and well. Thus, ethicists would argue in favor of ethicality in accordance with act-utilitarianism.
The pharmaceutical company had resources to create a drug that treats Malaria patients and is better than any other treatment on the market. The company can either continue to sell the product or remove it from market. If the product is removed, malaria patients do not have the option to seek treatment and face the possibility of death. The company does not perform as well or gain the revenues that would advance additional research and products over the long-term and competitors could develop alternatives at a higher cost. This results in no happiness for all stakeholders in this case except for market competitors. If the product stays on the shelves, Malaria patients can seek treatment and continue living, albeit at a high cost. The pharmaceutical company continues generating profits to pay employees and pursue additional research and medicine. Maximum overall happiness is achieved over the long term through continuing to sell the treatment. Based on the theory of rule-utilitarianism, as ethicist would argue that the pharmaceutical company is acting ethically.
Using the Deontology theory, an ethicist would argue that while the owner(s) of a life-saving product are turning a profit, whether the actions are ethical depend on the intention. For example, the cabin owner charges the desperate climbers a high fee for his life-saving hospitality. This situation, though not ideal for the hikers was born out of the cabin owner’s intrinsic desire to assist the climbers. The pharmaceutical company charges a high price for the malaria drug; however, the Pharmaceutical Company’s ultimate intention was to create a more effective life-saving treatment for malaria patients. The price does not factor into either scenario when external factors, such as the cost to create the product and supply and demand of economic market, are removed. “According to some deontological approaches, certain moral principles are binding, regardless of the consequences,” (Trevino & Nelson, 2013, p. 42). Because the deontology theory requires an examination of whether the intention behind the action or decision was morally good, an ethicist using this theory would argue the cabin owner and the pharmaceutical company both acted in an ethical manner.
Conclusion
Upon analyzing both utilitarianism and deontological theories, it is clear that ethical decision-making was demonstrated in both scenarios. The ethical issue of whether life-saving products can be sold at high cost in the same manner as market competitors, despite the desperation of consumers was examined. According to utilitarianism, both scenarios were determined ethical because the life-saving products maximized overall happiness for the most people. In applying deontology theory, both scenarios proved ethical because the overall intention of the cabin owner and the pharmaceutical company stemmed from moral goodness, despite potential consequences.
References
Rowan, J. R,. & Zinaich, S . (2003). Ethics for the Professions. Belmont, CA. Wadsworth/Thompson Learning.
Trevino, L.K., & Nelson, K.A.. (2013). Managing Business Ethics: Straight Talk About How to Do It Right (6th ed.). Hoboken, NJ: John-Wilely & Sons.