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Drug tests in India

Seminararbeit 2012 16 Seiten

BWL - Sonstiges


Table of contents

1 Moral standards, norms and ethical concepts

2 Economic ethics concepts

3 RADAR concept

4 Cultural iceberg and India’s business etiquettes

5 Culture concepts

6 Preparation for meeting

II Bibliography

1 Moral standards, norms and ethical concepts

Is it right or wrong? Ethics deals with many questions and plays a key role in the decision making process in businesses. Moral standards or norms in compa­nies, for example codes of conduct, help to serve as guidelines in a professional environment.[1] Furthermore there are global standards by organizations, such as the UN Global compact.

In the particular case of "Drug test in India”, one essential standard to be ques­tioned is the respect of human rights. In the UN Global compact it says: “Busi­ness should support and respect the protection of internationally proclaimed human rights” and “Business should make sure that they are not complicit in human rights abuses”.[2] Testing vaccine with known side effects on human vio­lates this standard.

Another two codes that apply to this case are part of the Global Business Standards Codex, the dignity and transparency principle. The dignity principle includes respecting the human rights like mentioned above but also protecting confidential information of the test person. Furthermore there should be no dis­crimination but equality for everyone and taking part in this test has to be volun­tarily and not by bribery or blackmail. CRE Ltd. should also be sure to have a professional and trained staff and provide a sterilized and save environment for the testing. Regarding the transparency principle, communication is important. CRE Ltd. as the company responsible for the studies has to explain and provide the test persons with all information regarding the test, starting with the process of the testing to possible side effects. Nothing should be omitted and truthful­ness towards the participants is demanded. Hereby deception will be avoided and participants will be clear about the whole process.[3] In case someone doesn’t qualify for the study, CRE Ltd. should be honest and not go through with the test for profit reasons.

These moral standards can be evaluated from various perspectives. Teleologi­cal theories are based on consequences and derive the "correct” action from it. Utilitarianism as a form of consequentialism defines "right” as an action that maximizes utility for the majority. The deontological approach contrary does not take the consequences into account but focuses on duties or rules.[4] Applying this to the case "Drug tests in India”, a utilitarian would carry out the tests after a cost-benefit analysis. His arguments would be that even though the participants will show side effects (in 20% for vaccine against leprosy and 0.1% for vaccine against tick-borne encephalitis) they can be cured and the research results in curing many people and thus have more benefit for the society than when not during the tests. A deontologist believes that doing the studies infringes on the participants individual rights. Even though utility is maximized, the deontologist would inform about the side effects and in result loose participants, not be al­lowed to carry out the research and thus waive on the probability of gaining new venture capital.

Each philosophical view can serves as a basis for decision making and there is no definition for the "right” action but it is more a question of one owns moral standards. Therefore the essential moral standards in this case should be based on evaluating both approaches and adaptation to one’s own standards in regards to profitability versus moral acceptance.

2 Economic ethics concepts

Four different types of approaches in economic ethics could be a guide in this case.

Homann’s theory is an example for a functional/instrumental business ethics approach. He describes ethics in terms of economic and blames ethical dilem­mas in businesses on imperfection of the economy’s institutional framework. In his approach of embedding ethics into business, moral norms and ideals have to be remodeled to non-monetary factors and seen as economic calculations. Homann sees market competition as legitimate but the participants should fol­low norms. Incentives for doing so have to be included into the institutional framework. This way known and strict "rules” have to be followed and moral will become obligatory without forbidding the profit-making goal of businesses.[5]

The approach of Steinmann and Ulrich are dialog-oriented and based on dis­course ethics. Steinmann sees competition and the profit-making principle as legitimate and ethics as pertaining to a particular situation. His corrective ap­proach is based on an argumentative conflict resolution via consensus in order to achieve peace. This consensus will be reached in a dialog with all involved people, while obeying standard principles.[6] In Ulrich’s theory, as an example for an integrative approach, economics should be submissive to ethics as a re­quirement in business. Economic rationality and efficiency cannot be the main goal but principles such as the dignity of every person have to be respected. Similar to Steinmann’s concept, conflict is solved via a dialogue but Ulrich i n- cludes the stakeholders as well.[7]

Steinmann and Ulrich’s approach are hard to apply in this case because they are normative and do not regard empirical consequences. Since opinions and views usually vary a lot, always reaching a consensus is not realistic.[8] Further­more the principle of profit maximization is legitimate but disregards how that goal is achieved.

Carroll’s pyramid of corporate social responsibility adds a charitable component to business ethics. The economic aspect of profit maximization serves as a ba­ sis, laws have to be obeyed and business has to be ethical, but should further­more be socially responsible by contributing to the community, for example by donati ng some of their profit.[9]

Carroll’s business ethics concept could be useful in this case "Drug test in India” because it addresses more than just economic, legal and ethical responsibility. Being socially responsible as a fourth factor in this case emphasizes that the company is not just out for profit but takes the well-being of India’s society into account. Using this theory shows going beyond just business.

3 RADAR concept

This chapter evaluates the case "Drug tests in India” by applying the RADAR concept. RADAR stands for recognize, assess, decide, act and resolve. With this model ethics will be taken into account while making decisions in ten steps.[10]


1. Is there an ethical component?

Is there anything unethical about acquiring new venture capital? Is it un­ethical to test drugs with obvious negative side effects on people in India in order to achieve this goal?

The first action in itself does not pose an ethical question but the way how the new venture capital would be generated does.

2. Ethicalness of the ethical component vs. ethical standards

The studies in this case infringe on the Global Business Standards Co­dex amongst others. Human rights that should be respected and protect­ed will be infringed on by carrying out these studies with known side ef­fects.


3. Who are the key stakeholders? How is your proposed action likely to im­pact them economically?

The participants treated with the leprosy vaccine might receive money for doing the test. Their human rights will be violated though and they could suffer from side effects which can be cured but that will most likely cost more than what they would receive for participation. Affected are also people suffering from tick-borne encephalitis. Patients could either be healed or suffer severe side effects which can be cured in a cost and time intensive treatment. Another key stakeholder is the BVVB AG. Suc­cess of the studies is needed for approval of both drugs.[13] Positive con­sequences are the acquisition of new venture capital. Negative media though could let BVVB AG appear in a bad light and jeopardize the com­panies’ existence.

4. What ethical standards apply?

BVVG AG has a moral duty to their stakeholders, to treat them with digni­ty, provide them with transparency of the testing process and thereby re­spect their human and individual rights.

5. Specification/quantification of the positive and negative consequences likely to result from intended action.

Testing the leprosy vaccine on 1000 people is expected to result in eve­ryone being protected for at least ten years. 200 will suffer from side ef­fects which can be healed by treatment costing € 500 per person. In 1000 people being treated with the tick-borne encephalitis vaccine, 999 will be healed and one person will show serious side effects that can be treated in a four-week hospital stay costing about € 100,000. Not doing the studies will result in not getting approval for the drugs and thus likely bankruptcy of BVVB AG. Negative media for the research could lead to the same result, if not it would damage the companies’ image immens e­ly. I as the product market development manager could receive an ex­pense account of € 100,000 or lose my job and income[14]

6. What could be done to reduce the likelihood of it happening or at least reduce the negative impact?

Firstly precaution must be taken regarding safety and risks. Providing a sterile testing environment reduces germs. Furthermore participant should be aware and explained the possible risk of side effects and then decide whether they want to take part or not. In total, every possible safety measure should be met and everything possible be done in order to avoid side effects.


7. Decision


[1] Com. Carroll und Buchholtz 2012 p.328

[2] UN Global Compact 2009

[3] Com. Lynn Paine 2005

[4] Com. Ferrell et al. 2013 p.159

[5] Com. Hans-Ulrich Kupper 2007 p.254

[6] Com. Hans-Ulrich Kupper 2007 p.255

[7] Com. Hans-Ulrich Kupper 2007 p.266

[8] Com. Hans-Ulrich Kupper 2007 p.257

[9] Com. Carroll 1991 p.6-7

[10] Com. Gershon Braun p.80

[11] Com. Gershon Braun p.82

[12] Com. Gershon Braun p.85-86

[13] Com. Drug tests in India

[14] Com. Drug tests in India

[15] Com. Gershon Braun p.87


ISBN (eBook)
ISBN (Buch)
Institution / Hochschule
International School of Management, Standort Hamburg
drug india



Titel: Drug tests in India