Merck & Co. Case Study on Ethics
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Questions and Answers

What was the main challenge Merck faced in developing Ivermectin for human use?

  • There might be adverse side effects affecting their animal drug sales. (correct)
  • The drug was too expensive to produce.
  • They couldn't find a market willing to pay.
  • They lacked sufficient research and development funding.

Which disease was Ivermectin intended to treat?

  • River blindness (correct)
  • Leprosy
  • Tuberculosis
  • Malaria

How did Merck respond to the ethical dilemma regarding the drug?

  • They decided not to develop the drug at all.
  • They developed the drug but charged a premium price.
  • They gave the drug away for free. (correct)
  • They created a payment plan for patients.

What was the estimated cost for Merck to develop the human version of the drug?

<p>$100 million (A)</p> Signup and view all the answers

What was the annual sales figure of Merck mentioned in the context?

<p>$2 billion (A)</p> Signup and view all the answers

What might be a long-term benefit for Merck from developing Ivermectin?

<p>Enhanced public perception of the company. (C)</p> Signup and view all the answers

What does the situation of Merck suggest about the relationship between ethics and profits?

<p>Ethical behavior can be beneficial in the long run. (D)</p> Signup and view all the answers

What major legislative change was Merck facing that influenced their decision?

<p>The Drug Regulation Act (C)</p> Signup and view all the answers

What is suggested as the best long-term business strategy for a company?

<p>Implementing ethical behavior (D)</p> Signup and view all the answers

Which statement accurately reflects the relationship between ethics and morality?

<p>Ethics studies moral standards. (B)</p> Signup and view all the answers

How are moral standards typically formed in individuals?

<p>From family, friends, and societal influences (A)</p> Signup and view all the answers

What dilemma did Kermit Vandivier face at B.F. Goodrich?

<p>He was required to report false results on defective brakes. (C)</p> Signup and view all the answers

What do moral norms generally express?

<p>General rules about actions considered ethically acceptable (D)</p> Signup and view all the answers

What can sometimes occur in the business world regarding ethical behavior?

<p>Ethical behavior is sometimes costly to a company. (C)</p> Signup and view all the answers

How do personal ethics differ from business ethics?

<p>Business ethics are related to professional standards in trade. (D)</p> Signup and view all the answers

What was one of Vandivier's moral standards in his case?

<p>Integrity is valuable and should be upheld. (A)</p> Signup and view all the answers

What is a potential outcome of unethical behavior in business according to the content?

<p>It can sometimes result in a competitive advantage. (C)</p> Signup and view all the answers

Which of the following statements about moral values is true?

<p>They express beliefs about what is morally good or bad. (D)</p> Signup and view all the answers

What does the engaging in ethical behavior imply for long-term business success?

<p>A company can gain a competitive edge. (C)</p> Signup and view all the answers

Which option best defines ethics?

<p>The study of moral standards and principles. (B)</p> Signup and view all the answers

What role does reflection play in understanding ethical behavior?

<p>It clarifies moral principles and their implications. (B)</p> Signup and view all the answers

What distinguishes moral standards from non-moral standards?

<p>Moral standards deal with issues that can seriously benefit or injure humans. (C)</p> Signup and view all the answers

Which of the following is NOT a characteristic of moral standards?

<p>They can be created or altered by government entities. (B)</p> Signup and view all the answers

What is the primary concern of ethics as a discipline?

<p>To examine and critique one’s own moral standards. (C)</p> Signup and view all the answers

Which statement best describes the relationship between ethics and social sciences?

<p>Ethics seeks to understand established norms while social sciences analyze behavior. (A)</p> Signup and view all the answers

Why might individuals choose non-moral standards over moral standards?

<p>Non-moral standards can simplify complex dilemmas. (A)</p> Signup and view all the answers

Which of the following situations reflects an ethical dilemma?

<p>Deciding whether to tell a truth that could hurt someone. (B)</p> Signup and view all the answers

What does the study of ethics critique in regard to moral standards?

<p>The consistency and reasons behind one’s moral beliefs. (A)</p> Signup and view all the answers

Which emotion is commonly associated with moral standards?

<p>Guilt (A)</p> Signup and view all the answers

What does it mean for moral standards to not be established or changed by authoritative bodies?

<p>Moral standards derive their validity from rational justification, not from authority. (B)</p> Signup and view all the answers

How are moral standards perceived in relation to self-interest?

<p>Moral standards may sometimes conflict with self-interest. (D)</p> Signup and view all the answers

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Flashcards

Ethical Business Practices

When a company chooses to act in a way that is considered morally right, even if it means sacrificing potential profits.

Ethical Dilemma

A situation where a company must decide between making a profit and acting ethically.

Profit Over Ethics

The idea that companies will always prioritize making money over doing the right thing.

R&D (Research and Development)

The process of researching and developing new products or technologies.

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Return on Investment (ROI)

The potential for a company to earn a return on its investment.

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Long-Term Benefits of Ethical Behavior

The idea that ethical behavior can benefit a company in the long run, even if it doesn't always seem profitable.

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Drug Copying

The copying and marketing of a drug originally developed by another company.

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Human Drug

A drug that is used to treat an illness or condition in humans.

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Moral Standards

Standards that deal with issues that can significantly harm or benefit humans, such as theft, murder, or child abuse.

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Non-authoritative Basis for Standards

Standards that are not set by authorities and are based on reason and justifications.

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Moral Standards over Self-Interest

The idea that moral standards should be valued above other things, including personal gain.

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Impartial Moral Standards

Moral standards should be applied without bias, considering everyone's interests equally.

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Emotional and Linguistic Aspects of Moral Standards

Moral standards are often associated with specific emotions and language used to express them.

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Ethics

The branch of philosophy that examines moral standards and their application in life.

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Ethical Reasoning

The process of evaluating moral standards and applying them to real-world situations.

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Moral Standards as Justified Beliefs

A set of moral standards that someone believes arejustified and reasonable to follow.

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Social Sciences and Morality

The study of morality from a descriptive perspective, focusing on how people behave and think about morality.

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Ethics as Normative Study

The study of morality from a normative perspective, focusing on the justification and evaluation of moral standards.

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Ethical Behavior as a Business Strategy

A company can have a competitive edge by behaving ethically, as it builds trust with consumers and employees leading to loyalty & good reputation.

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Ethics (as a Study)

The study of morality, focusing on right and wrong, good and evil. It's like an investigation of our moral beliefs.

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Morality

The standards we hold about right and wrong, good and bad. They guide our actions and shape our values.

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Moral Quandary

A situation where a choice must be made between two options, both of which have ethical implications. There might not be a totally 'right' answer.

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Moral Norms

Beliefs about what actions are morally right or wrong. Example: 'Always tell the truth.'

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Moral Values

Beliefs about objects or qualities that are morally good or bad. Example: 'Honesty is good.'

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Maturing Moral Standards

The process of developing and refining one's moral standards throughout life. Experiences and learning shape these standards.

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Gap between Moral Standards and Actions

The difference between what we believe is morally right and what we actually do.

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Accounting Ethics

The principles that guide the conduct of accountants, ensuring integrity and ethical practices in their profession.

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Profitability Responsibility

The responsibility of a for-profit company to make a profit for its shareholders. It's a key driver of business decisions.

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Ethical Behavior as the Best Strategy

The argument that pursuing ethical behavior is the best long-term business strategy, leading to trust, loyalty, and ultimately success.

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Ethical Costliness

Cases where doing the right thing might be financially costly, but still necessary from an ethical standpoint.

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Unethical Behavior Payoff

The idea that unethical behavior might pay off in the short term, but ethical behavior can be rewarded in the long run.

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Ethical Uncertainties

The uncertainty that managers face when dealing with ethical dilemmas in their business practices.

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Study Notes

Merck & Co. Case Study

  • Merck faced a dilemma: developing a life-saving drug (ivermectin for river blindness) with minimal profit potential.
  • The drug, though potentially life-saving, was designed for a largely impoverished population, making it hard to recoup the estimated $100 million development cost.
  • Adverse human side effects could jeopardize the company's very profitable animal version of ivermectin, which brought $300 million in annual sales.
  • The impending Drug Regulation Act added to the challenge, increasing competition.
  • Merck managers, despite the financial considerations, chose to proceed, giving away the drug for free.
  • The case suggests a long-term benefit of ethical choices for companies, as illustrated by their successful efforts in Japan

Ethical Considerations in Business

  • Ethical behavior can be a better long-term business strategy than unethical behavior.
  • Ethical choices aren't always clear-cut, and profit considerations often conflict with ethical dilemmas.
  • Companies have responsibilities to shareholders to create profit; however, this shouldn't override ethical standards.

Defining Ethics

  • Ethics has multiple meanings: principles of conduct for individuals or groups (personal ethics, accounting standards); and the study of morality.
  • Morality consists of standards regarding right/wrong and good/evil.
  • Moral standards have a different basis and criteria from other standards.

The B.F. Goodrich Case

  • Kermit Vandivier faced a moral dilemma in the production of faulty aircraft brakes for the US military.
  • His moral principles (telling the truth, not endangering lives) conflicted with pressure to produce a false report.
  • Vandivier chose to uphold ethicality despite facing potential consequences.

Distinguishing Moral Standards

  • Moral standards involve potential harm/benefit to humans and are independent of authorities.
  • Moral standards prioritize ethical considerations over other values(including self-interest) and are impartial.
  • They are accompanied by specific emotions(guilt, shame) and vocabulary.

Ethics and Its Study

  • Ethics examines personal and societal moral standards to determine their reasonableness.
  • Ethics is a process of critically evaluating moral standards to see if they are well-justified for use in real-world situations, and to construct reasonable moral standards.
  • Social sciences (anthropology, sociology, psychology) also study morality, but in a different way. They describe morality, not evaluate it.

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Description

Explore the significant ethical dilemmas faced by Merck & Co. in developing ivermectin for river blindness. This quiz delves into the challenges of balancing profitability with corporate social responsibility. Understand the implications of ethical choices on long-term business success.

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