Welcome to the second module of Global Business Ethics and Corporate Responsibility. In this module, we're going to discuss stakeholder theory, a theory that will help us in our decision-making processes, and we're going to talk about a case, Bayer Crop Science in India. But first, before we turn to those two, let's go back and look one more time at the Merck case. And this time we're going to use the Ethical Decision-Making model that you will find on page 21 of Business Ethics and Corporate Responsibility, the reading that you've been assigned as required. Now we've done this before, but you'll see the process itself, first, we look at the facts and we look at the assumptions, we try to obtain as many facts as we can. You're never always perfect on that, no one is. We look at the culture and the context, the issues and the challenges of the power dynamics. Think about Merck is a very big company, a lot of power, stakeholders who. And by stakeholders we mean who has an interest, who affects the company and who is affected by the company, and what are their motivations and what are their powers. Then we look at the alternatives which we've done in that case, the impact of the alternatives and what values are at stake, and then what remember what should Merck do? And then now what, what happens? And it's the now what we're going to focus on briefly, as we talk about Merck. So looking at Merck again, I think we've seen the facts, the culture and the ethical issues, and the the power dynamics. We hadn't talked much about that. But Merck is a very big company, and it can decide things, that will affect the decision-making. Not only their decision-making, but the decision-making of other companies who often model their actions on Merck's. And now let's look at the stakeholders, which we have talked about what we haven't talked about them as stakeholders. The executives, of course they make the final decision on in this case. This case was taken not only to the executives, but to the very board itself. The board itself decided that Merck would go ahead with investigating this drug and developing the drug. The employees, the researchers, as I talked about the importance of the researchers here, obviously the patients kind of forgotten about them. The people who have river blindness for heaven's sakes, they are really important. And in many pharmaceuticals, the positions and clinics in this case, we don't have any physicians and any clinics. They just are going to have to figure out how to give it away to people. The suppliers, the communities, and then of course, most importantly, the 30 to 100 million people with river blindness. People with other diseases for whom work is not developing research because they're developing this drug. And then the countries themselves, if you can imagine a country that has, say 10 million people with river blindness, that's a huge amount of the work force of people who are blind. And really can't do as much as those are with people with sight. Particularly if you have a country that hasn't learned how to deal with blindness and to help blind people get jobs which they can, they're very capable. But that takes us some skills, and not every country, not every company, not every individual has those skills. So now, what is this? What we've figured out should Merck invest in the drug? And they do, used to say we've done that, we've done all of these alternatives, we've talked about them, and then who benefits? The shareholders, they benefit from developing a profitable drug. They will not benefit from this, developing this drug. The researchers have low morale if they don't, but they do. And people with river blindness, what happens to them? Intuitively, it would appear we want to do the right thing to do, and we've talked about the cost benefit analysis. We talked about all of these, except one thing. What kind of precedent does this set for other drug industries? What happens is after Merck decided to give river blindness away, then some other people, other drug companies with other drugs for very rare diseases, realized that they were going to have to give those drugs away, too. So it's set a precedent for the other drug companies, very interesting. And of course that spread now to the HIV distribution of HIV drugs in Africa, where a number of companies, including Merck, give away their HIV drugs at a very low price, or a very low price. So as we know, Merck decided to give away this drug. But this is their challenge. How do you give away a drug to the most remote places in the world you can't even hardly get to? And Merck is in the pharmaceutical business, they don't know anything about distributing globally a drug that they can't just send off to some clinic or pharmacy, or physician or someone to distribute it. And how do you avoid the black market? Merck realized that the only way to distribute this drug is village by village, person by person. But Merck didn't know how to do that, and we don't expect them to know how to do that. So what they did, they formed a committee, including the World Health Organization and this committee distributes this drug, literally, village by village, person by person, child by child. The company has pledged to give away Mectizan forever. They now today, and you can look this up, they have given away over 100 million doses of this drug. And river blindness is considered almost a disease that's extinct, like smallpox. There was almost no one today who has smallpox. And river blindness, there's almost no river blindness today, there is some, but it's virtually going the way of smallpox, it's becoming extinct.
