Part 1: Recent ethical lapse
Last year, in one of the business journals, there were nothing but headlines about a corporate scandal involving Global Pharma Corp (GPC), an international pharmaceutical corporation. GPC is currently under scrutiny to determine whether the blockbuster drug has been marketed unethically. It is alleged that the company resorted to fraudulent marketing practices, underplaying possible side effects and encouraging doctors to overprescribe the drug. There are also several legal cases, loss of reputation, and a significant reduction in stock value in the aftermath.
The core of the problem is a culture that favored profitability over patient well-being and created an environment where ethical limits were ignored for quick bucks (Böhm et al., 2022). This case creates doubt about the possibility of such issues in small companies and what preventive actions can be taken to avoid ethical breaches.
Part 2: Small business ethical challenges and preventive actions
The ethical failings observed in corporate mammoths such as Global Pharma Corp are not limited to large companies. Irrespective of their size, small businesses may face some challenges that, if left unattended, can lead to serious ramifications (Böhm et al., 2022). For example, imagine a local pharmacy or health care provider that may succumb to financial pressures and intense competition slip into corruption, such as promoting drugs for non-approved uses or exaggerating the benefits advertised.
Small businesses face one of the significant challenges in proximity and relationships within a closed team setting. In the smaller environment, personal connections at times cause professional boundaries to disintegrate and, therefore, enable unethical practices to go on undetected. In order to avoid such negligence, small businesses should have a good and ethical solid foundation (Böhm et al., 2022). Well-defined codes of conduct that all employees are aware of strongly guide the company to emphasize their commitment to ethical behavior, transparency and compliance.
Also, SMEs need strong internal controls. The lack of these controls can allow for an environment where mistakes, whether intentional or not, go unnoticed. Internal controls, including segregation of duties and regular audits, form a deterrent to the occurrence of fraudulence. In addition to being deterrents, these controls also function as early warning systems in discovering irregularities before things get out of hand. Secondly, an open communication atmosphere should be developed. It is important for small businesses to promote an environment in which employee concerns can be voiced without the risk of retaliation (Böhm et al., 2022). The whistleblower policies ensure that employees are allowed to report ethical concerns without fear of reprisals, thereby ensuring quick and efficient redressing.
Financial pressures can be cited as a common driver of ethical failures. Compromises are often made to avoid ethical principles in small businesses characterized by budget constraints and fierce competition. In order to address this, companies should focus on long-term sustainability in lieu of short-run profits (Böhm et al., 2022). Concentrating on establishing a loyal customer base based on honest practices and quality products or services may lead to the business’s success in future.
In conclusion, the current ethical situation at Global Pharma Corp shows that unethical occurrences are not limited only to big business. They are also equally vulnerable, but by recognizing possible threats and taking preventive measures early on it is possible to create an ethical foundation with long sustained strength. It is also important that small businesses develop a culture of integrity, strengthen internal control, encourage openness, and emphasize long-term sustainability. If they do so, it will help them to reduce the risk of violations in ethics and protect their reputation thereby creating trust for all stakeholders including clients’ employees.
Reference
Böhm, S., Carrington, M., Cornelius, N., de Bruin, B., Greenwood, M., Hassan, L., … & Shaw, D. (2022). Ethics at the centre of global and local challenges: Thoughts on the future of business ethics. Journal of Business Ethics, 180(3), 835-861. https://link.springer.com/article/10.1007/s10551-022-05239-2
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