International Legal and Ethical Issues in Business - Essay Example

?Running head: INTERNATIONAL LEGAL AND ETHICAL ISSUES IN BUSINESS International Legal and Ethical Issues in Business Insert Insert Insert Instructor’s Name 19 May 2011 International Legal and Ethical Issues in Business Part 1 Bayer was established in 1863, as a dye stuff factory in Barmen Germany, and it well known globally for producing Aspirin since 1899 (Rugman, 2005, P.128). The company expanded it operation internationally by purchasing an interest in a US factory and began exporting supplies, marking its interest in the global market. From this point, it expanded rapidly to the current situation where it operates in almost all countries in the world. Indeed, it is the global market leader in various pharmaceutical fields especially in hormonal contraception and crop protection (Bayer, 2010). Bayer is among the few multinational enterprises that have diversified their pharmaceutical production business with other ventures. The company has been under pressure from its investors to follow the example of ICI that divested its pharmaceutical arm Zeneca, in bid to strengthen the company’s drug business and free it from the cyclical nature of Bayer’s other chemical businesses (Rugman, 2005, P.128). The Bayer group is managed through holding of four product-oriented companies - Bayer healthcare, Bayer chemicals, Bayer crop science and three service industries (Bayer Technology Services, Bayer Business Services and Bayer Industry Services), with each company being managed independently in efforts to improve individual primary competencies (Rugman, 2005, P.129). Bayer Group business units are mainly concerned with researching the possible market demands, embarking on marketing campaigns, and taking the required product to the market, with most units concentrating on a single business of the Bayer businesses. Its FSAs includes the drugs in pre-clinical trials, R&D labs, and the patented products (Bayer, 2010). Challenges and legal barriers Bayer pharmaceutical companies face many challenges in the global market especially from generic drugs companies, thus Bayer is among the strong global advocate against generic-drug and will go to any high length to delay the introduction of the lower priced generic drugs to the market. These challenges includes: first, there are global campaigns to push domestic companies to excel internationally, leading to changes in patent legislation that might affect the length of life of the patented products FSA or the benefits that Bayer may accrue as a result of that FSA (Rugman, 2005, P.129). Secondly, the generic brand companies infringe its patent right; for example, in October 2001, the generic manufacturer Apotex, accepted an order from the Canadian government to supply Cipro, an anthrax fighting drug in violation of Bayer’s rights (Rugman, 2005, P.129). Additionally, “an Indian court on 9 February 2010 declined Bayer’s latest attempt to introduce new measures to prevent generic competition in India; Bayer was trying to install a new barrier to generic competition by delaying the approval process that generic drugs are subject to following in order to be sold in India; by delaying the registration until after patent expiry would have prevented timely entry of new competitors, and extend the monopoly of the sole patent-holding manufacturer” (MSF, 2010). This scenario has been witnessed in other countries such as Thailand. Bayer’s argument was based on well-recognized international trade convection of TRIPS-Plus patent rules. These are rules “that are intended to broaden the scope and prolong the period of monopoly while still maintaining the high prices of the patents holders by offering the patent holders exclusive rights to the market without any introduction of generic drugs to the new market until their patent expires” (Melendez-Ortiz & Roffe, 2009, P.164). Lastly, generic-drugs offer unfair competition to the patented drug since they are produced cheaply and are lowly priced thus offering hyper competition in the global market where the price wars matter a lot. Possible ethical dilemmas Many countries are contravening the TRIPS-Plus patent rules for the sake their national interest, which is unethical looking on the companies perspective but on the national front, it seems ethical due to the worthy cause it serves. Challenging the supremacy of the countries legislation when they do not favor the interest of foreign industries may present ethical dilemma to the concerned parties. For Bayer serving interest of the people suffering from high prices of patented drugs rather, profit motives only may present ethical dilemma. SBC and the AT&T merger Introduction SBC Communications, emerged after the break-up of the giant AT&T in 1984, following a successful law suit, after the Telecommunications Act of 1996 it bought Pacific Telesis Group(1997), southern new England telecommunications(1998), and Ameritech corporation (1999) consolidating a vast telecommunication empire in the US (Daft, 2009, P.160). Before the merger, the two were competing in the sale of telecommunication services to the corporate and retail clients. In 2005, SBC acquired AT&T at a price $ 16 billion, adopting the name of the iconic organization and acquiring a holding in the wireless industry with Cingular Wireless, which was a joint venture between AT&T and BellSouth, and a year later the new AT&T merged with BellSouth creating the largest telecommunications companies in the US (Daft, 2009, P.160). The push for merger between the two companies was largely attributed to desire to create operational cost-related synergies as opposed to raising additional revenue growth opportunities for the joint companies; with the AT&T long distance assets will potentially reduce SBC overall transport costs, others benefit include reduction in management layers, network operations, IT support and procurement (Khan, 2005). Consumer concern over such merger First, consumer advocates claim that the two companies were the only owners or controllers of the local private lines in particular regions of the United States. In addition, the merger would result in reduced competition in the provision and sale of both local private lines, and voice and data communication services that relied on those local private lines (Hewitt, 2007, P.275). Secondly, the American Civil Liberties Union (ACLU) was very suspicious of the merger because of several lawsuits that had been filed against AT&T for allegedly violating privacy laws by giving customers’ records and information to the National Security Agency without a warrant or clients consent (Reardon, 2006). Additionally, consumer groups were against this merger, since the telecommunication companies were consolidating in large numbers, leaving the customers with limited options to choose from (Reardon, 2006). Lastly, the consumer advocacy groups were concerned by the fact that the SBC-AT&T merger would lead to significant reductions in workforce at both companies, with more consolidations expected in the industry more lay-offs are expected to affect the industry projecting negatively on the country economy through reduced employment (Khan, 2005). Possible ethical dilemmas Considering the consumers’ plea and the companies’ position any judicial determination of the situation may pose dilemma to the losing side. The customers are not clear of the benefit they stand to gain or the exploitation from the deal, so ethically they are not well prepared for any situation from the deal. Recommendations First, based on the cases in India and Thailand, Bayer Group should considered partnering or acquiring generic drug company (s) in order to remain competitive in the changing global pharmaceutical market. Secondly, Bayer Group should consider revising it market strategies in terms of the target markets and lowering of prices of it drugs in order to enhance it sustainability in the global market. Additionally, the SBC-AT&T merger should emphasis on customer satisfaction and fair prices to wade off any emerging competitions that may take advantage of the merger to establish. Lastly, for the SBC-AT&T merger should streamline it operation to meet global standards in all areas due the size and complexity of the new company formed. Conclusion For multinational pharmaceutical companies they should embrace the idea of partnering, merging, or acquiring generic producing enterprises to enhance their competitiveness and meet the global demand for generic drugs. Telecommunications companies should focus more on their client’s satisfaction and fair prices rather on mergers and price wars. Reference List Bayer, 2010. Highlights in the recent history of the Bayer Group. (Online). Available from: http://www.bayer.com/en/from-1996.aspx (Accessed on 19 May 2011). Daft, R.L., 2009. Organization Theory and Design. OH: Cengage Learning. Hewitt, P.B., 2007. Annual review of ... antitrust law developments. NY: American Bar Association. Khan, I., 2005. SBC-AT&T Merger: An Inexpensive Bargain or a Growth Powerhouse? (Online). Available from:http://www.frost.com/prod/servlet/market-insight-top.pag?Src=RSS&docid=32046263 (Accessed on 19 May 2011) Melendez-Ortiz, R., &Roffe, P., 2009. Intellectual property and sustainable development: development agendas in a changing world. London: Edward Elgar Publishing. MSF. 2010. MSF Campaign for Access to Essential Medicines. (Online). Available from: http://www.msfaccess.org/main/access-patents/victory-for-access-to-medicines-as-bayer-loses-lawsuit-in-india/?no_cache=1&print=1 (Accessed on 19 May 2011) Reardon, M., 2006. BellSouth shareholders approve AT&T merger. CNET News. (Online). Available from: http://news.cnet.com/BellSouth-shareholders-approve-AT38T-merger/2100-1036_3-6097110.html (Accessed on 19 May 2011). Rugman, A.M., 2005. The regional multinationals: MNEs and "global" strategic management. Cambridge: Cambridge University Press. Part 2 Discrimination remedies in the work place Affirmative action Affirmative action refers to the “positive steps taken to increase the representation of women and minorities in the areas of employment, education, government, and business from which they have been historically excluded” (Fullinwider, 2010). Preferential application of affirmative action is always accompanied by many controversies along two ways; with one way being that of government through the legislation, executive and the judiciary making and applying rules on affirmative action and the other being the way of public debate ranging on application of affirmative action (Fullinwider, 2010). Affirmative action is an appropriate remedy for discrimination in the workplace where there is discrimination of the minority and women, and the company policies allow for affirmative action or in situation where there is clear directive from the government to the companies on handling minorities and women issues at the work place. Reverse discrimination Reverse discrimination refers to “discrimination against members of a dominant or majority group, especially when resulting from policies established to correct discrimination against members of a minority or disadvantaged group” (Reverse discrimination, n.d). Reverse discrimination most occur due inequalities caused by privileges favoring the majority group against the minority group or due to application of the affirmative action. Reverse discrimination is an appropriate remedy for workplace discrimination when there is unfair disqualification of a majority group member in a promotion in which the parties were eligible for same considerations. Comparable worth Comparable worth is intended to address discrimination against the occupations in which women predominate with proponents of comparable worth believing that most of the gender gap in wages is caused by discrimination. According to this view, “employers, out of habit or prejudice, reduce the pay scale in traditionally female occupations to levels below the true worth of these jobs, even when the jobs are held by men” (O'Neill, 2002). Comparable worth is used as a remedy in handling gross discrimination against women in roles paying very little compared to male counterparts in same or equivalent roles for purpose of standardizing wages. However, incase applied were men and women are earning the same for their work with an increment to women it can result more discrimination. Other remedies to discrimination in the workplace Other remedies to discrimination in the workplace include management embracing diversity and involving the union representatives in tackling discrimination and harassment. Reference List Fullinwider, R., 2010. Affirmative Action, the Stanford Encyclopedia of Philosophy. (Online). Available from: http://plato.stanford.edu/entries/affirmative-action/ (Accessed on 19 May 2011). O'Neill, J.E., 2002. Comparable Worth. (Online). Available from: http://www.econlib.org/library/Enc1/ComparableWorth.html (Accessed on 19 May 2011). Reverse discrimination. N.d, definitions dictionary. (Online). Available from: http://www.yourdictionary.com/reverse-discrimination (Accessed on 19 May 2011).   Read More