Three Different Internal and External Stakeholders - Research Paper Example

? Corporate Governance and Ethical Responsibility Full and Number Submitted Corporate Governance and Ethical Responsibility 1. Three Different Internal and External Stakeholders Within and outside organization are various entities called stakeholders, which in one way or another affect and are affected by the organization. Generally categorized as internal and external stakeholders, the former is that which works within the bounds of the organization, such as management and employees, while the latter is that which although outside the organization interacts with it and possess considerable interest in it (Satzinger, Jackson & Burd, 2012, p. 46; Wolper, 2004, pp. 164). Based on their relationship to the organization, external stakeholders may be categorized as input providers, competitors, and special interest group (Wolper, 2004, pp. 161-163). Following the above definitions, three internal and external stakeholders that Dr. DoRight might have to deal daily at the Universal Human Care Hospital are its doctors and nurses, its patients and the pharmaceutical companies. The doctors and nurses, being employees of the hospital, bound by its VMG and policies are expected to provide satisfactory healthcare; thus, they are considered internal stakeholders. The patients, being one of the hospital’s input providers based on their interest to get proper medication at a reasonable rate, and the pharmaceutical companies, being one of the hospital’s suppliers, which are expected to supply safe and effective drugs and other medical paraphernalia, are both considered external stakeholders. As the hired hospital president tasked to supervise and monitor the hospital’s 5,000 workforces to address the hospital’s various stakeholders, Dr. DoRight’s duty of loyalty to doctors and nurses is to ensure that they do their jobs responsibly. As such their illegal activities and negligence must be stopped, because failure to do so would jeopardize the integrity of the hospital that would consequently harm the corporation’s interest. As defined in the American corporate law tradition, “the duty of loyalty is the obligation to act in good faith to advance the best interests of the corporation” (Strine, Hamermesh, Balotti & Gorris, 2009, p. ii). In short, whatever Dr. DoRight does should be for the best interest of the hospital provided it does not violate the constitution and federal and universal laws (Palmiter, 2010). To hospital patients, Dr. DoRight’s duty of loyalty is to ensure that they get safe and sound healthcare. Such is in the best interest of the corporation, because by providing effective and safe healthcare, the hospital is not only living to its sworn VMG but could also increase patient patronage that could mean greater profit. To pharmaceutical companies, Dr. DoRight’s duty of loyalty is to act in good faith by transacting with these companies only as authorized by the hospital’s Board of Directors and only in pursuit for the best interest of the hospital. For example, Dr. DoRight should not endorse pharmaceutical products that are not needed by the hospital, that are unsafe or overpriced; even if his endorsement would earn him a considerable commission. Thus Dr. DoRight should put the interest of the hospital above his own personal interest. 2. Potential Conflicts of Interest between Internal and External Stakeholders Stakeholders’ interests may not always conform to each other, primarily due to the different roles each play in the organization. Thus Dr. DoRight may confront an in-role conflict between his duties of loyalty to doctors and nurses and to patients in Universal Human Care Hospital. As the investigation of the illegal procedures and negligence of the hospital’s doctors and nurses drags on for two years, patients remain untreated effectively causing their deaths. Dr. DoRight, knowing that both parties have fundamental rights – the right of doctors and nurses to fair investigation and the rights of patients to safe and effective healthcare – might face with a dilemma on how to go about these duties of loyalty. Having the best interest of the hospital in his mind and understanding his delicate role to ensure that interests of various stakeholders are addressed appropriately, which role should he prioritize? Should he act on the complaints against these doctors and nurses in the absence of an investigative finding in order to fulfill his duty of loyalty to hospital patients? Because the longer the investigation drags on, the more the patients’ interest is jeopardized. However, doing so could violate the fundamental rights of doctors and nurses and may even by-pass the role of the Regional Director Compliance Manager and Executive Committee, which may cause disharmony in the organization. On the other hand, not unless he puts an immediate stop on this illegal practice; he is consciously putting more patient life at risk. Thus his failure to address the problem on doctors and nurses also fails the patients and ultimately fails the hospital. But if he chooses the patient’s interest, then he might violate the fundamental rights of doctors and nurses. Thus any which way, Dr. DoRight would face an ethical question. 3. Performance of Ethical Duty Clearly, it is not enough that Dr. DoRight has reported the illegal procedures, because this did not stop the unlawful practice. As such, he has not fulfilled his ethical duty, because his ethical duty is to ensure the safe and sound healthcare provision to patients, which in this case would only be possible by stopping the illegal procedures and negligence of doctors and nurses. In fact, it is quite amusing that he allowed the investigation to drag on for two years, knowing the seriousness of the problem. This alone makes him liable for negligence, because as the General Corporation Law of the State of Delaware argued, “a lack of effort amounted to bad faith” (Strine, Hamermesh, Balotti & Gorris, 2009, p. ii). He should have given the Regional Director Compliance Manager and Executive Committee a timeframe by which to finish the investigation. Also, he should have pushed for immediate result and held the committee accountable for such delay. In short, he should have been more decisive in ensuring that the investigation is done for its purpose in due time. What is more worrisome is that he continuous to win awards for his leadership of the hospital and for meeting business goals. Knowing the seriousness of the problem on their doctors and nurses and the risk patients go through, yet he continuously receives leadership award illustrates that something is not right. On the other hand, he may have installed additional mechanisms by which these illegal procedures could be minimized while awaiting for the result of the investigation. 4. The Deontology Principle Deontology comes from the Greek words ‘deon’, which means duty and ‘logos’, which means word. Thus the deontology principle considers duty and obligation found in all codes of ethics in health care as the central consideration in determining ethical actions (Morrison, 2009, p. 22; Hendirck, 2000, p. 19). Meaning, duty and obligation should always prevail regardless of consequences. Compared with utilitarianism, deontologist also aims to achieve good outcomes but more importantly it should reside on good motive. For deontologist, the end does not justify the means. It requires that the end to be ethical should also be achieved through an ethical means. So even if the result of the action is good, it remains to be questionable if it is achieved through unlawful or unethical means. “Kantian thinking maintains that certain fundamental rights should not be violated under any circumstances” (Halbert & Ingulli, 2012, p. 19). Applying the deontology principle would put Dr. DoRight into a deeper dilemma, because this would mean that he has to go through the legal processes by which he could legally stopped the illegal procedures being practiced by doctors and nurses – a process that may take for more years. As such, this would mean more possibilities of patient death. On the other hand, unless this illegal practice is not stopped, patient interest could not be guaranteed. So while Dr. DoRight is trapped by an ethical dilemma in dealing with his doctors and nurses; he is also confronted with an ethical dilemma in ensuring the safety of patients. His dilemma could be resolved by identifying which interest is of greater stake – the fundamental right of doctors and nurses to fair investigation or the fundamental right of patients to safe and sound healthcare? One may argue for the latter, because failure to address such patient right costs patient death. However, this would also mean to disregard the fundamental right of doctors and nurses. The deontological principle will further confuse Dr. DoRight’s ethical decision because he is confronted with a dilemma that requires him to prioritize his duties of loyalty. Furthermore, by prioritizing one duty he will have to defer another duty of loyalty. Though it may be hard and more complex, Dr. DoRight should find a better way by which he can address both duties of loyalty without having to disregard one’s right. 5. The Utilitarianism Principle Unlike the deontology principle which does not give any alternative course of action in cases of Dr. DoRight’s ethical dilemma, the principle of utilitarianism provides one which must be determined by greatest overall good (Halbert & Ingulli, 2012, p. 14). In short, the end justifies the means provided that the end has benefitted greater good than harm. To do so, the cost-benefit analysis is commonly employed in decision making. Furthermore, Williams (1998) argued that in healthcare the meaning of ‘doing good’ is “improving people’s life expectancy and the quality of their life” (as cited in Williams, Robinson & Dickinson, 2012, p. 17). In short, the interest of the patient is of primordial importance. Using the principle of utilitarianism, Dr. DoRight could easily resolve his ethical dilemma, because this principle clearly states which duty of loyalty should be prioritized and that is the patient’s interest. Following this principle, Dr. DoRight should do everything in his power to ensure that the patient’s well-being is effectively addressed in the hospital. By doing so, he is also serving the greater good in quantitative and qualitative terms. Quantitatively in terms of number of patients that could be saved and even in terms of greater profit that such action could bring into the corporation. Quantitatively in terms of instilling responsible practice among medical professionals to which their Hippocratic Oath is sworn to and in terms of the good image this may bring to the hospital. References Halbert, T. & Ingulli, E. (2012). Law & ethics in the business environment (7th edn.). Mason, OH: South-Western: Cengage Learning. Hendrik, J. (2000). Law and ethics in nursing and healthcare. UK: Stanley Thornes. Morrison, E.E. (2009). Health care ethics: Critical issues for the 21st century (2nd edn.). Sudbury, MA: Jones and Bartlett Publishers. Palmiter, A. R. (2010). Duty of obedience: The forgotten duty. New York Law School Law Review, 55 (11), 457-478. Satzinger, J. W., Jackson, R. B. & Burd, S. D. (2012). System analysis and design in a changing world (6th edn.). Boston, MA: CENGAGE Learning. Strine, L. E., Hamermesh, L. A., Balotti, R. F. & Gorris, J. M. (2009). Loyalty’s core demand: The defining role of good faith in corporation law. Harvard Law and Economics Discussion Paper No. 630. Retrieved from http://www.law.harvard.edu/programs/olin_center/papers/pdf/Strine_630.pdf Williams, L., Robinson, S. & Dickinson, H. (2012). Rationing in Health Care: The Theory and Practice of Priority Setting. UK: The Policy Press. Wolper, L. F. (2004). Healthcare administration: Planning, implementing, and managing organized delivery system (4th edn.). Sudbury, MA: Jones and Bartlett Publishers. Read More