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Business Management Unfair Product Pricing - Essay Example

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Trust is important for business on many levels. It is important for customers to trust the businesses they choose to engage when purchasing products and services. It is important for employees to trust that their company will provide a safe and secure work environment that will continue to provide them with a sustainable livelihood…
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Business Management Unfair Product Pricing
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Trust is important for business on many levels. It is important for s to trust the businesses they choose to engage when purchasing products and services. It is important for employees to trust that their company will provide a safe and secure work environment that will continue to provide them with a sustainable livelihood. And it is important for the community in which a business operates to trust that the business will operate as a responsible corporate citizen, investing in and strengthening the community as opposed to harming and taking advantage of it. The latter concern is most relevant to pharmaceutical companies that are charging unfair prices far in excess of the costs of the chemicals in their drugs. It is an ethical concerns that becomes particularly urgent in the case of life saving drugs.
Trust is closely related to ethical behavior. In fact, the two concepts are inextricably intertwined. Without ethical behavior on the part of a person or entity, it would arguably be impossible to gain the trust of others, who otherwise would have no concrete basis on which to extend that trust. Trust implies a confidence in someone else that they will generally do the right thing and exercise sound judgment when presented with various types of circumstances. Doing the right thing is the essence of what it means to be ethical. In the business context, that means sometimes sacrificing increased profits in order to avoid harm to people or the community. Thus, pharmaceutical companies should consider steeply discounting drugs that can help save lives, particularly for the poor.
Such trust can go a long way toward promoting long term goodwill for the business. This can be a key ingredient in establishing long term profitability. Thus, fostering trust by acting ethically is an important long term business strategy for any organization. When that trust is lost, it can put the organization on precarious footing in terms of its ability to remain competitive and profitable over the long haul. To be sure, existing and potential new customers will invariably gravitate over time toward those businesses that they trust the most.
To be sure, pharmaceutical companies have much to gain over the long term by serving the public good by selling their life savings medicines at cost or slightly above cost to consumers in need. The image of these companies as responsible and caring corporate citizens would be bolstered to the extent that they would be able to leverage their goodwill for growth and profitability in other areas that are not as critical for the poor. Trust is key; and the company that is successful in building that trust through outreach efforts will be on the strongest competitive footing and in the best position to sustain long-term profitability.
To instill a sense of trust in the organization's stakeholders, managers must be adept with PR. Of course, doing the right thing and acting ethically is the first step for managers, as it falls on them to make ethical decisions on behalf of the business. However, without a concerted PR effort in which stakeholders are made aware of the ethical actions of the business, they are unlikely to realize the true extent of the basis for trusting the business. Certainly it would be reasonable for a pharmaceutical company to leverage a PR campaign to promote its good deeds. They are, after all, for-profit businesses and thus are unlikely to sacrifice short term profitability out of the goodness of their hearts.
Ethics and social responsibility are important aspects of sound business practice, and are arguably helpful to a long term strategy of growth and profitability. Businesses, such as the big pharmaceutical companies, need not sacrifice their business in order to be ethical. Social responsibility and profitability are not mutually exclusive. On the contrary, they go hand-in-hand as a part of a company's effort to situate itself in the strongest competitive position possible within the marketplace. Read More
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