Sustainability in Business, Social Justice Concepts, Policy, Practices, and Initiatives - Case Study Example

THEORIES/CONCEPTS AND POLICY, PRACTICES AND INITIATIVES Theories/Concepts and Policy, Practices and Initiatives Affiliation Course Code Supervisors’ Name Date of Submission Theories and Concepts Sustainability in any business and marketing is believed to be an essential emerging concept for accessing business activities and industrial and social development (Crane & Matten, 2010). This concept came as a result of Rio Earth Summit held in the year 1992. The triple bottom line (TBL) is a common term commonly being used in the business especially by John Ellington, who first coined it to mean that business should not only be pegged on one factor but more than one factor. For example he alludes that business should be concentrated on factors like economic, environment and social virtues. The social aspect of the business from TBL concept should be linked with business activities on indigenous communities from least developed countries (LDCs). Under the social factor as a key element in business sustainability, one of the major concerns is social justice. The Worlds Gross Domestic Product (GDP) is estimated at 80% of the world’s gross domestic product belonging to the 1 billion living in the developed world. This translates to 20% of GDP being shared by the 5 billion people living in developing countries. According to these statistics, failure to address this inequality between the developed and developing countries could trigger an issue that may cause social justice and better living conditions for all people to remain a challenge. This puts the developing countries, communities and regions remaining vulnerable to social, political and economic status (Crane & Matten, 2010). A case study to this was the evaluation of HIV/AIDS status report of South Africa .The report was the most substantial material in the alteration of world-wide public opinion about the role of medical services and agencies in the promotion of human health and social welfare. In the Anglo-Saxon world, the most commonly accepted ethical theory is “Philosophy of Utilitarianism”. This philosophy is linked to powerful people driving the economy of the Anglo-Saxon world including, Jeremy Bentham (1748-1832) and John Stuart Mill (1806-1873). These personalities are key people in driving the modern economy in general of Britain and whole world as a whole. The philosophical approach of utilitarianism, states that an action is morally acceptable if it generates results in the greatest amount for the betterment of the greatest amount of people that are direct or indirect beneficiaries (Crane & Matten, 2010). Under this philosophy man is seen as the driver of results that could either be bad or good (Crane & Matten, 2010). However mans action is geared for the good of the programme to benefit majority of people in the community who are deemed to be the beneficiary of the products. Man is seen as holding the idea that all people have the right to do everything in their power to achieve the greatest amount of pleasure possible. Every persons pleasure should far surpass their amount of pain. In this case therefore, man strives to maximize on happiness and pleasure. For the case of South Africa this philosophy asserts that people could find satisfaction and happiness if there was access to medical health facilities. In these scenarios people could improve their livelihood and reduce mortality rate. However, citizens occasionally harm each other without being remorseful or humane enough to the one that is hurt. This kind of interactions where are not concerned about the repercussions of one’s action are what have accelerated the corruption in Pharmaceutical firms over developing countries like South Africa. The future of the society in terms of it sustainability and economic growth depends on the choice people make now. The right thinking and choices the society make now is very important. This is what is called the economic factor on sustainability. A detailed idea of economic sustainability may be summarised in the company’s attitude and impact upon the economic framework in which it is established. For example endeavouring very hard not to pay taxes by manipulation of accounting rules could lead to economic unsustainably. The GSK’s CSR report on economic sustainability demonstrates an aspect where one of the contributions has been made through an operation of the tax system of an organization’s profit amounting to £1.95 billion, (GlaxoSmithKline, 2013). GSK support has been seen in the health sector and social welfare of communities through global community programmes. According to an International Labour Organization report, the economic growth rate in certain sub-Saharan countries would be reduced by 25% due to increased mortality rate by AIDS in the year 2020 (Giseri &Sepala,2010). Corruption on the other hand is one of the biggest problems in South Africa especially over the health sector. Drugs for example are bought at discounted price and resold at higher prices to find more cash. The survey by GSK has found out that at least 30% of drug stocks in the National Health Service are stolen by customers and medical staffs which are later resold into the private sector (Giseri &Sepala, 2010). Another principle dubbed ‘Greatest Happiness Principle’ has also indicated the real view of the rot in medical sector in the South Africa. Trust as a principle is the most reliable factor in any environment or place of work (Crane&Matten, 2010). Therefore, it is an obvious undoubtbly fact that there is no trust between pharmaceutical companies and South Africa after the reported case of corruption and rot in the health sector. It is very clear from the above analysis and report that natives of South Africa have no capacity to sort out financial crisis for long period of time due to evidenced corruption, evasion of paying taxes and economic unsuistanability. For long term strategy the country needs to invest more on long-term perspectives in relation to social benefit gained from using these medicines. It could also be argued that people are not keen on using the drugs to improve the health of individuals hence reducing the mortality rate but people are keen to make money for their own selfish gain through back door deals with the drugs. One main reason that have triggered this is that the generic drug manufacturers began the drug business at lower prices especially over Nations like South Africa where rights had not been honoured. This compromised the quality of the drugs since some drugs sneaked into the marked without quality check by the relevant agencies responsible (Giseri &Sepala, 2010). Policy, Initiatives and Practices There are raft of measures that were done in order to respond to GlaxoSmithKline industry. These improvements are a number of initiatives proposed for implementation to deliberately curb any future fall out in the medical sector. Of importance for improvements was pricing policy and its ability to maximize access to essential medicines in least developed countries such as South Africa so that the drug suppliers and manufactures could be regulated through quality assurance standards. South Africa is used as a case study of the developing nations because its population are more interested on issues related to HIV/AIDS complications. This could again be probably due to high prevalence of HIV/AIDS victims. Efforts to make drugs for HIV/AIDS available and affordable had been put as a top priority amongst the Pharmaceutical firms and other NGOs. Oxfam International, a federation of twelve non-governmental organizations (NGOs) formed a movement dubbed “Find lasting solutions to poverty, suffering and injustice”. Under this movement, GlaxoSmithKline (GSK) who had been hinted as mismanaging the pharmaceutical sector through buying drugs cheaply and selling expensively, selling drugs that are sub-standard became major target of the movement. The campaigns objective was to lower medical cost especially for HIV/AIDS medicines so that victims of the disease do not die due lack of affordable medicine (Giseri &Sepala, 2010). However, this plot to weed out GSK industry from the pharmaceutical industry was not received by its staff in good faith and as a result they wrote a letter to counter the move by Oxfam and other NGOs to weed them out. According to the GSK, the intention of Oxfam to exit them out of the industry was because the GSK was doing so well in the pharmaceutical industry and was well established than other firms in the market. The other concern was that FI&S hosted a meeting for Oxfam, GSK, and other institutional investors to discuss Oxfam briefing where Oxfam made its report public(Giseri &Sepala, 2010). GSK was always ready for defence and to counter any challenge that were being imposed by the Oxfam who had formed a very strong movement with NGOs like Nobel Prize-winning Médecins Sans Frontiers and Treatment Action Campaign all that are world’s leading NGO on medical and health access issues over South Africa. These bodies were determined to mount a campaign challenging the pharmaceutical industry’s outmoded business model (Giseri &Sepala, 2010). According to Oxfam, all this was done in the interest of South Africa as they had no stable access to proper medicines over a long period of time. Oxfam had also expressed discontent with GSK global pattern rules that had kept the price of the drugs up even to the LDCs nations. This was thought so because the prices of generic drugs that could be available to South Africa for sale could be way below substandard compared with those sold in developed nations like U.S. (Giseri &Sepala, 2010). A drastic positive major change was done in the 2000 by the GSK. They came together and merged with five other companies in a partnership with WHO and UNAIDS to improve access to medicines with the main goal of enhancing access to HIV/AIDS drugs in LDCs. This was done through creation of a platform to establish national and local level HIV/AIDS treatment plans and delivery systems. This would fasten access to essential basic drugs, and last but not least, lower the cost of treating more people. However their critics argue that GSK should not only lower the cost of treatment but they should know that it’s their responsibility as industry to socially increase access to essential medicines over the LDCs without being reminded. Following the coming together of GSK with other partners to improve access to medicine, GSK since then had worked voluntarily with LDC nations in order to steadily reduce prices on HIV/AIDS drugs on a country-by-country approach. The firm have also gone milestone by reducing the price of medicine and availing their price list to the public for scrutiny while other companies kept their lists private. This idea did not pick up since they were criticised that their discounted price was small and that they had not established a long-term framework to ensure essential drugs reached the world’s poorest Nations (Giseri &Sepala, 2010). In the early year of 2000, a group of NGOs came together to force the pharmaceutical companies to radically reduce drug prices or to waive drug patent rights to allow generic copies of essential of medicines to be delivered by low manufacturers within developing countries ( Giseri &Sepala,2010). The NGOs were acting because of the trade regulations and rules that came into force late 2000, through the World Trade Organization (WTO). Lack of infrastructure however hindered the delivery of non-patented medicines to the LDCs which resulted to patients in these nations not getting the required treatment at the right time hence this might have affected the mortality rate in these nations. The protest by the NGOs came as a result of the trade laws that they feared could have severe ramifications and outcomes. Many believed that pharmaceutical companies had a moral duty to do more to fulfil their societal obligations. Another movement of activists in March 2000 from American NGO, ACT UP stormed the New York offices of Pfizer CEO Bill Steere, demanding that the company provide South Africans with cheap access to drugs used to treat meningitis. Meningitis is serious disease associated with AIDS. This protest and demands by the NGOs from America forced, Pfizer to supply the drug for free of charge to South African patients the following day. The demand by NGOs for firms like GSK to lower their prices of medicine in the LDCs was contested by Raymond Gilmartin, Merck’s CEO who thought that doing this will initiate pressure to lower prices of medicine in the developed world like United States (Giseri &Sepala, 2010). The reason why Raymond Gilmartin, Merck’s CEO thought that lowering prices at developing nations like South Africa would trigger other developed nations was because GSK who was under pressure by activists to lower prices of medicines had made some raft measure and commitments for sustainable pricing. When GSK presented their proposal to General Assembly of the United Nations, it was adopted and proclaimed with jubilations by the Universal Declaration of Human Rights on December 10, 1948. Some of the commitments touched on reducing the prices of medicine to LDCs, pricing for vaccines linked to gross national incomes per capita, set limit prices on GSK’s patented medicines and vaccines in the world’s poorest countries, so that products sold in LDCs are no more than 25% of their price in the UK, affordability partnerships including discount cards, reimbursement schemes and payment plans for patients in the middle-income partners and help for patients that have no medical security in developed countries and nations with strict measures(Hennigfeld et al.,2006). These were reached simply because people should have a right to good health which is enshrined in trade law and rules, Article 25, of World Trade organization. Paragraph 1 of this chapter quotes: “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing, medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control” (Giseri &Sepala, 2010). The WHO struggles on how to live up with Article 25, of World Trade organization. This is because according to World Health report, about three million children die each year from diseases that could have been prevented with available vaccines and that nearly 30 million of the 130 million children born every year were not receiving vaccinations of any kind (Giseri &Sepala, 2010).These deaths could be prevented if the medicines are availed at the right time to the LDCs. Justin Frain pioneered the Global Community Partnerships to develop GSK’s programmes that would lead to the implementation of its commitments and agenda towards provision of medical services to the LDCs as prescribed in the rules and regulations of WTO. The programme was later converted into an international programme of HIV education, care and support, in partnership with community groups, healthcare providers, governments, international agencies (Giseri &Sepala, 2010). In summary the LF Global Alliance that brought together GSK, WHO and 28 other organizations, was a revolution and good initiative that spearheaded the greatest of kinds drug donation in history of LDCs and the developed nations. There are several donations and promises for medical service provisions to the LDCs. For instance GSK have promised to offer between five to six billion treatments to prevent LF infection as part of their commitment and in bid to comply with WHO and WTO Acts (Giseri &Sepala, 2010). References Hennigfeld, J, Pohl, M, &Tolhurst, N 2006, The ICCA Handbook on Corporate Social Responsibility. John Wiley & Sons Ltd, the Atrium, Southern Gate, Chichester, West Sussex PO19 8SQ, England. Read More