1-7a What Companies Are Doing
Most firms today have strong written codes of ethical behavior; companies also
conduct training programs to ensure that employees understand proper behavior in
different situations. When conflicts arise involving profits and ethics, ethical
considerations sometimes are so obviously important that they dominate. In other
cases, however, the right choice is not clear. For example, suppose that Norfolk
Southern’s managers know that its coal trains are polluting the air; but the amount
of pollution is within legal limits, and further reduction would be costly. Are the
managers ethically bound to reduce pollution? Similarly, several years ago Merck’s
research indicated that its Vioxx pain medicine might be causing heart attacks.
However, the evidence was not overly strong, and the product was clearly helping
some patients. Over time, additional tests produced stronger evidence that Vioxx
did pose a health risk. What should Merck have done, and when should Merck
have done it? If the company released negative but perhaps incorrect information,
this announcement would have hurt sales and possibly prevented some patients
who could have benefit from using the product. If the company delayed the release
of this additional information, more patients might have suffered irreversible harm.
At what point should Merck have made the potential problem known to the public?
There are no obvious answers to questions such as these; but companies must deal
with them, and a failure to handle them properly can lead to severe consequences.