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Read the short case, Advertising, on p. 250 of Managing Business Ethics. Develop a strategy for dealing with the described ethical dilemma.
Read the short case, Advertising, on p. 250 of Managing Business Ethics.Develop a strategy for dealing with the described ethical dilemma.Post a 150- to 300-word business memo to senior management analyzing and explaining the dilemma and your strategy for solving the ethical dilemma. CONFLICT OF INTEREST:Big Company is a large manufacturer of health-care products that is under fire fromthe government to lower costs. Big Company has an excellent reputation and is widelyacknowledged as one of the best managed companies in the country. In spite of its reputation,however, Wall Street has reacted negatively to government efforts to reformthe health-care industry as a whole, and Big Company’s stock price has lost 30 percentof its value in the last year. To counter the effect of possible government intervention,Big Company has just purchased Little Company, a discount health-caresupplier. Wall Street has greeted the acquisition with enthusiasm, and Big Company’sstock price has rebounded by more than 10 percent since news of the acquisition wasmade public.While this acquisition could provide Big Company with a foothold in a growingpart of the health-care industry, a real problem lies in the mission of Little Company.Little has made its reputation by providing objective health-care advice to itscustomers. Now that it’s owned by Big Company, customers have expressed doubtsabout how objective Little can be in recommending health-care products if it’sowned by a health-care giant. Will Little Company be pressured to recommend theproducts offered by Big Company, its parent? Or will Little Company’s adviceremain objective?As the senior executive charged with bringing Little Company into the corporatefold, how do you proceed? What are your obligations to Big Company, Little Company,and the customers of both? What do you owe to shareholders and the financialcommunity? Are there other stakeholders, and what do you owe to them? What provisionswould you include in an ethics code for Little Company?
