Practice skills used in ethical decision-making methods by analyzing stakeholder interests. Also applying ethical theory, utilitarian ethics, by considering two different utilitarian models of corporate social responsibility (CSR): The economic model of CSR and the stakeholder model of CSR.
BRAINSTORMING: Find an example of a business situation in which shareholder interests might conflict with stakeholder interests.
Section 230 case
Use the stakeholder analysis worksheet to brainstorm about various stakeholders and potential conflicts of interest.
If cite any data that is not common knowledge, provide a works cited entry for your source.
STEP 1: Write a brief description of the business, product, or service being considered and briefly explain why there might be a conflict of interest.
STEP 2: In a new paragraph, briefly explain the shareholders’ interests as you understand them.
STEP 3: In a new paragraph, briefly explain who all of the stakeholders are and what their interests are as you understand them. You can use bullet points if you like.
STEP 4: In a new paragraph, briefly explain which interests you think should have primacy in this conflict (shareholders or stakeholders and why -OR- explain why you think these interests should be balanced and why. You should also directly state which of the models of CSR (shareholder or stakeholder) you think your view aligns with but you need not give an explanation of this view. Note that shareholders are included as stakeholders within the Stakeholder model of CST.
Example post:
Vyvanse is a medication used to treat ADHD and binge eating disorders. Takeda, the manufacturer, held an exclusive patent on Vyvanse that expired in 2023. Prior to expiration, shareholder interests in exclusivity and profits were in conflict with stakeholder interests in cost effective medical treatment.
Shareholder interests here seem to be determined solely by profit. Exclusivity allowed by the patent created maximum profits by Takeda with no competitors. However, shareholders might also claim interest in innovative medical research insofar as Takeda’s profits can be reinvested in research and development of other products.
Stakeholders and interests:
Patients have an interest in receiving the best medical care possible at an affordable price. Vyvanse’s cost means it is not an option for many. The lack of competition means patients have no power to influence the market via supply and demand.
Insurance companies have an interest in providing satisfactory patient care while balancing their own expenditures. Medication that is cost-prohibitive makes this difficult.
Medical providers have an interest in prescribing the best medication possible to the patient. When cost prohibits that from being done, they must explore less optimal treatment options.
Competitors have an interest in providing generics to consumers as well as a free market that is not dominated by few companies.
My view: Considering the stakeholders’ interests alongside the interests of shareholders using the stakeholder model would likely result in substantially lowering the cost. This would benefit and prevent harm for the greatest number of people while allowing Takeda to continue to profit at a less inflated rate. The patent actually prevents the shareholder model from functioning in an ethical manner because the economic model of utilitarianism requires a free market where competition of supply and demand can meet the interests of the public.
