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Corporate Social Responsibility Merck &co.

Autor:   •  April 3, 2012  •  Case Study  •  1,631 Words (7 Pages)  •  1,806 Views

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Head quartered in New Jersey, Merck & Co. is one of the largest pharmaceutical companies in the world, producing medication that has lead to $2 billion dollars in annual sales (Trevino & Nelson, 2007, p.57). In 1978, Merck was testing a new drug for animals, to see if it could effectively kill parasites and worms, when they discovered that the drug killed a parasite in horses that was very similar to the worm that causes river blindness in humans (Trevino & Nelson, 2007, p.58). Because of this scientist encouraged Merck to invest in further research, but Merck new it would likely never be a profitable product, therefore creating Merck’s dilemma of weather to further research or not (Trevino & Nelson, 2007, p.58). One of the reasons that this was a dilemma for Merck is they had to take in considerations all their stakeholders who would be affected, corporate social responsibilities, organizational values, and stakeholder’s impact and trust of weather this would be a good decision. The first thing Merck needs to consider is how this dilemma would affect its relations with its stakeholders.

Stakeholders

According to Trevino & Nelson, (2007, p.105) stakeholders are all of those who have a stake in what an organization does and how it performs. This can include owners, managers, customers, employees, suppliers, financial institutions, the community, the government, the natural environment, and stockholders (Trevino & Nelson, 2007, p.105). When it comes to the Merck company dilemma of weather to invest in further research to find a cure for onchocerciasis or river blindness, I believe the key stakeholders include the scientists who want the company to invest in further research, Merck’s shareholders who want growth in stock value and/or dividends, the people who would be saved from river blindness, humanitarian agencies that have tried to bring relief to river blindness victims, and the countries in which river blindness occurs.

Another reason I believe these people are stakeholders and have bona fide interest in the Merck dilemma, is the legitimacy and power these groups have to affect and be affected by Merck’s decision. According to Carroll (1991, p.43) the importance of various stakeholders is based off of two vital criteria which include the legitimacy and power of the stakeholder. The stakeholders with the most power are the shareholders, whose power comes from being able to remove Merck’s management or sell their stock if they believe a bad decision has been made. The next under them is the scientist and humanitarian agencies which have little effective power and legitimacy, as their stance may affect consumers or physician perceptions of Merck based on there decision. The final and lowest stakeholders that have a bona fide interest in the Merck dilemma are the people and the countries where river blindness is present. Though this group has neither legitimacy

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