11/07/2005

Corporate Responsibility

I recently came across an article in Business Week talking about the future of Merck. This pharmaceutical company is interesting to me because of how much focus they put into corporate social responsibility. This article talks about Vioxx and the lawsuits and problems that have resulted from removing it from the shelves. Many people seem to think that Merck needs to work a little more on maximizing profits rather than their corporate responsibility. With many of their drug patents running out in the next few years many think their profits will decrease drastically. However, I think that since they are trying to better the people in whom they serve and donate millions of dollars to those who can't afford medication, doctors will see Merck as a brand they can trust and continue to recommend it to their patients rather than some cheaper brand that doesn't have the trustworthy reputation. Though in the short-run they may be losing some profits, in the long-run it will help this company succeed.

2 comments:

Morgan said...

I think practicing corporate responsibility can only help a company, and society overall. If people are worried about a potential loss in profits, they can start wiping away their tears, because pharmaceutical companies can mark up their drugs thousands of times their cost, all at consumers' expense. If Merck chooses to do some charitable good, it is helping them too. They gain recognition, and notoriety for their contributions, ultimately winning in the end.

Dr. Tufte said...

-1 on Chloe's post for grammatical errors.

I think corporate responsibility has some merits, but I find it disturbing that most of the people who talk about it are not the people out of whom's pocket the money to be corporately responsible would come. It's very easy to say that corporations should spend their shareholders money, but unfortunately it isn't right.

Having said that, goodwill appears on balance sheets for a reason, and some acts of corporate responsibility can and do contribute to that.