Business Ethical AnalysesBased on the Faulty Vaccines Incident in2018

王藝萌

【Abstract】Nowadays， as the rise of concern about the business ethics of the companies， whether the business activity is ethical is increasingly important. The ethical issues can arise in many areas of decision making， such as the protection of consumers and environment. And the choice between ethical or not can even influence the company go successful or bankrupt. The faulty vaccines incident in 2018 is undoubtedly one of the event which is unexpected， abominable and with widespread impact. The thesis is about the business ethical analyses based on this incident， and the study is done according to three principle： Utilitarian Ethics， Rights of the Parties， and Justice or Fairness.

【Key words】Business Ethical Analyses; Faulty Vaccines Incident

1. Introduction

The faulty vaccines incident in 2018 has attracted plenty of attention owing to its negative effect on public health. This unethical practice finally made the business become impoverished. And after a series of punishment， the Chairman of the Board of Changsheng Bio-technology Co. will be sent to the court on March 9th.. The thesis is going to analyse the incident based on a framework containing three principles （Utilitarian Ethics， Rights of the Parties， and Justice or Fairness） to show why the business practices are unethical and also give suggestions to avoid similar events. Also， the study is expected to let companies attach great importance on the ethical issues during development.

2. Business Ethical Analyses Based on the Faulty Vaccines Incident in 2018

2.1 Review and Outcome of the Incident

“The consumer outcry followed news in July that Chinese health-care company Changsheng Bio-technology Co. was fined by the nations drug regulator for having produced 250，000 low-quality vaccines for infants. It was also found to have fabricated production and inspection data for a rabies vaccine as far back as 2014， using expired materials in making some batches. Regulators also found that state-owned Wuhan Institute of Biological Products Co.， another major vaccine maker， produced more than 400，000 low-quality infant vaccines， according to Xinhua.” This is a n abstract from Bloomberg with the title as “How Faulty Vaccines Sparkled Consumer in China”. So the apparent outcomes are as follows： Firstly， there was a rapidly growing wave of anger. The relevant vaccines are compulsory for infants. Though they havent been tied to any deaths or illnesses， the faulty vaccines can not effectively shield people， especially the infants， from the deadly disease. The potential danger on public health sparkled the fury of the public. Secondly， the incident caused the distrust in the capacities of government. After the incident， some social media criticized the lax enforcement and poor supervision by the government， which also damaged the governments credibility. Finally， owing to the incident， the worried parents shared the radical articles about the poor-quality vaccines which announced that the vaccines can hurt kids. Some even ran to Hong Kong for foreign-made vaccines. All these further put everyone on concern and on edge.

2.2 Analyses Based on the Framework for Ethical Precepts

The analyses will all made on the basis of the framework for ethical precepts. And the three principles under the framework are Utilitarian Ethics， Rights of the Parties and Justice or Fairness.

2.2.1 Utilitarian Ethics

The Utilitarian Ethics is originated from the utilitarianism proposed firstly by Jeremy Bentham who believes the best action is the one that maximizes utility. And the word “utility ” here usually refers to the well-being of sentient entities——people. It simply holds the belief that the morally correct behaviors are those produce the greatest benefit to the majority. Also， utilitarianism is a kind of consequential-ism， focusing on the results. To make this abstract concept easier to be understood， we can use an equation. The utility equals to the sum of all pleasure hat result from the action minus the suffering of anyone involved in the action. From this we can find that this theory allows to sacrifice the interests of the minority to protect the interests of the majority.

Under this principle， the criteria is whether the business action optimizes the “common good” or benefits of all constituencies. In this case， the pertinent constituencies are the customers， the public， the government and the shareholders， employees， business partners of the company. Using the equation above， the sum of all pleasure here is the gains of the illegal operators. However， the suffering should be the losses of hundreds of thousands of victims since the drug might not shield people from disease effectively. So the result is undoubtedly negative with the gains that are far from making up the public losses.

To sum up， the business action by Changsheng Bio-technology Co. Went against the basic point of view of utilitarianism and didnt follow the first principle under the framework.

2.2.2 Rights of the Parties

Under this principle， we should answer the question “Does the action respect the rights of the individuals involved？” And the individuals are also called the stakeholders who are mentioned as the pertinent constituencies in the previous principle. This principle requires the company not only to improve the welfare of the shareholders， but also to be responsible for the interests of other stakeholders.

Firstly， to the customers， since there were something wrong during the transportation and storage of the invalid vaccines. But the company keep it as a secret and pretend ignorance of the situation instead of dealing with the problem. So its action make infringement of the right to life and health which s the most basic one， the right to personal and property safety， the right to know， and the right to fair trade of customers.

Secondly， the shareholders were suffering from the losses of interests because of the erosion of stoke value. Starting from the mid-July （the time that the incident broke out）， it faced the situation that the stoke price reaching the decline limit during consecutive days and those bars representing the decline limit also witnessed a decline trend. Also， due to the big problems， the stoke was under special treatment and even faced the delisting warning. And it was estimated that the incident has wiped out around ￥20 billion from its market value.

Besides， the employees on indefinite leave because of the shutdown of the company were facing the potential risk of unemployment. Its business partners including the suppliers and distributors may lose their reputation， customers and profits. Of course， we can not ignore the great social panic to the public and peoples growing distrust to the government.

2.2.3 Justice or Fairness

The question here is whether the action respect the canons of justice or fairness to all parties involved. As we all know， justice and fairness are so abstract. So we can list several criteria for being a fair company. For example， it should abide by the law， pay the lawful taxes， recruit and treat employees in the basis of non-discrimination， provide good-quality products to customers and competitive prices to suppliers and avoid bribery.

In this case， Changsheng Bio-technology Co. firstly broke the Criminal Law of the PRC and the Drug Administration Law of the PRC. In addition， the bribery was really serious. From 2002 to 2017， this company involved in many bribery cases and took kickbacks in the selling of the different kinds of vaccines. The highest kickback was ￥20 which accounted for more than 30% of the selling price ---￥72.

From the analyses under the three principles of the framework， the business action oF Changsheng Bio-technology Co. was totally unethical.

2.3 Ideas about Business Ethics

Generally speaking， the reasons of such unethical incident can firstly be the low crime cost. And also the lack of commercial integrity and the poor supervision lead to the tragedy. And we can make some suggestions. As for the company， it should be honest and trustworthy and always carries out fair competition. And public should develop professional ethics and social ethics. Also， taking full? advantage of public scrutiny can also give help. At last， strengthening the law enforcement and improving both the penalty and supervision system by the government are also necessary.

Only with the joint efforts of all sides can we create an ethical business environment and avoid such a tragedy from happening again.

3. Conclusion

From the ideas the thesis has discussed about， the companies are expected to pay more attention on their own business behaviors. And its easy for us to draw a conclusion that only the ethical choices in the business decision-making process can lead the company to success. Also， during the accomplishment of the thesis， the ability of combing the theory with practice has been improved a lot.

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