Business Law 12th Edition by Roger LeRoy Miller ,Frank Cross

Exercise 17

Isabel Arnett was promoted to chief executive offi cer (CEO) of Tamik, Inc., a pharmaceutical company that manufactures a vaccine called Kafl uk, which supposedly provides some defense against bird fl u. The company began marketing Kafl uk throughout Asia. After numerous media reports that bird fl u could soon become a worldwide epidemic, the demand for Kafl uk increased, sales soared, and Tamik earned record profi ts. Tamik's CEO, Arnett, then began receiving disturbing reports from Southeast Asia that in some patients, Kafl uk had caused psychiatric disturbances, including severe hallucinations, and heart and lung problems. Arnett was informed that six children in Japan had committed suicide by jumping out of windows after receiving the vaccine. To cover up the story and prevent negative publicity, Arnett instructed Tamik's partners in Asia to offer cash to the Japanese families whose children had died in exchange for their silence. Arnett also refused to authorize additional research within the company to study the potential side effects of Kafl uk. Using the information presented in the chapter, answer the following questions.
This scenario illustrates one of the main reasons why ethical problems occur in business. What is that reason?
DEBATE THIS : Executives in large corporations are ultimately rewarded if their companies do well, particularly as evidenced by rising stock prices. Consequently, shouldn't we just let those who run corporations decide what level of negative side effects of their goods or services is "acceptable"?