Monday, August 25, 2014

Philosophical Issues and Ethical Standards Case Study: The Case of the Sole Remaining Supplier

The heart pacemaker is a modern wonder. The device has a timer that resets itself every time the patient's heart beats. If the heart does not beat on schedule (say, within 1.2 seconds), the pacemaker gives a stimulus that causes a heartbeat.

But the technology was not always so sophisticated, and its early limitations form the background of this true story, told to Markkula Center for Applied Ethics Director Thomas Shanks, S.J., by one of the participants. Although the events happened 20 years ago, the ethical issues they raise are still relevant.

It's 1975, and you are on the board of directors of a company that makes transistors. Among the many companies with whom you have a contract is one that makes heart pacemakers.
Pacemaker technology is in its infancy. When doctors implant a pacemaker, the patient's normal heartbeat is disabled, and he or she relies entirely on the device. If it fails, the patient's heart stops. Doctors are not very adept at installing the pacemakers, which are extremely delicate; there is even a story of a person yawning deeply, pulling the pacemaker wire in his chest, and dying.

After that and many similar incidents, the board begins to reconsider whether your company should sell to the pacemaker company. Members of the board feel this situation is a major lawsuit just waiting to happen and your company, as well as the company you supply, will be liable. In addition, you feel the specs the pacemaker company uses to test the transistors are not very strong.

You and the board decide to get out of the business before it's too late. You tell the pacemaker company representatives about your conclusion, and they respond, "You can't stop selling us the transistors. You are the sole remaining supplier for us. Everyone else has backed out for the same reasons you're giving. If you don't sell us the product, we'll go out of business. Pretty soon, no one will be making heart pacemakers, and many people need them. Without the pacemaker, people don't even have a chance."

You take that information back to the board. People around the table have different opinions. One person says, "This is a bad deal, and it isn't our problem. We don't make enough on this sale to make the risk worthwhile." Another person says, "We don't know how other companies use the transistors we sell them; why should we be concerned about this one? What about that baby who died when the transistor in the incubator failed? We didn't know how that company was using the transistor." Another person says, "I think we're missing the real issue here. Don't we have an ethical obligation to sell the product to the pacemaker company? What will happen if we don't sell to them?" Another person says, "Give me a break. Our only obligation is to our shareholders. And how did we get so stupid that we're the last source? I'm telling you, we don't need this." Finally, the chair of the board says, "OK. Let's make a decision."

What do you do?

The moral issue(s) in this case.

The moral issue in this case is that if the Company will stop supplying the transistors, the Pacemaker Company will be forced to shut down its manufacturing business and the heart patients who will need the pacemaker will die.


Facts of the case.
        
        The company makes transistors for electronic devices and supplying transistors to a Company that makes Pacemakers. Other companies that make transistors would not sell to the company that makes pacemakers. The company is the sole remaining supplier of transistors.  In the United States, a company that sells products that are found to be defective could be held liable for injuries or death to a consumer. The company does not make enough on this sale to make the risk worthwhile.


Identifying and evaluating alternative actions from the various moral perspectives applying the questions suggested in the article "A Framework For Ethical Decision Making".

Five Sources of Ethical Standards:

The Utilitarian Approach

We can stop selling to the pacemaker company, avoid the risk of getting into a major lawsuit and would eventually please our shareholders, and besides, there are only a few people who will need pacemaker devices for their heart.
Some ethicists emphasize that the ethical action is the one that provides the most good or does the least harm, or, to put it another way, produces the greatest balance of good over harm. The ethical corporate action, then, is the one that produces the greatest good and does the least harm for all who are affected-customers, employees, shareholders, the community, and the environment. Ethical warfare balances the good achieved in ending terrorism with the harm done to all parties through death, injuries, and destruction. The utilitarian approach deals with consequences; it tries both to increase the good done and to reduce the harm done.

The Rights Approach

Heart patients have the right to live, so we will protect their right to life by selling to the pacemaker company and besides, it is our duty to make the transistors reliable in the first place.

Other philosophers and ethicists suggest that the ethical action is the one that best protects and respects the moral rights of those affected. This approach starts from the belief that humans have a dignity based on their human nature per se or on their ability to choose freely what they do with their lives. On the basis of such dignity, they have a right to be treated as ends and not merely as means to other ends. The list of moral rights -including the rights to make one's own choices about what kind of life to lead, to be told the truth, not to be injured, to a degree of privacy, and so on-is widely debated; some now argue that non-humans have rights, too. Also, it is often said that rights imply duties-in particular, the duty to respect others' rights.
 The Fairness or Justice Approach

“We don’t make enough on sales to the pacemaker company, and there is a risk of being sued should one of our transistors fail, it is only fair that we should look after our company and share holders first”

Aristotle and other Greek philosophers have contributed the idea that all equals should be treated equally. Today we use this idea to say that ethical actions treat all human beings equally-or if unequally, then fairly based on some standard that is defensible. We pay people more based on their harder work or the greater amount that they contribute to an organization, and say that is fair. But there is a debate over CEO salaries that are hundreds of times larger than the pay of others; many ask whether the huge disparity is based on a defensible standard or whether it is the result of an imbalance of power and hence is unfair.

The Common Good Approach

“We feel pity for those people who need the pacemaker, What if we too would need one someday; let us sell the transistors to the pacemaker company”

The Greek philosophers have also contributed the notion that life in community is a good in itself and our actions should contribute to that life. This approach suggests that the interlocking relationships of society are the basis of ethical reasoning and that respect and compassion for all others-especially the vulnerable-are requirements of such reasoning. This approach also calls attention to the common conditions that are important to the welfare of everyone. This may be a system of laws, effective police and fire departments, health care, a public educational system, or even public recreational areas.

The Virtue Approach

“Let us sell the transistors to the pacemaker company for the sake of the patients."
A very ancient approach to ethics is that ethical actions ought to be consistent with certain ideal virtues that provide for the full development of our humanity. These virtues are dispositions and habits that enable us to act according to the highest potential of our character and on behalf of values like truth and beauty. Honesty, courage, compassion, generosity, tolerance, love, fidelity, integrity, fairness, self-control, and prudence are all examples of virtues. Virtue ethics asks of any action, "What kind of person will I become if I do this?" or "Is this action consistent with my acting at my best?"

What we would do in this case.

As members of the board, we should continue to sell to the pacemaker company with conditions that: The pacemaker company will be solely responsible legally, should their pacemaker fail and the pacemaker company should continue to develop their pacemakers to make it less prone to failure.


Commentary on the Case of the Sole Remaining Survivor
by Thomas Shanks

As the story of the Sole Remaining Supplier was told to me, the Board conversation went pretty much the way the case describes it. Legal was saying, "This is a time bomb waiting to happen. Why are we even talking about this?" Engineering was bemoaning the lack of standards for testing the electronics of pacemakers, and the majority of the Board understood that they had a problem with no easy solution.

One of the people on the Board told me later that the founders of Silicon Valley were the sons (and a few daughters) of blue-collar parents. Their fathers were plumbers, electricians, and carpenters, who had passed on a core set of values to their children. This was the Valley before greed and early retirement (at the age of 30) had swept through it. So they took seriously their responsibility and duty to protect the rights of people who needed pacemakers at the same time as they balanced their fiduciary responsibility to the current company. They understood that "doing the right thing" did not have to be stupid, and that they could both do the right thing and do well for the company ("DO RIGHT" AND "DO WELL," rather than having to choose one or the other.)

So, they continued to sell to the pacemaker company. But they also instructed their engineers to develop more rigorous testing and technical standards they could hold the other company to. They reserved the right to stop selling if the other company did not improve its technical standards. They took steps to be sure they did not have a legal liability down the line and then turned it over to the other company to improve the quality of its products.


In these ways they felt they were reducing harms and maximizing utility. They felt it fair to single out the industry because it was new and standards were developing, an equal way of treating start-up industries. They felt they were showing compassion without sacrificing business, and were living out their parents' other virtues. In this way they felt that they were serving the common good, protecting people's rights to a promising new medical technology, the pacemaker.


Submitted by:

Kerwin Salvador P. Caragos
Ernie Ecol
Jonainah Usman

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