November  10, 2005
1,000 Causes, One Company—How to Determine Who Gets What
By Asher Garonzik

At the 2004 Annual AIDS Conference, activists demanded that pharmaceutical companies render aid to developing countries suffering from AIDS outbreaks. For corporations, this call for action raises ethical questions: How should a manager for a multinational corporation (MNC) such as Pfizer or Merck address the constant pressure to use its clout and financial strength to assist those in need? How should such a manager answer calls for assistance without undermining the for-profit nature of business enterprise?

“The question is not really whether or not to provide assistance,” said Nien-hê Hsieh, associate professor at the University of Pennsylvania, at the McCombs School Ethics Speaker Series Nov. 4. “The question is when and how much?” Hsieh emphasized the need for MNCs to adopt unambiguous, highly specific philosophies to deal with these

Hsieh outlined two types of viewpoints a corporation might consider—the rescue principle and the fairness principle. While the rescue principle emphasizes a company’s urgent need to alleviate plight with only moderate sacrifices, the fairness principle stipulates that affluent companies must aid other groups below a minimum threshold.

The furniture company, Ikea, for example, implemented the rescue principle a few years ago when working with the United Nations Children’s Fund to improve the educational infrastructure in India’s Uttar Pradesh State. In this situation, the country’s plight required urgent action, the company was in a position to alleviate the plight and the corporate sacrifice was moderate.

Hsieh asserted that a clear code of conduct can guide MNCs as they face a variety of requests. With established ground rules, a company can clearly define the limits of the amount of aid it may provide. “This kind of decision making is an integral part of business,” Hsieh said. “Having a clear set of rules helps managers reconcile the various conflicting interests for which they are responsible.”