Practical Application: Identifying Sources of Ethical Standards in Business

Instructor: Scott Tuning

Scott has been a faculty member in higher education for over 10 years. He holds an MBA in Management, an MA in counseling, and an M.Div. in Academic Biblical Studies.

Ethics can be defined as doing the right thing and there are a number of ethical models that allow individuals to take a systematic approach to ethical behavior. This scenario will help you sort through these approaches.

Sources for Ethical Behavior in Business

Ethics can be defined simply as ''doing the right thing.'' The problem, however, is that choices are almost never so black-and-white. In fact, many times acting ethically means choosing between options that may seem equally right or equally wrong. In the lesson entitled Sources of Ethical Standards in Business, we learned that following an ethical theory can make our thoughts and decisions more consistent. Let's take a look at some scenarios and try to formulate answers to some questions related to business ethics.

Scenario Part 1: It's Just Lunch

Juanita, the newest physician at a medical clinic, loved Fridays. It wasn't just that the week was over, it was also because there was always a high-quality lunch. Friday was the day set aside for pharmaceutical representatives to come to the facility and talk to the staff about their company's pharmaceutical products. The reps always came with a full spread, and there was always more than enough good food to go around. Juanita didn't know the exact number, but to feed 225 employees, she figured every lunch must've cost the drug company at least a couple thousand dollars. Admittedly, this didn't bother her much at all. She was still the doctor, and she could still be an impartial advocate for patients.

  • Does this situation seem unethical on its face?
  • What could Juanita do if she wanted to systematically determine if this was ethical behavior?

Scenario Part 2: An All-Expense-Paid Vacation with a Hint of Education

As the months passed, Juanita became uneasy as she realized that Friday lunches were only the tip of the iceberg. Many of the drug manufacturers hosted continuing education conferences for physicians to attend in exotic locations like the Caribbean, high-end ski resorts, or other exotic international locations. These all-expense-paid trips tended to have about 4 hours of ''conference content'' and the remainder of the time was ''free time.''

  • Is this situation unethical?
  • If so, who is acting in an unethical manner? The pharmaceutical company, the physician, or both?

Scenario Part 3: Double Dipping, Double Ethical Dilemmas

But, even that conflict of interest wasn't the worst. A few physicians at Juanita's practice were active participants in clinical trials involving pharmaceuticals they would prescribe. In exchange for being a principal investigator in the research study, many physicians were well compensated. Juanita soon discovered that one colleague made a handsome part-time salary of more than $200,000 in ''honorariums'' for advocating the drug to other physicians.

  • Is it unethical to place oneself in a position of benefiting from their own decisions?
  • Does it matter that this situation involves a physician and a patient, or would the ethical theory apply either way?


Although some might have been critical of this arrangement, the physicians and drug companies mounted a compelling counterargument. Sure, a lot of money was spent to wine and dine the physicians who would ultimately be responsible for prescribing the drug. But they believed that such behavior was ethical because, at the end of the day, the patient was the winner. The argument goes that, because a drug that would improve a patient's quality of life, the aggressive marketing and physician involvement were entirely ethical.


Although this scenario is fictional, there are very real parallels in the medical world. While such behavior was common 20 years ago, there has now been a nearly complete turnaround regarding the acceptability of this arrangement. Many large healthcare systems do not allow pharmaceutical representatives on their campuses, and almost none allow physicians to receive things of value from pharmaceutical companies.

Arguing for the Utilitarian Ethic

Nevertheless, the argument made in favor of the old system of enticing physicians to prescribe a drug manufacturer's product is relatively consistent with the utilitarian ethic. In this ethical model, the argument is that, although such practices might be unseemly, they were actually perfectly ethical because they were doing the greatest good for the greatest number. In other words, sure this was a not-so-subtle way of influencing prescribing habits, but it was all for the good of the patient.

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