Corporate Ethics: A Case Study Johnson & Johnson and the Human Life International Shareholder Proposal Case Study from Lawrence & Weber Business and Society (1 pp. 492 - 500) Abstract In 2005 Johnson & Johnson's philanthropic contributions totaled nearly $600 million to organizations impacting women's and children's health, community responsibility, access to care, global public health, and advancing health care knowledge. One of the recipients, Planned Parenthood, offered many services through neighborhood clinics, including, in some cases, abortions or abortion referrals. One of the stockholders, Human Life International (HLI), a \"pro-life\" organization, noted that Johnson & Johnson did not publicize its support of Planned Parenthood and submitted a \"Shareholder Proposal on Charitable Contributions\" for consideration at the stockholders' meeting in 2006. This proposal resolved that the stockholders \"request the Board of Directors to implement a policy listing all charitable contributions on the company Web site.\" Management countered that sufficient information about Johnson & Johnson's charitable giving was already available on its website and that further reports would require a burdensome and expensive additional administrative effort. Pros and Cons of Johnson & Johnson's Corporate Philanthropy Arguments in favor of Johnson & Johnson's corporate philanthropy policy include: It is important to society for our corporate citizens to take responsibility for acting to facilitate social progress. Large corporate donations do a lot of good by enabling recipients to stop fundraising and get on with their projects. It takes a lot of overhead to solicit and process numerous small donations, compared to one large corporate donation. Because they are in the health care field, the management of Johnson and Johnson have a valuable knowledge base to judge where resources can most effectively affect progress. Management's policy that \"its corporate contributions program was essential to its mission and values, regardless of its effect on shareholder wealth\" is clearly stated. Therefore investors and others can consider this when deciding whether to become or remain shareholders in the company, and it can be assumed that many stakeholders are supportive of this commitment. Arguments against Johnson & Johnson's corporate policy include: The money which management is donating belongs to Johnson & Johnson's diverse stockholders, most of whom would likely make different choices regarding their money: perhaps giving to different organizations, or perhaps not giving at all. The majority of investors invests through mutual funds and therefore will not be aware that Johnson & Johnson is contributing profits to various projects and organizations. Because Johnson & Johnson is a consumer products company, it is vulnerable to boycotts by groups that disagree with its choices, and this is a business risk to the stockholders. It seems that of all the stakeholders in the company, the general public benefits the most from Johnson & Johnson's contribution policy and the stockholders benefit the least. This, however, could be a very short sighted assessment. The stockholders benefit when the stock is wanted by more investors, as prices increase whenever demand increases; and more and more investors are interested in owning part of a company whose policies they are proud of - a company with a credo such as Johnson & Johnson's. Pros and Cons of Johnson & Johnson's Contributions to Planned Parenthood CONS: Many stakeholders believe that abortion is murder and immoral. It is not right to force them, without their knowledge, to help to kill unborn children. Several pro-life organizations promoted a boycott of Johnson & Johnson's products because of its financial support of Planned Parenthood. Several mutual funds decided against buying Johnson & Johnson stock in protest of these corporate donations. PROS: The vast majority of Planned Parenthood's programs fulfill the company's goals to support women's health, access to care and advancing health care knowledge. For many in our country the neighborhood Planned Parenthood clinic is the only resource for certain essential health services. Some stakeholders support a woman's right to choose abortion, and have no objections to corporate contributions to Planned Parenthood. Analysis of Firm's Obligation to Disclosure Regarding Corporate Donations It is important to have a balance between (1) trusting management to do a good job and (2)ensuring that there is enough oversight to ensure that the desires of the owners are truly being transferred into action. The nature of this important balance is organic and is unique to each company. The organization itself must answer the question of whether the cost and opportunity cost of disclosing such information is worth the benefits gained. I do not think it is an obligation. Ethical Issues Regarding Shareholder Resolutions Both religious and secular groups pursue socially responsible investing (SRI) to promote agendas such as justice, environmental sustainability, and union rights and to oppose child labor, pornography, alcohol, tobacco, abortion, gay marriage, and gambling. One of their tactics is to create mutual funds that only buy stocks of companies whose practices meet with their approval. Another tactic is to become shareholders in a corporation and then sponsor a socially responsible shareholder resolution, such as the one HLI sponsored for the 2006 shareholders' meeting for Johnson & Johnson. Although it is important for all of us on the planet to live responsibly and ethically, and although I value the impact socially responsible groups have had in many situations, I feel that they can muck up the gears of industry if the agendas of stockholders' meetings are dominated by numerous socially responsible stockholder resolutions. Therefore, resolutions relating to social responsibility should require co-sponsorship of a significant number of shareholders before they are considered and voted upon, following a pattern common to many political elections where a candidate or a resolution must be supported by numerous signatures to a petition in order to qualify for inclusion on the election ballot. My Conclusion Johnson & Johnson already assigns staff to prepare the contributions page for the annual report. This page communicates the scope and focus of the firm's contributions, and I agree that this format is excellent for the important goal of communicating the firm's goals and strategy in giving to charities. The \"Management's Statement in Opposition to Shareholder Proposal\" states that \"the detailed disclosure sought by this proposal... would require additional administrative efforts... which would be burdensome, and not an effective use of the Company's resources.\" I disagree with this. For tax purposes, the accounting department is already carefully listing all these donations in far more detail than that requested in this proposal. I think it would be very little extra effort to generate a list of all charitable contributions to be appended to the existing report and available on the website. It is part of the company's credo to \"be good citizens - support good works and charities and bear our fair share of taxes.\" It is commendable that Johnson & Johnson has so sincerely committed to living by its credo for so many years. I am sure this attracts many stakeholders, including shareholders, and this additional commitment to transparency can only increase the loyalty and trust of all stakeholders. Although it is important to fully investigate and consider the ideas, viewpoints and preferences of all stakeholders, this must be done only in moderation. The fact that some people object is not a sufficient reason to abandon a course of action. Abraham Lincoln was right when he said, \"You can please Some of the People All of the time; and All of the People Some of the time; but you can't please All of the People All of the time.\" (2) Unless you are blandly doing nothing at all, you are going to displease some people, and we need peaceful systems enabling these people to take their resources elsewhere. I think that Mr. McCafferty should have voted in favor of the Shareholder Proposal. What is your Conclusion? Do you know of similar cases? Works Cited 1. Lawrence, Anne T. and Weber, James. Business and Society.New York, NY : McGrawHill/Irwin, 2008. 2. Lincoln, Abraham. I have had this quote memorized since childhood. Posted in Character & Ethics, Ethics, Goodenomics Tagged Business, Ethics, Shareholders, Social responsibility Leave a comment Running Head: WHOEVER HITS ITS TARGET, WINS THE ORDER Whoever Hits Its Target, Wins the Order Name has been erased Table of Contents Abstract......................................................................................................3 Review of the Related literature..........................................................................4 Comparison between Airbus and Boeing ..............................................................5 The products: Airbus A340-600 and Boeing 777300ER.............................................5 Negotiation Strategies.....................................................................................7 Marketing Strategies.......................................................................................8 Airbus's key success factors............................................................................10 Boeing: Another chance to succeed....................................................................11 Summary ..................................................................................................12 Let's talk about Ethics....................................................................................13 References.................................................................................................14 Appendix...................................................................................................15 Appendix A................................................................................................16 2 3 4 WHOEVER HITS ITS TARGET, WINS THE ORDER Abstract The financial crisis that occurs in 2008 affected a lot the Airline Industry. Airbus and Boeing, the two largest manufacturers of commercial aircraft were affected and then became vulnerable. Their growing was mainly due to airlines, engine suppliers and aircraft financiers for convoluted deals. Iberia Airlines, a national Spanish airline, was one of the few airlines that were financially healthy enough to order planes and was one of the industry's few highly profitable carriers. This is it. It was the perfect way for Iberia to make a hard bargaining. Airbus was already a supplier of Iberia with 718 Airbus's planes and Boeing sold Iberia planes in 1995. To make things more interesting and more competitive, Enrique Dupuy de Lome, the Chief Financial Officer of Iberia, decided to confront Airbus and Boeing toward its offer. Iberia Airlines wanted to buy 12 planes in order to complete a 10 year moderation program for its long-haul fleet and replace six old Boeing 747-200 jumbo jets. A discussion between Dupuy and Toby Bright, the top salesman of Boeing, brought Boeing back into the competition since Dupuy stated that he needed two suppliers instead of Airbus only. Is it true? Was it just a strategy for Iberia to build a BATNA? This report will specify into details the different marketing and negotiations strategies used by Iberia, Airbus and Boeing by stating the different tactics used by each one of them. This report will also counter the different strategies that should be used by Boeing to win the offer if Iberia is one again on the jet liners market. In the end of this case, it is noticed that Airbus won due to its low prices, guarantees offered and same design as the existing ones. This conclusion was predicable from the start and brings into question: Was Bringing Boeing into the competition only a way to obtain the best offer from Airbus? Keywords: Iberia, Airbus, Boeing, Competition, strategies, BATNA 5 WHOEVER HITS ITS TARGET, WINS THE ORDER Review of the Related literature This part of the report is dedicated to a review of the literature concerning Iberia Airlines, Airbus and Boeing. According to the Iberia's Website, Iberia Airlines was created in 1927 and is based in Madrid. It is the largest air transport group of Spain. After its merger with British Airways in 2011, it has become the third-largest in Europe and the sixth one in the world in terms of revenues. Iberia Airlines is also the leading airline on routes between Europe and Latin America. Iberia Airlines is focused on three main activities which are transport of passengers, aircraft maintenance and services in airports. Iberia Airlines is one of the only two airlines to be included in Dow Jones index which means that Iberia Airlines has the best economic, social and environmental practices. All in all, Iberia Airlines is a member of Oneworld, the airlines alliance around the globe that serves around 700 destinations. In the summer 2011, Iberia Airlines launched its new project low cost which took the name of Iberia Express. (\"www.iberia.com\\fRunning head: JOHNSON AND JOHNSON CASE ANALYSIS Johnson and Johnson Case Analysis Table of Contents 1 JOHNSON AND JOHNSON CASE ANALYSIS 2 Abstract............................................................................................................................................3 Answer 1..........................................................................................................................................4 Arguments for Corporate Philanthropy........................................................................................4 Arguments against the Corporate Philanthropy...........................................................................5 Answer 2..........................................................................................................................................6 Arguments for Donating to Planned Parenthood.........................................................................6 Arguments against Donating to Planned Parenthood...................................................................7 Answer 3..........................................................................................................................................7 Answer 4..........................................................................................................................................8 Answer 5..........................................................................................................................................9 References......................................................................................................................................10 Appendix........................................................................................................................................11 Exhibit A....................................................................................................................................11 Exhibit B....................................................................................................................................11 JOHNSON AND JOHNSON CASE ANALYSIS 3 Abstract This case talks about the various aspects of Johnson and Johnson's philanthropic donations in 2005, to the organization Planned Parenthood that approximately totaled 600 million US dollars, which sparked anger and debates regarding corporation's roles when it comes to financial support and or aid to social organization that stand for a particular idea. Since Planned Parenthood provides pregnant women who do not want to have the child, an option to abort the pregnancy safely and securely. This brought about comments both for and against abortion, which also to an extent consists of the argument regarding the women's basic choice, to either have the child or to abort the pregnancy. There was also the argument that stockholders money is being used to donate to third party organizations, and since one of the stockholders was an antiabortion and pro-life organization (Human Life International), they decided to boycott Johnson and Johnson products as a form of protest until or unless the board at Johnson and Johnson decide to reform their philanthropic actives. Keywords: abortion, women's rights, pro-choice, philanthropy JOHNSON AND JOHNSON CASE ANALYSIS 4 Answer 1 Arguments for Corporate Philanthropy Every corporation that exists in a society ought to take some responsibility for the society and in-turn return to it, in the form of corporate social responsibility. Corporate donations do a lot of good when given to the right organization and used correctly. Therefore, if Johnson and Johnson chooses to give back to the society for the good of society, it should gladly accept Johnson and Johnson's donation and try to make the best use of it. Johnson and Johnson chose to give their donations to Planned Parenthood. Planned Parenthood is an organization that promotes contraceptives to allow couples and women to plan when to have or not to have a child. In addition to contraceptives, they also allow abortions in case of a pregnancy and give the option to the woman and/or couple to terminate the pregnancy and abort the child. This has always been the hot topic for many conservatives, who say that abortion is equivalent to murder, that too of an unborn child. This argument however, is often successfully refuted by pro-abortion liberals who suggest that if a couple, or a woman gets pregnant despite the use of contraceptives, and are for some reason not able to take care or provide financially for the child, they have the right to abort the pregnancy, rather than to bring the child into the world and give them a life of misery. Similar arguments are used by proabortionists who often argue that a when a couple or woman gets to know that the child will have some sort of deficiency and/or disability, they ought to terminate the pregnancy, rather than bring the child without their own consent and give them a life of hardships. Johnson and Johnson operates in the health care field and hence the management of Johnson and Johnson has an idea of where donations must be given and for what cause. Since Johnson and Johnson were pro-abortion, and family planning, they chose to give to Planned Parenthood. JOHNSON AND JOHNSON CASE ANALYSIS 5 Moreover, it's their management's policy that the corporate contributions to the society and/or donations are necessary to their values and mission regardless of its effect on shareholders wealth. Therefore the management will contribute to social organizations, and shareholders ought to consider this before deciding to invest with Johnson and Johnson. Arguments against the Corporate Philanthropy A majority of investors invest in Johnson and Johnson through mutual stocks, and therefore they will not be aware that Johnson and Johnson is donating huge amounts to Planned Parenthood. Ethically Johnson and Johnson needs to have the consent of ALL investors in order to use their money (profits) to donate to another organization. Johnson and Johnson, being a consumer goods company, is vulnerable to boycotts by retailers and/or groups that disagree with the choices Johnson and Johnson makes, or where they spend their money. The money Johnson and Johnson is donating belongs to the shareholders and investors. It can be given to outside corporations for as a gesture of corporate social responsibility, but with the consent of the investors, because after all, the shareholders are the real owners of the company, and therefore their consent has to be in whatever decision Johnson and Johnson takes. Especially when it comes to using their profits for philanthropic purposes. The general public, of all the stakeholders of Johnson and Johnson, benefit the most from contributions by Johnson and Johnson, and the stockholders profit the least. This could be however, a rather short sighted assessment and stockholders may benefit from this policy or corporate social responsibility. Due to this policy Johnson and Johnson's reputation could possibly rise and in-turn will its stock value, which will eventually benefit the real owners of the company - the stockholders. When demand of the stock increases, the price would increase, JOHNSON AND JOHNSON CASE ANALYSIS 6 keeping other factors constant, which will make stockholders profit on their stocks if sold. However, the company is also harmed, since Human Life International (HLI) would boycott Johnson and Johnson's products, which will cause Johnson and Johnson to lose significant amounts of profits. Answer 2 Arguments for Donating to Planned Parenthood Planned Parenthood helps couples, families and single women plan their future. They support women's health issues, advocate for women's rights to make the choice of 'if' and 'when' to abort a pregnancy, work to advance health care knowledge and awareness. For quite a few women in the United States, the Planned Parenthood clinic is the only place accessible to them and where they can get basic health services. There is also a philosophical point that is often made regarding abortion, which is that when parents conceive a child, and decide to bring the child into this world, they are not actually getting the consent of the child to come into the world. Later in life the child may question their parents as to why they chose to bring them in this world under these circumstances. Some of the stakeholders are in favor of women's right to choose to abort, and hence they have no issues whatsoever, when it comes to donating to planned parenthood as fulfilling their corporate social responsibility. There have been activist groups and members of those groups, such as \"All Our Lives\" that strongly advocate that contraceptives must be provided to women and in case of an unplanned pregnancy, the woman and/or couple must have the right to get an abortion without any questions asked (Ziegler, 2013). In the case Roe v. Wade, the court took careful measures to conform and ensure the people that the right to abortion shall not de determined by religious positions on the subject (Scaldo, 2012). JOHNSON AND JOHNSON CASE ANALYSIS 7 Arguments against Donating to Planned Parenthood Quite a few pro-life activists and organizations decided to boycott Johnson and Johnson products just because of their donations to Planned Parenthood who are pro-abortion. The main idea behind the boycott is to hut Johnsons and Johnson financially and in-turn compel them to stop donating to Planned Parenthood. Most arguments for the abolition of abortion practices throughout the United States stem from a rather common core, that is, that religions (specifically Christianity) do not allow abortions. It is also argued that men and women must abstain from having intercourse until or unless they choose to bring a child into this world, and if a woman gets pregnant on accident or unintentionally, they (the man and woman) ought to take responsibility of their mistake and raise the child to the best of their capacity. Many of the stakeholders have the opinion that abortion is murder of the unborn child and therefore is wrong and must be stopped. They also propose the argument that it is not ethically correct to force them, and to kill the unborn child without their own knowledge. Lee (2010) argues that even if people are not entirely convinced of the arguments revolving around rights of a person, it is just wrong to abort, or kill an unborn human, because that would be similar in nature to killing another human. Beckwith (2007) and Lee (2010), both argue against the practice of aborting a pregnancy using the notion that it is essentially a human life that abortionists end, without their consent. Many of the mutual funds decided against buying Johnson and Johnson shares in order to protest against these donations. Answer 3 The whole company is owned by a number of people called the shareholders, and run by the board of directors and the CEO. Exhibit A in the appendix show the pattern of growth of JOHNSON AND JOHNSON CASE ANALYSIS 8 Johnson and Johnson from 1995 to 2005, and there is a constant increase in sales from 1995 to 2005. Exhibit B shows the increasing Johnson and Johnson share prices in 2004, and the decreasing share prices in 2005, due to issues revolving this philanthropic activity. Since shareholders own the company and it is their money invested in Johnson and Johnson, the organization has an obligation to disclose any material activity, financial or otherwise, to the shareholders/owners. Not doing so would be unethical and could even be considered as corrupt behavior. In order to develop trust between the corporate government and owners, the government ought to disclose everything material. Given some companies define material events and/or finances to be different from other, they need to explicitly let the shareholders know what is considered material and what is not. Therefore, it is definitely an obligation to disclose everything material to the shareholders. Answer 4 Activists should not generally use shareholder resolutions in order to propagate or promote their own agenda, until or unless they belong to an activist group that is trying to bring about positive change to the society or helping the government make changes or implement laws that will, in-turn bring about positive change to the society; for example, advocating for gun control in the United States. Social activist groups create mutual funds and buy only stocks of companies and organizations who tend to create policies, or donate to other social organization that are in line with their agenda. Another possible way to influence an organizations actions is to become shareholders in the organization in order to manipulate and/or influence them towards a rather socially responsible area. However, activists groups can even often cause the stockholders JOHNSON AND JOHNSON CASE ANALYSIS 9 agenda to change. This will not be viable or acceptable to most stockholders since their main purpose is to make as much profit as possible. Answer 5 McCafferty should have had voted for the shareholder's proposal. The accounting department at Johnson and Johnson, records the details of each and every donation given to Planned Parenthood by Johnson and Johnson. The detail that exists in accounting records is far more than what is required by the shareholders. Johnson and Johnson's credo states that to be good citizens, support good charities and good works. Which is why Johnson and Johnson supports Planned Parenthood, since it believes that Planned Parenthood, provides health services to women in need and allows them to have abortions if at all they need it. It is very important to investigate and even consider the viewpoints and ideas of shareholders, and preferences of all stakeholders, this must only be done in moderation. People object and have their opinions on various ideas, however, this alone is not reason enough for a company like Johnson and Johnson to stop contributing to organizations they believe in. under any circumstances, giving to any charitable organizations and/or non-government organization, there ought to be some percentage of the public that does not like the choices made by the company. JOHNSON AND JOHNSON CASE ANALYSIS References Beckwith, F. J. (2007). Defending life: A moral and legal case against abortion choice. Cambridge University Press. Lawrence, A. T., & Weber, J. (2008). Business and society: Stakeholders, ethics, public policy. Tata McGraw-Hill Education. Lee, P. (2010). Abortion and unborn human life. CUA Press. Scaldo, S. A. (2012). Life, Death & the God Complex: The Effectiveness of Incorporating Religion-Based Arguments into the Pro-Choice Perspective on Abortion. N. Ky. L. Rev., 39, 421. Ziegler, M. (2013). Women's Rights on the Right: The History and Stakes of Modern Pro-Life Feminism. Berkeley Journal of Gender, Law & Justice, 28(2), 232-268. 10 JOHNSON AND JOHNSON CASE ANALYSIS Appendix Exhibit A Exhibit B 11 \fRunning head: JOHNSON AND JOHNSON CASE ANALYSIS Johnson and Johnson Case Analysis Table of Contents 1 JOHNSON AND JOHNSON CASE ANALYSIS 2 Abstract............................................................................................................................................3 Answer 1..........................................................................................................................................4 Arguments for Corporate Philanthropy........................................................................................4 Arguments against the Corporate Philanthropy...........................................................................5 Answer 2..........................................................................................................................................6 Arguments for Donating to Planned Parenthood.........................................................................6 Arguments against Donating to Planned Parenthood...................................................................7 Answer 3..........................................................................................................................................7 Answer 4..........................................................................................................................................8 Answer 5..........................................................................................................................................9 References......................................................................................................................................10 Appendix........................................................................................................................................11 Exhibit A....................................................................................................................................11 Exhibit B....................................................................................................................................11 JOHNSON AND JOHNSON CASE ANALYSIS 3 Abstract This case talks about the various aspects of Johnson and Johnson's philanthropic donations in 2005, to the organization Planned Parenthood that approximately totaled 600 million US dollars, which sparked anger and debates regarding corporation's roles when it comes to financial support and or aid to social organization that stand for a particular idea. Since Planned Parenthood provides pregnant women who do not want to have the child, an option to abort the pregnancy safely and securely. This brought about comments both for and against abortion, which also to an extent consists of the argument regarding the women's basic choice, to either have the child or to abort the pregnancy. There was also the argument that stockholders money is being used to donate to third party organizations, and since one of the stockholders was an antiabortion and pro-life organization (Human Life International), they decided to boycott Johnson and Johnson products as a form of protest until or unless the board at Johnson and Johnson decide to reform their philanthropic actives. Keywords: abortion, women's rights, pro-choice, philanthropy JOHNSON AND JOHNSON CASE ANALYSIS 4 Answer 1 Arguments for Corporate Philanthropy Every corporation that exists in a society ought to take some responsibility for the society and in-turn return to it, in the form of corporate social responsibility. Corporate donations do a lot of good when given to the right organization and used correctly. Therefore, if Johnson and Johnson chooses to give back to the society for the good of society, it should gladly accept Johnson and Johnson's donation and try to make the best use of it. Johnson and Johnson chose to give their donations to Planned Parenthood. Planned Parenthood is an organization that promotes contraceptives to allow couples and women to plan when to have or not to have a child. In addition to contraceptives, they also allow abortions in case of a pregnancy and give the option to the woman and/or couple to terminate the pregnancy and abort the child. This has always been the hot topic for many conservatives, who say that abortion is equivalent to murder, that too of an unborn child. This argument however, is often successfully refuted by pro-abortion liberals who suggest that if a couple, or a woman gets pregnant despite the use of contraceptives, and are for some reason not able to take care or provide financially for the child, they have the right to abort the pregnancy, rather than to bring the child into the world and give them a life of misery. Similar arguments are used by proabortionists who often argue that a when a couple or woman gets to know that the child will have some sort of deficiency and/or disability, they ought to terminate the pregnancy, rather than bring the child without their own consent and give them a life of hardships. Johnson and Johnson operates in the health care field and hence the management of Johnson and Johnson has an idea of where donations must be given and for what cause. Since Johnson and Johnson were pro-abortion, and family planning, they chose to give to Planned Parenthood. JOHNSON AND JOHNSON CASE ANALYSIS 5 Moreover, it's their management's policy that the corporate contributions to the society and/or donations are necessary to their values and mission regardless of its effect on shareholders wealth. Therefore the management will contribute to social organizations, and shareholders ought to consider this before deciding to invest with Johnson and Johnson. Arguments against the Corporate Philanthropy A majority of investors invest in Johnson and Johnson through mutual stocks, and therefore they will not be aware that Johnson and Johnson is donating huge amounts to Planned Parenthood. Ethically Johnson and Johnson needs to have the consent of ALL investors in order to use their money (profits) to donate to another organization. Johnson and Johnson, being a consumer goods company, is vulnerable to boycotts by retailers and/or groups that disagree with the choices Johnson and Johnson makes, or where they spend their money. The money Johnson and Johnson is donating belongs to the shareholders and investors. It can be given to outside corporations for as a gesture of corporate social responsibility, but with the consent of the investors, because after all, the shareholders are the real owners of the company, and therefore their consent has to be in whatever decision Johnson and Johnson takes. Especially when it comes to using their profits for philanthropic purposes. The general public, of all the stakeholders of Johnson and Johnson, benefit the most from contributions by Johnson and Johnson, and the stockholders profit the least. This could be however, a rather short sighted assessment and stockholders may benefit from this policy or corporate social responsibility. Due to this policy Johnson and Johnson's reputation could possibly rise and in-turn will its stock value, which will eventually benefit the real owners of the company - the stockholders. When demand of the stock increases, the price would increase, JOHNSON AND JOHNSON CASE ANALYSIS 6 keeping other factors constant, which will make stockholders profit on their stocks if sold. However, the company is also harmed, since Human Life International (HLI) would boycott Johnson and Johnson's products, which will cause Johnson and Johnson to lose significant amounts of profits. Answer 2 Arguments for Donating to Planned Parenthood Planned Parenthood helps couples, families and single women plan their future. They support women's health issues, advocate for women's rights to make the choice of 'if' and 'when' to abort a pregnancy, work to advance health care knowledge and awareness. For quite a few women in the United States, the Planned Parenthood clinic is the only place accessible to them and where they can get basic health services. There is also a philosophical point that is often made regarding abortion, which is that when parents conceive a child, and decide to bring the child into this world, they are not actually getting the consent of the child to come into the world. Later in life the child may question their parents as to why they chose to bring them in this world under these circumstances. Some of the stakeholders are in favor of women's right to choose to abort, and hence they have no issues whatsoever, when it comes to donating to planned parenthood as fulfilling their corporate social responsibility. There have been activist groups and members of those groups, such as \"All Our Lives\" that strongly advocate that contraceptives must be provided to women and in case of an unplanned pregnancy, the woman and/or couple must have the right to get an abortion without any questions asked (Ziegler, 2013). In the case Roe v. Wade, the court took careful measures to conform and ensure the people that the right to abortion shall not de determined by religious positions on the subject (Scaldo, 2012). JOHNSON AND JOHNSON CASE ANALYSIS 7 Arguments against Donating to Planned Parenthood Quite a few pro-life activists and organizations decided to boycott Johnson and Johnson products just because of their donations to Planned Parenthood who are pro-abortion. The main idea behind the boycott is to hut Johnsons and Johnson financially and in-turn compel them to stop donating to Planned Parenthood. Most arguments for the abolition of abortion practices throughout the United States stem from a rather common core, that is, that religions (specifically Christianity) do not allow abortions. It is also argued that men and women must abstain from having intercourse until or unless they choose to bring a child into this world, and if a woman gets pregnant on accident or unintentionally, they (the man and woman) ought to take responsibility of their mistake and raise the child to the best of their capacity. Many of the stakeholders have the opinion that abortion is murder of the unborn child and therefore is wrong and must be stopped. They also propose the argument that it is not ethically correct to force them, and to kill the unborn child without their own knowledge. Lee (2010) argues that even if people are not entirely convinced of the arguments revolving around rights of a person, it is just wrong to abort, or kill an unborn human, because that would be similar in nature to killing another human. Beckwith (2007) and Lee (2010), both argue against the practice of aborting a pregnancy using the notion that it is essentially a human life that abortionists end, without their consent. Many of the mutual funds decided against buying Johnson and Johnson shares in order to protest against these donations. Answer 3 The whole company is owned by a number of people called the shareholders, and run by the board of directors and the CEO. Exhibit A in the appendix show the pattern of growth of JOHNSON AND JOHNSON CASE ANALYSIS 8 Johnson and Johnson from 1995 to 2005, and there is a constant increase in sales from 1995 to 2005. Exhibit B shows the increasing Johnson and Johnson share prices in 2004, and the decreasing share prices in 2005, due to issues revolving this philanthropic activity. Since shareholders own the company and it is their money invested in Johnson and Johnson, the organization has an obligation to disclose any material activity, financial or otherwise, to the shareholders/owners. Not doing so would be unethical and could even be considered as corrupt behavior. In order to develop trust between the corporate government and owners, the government ought to disclose everything material. Given some companies define material events and/or finances to be different from other, they need to explicitly let the shareholders know what is considered material and what is not. Therefore, it is definitely an obligation to disclose everything material to the shareholders. Answer 4 Activists should not generally use shareholder resolutions in order to propagate or promote their own agenda, until or unless they belong to an activist group that is trying to bring about positive change to the society or helping the government make changes or implement laws that will, in-turn bring about positive change to the society; for example, advocating for gun control in the United States. Social activist groups create mutual funds and buy only stocks of companies and organizations who tend to create policies, or donate to other social organization that are in line with their agenda. Another possible way to influence an organizations actions is to become shareholders in the organization in order to manipulate and/or influence them towards a rather socially responsible area. However, activists groups can even often cause the stockholders JOHNSON AND JOHNSON CASE ANALYSIS 9 agenda to change. This will not be viable or acceptable to most stockholders since their main purpose is to make as much profit as possible. Answer 5 McCafferty should have had voted for the shareholder's proposal. The accounting department at Johnson and Johnson, records the details of each and every donation given to Planned Parenthood by Johnson and Johnson. The detail that exists in accounting records is far more than what is required by the shareholders. Johnson and Johnson's credo states that to be good citizens, support good charities and good works. Which is why Johnson and Johnson supports Planned Parenthood, since it believes that Planned Parenthood, provides health services to women in need and allows them to have abortions if at all they need it. It is very important to investigate and even consider the viewpoints and ideas of shareholders, and preferences of all stakeholders, this must only be done in moderation. People object and have their opinions on various ideas, however, this alone is not reason enough for a company like Johnson and Johnson to stop contributing to organizations they believe in. under any circumstances, giving to any charitable organizations and/or non-government organization, there ought to be some percentage of the public that does not like the choices made by the company. JOHNSON AND JOHNSON CASE ANALYSIS References Beckwith, F. J. (2007). Defending life: A moral and legal case against abortion choice. Cambridge University Press. Lawrence, A. T., & Weber, J. (2008). Business and society: Stakeholders, ethics, public policy. Tata McGraw-Hill Education. Lee, P. (2010). Abortion and unborn human life. CUA Press. Scaldo, S. A. (2012). Life, Death & the God Complex: The Effectiveness of Incorporating Religion-Based Arguments into the Pro-Choice Perspective on Abortion. N. Ky. L. Rev., 39, 421. Ziegler, M. (2013). Women's Rights on the Right: The History and Stakes of Modern Pro-Life Feminism. Berkeley Journal of Gender, Law & Justice, 28(2), 232-268. 10 JOHNSON AND JOHNSON CASE ANALYSIS Appendix Exhibit A Exhibit B 11