...“BioHemi, Inc.” I strongly disagree to continue to sell the old product and complete the fix-price contracts. I am sure that the unemulsified plasma product allows more people to be infected with AIDS and it had been proved by CDC in 1983. I am an accountant who is responsible to generate profits for the company, but it is reasonable for a professional accountant to considerate ethics first. Ethics is moral philosophy, which means that people have strong beliefs about what is right and wrong. The judgment may come from our parents, teachers and friends, which is closely related to the environment for the growth of individual and the culture of country. Even though there are a large number of environmental and cultural differences, people are supposed to achieve their purposes on the basis of helping others, at least it cannot be harmful to others. Obviously, sales of the old product will hurt others deeply and making new version of product will be beneficial to each other. Business exists to create wealth, which include creating customer value and generating profit. Although individuals now focus more on profit than ever, it is only a part of business. In other words, business is to meet customers’ satisfactions. In primitive society, people used an item which they do not need to exchange another one needed. In this case, everyone was both seller and buyer; they felt satisfied because they all got what they want. Therefore, if BioHemi, Inc. continues to sell old product...
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...Due to the recent findings in regards to the unemulsified plasma product, BioHemi has been faced with a difficult decision. Both options will affect large numbers of people. On one hand, BioHemi can continue to sell the unemulsified product and save millions of dollars. However, this would be harmful and potentially even fatal for thousands of hemophiliacs. On the other hand, BioHemi could stop selling the unemulsified product and not endanger hemophiliacs that would be unknowingly taking a potentially deadly product. However, this would inhibit research and development and ultimately take money away from shareholders and employees. After weighing the options, we have come to the consensus that BioHemi cannot continue to sell the unemulsified product. Furthermore, BioHemi needs to stop production of the unemulsified product and only sell the emulsified product to the customers that we have fixed contracts with. The most important reason we cannot in good faith sell the unemulsified product is because we are infecting humans with a life threatening disease. This is especially true when the consumer is under the impression that the product is going to improve their condition. Seventy-four percent of the consumers contracted HIV from our unemulsified product. In addition, we are indirectly responsible for taking even more lives than just the hemophiliacs that contract HIV. The hemophiliacs will likely pass the disease on to others, who in turn can pass it on to others...
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...BioHemi, Inc. Response In the case of BioHemi’s old product, the decision on what to do is a difficult one. When meeting with the team I would consider the potential loss or gain when it comes to selling this product. If we decided to not continue the sale of the old product, then the company would face an automatic loss of 37.5 million dollars due to wasted inventory. We would also be facing a loss regarding the fixed price contracts because the company would not be generating enough profit to cover them. On the other hand if we did continue to sell the old product we would not face the 37.5 million dollar loss, and know that we would generate enough income to cover our expenses. Going into the team meeting I would discuss both options to the other members. As the accountant for the company product team I would recommend that we continue to sell the old product, only selling up to the 500,000 units in our inventory. Once we sold those units, we would no longer have the loss or the contracts to worry about. As of now though, we simply couldn’t rely on the new product generating enough revenue to cover all of our costs. There are many reasons why I would suggest this. Recovering from a 37.5 million dollar loss would be really difficult for the company. If that was to happen, we would want to cut expenses as much as possible to somehow make up for that amount. Many of the employees would have to be laid off, or fired, in result to this action. Firing those employees...
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...Memorandum To: FROM: DATE: September 8, 2013 SUBJECT: BioHemi, Inc. Ethics A decision such as this is a very difficult one. The options we’re given are to continue distributing our product at a risk of harming people or to take a huge loss. I understand it can be a hard truth, but I believe that the ethical choice will be to discontinue distributing our unemulsified plasma. I am aware we will be losing 37.5 million dollars in product and that we will be unable to satisfy our fixed contracts, but we have to remember our obligations to our customers and clients. The CDC has released the statistic that “74 percent of hemophiliacs who used an unemulsified plasma product were HIV positive”. The percentage is too high to gamble people’s lives with. We also have to remember how this will look on our company, can you imagine the widespread news if it was released that we continued distributing to Guatemala and many people died as a result? As a professional accountant of this firm I promise you that my choice is in the best interest of the company as a whole. That 37.5 million won’t last forever, and if we decided to take it, we would never have people’s trust again. In the long run, we will still be a company with integrity and end up making more money because of it. I am also bound by the IMA code of ethics. I know that ethical issues were raised in the team meetings so I am going to address those. Within the IMA code of ethics under integrity, numbers two and three both apply...
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