Running head: Ethics of Offshoring

Research project on Ethics Of Offshoring:

Novo and Clinical Trials in Emerging Economies

Submitted To
Dr. Michele Vincenti
Master of Administrative Science (MAS)
Ethics and Public Values MADS 6604-v4
Fairleigh Dickinson University- Vancouver Campus
Summer Semester, 2015.

Prepared by:
Akshay Pillai
Neil Arun
Phannarat Phomphadungcheep
Pornrawee Posri

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Abstract

Novo Nordisk is one of the leading pharmaceutical companies in the world, which is
based in Denmark and deals with the research and development of the drugs. The
company was established in 1989 by merging of two Danish companies (Novo
Industries and Nordisk Gentofte, both of these companies was established in the
1920s). In 2008, the company became a focus industry in the healthcare and leader of
the diabetic care in the world. It avows the most innovative and broadest company in
the innovation of the diabetic product, which includes the advancement in the insulin,
homeostatic management, growth hormone therapy and hormone replacement. Novo
Nordisk is the first Danish company and one of the first in the world who published
environmental report and established the world diabetes foundation (Novo Nordisk).
Ethics plays a key role in the success of a company. On the basis of ethics major
decisions are decided for the companys future as well as for the employees. Novo
Nordisk had been doing research for the development of medicine, which contain four
(North America Free Trade Aggrement)phases. The company had to conduct the trails
of third and fourth phase on large number of patients for the drug improvement. It was
found that companies were conducting trials especially in the Eastern Europe, India,
South America and China. These countries provided them the best medical staff, large
number of patients with the specific conditions and at the lower cost, which exhibits
the offshoring by the company. Ramifications like the reputation of the company can
get damage. It is an important asset of the company, which is difficult to rebuild.
Unethical behavior can lead to the degradation of the company, which Novo Nordisk
was implementing.

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Table of Content

Abstract2
Introduction..4
Background of the Issue...4
Statement of Problem.......7
Description of Decision Making Process
SWOT Analysis
PEST Analysis
Fishbone Analysis.......
5 Why Analysis
Combating the Issue of Drug Trafficking
Conclusion
Appendix...
References..

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Introduction

Offshoring has the major impact on the global market. What exactly offshoring means
that when a company shifts its business from one country to the different for the
manufacturing of the product at cheap laboring cost. This entails the product moving
from its local area to another country. It has its pros and cons for instance, it introduce
employment to the developing countries, export revenue, business growth, innovation
in the work, etc. On the other hand, the disadvantages of the offshoring are that it
transfers poor knowledge; the quality of work is degraded and lower morale among
the respondents. (Pros and Cons of Offshoring)

Background
History says that the manufacturing of good has been started before the Revolutionary
war and America had both benefits and loss from it. Goods were transported to
England because the labor was surplus there and to protect the factories, the
parliament passed the law to manufacture the in England. After the war, American
companies found that the cost of goods was high and they started copying the English
companies. (History of Offshoring) In early 1980s, Ireland was the poorest country of
the European Union. Offshoring came into light when NAFTA (North American Free
Trade Association) opened gate for the manufacturers to shift their production to
Mexico from US. The governments of Canada, U.S and Mexico decided to have
trilateral negotiation to achieve NAFTA. This negotiation was not raised earlier
between the two governments. The cost of labor was cheap in Mexico and this
negotiation helped Mexico to increase the wages of the workers and overall economic
condition of the country. (North America Free Trade Aggrement)

Ethics of offshoring

Then

Now

Statement of problem

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Appendices

I. SWOT analysis:
STRENGTHS

The companies have followed the triple

WEAKNESSES

bottom line philosophy.

all of the medicines due to the economy

crisis.

Most of the managers and employees

have been training on ethics in order to

Greek government reduced the prices of

There were many problems in the

engage the corporate social

developing countries such as Africa

responsibility.

about the high cost of the experiment.

Novo Nordisk established the Diabetes

The social media mentioned the

Foundation in many developing

company as a reputation in the world

countries.

market.

The core value of the company is its

follows the high universally standard in
business ethics and transforms the
strategies when needed.

Ethics of offshoring

II. PEST analysis:

Political

Opportunities
Established the

Threats

world Diabetes
Foundation in
developing
countries.

Economical

The companies used

the ethical business

method to briefly
differentiate its
competitors.

Social

The company
usually follows the
sustainability ways
for such a long
period of times.

Created awareness
and trust with in the
company.

Ethics of offshoring