Factors affecting the decision making process of Vegesna:So far, we evaluated the decision made by Raju Vegesna about

bribing the FDA officials to get approval of the drug Trazodone Hydrochloride. Now, I am going to throw some light on what could be the major factors that could have affected his unethical decision. Now, many factors could have affected Vegesnas decision. Some factors could be personal such as selfinterest and egoism. Others could be organizational such as organizational climate, organizational goals and competition in the generic drug industry. Personal traits of Raju Vegesna:The decision of bribing FDA officials and falsifying information about the testing laboratory reflect the personal values of Vegesna. Values of Vegesna: According to Rockeach, Values are of 2 types: Terminal and Instrumental. Terminal values refer to the beliefs or conceptions about ultimate goals (e.g. a comfortable life, a sense of accomplishment) while Instrumental values refer to beliefs refer to beliefs or conceptions about desirable modes of behavior that are instrumental to the attainment of ultimate goals (e.g. Responsible, hard-working, Honest). Clearly, Vegesna possessed terminal set of values because he was more concerned about corporate profits that he and his company could have earned by selling the drugs, without any consideration to the unethical practices that he resorted to in order to get approval for the drug from FDA. Moderators of personal traits:There are 3 moderators of personal traits. Ego strength, Field dependence and Locus of control. Ego Strength is synonymous to self confidence in terms of personal beliefs. A person with high ego strength will have rely more on personal values and beliefs than a person with low ego strength. Thus a person with high ego strength will be more vulnerable to factors be it economic, political, social or technological to alter his system of ethical beliefs and values. 2nd moderator is Field Dependence. Someone with high field dependence tends to make greater use of information provided by others to clarify the issues when situations are ambiguous. We think that Vegesna had high field dependence because he was consulting a generic drug consultant to bribe the FDA officials. The generic drug consultant was also convicted along with Raju Vegesna. 3rd moderator is Locus of Control which reflects an individuals understanding of the control he or she has over lifes events. An external believes that lifes events are controlled by destiny or fate. An internal believes that they are controlled by his/her own actions. Vegesna was an external because he did not take into account the negative consequences of his unethical actions and hence did not feel a sense of responsibility for what will be the impact of his behavior on consumers and society in large.

Thus, the decisions made by Vegesna to some extent depend on his personal traits such as low ego strength, high field dependence and external locus of control. Therefore, we can say that to some extent his decision was convoluted due to the organizational forces as well. Generally also, in a professional setup personal values are mediated by external forces that may alter the role played by personal values in decision making. Now, let us examine the role of organizational forces that might have affected Vegesnas judgment. External factors comprise of stakeholders, organizational climate and organizational goals that play a key role in ethical decision making. Stakeholders: As Nikki has discussed that Vegesna identified investors and the company as preferred stakeholders, rather than the consumers, which led him to take an unethical decision leading to negative consequences. Organizational climate with respect to Generic drug industry: In the highly-competitive generic drug business, the first company to provide a low-cost generic equivalent of a prescription drug going off patent often reaps fat profits, while the profits fall quickly as more competitors leap in. ATI had immense pressure to obtain FDA approval before any of the competitors did. So, the organizational drive to gain first mover advantage played a very crucial role in Vegesnas decision making process. Organizational goals: As per our learning from Managerial Finance course, the primary goal of a commercial firm is maximization of wealth and profits of the investors. This often leads to unlawful and hence unethical behavior on the part of representatives of an organization, in this case Vegesna. He put unlawful corporate profit ahead of consumer safety which provoked him to bribe FDA officials and submit false data in order to get the approval. So, these could have been the factors that could have influenced Vegesnas decision to follow the unethical path. Now let us analyze as to what were the decision dimensions that Vegesna might have used while developing the drug: But before that, Let us imagine that before actually going ahead with the bribery decision, Vegesna actually thought and discussed about this decision problem. Now, decision problems are of 2 types: A) Strategic which require long term deployment of resources and B) Tactical which requires short term deployment of resources. What do you think? What kind of a decision problem was it? Correct. This was a tactical problem as it required bribing the FDA officials and submitting false information about raw material testing laboratory and bam!!! they could have gotten the approval for drug development. The recognition of a problem motivates the decision maker to search for solutions. Once, these set of decision alternatives is established, one evaluates all the decision alternatives on the basis of certain criteria or dimensions. These dimensions are economic, political, technological, social and ethical. An alternative with

sufficient benefits from any one or a combination of these dimensions may offset a marginally acceptable ethical judgment and become an alternative of choice. In this case when Vegesna took the decision of developing the drug, the economic dimension i.e. the huge profits that ATI could have made by selling the drug had positive benefits that were large enough to more than offset the negative consequences of ethics dimension of not bribing and submitting false information and social dimensions of providing high quality, safe and reliable products to consumers. In the highlycompetitive generic drug business, the first company to provide a low-cost generic equivalent of a prescription drug going off patent often reaps fat profits, while the profits fall quickly as more competitors leap in. ATI had immense pressure to obtain FDA approval before any of the competitors did. So, the organizational drive to gain first mover advantage for profit maximization played a very crucial role in Vegesnas decision making process. So, why did a supposedly intelligent and presumably experienced CEO end up with such a misconduct. There are various rationalizations for such behavior:1) A belief that the activity is reasonably ethical and legal because several others are doing it as well. Sometimes, the fact that everybody else is doing it makes people to believe that the act is not wrong and not really illegal or immoral. During the late 1980s, several generic drug industries were involved in bribery and many FDA officials were willingly accepting bribes to accelerate the drug approval process. 2) A belief that the activity is in the individuals or corporations best interest As we discussed, in a highly competitive industry where first mover advantage is crucial, Vegesna did not mind resorting to illegal methods profits and beating the competitors were more important. 3) A belief that the activity is safe and will never be found out or publicized- During the 1980s, many generic drug industries were involved in similar activities and none of them were caught. This reinforced the belief in Vegesna that the cat will never come out of the bag. But the reason we are discussing this case is because the cat is out of the bag. Abnd now the question is Is there any other way in which Vegesna could have obtained FDA approval as quickly as he did? Mario will take over now to discuss the same.