An Examination of Glaxosmithkline Performance in Society

Length: 1583 words

Companies are expected by society to act responsibly which translates into a set of corporate responsibility principles, the outcome being a substantial difference to the durability, prosperity and liveability of the communities in which they operate (Smith 2008). GlaxoSmithKline is a world leading research based pharmaceutical company, with a mission that is challenging and arousing to improve the quality of human life. GlaxoSmithKline has a robust combination of resources and skills delivering strong growth in today’s rapidly changing environment (Pangarkar 2006).

The company also has leadership in four major therapeutic areas, anti infective, central nervous system, respiratory and gastro intestinal/metabolic and is also leading in the important area of vaccines (Tregear 2005). Therefore, this essay evaluates GlaxoSmithKline’s social performance in relation to the environment. It focuses on their corporate responsibility and portrays both positives and negatives in their operations and their impact on the environment and its stakeholders. GlaxoSmithKline achievements and social performance Companies are growingly discussing Corporate Social Responsibility at their highest level.

Strong practices result in to a solid company reputation (Othman and Ameer 2009). In a New York news publication GlaxoSmithKline report confirms progress and dedication to its extensive approach in meeting society’s needs. Areas such as access to medication in developing countries and research and development in such nations, training of employees, environmental responsibility and conservation of environment, flora and fauna are widely supported by GlaxoSmithKline (GSK confirms Global Commitment to Corporate and Social Responsibility 2003).

The company’s achievements in Research and development are significant, contribution to society by discovering new ways of treating and preventing diseases. An investment of 500 million pounds has been made for product innovations. In addition the company is doing their best to replace animals in their research with other methods where possible such as using new technologies and refining the techniques used on animals for their research (GlaxoSmithKline . n. d). This shows commitment towards preserving the environment.

Evidence of the company’s social commitment, is rewards for their achievements in both local and global community work by the Business in the community committee for their commendable contribution in the community such as provision of medicines in the Lymphatic Filariasis(a disease caused by mosquito bites) programme conducted by the World Health Organisation (WHO), Global Alliance, Ministry of health, NGO’S, the company donated 67 million albendazole treatments to 34 countries in the year 2004 (Boseley 2002).

Such alliance with Global Organizations for noble causes is a great contribution factor in building corporate reputation. GlaxoSmithKline incorporates green products in their product development from an early stage. The corporation has experienced great success especially in packaging and has won the big Tick 2008 excellence awards by the business committee for responsible business practices(Atkinson 2009). The company has ties with committees to collect used bottles to ensure efficient recycling which as per statistics 95% leading to prominent green savings and benefits(Atkinson 2009).

This builds trust in the company and its products by its prominent stakeholder’s i. e. its shareholders and consumers. As per statistics annual sales of GlaxoSmithKline are pounds 20. 3 billion and a profit of pounds 6. 1 billion before tax. The company together with making tremendous profits, GlaxoSmithKline plays a major role in practicing corporate responsibility in areas like alleviating poverty, lack of infrastructure in underserved communities, disease prevention.

Being a member of Percent Club in UK, GSK donates 1% of their pre tax profits to Charitable causes (Tregear 2005, 30). In addition the company also donated medicines for the earthquake and tidal waves in Asia on 26th December (Armstrong 2005).? In addition GlaxoSmithKline is commited to various environmental sustainability programmes like increasing use of renewable materials and energy, also an implementation of climate change programme with an aim to conserve energy by 20% per unit of sales by this year.

Giving Priority to water consumption, the company aims to go beyond saving water not only in their operations but also engage in issues related to water borne diseases (GlaxoSmithKline n. d. ) ? Another Community initiative that GlaxoSmithKline is engaged in is the Personal Hygiene and Sanitation Programme; this is an education program to reduce diarrhoea related disease. As per statistics every year about 2 million people die of diarrhoea related disease majority of them are children in developing countries, therefore the aim of this programme is to educate children in hygiene (Tregear 2005).

The impact of this on the organization leads to improved visibility, and a global recognition leading to more investors in the company and more prospective customers. Good comments. In addition to this the company is also a supporter of Hospice care network in Canada that improves quality of life for terminally ill people and their families. GSK helped develop several strategies to address complex issues affecting the hospice community (Svendsen and Laberge 2005). Through this the company built strong, trust based relationships with its stakeholders.

During the Asian crisis, there were many restructurings and job losses in Singapore, therefore the government announced for companies to make wage reforms and adopt flexible wages, this had an impact on employees of GlaxoSmithKline, the company made flexible restructurings such as fixed service benefits, bonuses, medical benefits. GlaxoSmithKline ensured competitive wages to retain and attract quality employees (Pangarkar 2006). This evaluates that GSK values its employees, hence the fast growth, new innovations and success of the company. GlaxoSmithKline negative impacts on society

In comparison to GlaxoSmithKline’s corporate report stating the company’s strong commitment towards a sustainable environment, its responsibility towards their consumers and efforts to cure diseases in a responsible manner. Despite of such commitment GlaxoSmithKline faces legal cases and criticisms for putting people’s lives at risk. The Avandia case has been a difficult situation for the company, this has been a big issue especially in UK and USA, many news articles reported Avandia , a diabetes drug (Houlton 2010), being GlaxoSmithKline’s blockbuster product reporting a sales of pounds 1.6 billion in the year 2006, however after concerns were raised of potential link to heart attacks and evidence from FDA’S scientists concluded that Avandia was associated with 83000 heart attacks. After these accusations sales of this product dropped to pounds 771 million (Lofstedt 2010). Many stakeholders such as shareholders benefited from the products sale in 2006, other stake holders like employees with good incentives, government through taxes. Share Prices in the market dropped drastically by 8% (Lofstedt 2010).

While on the negative side when company sales dropped, Shareholders dividends dropped and company’s profits also dropped, the company’s corporate reputation was affected and harm caused to human community. Further a news company Health-care digital published that GlaxoSmithKline has agreed to pay $460 million to resolve the Avandia case and in settlement of a bulk of lawsuits blaming that the company hid the drug’s heart attack risks (Houlton 2010).

Despite of a meta-analysis published in 2007 in the New England Journal of Medicine by cardiologist Steven Nissen with conclusions that Avandia had a significant increase in the risk of heart attacks, GSK and other expert groups rejected this study and allowed the drug to remain in the market (Houlton 2010). However the company rejected these conclusions stating that the analysis is not consistent with the rigorous scientific evidence supporting the drug’s safety.

Such actions by the company bring about benefit of doubt in their consumers with regard to the company’s social responsibility, investors could decide not to invest, new product innovations by the company could be doubted (Houlton 2010). Another is the Paxil case where GlaxoSmithKline, maker of this famous anti depressant drug has been accused of the drug having increased suicidal tendencies while having questionable effects of mental illness. GlaxoSmithKline is said to have paid more than $1 billion to resolve cases alleging Paxil antidepressant.

Claims by many law suits are that GlaxoSmithKline failed to provide negative information about the drug and its effects (Jadhav 2007). In contrast to this another source states that that the risks of not giving antidepressants to a depressed child could be greater. With certain consumers believe that antidepressants are also lifesaving (Bernstein and Dooren 2007). In evaluation of the above cases it is recommended that GlaxoSmithKline activities be transparent so as to gain by its various stakeholders and also act in a socially responsible manner.

Concluding Remarks A close examination of both positive and negative aspects of the company’s performance in society, GlaxoSmithKline’s has benefited in both commercial and societal aspects. GlaxoSmithKline has portrayed its social corporate performance and achievements through its innovative product research and development, invention of new drugs to cure diseases, this is the company’s phenomenal contribution to society in saving human lives.

GlaxoSmithKline is one of the top Research and Development companies, yet there are many iseases for which there is no effective treatment, therefore GSK has strong commitment in discovering and development of new vaccines. Further GSK’s profits have been a great benefit to its shareholders, the company also involves its employees in social causes and motivates them, also it is responsible for conservation of environment such as saving energy and water and common resources like fauna. The company has made numerous social contributions to make the environment a better place, and delivering better health outcomes in collaboration with major global alliances.

However the negative claims on the company are outweighed compared to their social contributions to society. GlaxoSmithKline is making efforts through research and evidence to support cases such as Avandia and Paxil. In addition the Food and Drug Administration should also be responsible, for permitting the company to sell harmful drugs. To sum up evidence from peer reviewed journals and statistics show that GlaxoSmithKline is a positive contributor to environment, therefore their negative actions outshadow.

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