Hoffman-La Roche and Risk

Application of "When Good Companies Do Bad Things: Responsibility and Risk in an Age of Globalization" to Hoffman-La Roche

This analysis will apply some of the theoretical observations and policy observations made by Schwartz and Gibb (1999) in their book "When Good Companies Do Bad Things: Responsibility and Risk in an Age of Globalization" to Hoffman-LaRoche. Since the book forms the seminal structure of this essay, Part I will deal with a summary overview of the arguments presented. Part II will compare the ideas in the book to some of the past strategies of Hoffman. Part III will suggest ways in which Hoffman-LaRoche can learn from both its past and the ideas in the book to structure future strategies.

This book is for corporate executives who would like to develop a social conscience, or for activists who would like to persuade corporate executives to learn how to develop one. The authors use numerous case examples of companies that have come under intense social criticism following events or revelations that damaged their reputation: Union Carbide after Bhopal; A.H. Robins after the Dalkon Shield; Exxon after Valdez; NestlT and infant formula; Shell in South Africa; Texaco and racial discrimination; Unocal and Burmese human-rights violations; Nike and Asian sweatshops.

It also contains brief but interesting discussions of the "best practices" of some of the world's most socially responsible companies: the partnership

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based in Portland, Oregon stated When the drug came out, I was very surprised at the concentration and I ran some of the dosage numbers and found it was a dreadful mistake--that the drug was too concentrated for physicians to use responsibly," says "My feeling was that the company was desperately trying to protect its Valium market with a very expensive brand-named drug...When it was marketed in early 1987, it was purported to be a Valium replacement and Valium look alike. It is clear that Versed is about four to six times as potent as Valium--although it was purported to be equal to Valium (Mokiber 1991 Online). 5 The concentrated form was deemed to be an insured risk, and was not considered to be as great a corporate risk as the loss of revenues from Valium. That this was a concerted strategy was evidenced by a summary and analysis of the correspondence between the Basel headquarters and the Nutley division prepared by the Washington, D.C. law firm of Arnold & Porter prior to the FDA investigation into the marketing of the drug. "The Arnold & Porter memorandum, marked confidential, concluded, 'One interpretation possible from these documents is that Roche/Nutley disregarded its own concerns for safety of the drug in favor

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