Pfizer's Outsourcing Implications

I recently read an article on CNN Money.com in regards to Pfizer outsourcing its drug manufacturing. According to the article, Pfizer has increased the amount of outsourced manufacturing to 17%. The company has also sold 21 of its factories and reduced staff by 21%. In response to this the Chief Executive Jeffrey Kindler stated, “We will do whatever is necessary to size the accordingly. Our DNA has changed. We’re moving faster. We are making smarter decisions with your capital.”

I felt this was a great example to apply the two theories of stockholder versus stakeholder. From Friedman’s stockholder perception of ethics, this strategy is completely acceptable because it results in a positive impact for the stockholders. On the other hand Freeman’s stakeholder theory would not be supportive of this approach. Based upon the Mr. Kindler statement above, employees do not seem to only be taken into account in their decisions. It seems that profit is ranked first and foremost, leaving employees out of the equation.

This topic then leads us to chapter 9 with Radin and Werhane’s interpretation of employment at will (EAW). This allows for minimal interference in employment and therefore the freedom to come and go. The employer, Pfizer, in this case has the upper hand. The employer has the right to hire and fire as they please but then this leads to the employee feeling like an object. I agree with Jeffrey Pfeffer’s belief that people should come first and harnessing this properly will lead to profitable benefits in the end.

Reference: http://money.cnn.com/2008/03/05/news/companies/pfizer/index.htm?postversion=2008030512