Today, multinational organisations are challenged by the complexity of international processes that they must apply to create a share for themselves in the world markets. Companies often face more demanding economic conditions on their way to success because of the need to adapt to the rapid market changes, so as to protect themselves from the risks within such environments. Managers, in particular, have to address the increasingly complex challenges that face their organisations as a result of the severe competition and the growing demands of customers (Vadastreanu, Maier & Maier, 2015).
Moreover, the
sophistication in the process of creating foreign market space is that it
involves coordination of different cultures and aligning them from the
periphery to the centre of the company’s strategic focus. The major issue of
concern has thus always been to develop a mindset that accommodates the in advance
the perspectives of intercultural and internal communication between the
domestic setup and the foreign branches. It is thus advisable that
organizations consider the cultural differences among their employees since
this gives the concerned company a competitive advantage (Walker, Walker &
Schmitz, 2003). Many current organizations have managed to comply with
diversity by adopting individual and culture-oriented communication approaches
along with managerial strategies. However, some companies still implement
strategies that only favour the nationality within the investors’ homeland.
The Wall Street
Journal (2016) mention that the outcome of the scandals and crises that
organisations faced in the 2000s revealed that ethical and compliant culture
would secure organisations from business risks. In this regard, culture is no
longer a mere concept as it has been undergone measurement and improvement. The
Wall Street Journal, for instance, cites US Federal Sentencing Guidelines which
defines culture as the organisational perspective with regards to facilitating
its culture so that ethical conduct is advanced and aligned with the regulatory
law. Moreover, the Organisation for Economic Co-operation and Development’s
Convention on Combating Bribery of Foreign Public Officials in International
Business Transactions acknowledges the usefulness of a stable organisational
cultural ethics. Vadastreanu et al (2015) thus states that managers are
sometimes tempted to adopt a simpler way that would enable the company to meet
its objectives and stay ahead of competitors. However, the authors explain that
the simpler strategies would always involve violation of the established ethics
as well as the deontology in the business. From the managers’ perspective, the
researchers questioned the ability of businesses to adhere to business ethics
when they very well know that competitors have better competitive advantage as
a result of non-compliance. At the same time, they question the ability of
ethics and compliance to enable an organisation performs as good as or even
better than competitors. The current research also investigates these similar
areas with a special focus on business ethics mindset at Novo Nordisk.
1.1 Problem Area
Business ethics
is part of social ethics and is thus continually influenced by the ethics of
the given era. Traditionally, the world and people, especially leaders of world
countries, did not pay attention to ethics and morality that in turn impacted
the later periods. According to Salehi, Saeidinia & Aghaei (2012) the
history of business is traced from the period of slave trade, colonisation and
the Cold War. However, ethics is only related to the post-war and post-colonial
periods. The researchers clarify that the need for business ethics started
gaining attention in 1970s but firms only began highlighting their ethical
structure towards the end of 1980s and 1990s. This practice was given
importance during this era because of the economic and natural disasters that
resulted from unethical conducts of businesses. At present, it has come to the
global attention that ethics in business is important for success,
profitability and sustainability of organisations (Salehi et al, 2012). There
is continuous rise in issues and ethical trends that not only impact organisational
operations but also affect customers. Today, establishment of proper ethical
behaviour is the key to avoiding lawsuits related to business ethics. Global
expansion by multinational organisations, which seek a share of the foreign
markets, raises concern of investors regarding ethical behaviour of officers
and employees. These areas greatly affect the ethical cultural values of the
organisation. There are thus two main concerns of businesses across the globe:
1) How business ethical values can effectively be communicated to the
employees; and 2) the most appropriate communication channel to use.
Researchers have
discovered that the traditional Ethics and compliance design is no longer
effective in addressing business ethics issues. This calls for establishment of
more formalised ethics and compliance strategies. In fact, regulators have
realised that absence of cultural integrity might make organisations to
consider their ethics and compliance programs as hindrance to achieving
business goals (The Wall Street Journal, 2016). This paper
investigates the ability of the BE Mindset to enable the Novo Nordisk to handle
the three major challenges its business faces and achieve its organisational
objectives. The three challenges that the organisation currently faces include:
i) the increasingly complex compliance requirement such as serious fines and
market exclusion; ii) global expansion of the company, so as to accommodate
7,000 to 8,000 new employees and managers, and iii) Organisational pressure due
to the need to achieve financial targets, by meeting the expected sales level
(Novo Nordisk, 2017). The third challenge is further complicated by the
increasing cost of creating awareness across the organisation, and rising risk
of BE non-compliance and financial misconduct. These factors make the
organisations’ values very difficult to maintain.
1.2 Problem Formulation
Multinational
companies are found to spend a large portion of their income on compliance
every year. Even so, companies in industries such as health care and finance
are reported to spend even larger amounts in when they hire several compliance
officers to assist them with investigations (Griffith, 2012). Previous research,
for example, reported that Siemens AG
used approximately 1 billion on internal investigation following government
inquiry into the company’s alleged payment of foreign bribes (Henning, 2012).
The adoption of compliance program is recognised as tool for reducing such
financial costs and elimination of related regulatory and legal procedures that
are encouraged by ethical failure. Enforcement of anti-bribery laws and the
corruption scandals that were witnessed under the US government regulations
made many multinational businesses understand that unethical conduct has
influence on organisational reputation along with profits (Sampson, 2016).Corporate
managers are now driven by the belief that rigorous compliance has the ability
limit the occurrence of misconduct among employees. The presence of effective
compliance also defends the company before regulators in situations where
certain wrongs are committed within the industry.
Each company
strives to make the adopted strategy blameless but the best compliance
strategies have showed their inability to block misconduct within the
organisation as well as the interference by the government. According to Haugh
(2017), for example, the Volkswagen
AG’s compliance program reportedly failed to prevent employees from
cheating during the emissions test. Similarly, Well’s Fargo & Company’s
policies was not effective enough to stop employees from opening accounts that
were unauthorised by customers. Haugh (2017) also reports that even today,
little attention has been placed on determining the causes of such decisions by
employees. Additionally, there is little knowledge of the psychological factors
that promote the employees to engage in such unethical and illegal activities. Companies
desire to effectively control ethical standards of their businesses and have
established both formal and informal policies. Some are labelled as ‘ethics and
compliance’ while others are called ‘corporate social responsibility’. Even
then, little research has focused on determining understanding of the people who develop and
implement the practices concerning the meaning and relations of the same to
the business.
Managers of an
organisation have the major duty of ensuring that ethical behaviour is properly
implemented in an organisation. However, Downe, Cowell & Morgan (2016)
report that researchers have ignored the relationship between leaders’ actions
and formal ethics, and how these factors affect the overall conduct of
business. Moreover, business codes are now widely used as management tools but
the investigation into the effectiveness of the business codes have resulted in
conflicting outcomes. Kaptein & Schwartz (2008) stated that the variations
resulted from differences in definition of terms, inadequate data, and absence
of theoretical framework. The present study aims to address these concerns when
studying business ethics at Novo Nordisk. This is supported by the realisation that the
abilities of instruments applied during analysis to identify and clarify the
concerned ethical issue have direct impact on the resulting ethical awareness,
accountability and achievement of rationalizations in business processes.
Research Questions
The research
questions are as follows:
- What are the advantages and
disadvantages of the BE Mindset at Novo Nordisk?
- Will the BE mindset assist the
company in achieving global compliance, including global growth and its
financial targets?
- What strategies can improve the
BE Mindset to ensure organisational objectives are achieved?
- Do the managers possess the
right knowledge and skills to enable them understand the organisational ethical
practices that they are expected to pass across?
- Does the company posses proper
communication channels that will enable it to pass the ethical practices from
managers to the employees?
2.
Case Presentation
2.1 History of Novo Nordisk
The origin of
Novo Nordisk can be traced back to 1922, when Nordisk Insulin laboratorium was
established by August and Marie Krogh. The two were a couple, where August was
then the medical research professor at the University of Copenhagen and Marie
was a researcher in metabolic diseases as well as a doctor. The two had visited
the US as August wanted to present his lectures on medical research. During the
stay, the couple came to learn about how diabetics were treated using insulin.
This treatment was discovered by two Canadian researchers. The couple developed
connections with the institute of Toronto where the insulin was produced and
gained the permission to manufacture the same (History Novo Nordisk, 2011, p.
2). When they returned to Copenhagen, the couple worked alongside Dr Hans
Christian H. who supposedly was proficient in regulation of blood sugar. They
agreed to conduct further research into the treatment together. The researchers
received funding from Danish pharmacist, August Kongsted, and were successful
in extracting the needed insulin from bovine pancreas. The success was
confirmed after the treatment of the first patient in March 1923 (History Novo
Nordisk, 2011, p. 4). The team advanced and employed Harald Pedersen, who
previously managed a mechanical shop, to construct machines for insulin
production. Thorvald Pedersen, Herald’s brother, was as well hired to conduct
chemical analysis during insulin manufacture. However, the brothers failed to
cooperate and left the team.
The brothers
later started their own facility and successfully competed with Krogh under the
brand name of Novo Terapeutisk Laboratorium (History Novo Nordisk, 2011, p. 7).
The two companies operated separately for about 65 years, during which both
were successful and managed to expand. Innovativeness was prioritised by both
sides and they invested heavily in in research and development with the purpose
of outperforming the other with regards to production of new medicine for
treating diabetes. The increased research started the two companies on a
journey of differentiation since there was enormous growth in in the range of
products from each side. Novo started to specialize in production of industrial
enzymes, and became the largest global manufacturer of the product. On the other
hand, Nordisk succeeded in producing drugs for treating haemophilia along with
growth disorder. Towards the fall of 1980’s, the two companies decided to
merge. They had become so established that each had international subsidiaries
and information offices, with a constant export level rated at 90%.
When they
merged, the new company name was Novo Nordisk A/S. This merger was very
strategic as it provided the newly formed organisation with the resources it
required to achieve further growth of the global market share. This was an
advantage because the cost of research and development had greatly risen hence
rapid product development and greater business amortized expenses were required
for successful establishment (Kamper, Podolny & Roberts, 2000). The merger
proved very successful despite the transitional challenges that it faced
initially. In fact, Novo Nordisk emerged to be the global leader in manufacture
of insulin. The company also gained global competitiveness. Novo Nordisk is now
a Danish pharmaceutical company with established headquarters in Denmark. At
present, it runs internationally with developed production equipment in 7
countries and has subsidiaries in other 75 countries. The company is also an
employer to about 32,600 workers globally, with 43% of the employees within
Denmark and 57% in other parts of the world (Novo Nordisk, 2017). NN is thus a
properly established multinational company that must invest in creating
constant awareness of ethical practices and performing regular inspection of
internal communication between the domestic branch and international
subsidiaries. So far Novo Nordisk has managed to coordinate its functions,
thanks to Novo Nordisk Way (Novo Nordisk, 2017).
2.2 The History of Novo Nordisk Way
Novo Nordisk Way is an internal managerial framework that targets to
realize homogenization of policies within an organisation. The main focus is
placed on the vision, mission and organisational values. These are important in
development of organisational commitment. For effective communication of the
strategy, the organisation has written 10 essentials to describe the company
and aid managers and employees in behaving in accordance with the NNW (Nordisk
Novo, 2012). The NNW is formulated in such a way that it concentrates on values
of Danish society. The organisation therefore views itself as a Danish based
company and pays keen attention to a number of values, including: equality,
confidence, reduced power distance, inclusion, flexibility, environment
conservation, Protestant work ethic and aesthetics (NN, 2017). This implies
that the overall NNW framework reflects a Danish business environment hence
there are values that are valued over others. This specifically refers to the
values already listed above. The factors are prioritised because of the
societal perception that they define a successful business setting. However,
these conditions are relatively challenging to the subsidiary branches since
they operate within cultures that differ from those in Danish society. The
challenges are very likely to affect the procedures conducted at managerial
level.
The contradictions have made it generally difficult for the
subsidiaries to adopt the standardised managerial strategy because it relates
directly to the immediate nationality within which the main headquarters
belongs (Vadastreaunu et al, 2015). The more illustrative example is the
comparison between the Danish and American perceptions of the NNW values. The
major question thus investigates the reason why Novo Nordisk continues its practices,
knowing so well that managerial procedures are affected by the differences in
cultural beliefs across their international branches. As had earlier been
stated by Sorensen, the organisation management understands that the collapse
of values would negatively
impact the standard and quality of the company’s products. This would
further destroy the organisation’s reputation, citing that the company would be
accused for promoting individual cultures. Despite that the culture helps with
recognition of Novo Nordisk brand all over the globe, the management
understands that its promotion would destroy the organisational foundation. Even
then, the overall opinion is that the management at Novo Nordisk has given
little importance to the improvement of the organisational culture. This may
affect the preservation of the values of the company during its future
operations. This paper particularly focuses on the organisational values that
are very likely to result in failure of the BE Mindset in achieving global
compliance as well as company expansion and attainment of the already established
financial goals.
2.2.1 The Novo Nordisk Way Challenges
After the
merger, there followed challenging years that almost destroyed the
organisational operations within the US market. This was due to the wide range
of requirements that the US Food and Drug Administration (FDA) imposed on the
market. Novo Nordisk was actually unable to meet the requirements within the
established duration. This difficulty was advanced by the organisation’s
failure to recognize the newly established regulations until when it was too
late. At this point Novo Nordisk had no other choice than to refer its
customers to the larger competitor it had in the US, Eli Lilly (Kamper, Podolny
& Roberts, 2000). However, further research revealed that some stakeholders
were actually aware of the situation and even discussed it with others during
particular organisation’s forums. This was not a good sign for the organisation
that was recognised with values that encourage transparency, honesty and
empowerment. The realisation of such a failure called for immediate changes in
styles of internal management. One of the proposed solutions was to ensure that
the organisation allowed employees who were not part of top level management to
contribute in decision making. Conversely, this too would require the
organisation to invest in ensuring accountability and readiness of employees to
share their practices. This led to the development of The
Novo Nordisk Way of Management.
2.2.2 The Novo Nordisk Way of Management
This strategy
enabled the organisation to improve its place in the global market since it
allowed for creation of special task group. The group included internal
consultants that were than identified as facilitators. These were previously
managers at Novo Nordisk hence were experienced and also ISO 9000 certified. The
facilitators were used to would monitor the extent to which the organisational
performance was in accordance with the established company values. They also
assisted other branches to align their practices with the respective values,
and completely follow them in all operations of the company (Novo Nordisk,
2011, p. 55). The assessments were always performed using the
value-based framework of the NNoM whose major elements included: The Vision 21, The Fundamentals, The Global
Policies, and Novo Nordisk’s Quality System. These explained the manner in
which employees at Novo Nordisk exercised the values.
The facilitators
gathered data during in depth interviews with employees found within the
domestic and international subsidiaries. The vision policies were employed to
describe the procedures that the organisation used in normal business
operations (NNoM, 2012). It was also made the main value-based framework of
governance that lasted for over 10 years. During this time, the company expanded
its employee base from 13,000 to more than 30,000. This also reduced the
overall number of employees that represented the Danish society to two-thirds
in 1997, and below half the total employee population by the year 2000. The
period had also seen a growth in turnover rates and the business remained
concentrated in above 180 global countries. The growth in business expansion
necessitated the adoption of a new framework in 2010. The framework was
required to match the expansion and internationalisation of the company. It was
recommended that the new strategy focuses on the then business principles and
values as opposed to new ways of conducting business. The development of the
new strategy thus started in the year 2010 as a qualitative process that was
named ‘Novo Nordisk Way tour 2010’.
2.2.3 Novo Nordisk Way tour 2010
The framework’s
mission was to provide contributions from over 750 stakeholders from global
countries. This process of consolidation produced ‘a revitalisation’, but not
an actual change. The focus of the strategy was on the employees realising the
level of understanding that the employees had developed regarding the
framework. This strategy was backed by ten essentials that could assist the
mangers and employees when assessing the ability of the organisation to act the
NNW. In this case, therefore, mangers and workers performed the role that had
earlier been given to the facilitators under NNoM (2012). By July 2012, Novo
Nordisk had approximately 4,400 employees in the US and gained an increase in
its US workforce by about 15%. The company also concentrated on research and
development within an inflammation centre it had established in Seattle. The
increased investment in R&D facilities in other locations such as Clayton
actually supports the further expansion of the company. The company also continues the development of
clinical facilities for example the Princeton, New Jersey branch that also
serves as the US Novo Nordisk headquarters.
2.3 The Novo
Nordisk Business Ethics Mindset
The Novo Nordisk
mind set concentrates on determining ways for ensuring motivation during its
internationalisation processes. This also applies to the analysis of the
relations between the headquarters and the internationally established
subsidiaries. The two organisations that formed Novo Nordisk had originated
from the same country but divergence in organisational culture happened
gradually as years continued to advance. The type of analytical management
employed by the organisation represented a top-down decisions scheme throughout
the organisation’s hierarchy. The organisation also expressed a strong control
over culture, which actually influenced the activities of managers. Nordisk as
well had an international mentality as shown in its struggle to achieve
business efficiency through standardization. The company established a domestic
headquarters, where all organisational decisions are established then later
communicated to branches that operate abroad (Novo Nordisk, 2011). The company
has also managed to maintain its culture abroad by appointing managers that
share a cultural background, of Danish society. The organisation also ensures
that the managers only concern themselves with local sellers, dealers and those
that distribute the standardised products to ensure that no cultural influence
occurs in any international location. At
the initial stages, before merger, Novo exercised a more democratic business
culture in which decisions were discussed in depth and only agreed upon
decisions would be implemented (Novo Nordisk, 2011). This was because the
organisation believed that consensus oriented decision making was more
beneficial to the organisation. It made the Novo subsidiaries to run
independent of other branches and the foreign subsidiaries would be managed by
the local managers as opposed to Danish practitioners, in the case of Nordisk.
The style of management thus was similar to the Walker, Walker, & Schmitz
(2003) approach to international operations. The model is based on modification
of products, strategies as well as management practices to match those of the
country of operation.
These
differences were the source of internal conflicts that marked the transition
period. This actually revealed in cases where employees would disagree of some
aspects of the same roles within the newly adopted business structure (Kamper
et al, 2000, p. 8). The two organisations thus had to establish a common
mentality. The final strategy had to solve the problems that the business
encountered while representing the previous views of both organisations. The
companies agreed to undertake a temporary re-empowerment of the central
managerial monitoring. This would offer adequate time for the management
members to collect resources that were required to shape the culture of the new
entity. The period would also allow for research and development efforts that
focused on determining the power that the management owned with regards to
making decision. It was time for the organisations to search and understand the
operations, beliefs and values of each other to enable good understanding as
well as development of sound policies. The strategy would help Novo Nordisk to
operate independently and still withstand foreign completion. The organisation
finally managed to achieve independence together with the ability to select and
retain values that it admired most. The mentality that the organisation created
and operated with differed from both national and international perspectives.
However, it still reflected a variety of elements that pointed to global
mentality. It had employed a strategic approach which required the organisation
to centralise assets and resources and support these practices through common
decision making procedures. In a global mentality, business coordination and
monitoring is more centralised. Moreover, managers in such an organisation
perform global responsibilities. Such organisations also ensure that R&D
efforts along with manufacturing processes are performed at the company’s
headquarters. Decisions that are strategic to the business are also made at the
headquarters.
The mindset,
however, had both advantages and disadvantages on Novo Nordisk. The temporary
adoption of global mentality as the empowerment of the central headquarters saw
subsidiaries loss freedom to establish and pursue independent strategic
decisions. This type of mentality can be blamed for the failure Novo Nordisk to
respond to the requirements of FDA on time. In fact, the managers within the US
market did not know how they could respond to the situation. Since the outcome
of the condition was harmful to the organisation, it is only through creation
of Novo Nordisk Way of Management that more flexible terms could be
incorporated in the previous framework to enable similar situations to be
addressed appropriately. This framework returned the prior freedom of
subsidiaries to operate independently since strategic resources and assets were
coordinated at national levels. The study of Novo Nordisk management style
reveals tendencies to readopt some of strategies that were considered during
the early operations, especially in mid-90s. This is for example seen in the
recent adoption of NNW and the focus of ‘empowerment’. The supposed empowerment
has been achieved in the business through increased recognition of the
importance of average employees as being key stakeholders. This has helped the
company to achieve multinational mentality since it encourages employee
empowerment. The organisation has also adopted flexible strategies at
international level in favour of managers in foreign locations (Novo Nordisk,
2017). The re-establishment of the global mentality as well points to the
re-adoption of the model of global leaning since recognition of new ways of
generating organisational values is promoted through learning of one another.
However, this model is still problematic in that it leans more towards the
Danish values that are not understood appropriately by the American employees.
3.
Business Ethics
Compliance
Corporate
responsibility is now considered an important part of corporate global
strategy. It directs various organisational actions such as market expansion
and promotes entry into various international markets. The major concern of
companies as explained by Brown & Knudsen (2017) is the ability to increase
business efficiencies while minimizing chances for changing the organisational
culture. The organisations that want to work successful must consider the
conditions in both local and international contexts. This study focuses in
determining the strategies that Novo Nordisk had employed in various markets in
China and the US where the business has subsidiaries. The study is driven by
the belief that a common set of organisational values are important for successful
operations locally and internationally. Even then, it is important that the
implemented corporate responsibility be sensitive to the local settings of the
business. Companies are, however, likely to become more compliant if they get
involved in situations that expose them to risks that could have been avoided
through strict compliance and adherence to business ethics.
Novo Nordisk
followed a long term business strategy in its Chinese market since 1994. The
company was concerned with creation of strong relations with the Chinese
society and cooperated with the local operators. The company constructed
research and production facilities in China and worked alongside the World
Diabetes Foundation. The organisation also worked with the local ministry of
health as well as the local patient associations to encourage education of
doctors and patients about the treatment of diabetes (Global CSR, 2013).
Additionally, Novo Nordisk conducted campaigns about prevention of diabetes as
part of its CSR activities in China. The company has also emerged as the leader
in insulin manufacturing in Chinese market. The evidence of this prosperity is
in the size of its market share and the company’s reputation. With regards to
market share, Novo Nordisk operated 30% of the market in 2002 and saw a growth
that made its sales to rise to 5 billion within Danish kroner in 2011.
The efforts of
the company that aimed to strengthen local health care system created value for
the business and benefitted the society as well. Global CSR (2013) gives an
example of a case where Novo Nordisk reported that increase in education
enabled growth in lifetime sales for each educated patient by 3400 DKK and that
the same enabled the society to cut on costs by 13,000 DKK for every educated
patient. The activities that Novo Nordisk conducts have also encouraged other
pharmaceutical companies to invest in finding further mitigation, prevention
and treatment for diabetes. The processes have thus generated value for the
concerned stakeholders. Examples of the partnerships that had such benefits
include the World Diabetes Foundation and Novo Nordisk, and the other with HE
eye-care clinics (a local clinic chain of eye-care). The HE eye-clinic owner
was actually attracted by the fact that Novo Nordisk partnerships encouraged
educational experiences for teachers and patients that had diabetes, including
the late complications. This was a relief to the ye-clinic owner whose
customers developed complications as a result of diabetes. Furthermore, the HE
eye-clinic owner did not have the competencies that were required to impart
education regarding prevention and treatment of the diseases to the doctors and
patients.
Novo Nordisk
also participated in other partnerships that would ensure cost neutral
attainment of reduction in emission rates of CO2. The company also had plans of
establishing a market for renewable energy in its Denmark branch. In fact, the
organisation is reported by Global CSR (2013) to have been able to save over
10% of the company bills from electricity in Denmark. The energy reduction
projects that the company pursued also had an average period of two year before
pay-back. These are some of the initiatives that Novo Nordisk has adopted to
ensure environmental sustainability. Additionally, a partnership was
established between Novo Nordisk and WWF in January 2006 based on commitment to
reduce emissions of CO2 from Novo Nordisk’s production by 10% between 2004 and
2014. In May 2007, Novo Nordisk also established partnership with DONG Energy. This
led to development of a fulfilling mix of energy reductions alongside renewable
energy production. Through this alliance, DONG Energy assists Novo Nordisk with
reduction in its energy consumption. At the same time, Novo Nordisk is able to
save energy to enable purchase of certified green power from the Horns Rev 2
(Global CSR, 2013). This partnership was strategic for Novo Nordisk because the
Horns Rev 2 was not yet fully established and besides, the company did not have
adequate funds to finance its completion. The company would not incur any costs
through this partnership yet the significant reduction in CO2 emission would
help it finally achieve the goal of constructing the renewable energy market in
Denmark. Wind power is generally more expensive compared to conventional energy
but the partnership was a good business.
Novo Nordisk
understood how the absence of business could harm the business following the
events of 2000’s. The company had been badly affected by the Oil-for-food
scandal. The United Nations had established the Oil-for-Food program in 1996 to
allow Iraq sell its oil in order to achieve humanitarian objectives. The UN
reported in 2005 that Novo Nordisk was among the 220 companies that had been
affected by the program, which were to pay $1.4 million. Novo Nordisk made
payment in 2009 with the US Securities Exchange Commission. For the Novo
Nordisk, the case resulted in new business strategy with ethics that emphasized
that bribery and corruption were not acceptable, and that business ethics had
to be maintained (Ryan, 2017). This new strategy contains procedures that
illustrate expected ethical business conduct, serious training programme for
the employees, improved governance, proper auditing, reporting procedures, and
a compliance hotline. The compliance hotline enables employees and external
stakeholders to report on violations of company policy with respect to business
ethics (Novo Nordisk, 2017). The company also understands the growing demand
for compliance in the healthcare industry since many organisations are unable
to remain compliant. The organisation believes that the system they have is
very good for future operations of the business. However, the current study is
concerned with determining the effectiveness of the BE mind set. The main areas
of concern during the study are: the strategic features of the initiative with
regards to the company’s position; and the ways in which the strategy leads to
fulfilment of the internationally developed and accepted principles for
realising sustainable development.