Business Ethics Analysis of
The Dow Corning Corporation
Dow Corning Corporation began operating with Dow Chemical in 1943 when Dow Corning agreed to supply the silicone technology, while Dow Chemical supplied the manufacturing processes (Wilkicki and Craig). In the 1960s, Dow Corning began manufacturing silicone breast implants to use for reconstructive surgery of cancer patients and for breast augmentations. However, Dow Corning knew as early as the 1950s that silicone and silica used to produce breast implants was “bioreactive, immunogenic, toxic, and inflammatory” when exposed to the human body (Rumptz, Leland, McFaul, Solinski, and Pratt). Research has also found that implants can rupture occasionally and leak silicone fluid into the rest of the body possibly causing autoimmune disease, cancer, as well as numerous other symptoms (Hermes). In 1991, Dow Corning was considered to be an industry leader. The corporation distributed more than 4,500 silicon-based products to 45,000 customers throughout the world. During this time, silicone breast implant products accounted for approximately 1 percent of the corporation’s total sales. Dow Corning’s corporate headquarters were located in Midland, Michigan, but it also had production facilities in many other locations including Indiana, Kentucky, North Carolina, and numerous countries around the world Wilkicki and Craig). In 1983, the Food and Drug Administration (FDA) proposed a further study of Dow Corning’s breast implant products. One year later, in 1984, a woman who sued Dow Corning over its breast implant product was awarded $1.5 million. However, the court records were sealed, and Dow Corning continued production of the product. During hearings in 1990 and 1991, Dow Corning submitted 30,000 pages of information to the FDA to prove the safety and effectiveness of its products. Finally, on January 6, 1992, the FDA asked silicone manufacturers and medical practitioners to stop the sale and use of silicone breast implants until investigated further. At this time, Dow Corning willingly halted any shipment of the breast implant products (Wilkicki and Craig). In 1992, Dow Corning had a class action lawsuit brought against the corporation with more than 100,000 claimants trying to compensate those injured more quickly. The number of claimants in the class action lawsuit eventually grew from 100,000 to 400,000. Dow Corning was also faced with 9,000 lawsuits from individuals claiming medical injuring from breast implants in 1993 (Hermes). By 1994, the number of individual lawsuits had risen to 12,000, and Dow Corning was on the brink of filing for bankruptcy (Singer).
Several reasons attributed to the Dow Corning breast implant scandal. Dow Corning’s organizational characteristics played a significant part. Because the company had only two shareholders, Dow Corning Corporation and Dow Chemical, it was able to operate free from the surveillance that most large public companies face. The company had an attitude that it was untouchable and could do no wrong because at the time it was a world leader in silicone technology (Singer). There was also a discrepancy between how ethical the employees perceived Dow Corning to be and how ethical the company’s practices actually were. Before the controversy took place, an employee survey showed that over 90 percent felt that Dow Corning was a highly ethical company. This discrepancy eventually had a negative impact on the morale of the company when news of Dow Corning’s unethical behavior with the breast implant product came to light (Singer).
Another main cause of the scandal was the lack of ethical and effective leadership in the company. Leaders of the Dow Corning Corporation were seen as highly reactive to the scandal and were accused of misleading regulators, consumers, and physicians by withholding internal documents (Rumptz, Leland,...
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