Astra Usa - a Sexual Discrimination Scandal

Running head: AstraZeneca

Astra USA

A Sexual Discrimination Scandal

Prabhdeep Bedi

Fresno Pacific University

Ethical Responsibility in Business, Bus 788

Professor Dennis Langhofer

April 12, 2010

Abstract

This ethical issue research and analysis paper is about the current and past issues that have been facing workplaces when dealing with sexual harassment. This paper will discuss how these issues have been affecting organizations and relationships with its employees. It will take a look into the unethical choices that have been made in regards to sexual harassment and will analyze the AstraZeneca case of Lars Bildman and how CEO's and other top management abuse their power and authority with female employees. Over the years there have been a number of reported sexual discrimination acts in corporations, and large legal law suits against top CEO's. However sexual harassment in the work place is not a new phenomenon. It is prevalent in all cultures and all workplaces around the world, where men and women both work together. The way in which woman are sexually harassed - the modus operandi - has evolved with technology and women need to keep a tight vigil over what could be professionally and emotionally upsetting in the long run.

This research paper will also investigative whether such behavior of sexual discrimination would be acceptable in the United Kingdom as Mogren the new CEO of AstraZeneca stated that, sexual harassment is handled differently in other countries. This research and analysis paper will analyze these issues that AstraZeneca face, how we might think about them, and what if any might be considered and done to resolve these issues that companies and employees face in terms of sexual harassment and discrimination.

AstraZeneca: A Sexual Discrimination Scandal

Astra was established in the early 1900s. Astra is a global pharmaceutical corporation that provides a range of healthcare products. Astra began manufacturing its first pharmaceutical drug, called Digitotal, a heart medicine. Astra continued to be aggressive in marketing and research and development, forming subsidiaries all around the world (Fraedrich & Gilmer, 2005, p. 307). Astra was also a wholly owned subsidiary in the US and was called Astra USA at that time with its former German president and CEO, Lars Bildman. The drug that propelled Astra into an elite group of competitors was Xylocaine, a local anesthetic. In 1987, Hakan Mogren was appointed the new CEO and president of the company. Before Mogren came to Astra's organization, it had been very slow moving. Many people in the industry thought it was a mistake to hire Mogren, as he had no pharmaceutical or drug based experience. But "Mogren shook up the sleepy company" (p.307). He took an unknown anti-ulcer drug and marketed it globally. He tripled the company's international sales staff and built subsidiaries overseas. Astra had become one of Europe's strongest pharmaceutical companies. Astra combined with Zeneca to form AstraZeneca on December 2006 (EBSCOhost, Business Source Premier, Company Profiles AstraZeneca). In 1996, Astra's top managers, in particular Lars Bildman were charged with sexual harassment.

On June 26, 1996, Lars Bildman was terminated as CEO and president of Astra, after an internal investigation provoked by an expose in Business Week magazine. It raised a number of sexual harassment allegations against Astra. Astra refused to comment on the specific sexual harassment allegations. " The BUSINESS WEEK investigation, which involved interviews with more than 70 former and current employees, uncovered a disturbing pattern of complaints during much of Bildman's 15 year tenure as CEO of Astra USA" (Maremont & Sasseen, 1996, para. 5). Business week discovered that several women had claimed to have been fondled or solicited for sexual favors by Bildman or other executives. Numerous women also confirmed that they were expected to escort senior executives to bars and dancing clubs and some would also receive repeated invitations to join manager in their hotel suites for more intimate late night gatherings. A former employee Kimberley .A, recalls, "Guys were encouraged to get as drunk as they could--and do whatever they could to the women" (para. 5). "If they felt like grabbing a woman by the boob or by the ass that was O.K" (para. 5). Bildman obviously allowed this kind of sexual behavior to be present in Astra organization, with top executives taking advantage of the female employees. Top executives would use their power and authority to make the women feel uncomfortable and force them to attend these gatherings. Bildman himself supposedly steered one of his trainees to a bed at one of the private parties, the trainee thought "He's the president of the company. Is there any way to get out of this discreetly?" (Fraedrich & Gilmer, 2005, p. 310). This seemed to be the pattern during the reign of Bildman at Astra.

Furthermore it was suspected that Bildman and his colleague's used expenses from the company to chartered yachts with high priced prostitutes (p. 310). All this money that Bildman used was from the corporation which summed up to about a million dollars. This was apparently some of the money that Bildman had used to defraud the corporation of (Too much sex, not enough drugs, 1998, para. 3). With the investigation still ongoing, Astra disclosed that it believed Bildman actually used $2million worth of the company's fund to pay for personal expenses during the past decade. The investigation discovered that the bulk of the money supposedly came in the form of renovations that Bildman carried out on three of his homes, by Astra-paid contractors. He used the company's money to pay for lavish vacations and other personal expenses (Maremont, 1996, para. 3). Bildman denied these charges. Bildman then bargained and pleaded against all three accounts, of false federal income charges. He was sentenced to twenty-one months in prison, to be followed by three years probation, and was forced to pay $281,190 in back taxes and $30,000 fine (Fraedrich & Gilmer, 2005, p. 310). According to Maremont (1996), Bildman wasn't the only one from Astra that faced charges, two other top executives, George W. Roadman and Edward Aarons also "face a blizzard of lawsuits