Law, Business and Society 11th Edition by Tony McAdams

تمرين 68

Bill Hawkins, CEO at Medtronic ($14.6 billion, Minneapolis-based medical device maker), faced a critical ethical decision-making moment in 2007 when he learned that Medtronic's Sprint Fidelis leads might have been malfunctioning at an unacceptably high rate. Leads are very thin wires that connect implanted heart defibrillators to the heart thus allowing a shock to be delivered from the defibrillator to the heart muscle. Sprint Fidelis leads (Sprint was the brand name for Medtronic's leads and Fidelis was the particular model of lead) were the company's newest, and thinnest, model. Medtronic began receiving reports of fractures in the Sprint Fidelis leads. Those fractures might prevent a needed shock from reaching the heart, or patients might receive random shocks.
Hawkins had been with Medtronic for about five years and had been serving as president and chief operating officer for about two months when he learned in March 2007 that one hospital was reporting problems with the leads. According to Hawkins, Medtronic's internal experts and an independent physician advisory board investigated and the company concluded that monitoring should continue but the leads should not be removed from the market. In October 2007, when Hawkins had been CEO for two months, he received new data showing that the Fidelis lead's resistance to fracture was 97.7 percent versus 99.1 for the previous model; a statistically insignificant difference, but a gap that would become statistically significant over time if the fracture rates remained constant. After consultation with other company officers and an independent physician advisory board, Hawkins felt that the Fidelis was displaying a negative trend, but he wanted more deliberation. Various Medtronic leaders met for discussion, as did the physicians. The next day they met again by teleconference and after 90 minutes of discussion, the decision was reached to voluntarily recall the Sprint Fidelis.
The leads had been on the market for about 38 months and 268,000 had been implanted. The day the recall was announced, Medtronic had its worst day on the stock market in 23 years with a 12 percent decline and its market share in the category fell from 51 to 47 percent. By March 2009, Medtronic's physician panel had identified 13 deaths that might have been associated with the lead fractures. Within two years, however, Medtronic had largely recovered from the episode, a software package had been developed that would alert patients that a lead might be fracturing, and a favorable U.S. Supreme Court decision was offering Medtronic substantial shelter from lawsuits.
Hawkins described how Medtronic's culture influenced him and his company:
Our founder wrote in 1960 that the purpose of our company is to "alleviate pain, restore health, and extend life." I am not being coy when I say that I personally and that our company is strongly influenced by this sense of mission. During the course of our Fidelis discussions, not once did we talk about what might happen to the stock price or market share if we suspended distribution. The conversation was about our responsibility to do the right thing. 72
Beyond market share and stock market prices, what considerations would have influenced Hawkins's decision
Sources: Bill Hawkins, as told to Cait Murphy, "Bill Hawkins: How I Made the Toughest Call of My Career," BNET, October 5, 2009 [http://www.bnet.com/]; Cait Murphy, "The Price Medtronic Paid," BNET, October 5, 2009 [http://www.bnet.com/]; and Chris MacDonald, "Can Life-Saving Decisions Really Be 'Tough Calls' " The Business Ethics Blog, October 15, 2009 [http://www.businessethics.ca/blog/].