We analyze Mercks dilemma using Halls Seven Stage framework: The following are the various steps used

to enable the company in arriving at a suitable decision: STEP 1: Define the problem: In the present case, the problem of the company is: The company is at the verge of losing its patent on two of its drugs and hence it is looking at investing in different research methods for launching new drugs into the market to boost its profitability. The dilemma is whether to listen to the recommendations of the company scientists who urge the company to go forward with the further research of the drug ivermectin, which has been successfully tested in horses and has been seen to kill parasites which were similar in nature to the ones causing the rare disease: River Blindness in the Middle East, Africa, and Latin America, to determine its effectiveness in humans. This would lead to possible cure to the rare disease and relief to the patients but with lesser profit generation. The company is also sure that this product will likely never be successful in the market since the people of the affected countries do not have enough capital to fund their medical needs. Hence the company can decide not to indulge in research of the drug Also, cognizance should be given to the fact that, in 1978 WHO declared that the disease had no cure, and out of the two drugs which could kill the parasite, they also induced serious and sometimes even fatal sideeffects.

STEP 2: Identify the stakeholders: In the present case, the following are the major stakeholders: Shareholders of the company: These are the community of people holding shares of Merck and are interested more in the performance of the company in terms of its profit generation in the market Patients: These are the people suffering from the rare disease and can potentially be cured of the disease and lead a normal life Government: The laws made by the government lay down the rules by which the company needs to abide by for obtaining patent and for sale of the drug

STEP 3: Identify the practical alternatives: The practical alternatives for the company are as follows: Alternative 1: As the Chairman of the company pointed out that, the company should always remember that the drugs are manufactured for the patients and that the profits follow, the research on ivermectin should be carried forward with a view to relieve the patients and the profits will automatically follow Alternative 2: The Company can also choose not to go forward with the research of ivermectin since the precedents of the drug caused fatal side-effects and hence, even if the drug is successful in killing the parasites, the side effects reduction will have to be researched on and may make the costs even more exorbitant. Also, as the company is already facing the expiry of two of its patents, the need for funds is greater now to keep the company from shutting down. So, the company can choose to research a more safer drug in terms of generating profits for the company instead of ivermectin

STEP 4: Measurable economic impact of each alternative: Alternative 1: If the company decides to act according to alternative 1, then it would pump in more funds into research of ivermectin to determine its effectiveness in humans as well as test its side-effects. o Relief to the patients: Measurable impact of this decision would be in terms of relief to a number of patients suffering from this disease and also prevention of spreading of this disease to millions more. Also Government Support: Further, Merck may also receive grants from WHO for selling of the drugs to all the affected geographies and favourable trade conditions will emerge as a result of more governmental support both from local/domestic as well as the International governments. Losses/reduction in profitability: On the downside, the drug may not fetch profits to the company since the people of the affected areas cannot afford the drug, and hence the company may not realize the ROI on the research investments Favourable trade climate: The export and import might become easier for the drugs produced by Merck due to the humanitarian non-profit oriented gesture to provide relief for the people suffering from River Blindness.

Alternative 2: If the company decides to terminate the research process of the drug due to failure of the precedents in producing a cure without fatal side-effects, and instead carry out the research on another profitable drug then o Profitability: The impact of such a decision would be more profitability to the company in near future due to patent of new potentially profitable drugs and yield in higher sales Relief to patients: This will also bring relief to many patients suffering from illness specific to the drug Favourable ROI: The company will be able to realize more profits and gain a ROI on its investments in the research, by the time the existing patents expire and stop generating profits

STEP 5: Identify the immeasurable economic consequences of each alternative Alternative 1 consequences: o Achievement of Motto: The company will be able to fulfil the commitment of its Motto: To serve the people first, the profits will follow. Hence the employees of the company will see an increase in their self-worth and identify more with the company which may yield better results for the company in the future Social reputation: Also, due to this, the social reputation of the company will increase which may increase the brand value of the company and hence boost revenue indirectly when people prefer Mercks drugs owing to its ethical and humanitarian business conduct. International Publicity: By this method, the company will be a able to get more publicity and this also can boost the sale of drugs produced by Merck in these companies Attraction of talent: Merck will be able to attract talented and ethical people which may further increase the commitment from the employees and hence help in increasing the quality of work and reduction in the time taken to discover new drugsIncreasing the profitability Possible Downsizing/Closure of company: On the other hand, if the company was not able to realize the profits as expected due to insufficient capital in these affected countries to pay for the drug, then the company may have to downsize and retrench some employees and as an extreme step, close down the company, as a consequence of which, the livelihoods of many families will be lost

Alternative 2 consequence: o Violation of the Chairmans Motto: If the research is not carried out to relieve the poor patients of the affected regions from their illness, then the Chairmans motto of helping the people first irrespective of the profits will be violated Lower trust in management: Due to the violation of the company motto, the trust levels of the employees on the management will reduce as Merck does not even strive for what it preaches to stand forlower productivity Stable Employment: The company will be able to generate a stable employment condition due to the acquisition of new patented profitable drugs and the employees will gain a sense of job security Possible reduction in commitment from employees: Since the employees gain sense of job security, they might not excert much more efforts in discovering new drugs and hence the profitability of the company may reduce as a result of this Possible generation of more jobs: Due to increased profitability of the company due to the patenting of more newer drugs, the company might generate more employment opportunities and hence act as a source of livelihood for many families

STEP 6: Arrive at a tentative decision: o The tentative decision is to keep funding the research for finding a cure to River sickness since the research has already progressed till the stage of animal testing. If the research is concluded now, then the sunk funds will be wasted. Also, stopping the research at this stage will lead to violation of the chairmans motto of serving the patients first. Side by side, the research should be started towards discovery of a potentially profitable drug so that the funds of the company do not run dry

STEP 7: Decide on how to implement the decision: The funding should be done towards the research of both the potentially profitable drug for the realization of profits by way of patenting since the expiry of already patented drugs is nearing, as well as the research on the suitability of its usage on humans and its side effects. This way, the employees are not thrown out of job immediately and the motto of the company is upheld, apart from generating profits also.