Galena Medical Corporation

A. The situation involving Galena Medical Corporation has many stakeholders involved. One of the most important stakeholders in this situation is Sam Farr. Sam Farr is the president, founder, and majority owner. As majority owner he holds 51% of the stock. Jill Hutton is another significant stakeholder in this situation in which she holds 40% of the stock. Both Sam and Jill are the prominent stakeholders because if Jill is able to purchase more shares or increase her voting power Sam will risk losing control of his company or even worse he may face the possibility of losing his job. If Sam loses control, the company will no longer move in the direction he is striving for. Because Jill is a nonemployee investor she would like to see a better return on her investment. Therefore, she would like more emphasis on the marketing function and less emphasis on the R&D functions, which are the primary focus now. Because of the possibility that the debt may increase it can have an adverse affect on the company and its standing. Employees are also stakeholders because depending on the direction of the company, it could affect their standing within the corporation as well. Customers are also stakeholders, this being so because deemphasizing R&D functions may hinder the finding of new lifesaving mechanisms. Other stakeholders include: the other minority 8% stockholders, suppliers, and those within the medical community.
B. The ethical issues that arise in the case are based on the motives of certain individuals. For example, Jill would like to decrease the R&D department functions and increase the marketing function. She wants to increase the marketing function so that the company is able to maximize short-run sales and profits from existing products. As a nonemployee investor, Jill just wants to see a bigger return on her investment, which shows she is only concerned with how much the company excels financially and not who is benefiting from what the company is