This case involves an international pharmaceutical company called Southard Pharmaceuticals, Inc. (SPI). SPI researches, makes and markets both over-the-counter drugs as well as prescription only produ

This case involves an international pharmaceutical company called Southard Pharmaceuticals, Inc. (SPI). SPI researches, makes and markets both over-the-counter drugs as well as prescription only products. SPI is a Delaware corporation and is a publicly traded firm with headquarters in a stand-alone building on the outskirts of Atlanta, Georgia.  Due to favorable tax laws, production of the firm’s many different drugs takes place within an industrial park in San Juan, Puerto Rico.  All research and development activities for SPI are carried out by a wholly owned subsidiary, Southard Research, based in Geneva, Switzerland.  While the company is publicly traded, a major share holder and member of the board of directors is a citizen of Saudi Arabia.

The general flow of products for the company starts with research and development being done in Geneva, with clinical trials being conducted in Europe, North and South America, Asia and Africa. It is also on these five continents along with Australia and Central America that SPI distributes its pharmaceuticals.  Once a drug is approved for distribution, production is started in San Juan.  The drug is then shipped to one of six regional distribution centers located in Geneva (Switzerland), Atlanta (USA), Mexico City (Mexico), San Palo (Brazil), Sidney (Australia) and Tokyo (Japan).  It is from these five distribution centers that the pharmaceuticals are shipped to various hospitals, pharmacies, clinics, retail outlets, etc.

SPI promotes its products through medical journal advertising, direct mailing and a field force of Pharmaceutical Sales Representatives.  These sales reps call directly on the doctors that prescribe SPI’s products, as well as retail store chains that sell the over-the-counter medicines.  All of the promotional activities are directed out of the Atlanta, GA headquarters.

Additional information:

The company is headquartered in Atlanta, Georgia, but is actually a Delaware Corporation.

The President and C.E.O.’s name is D. C. Southard.

The company uses Employee Advisory Councils in each of its locations to provide management additional viewpoints regarding issues that face the company.

Big Dog Security Service (BDGS) is an outside contractor that provides security at the Atlanta location.

Your assignment:  The management of SPI has asked you to look over six different areas of concern regarding security within their organization.  After you study each of the situations, you are to prepare a security report directed to the management of the company, outlining each of the six situations, including the issues involved, and one or more methods that could be used to address the situation as well as your recommendation for action. 

Your final report will be composed of eight parts or identified chapters.  They will be:

              An introduction (No more than 300 words)

              Six scenario reports

              Your conclusion (No more than 300 words)

NOTE:  Each of the six scenario reports is to contain the following:

              No more than a two paragraph explanation of the situation

              A list of the issues involved in each scenario—can use bullet points

              The facts that support each issue

              One or more methods to address each issue

              Identify your recommendation based upon the information available in the case and the scenario.


Each of the scenarios given stands alone.  They may give contradictory information regarding the situation.  DO NOT take information from one scenario and use it in another.  Use only information from the core case and the scenario to complete each scenario report .

Example:  Scenario Business Assets Protection and Scenario Information Systems Security contradict each other regarding the location of the apparent inventory shrinkage.

Legal and Ethical Issues in Security

Hanz Schroeder is a field pharmaceutical sales representative for the company.  Hanz is a superb salesperson and during his seven year employment with SPI, no one has had more sales.  Last year, he took home over a million dollars.  Because of his results, the company has held him out as a model to be emulated by the entire sales force.

You are in the office of a junior attorney with the company’s general counsel.  The junior attorney’s boss has just handed the attorney 50 page lawsuit filed in the Circuit Court of Buzzard County South Carolina.  Buzzard County has a national reputation for picking clean the bones of corporations sued there.  The lawsuit alleges that Schroeder sold one of the company’s drugs to a group of doctors representing that the drug (RU-9355) was approved for cancer treatment for patients suffering from liver cancer.  As a result of the prescription, it is alleged in the suit that one of the physicians in the clinic, Dr. Careless, gave samples of the drug to Mr. Ima Sick who later died.  Mrs. Sick is now suing for wrongful death.

RU-9355 is an approved drug.  It isn’t yet FDA approved for treatment of liver cancer although it is in clinical trials. 

Although SPI is a Delaware Corporation, its national headquarters is in Atlanta.

The junior attorney has asked you to help analyze the following issues:  What is the appropriate jurisdiction for the lawsuit against the company?  Identify and analyze the potential legal issues given this fact pattern and state any factual assumptions you feel you must make to justify your response.  Discuss the legal relationship between Schroeder and the company and whether the company might be liable for Schroeder’s acts (assuming the allegations are true) or whether you feel the company could distance itself from Schroeder and avoid liability.  Finally, assuming the company cannot distance itself from Schroeder; discuss your thoughts on how the company avoids liability.

Security Administration and Management

The corporate director of security has determined there is a need to install various monitors and sensors to reduce the shrinkage problem recently identified at the shipping dock in San Juan.  However, the CFO has strongly challenged the increased cost associated with this security approach.

Consider alternative approaches to the problem, costs associated with appropriate solutions, and methodology for getting the necessary board approval for your approach. This should include a metrics-based justification for the expenditures.

Business Assets Protection

The company is experiencing an increase of “Inventory Shrinkage” from the San Juan plant.  There are no shortages observed by other company distribution centers.   All of the losses are prescription pharmaceuticals.

You are to identify investigative strategies and methods of addressing the issue.  Make your recommendations in countering the loss.  Costs factors may be considered including man hours etc.

Emergency Planning

Southard Pharmaceuticals, Inc. has recently occupied their present headquarters building in Atlanta. Previously, they occupied rental and leased facilities in different smaller buildings in the greater Atlanta area. Now that they are in the facility as both owner and occupant, the CEO has directed that a single comprehensive emergency management plan be developed to ensure the safety of the workforce and the facilities and demonstrate that SPI is an interested community partner.

Your project is to formulate the plan outline and present it to the CEO for approval. The plan should have an identifiable creation and approval process, development timeline, logical methodology, and display a comprehensive understanding of the emergency planning process consisting of the four phases of mitigation, preparation, response and recovery.

Once you have created the plan outline, you must create at least one functional annex. Example one: A functional annex describing the emergency planning for an emergency evacuation of the building. Example two: A functional annex describing the emergency planning to preserve the information in the companies computer systems.

Information Systems Security

The company has noticed a steadily increasing “Inventory Shrinkage” from the time their products leave the shipping dock in San Juan until the products arrive at the various distribution centers.  There appears to be shrinkage no matter to which distribution center the products are shipped.  The products disappearing are all prescription pharmaceuticals. This problem was identified purely by accident.  A shipping clerk noticed that the shipping invoice did not match the data in the database. 

The main database is located in Atlanta Georgia.  This could also account for unexplained revenue losses across the board in the organization.  The quantity is somehow changed from the original shipping document to reflect the lesser quantity that arrives in other ports days or weeks later.  It is not known how long this has been going on. 

The quantity is automatically transmitted from the shipping database to the corporate database via a secure link weekly.  No user involvement is required the query into the shipping database is performed by a program provided by the Corporate Office.   

You have been asked to identify the possible issues, one or more possible methods of addressing the issues identified, and finally your recommendation. 

Behavioral Issues

Within the past two years the company has noticed a 10% increase per year in workplace violence at the production facility in San Juan, Puerto Rico.  The majority of the violence, over 60 percent, involves employee on employee violence while the remaining violence involves physical assaults on female employees by ex-boyfriends and husbands.   Over 80% of the assaults involve the use of a firearm.   Approximately 50% of the assaults occurred within the facility, while the remaining assaults occurred in the parking lots (30%) and entrances (20%) to the facility.  Last year an employee killed his supervisor after he felt he was unfairly terminated.

Senior management at the San Juan production facility is naturally concerned with the continued increase in workplace violence at the facility.  You have been asked to: a) identify the possible issues and actions necessary to develop a workplace violence prevention plan; b) develop one or more possible strategies of addressing the workplace violence incidents identified; and finally, c) provide your recommendation for a workplace violence prevention plan.

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