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316 PART 5 • KEY STRATEGIC-MANAGEMENT TOPICS

9. Union Pacific
10. Fortune Brands 8
From a social responsibility perspective, these were the least admired companies
in 2009:
1. Circuit City Stores
2. Family Dollar Stores
3. Dillard’s
4. Sears Holdings
5. Tribune
6. Hon Hai Precision Industry
7. Fiat
8. PEMEX
9. Surgutneftegas
10. Huawei Technologies 9

Firms should strive to engage in social activities that have economic benefits. Merck &
Co. once developed the drug ivermectin for treating river blindness, a disease caused by a
fly-borne parasitic worm endemic in poor tropical areas of Africa, the Middle East, and
Latin America. In an unprecedented gesture that reflected its corporate commitment to
social responsibility, Merck then made ivermectin available at no cost to medical personnel
throughout the world. Merck’s action highlights the dilemma of orphan drugs, which offer
pharmaceutical companies no economic incentive for profitable development and distribu-
tion. Merck did however garner substantial goodwill among its stakeholders for its actions.

Social Policies on Retirement
Some countries around the world are facing severe workforce shortages associated with
their aging populations. The percentage of persons age 65 or older exceeds 20 percent in
Japan, Italy, and Germany—and will reach 20 percent in 2018 in France. In 2036, the
percentage of persons age 65 or older will reach 20 percent in the United States and China.
Unlike the United States, Japan is reluctant to rely on large-scale immigration to bolster its
workforce. Instead, Japan provides incentives for its elderly to work until ages 65 to 75.
Western European countries are doing the opposite, providing incentives for its elderly to
retire at ages 55 to 60. The International Labor Organization says 71 percent of Japanese
men ages 60 to 64 work, compared to 57 percent of American men and just 17 percent of
French men in the same age group.
Sachiko Ichioka, a typical 67-year-old man in Japan, says, “I want to work as long as
I’m healthy. The extra money means I can go on trips, and I’m not a burden on my chil-
dren.” Better diet and health care have raised Japan’s life expectancy now to 82, the highest
in the world. Japanese women are having on average only 1.28 children compared to 2.04 in
the United States. Keeping the elderly at work, coupled with reversing the old-fashioned
trend of keeping women at home, are Japan’s two key remedies for sustaining its workforce
in factories and businesses. This prescription for dealing with problems associated with an
aging society should be considered by many countries around the world. The Japanese
government is phasing in a shift from age 60 to age 65 as the date when a person may begin
receiving a pension, and premiums paid by Japanese employees are rising while payouts are
falling. Unlike the United States, Japan has no law against discrimination based on age.
Japan’s huge national debt, 175 percent of gross domestic product (GDP) compared to
65 percent for the United States, is difficult to lower with a falling population because
Japan has fewer taxpaying workers. Worker productivity increases in Japan are not able to
offset declines in number of workers, thus resulting in a decline in overall economic pro-
duction. Like many countries, Japan does not view immigration as a good way to solve this
problem.
Japan’s shrinking workforce has become such a concern that the government just
recently allowed an unspecified number of Indonesian and Filipino nurses and caregivers
to work in Japan for two years. The number of working-age Japanese—those between ages
15 and 64—is projected to shrink to 70 million by 2030, from 82 million in 2009. Using