Several factors determine the need for collaboration between the American Medical Association (AMA) and businesses. Economic justification and reputation determine whether cooperation is justified from a rational point of view. The contract between the Sunbeam Corporation and the AMA reflects these issues. The collaboration between the AMA and the Sunbeam Corporation was practical when the association required financing, and this interaction did not harm the reputation of the healthcare professionals.
The first critical detail is that the time context determines the justification of the deal. The Sunbeam Corporation signed an agreement with the AMA to provide the products for the home in return for the annual royalties from the sales (Nanda, 2002). The deal was prolific in the 1970s when it was articulated because the number of healthcare professionals who were members of the AMA declined significantly (Nanda, 2002). The association required money to continue functioning, and the commercial deal with the Sunbeam Corporation allowed the AMA to solve its financial problems. Therefore, when the agreement was signed, it was rationally justified because the AMA required royalties.
The second vital detail is that the medical association needed authority in the professional community when the deal was signed. Nowadays, the AMA has a high professional status, and its affiliation with another company means that the professional community supports the products the Sunbeam Corporation sells (Nanda, 2002). Therefore, it is responsible for the quality of these products, and all possible problems with these items harm the AMA’s reputation (Nanda, 2002). In other words, the AMA has a good image in the professional circle, and it should be cautious of the contracts it signs with commercial organizations to protect its name.
It allows concluding that the Sunbeam deal be dismantled for two main reasons. First, the AMA does not need money from the royalties to support its work, which justifies the signing of the contract. Second, this deal has a controversial impact on the AMA’s reputation, which is unacceptable in the contemporary context. The American Medical Association should protect its image and name and decrease the number of potential problems with its affiliated companies.
Reference
Nanda, A. (2002). The American Medical Association-Sunbeam Deal (A): Serpent on the staff meets Chainsaw Al. Harvard Business School 801(326), 1-16.