Question

e." om ces In 18 months, when these overpriced employees have trained the others, we'll find some way of getting rid of them. Ed, you're going to lean on the players' bankers. See if we do business with them as well. See what other information you can squeeze out of them. Victoria, since you're the newest, I'm putting you in charge of breaking the pricing problem. I want you to come up with a unique pricing strategy for each of the 20 stores that will consistently undercut the competition for the next 18 months, even if we have to lose money on everything in the stores! The franchisees will go with this once we explain the payout." One of the newer staff members asked, "If we're successful, doesn't that make us a monopoly in the area? Don't we have to worry about antitrust issues?" Wendy raised her eyebrow a little and said, "We don't mention the word monopoly around here as if it were wrong. It took the Feds decades to break up AT&T. Microsoft was next on their list, and now it's MasterCard. We're in retail. No one has ever had problems with the Feds in this industry. By the time they deal with what we're doing, we will all be retired." ng SO gs my. QUESTIONS. EXERCISES 1. Identify the issues of which Victoria needs to be aware. 2. Discuss the implications of each decision that Wendy made. 3. Discuss the issue of monopolies and whether they are right or wrong. *This case is strictly hypothetical, any resemblance to real persons, companies, or situations is coincidental

Answer 1

Ethics : Moral Principles or standards that governing the Individual behaviour or their activities on the society

Answer 1 : Issues which Victoria needs to aware

Ethical Issues towards Employees (Firing of Employees in future after getting the necessary information related to the trade & business)

Victoria needs to aware the retail industries like KI is labour Intensive and it has rules and regulations related to employees recruitment and retrenchments.It needs to be adhered strictly otherwise if the employees layoff's are not handled as per company policies it will create bad reputation and effects its market share all over its operation in the world.

Ethical Issues towards Consumers

Victoria needs to aware of benefits and moral responsibilties of retailers to charge the fair price of the products and services it offered towards consumers.Since the fair pricing will be more beneficial towards the customers,suppliers and all it stakeholders.

Ethical Issues towards Stakeholders

Victoria needs to aware of his responsiblity towards the stakeholders (Shareholders,Investors,Customers,Governments,Employees and Employees).She needs to disclose the correct information about the financial status of the company and she needs to act according to best interest of all the stakeholders.She needs to aware of government regulations related to antitrust laws and anticomptetitive policies.

Ethical issues involves Professional Obligations

Since Victoria is a Professional.She needs to adhere the code of ethics of professisonal Institutes from where she educated.Most of the code of ethics of professional institutes are Integrity,Objectivity,Confidentiality and Professional competence and due care.

Reputaional Risks & Brand Image

Victoria needs to be aware of the organisation activities which may affect the KI reputation and its brand image.

Answer 2

Implication of Wendy's Decisions

Retrenchment of Employees in a future case through immoral activity

Wendy needs to aware of KI's Internal policies & regulations and Federal & State governement laws & regulations related to labour practices.If the employees treatment was not handled as per the rules & regulations.It may brings fines & penalties and it will effect the KI brand image in National & International level.

Antitrust Laws - Predatory pricing strategy & forcing competitors out of industry

Wendy needs to aware of antitrust laws & regulations which are nothing but a competition laws which prevents the customers from unthical practices followed by organisations in order to capture the market.If the wendy desicisons related to capture the Market share by using predatory pricing & other unethical means by forcing other competition out of industry will capture the eye of government & legal authorities and it involves unnecessary media galloring on the activities of KI.Which may create bad reputation and potential loss of market share and share price,if it handles not very well.

Wendy not disclosing correct information to Shareholders related to Anittrust laws.

Wendy has the Legal responisibilty towards shareholders by disclosing the true and fair information related to the business.If she hide the material information related to the shareholders,it may potentially leads to fines and penalties and unnecessary regulatory authorities scrutiny (If iit is identified in late stage).If any private shareholders brings the case to court by declaring KI Cheated the investors by not disclosing the correct information,they can claim Compensations which may huge and it effects the KI brand Image and reputation.

Answer 3

Monopoly

"Monopoly is single supplier in the Market or having the large market share in the industry which will dictates the price it will be charging on to the customers and the other suppliers forced to follow the selling price or forced to exit the market"

Issues of Monopoly

Monoploy will brings the eyes of competitive watchdogs,media galloring and unnecessary legal suits.which may potentially creates bad reputation if it not handles very well.So the organistation must be very careful on its pricing strategy and there may be potential outisde competitor entering into the market with different strategy on seeing the high profit.Monopoly without ethical descisons will not brings fair return in long run to the shareholders.Som etimes law suites will takes longer period and creates the unnecessary government & regulatory scrutinisation of the business activities.

Right or Wrong

Monopoly is always neither wrong nor correct if it adheres the rules & regulations of underlying territories it operates and it also needs to do the business based on the ethical desicisons and it needs to charge the fair pricing towards the customers.This alone will helps the company in long run.