Chapter 9 - Suppliers, Competitors and Business Ethics

Who counts as a stakeholder, and how are firms linked to suppliers?

• A stakeholder is anyone who is harmed or benefited by the corporation

• Organizations and suppliers are mutually dependent

Why are competitors considered stakeholders?

Some call them “forgotten stakeholders” because they have:

• Legal rights (e.g., not having pricing manipulated)

• Moral rights (e.g., fair play in the market)

How should businesses be viewed in relation to competitors?

Businesses operate in an industrial network, not in isolation.

• They are connected through mutual interests and resource flows.

• Competitors can influence how a firm’s industry reputation evolves 

What ethical issues arise from power, loyalty, and conflicts of interest?

• Misuse of power: power comes from dependency (resource dependence theory).

• Loyalty dilemmas: loyalty doesn’t fit economic models but can create mutual benefits.

• Conflict of interest: obligation to act for someone else is potentially interfered with by a competing interest.

What are the two main types of conflicts of interest?

• Professional vs. organizational interests

  • Professionals may act to secure future work (e.g., accountants/lawyers making problems “go away”).

• Personal vs. organizational interests

  • Employees may favour external salespeople who give “gifts,” shaping procurement to benefit them.

How do we evaluate gifts, bribes, and hospitality ethically? 3-part

Ask three questions:

• Intention: Is the giver trying to gain an advantage or just showing appreciation?

• Impact: Does it change the receiver’s behaviour toward the giver?

• Perception: Would others see this as a bribe?
  

Why avoid unethical negotiation tactics?

• It’s the right thing to do

• Ethical idea: negotiation is a chance to build mutually beneficial relationships

What privacy and confidentiality issues apply to corporations?

• Corporations are boundaryless in comparison to individuals

• Corporations consist of, and deal with, multiple individuals

• Corporate activity takes place in public places

What ethical problems arise from overly aggressive competition?

• Unethical intelligence gathering (questionable tactics, confidential info, harming public interest)

• “Dirty tricks” (negative ads, stealing customers, predatory pricing, sabotage)

• Anti-competitive behaviour (unfairly restricting competition + harming market fairness)