Xarier’s are planning an alternate strategy to counter the loss that they are incurring against Yolanda’s in their production of Doodad. In this case Xarier is being unethical because they are not going for a healthy competitive strategy. They are just exploiting the fact that they have a successful conglomerate to absorb their profits so they are willing to bear further losses so that Yoland’s profit declines and since they are a one product company they will not have the finance to support future investment in development and technology and lose market share eventually.
Xarier should have made their production efficient and then competed with Yoland on fair basis by bringing their cost down, however this is an unethical mean of gaining market share. Case 2: “Xavier Conglomerate 2” In such a scenario Xarier has not acted unethically because healthy competition is always encouraged in the industry and whoever is the best survives while the other leaves. In this Xarier is going to use its resources by investing heavily in research and development and scientists in order to make the production efficient and reduce their cost.
This is fair and if Yoland cannot cope up with Xarier’s efficiency then it will have to incur losses. However Xarier is not being unethical in this case. Case 3: “Xavier Conglomerate 3” This attempt of Xarier’s show that they desperately want Yoland’s out of the business. This will be unethical because they are on purpose selling on cost and not adding any profit margin to it because they know they will not harm them but will surely harm Yoland in the short run as well as the long run. Case 4: “The Travel Agent’s Question”
This is definitely going to be a very advantageous investment hence the company should go forward with it. This software will make the entire system very efficient as the sale of tickets will take place much faster. More travel agents will be able to access the fares and book the tickets online much easily hence convenience and satisfaction will increase and so will the revenue for the company. We will be able to give projected fares and give other timely instructions to the system which will then take care of it.
There will be less chances of error and up to date information regarding sales can be extracted from the data base. Hence overall it will be very useful for the business and therefore I suggest the company should ahead with it. Case 5: “Cut-Rate Widgets” 1) It depends on the situation. In order to be predatory pricing this retail store will have to be a monopoly only then by lowering the prices it can drive out competition but here it doesn’t look like a monopoly. On the other hand it can be dumping if the retail store is importing from a foreign country and selling them at lower prices below cost here.
Here the company is merely following its policy to match the price. 2) The company advertised policy says that it should match the price, by lowering the prices on purpose and selling below cost it will take away the advantage that the discount stores have over the retail store of stronger negotiation power and getting lower price relatively. Therefore it will be unethical it should cover the cost at least and sell rather than following the policy blindly. Case 6: “Frida’s Fabricating”
Oscar’s CEO was under pressure but she has acted in a very inappropriate way which is very unethical and unprofessional. Frida’s head of purchasing person very politely explained it to Oscar’s representative that they were sorry about the trouble and have tried to help them whatever way they could owing to the long term business relations they shared however they too had budget constraints and hence could not help them much with the purchasing for the time being. However Oscars CEO in reply without considering the long term business relations they shared with Frida’s very bluntly said all that.
This is going to give a negative publicity to Oscar’s, the CEO should have politely replied instead, keeping in consideration Frida’s cooperation during bad times and looking forward to work with them in the future, that would have been ethical. You cannot just impose your decisions on the other company. Case 7: “Handbags and the Power of the Price” 1) He is just concerned about the deteriorating sales of the specialty stores that is why he took such a step, he was thinking for the betterment of those stores at the same time rather than himself alone hence so it is ethical.
2) Larson has very well explained in the email the reason behind such a step and most importantly that his products image has to be maintained that is targeting towards the high end consumers. He has indirectly conveyed both the messages hence there is nothing unethical about his act. 3) I believe Larson has taken the right decision this way his own profits will also be standardized and maintained and at the same time the specialty stores will also survive. He has not refused to supply to these discount stores he has just given them a price list which he expects them to follow in order to position his brand as a quality one.
Case 8: “Supply, Demand, and Fluff Cakes” 1) It is unethical in a way that Curtis is imposing his decision on them to reduce their sales price. Irrespective of the fact that how loyal customers these stores have been and their business terms with them and their contribution in their revenue he has said that they would stop the supply. This can lead to a fall in the demand for Fluff cakes and if Curtis wants to increase his sales volume he should improve his efficiency and lower his price so that when these cafes and stores add up their overheads it leads to a minimum price rather than force them to reduce their price.
2) He can improve his production and efficiency so that cost decreases and he can sell the Fluff cakes to the grocery stores too for an increase in sales because not all the people go to cafes and coffee shops yet they want to have Fluff cakes hence Curtis is missing on those sales. Case 9: “Gas Gouging? ” Price Gouging is when prices are excessively over charged that is unfair for the consumers. Like in this case Chevron is engaged in price gouging because it is charging a price that is almost triple to other gas stations.
It was doing so because it was situated in a deserted area and it knew that people would be bound to come for fuel here and hence pay the high price. They are exploiting their location. However this is unethical because it is providing the same quality that others are providing at a much lesser price and hence is charging consumers high unnecessarily. References Daft, R. (2001). Organization Theory and Design, 9th ed. Chicago: South-Western.