Lecture 10 – Business Ethics
Supplier and Competitors
Introduction
Why focus on Suppliers and Competitors?
Often overlooked in stakeholder theory / BE
It could be seen as counter-intuitive to consider them as stakeholders. After all, they are
part of the market environment strictly defined (cf. Michael Porter’s five forces)
– Suppliers: price, quality, timing – Competitors: main purpose is to compete
However:
A supplier or a competitor is a stakeholder, i.e. an “organisation that either is harmed by or
benefits from the corporation or whose rights can be violated, or have to be respected by the
corporation” (Evans and Freeman 1993)
Indeed suppliers and competitors both have legal rights and moral claims upon a company
– Legal rights, e.g. right to enter and leave the market
– Moral claims, e.g. right to privacy or right to ‘fair play’
Moreover:
Companies operate in industrial networks with suppliers and competitors which yield issues of
social responsibility.
These networks make suppliers and competitors from a given corporation mutually dependant.
èe.g.: The behaviour of DeBeers with its suppliers may influence a long chain of suppliers’
suppliers, etc.. Cf. the movie ‘Blood Diamond’
Ethical issues among competitors
Overly aggressive competition
– Blurred border between industrial intelligence and espionage (searching rubbish; hiring spies;
’interviews’)
– Dirty tricks such as negative marketing, predatory pricing (e.g. Wal-Mart destruction of the
small merchants in many US cities) - Right: to fair competition? - Impact: trust deficit on the
market
- Insufficient competition: collusion and cartel, abuse of dominant position – When dominant
firm stifles competition e.g. Microsoft and ‘bundling’ its Explorer internet software browser
and its Media Software player with Windows – Right to information undermined – Impact
on consumer trust – Impact on competitor access to market
Supplier and Competitors
Introduction
Why focus on Suppliers and Competitors?
Often overlooked in stakeholder theory / BE
It could be seen as counter-intuitive to consider them as stakeholders. After all, they are
part of the market environment strictly defined (cf. Michael Porter’s five forces)
– Suppliers: price, quality, timing – Competitors: main purpose is to compete
However:
A supplier or a competitor is a stakeholder, i.e. an “organisation that either is harmed by or
benefits from the corporation or whose rights can be violated, or have to be respected by the
corporation” (Evans and Freeman 1993)
Indeed suppliers and competitors both have legal rights and moral claims upon a company
– Legal rights, e.g. right to enter and leave the market
– Moral claims, e.g. right to privacy or right to ‘fair play’
Moreover:
Companies operate in industrial networks with suppliers and competitors which yield issues of
social responsibility.
These networks make suppliers and competitors from a given corporation mutually dependant.
èe.g.: The behaviour of DeBeers with its suppliers may influence a long chain of suppliers’
suppliers, etc.. Cf. the movie ‘Blood Diamond’
Ethical issues among competitors
Overly aggressive competition
– Blurred border between industrial intelligence and espionage (searching rubbish; hiring spies;
’interviews’)
– Dirty tricks such as negative marketing, predatory pricing (e.g. Wal-Mart destruction of the
small merchants in many US cities) - Right: to fair competition? - Impact: trust deficit on the
market
- Insufficient competition: collusion and cartel, abuse of dominant position – When dominant
firm stifles competition e.g. Microsoft and ‘bundling’ its Explorer internet software browser
and its Media Software player with Windows – Right to information undermined – Impact
on consumer trust – Impact on competitor access to market
