Question

A large retailer such as Tesco possesses power over smaller suppliers. Tesco could force these suppliers...

A large retailer such as Tesco possesses power over smaller suppliers. Tesco could force these suppliers to sell on payment terms that were well beyond a typical industry norm. In your opinion is there any ethical issues involved in such practice? (short essay)

Homework Answers

Answer #1

Yes there are ethical norms related to this.It is unfair abusive use of monopoly. This type of practices adopted by the Tesco possesses is unethical in nature as it is forcing its competitor out of the competition by extreme survival crisis.

The competitor are forced to sell their products on payment terms which were never the industries typical norm so it is trying to to change the way of operating the business, else the the smaller companies would be wiped out and it is not good for the market and the consumers as they would not be left with many of the substitute, so it is an unfair practice in which it is depriving customers to avail many alternative to the product and it should be avoided.

High level of competition is always desired but if it is leading to abuse of power by some dominating firm, this is unethical in nature.

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