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[ Ethics in Market Structures ][ Ethics in Market Structures ]

Monopoly, Oligopoly, Perfect Competition

Group MembersGroup Members

• Nabeel Altaf BB-09-101

• Umar Farooq khan BB-09-93

• Raza Najam BB-09-107

Code of ethicsCode of ethics

• Company's assets, funds and records

• Conflict of interest

• Management and employee practices

• Information on competition

Ethical business practicesEthical business practices

• Investors• Employees• Customers• Competitors• Government• Environment

Unethical business practicesUnethical business practices

• Resorting to dishonesty, trickery or deception.

• Distortion of facts to mislead or confuse.• Manipulating people emotionally by

exploiting their vulnerabilities.• Greed to amass excessive profit.• Creation of false documents to show

increased profits.

• Avoiding penalty or compensation for unlawful act

• Lack of transparency and resistance to investigation.

• Harming the environment by exceeding the government prescribed norms for pollution.

• Invasion of privacy used as leverage, for obtaining personal or professional gains.

• Sexual discrimination

Preventing unethical practices in organization

Preventing unethical practices in organization

• Codes of corporate ethics must be formulated

• An appeal process must be in place• Seminars• Compliance officers must be appointed• To promote ethical behavior

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Umar Farooq khanUmar Farooq khanBB-09-093

A single entity control the entire market to purchase of good and service. Thus single firm dominate the market.

These are some example of Monopolistic competition.

MonopolyMonopoly

Monopoly Role EthicsMonopoly Role Ethics

Why we involved ethics in Monopoly?

Corruption by the employees

Pepsi recent corruption done by it manager in Multan, (Restaurant)

Misrepresentation of products

PTCL representation of Nitro and evo internet speed.

Monopoly Role EthicsMonopoly Role Ethics

Misleading the Price list

Wapda and PTCL. High Prices

They charge high price regardless of it actual cost.

Harassment of Employees (low wages) Working environment

To much discipline problems and congested offices

Monopoly Role EthicsMonopoly Role Ethics

Working Hours of Employees

Because there are no competitors employees are forced to stay with them

Advertisments

I was really surprised that the company in monopoly don’t advertise at all in Pakistan.

How we can effectively used ethics in itHow we can effectively used ethics in it

We can form Employee union so they may have some one to represent them.

Improve there working environment.

Don’t Mislead customers (there are no competitors)

How we can effectively used ethics in itHow we can effectively used ethics in it

Implementation of Social Responsibility in there business.

Allow other competitors to enter in the market so there is a healthy competition.

Learn from the Best Google and Microsoft they do implement CSR and Ethics in Business having almost a Monopoly

(1996-2005)

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Raza NajamRaza NajamBB-09-107

DOES COMPETITION DESTROY ETHICAL BEHAVIOR?

DOES COMPETITION DESTROY ETHICAL BEHAVIOR?

• Oligopoly

• Perfect Competition

five censured activitiesfive censured activities

Employment of children1

Corruption2

Excessive executive pay3

Corporate earnings manipulation4

Involvement of universities in commercial activities3

Where Ethics can play a roleWhere Ethics can play a role

• Leakage of Secret Information• Short Cuts and unfair means • Cheap Publicity• Insider trading• Employee Work Load• Price War• Shares Manipulation

What can be doneWhat can be done

• We can think of (at least) three strategies for curtailing unethical conduct, involving increasing amounts of coercion:

• long run market pressure, • moral suasion, • government regulation.

Influence - Business Culture & Industry Practices - B to C

• 1962, Kennedy’s Consumer Bill of Rights

• Early 1900s: Caveat Emptor– A Latin phrase meaning “let the buyer beware” - what you see is what you get, &if it’s

not what you expected, too bad– Belief that competition in the marketplace corrects abuses

Business Culture & Industry Practices - B to B

Ethics of Competition

• Economic Espionage – stealing trade secrets

• Bribes -payment before service

• Kickbacks-payment after service

Both are illegal in U.S., but very common in developing nations

Organization Should focus on 4 core things

Organization Should focus on 4 core things

• Corporate Governance: • Corporate Social Responsibility: • Human Rights• Global Economy• Long Run benefits

Admirable business principlesAdmirable business principles

• Be Trustful• Be Open Mind• Meet Obligations• Become Community involved• Be Respectful

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Question & Answer

There is no Wrong Question…. But answer maybe ……….