Business Ethics – Essay Example
Discrimination is when something you do favors one group of people or individual over another. In organizational terms, one area where this often comes up is in price discrimination, which is “when a firm charges different prices to different customers” (Ferrell, Fraedrich, Ferrell 278). Since a lot of the business world is global now, this often comes into play when corporations charge different prices to different countries. While this may sometimes be because “the costs of transportation, taxes, tarriffs and other expenses can raise prices” (Ferrell, Fraedrich, Ferrell 278), sometimes it can raise ethical or legal issues.
Three examples of ethical or legal issues with price discrimination are:
When the practice violates a countrys laws
The market cannot be divided into segments
The practice causes extreme customer dissatisfaction
(Ferrell, Fraedrich, Ferrell 278)
Dividing the market into segments is an especially sticky issue, because if there is no real reason to have done it, such as a large geographical difference that accounts for extra costs, it is illegal in places like the EU or the USA. Price Gouging can also raise ethical concerns, as it artificially increases the costs to the consumer without affecting corporate costs. (Ferrell, Fraedrich, Ferrell 278)
Ferrell O.C., Fraedrich J., Ferrell J. (2009). Business Ethics: Ethical Decision Making and Cases. (7th ed.) Mason, OH : South-Western Cengage Learning.