It is correct to state that the main goal of all business is to make profit. That is why all efforts of the business activities aim at profit maximization. However, even with this as the major agenda of running businesses, strategic leadership identifies that not all means of profit maximization are fit. There are some, which in the process of increasing the business revenue, end up creating a negative effect to the consumers: exploitative effects. This supports the fact that ethical misconduct in the today’s word is a major concern, as written by Ferrell, Fraedrich, & Ferrell (2012, p. 8). In relation to this, the areas covered by business ethics are many and they incorporate many scenarios as well. One of the basic issue included in business ethics include the treatment of consumers or customers by the organisation or the business entity. It is important to keep in mind that the customers are the key reasons for the existence of businesses and thus while defining the ethical code of conduct they are worth considering.
In this article, the major issue of concern is the unethical exploitation of consumers by the producers. Business activities exist under different market conditions. There is the extremely favourable free market characterized by perfect competition, where ethical justice prevails at ease, as noted by Jakhar (2005, p. 45). There is also a moderated kind of market. In the other extreme, there is a monopolistic kind of market structure, which tends not to favour the consumers or the customers. In this article, matters reflected concern the practices of monopolistic companies towards the consumers or the customers of their products. In the first instance, the article reflects on how broadcasters of television content force the subscribers of their services to pay a lot of money for products they are not interested in using, says Lazurus (2013). Instead of arranging with individual consumers on the exact number or options of channels, they are willing to pay for; these broadcasters pre-package the channels and price them without consulting the customers. In this case, the consumers end up paying for extra channels they are not interested in watching. In as much as this practice helps in finding audience for small and upcoming channels, it promotes the act of forcing unwanted services and products to the consumers. This article creates awareness to the consumers of cable and satellite television-channel packages of the unethical exploitation subjected to them. The article also reflects on absence of business ethics in the financial and air transport sectors. They advertise for services and products certain prices aimed at attracting many customers. However, after the customers subscribe for the services, they face additional add-on fees. This means that they end up paying more than the companies had indicated. This partial disclosure of vital information to consumers is unethical since it leads to them making inappropriate decisions that affect them later.
Relevance to the Ethics Theory of Justice and Fairness
In discussing the ethical issues as portrayed in this article, I will use the business ethics theory of Justice and fairness. Fundamentally, this principle views justice as fairness. It is a widely accepted theory whose parent principle states that, “equals should be treated as equals”. To elaborate on this theory, all individuals are subject to similar treatment, not unless they differ in the ways they relate to a certain situation, as put by Rawls (2009, p. 5). According to this article, it is true that business cannot exist without either the producer or the consumer. These two parties are vital for business’s survival. Their relevance in business is therefore similarly important. In the light of this, the television broadcasters, who are the producers of television content, and the subscribers of cable and satellite television packages, who are the consumers of the television content, all have the right to decide on the various ways of packaging and pricing the channels. They are equals in the television business industry. Same case applies with airlines and financial institutions. The companies offering such services are equals with the consumers who subscribe for their services. According to the theory of justice and fairness as applied in business ethics, they are entitled to disclose all information to the customers since non-disclosure gives them an upper hand advantage, which is a violation of business ethics. From the two scenarios illustrated in this article, there is a great violation of the standards of ethics as expected from theory of fairness and justice. I would recommend to the management of broadcasting companies, airline companies, financial institutions and all business organisations in general to always remember that in any business transaction, there are two key players, the buyer and the seller. Both are equally important for the long-term existence of the business. It does not matter the type of market in which the business operates. The key objective is observing the application of fair treatment of all business stakeholders.
It is possible to solve the issues reflected in this article. As the author of the article states, the cable and satellite companies used by the television broadcasters to avail the broadcast packages to the consumers should consult the lawmakers and urge them to illegalise the packaging of channels by the broadcaster. I agree with such a move. Since this problem exists because of the monopolistic powers of this broadcast companies, such a move would be perfect. Monopolistic powers enable companies to exploit their customers without much for the customers to do to control them. The companies are aware of the fact that the consumers have nowhere else to subscribe or their favourite television programs and use that to their advantage. As the author suggest, the only way to control this exploitation is by use of legal tools. The responsible government agencies should ensure that the broadcast companies quit bundling the channels or if they do, they do it according to consumer directions.
Concerning the airline and the financial institutions that advertise their services with prices that are not all inclusive, a similar step could resolve that problem. The relevant government agencies should include a legal requirement that pushes for proper price disclosure in advertisements placed by such companies. The requirement should include a legal consequence, monetary in nature, for all the companies that overlook it leading to consumer exploitation.
Stakeholders Involved and the Impact on Them
The ethical issues discussed in this article impact various stakeholders. In the television broadcast industry, one chiefly affected stakeholder is the television-content consumer. The consumers, subscribers as well, are victims of exploitation. Presently, they end up paying more money for services that they do not need or use. This is leads to an economical waste on their side. In the future though, with the possibility of the resolution of this issue, they might be able to subscribe to only what they need and thus all the money they will pay will be utilized 100 percent.
Another stakeholder in this issue of television channels bundling is the broadcaster. The television broadcasters reap a great deal from exploiting the consumers of their products, television content. For now, they are making a lot of money by exercising their monopolistic powers to the best that they can. There are no rules at the present that prohibit their action of pre-packaging the television channel for the customers as they wish. This means that although they are unethically exploiting their customers, they legally have a stand towards this action. However, with one resolution step being the enactment of a law to prohibit the pre-packaging of the consumer television bundles, their exaggerated monopolistic powers will definitely decrease in the future. This will lead to a decrease in the annual revenue turnover for the broadcasting companies. They will also incur extra costs of incorporating the many packages they will incorporate in the pursuit of satisfying the diversified wants of their customers.
The cable and satellite television companies, who act as the intermediaries between television broadcasters and television content consumers, are also stakeholders in this issue. They make money based on the number of bundles received from the television broadcasters to the consumers of those bundles. As at the present, there are relatively few bundles since the broadcasters pre-package them, as they want. Therefore, they make relatively less profits. In the future, if the lawmakers make the move to control the powers of the broadcasters, there will be more bundles to traffic. This means that they will be open to make more profits, certainly.
In the other issue of partial disclosure of prices by airlines and most financial business institutions, as reflected in this article, the key stakeholders impacted by the violation of ethical expectations are chiefly the companies and the consumers. The companies enjoy the benefit of acquiring more customers. By failing to include all expenses, the customers get the notion that the services offered are relatively cheap. They then rush to pay for them resulting to increased consumer base and profits as well. This works out in the short-run. As time goes, the consumers end up paying add-on fees for the complimentary services, which they thought, were included in the advertisement prices. These results to withdrawal of some customers, limit the occurrence of repeat business, and affect the company’s reputation through bad mouthing by the offended customers.
The consumer too is a major stakeholder in this second scenario of business ethics violation by airlines and most financial business institutions. The consumers end up overspending their budgets because of the under disclosure of prices by these companies. This affects their economic plans since it is cheaper to pay the add-on expenses than forfeiting the entire deal with the companies. The companies are very crafty in that they include clauses that hinder the reimbursement of all the money to withdrawing customers. This leaves the customers with no option other than giving in to the companies’ deceitful advertisements which means the issue of extra money to them; an equivalent loss on their side.
Generally, in both scenarios of ethical violation to the consumers as expressed in this article, it is evident that their prevalence mostly thrives because of the absence of a clear legal structure to inhibit such extents of company-to-customer exploitations. This means that although not impacted directly by the issues under discussion in this article, the lawmakers are also important stakeholders to this issue. As we have seen, their involvement in provides a very good basis for resolving the prevailing issues of business ethics violation highlighted in this article.
Ethics is a very wide issue. It is a discipline encompassed in many fields of operations. Many scholars and professionals from various schools of thoughts have tried to explain ethics in various theories. This article plays an important role in helping one to understand the extent of business ethics and the various other disciplines it relates within its frameset. For instance, this article helps us understand that ethics combine with law to create a harmonious society that benefits all people and business stakeholders (Mandal, 2010, p. 92). The ethical issues highlighted in this article may seem good under the perspective of the companies practicing them. This is especially so because they reap huge benefits as a result indulging in such activities. However, with reference to the business ethics theory of justice and fairness, the activities that the companies mentioned in this article indulges in are unethical.
The mentioned companies either monopolistically exploit their consumers or exploit them through partial disclosure of information to the customers. These actions are both violations of the standards of business integrity ethics. It a universal knowledge that the consumers and the producers have a similarly important stake as far as business transactions are concerned. Absence of either means the end of business. This means that as far as business transactions are concerned, both are equals and subject to the same rights. However, in the scenarios discussed in this article, this fails to apply. Therefore, the absence of fair treatment to the customers by the companies as discussed in this article, qualifies their actions as a violation of business ethics.
In the light of the sample ethical issues covered in this article, it is important for all businesses to understand their respective microenvironments, as Carroll & Buchholtz (2008, p. 7) write. This enhances the extent to which they are aware of the ethical expectations due from them and thus reducing the chances of violating them.
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