Homework Question on Ethical Challenges in Pricing Products and Services
- The research should include:
- Appropriate use of literature on ethical decision making (properly cited);
- A discussion of legal versus ethical behaviors; possible consequences of actions taken to stakeholders; support or debate of actions taken; and, your thoughts, recommendations or conclusions for leaders in organizations who might experience similar challenges.
- As a starting point, please review the College of Engineering’s website on ethics at: http://www.engr.psu.edu/ethics/ The one page summary is to be submitted in the Drop-Box below. The scoring criteria are indicated below.
- Ethical Challenges:
- Balancing organizational and individual interests
- Maintaining appropriate confidentiality
- Showing respect for patents, copyrights, and intellectual property
- Ensuring truth in technical claims, data, and recommendations
- Pricing and/or costing products or services fairly
- Using power and authority appropriately Grade-Sheet: Individual Ethical Challenges Submission (50 points)
Homework Answer on Ethical Challenges in Pricing Products and Services
The pricing of a product or service determines its selling. Producers and sellers should be ethical in pricing to make profits without taking advantage of consumers or competitors. However, there is a challenge in many organizations; unscrupulous traders do not practice ethical pricing. The discussion below illustrates some of the challenges in the pricing of products and services.
Producers should practice fair pricing by selling products at a price that compensates their cost of labour, raw materials, and overheads used to manufacture the product, hence allowing a reasonable profit margin (Palmer, 2010). Retailers too should add a reasonable margin of profit to the costs incurred when pricing the goods and services. Unfortunately, many organizations do not apply this strategy, and hence overcharge consumers for their goods and services, which is unethical.
“Consumers experience this challenge still when an organization is a monopoly in setting prices of the whole market” (Palmer, 2010). Similarly, it is unethical and illegal for an organization to set very low prices, especially cutting prices of new products, to put away the competitors.Tittle (2000) argues, “Some practices in business are legal but unethical in pricing.” For instance, it is legal to make profits, but unethical if the business will attain huge profits through overpricing.