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Sotheby's

In: Business and Management

Submitted By bledi224
Words 342
Pages 2
Price fixing is unethical and illegal for the simple fact that it hurts not only the customers, but also the public at large and in the long-rung, the company itself. By employing unethical strategies, these companies lose on of the most important assets they have, their reputation. The case of price fixing scheme by Sotheby’s and Christies illustrates a perfect example of how firms behave unethically when motivated solely by profit. The collusion of top managers of these two leading companies, though falling short of operating a cartel in the traditional sense, is unethical for the main reason that it disregards the interest of its external stakeholders, particularly its customers. When there is competition in the marketplace, customers can rely on this to obtain competitive pricing and services, but once the major players collude to fix the prices, this advantage is gone. This activity is directly against the principle of free markets, which are the best way to ensure that both companies and organizations benefit. The nature of the auctions industry, with two companies controlling 90 percent of the market, made it relatively easy and very tempting for these companies to illegally fix the prices in their own interest. While top managers of both companies agreed on these steps, the fact that they were able to pull along the whole organization indicates that the culture in these organization was not particularly ethical. According to the ethical model explained in the textbook, both Taubman and Tennant fall in the “manipulators” category, whereby the ends justify the means (Weiss, 2006). Then these leaders went ahead to convince their crews that this was the way to go. This indicates that the culture in both organizations were in trouble and weak cultures. Both these companies failed to balance the interests of the various stakeholders of the company, both internal and external, and this alignment is precisely one the most crucial duties of organizational leaders (Weiss, 2006).
REFERENCES

Weiss, J. W. (2006). Business Ethics: A Stakeholder and Issues Management Approach (4th edition). Thomson South-Western.

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