Question

Is it ethical for tobacco companies to sell a product that is known to be addictive and a danger to the health of the user? Is it relevant that the product is legal? • Should boards of directors consider only price when faced with a buyout offer? • Is it ethical to concentrate only on shareholder wealth, or should stakeholders as a whole be considered? • Should firms be penalized for attempting to improve returns by stifling competition (e.g., Microsoft)?

Answer 1

1. In general scenerio, doing something which may harm the others is unethical. However, As per rule of law, an act which is done within the rules and regulations without violating any guidelines is fair and ethical. And something done against rule of law is unethical. Hence, selling the tabacco is ethical even though it causes critical health issues to the consumers. As the companies as following all the rules and regulations. Such as danger symbols on the packets, advertisements of awwareness etc.
2. The board of directors should not only consider the price in case of buyout offer but also duration left for the term. Usually the longer duration is preferred as it gives more time for the directors to go for the other role.
3. Share holders are the owners of the organisation, but as an organization it should competely focus on all their stake holders like suppliers, creditors, banks, government etc. Because a company will not sustain in the longrun if it focuses only on their share holders.
4. Stifling competition is also accepted as it follows rules and regulations of the country. It cannot be penalized on the basis of continuing stifling competition. However, other competitors can still start their business in the same industry by following the sets of rules and guidelines.