COMPETITION AND BUSINESS ETHICS

DEFINITION

Competition is the rivalry of two or more parties over something. Competition in economics is a term that encompasses the notion of individuals and firms striving for a greater share of a market to sell or buy goods and services.

TYPES OF COMPETITION

MONOPOLISTC COMPETITION
(from Greek mono [alone or single] + polο [to sell])

A market structure characterized by a single seller of a well-defined commodity for which there are no good substitutes and in which there is a barrier preventing the entry of new firms into the industry.

In Economics, the situation in which one producer is the sole provider of goods and can therefore choose what price to charge.

OLIGOPOLISTC COMPETITION
(from Greek oligo [few] + polο [to sell])

Oligopoly is a market structure where a market has just a few firms. Each of the firms will account for a large proportion of output. In an oligopolistic market there will tend to be a high degree of interdependence between the firms as they will watch carefully what each other are doing.

PERFECT COMPETITION

Perfect competition is a market structure made up of a large number of small firms, each selling homogeneous (identical) products with a small market share to a large number of buyers. Perfect competition also requires freedom of entry and exit for firms and perfect knowledge amongst them.
The market situation in which there are many sellers in a market and no seller is large enough to dictate the price of a product.
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ETHICAL ISSUES IN COMPETITION
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1. FALSE TRANSACTION
2. BUSINESS BRIBES
3. FALSE ADVERTISEMENT
4. INVASION OF BUSINESS SECRETS
5. BALEFUL GOODWILL DENIGRATING BEHAVIORS.
6. NEGLIGENCE OF SOCIAL RESPONSIBILITY