Ethical Challenge

Please read the following two paragraphs, and then answer the following questions. You may copy/paste the questions onto an MS Word document, save and answer on that and then upload below. Don't forget to put your name on the document.

Tony Dauginas is a purchasing agent for a consumer packaged-goods company based in the U.S. Tony's company has come under assault from another, much larger company that can use its large purchasing volume as leverage to buy components for its products much less expensively than Tony's company can. This has put a lot of pressure on Tony's purchasing group to get the best price possible on the components it buys for manufacturing.

Tony is considering calling on Amalgamated's sales office to chat with the vice president of sales. He figures that Amalgamated will be desperate for business and will be willing to do just about anything to secure Tony's company as a customer. Tony is thinking that he might be able to negotiate a long-term contract that locks in prices over several years, preventing Amalgamated from passing on rising wood pulp prices to his company. He is also thinking about making a deep reduction in Amalgamated's prices a condition of the contract.

Answer the following questions:

What are the ethical implications of Tony's plan to negotiate a long-term contract under the conditions presented in the scenario? Explain your answer.

What other approaches could Tony take with Amalgamated?

If you were in Tony's shoes, what would you do, and why?