Overview for CSR towards the competitors

1. B Y: N E R I S S A E . M A G L A L A N G
SOCIAL RESPONSIBILITY
TOWARDS THE
COMPETITORS

2. Agenda
Overview of CSR
Unfair Competition
-Definition
-Antitrust laws
Cartels
Intellectual Property Rights

3. CSR Overview
 CSR policy function as
built-in, self-regulating
mechanism whereby
business monitors and
ensures its actives
compliance with the spirit
of the laws, ethical
standards, and
international norms.

4. Unfair Trade Practice
Resorting to unethical
business behavior to
gain a competitive edge
(Advertising fraud, patent/ trademark
infringement, socially irresponsible
gimmicks, etc.)

5. REASONS why companies resort to
Unfair Trade Practices
 Globalization of Competition
 Better Informed & more discerning
customers
 Increasing number of competitors
 Rapid advance in both soft &hard
technology
 Advance in scientific fields

6. In short, competition is
getting stiffer & stiffer, any
kind of edge will count, which
is why some companies
resort to unethical practice.

7. When does competition become
UNFAIR?
When profit maximization becomes the
sole driving force of the business that it
pursues it with any means necessary.
Resorting to:
.Fraud
.Violation of Human Dignity
.Patent/ Trademark Infringement
.Socially Irresponsible gimmicks

8. ANTI TRUST LAWS
TRUST: or Corporate
Monopoly was Created for
the Purpose of eliminating
competition in an area of
business & of controlling the
market for a product.

9. Coverage of Anti trust Laws
Price fixing between
competitors
Abuses of market power by a
monopolist or dominant firm
Agreement between
competitors to restrict output

10. Price Fixing between Competitors
Price: often the principal way by
which firms compete
Agreements on price initiatives,
price ranges, price targets,
collusion between competitors on
the floor prices are generally illegal
under antitrust laws.

11. Are similarity of prices, simultaneous price
changes, or high price, indications of price fixing?
NO, Not always…
Supply and demand can cause these.
Price fixing must be PROVEN.
(systematic exchange of pricing
information between competitors)

12. How do we determine the JUST PRICE
Pricing Process: require business to
effectively calculate resources/needs,
supply and demand.
Just Price: one in which both buyer &
seller are given what is due the ( price a
manufacturer chargers its customers for G&S is
total cost investment plus normal profit)

13. “Buying & Selling were instituted for the
common good of both parties since each
needs the product of the other.. Therefore,
the contract between them should rest upon
equality of the thing to things. The measure
of the value of a thing which is exchanged
should be given by its money price. Hence to
sell a thing dearer or buy it cheaper than it is
worth is unjust.”
-St. Thomas Aquinas

14. Abusing Market Dominance
Dominance: refers
to a position of
considerable
economic power in
a market held over
a period of time.

15. Why is the abuse market dominance
unethical, socially irresponsible and
anticompetitive?
New rivals are barred to
compete
Prices controlled are above
the equilibrium level
The product becomes the
sovereign of the market

16. Oligopoly: Agreements between Competitors
Oligopoly:
agreements
between
competitors
wherein prices can
be set at highly
profitable levels &
restricts
competition

17. Why is oligopoly wrong?
1. It is basically a MONOPOLY
2. NO competition= no benefits to the
consumer
- no improved product quality
- no better price
- no choice

18. CARTELS
A Cartel is a formal
(explicit) agreement
among competing
firms. It is a formal
organization of
producers and
manufactures that
agree to fix and
production.

19. Strategies of Cartels
Market division & Market Sharing
Agreements between competitors
to restrict output
Collective boycotts
Resale price maintenance
agreements

20. -conformity among
competitors to
divide sales
territories or
allocate customers
(agreement no to
complete)
Market division & Market Sharing

21. Agreements between competitors
to restrict output
-collusion between
competitors to
restrict
production
facilities in order
to drive up the
price

22. Collective boycotts
-conformity between competitor not to
deal with another person or business
(illegal because it twist/deforms the competitive
process by foreclosing competitive opportunities
for suppliers or by denying customer choice)

23. Resale price maintenance agreements
-agreement
between a
supplier &
dealer that fixes
the minimum
resale price of
the a product

24. GREY AREAS
An agreement between competitors to adopt
standards that require fire-resistant
materials for certain products.
Con: the agreement to adopt is restrictive. The
manufacturers have limited their own ability
to use other materials & have limited
supplier choice
Pro: will benefit consumers in terms of safety

25. INTELLECTUAL PROPERY RIGHTS
-constitutes
those original
creative works
that have
economic
value & are
protected by
law.

26. REASONS
They reward the creators of original
works by preventing others from
copying, performing of distributing
those works without permission
They provide incentives for people to
produce scientific & creative works that
benefit society at large

27. PATENT LAW
-protect
inventions that
demonstrate
technological
progress

28. COPYRIGHT LAW
-Protect a variety of
literary & artistic
works, including
paintings sculpture,
prose, poetry, plays
musical competitions,
dances photographs,
motion picture, radio,
TV, computer
programs

29. TRADEMARK LAW
-Protects words
& symbols that
serve to identify
different
brands of G&S
in the market
place

30. COUNTERFEITING
-A criminal offense
of making an
imitation of an
article with intent
to defraud others
into accepting it
as a genuine item