In the case study, Toys ‘R” Us was both legally and economically right in purchasing Child World Inc.’s inventory off the shelves during promotion and re-selling them in its stores. Hardball tactics are acceptable in business, and for this case, despite Child World stating that the promotion did not cover dealers, retailers, and wholesalers, the act is considered legal ( WILSON, 1991, September 18) . However, according to the laws of business ethics, companies should be committed to dealing fairly and honestly with their buyers, suppliers, and competitors. Therefore, Toys “R” Us is obligated to treat Child World Inc. and other competitors fairly and to purchase the latter’s products and re-sell them amounts to business theft and not fair treatment.
Given the assumptions, Toy “R” Us may have done the right thing legally but was wrong ethically and economically. The company did the right thing legally by not directly purchasing the products, but using its employees who should not be treated as dealers, retailers, or wholesalers under the law. However, economically, Toy “R” Us weakened its competition by using underhand tactics and by eliminating competition, the company would be creating a monopoly, which is often not suitable for the development of any economy. The company did a wrong thing ethically since Child World has several dependents and the actions of Toy “R” Us both, directly and indirectly, affected many people negatively.
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I concur with the post in both the legal and ethical perception of Toys “R” Us actions. Ethically, the downfall of Child World meant that people would lose jobs, and this would lead to an increase in poverty levels. Legally, the company was also right since it is an independent entity, and any actions that its employees take on its behalf should be accompanied by evidence admissible in a court of law. Unfortunately, there was no evidence that the company had sent its employees; thus, the employees were acting on their behalf. I, however, differ with the post on economic impact of the actions of Toys “R” Us. While the company benefited economically, this benefit is limited and only for a short term because when Child World exits the competition, leading to layoffs, poverty levels increase and this would be bad for the economy.
References
WILSON, D. (1991, September 18). Child World mulls legal action against Toys 'R' Us. Retrieved from https://www.upi.com/Archives/1991/09/18/Child-World-mulls-legal-action-against-Toys-R-Us/2613685166400/
