Management Information Systems
Business ethics is one area that has drawn a lot of debates and the main question is normally the manner in which business practices should be conducted. Although organizations normally set clear economic goals which are achieved through a competitive process, their actions may sometime be deemed as unethical and may lead to creation of monopolies which reduces the level of competition in an industry. This essay will mainly focus on the software development giant called Microsoft which has elicited a lot of debates and court cases as to whether it should be allowed to continue operating as a monopoly or the government should intervene to protect the interest of other players in the same industry. This discussion will particularly analyze the pros and cons such decisions.
Microsoft has evolved from many years to become the world leading software developer and although the success in its innovativeness is a great incentive for the customers, some of its practices have been considered to be unethical and unacceptable for fair competition. Let’s examine some of the pros of the Microsoft initiatives:
The main success of Microsoft relates to an economy that allows businesses to operate without regulations. Microsoft entered the market in the 1970s and in a bid to consolidate its market and ensure a wider network in its business the company was able to establish strategic partnerships and alliances with hardware manufacturers like IBM and DOS to ensure smooth flow of its business. These companies were specializing in the manufacture of personal computers while Microsoft specializes in the provision of the software in form of the operating systems. This was a major advantage for the customers who were able to get complete computer components. Microsoft later decided to fit all the computers with windows operating systems, Microsoft explorers and window media player. Although the competitors were selling the software’s separately Microsoft ensured that all the computers from its affiliates were fitted with these software’s free. This was a major boost for the customers as it reduced the cost of operating computers. The development and innovativeness of Microsoft over the last 30 years has been attributed to the fact that the software development market has been free and hence the best companies are able to maximize on their profits. Although the competitors may complain about the conduct of Microsoft, they have never been excluded from using the same strategies. Free market therefore allows businesses to be innovative and maximize their profits. The initiatives by Microsoft have led to stiff competition in the market and this has led to development of variety of quality software products to the customers by Microsoft and other players. This has led to creation of value for the customers (Moriati,2006).
Microsoft adopted a good strategy to affirm its dominance in the as the most trusted company for producing computer operating system. By doing its maneuvers, it was adding value to its main product, Windows Operating System. It may be unfortunate that other companies had to be sacrificed in the process but this can simply be viewed as a strategy for expanding making the consumers more attached to their product.
Although Microsoft has been able to command the market, many players believe that the tactics used have been quite unethical and aimed at closing out other competitors. One of the notable cases can be traced from the Microsoft and Netscape in the provision of browsers. One of the key reasons why the government should strongly intervene is to protect the interest of all players in the market and discourage monopolistic tendencies. When companies create monopolies consumers are denied opportunity to make choices and this may lead to consumer exploitation. Markets controlled through monopolies normally fail as there is no equitable distribution of the scarce resources. The maneuvers by Microsoft will ensure that only consumers with the ability to purchase the products gets them while those who cannot afford them will have to stay without the computers. This can be corrected when many players are allowed to participate in the industry as this will lead to proper consideration of consumer needs by matching the prices with income (Rothbard,2006).
The other reason why the government should step in, in such a case, and regulate the different enterprises in the market is because Microsoft, once it gains the status whereby it has no competitors, then it can use that opportunity to dictate market prices of the software programs under contention. This will reduce the demand for the software programs and the production will be low. Having a competitive enterprise market helps prevent such scenarios from occurring.
The performance of any economy will largely depend on the efficiency in individual industries and hence the government comes in to restore efficiency in the market and boost the overall economic situation in a country.
Rothbard,N.M. (2006). Power and Market. Auburn, Ala. : Ludwig von Mises Institute.
Moriati, P. (2006). Antitrust policy issues. New York: Nova Science Publishers.