Legal and Ethical Issues in Channel Relations

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Legal and Ethical Issues in Channel Relations

As an owner of a small business, the danger of crippling litigation should also be at the top of your priorities. Legal headaches, especially in America can take you by surprise and severely hurt your business’ bottom line.

Ethical standards also require that researchers not put participants in a situation where they might be at risk of harm as a result of their participation. Harm can be defined as both physical and psychological.

The major factors that can cause ethical problems in the workplace are:

Lack of integrity, where employees do not embrace fairness and honesty in the workplace.
Organizational relationship problems, which is when a company’s mission, goals, and objectives are not stated clearly.

For the most part, companies are legally free to develop whatever channel arrangements suit them. In fact, the law seeks to prevent companies from using exclusionary tactics that might keep competitors from using a channel. Here we briefly consider the legality of certain practices, including exclusive dealing, exclusive territories, tying agreements, and dealers’ rights.

^ Exclusive dealing. A strategy in which the seller allows only certain outlets to carry its products is called exclusive distribution, and when the seller requires that these dealers not handle competitors’ products, this is called exclusive dealing. Both parties benefit from exclusive arrangements: The seller obtains more loyal and dependable outlets, and the dealers obtain a steady source of supply of special products and stronger seller support. Exclusive arrangements are legal as long as (1) they do not substantially lessen competition or tend to create a monopoly, and (2) both parties have voluntarily entered into the agreement.

basic ethical principles, are

Respecting autonomy. The individual has the right to act as a free agent. …
Doing no harm (Nonmaleficence) Our interactions with people (within the helping professions or otherwise) should not harm others. …
Benefiting others (Beneficence) …
Being just (Justice) …
Being faithful (Fidelity)

Ethical standards are based on the human principles of right and wrong. The differences between them are these: Legal standards are based on written law, while ethical standards are based on human rights and wrongs. Something can be legal but not ethical.

Channel Issues are

  • Exclusive Dealing
  • Exclusive Territories
  • Tying Agreements
  • Dealers’ Rights

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