The Importance of Ethical Business Practices
Ethics play a vital role in defining business practices. According to Pozgar (2019), ethics in an organization is demonstrated by how it responds to external and internal factors affecting the organization’s values and mission. One of the important aspects of ethical business practices is that they create a good reputation for the business. A good reputation is vital in attracting and retaining customers and investors, leading to business success. Another important aspect of ethical business practices is that they enable an organization to build customer confidence. The business can leverage customer confidence to create customer loyalty and attract more customers. Ethical business practices also promote healthy competition in the business environment (Lütge, 2019). For example, ethical business practices prohibit marketing malpractices and unfair pricing. Do you need any help for completing your assignment ? Contact us at eminencepapers.com. We endeavor to provide you with excellent service.
Many healthcare organizations use group purchasing to realize efficiencies and savings by aggregating buying volume and negotiating discounts with other vendors, distributors, and manufacturers (Sethi, 2009). In my opinion, hospitals that engage in group purchasing organizations engage in a form of price fixing because they negotiate to lower, raise, stabilize, or maintain price levels or prices in the healthcare environment, thus controlling the demand and supply of healthcare products. The two types of price fixing that can be achieved through group purchasing are vertical and horizontal price fixing. Horizontal price fixing includes an agreement between competitors to set a maximum or minimum product price. For example, healthcare organizations may agree to set a specific price. Vertical price fixing includes an agreement among parties in the supply chain, such as producers, manufacturers, and retailers, to set a maximum or minimum price. For example, healthcare organizations may agree with medical supplies manufacturers and retailers to set minimum prices to increase the hospital’s profitability.
References
Lütge, C. (2019). The ethics of competition: How a competitive society is good for all. Edward Elgar Publishing.
Pozgar, G. D. (2019). Legal and ethical issues for health professionals. Jones & Bartlett Learning.
Sethi, S. P. (2009). Healthcare Group Purchasing Industry Initiative (HGPII). Group Purchasing Organizations, 117-136. https://doi.org/10.1057/9780230621725_11.
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Question 
Discuss the importance of ethical business practices.
The Importance of Ethical Business Practices
Do you think that hospitals that engage in group purchasing organizations are engaging in a form of price-fixing? Justify your reasoning