Avoiding Corruption when Working With Third Parties

Predatory pricing happens when  a supplier or service provider lowers a price to gain some type of competitive advantage. Competitive pricing in itself is not predatory, but it becomes predatory when the price advantage causes an issue with quality and or industry competition.

Reciprocal contracts act like a “tit for tat” agreement. For example, you buy my services and I make sure I purchase all of my goods from you, can be simply developing a relationship with a service provider or supplier, but when conducted unethically can cause dire situations for an organization and even an industry.

Exclusive contracts are contracts between two parties that prevent selling goods or services to others outside of the contract. This can have many benefits, such as ensuring a standard of goods and/or services, when they are ethical and legal. The concern happens when the exclusive contract makes it impossible for anyone else to compete within the industry. For example, the goods purchased may not be of the best quality or could be potentially dangerous to a consumer. This sense of obligation to reciprocate can cause situations where a person may not do their due diligence to ensure they are doing right by their organization and its consumers.