Toys R Us And Machiavelli's Virtues Summary

Toys “R” Us and Machiavelli’s Virtues
Machiavelli believed that what one may have been taught as moral and ethical might actually deter you from advancing and obtaining power and that one may need to do “bad” actions only when it’s necessary to protect yourself, maintain and/or gain power. Under Machiavellis’ virtues, a leader should use, “whatever means are available to promote the acquisition and maintenance of one’s power,” (Cavico, Mujtaba, 2009, pg. 65). When one looks at Toys “R” Us’ conduct from a Machiavellian perspective, what Toys “R” Us did in urging suppliers to limit supply of products or refuse to sell to discounters was all done to preserve and advance the firms dominance in the marketplace at the expense of its competitors.
District Court for the District of Columbia where the court ruled on March 29, 2011 that Toys “R” Us used its clout to complain to, “a supplier about discounting of the supplier’s product or about the supply of product to a toy discounter…in each instance it sought information from a supplier about the supply of product to a toy discounter…” (Federal Trade Commission v. Toys “R” Us, Inc., [2011]. Retrieved May 26th, 2011 http://www.ftc.gov/os/caselist/9410040/110329toysruscmpt.pdf). According to the courts decision, Toys “R” Us’ actions were illegal. When looked at it from Machiavelli’s perspective, they acted in a manner to preserve their dominance in the marketplace and their power over their suppliers. Morally, in the eyes of the Toys “R” Us executives, they were only acting in a manner to secure and maintain their power in their marketplace to protect their business and their margins from online competitors. To their customers, they acted immorally as the tactics used by Toys “R” Us were only benefiting them and not their customers who ultimately overpaid for items that could no longer be purchased by online retailers. Any additional savings that were obtained by Toys “R” Us was not passed on to the customers but rather used to increase the company’s margins because of the fixed pricing that was created with the forced agreements with its suppliers. This resulted in higher prices in the
A negative perception of the corporation by society could result in loss of customers, declining revenue, harder time attracting investors, among other things. This is why a corporation needs to be cognizant of how it is viewed within society. As long as you are in the business of providing goods and services to the marketplace, directly or indirectly, the corporation is serving society and therefore is a part of society. If society feels the corporation is being irresponsible or ignoring their requests to be more socially responsible, they can and will take action. This is exactly what was done with Toys “R” Us when a lawsuit by consumers was brought against them. Toys “R” Us put pressure on its suppliers to control prices and limit the number of retailers/competitors who could carry the products. Toys “R” Us’ intentions to manipulate prices for products was made clear by Judge Anita Brody in her memorandum where she stated that they were, “sufficiently dominant to coerce each manufacturer into preventing internet discounting,” because they were, “by far each manufacturer’s most important distributor,” (Carol McDonough, et al., v. Toys “R” Us, Inc., et al., [2009]. Retrieved May 26th, 2011