Ethics and Organizations: Spring 2013, Block 2 April 9, 2013

Case Study 2 – Group 1: Tonya Harman, Jannice Williams, Beverly Bordy, Jason Crain, Claudia Marquez
Gomez, and Le Tran

Q2....In your judgment, were Intel's rebates ethical or unethical? Explain your answer.

Intel's rebates were nothing more than payments designed to buy AMD out of business. By not
participating in the rebate program, companies were compromising their market position relative
to competitors that did participate. Hesitant to put their position at risk, companies felt obligated
to participate, thus not purchasing AMD's products. This is unfair business practice because it is
the intentional placing barriers of entry into the market for AMD. Never minding the fact that
Intel's compiler sabotaged 3rd party programs and rigged 'library' code, absolutely, Intel's rebates
were unethical.

Q3….Was it unethical for Intel to use its compilers and its libraries of software code in the
way it did, or is this permissible for companies in a free market economy? Explain.

It was unethical for Intel to use its compilers and libraries of software code the way it did,
because a free market system is dependent upon the buyers’ freedom of choice. However, Intel
stifled the competitive nature of this very system, by depriving consumers of this freedom. Intel
deliberately provided software companies with software codes that were designed to trip up
programs when they ran on AMD microchips. The compilers were also corrupt, as they secretly
inserted bugs into the programs that slowed when they ran on AMD microprocessors. In
addition, Intel is impeding the progress of the industry by driving out competitors through both a
reward and penalty system. Consumers who purchased only goods through Intel were rewarded
with what they termed rebates. In actuality, they were working to achieve monopolistic powers,
by utilizing software codes that sabotaged their competitor. This is not permissible in a free
market economy and these are examples of anticompetitive practices. In addition, this goes
against the very morals a free market economy represents and may be why Intel felt compelled to
settle on their lawsuit.
Ethics and Organizations: Spring 2013, Block 2 April 9, 2013

Reference

Velasquez, M. (2012). Business ethics: Concepts and cases (7th ed.). Upper Saddle River, NJ: Pearson

Education, Inc.

Case Study Four – Submit this section with Case Four in the dropbox on Tuesday, 4/23

Group Leader: Le Tran Alternate Leader: Jason Crain

Who (Task What (Identify specific When (scheduled Contingent plan if assigned member is
delegation) tasks) day and completion not able to contribute /Comments
time)
Claudia Marquez Question 1 Due by 4/20/13 Group leader will stay in touch with
Gomez and Le Tran each member of the assigned task.
Jannice Williams Question 2 Due by 4/20/13 Alternate leader will stay in touch with
and Jason Crain each member of the assigned task
Tonya Harman and Question 3 Due by 4/20/13 Will contact each member in the event
Beverly Bordy that something happens.
Group 1: all Review and provide Due by 4/22/13 . All members will review
members feedback of final product midnight
Le Tran Submit case study 4 into Due by 4/23/2013 Alternate leader will submit.
dropbox