Crockett & Tubbs - Assignment Example

Paper Contract is the most important of all business transactions. A contract is a promise or pledge to do something. This can be through conducting a service or delivering goods. Making and fulfilling contracts is at the core of every business. There are more than a few ethical and legal issues that are involved in a business contract. In business, a contract is legally binding. Ethics refers to the standards held by an individual or a group of persons concerning right or wrong or expedient and evil.

Whether Tubbs should sell the Ferrari Daytona to Crockett at $250,000 or $500,000, are both a legal and an ethical business decision-making situation. There are legal frameworks that guide the formation and fulfillment of business contracts. There are ethical practices that form the business culture of any business establishment. A contract formation consists of several stages. In the case of Crockett and Tubbs, the contract was at the negotiation stage. If an agreement had been reached and the business contract signed by both parties, then such a contract is not to be contravened, since it is legally binding.

In law, under the rule of contract, when a business matter, transaction or contract is completed, it is final. Failure for Crockett to sale the Ferrari Daytona at $250,000 would lead to a court case. Otherwise, if a contract had not been signed, Tubbs negotiators can be influenced by the increase in demand for the Ferrari Daytona and change the terms of negation so as to make more profits. For this case, Crockett had not signed a business contract with Tubbs and therefore, the law leaves the decision upon Tubbs to either change the terms and conditions.

The aim of a business is to generate profits. To achieve this, the business must establish a nourishing relationship with its partners in business. Crockett should be guided by ethical principles of business conduct. A legitimate business will make the customer come for more and therefore, to reinforce the relationship and also ensure sustainable business, Crockett ought to sell the Ferrari Daytona to Tubbs at $250,000. Some business individuals advance the argument that there is a mutual relationship between ethics and business.

They presume that ethics naturally comes to those businesses that are profit-oriented. This argument has both weak and strong versions. For the present case of Crockett and Tubbs, a profit-oriented approach may seem to provide a short term success (Fieser, 1996). Businesses which are thriving are those that have embraced ethical practices in their business operations. Crockett may take the easier option of enforcing the terms that Tubbs buys the Ferrari Daytona at $500,000. Crockett would make profits and increase its revenue for the year.

This is what is termed as short term success. The more difficult option for Crockett to take would be to observe an uncompromising culture of ethical business conduct, and see Tubbs not just a purchaser but a potential business partner. In such a case, Crockett would sell the Ferrari Daytona at $250,000 and the same time establishes a strong business relationship with Tubbs which can be exploited for more business opportunities. Business ethics provides a strong basis for a solid business culture that shape successful business through generations.

Good morals and principles results in a successful business. Businesses just like humans have an aspect of morality that should be carefully guarded and engendered by its employees. To integrate ethics into business operations is to ensure sustainable business. They should focus to build long term relationships with the public. Fieser claims that the enduring best wellbeing of any business is served by developing a trusting relationship with the public (Fieser, 1996). In conclusion, Crockett may have all the legal support to change the prices due to the present opportunity to increase profitability.

However, he may lose public trust and therefore, fail to achieve long term success. This case provides an opportunity for Crockett to affirm to the public that its ethical foundations are strong enough to be trusted by business partners. Crockett should sell the Ferrari Daytona to Tubbs at $250,000. Reference:Steinhoff, D., & Burgess, J. F. (1993). Small business management fundamentals. New York: McGraw-Hill.Fieser, J. (1996). Do businesses have ethical obligations outside what the law requires?

Journal of Business Ethics, 15(4), 457-457. Tibergien, M. C., & Pomering, R. (2005). Practice made perfect: Discipline of business management and financial advisers. Princeton, New Jersey: Bloomberg Press.