Asked by Maritza Cabrera on Jul 01, 2024

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Consider the case where a large firm tells its suppliers that even if they require terms of net 30, the large firm is going to take 60 days to pay. The large firm essentially tells its suppliers to take the terms or lose the account. Is this ethical? Would this impact small suppliers more than large suppliers? Explain.

Net 30

A payment term indicating that payment is due in full 30 days after goods are delivered or a service is completed.

  • Scrutinize how economic environments influence a corporation's credit approach.
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charlese Ellison7 days ago
Final Answer :
This question can lead to a lively discussion about the ethics of abusing the credit period. Some or even most will argue that it is unethical for the large firm to exercise its will against its suppliers. Most would argue that a supplier that is a relatively large firm will better be able to deal with the change than a small firm would. If a supplier is small, it could be that the account is a significant proportion of total sales and that the firm cannot afford to lose the sale.