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Description

The rapid growth of computer industry has seen formation and expansion of different companies. During to the nature of demand technology, there has been a move to specialization. One of the specialized areas of manufacturing is the in computer memory chips referred to as DRAM or dynamic random access memory sold in giga-bytes and megabytes. The DRAM industry is dominated by few companies including Micron, Infineon, Samsung, Hynix, and few others. Since 190s, there have been great fluctuations in the industry. However, in 2001, the recession and other factors including expansion of the factories created a glut in the industry and the price fell drastically. The price fell to below the production level and this trigger immediate response from the manufactures. In April 2002, the price suddenly rose to $4.50 from $1.0 although the inventories remained high. This lead to speculation of collusion and Michael Dell of Dell Computers accused the company of a cartel-like behavior. This alerted Depart of Justice that began investigating price-fixing.  After the investigation was launched, the price fell to $2 which was below the manufacturing price. Later, the report by Department of Justice revealed that there was collusion between the DRAM makers to increase the price of the memory chips. Feeling the heat of losses they were making, they agreed in unison to move the prices upwards.  The main ethical issues in this case is whether the companies were justified to move their prices upward in unison considering the close relationship they had with the computer manufacturer. This will be analyzed in the lens of ethics of care.