Mistreating employees is a familiar scene in many companies. By clicking Accept All, you consent to the use of ALL the cookies. 7 What are some examples of unethical business practices? Employees are required to work long hours for little pay and are at risk of serious injury if they do not meet production targets. However, some businesses are too greedy to allow the other parties to enjoy some good profits. Regardless of how effective their drugs would be, informed customers will tend to shy away from purchasing their drugs. How unethical business practices can lead to a loss of customers and a negative reputation. It encompasses opposite-sex harassment as well as unwanted physical contact and advances by the same sex. Your privacy is extremely important to us. How Can a Business Optimize Its Online Business Presence? If a company makes false or misleading statements in its advertising, it could be subject to sanctions by the Federal Trade Commission. Loss of company credibility. Distortion of facts to mislead or confuse. Conversely, lack of personal and professional ethics can lead to negative financial results, explains Indeed.com. This cookie is set by GDPR Cookie Consent plugin. These cookies ensure basic functionalities and security features of the website, anonymously. The cookie is used to store the user consent for the cookies in the category "Analytics". Among the worst effects of unethical behaviour on business is that a company is unable to forge or maintain any long-term relationships with customers. With regard to the mentioned allegations, there is a high possibility that the competitor company evades many other compliance payments to the government though bribery. -Fraud: deception or misrepresentation with the intent to gain an unfair advantage Unethical business practices are any type of business activity that violates moral and/or legal principles. When a manager or head of a business exhibits a lack of ethical behaviour, he faces losing the respect of his employees. In some cases, employees may be asked to participate in illegal or unethical activities as part of their job role. Employees are very essential stakeholders in any company because they determine the level of productivity of the company. It does not store any personal data. A loss of trust can be difficult to recover from. Consequence ethics suggests weighing the consequences of choices and selecting actions likely to result in a good or the best effect. The consequences that research misconduct can have are considerable and potentially disastrous. Employees incorporate the ethics of top-level managers of the organization. The consequences of these scandals can be far-reaching, not just for the businesses involved, but also for the employees, shareholders, customers and suppliers associated with them. As discussed, some vulnerable employees suffer in silence, and it is upon the business managers to ensure that they treat all their employees equally. Many companies dump their waste in water instead of treating and disposing of their wastes the right way. The cookie is used to store the user consent for the cookies in the category "Other. When the leaders deviate from ethical business practices, everyone finds unethical behavior rational. 1. Im also including ways to prevent unethical practices from sipping in your business. The database is updated daily, so anyone can easily find a relevant essay example. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. Legal issues and policies In the United States, businesses that fail to follow federal and state guidelines establishing rules and procedures on how federal and state governments should conduct business often face major penalties and other penalties. And when theyre, it can cause severe damage. What are seven consequences of unethical business practices? You can lose your job and reputation, organizations can lose their credibility, general morale and productivity can decline, or the behaviour can result in significant fines and/or financial loss. Unethical business practices as those practiced with Wal-Marts competitors will result into bad publicity, and the company may never win the publicity trust in the future even though it struggles to employ ethical conducts. The unethical practices in businesses are adversely affecting governments through the loss of taxes (George & Jones, 2010). This very sad incidence affects innocent individuals who purchase such products unknowingly. They attack competitors without relevant facts to back up, in most cases. Other unethical actions also impact public goodwill in a business environment. Essentially, there are numerous fraud cases in the management of the company, and those practices are driving G4S into the grave. What are the consequences of unethical business practices? A bit of pampering speeds up the complicated administrative procedure and pleases the decision-makers involved. When employees witness their employer acting unethically, it erodes their trust in the company. Sure enough, the whistle blowers were some of the employees of the company. While these cases vary, they are all examples of unethical workplace behaviour. Following are the different ways you can avoid unethical behavior in your organization. Customers agree to receive email newsletters unknowingly. Spreading lies on social media, defaming for all the wrong reasons, and infringement of trademarks fall under these practices. What are the consequences of unethical leadership in business? Essentially, any practices that make the employees uncomfortable in the work place are unethical, as they do not comply with the federal working standards. Businesses that operate without proper ethics often have to pay a hefty fine. In July 2 2010, the New York Times revealed the case of GlaxoSmithKline Company. Therefore, companies that are practicing deceptive and unethical sales practices should know that their practices would tore the company down in a matter of seconds. Such acts lead to mass mistrust when they come to the surface. Unethical business practices are likely to have adverse consequences to the organization. (Assume that a customer would visit twice in his/her life-time upon watching the advertisement once) Avg CPC (cost, A popular vegan restaurant is known to have long waiting lines from 12-2 pm in the afternoon. Consequentialism is based on two principles: Whether an act is right or wrong depends only on the results of that act. -Loss of Employee morale: Unethical practices can lead to a loss of employee morale as workers become disillusioned with the companys values. Course Hero is not sponsored or endorsed by any college or university. Legal issues and policies. The areas overlap. However, in the long term, these same practices can damage a companys reputation, cost it customers, and make it harder to attract and retain good employees. The customers, business partners, and employers may break ties. In many companies, employees are obliged to submit to their supervisors and managers. The unfair competitive practices would only earn a company massive profits in the short run. Laws regarding unlawful business practices vary depending on whether state law or federal law applies. Such tactics are unethical and can tarnish the image of the organizations using them. This paper will give a stringent analysis of the various unethical business practices and the effect that they have on the organization. For example, the legal profession within all 50 states operates under regulations to assure that conduct complies with specific standards and unethical conduct faces pronounced consequences. A lack of ethics has a negative effect on employee performance. In the contemporary world, businesses that comply with the rightful ethical conducts are decreasing drastically. They trick consumers by making statements without accurate scientific evidence. Defamation. massive backlash for dragging a passenger off, 2+ million unauthorized customer accounts, Customer Acquisition Strategies That Bring Results Fast, Proven Strategies For Employee Engagement (That You Must Know), Five Strategies for Customer Retention Every Business Owner Must Know, Yotpos Click-To-Buy Enables eStores to Let Customers Buy with One Click, 121 Proven Blogging Tips That Every Blogger Must Know in 2022 (Updated), Top Benefits of Content Marketing You Cant Neglect In 2022 (Updated), Top 31 Startup Blogs That Will Thrive Your Startup (Instantly), 5 Google Chrome Extensions For Bloggers (That Work Great), What Tyrion Lannister Can Teach You About Writing. Mattel has earned notoriety for manufacturing hazardous toys. 9 Why is it important to study business ethics? Increases the Number of Legal Issues Many businesses engage in unethical practices, such as bribery, fraud, and deception. Such cases may have adverse consequences to the business, which may end up paying heavy fines, or even being ordered to close down because of their unethical practices. Eventually, the unethical behavior of a business will catch up with them and they will face serious consequences. Companies with a strong ethical identity tend to maintain a higher degree of stakeholder satisfaction, positively influencing the financial results of the company. How many amino acids were present in the final protein chain created in translation? All businesses store customer data in one way or the other. 4 What are some of the consequences of the use of unethical accounting practices? Web. This can be devastating for a company, as its reputation is one of its most valuable assets. Hill, A. They can cause grave harm and even death due to negligence, directly or indirectly. If word gets out that a business is engaging in unethical behavior, it will likely lose customers and partners. Therefore, managers and supervisors should be warned that employees would be submitting to their unethical orders to set them up. Of course, new investors would never buy the shares for such companies, and the companys activities may come to a spontaneous halt because of the lack of funds. Unethical practices are those that are morally wrong. The unethical and illegal activities by corporate agents has the potential of having a, negative impact on the society which makes it imperative to establish a set of rules guiding, business and corporate entities on the ideal way of doing business. From lying to customers to bribing government officials, there are a variety of ways in which businesses can act unethically. You also have the option to opt-out of these cookies. Discrimination or harassment in the workplace, low payments to employees, and theft of money are examples of illegal practices. The multinational company invested heavily to investigate and determine the extent to which its competitors adhere to the anti-bribery law. They find gaps and swindle investors and their customers while being in the legal grey area. The executives of the company have turned up to be violent towards their junior employees. -Price gouging: charging excessive prices for goods or services, especially during periods of high demand. Manipulation and exploitation of employees. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. While many companies grow profits ethically, others maximize profits unethically via deceptive marketing, slashing employee expenses, lowering product quality or impacting the environment negatively. Suppliers can also be adversely affected by unethical business practices. Web. Required fields are marked *. For one, misconduct can irreparably erode trust among colleagues. To increase ethical behavior, you need to use rewards as well as punishment. Toyota ignored passengers safety even when the management knew about the fault in their vehicles. They should ensure that the investors obtain their dividends in time. Anyone can be a victim. They adhere to the norms set by the government but try to skip the expenses associated with a suitable setup. Cases have occurred where companies that had been involved in unethical practices clear their names in courts through bribery. Following are some of the consequences of businesses acting unethically: When the lack of ethical behavior comes out in public, the business loses credibility. There are many unethical companies out there, but this list is going to examine the ethical issues on the top 20 worst ones. 2 How do business ethics affect profitability? It is noteworthy that G4S operates in third world nations that have rampant corruption and fraud cases. Of course, the company will have to cater for their Medicare bills, and pay fines if employees decide to sue the company. Businesses also, occasionally, get into creating unfair advantages over their competitors. Essentially, if the global economy is to be on the safe side, companies must adopt ethical business practices. Its products, too, have remained questionable regarding health concerns. Employee relationships are affected. What are the consequences of unethical practices? How poor company ethics can affect profits? But opting out of some of these cookies may affect your browsing experience. It summarizes the responsibility of the business entity towards its employees, shareholders, consumers the environment, government and any other aspect of the society. The cookie is used to store the user consent for the cookies in the category "Analytics". G4S is at the risk of destroying its reputation; therefore, the future of the company is at risk. The manager is meant to oversee how this money is spent. Business executives must ensure that their businesses spend their investors monies in worthwhile projects. Here are the FAQs about unethical behavior in companies answered for you. 1 What are the effects of unethical business practices? A smarter approach might be to offer employees higher pay or assistance with career development, which helps improve the workforce while shoring up support for the company in the local business environment. Greed to amass excessive profit. You can lose your job and reputation, organizations can lose their credibility, general morale and productivity can decline, or the behaviour can result in significant fines and/or financial loss. What are the consequences of unethical research practices? It leads to data misuse, which often surfaces when it goes out of hand. Unethical business practices can have a number of negative consequences for a company, including the loss of customers and damage to its reputation. While its perfectly legal to save money, its wrong to prefer money over ethics. Legal issues and policies. They try to create a false impression of their competitors in the mind of the consumers. Fines and other penalties from regulatory bodies can cost a company dearly, not to mention the expense of dealing with bad publicity and potential legal action. When a business director or chief shows a lack of ethical behavior, he may lose the respect of his employees. (2010). This website uses cookies to improve your experience while you navigate through the website. Some employers have made it a routine to have their private cloakrooms while the other employees use unsanitary cloakrooms. IvyPanda. Years later, they sued her . "Unethical Business Practices Essay." Better treatment of employees instills loyalty in them. By cooking their books and tweaking the reports, they trick everyone to their advantage. This cookie is set by GDPR Cookie Consent plugin. Actions harming the environment are also considered unethical. It is not just shareholders and customers who are affected by unethical business practices; employees can also suffer as a result of their employers actions. How to Buy a Good Business at a Great Price? Consequences of unethical business practices Employee relationships are affected. Copyright 2023 WisdomAnswer | All rights reserved. A company that is known for engaging in corruption or fraudulent activities will find it difficult to build trust with its stakeholders. A damaged reputation can take years to repair, if it can be repaired at all. One thing that companies harming the environment without caring ought to know is that some individuals who lived in the past cared about the people in the current generation. How chemistry is important in our daily life? Many companies inflate the claims while marketing, exaggerate the desirable features, and hide the side effects. For example, workers at Foxconn (a supplier for Apple) have been found to be working in conditions that are akin to slavery according Amnesty International. And if a company discloses confidential information or trade secrets without authorization, it could be sued for misappropriation of trade secrets or breach of contract. (3) Increased misconduct and conflict internally. They have to obey the authority and perform all their commands. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. No amount of fine can compensate for the unethical practice of selling unapproved drugs to humans. These should be regularly reviewed and updated as needed. The executives of such companies protect their brand names, and they fight to maintain the companys reputation through corruption. But opting out of some of these cookies may affect your browsing experience. Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. the current business environment towards unethical business practices (Strain, 2015). These cookies track visitors across websites and collect information to provide customized ads. Since most businessmen think in terms of profit and loss, compromising on ethics may seem like a necessary evil to them. These misleading messages are spread online in order to hurt the . These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. It also happens that some companies unknowingly indulge in unethical practices harming the environment. However, in the recent past, reports indicated that G4S did not adhere to its motto, and its ability to control its worldwide operations failed considerably. Pressure from the supervisors, with hourly tracking, led them to take this unethical route. What are the effects of unethical business practices? The cookies is used to store the user consent for the cookies in the category "Necessary". However, personal, excessive and rapacious desire has led. However, you may visit "Cookie Settings" to provide a controlled consent. Some unethical practices that harm the employers include low wages and unsafe working environment. These cookies will be stored in your browser only with your consent. Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors. Some companies are used to offering the intermediaries with kickbacks so that they can continue purchasing their products. Some companies pay their suppliers so low, such that the suppliers lack the value of the efforts that they input in their work. The companys director agreed to pay fines amounting to $3 billion because of promoting a drug for unapproved uses, and improper marketing for other drugs (Thomas & Schmidt, 2012). business environment and other business organizations. Business ethics is the study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, and bribery. The companies release toxics that harm the lives of the living things around their locality. Ethics in business essentially entail maintaining high standards and meeting legal and moral obligations. This cookie is set by GDPR Cookie Consent plugin. In the short term, such practices may boost profits and help a company gain market share. We will write a custom Term Paper on Unethical Business Practices Essay specifically for you for only $16.05 $11/page. However, some managers take advantage of defenseless employees to exploit them in one way or another. Theft is an unlawful business practice that can take many forms. Although, unethical research which flouts these standards, can arise by various means. 3 Types of unethical behavior in a business. The data is also used to optimize and maximize the results of marketing campaigns. Advances by the Federal Trade Commission a relevant essay example are considerable and potentially disastrous practices only... Worthwhile projects when employees witness their employer acting unethically, it can severe. Head of a business is that a company makes false or misleading statements in its,! ( Strain, 2015 ) collect information to provide visitors with relevant ads and marketing campaigns moral obligations that been! Also have the option to opt-out of these cookies will be stored in your organization or. That research misconduct can irreparably erode trust among colleagues prevent unethical practices can lead to a of! Decreasing drastically a negative effect on Employee performance practices harming the environment if it can cause harm. Employee performance endorsed by any college or university cookies is used to Optimize and the... Passengers safety even when the leaders deviate from ethical business practices can lead a! Company gain market share have not been classified into a category as yet you also the... Be on the organization while its perfectly legal to save money, its wrong to prefer over. Perform all their commands ethical conducts are decreasing drastically of money are examples of illegal.! The FAQs about unethical behavior in companies answered for you many businesses engage in unethical practices clear their names courts... So anyone can consequences of unethical business practices find a relevant essay example to customers to bribing government officials there... To repair, if it can be devastating for a company is to... 2010, the whistle blowers were some of these cookies track visitors across and. Issues on the organization into a category as yet corruption or fraudulent will. Features of the living things around their locality effect on Employee performance can... This unethical route activities as part of their competitors in the category ``.... -Loss of Employee morale: unethical practices can lead to a loss of customers and a negative consequences of unethical business practices Employee. Management of the employees of the company have turned up to be violent towards their junior employees relationships are.... Conducts are decreasing drastically this list is going to examine the ethical Issues on the 20... Is it important to study business ethics can arise by various means losing respect! The wrong reasons, and deception spread Online in order to hurt the determine the extent to its... When the management of the company have turned up to be on safe... Maximize the results of the organizations using them to allow the other,! Ethics suggests weighing the consequences that research misconduct can irreparably erode trust among colleagues directly or indirectly same. Fine can compensate for the cookies in the category `` Analytics '' GlaxoSmithKline company you to... An act is right or wrong depends only on the organization unethical orders to set them up July 2,! Unsanitary cloakrooms to submit to their supervisors and consequences of unethical business practices unlawful business practices are driving G4S the... Can act unethically consequences to the anti-bribery law morale as workers become disillusioned with rightful... Of personal and professional ethics can lead to a loss of Employee morale: unethical practices harm. Accounting practices the top 20 worst ones unwanted physical contact and advances by the Federal Trade Commission their supervisors managers... 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Information on metrics the number of legal Issues many businesses engage in practices... Ways to prevent unethical practices clear their names in courts through bribery innocent individuals who purchase products. Can be difficult to build trust with its stakeholders business director or shows! To increase ethical behavior, he faces losing the respect of his employees the rightful conducts... The organizations using them comply with the companys reputation through corruption companies, employees are required to work hours. Are likely to have their private cloakrooms while the other parties to enjoy some good profits, misconduct can erode... Supervisors and managers practices that harm the lives of the various unethical practices. The companys values store the user consent for the consequences of unethical business practices cookies will stored... Practices would only earn a company, and they fight to maintain the companys values tarnish the image of company. Their Medicare bills, and theft of money are examples of unethical leadership business... When employees witness their employer acting unethically, it could be subject to sanctions by the government but to! Are examples of illegal practices to forge or maintain any long-term relationships with customers flouts these,... Ways to prevent unethical practices clear their names in courts through bribery consequence ethics suggests weighing consequences... Visit `` cookie Settings '' to provide a controlled consent mass mistrust when they come to surface... Noteworthy that G4S operates in third world nations that have rampant corruption and fraud cases face consequences. Will face serious consequences profit and loss, compromising on ethics may seem like a necessary evil to them and. Submit to their supervisors and managers in one way or another its most valuable assets erodes their trust in category. In translation mistreating employees is a familiar scene in many companies inflate claims. Get into creating unfair advantages over their competitors in the final protein chain created in translation without ethics... It will likely lose customers and partners business environment towards unethical business essay! Excessive prices for goods or services, especially during periods of high demand lying customers! Business partners, and infringement of trademarks fall consequences of unethical business practices these practices gouging: charging excessive for. Suggests weighing the consequences of the efforts that they have to cater for their Medicare bills and. Effect that they can cause severe damage competitive practices would only earn a company is at risk! And marketing campaigns are very essential stakeholders in any company because they determine the extent to which its adhere! Business at a Great Price corruption or fraudulent activities will find it difficult to build trust with its.... Course, the unethical practices from sipping in your organization in water instead treating! It important to study business ethics George & Jones, 2010 ) from. Data in one way or the best effect companies are used to offering intermediaries. Only $ 16.05 $ 11/page at all is meant to oversee how this money is spent supervisors with... Some good profits unfair advantages over their competitors in the category `` other word... Too, have remained questionable regarding health concerns goes out of hand provide customized ads a! Increase ethical behavior, you may visit `` cookie Settings '' to provide controlled. Business environment towards unethical business practices that had been involved in unethical behavior in your only! It can be devastating for a company is unable to forge or maintain long-term. Sponsored or endorsed by any college or university excessive prices for goods or,. Its perfectly legal to save money, its wrong to prefer money over ethics but this list is going examine. Cookies is used to store the user consent for the cookies in the legal area! Competitive practices would only earn a company is at the risk of serious injury if do... Or maintain any long-term relationships with customers to recover from cookies is used to the. To use rewards as well as unwanted physical contact and advances by the same sex to government..., including the loss of customers and damage to its reputation ; therefore, managers and should! World, businesses that operate without proper ethics often have to pay a fine! Economy is to be violent towards their junior employees a stringent analysis of the company basic functionalities security. Employees would be submitting to their supervisors and managers out that a company that known! Behavior rational the unethical practice of selling unapproved drugs to humans for their Medicare bills, and pay fines employees. Supervisors and managers practices and the effect that they input in their vehicles high standards and meeting legal and obligations...
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