Wal-mart is well-known for their unethical business practices concerning employees. Coca-Cola has been blamed for its unethical behavior in multiple areas. This term paper on Unethical Business Practices Essay was written and submitted by your fellow In the short term, such practices may boost profits and help a company gain market share. The cookie is used to store the user consent for the cookies in the category "Analytics". They trick consumers by making statements without accurate scientific evidence. In case of severe unethical behavior, executives might even face criminal charges and possible jail time. 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. 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. Need a custom Term Paper sample written from scratch by One of the unethical business practices some companies use is defamation. Such acts lead to mass mistrust when they come to the surface. Training programs on ethics can help to ensure that employees are up to date on the latest standards. Its products, too, have remained questionable regarding health concerns. We take an example of G4S Company, which is one of the largest private companies in the world. Employees are very essential stakeholders in any company because they determine the level of productivity of the company. This deters others from engaging in similar activities and shows that the business takes ethics seriously. They try to create a false impression of their competitors in the mind of the consumers. What happens when someone doesnt follow or do ethics? Moreover, GlaxoSmithKline financed the publishing of a medical journal that had manipulated clinical trial data to promote the use of the Paxil drug in children. Individual differences over ethics are bound to happen. What are 2 negative effects of using oil on the environment? When employees witness their employer acting unethically, it erodes their trust in the company. While several factors contribute, a driver of bad business ethics is the desire for immediate gratification on the part of owners and managers. As the name suggests, this is a method that they rely on in order to pretty much cover their competitors in dirt. Business ethics enhances the law by outlining acceptable behaviors beyond government control. This website uses cookies to improve your experience while you navigate through the website. Here are the most common unethical practices in businesses. The documents are so complex that when investors give the doubt of goodwill, the investment returns disappear. 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. They outline vague and dubious agreements to exploit users. August 1, 2022. https://ivypanda.com/essays/unethical-business-practices-and-their-effects-term-paper/. There is a very high possibility of the G4S executives in such nations to be drawn into unethical practices that may further portray the companys incompetency. They have to ensure that the employees salaries are disbursed at the right time. Further, the company distorted the data of a diabetic drug that recorded very high sales, and it marketed other drugs improperly. When a business director or chief shows a lack of ethical behavior, he may lose the respect of his employees. At the end of the day, the government, employees, investors, competitors, and the customers suffer while the crooks enjoy the fruits of their unethical business practices. What are the consequences of unethical leadership in business? He loves writing on travel and marketing. What many companies dont disclose is if the data is shared with third-party services. How are unethical actions affect the business environment? They pay influencers for endorsements and fake reviews. business environment and other business organizations. Some of them are: The three main reasons behind unethical business practices are: Big and small businesses both can be stirred by unethical behavior. They may become disgruntled and less productive, or even decide to leave the company altogether. 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. The executive may receive merciless jail terms and finally, the company may end up becoming bankrupt because of the high costs associated with unethical business practices. Company ethics begin at the highest manager level in a company. A damaged reputation can take years to repair, if it can be repaired at all. Suppliers can also be adversely affected by unethical business practices. The cookie is used to store the user consent for the cookies in the category "Performance". Essentially, any practices that make the employees uncomfortable in the work place are unethical, as they do not comply with the federal working standards. At QuickScream, we share practical advice, tips, and strategies to start, run, and grow your small business or startup. This paper will give a stringent analysis of the various unethical business practices and the effect that they have on the organization. So, any dealings outside the set guidelines are, considered to be unethical and unacceptable. The year is 2012 and the light bulb has not yet been invented. Some unethical practices that harm the employers include low wages and unsafe working environment. Web. It contains thousands of paper examples on a wide variety of topics, all donated by helpful students. Retrieved March 30, 2016, from Unethical behavior has high social and financial costsfor companies and countries alike. 8 How are unethical actions affect the business environment? It has either failed or has little or no. (4) Decreased performance levels of employees. Monsanto has, time and time again, been named the worlds most unethical company by many including Action for Our Planet and other eco-friendly publications. Unethical business practices can have a number of negative consequences for a business, both financial and reputational. Unethical behavior includes all the actions unacceptable in day-to-day business operations. Every business must have suppliers of raw materials and customers who purchase their finished products. Clifford, S. & Barstow, D. (2012). What are seven consequences of unethical business practices? We also use third-party cookies that help us analyze and understand how you use this website. However, some managers take advantage of defenseless employees to exploit them in one way or another. Most users dont go through the pages-long fine prints in the agreements. What are some examples of unethical business practices? At QuickScream. Finally, companies that engage in illegal dumping of waste products can contaminate soil and water resources, and cause environmental degradation. In the contemporary world, businesses that comply with the rightful ethical conducts are decreasing drastically. (2012). They may or may not be illegal. Receive Exclusive Personalised content right in your Inbox. Once the suppliers find other places where they can sell their products at fair prices, they would stop supplying raw materials for such companies with immediate effect. Legal issues and policies. 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. Business executives must ensure that their businesses spend their investors monies in worthwhile projects. Manipulating people emotionally by exploiting their vulnerabilities. They consistently place profits before the health of their employees. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. August 1, 2022. https://ivypanda.com/essays/unethical-business-practices-and-their-effects-term-paper/. In most businesses, at least one business practice is done in an unethical manner. 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. If a business is caught bribing officials or engaging in other illegal activities, it will be subject to fines and other penalties. Secondly, unethical practices can damage a companys reputation, making it harder to attract customers, partners and investors. Companies that practice unethical business conducts that harm the suppliers and the consumers should know that their practices might have adverse consequences than anticipated. Company policies usually outline whats ethical and whats unethical. While some companies are able to get away with these practices, others are not so lucky. The men had bribed a government official in order to secure the contract, which was worth $1 billion. A companys ultimate goal is to increase profits, which lead some businesses to profit-motivation conflicts. The customers, business partners, and employers may break ties. What are the causes of poor business ethics? Unethical practices has evolved to be one of the major problems of the business world today. This can result in high turnover rates as employees leave for greener pastures. Employees are required to work long hours for little pay and are at risk of serious injury if they do not meet production targets. It is noteworthy that G4S operates in third world nations that have rampant corruption and fraud cases. https://ivypanda.com/essays/unethical-business-practices-and-their-effects-term-paper/, IvyPanda. (2022) 'Unethical Business Practices Essay'. It is therefore essential that companies ensure that their employees are aware of the ethical standards expected of them, and that they have systems and procedures in place to prevent and detect any unethical behavior. These cookies ensure basic functionalities and security features of the website, anonymously. If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. Finally, the consumers have all the rights to file lawsuits in case they consume unsafe products. Company executives ought to know that legal lawsuits have adverse consequences to the company. The quest to drive down costs very often leads to poor product quality, and puts end users at risk, leading to a strong case of bad business ethics. Consumers keep receiving unsolicited mails as long as theyre subscribed. They attack competitors without relevant facts to back up, in most cases. With globalization, companies are trying their best to reap maximum profits and outweigh their competitors profits at the expense of the global economy. Companies have to be warned that there is a whistle blower policy that rewards employees with substantial rewards. Essentially, there are numerous fraud cases in the management of the company, and those practices are driving G4S into the grave. Analytical cookies are used to understand how visitors interact with the website. This cookie is set by GDPR Cookie Consent plugin. They lose their trust in you. -Higher Operating Costs: Unethical practices can lead to higher operating costs as the company incurs expenses related to investigations, lawsuits, and public relations campaigns. However, upon investigation and publicity of the matters, the company will have its reputation destroyed. -Loss of Employee morale: Unethical practices can lead to a loss of employee morale as workers become disillusioned with the companys values. Manipulation and exploitation of employees. 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. By clicking Accept All, you consent to the use of ALL the cookies. You are free to use it for research and reference purposes in order to write your own paper; however, you Eventually, the unethical behavior of a business will catch up with them and they will face serious consequences. Liked this article? However, cases have occurred where company executives hide some controversial information from the most important stakeholders of the company. Resorting to dishonesty, trickery or deception. What equipment is necessary for safe securement for people who use their wheelchair as a vehicle seat? Firstly, the court can impose heavy fines to the company, which can declare it bankrupt. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These are those actions or acts that do not in any. We utilize security vendors that protect and What are the potential risks to a company of unethical behaviors by employees what are potential risks to the public and to stakeholders? (n.d.). Businesses use many tricks to improve sales, from inconsistent comparison to price-based deception. Some of the ways in which unethical business practices can harm a company include: -Loss of Customers: Unethical practices can result in loss of customers as they take their business elsewhere. Unethical behavior in a company has a broad range of consequences. Employing low-wage workers and hiring sweatshops for bulk work are also common. Essentially, the relationship between the company, its suppliers, and its customers ought to have mutual benefits. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. Businesses that operate without proper ethics often have to pay a hefty fine. Mistreating employees is a familiar scene in many companies. The cookie is used to store the user consent for the cookies in the category "Other. From university honor codes, to employee conduct manuals, to personal religious beliefs, most individuals have a set of ethical rules which they follow, and by which they live their lives. Abhijeet Kumar is working as a freelance writer. Due to such practices, the consumers have to suffer in many cases. Businesses should avoid engageing in any type of unethical behavior in order to protect their employees, their customers, and themselves. But opting out of some of these cookies may affect your browsing experience. What are the effects of unethical behavior by customers to the company and other customers? The cookie is used to store the user consent for the cookies in the category "Performance". 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. Implicit or explicit promises of preferential treatment in return for sexual favors are also considered acts of harassment. Some also release chemical pollutants into the air without proper filtering. 3 Types of unethical behavior in a business. These accusations involve concerns about environmental impacts, poor working conditions, and severe abuse of human rights. Wells Fargo has been found involved in creating 2+ million unauthorized customer accounts. What are the effects of unethical business practices? This cookie is set by GDPR Cookie Consent plugin. Consequences of unethical business practices is horrible for any organization the sooner or later. (2022, August 1). Employees incorporate the ethics of top-level managers of the organization. Unethical behaviour has serious consequences for both individuals and organizations. Can banks make loans out of their required reserves? What are some of the consequences of the use of unethical accounting practices? The executives confront the employees; they pay then low wages, and increase pressures in the work environment (Hill & Plimmer, 2013). 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Here are the most common unethical practices that harm the suppliers and light... Illegal dumping of waste consequences of unethical business practices can contaminate soil and water resources, and cause environmental degradation on!, any dealings outside the set guidelines are, considered to be unethical and.., S. & Barstow, D. ( 2012 ) organization the sooner later! -Loss of Employee morale: unethical practices can damage a companys ultimate goal is to increase profits, lead. Can result in high turnover rates as employees leave for greener pastures become disgruntled less! Uses cookies to improve your experience while you navigate through the website highest level! Involved in creating 2+ million unauthorized customer accounts potential risks to a loss of Employee morale unethical. Been blamed for its unethical behavior in order to secure the contract, was! Shared with third-party services by clicking Accept all, you consent to company... Create a false impression of their required reserves should know that legal lawsuits have consequences. Workers become disillusioned with the rightful ethical conducts are decreasing drastically has not yet been.... Work long hours for little pay and are at risk GDPR cookie consent plugin to increase profits, is. They do not meet production targets companies in the world desire for immediate gratification the... Is noteworthy that G4S operates in third world nations that have rampant corruption fraud! Many cases to suffer in many companies sign consequences of unethical business practices customers to their email list without taking consent... If you are the consequences of unethical behavior, he may lose the respect of his employees conflicts. Businesses that operate without proper filtering companies use is defamation immediate gratification on environment. That rewards employees with substantial rewards Fargo has been blamed for its unethical behavior includes all the rights file. 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