Consequences of unethical business practices. Just one example is Deborah Shank, who was in a collision involving a semi-trailer in 2000, resulting in permanent brain damage and confinement to a wheelchair. Nestle. The men had bribed a government official in order to secure the contract, which was worth $1 billion. Analytical cookies are used to understand how visitors interact with the website. Moreover, the companies should adhere to the corporate social responsibility policy that obliges companies to honor the surrounding environment and the people in it. These misleading messages are spread online in order to hurt the . Unethical behaviour has serious consequences for both individuals and organizations. 6 What are the potential risks to a company of unethical behaviors by employees what are potential risks to the public and to stakeholders? A reward can be as simple as praise in the face of good behavior particularly when it would be easy for an employee to act unethically. The G4S Company has existed for decades and it has expanded globally, however, the company can collapse within a short period if its reputation is disputed. It provides an overview of whats acceptable and whats not. With globalization, companies are trying their best to reap maximum profits and outweigh their competitors profits at the expense of the global economy. (2010). However, there are those business people who opt to employ unfair and unethical business practices that result into unfair competitive practices. activities of an organization in dealing with employees, customers, government agencies. Ethics in business essentially entail maintaining high standards and meeting legal and moral obligations. Its not limited by gender. What are the effects of unethical business practices? Further investigations indicated that the company lured the doctors by enticing them with luxury trips and spa treatments. Although it depends on the specific circumstances surrounding the case, this can result to being sentenced to prison, fines, withdrawal of license and other legal punishments to the accountants found guilty. To encourage this, businesses can have an anonymous reporting system in place. To increase ethical behavior, you need to use rewards as well as punishment. Business ethics is the study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, and bribery. This very sad incidence affects innocent individuals who purchase such products unknowingly. The paper will bring in ideas, information, and examples of unethical business practices in major organizations. In addition to affecting employee morale, unethical business practices can also damage a companys reputation. Here are the most common unethical practices in businesses. Financial Times. Regular reporting and auditing will discourage employees from being unethical. (2) Decreased productivity. What are some examples of unethical business practices? All companies ought to adhere to the pollution norms set by the government. 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. Is it Ethical for Employers to Search Social Media for Information about Applicants for a Job. Manipulation and exploitation of employees. This website uses cookies to improve your experience while you navigate through the website. Copyright 2023 - IvyPanda is operated by, Wal-Mart inquiry reflects alarm on corruption, Glaxo agrees to pay $3 billion in fraud settlement, GlaxoSmithKlines Leadership Management Framework, GlaxoSmithKlines Limit to Supply in Canada, The Exchange Rate Impacts on GlaxoSmithKline Company, GlaxoSmithKline: Impact of Production Chain, GlaxoSmithKline: the Management of Innovation, GlaxoSmithKline Plc's Financial Reporting, Role of Hiring Ethical People in Creating and Sustaining Organization, Moral obligations of multinational corporations, News of the Ethics and Social Responsibility. 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. While some companies are able to get away with these practices, others are not so lucky. Moreover, the affected individuals would be junior employees of the company who may suffer from lifestyle diseases. Save my name, email, and website in this browser for the next time I comment. . What are the potential risks to a company of unethical behaviors by employees? Unethical behaviour from low-level incivility to bullying and personal harassment, misrepresentation in advertising, corporate fraud and bribery seem to have become more commonplace . There are two main theories of business ethics, Human Resource Management and Business Ethics. & Plimmer, G. (2013). These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. Sometimes, the cause might be an individual act, and at other times, the entire company culture is responsible. 4 What are the consequences of unethical and illegal practices in a business? Employee relationships are affected. This is exemplified by Mattel, of Barbie doll fame. Such tactics are unethical and can tarnish the image of the organizations using them. Some employers have made it a routine to have their private cloakrooms while the other employees use unsanitary cloakrooms. Another unethical practice is deliberately over-billing the customers. 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 Business Practices Essay." For example, if financially reckless companies fail to follow ethical accounting guidelines, shareholders can't make informed decisions. Loss of company credibility. The vulnerable employees have no choice but to be submissive. Following are some of the consequences of businesses acting unethically: When the lack of ethical behavior comes out in public, the business loses credibility. Conversely, lack of personal and professional ethics can lead to negative financial results, explains Indeed.com. Unethical business practices can have a number of negative consequences for a company, including the loss of customers and damage to its reputation. "In civilized life, law floats in a sea of ethics.". 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. What other two military branches fall under the US Navy? Many companies sign up customers to their email list without taking proper consent. It makes a business seem more profitable while hurting the investors and end consumers. 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. Defamation. Unethical business practices arent the same as illegal practices. Course Hero is not sponsored or endorsed by any college or university. Behaving unethically can break your business in a way you can never recover. Essentially, there are numerous fraud cases in the management of the company, and those practices are driving G4S into the grave. They may become disgruntled and less productive, or even decide to leave the company altogether. The database is updated daily, so anyone can easily find a relevant essay example. Since most businessmen think in terms of profit and loss, compromising on ethics may seem like a necessary evil to them. Certainly, if all companies adopt the above named ethical practices, every individual in the world would be very comfortable, whereas, companies will be making honorable profits. The burgeoning, proliferation of unethical practices impacts the global financial crisis, deepening the fallout in, human terms and slowing the ability to rebuild (Gill, 2012, P.371 -391), The code of conduct put in place by various governments has so far been very, ineffective in combating or reducing unethical practices. From lying to customers to bribing government officials, there are a variety of ways in which businesses can act unethically. Essentially, the relationship between the company, its suppliers, and its customers ought to have mutual benefits. This deters others from engaging in similar activities and shows that the business takes ethics seriously. Web. Unethical Business Practices Essay. Some common ones include the desire for personal gain, the pressure to meet certain goals or targets, a lack of awareness of the consequences of their actions, and a lack of ethical values. In some cases, employees are so concerned with getting ahead and making money that they ignore procedures and protocol. What are the positive and negative effects of industry? Laws regarding unlawful business practices vary depending on whether state law or federal law applies. Understanding and managing organizational behavior (6th ed.). The customers, business partners, and employers may break ties. The managers have a responsibility of offering a favorable working environment for all their employees. 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. What are the consequences of unethical research practices? Years later, they sued her . They can no longer trust anyone in their workplace, thus affecting their daily operations. 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. The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. In the area of human resources, a company may engage in unethical practices such as discrimination or sexual harassment. Secondly, unethical practices can damage a companys reputation, making it harder to attract customers, partners and investors. Incentivize Ethical Behavior. The consequences of unethical business practices are horrible for any organization sooner or later. How many amino acids were present in the final protein chain created in translation? Indeed, unethical business practices harm a series of people, whereas; only a few greedy incumbents enjoy the fruits of their ill deeds. The destroyed reputation of such companies may cause their sales to reduce drastically, and the company may end up being bankrupt. professional specifically for you? 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).
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