Unethical Business Practices Essay. As well as being fined, the company was banned from doing business in Bangladesh for 10 years. Unethical treatments to suppliers and customers. 5 What are the potential risks to a company of unethical behaviors by employees? In extreme cases, it can even result in physical violence. This can result in high turnover rates as employees leave for greener pastures. Analytical cookies are used to understand how visitors interact with the website. Here are five examples of businesses that tossed their ethical standards in the bin: Huawei has been in the limelight for copying the design of Apples iPhone. There are two main theories of business ethics, Human Resource Management and Business Ethics. A review system by employees for employees will ensure that the established codes are being followed. It is noteworthy that G4S operates in third world nations that have rampant corruption and fraud cases. While these practices can sometimes help a business succeed, they can also have a negative effect on the business. Damages company credibility When the lack of ethical behavior comes out in public, the business loses credibility. It has either failed or has little or no. 2022. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". We also use third-party cookies that help us analyze and understand how you use this website. To make the matters worse, the subsidiarys parent company suppressed the investigations through bribery. Consequence ethics is a philosophical approach to morality by which the results of an action determine the potential good of the action. & Plimmer, G. (2013). Wal-mart is well-known for their unethical business practices concerning employees. The company would meet the full payments of hunting excursions and all sorts of luxuries to win the doctors, and force them to promote some unapproved drugs. Upper Saddle River, NJ: Prentice Hall. However, personal, excessive and rapacious desire has led. Recording false transactions, overvaluing inventory, and understating liabilities are many ways businesses manipulate their financial records. Businesses causing harm to the environment are probably the most talked-about unethical business behavior. There are a number of possible legal implications of unethical business practices. (2) Decreased productivity. Corporations establish business ethics to promote integrity among their employees and gain trust from key stakeholders, such as investors and consumers. Wal-Mart did the investigation in Mexico, Brazil, China, and India, which are its major international markets. Among the worst effects of unethical behaviour on business is that a company is unable to forge or maintain any long-term . If unethical business practices are prevalent, everyone in a business environment is at risk. Why are moral and ethical beliefs important in business? Once consumers know that a company employs unethical business practice in their operations, the effects are inerasable. The customers, business partners, and employers may break ties. The cookie is used to store the user consent for the cookies in the category "Analytics". Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. student. This cookie is set by GDPR Cookie Consent plugin. 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. These actions dont conform to the established standards of the ideal corporate world. Consequence ethics suggests weighing the consequences of choices and selecting actions likely to result in a good or the best effect. What are the effects of unethical behavior by customers to the company and other customers? How Can a Business Optimize Its Online Business Presence? Such practices are always unethical. 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. Further, the courts can even order the company to be closed down. With globalization, companies are trying their best to reap maximum profits and outweigh their competitors profits at the expense of the global economy. You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. Businesses also, occasionally, get into creating unfair advantages over their competitors. 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. Whenever the investors resolve to have the company investigated, the company managers and other executives resist the investigations. To increase ethical behavior, you need to use rewards as well as punishment. -Conduct audits: Regular audits of ethical compliance can help to identify any areas of concern. Learn the answer in the paper below! Companies also use AI tools to create fake images, fabricate phony social media profiles, and mass outreach to potential customers. What are the consequences of unethical leadership in business? Glaxo agrees to pay $3 billion in fraud settlement. In its investigations, Wal-Mart discovered that its competitors were indeed violating the corruption act that guides foreign investors. Many companies go to extreme lengths to maximize their revenues. So, a clear understanding of the common unethical business practices can help keep such behavior in check and follow ethical business practices. These cookies track visitors across websites and collect information to provide customized ads. Polluting the environment should be outdated, as companies ought to employ practices that are environmental friendly. Whether it is a big conglomerate or a small business or even an online project, the stakes of outperforming the competition are always high. The cookie is used to store the user consent for the cookies in the category "Performance". What is unethical business practice? This sad incidence clearly indicates that the greedy executives of such companies care less about those individuals and other living things that are affected in one way or another. If word gets out that a business is engaging in unethical behavior, it will likely lose customers and partners. Lack of accountability may result in your boss thinking you have an "I don't care attitude" to the company's project or worst take you as a liar and may lead to job loss in the long run. However, that does not mean that the companies should involve themselves in deceptive sales practices. (n.d.). Cases have occurred where companies that had been involved in unethical practices clear their names in courts through bribery. -Damage to Reputation: Unethical practices can damage a companys reputation, making it harder to attract new customers and do business with other companies. Indeed, unethical business practices harm a series of people, whereas; only a few greedy incumbents enjoy the fruits of their ill deeds. Carlsberg's probes reveal details of 'potential' unethical practices at India arm The maker of Tuborg also clarified it had also identified a case involving underage labourers and non-compliant working conditions in a warehouse operated by a third party and terminated their contract in 2018. What are the conflicts in A Christmas Carol? immoral Add to list Share. Genuinely, drugs are meant to enhance human life, and the named unethical practices concerning drugs are so inhumane. The companys stock price plummets as a result of the wrongdoings. Some unethical actions are also illegal, and you could be arrested. Regular reporting and auditing will discourage employees from being unethical. Such acts, even if performed unknowingly, lower the repute of the organization. These cookies will be stored in your browser only with your consent. Consequences of Unethical Business Practices shareholders, consumers the environment, government and any other aspect of the society external to the organization (Anghel - Ilcu, 2014). Since most businessmen think in terms of profit and loss, compromising on ethics may seem like a necessary evil to them. Training programs on ethics can help to ensure that employees are up to date on the latest standards. Loss of company credibility. Of course, the company will have to cater for their Medicare bills, and pay fines if employees decide to sue the company. The moral principles may relate to values such as honesty, respect, trustworthiness, and fairness. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. This deters others from engaging in similar activities and shows that the business takes ethics seriously. What equipment is necessary for safe securement for people who use their wheelchair as a vehicle seat? Consequences of Unethical Business Practices Unethical business practices, shady business practices, and poor workplace ethics have many bad effects on a company, including: Decreased Productivity Levels The main goal of any corporation is to drive through sales from customers to maintain a strong presence in the business world. Loss of company credibility. Therefore, company executives are obliged to ensure that the company pays taxes exclusively. Make your goals clear. 5 What are the causes of poor business ethics? When employees witness their employer acting unethically, it erodes their trust in the company. What are considered as better consequences in ethics? Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. Essentially, if the global economy is to be on the safe side, companies must adopt ethical business practices. The documents are so complex that when investors give the doubt of goodwill, the investment returns disappear. (2010). As if that is not enough, some companies go ahead to produce low quality or unsafe products. From mirroring its form factor to camera placement style, it has constantly reproduced iPhone models. These cookies will be stored in your browser only with your consent. IvyPanda, 1 Aug. 2022, ivypanda.com/essays/unethical-business-practices-and-their-effects-term-paper/. 3 Types of unethical behavior in a business. Unethical practices are those that are morally wrong. The New York Times. we share practical advice, tips, news, and strategies to help you start, run, and grow your business or startup. How long is it safe to use nicotine lozenges? Essentially, any practices that make the employees uncomfortable in the work place are unethical, as they do not comply with the federal working standards. Employee anxieties, feelings of helplessness, frustration, low job satisfaction, loss of trust toward the leaders, work alienation and related negative consequences for private lives of employees these all are the malign products of unethical leadership. 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. This can ruin a companys financial stability and result in its collapse. Essentially, whistle blowers earn a great share of the amount that the federal government recovers from the unethical business practices that they report. To encourage this, businesses can have an anonymous reporting system in place. The cookie is used to store the user consent for the cookies in the category "Performance". "Human Resource Executive Online" reports 30 percent of small businesses . What are 2 negative effects of using oil on the environment? They lose their trust in you. What are seven consequences of unethical business practices? For a start, you could get fired. And in most cases, auditors may not detect the manipulation unless they go deep. We will write a custom Term Paper on Unethical Business Practices Essay specifically for you for only $16.05 $11/page. Unethical behaviour has serious consequences for both individuals and organizations. Thus, businesses slip into undesirable and complex conditions, which they can tap later to their advantage. Creation of false documents to show increased profits. You also have the option to opt-out of these cookies. By cooking their books and tweaking the reports, they trick everyone to their advantage. Businesses should avoid engageing in any type of unethical behavior in order to protect their employees, their customers, and themselves. If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. Coca-Cola has been blamed for its unethical behavior in multiple areas. It was so embarrassing that G4S was unable to supply enough security guards in a contract that would earn it massive profits during the 2012 Olympics. Finally, the consumers have all the rights to file lawsuits in case they consume unsafe products. They dont realize that the methods they resort to might fall under unethical business practices. Its products, too, have remained questionable regarding health concerns. For example, in 2013, two executives of British energy company GDF Suez were found guilty of corruption in relation to a gas supply contract in Bangladesh. In this alternative history. Companies are always obliged to portray transparency in all their activities. Consequentialism is based on two principles: Whether an act is right or wrong depends only on the results of that act. Some also release chemical pollutants into the air without proper filtering. What are the consequences of unethical leadership in business? The unfair competitive practices would only earn a company massive profits in the short run. Thats what theyre set up for. Companies should comply with the governments rules of conserving the air, water, and the general environment. Business ethics are moral values and principles that guide the day to day business. Distortion of facts to mislead or confuse. Financial Times. These unethical practices continue until the consumers become aware of them. 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. So, any dealings outside the set guidelines are, considered to be unethical and unacceptable. How are unethical actions affect the business environment? They may or may not be illegal. The workers (mostly women) were required to work excessive hours for little pay and were subjected to verbal and physical abuse if they did not meet targets. If a business is caught bribing officials or engaging in other illegal activities, it will be subject to fines and other penalties. When a manager or head of a business exhibits a lack of ethical behaviour, he faces losing the respect of his employees. This cookie is set by GDPR Cookie Consent plugin. In 2013, it was revealed that Walmart had been using forced labor at its suppliers factories in China. Business ethics is the study of proper business policies and practices regarding potentially controversial issues, such as corporate governance, insider trading, and bribery. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. These cookies ensure basic functionalities and security features of the website, anonymously. Transparency and accountability is outdated as companies are aiming at one thing; to reap maximum profits at all cost. Moreover, company managers should understand that the government depends on taxes to develop the nations. The introduction of new regulations that apply to all companies could result from unethical practices. Become aware of them rates as employees leave for greener pastures, companies must ethical... 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