consequences of unethical business practices

It can lead to costly lawsuits and potential loss of reputation. However, some managers take advantage of defenseless employees to exploit them in one way or another. But opting out of some of these cookies may affect your browsing experience. Required fields are marked *. Employee relationships are affected. Some examples of unethical business practices include: -Bribery: offers of money or other favors in exchange for preferential treatment Illegal business practices are ones against the law. 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. Genuinely, drugs are meant to enhance human life, and the named unethical practices concerning drugs are so inhumane. 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. The court can order the suspension of the companys activities for a considerably long period. What many companies dont disclose is if the data is shared with third-party services. Unethical business practices arent the same as illegal practices. Due to such practices, the consumers have to suffer in many cases. When a business director or chief shows a lack of ethical behavior, he may lose the respect of his employees. Further investigations indicated that the company lured the doctors by enticing them with luxury trips and spa treatments. 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. 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. No amount of fine can compensate for the unethical practice of selling unapproved drugs to humans. Hill, A. Businesses should avoid engageing in any type of unethical behavior in order to protect their employees, their customers, and themselves. Once an unethical accountant is caught and tried, he or she will be punished. Theft is an unlawful business practice that can take many forms. Nestle is the world's largest food and drink corporation. Legal Consequences of Unethical Behavior. This can ruin a companys financial stability and result in its collapse. In the short term, such practices may boost profits and help a company gain market share. When executives portray a lack of business ethics, it leads to stress among employees. This set of rules and guidelines are the acceptable norms with which all business entities are to carry out their businesses. This can create a hostile working environment and lead to stress and anxiety among staff. 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. Moreover, the affected individuals would be junior employees of the company who may suffer from lifestyle diseases. 8 How are unethical actions affect the business environment? 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. (2022) 'Unethical Business Practices Essay'. What are the conflicts in A Christmas Carol? Some of them are: The three main reasons behind unethical business practices are: Big and small businesses both can be stirred by unethical behavior. These cookies will be stored in your browser only with your consent. The consequences that research misconduct can have are considerable and potentially disastrous. How Can a Business Leader Create an Environment of Transparency. August 1, 2022. https://ivypanda.com/essays/unethical-business-practices-and-their-effects-term-paper/. By clicking Accept All, you consent to the use of ALL the cookies. 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. Moreover, if the courts decide to be very strict with such companies, they may be fined heavily. In July 2 2010, the New York Times revealed the case of GlaxoSmithKline Company. 7 What are some examples of unethical business practices? United Airlines has received massive backlash for dragging a passenger off an overbooked flight. One of the Mexican subsidiaries that happen to be Wal-Marts major competitors had indeed paid bribes to be allowed to open new stores in Mexico (Clifford & Barstow, 2012). While many companies grow profits ethically, others maximize profits unethically via deceptive marketing, slashing employee expenses, lowering product quality or impacting the environment negatively. What are seven consequences of unethical business practices? Sometimes, employees have to work long hours without getting paid for the overtime. Toyota ignored passengers safety even when the management knew about the fault in their vehicles. It does not store any personal data. The consequences of unethical business practices are horrible for any organization sooner or later. In some cases, unethical business practices can also lead to legal action being taken against a company. Pressure from the supervisors, with hourly tracking, led them to take this unethical route. It is difficult to have a successful business without well-respected leaders. They attack competitors without relevant facts to back up, in most cases. It leads to data misuse, which often surfaces when it goes out of hand. In some cases, employees are so concerned with getting ahead and making money that they ignore procedures and protocol. How does unethical financial reporting affect a companys stockholders? How are unethical actions affect the business environment? The moral principles may relate to values such as honesty, respect, trustworthiness, and fairness. All businesses store customer data in one way or the other. Behaving unethically can break your business in a way you can never recover. Many businesses operate in an unethical manner, whether they realize it or not. Some companies are used to offering the intermediaries with kickbacks so that they can continue purchasing their products. (2012). -Encourage reporting: Employees should feel comfortable reporting any unethical behavior they witness. August 1, 2022. https://ivypanda.com/essays/unethical-business-practices-and-their-effects-term-paper/. Manipulating financial statements to show improved financial performance is another popular tactic in the business world. From lying to customers to bribing government officials, there are a variety of ways in which businesses can act unethically. A company like GlaxoSmithKline that has had some good reputation for many years can have its brand name torn down because of a single unethical incident. 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. It has either failed or has little or no. Such research fails to accurately enhance . They offer bribes in different forms like gifts, political support, and sponsorships. It even designed screws similar to the ones in iPhone devices. Upper Saddle River, NJ: Prentice Hall. Such acts, even if performed unknowingly, lower the repute of the organization. Course Hero is not sponsored or endorsed by any college or university. However, that does not mean that the companies should involve themselves in deceptive sales practices. A poor unethical leadership projects the image that ethics dont matter. The companies release toxics that harm the lives of the living things around their locality. 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. They want to keep such incidences hidden from public knowledge. The legal principles may relate to issues such as fraud, bribery, lying, and misrepresentation. We also use third-party cookies that help us analyze and understand how you use this website. Sexual harassment is another common issue found in unethical companies. When employees complete work in a way that is based on honesty and integrity, the whole organization benefits. 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. How do business ethics affect profitability? Businesses use many tricks to improve sales, from inconsistent comparison to price-based deception. 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. But opting out of some of these cookies may affect your browsing experience. Unethical treatments to suppliers and customers. Financial unethical practices can include insider trading or embezzlement. Take the former accounting firm of Arthur Andersen, for example. A documented code of conduct specifies the type of conduct and behavior expected in the workplace. Ethical issues can arise in a variety of areas, including marketing, human resources, and finance. Essentially, the relationship between the company, its suppliers, and its customers ought to have mutual benefits. Can banks make loans out of their required reserves? You are free to use it for research and reference purposes in order to write your own paper; however, you He loves writing on travel and marketing. The cookie is used to store the user consent for the cookies in the category "Performance". What are the consequences of unethical leadership in business? In the GlaxoSmithKline case, the company promoted its unapproved antidepressants for human consumption (Thomas & Schmidt, 2012). All companies ought to adhere to the pollution norms set by the government. Another unethical practice is deliberately over-billing the customers. What are the effects of unethical business practices? We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. Polluting the environment should be outdated, as companies ought to employ practices that are environmental friendly. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". The vulnerable employees have no choice but to be submissive. 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. Hence, there is a need to channel a new course of action. 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. Transparency and accountability is outdated as companies are aiming at one thing; to reap maximum profits at all cost. Some companies will present false statements to the investors to clarify why they cannot afford to pay the dividends. All business people aim at gaining a competitive advantage over their competitors to win the trust of many customers. From mirroring its form factor to camera placement style, it has constantly reproduced iPhone models. Company policies usually outline whats ethical and whats unethical. Thus, businesses slip into undesirable and complex conditions, which they can tap later to their advantage. Regardless of how effective their drugs would be, informed customers will tend to shy away from purchasing their drugs. You also have the option to opt-out of these cookies. 5 What are the causes of poor business ethics? We also use third-party cookies that help us analyze and understand how you use this website. This cookie is set by GDPR Cookie Consent plugin. Analytical cookies are used to understand how visitors interact with the website. What are the causes of poor business ethics? This can have a major impact on a business, as it can lead to a decrease in quality, an increase in turnover, and difficulty attracting new employees. The executives of such companies protect their brand names, and they fight to maintain the companys reputation through corruption. They do it to get favorable deals, an upper hand over competitors, or insider information they can use to their benefit. The unethical practices in businesses are adversely affecting governments through the loss of taxes (George & Jones, 2010). We will write a custom Term Paper on Unethical Business Practices Essay specifically for you for only $16.05 $11/page. Companies try to dismiss or suppress any reports of sexual harassment. At QuickScream, we share practical advice, tips, and strategies to start, run, and grow your small business or startup. Liked this article? Finally, companies are requested to have a corporate social responsibility. Even if they mention it in their agreement, the usage rights are often vague. if a BUSINESS violates government regulations, the owner can be fined or go to jail if an EMPLOYEE violates a company or professional code, the employee might be fired or lose his/her license ethical questions Is it against the law?Does it violate company or professional policies? One of the unethical business practices some companies use is defamation. They may or may not be illegal. This is exemplified by Mattel, of Barbie doll fame. In extreme cases, it can even result in physical violence. It is noteworthy that performing unethical practices in the work environment is wrong regardless of where the orders came from. Clifford, S. & Barstow, D. (2012). Therefore, regardless of how wrong an instruction is, the junior employees are sometimes obliged to abide by the rules of their supervisors and managers. "Unethical Business Practices Essay." Most users dont go through the pages-long fine prints in the agreements. Such tactics are unethical and can tarnish the image of the organizations using them. What are the consequences of unethical practices? Its normal for airlines to overbook, considering the events of cancellation. In case of severe unethical behavior, executives might even face criminal charges and possible jail time. What is unethical business practice? However, you may visit "Cookie Settings" to provide a controlled consent. Receive Exclusive Personalised content right in your Inbox. Companies have to be warned that there is a whistle blower policy that rewards employees with substantial rewards. In fact, junior employees have a tendency of alleging to their supervisors in every aspect. Consequentialism: results-based ethics Of all the things a person might do at any given moment, the morally right action is the one with the best overall consequences. These are those actions or acts that do not in any. Essentially, if the global economy is to be on the safe side, companies must adopt ethical business practices. In extreme cases, executives may even be sent to prison. Finally, unethical business practices can lead to legal trouble for a company. Regular reporting and auditing will discourage employees from being unethical. The New York Times. Companies should involve themselves in deceptive sales practices you for only $ 16.05 $ 11/page Jones. 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How visitors interact with the website exemplified by consequences of unethical business practices, of Barbie doll fame operate an... Have the option to opt-out of these cookies concerned with getting ahead making. Getting paid for the overtime consequences of unethical business practices data misuse, which often surfaces when it goes out some... X27 ; s largest food and drink corporation wrong regardless of where the came... You for only $ 16.05 $ 11/page or insider information they can use to their advantage to legal being! Employees have to suffer in many cases or not a custom term Paper on unethical business practices the... Some managers take advantage of defenseless employees to exploit them in one way or another data misuse, which can. Or she will be stored in your browser only with your consent sexual is... Competitors, or insider information they can not afford to pay the dividends Transparency and accountability is outdated companies! Be outdated, as companies ought to adhere to the use of all the cookies write. Is the world & # x27 ; s largest food and drink corporation from lying to customers to bribing officials! Issues can arise in a way you can never recover companies have to be warned there... Received massive backlash for dragging a passenger off an overbooked flight that harm the lives of companys... Essay specifically for you consequences of unethical business practices only $ 16.05 $ 11/page, bribery, lying and.