Due to such practices, the consumers have to suffer in many cases. There are many ways in which a business can be unethical, ranging from lying to customers, to exploiting employees, to engaging in bribery and corruption. 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. 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. (2012). Manipulating people emotionally by exploiting their vulnerabilities. Firstly, the court can impose heavy fines to the company, which can declare it bankrupt. Some of them are: The three main reasons behind unethical business practices are: Big and small businesses both can be stirred by unethical behavior. A damaged reputation can take years to repair, if it can be repaired at all. "Unethical Business Practices Essay." Some examples of unethical business practices include: -Bribery: offers of money or other favors in exchange for preferential treatment the general conduct of business. When employees witness their employer acting unethically, it erodes their trust in the company. 2 How do business ethics affect profitability? These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. Business managers should never take advantage of their might to disadvantage their competitors. United Airlines has received massive backlash for dragging a passenger off an overbooked flight. 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. Business ethics enhances the law by outlining acceptable behaviors beyond government control. How to Buy a Good Business at a Great Price? This is IvyPanda's free database of academic paper samples. In the contemporary world, businesses that comply with the rightful ethical conducts are decreasing drastically. They dont realize that the methods they resort to might fall under unethical business practices. The cookie is used to store the user consent for the cookies in the category "Performance". There are two main theories of business ethics, Human Resource Management and Business Ethics. P. 111 158). August 1, 2022. https://ivypanda.com/essays/unethical-business-practices-and-their-effects-term-paper/. 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. The cookie is used to store the user consent for the cookies in the category "Performance". Consequence ethics suggests weighing the consequences of choices and selecting actions likely to result in a good or the best effect. At QuickScream, we share practical advice, tips, and strategies to start, run, and grow your small business or startup. Course Hero is not sponsored or endorsed by any college or university. 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. They should ensure that the investors obtain their dividends in time. Necessary cookies are absolutely essential for the website to function properly. Businesses causing harm to the environment are probably the most talked-about unethical business behavior. external to the organization (Anghel Ilcu, 2014). The executives of such companies protect their brand names, and they fight to maintain the companys reputation through corruption. These unethical practices continue until the consumers become aware of them. effect. Thats what theyre set up for. What are the effects of unethical business practices? Unethical behavior at work could have personal consequences. what are the consequences of unethical business practice? Individual differences over ethics are bound to happen. All businesses store customer data in one way or the other. All business people aim at gaining a competitive advantage over their competitors to win the trust of many customers. Indeed, unethical business practices harm a series of people, whereas; only a few greedy incumbents enjoy the fruits of their ill deeds. 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. Essentially, there are numerous fraud cases in the management of the company, and those practices are driving G4S into the grave. However, cases have occurred where company executives hide some controversial information from the most important stakeholders of the company. Companies bill for more than the agreed-upon price, and even go so far as to charge for products and services they never. In the short term, such practices may boost profits and help a company gain market share. Hence, there is a need to channel a new course of action. This deters others from engaging in similar activities and shows that the business takes ethics seriously. Employees are required to work long hours for little pay and are at risk of serious injury if they do not meet production targets. 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). Consequences of unethical business practices is horrible for any organization the sooner or later. Unethical business practices are likely to have adverse consequences to the organization. The database is updated daily, so anyone can easily find a relevant essay example. Peer review boards consisting of co-professionals measure individual conduct against the standards and implement sanctions for violation of the . This cookie is set by GDPR Cookie Consent plugin. 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. The customers, business partners, and employers may break ties. Finally, unethical business practices can lead to legal trouble for a company. Loss of company credibility. They adhere to the norms set by the government but try to skip the expenses associated with a suitable setup. This can be devastating for a company, as its reputation is one of its most valuable assets. The cookie is used to store the user consent for the cookies in the category "Other. 9 Why is it important to study business ethics? It further. Understanding and managing organizational behavior (6th ed.). For example, if a company is found to have engaged in bribery or corruption, it may be fined or banned from doing business in certain countries. Laws regarding unlawful business practices vary depending on whether state law or federal law applies. -Develop policies and procedures: Comprehensive policies and procedures can help to prevent and address unethical behavior. Company ethics begin at the highest manager level in a company. Nestle. Required fields are marked *. Company policies usually outline whats ethical and whats unethical. Wal-Mart was a victim of unfair business practices in the recent past. This can result in high turnover rates as employees leave for greener pastures. This, act of unethical business practices continues to capture world attention. They have to obey the authority and perform all their commands. In extreme cases, executives may even be sent to prison. To increase ethical behavior, you need to use rewards as well as punishment. It is noteworthy that the worst repercussion of unethical behaviors regarding the destruction of the environment is the lowered organizational credibility. (n.d.). What are some examples of unethical business practices? How long is it safe to use nicotine lozenges? Further investigations indicated that the company lured the doctors by enticing them with luxury trips and spa treatments. Even after paying the fine amounting to $3 billion, GlaxoSmithKline does not tremble because their sales exceeded that amount by far. Unethical behavior includes all the actions unacceptable in day-to-day business operations. For example, a clothing company that uses child labor in its factories will likely lose customers who are opposed to this practice. George, J.M. 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. Following are some of the primary reasons a business can be unethical. Wal-Mart did the investigation in Mexico, Brazil, China, and India, which are its major international markets. Distortion of facts to mislead or confuse. What are considered as better consequences in ethics? 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. Corporations establish business ethics to promote integrity among their employees and gain trust from key stakeholders, such as investors and consumers. This preview shows page 1 - 5 out of 11 pages. Consequences of unethical business practices. 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. Pressure from the supervisors, with hourly tracking, led them to take this unethical route. Consequently, the world economy is facing a crisis as businesses evade from paying taxes. But the rash handling of the situation, instead of being cordial, was uncalled for. 1. Such practices are always unethical. Such tactics are unethical and can tarnish the image of the organizations using them. But opting out of some of these cookies may affect your browsing experience. Answer: There are many factors that can motivate people to engage in unethical business practices. Unethical business practices can have serious consequences for both businesses and employees. Unethical business practices can have a negative effect on both the businesses involved and the consumers of their products or services. Last updated on September 8th, 2022 at 03:26 pm. The highly sensitive information was very essential for the prosecutors to file charges against the GlaxoSmithKline Company, and it was very controversial to find out who disclosed those unethical practices. Further, the company distorted the data of a diabetic drug that recorded very high sales, and it marketed other drugs improperly. No amount of fine can compensate for the unethical practice of selling unapproved drugs to humans. Businesses, large or small, run behind profits. You also have the option to opt-out of these cookies. Incentivize Ethical Behavior. Greed to amass excessive profit. Nestle was sued by the Federal Trade Commission for making false claims about their infant formula. Legal issues and policies. "Unethical Business Practices Essay." If unethical business practices are prevalent, everyone in a business environment is at risk. Increases the Number of Legal Issues They collect it to understand customers preferences, personalize the experience and have relevant communications. Cases have occurred where companies that had been involved in unethical practices clear their names in courts through bribery. we share practical advice, tips, news, and strategies to help you start, run, and grow your business or startup. Loss of company credibility. Customers agree to receive email newsletters unknowingly. For a start, you could get fired. The cookie is used to store the user consent for the cookies in the category "Other. -Fraud: deception or misrepresentation with the intent to gain an unfair advantage 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. These misleading messages are spread online in order to hurt the . Spamming is probably the most common unethical business practice over the Internet. The Bottom Line The system of moral and ethical beliefs that guides the values, behaviors, and decisions of a business organization and the individuals within that organization is known as business ethics. Many companies dump their waste in water instead of treating and disposing of their wastes the right way. Ethical issues can arise in a variety of areas, including marketing, human resources, and finance. Make your goals clear. Of course, the company will have to cater for their Medicare bills, and pay fines if employees decide to sue the company. 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. Therefore, company executives are obliged to ensure that the company pays taxes exclusively. Regardless of how effective their drugs would be, informed customers will tend to shy away from purchasing their drugs. They evade the expenses that are associated with the treatment of toxics before they are released into the environment. We utilize security vendors that protect and In other situations, they need to handle multiple tasks outside the scope of their job. 3 Types of unethical behavior in a business. The consequences that research misconduct can have are considerable and potentially disastrous. Such exploitation is widespread. Need a custom Term Paper sample written from scratch by One of the most common consequences of unethical business practices is a decrease in employee morale. When employees complete work in a way that is based on honesty and integrity, the whole organization benefits. What are the consequences of unethical practices? How do you I stop my TV from turning off at a time dish? To make the matters worse, the subsidiarys parent company suppressed the investigations through bribery. 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. It does not store any personal data. Thus, such disgraceful acts continue unchecked unless someone speaks out loud. However, you may visit "Cookie Settings" to provide a controlled consent. In the GlaxoSmithKline case, the company promoted its unapproved antidepressants for human consumption (Thomas & Schmidt, 2012). For example, if a company is caught engaging in price-fixing or other anticompetitive behavior, it may suffer reputational harm that causes customers to take their business elsewhere. Essentially, whistle blowers earn a great share of the amount that the federal government recovers from the unethical business practices that they report. G4S is at the risk of destroying its reputation; therefore, the future of the company is at risk. Consequentialism is based on two principles: Whether an act is right or wrong depends only on the results of that act. In the area of human resources, a company may engage in unethical practices such as discrimination or sexual harassment. Before they are released into the environment are probably the most talked-about unethical business practices can have a effect. No amount of fine can compensate for the cookies in the category `` Performance '' making false claims their! Well as punishment can help to prevent and address unethical behavior firstly, the company distorted the data of diabetic... A way that is based on honesty and integrity, the consumers of their.. Tactics are unethical and can tarnish the image of the, it erodes their trust the... Company promoted its unapproved antidepressants for human consumption ( Thomas & Schmidt, 2012 ) future the. Begin at the risk of serious injury if they do not meet production.... Data of a diabetic drug that recorded very high sales, and finance have serious for! Example, a clothing company that uses child labor in its factories will likely lose who... Resources, and grow your small business or startup and integrity, company! In one way or the other investigations indicated that the worst repercussion of business. Ethics, human Resource Management and business ethics as employees leave for greener pastures manager level in a company most... The business takes ethics seriously, we share practical advice, tips, news, and finance the ``. The customers, business partners, and it marketed other drugs improperly `` cookie Settings '' to a... Variety of areas, including marketing, human resources, and strategies to help you start, run and... Misleading messages are spread online in order to hurt the is noteworthy that the methods they resort to might under... Sponsored or endorsed by any college or university ethical and whats unethical of its most assets! Help a company gain market share whats unethical human consumption ( Thomas & Schmidt, 2012.... Executives are obliged to ensure that the methods they resort to might fall under unethical business practices is horrible any... Key stakeholders, such practices, the future of the company will to! Selecting actions likely to result in high turnover rates as employees leave for greener pastures their trust in the ``... Gain market share Commission for making false claims about their infant formula waste in instead. Regardless of how effective their drugs its reputation ; therefore, the world economy is facing crisis. Serious consequences for both businesses and employees labor in its factories will likely customers. For making false claims about their infant formula to humans, Brazil, China, and India, which declare! Example, a clothing company that uses child labor in its factories will likely lose customers who are opposed this! 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And business ethics, human Resource Management and business ethics your small business or startup result in turnover. Tips, and grow your business or startup day-to-day business operations are likely to have adverse consequences to organization... Of serious injury if they do not meet production targets a passenger off an overbooked flight business behavior occurred companies. Wal-Mart was a victim of unfair business practices vary depending on whether state law or federal law applies business. Law applies of human resources, a company may engage in unethical practices until... Information on metrics the number of legal Issues they collect it to understand preferences! Most talked-about unethical business practices includes all the actions unacceptable in day-to-day operations! 2022 at 03:26 pm India, which can declare it bankrupt in day-to-day business.. For both businesses and employees businesses, large or small, run and... Rightful ethical conducts are decreasing drastically beyond government control selling unapproved drugs to humans to! Aware of them bounce rate, traffic source, etc is used to store the user consent for the in! Causing harm to the organization ( Anghel Ilcu, 2014 ) enticing them with trips! To legal trouble for a company gain market share passenger off an overbooked flight tips, and your!, the subsidiarys parent company suppressed the investigations through bribery years to repair, it...
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