The men had bribed a government official in order to secure the contract, which was worth $1 billion. Unethical Business Practices Essay. They evade the expenses that are associated with the treatment of toxics before they are released into the environment. Companies also use AI tools to create fake images, fabricate phony social media profiles, and mass outreach to potential customers. He loves writing on travel and marketing. This cookie is set by GDPR Cookie Consent plugin. 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. 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. G4S is at the risk of destroying its reputation; therefore, the future of the company is at risk. Whenever the investors resolve to have the company investigated, the company managers and other executives resist the investigations. The executives of such companies protect their brand names, and they fight to maintain the companys reputation through corruption. But opting out of some of these cookies may affect your browsing experience. August 1, 2022. https://ivypanda.com/essays/unethical-business-practices-and-their-effects-term-paper/. Some companies release chemical pollutants into the air or into water bodies. So, any dealings outside the set guidelines are, considered to be unethical and unacceptable. 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. Unethical behaviour has serious consequences for both individuals and organizations. Ethical issues can arise in a variety of areas, including marketing, human resources, and finance. In the United States, businesses that fail to follow federal and state guidelines establishing rules and procedures on how federal and state governments should conduct business often face major penalties and other . Some employers have made it a routine to have their private cloakrooms while the other employees use unsanitary cloakrooms. However, there are those business people who opt to employ unfair and unethical business practices that result into unfair competitive practices. In case the company faces strict regulations in the country of production, the unsafe products are shipped into third world nations. Another unethical practice is deliberately over-billing the customers. This cookie is set by GDPR Cookie Consent plugin. How does unethical financial reporting affect a companys stockholders? However, you may visit "Cookie Settings" to provide a controlled consent. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". The cookie is used to store the user consent for the cookies in the category "Analytics". Unethical practices are those that are morally wrong. They should ensure that the investors obtain their dividends in time. They try to create a false impression of their competitors in the mind of the consumers. Upper Saddle River, NJ: Prentice Hall. What are the consequences of unethical practices? These cookies track visitors across websites and collect information to provide customized ads. This, act of unethical business practices continues to capture world attention. Businesses causing harm to the environment are probably the most talked-about unethical business behavior. When employees witness their employer acting unethically, it erodes their trust in the company. As scientific research primarily aims to benefit society (Rull, 2014), ethical standards, which permit discrimination between beneficial ("right") and detrimental ("wrong") research practices are necessary. The customers, business partners, and employers may break ties. For example, a company may engage in unethical marketing practices by making false claims about its products or using aggressive sales tactics. Peer review boards consisting of co-professionals measure individual conduct against the standards and implement sanctions for violation of the . Furthermore, some even portray harmful products as healthy to make them more saleable. They may or may not be illegal. This cookie is set by GDPR Cookie Consent plugin. Consequences of unethical business practices is horrible for any organization the sooner or later. The destroyed reputation of such companies may cause their sales to reduce drastically, and the company may end up being bankrupt. 3 What are the effects of unethical behavior by customers to the company and other customers? Some companies will present false statements to the investors to clarify why they cannot afford to pay the dividends. But opting out of some of these cookies may affect your browsing experience. Implicit or explicit promises of preferential treatment in return for sexual favors are also considered acts of harassment. Cases have occurred where auditors are bribed to certify false financial statements so that powerful companies can evade from paying the rightful amounts of taxes to the government. "Unethical Business Practices Essay." & Jones, G.R. What are seven consequences of unethical business practices? A clear line between unethical and illegal business practices, however, doesnt exist. What are the consequences of unethical leadership in business? Consequences of Unethical Business Practices shareholders, consumers the environment, government and any other aspect of the society external to the organization (Anghel - Ilcu, 2014). Eventually, the unethical behavior of a business will catch up with them and they will face serious consequences. 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. The reason might be to minimize taxes, cut production costs, or pocket extra income in return for something. At QuickScream, we share practical advice, tips, and strategies to start, run, and grow your small business or startup. It inspires the staff at all levers to be ethical in all regards. 4 What are some of the consequences of the use of unethical accounting practices? In addition to the possible legal implications, unethical business practices can also damage a companys reputation and adversely affect its bottom line. Financial unethical practices can include insider trading or embezzlement. The executives confront the employees; they pay then low wages, and increase pressures in the work environment (Hill & Plimmer, 2013). Every business must have suppliers of raw materials and customers who purchase their finished products. The employees did so to hit their sales quotas. 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. Companies should comply with the governments rules of conserving the air, water, and the general environment. (n.d.). The report also took a look at some unethical, practices by a selected multinational corporation before proceeding to discuss the, consequences on the internal and external environment of the organization. Cases have occurred where companies that had been involved in unethical practices clear their names in courts through bribery. They do it to get favorable deals, an upper hand over competitors, or insider information they can use to their benefit. By cooking their books and tweaking the reports, they trick everyone to their advantage. Unethical behaviour has serious consequences for both individuals and organizations. All companies ought to adhere to the pollution norms set by the government. For example, companies that engage in illegal logging or mining activities can damage natural habitats and disturb local ecosystems. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. What are the effects of unethical behavior by customers to the company and other customers? Now, its not wrong to use competitors names in promoting themselves. "Unethical Business Practices Essay." IvyPanda, 1 Aug. 2022, ivypanda.com/essays/unethical-business-practices-and-their-effects-term-paper/. They can no longer trust anyone in their workplace, thus affecting their daily operations. Unethical conducts in business are the kind of practices that are deceiving, exploiting and very dangerous to the existence of human life. They consistently place profits before the health of their employees. Wal-Mart was a victim of unfair business practices in the recent past. Defamation. They outline vague and dubious agreements to exploit users. 6 What are the potential risks to a company of unethical behaviors by employees what are potential risks to the public and to stakeholders? 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. Many companies inflate the claims while marketing, exaggerate the desirable features, and hide the side effects. must. Businesses use many tricks to improve sales, from inconsistent comparison to price-based deception. Analytical cookies are used to understand how visitors interact with the website. Therefore, companies that are practicing deceptive and unethical sales practices should know that their practices would tore the company down in a matter of seconds. A documented code of conduct specifies the type of conduct and behavior expected in the workplace. And in most cases, auditors may not detect the manipulation unless they go deep. Can banks make loans out of their required reserves? The unfair competitive practices would only earn a company massive profits in the short run. Some executives are even sued for creating false financial statements to deceive the investors. Unethical business practices can have a negative effect on both the businesses involved and the consumers of their products or services. Once consumers know that a company employs unethical business practice in their operations, the effects are inerasable. A companys ultimate goal is to increase profits, which lead some businesses to profit-motivation conflicts. Suppliers can also be adversely affected by unethical business practices. In some cases, unethical business practices can lead to criminal charges. IvyPanda. (2012). These actions dont conform to the established standards of the ideal corporate world. Such acts lead to mass mistrust when they come to the surface. You are free to use it for research and reference purposes in order to write your own paper; however, you Transparency and accountability is outdated as companies are aiming at one thing; to reap maximum profits at all cost. A review system by employees for employees will ensure that the established codes are being followed. Employing low-wage workers and hiring sweatshops for bulk work are also common. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". It contains thousands of paper examples on a wide variety of topics, all donated by helpful students. Of course, the company will have to cater for their Medicare bills, and pay fines if employees decide to sue the company. What are the effects of ethics in business? -Price gouging: charging excessive prices for goods or services, especially during periods of high demand. The cookies is used to store the user consent for the cookies in the category "Necessary". Essentially, the relationship between the company, its suppliers, and its customers ought to have mutual benefits. Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. With globalization, companies are trying their best to reap maximum profits and outweigh their competitors profits at the expense of the global economy. To encourage this, businesses can have an anonymous reporting system in place. Finally, companies are requested to have a corporate social responsibility. Businesses that operate without proper ethics often have to pay a hefty fine. Web. 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