consequences of unethical business practices

In July 2 2010, the New York Times revealed the case of GlaxoSmithKline Company. But opting out of some of these cookies may affect your browsing experience. This website uses cookies to improve your experience while you navigate through the website. Loss of company credibility. However, you may visit "Cookie Settings" to provide a controlled consent. Clifford, S. & Barstow, D. (2012). Most users dont go through the pages-long fine prints in the agreements. It does not store any personal data. Unethical business practices are likely to have adverse consequences to the organization. Once consumers know that a company employs unethical business practice in their operations, the effects are inerasable. Actions harming the environment are also considered unethical. effect. And in most cases, auditors may not detect the manipulation unless they go deep. In its investigations, Wal-Mart discovered that its competitors were indeed violating the corruption act that guides foreign investors. Necessary cookies are absolutely essential for the website to function properly. Consequences of Unethical Business Practices - Consequences of Unethical Business Practices Consequences of Unethical Business Practices Erastus, 6 out of 6 people found this document helpful. (4) Decreased performance levels of employees. Secondly, unethical practices can damage a companys reputation, making it harder to attract customers, partners and investors. The consequences of these scandals can be far-reaching, not just for the businesses involved, but also for the employees, shareholders, customers and suppliers associated with them. Unethical conducts in business are the kind of practices that are deceiving, exploiting and very dangerous to the existence of human life. These cookies will be stored in your browser only with your consent. It is noteworthy that G4S operates in third world nations that have rampant corruption and fraud cases. Businesses, large or small, run behind profits. Theft is an unlawful business practice that can take many forms. Resorting to dishonesty, trickery or deception. 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. 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. However, cases have occurred where company executives hide some controversial information from the most important stakeholders of the company. (2012). 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. Finally, companies that engage in illegal dumping of waste products can contaminate soil and water resources, and cause environmental degradation. Anyone can be a victim. Essentially, there are numerous fraud cases in the management of the company, and those practices are driving G4S into the grave. This very sad incidence affects innocent individuals who purchase such products unknowingly. This deters others from engaging in similar activities and shows that the business takes ethics seriously. From lying to customers to bribing government officials, there are a variety of ways in which businesses can 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. Employee relationships are affected. Finally, unethical business practices can lead to legal trouble for a company. However, in the long term, these same practices can damage a companys reputation, cost it customers, and make it harder to attract and retain good employees. Can banks make loans out of their required reserves? 1 What are the effects of unethical business practices? It also gives employees the confidence to call out any wrongdoing. "Unethical Business Practices Essay." They can cause grave harm and even death due to negligence, directly or indirectly. -Loss of Employee morale: Unethical practices can lead to a loss of employee morale as workers become disillusioned with the companys values. What are the effects of unethical business practices? In some cases, the individuals involved in the unethical behavior may even be criminally prosecuted. The cookie is used to store the user consent for the cookies in the category "Analytics". Why are moral and ethical beliefs important in business? Therefore, managers and supervisors should be warned that employees would be submitting to their unethical orders to set them up. Finally, the consumers have all the rights to file lawsuits in case they consume unsafe products. Consequences of Unethical Business Practices Strain, M. (2016). Business ethics are moral values and principles that guide the day to day business. What are considered as better consequences in ethics? Such companies do not care about the repercussions of their ill deeds. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. You also have the option to opt-out of these cookies. 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. Sexual harassment is another common issue found in unethical companies. 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. They may or may not be illegal. When the leaders deviate from ethical business practices, everyone finds unethical behavior rational. How Can a Business Optimize Its Online Business Presence? Web. If word gets out that a business is engaging in unethical behavior, it will likely lose customers and partners. Companies sales managers are obligated to try all possible ways of making massive sales. 1 August. Some junior employees are obliged to withhold information regarding the unethical practices of their bosses for the fear of intimidation, which that is also unethical. Some also release chemical pollutants into the air without proper filtering. They consistently place profits before the health of their employees. 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. A loss of trust can be difficult to recover from. Employees are required to work long hours for little pay and are at risk of serious injury if they do not meet production targets. Companies with a strong ethical identity tend to maintain a higher degree of stakeholder satisfaction, positively influencing the financial results of the company. 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. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". Unethical business practices can have a number of negative consequences for a company, including the loss of customers and damage to its reputation. In case of severe unethical behavior, executives might even face criminal charges and possible jail time. 1 What Are Levendarys Business-level and Corporate-level Strategies?? The reason might be to minimize taxes, cut production costs, or pocket extra income in return for something. 3 What are the effects of unethical behavior by customers to the company and other customers? 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. The manager is meant to oversee how this money is spent. 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. Legal issues and policies 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 penalties. 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. How do you I stop my TV from turning off at a time dish? They collect it to understand customers preferences, personalize the experience and have relevant communications. The cookies is used to store the user consent for the cookies in the category "Necessary". -Misrepresentation: providing false or misleading information in order to manipulate someones opinion or decision We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. As well as being extremely harmful to the workers involved, forced labor is also illegal under international law. Consequences of Unethical Business Practices, This textbook can be purchased at www.amazon.com, This report examines and discusses unethical business practices in corporate business, organizations where it focuses on the norm or ethics of a business organization; and the, meaning of unethical practices in business. IvyPanda. They lose their trust in you. Therefore, regardless of how wrong an instruction is, the junior employees are sometimes obliged to abide by the rules of their supervisors and managers. Deception, collusions, swindling sounds like the plot of a best-selling novel. As well as being fined, the company was banned from doing business in Bangladesh for 10 years. This cookie is set by GDPR Cookie Consent plugin. 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. Better treatment of employees instills loyalty in them. Firstly, engaging in unethical practices can be expensive. IvyPanda. When the top management and executives behave responsibly, employees walk in the same direction. When you value the hard work of your workers, youll notice higher ethics in the workplace. There are a number of ways to avoid unethical business practices: -Educate employees: Employees should be aware of the companys ethical standards and expected to comply with them. Wells Fargo has been found involved in creating 2+ million unauthorized customer accounts. They want to keep such incidences hidden from public knowledge. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. Sometimes, employees have to work long hours without getting paid for the overtime. Unethical treatments to suppliers and customers. Once the suppliers find other places where they can sell their products at fair prices, they would stop supplying raw materials for such companies with immediate effect. This cookie is set by GDPR Cookie Consent plugin. This is IvyPanda's free database of academic paper samples. Some companies pay their suppliers so low, such that the suppliers lack the value of the efforts that they input in their work. 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. 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. Web. This term paper on Unethical Business Practices Essay was written and submitted by your fellow 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. A lack of ethics has a negative effect on employee performance. 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? 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. 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