Unethical Business Practices
Unethical business practices and ethical misconduct in any company can lead to very serious consequences which can cause the company time and money in trying to repair their business reputation and any legal issues that may arise depending on the severity of the situation. Integrity breakdown can dramatically cost a business millions of dollars and even prison time in some extremely serious cases.
In order to really protect your company from an ethical misconduct scandal, you need to incorporate a management plan in order to stay on top of any unethical practices within the corporate environment. To do this you must first understand the effects that poor corporate ethics can cause to your company in order to setup barriers to help prevent something like this occurring. This expert guide will give you inside advice on the major effects that ethical misconduct can cause to your company. But first:
What Causes Poor Business Ethics?
There are many different factors that can cause poor business ethics and unethical behavior. The top factors include, but aren’t limited to:
- Demanding workloads which create high stress at work and at home.
- Top executive poor management practices. If unethical behavior goes without consequence or you choose to promote these activities, it can lead to continuous and more erratic behavior.
- Money is a high contender as to why someone may choose to undertake unethical behavior, especially at the executive level. Avoiding tax payments is one of the common misconducts that are carried out by corporations which eventually lands them into major trouble.
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. Unfortunately, when a level of unethical behavior starts to form, it can cause productivity levels to decrease which surround the person or corporation in question. When this happens, errors start to form in a once productive production line. This in turn can cause other employees to feel unmotivated resulting in a complete slowdown of the sale process that can lose you valuable time and money.
Loss of Respect
When managers or leaders start to make unethical decisions, it can lead to employees losing a lot of respect for their bosses. When this occurs, it can be difficult for the leader to gain back the respect and trust that’s been lost. It also causes problems for them to run a successful business when their team feels as if they’re making poor or unethical business choices. Employees may also feel resentful towards their leaders. This is because, as a part of the company, they feel their reputation is also starting to fall apart along with the business’s reputation.
Loss of Public Credibility
When unethical behavior occurs in a business setting, there’s a high chance it will be publicized. This in turn can cause your company to lose its credibility, resulting in customers abandoning sales with you, bad-mouthing your business, and not holding respect for you anymore. To gain credibility back a corporation needs to create a well-planned rebranding and marketing campaign, along with hiring a public relations team to help improve their reputation. This can lead to millions of dollars in costs, especially if you’re a well know and worldwide organization.
Legal Issues
In severe cases of unethical misconduct, it can lead to severe legal issues that result in loss of time, large fines, and other penalties with possible jail time. The cost of legal battles can go on for months to years and can lead into the millions of dollars depending on the corporation’s particular situation and level of unethical behavior. In addition to this, executives who break the law can lead employees to also follow in pursuit in facing criminal charges.
How to Prevent Unethical Behavior in the Workplace
In order to stop unethical behavior in the workplace whether your company is large or small you need to consider a few things. These include:
- Setting realistic goals for employees to meet
- Create policies and practices which promote good ethical behavior
- Select high quality people to add to your team that have a good reputation of work ethics in previous employment.
- Train people on good ethical behavior by implementing training sessions on a yearly basis to maintain strong ethical behaviors.
- Maintaining strong ethical behavior at a higher executive level to ensure employees maintain strong respect and good work ethics.
- Build a corporate culture that’s based on communication, openness, and transparency.
- Put controls in place such as progress audits to assess employees work efficiency and behavior if complaints arise.
Examples of Unethical Business Practices
There are many examples of unethical business practices, some of them being illegal, others, legal but still shady. Some examples include:
- Executives approve an employee to cut corners to complete a job on time against set guidelines.
- An executive or an employee takes money from the company to use in his own agenda on the side.
- Employees take sick days when they aren’t actually sick to spend the day shopping or at the beach.
- Executives or managers engage in a sexual affair with a company employee or someone else who’s associated with the company without ending their current business relationship first.
- Employees clock in late or leave half an hour early before the working day is through.
Conclusion – Preventing Unethical Business Behavior
In any business environment, it’s important to maintain a high level of conduct and ethical behavior to ensure the success of a company. By knowing the consequences of what unethical misconduct can do to your business, you can work on keeping a strong and positive presence within your corporation to limit this behaviou from happening. Have you made a plan to reduce the risk of a scandalous situation?
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Author’s Bio:
Aaron Gray is the co-founder of Studio 56 and is a passionate digital marketing expert who has worked with some of the largest digital marketing agencies in Australia. He has been working in the digital marketing field for ten years. Aaron loves to travel the world to not only enhance his cultural experiences but learn and enhance his skills in the digital marketing industry. He is dedicated to helping others reach their online marketing goals.