In the business world you always find yourself trying to innovate, create new things and experiment with ideas. You also expect the other companies to do the same. But as you can suppose, that’s not always the case. There are times when you encounter unethical business practices, and that’s unfortunately a part of our society. Whether we like it or not, there will always be people that try to take the easy road, and it may or may not work for them. Here is a list with some of the most common unethical business practices out there.
Bribery
There are situations when companies are trying to bribe officials in order to receive the upper hand or just obtain better deals in their own industry. These things happen whether we like it or not, and it’s certainly the type of thing we need to take into consideration. It’s possible for these companies to try and offer financial benefits or a variety of other things in order for them to stand out on the market. Needless to say, this is not an ethical approach, yet a lot of companies choose to do it.
False claims
Out of all unethical business practices, this one is maybe the most common. Why would companies lie when it comes to their product capabilities? The reason is simple, it makes them seem better than competitors. Because of that, clients gravitate towards them and obviously it’s a much better thing for themselves. In the end, having the right claims is very important and you do want to back them up with data and proof. Without proof, it’s just a wild claim that not a lot of people will believe.
Inappropriate use of trade secrets
Trade secrets are important, they are keeping the industry alive and not everyone should have access to them. But there are some companies with unethical business practices that will focus on using those trade secrets just to harm competitors. Needless to say that’s an issue and something people should not do. Unfortunately it happens more than expected, but it really is one of those problems and challenges that arise within the industry. That kind of unfair competition is unlawful and certainly unethical, yet it still is quite common in many industries.
Underpaying employees
There are a ton of businesses doing this and they do it because they can. There aren’t a lot of laws when it comes to underpaying or mistreating employees. In many cases, these unethical business practices include things like forcing people to work long hours and just paying them the minimal amount allowed. And the governments can’t really do that much, because these people get paid the lowest allowed salary and thus the companies are not breaking the rules.
Account manipulation
Another thing some companies do is they manipulate their accounting. There are many reasons why they do so, one of them being to show inflated profits and thus bring in more potential investors. Others do this in order to avoid high taxes, so there are certainly a lot of reasons why these things appear. It’s quite common especially in retail, but also in the case of some startups that may change the world. But more than 90% of startups fail, so there are people who use unethical business practices like this to try and gain the upper hand.
Defamation
One of the unethical business practices some companies use is defamation. As the name suggests, this is a method that they rely on in order to pretty much cover their competitors in dirt. They do that via spreading false messages, creating fake accounts and so on. These misleading messages are spread online in order to hurt the reputation of a business, and that ends up offering these smaller businesses the advantage they need to stand out. Needless to say, this is a very bad way to do business, yet a lot of companies do it just to surpass competitors that would otherwise be very hard to touch.
Abuse and harassment
There are many employees that deal with harassment and abuse and other stress at the workplace. Many times these things stem from the top. The reality is that sexual and even workplace harassment can have a very negative impact on a person, the way they think and their beliefs. That’s why it’s imperative to implement ways to stop any abuse, harassment and discrimination at workplace. Those people that know about this and lie do so in order to show that the company is indeed incredible and it works amazingly well. But as you can see, there are many things happening behind closed doors that make a workplace like this feel like a living nightmare.
Bad working conditions
Why are these things? These poor working conditions are designed from the ground up with a single premise, and that’s to generate massive profits without a lot of investments. In addition, there are situations where a worker will lack protective equipment for example.
Things get even worse if we are talking about any immigrants or people that are undocumented workers. Companies with unethical business practices will take advantage of that and underpay them, make them work way more than agreed upon, and it’s all because they can. They leverage the benefit of not having to do things legally and that becomes a problem for any employee.
Hidden terms
There are times when some companies will end up hiding various terms just to ensure that people are hooked into a subscription or hidden terms without even knowing. Then when the person is obviously not ok with the issue in question, they point out the terms that they accepted. Many times, this is done to hook people into long term deals or just offering them a deal in front while they are locked in for a more expensive renewal in the long run.
While this type of unethical business practices is very common, it’s also difficult to remove them because they aren’t really illegal. People are not forced into these deals, and when they enter, they do so at their own will. Which is why it’s a major problem and quite difficult to get out of this type of situation.
Selling customer data
You will notice that some companies use other unethical business practices like selling customer data. Whether we like it or not, these practices appear because people think they are rightful and the best thing they can do. Selling customer data is anything but normal, yet again these companies with unethical business practices will shift things to their advantage. They will make people sign they consent to data sharing (unknowingly), distribute it and make a profit.
These are only some of the many unethical business practices that companies are using worldwide right now. The truth is that issues like these will always arise, so it’s very important to understand the market and ensure that you eliminate concerns and issues in the long term. Even if unethical business practices are obviously not ok, there are still many companies using them because there are no consequences, only potential benefits. That’s why it’s very hard to remove such unethical business practices from the market, and that’s especially true in those industries where there are a lot of money to be made just by deceiving customers.
Tags: Abuse Account manipulation Bad working conditions Bribery Business Practices customer data Defamation False claims harassment Hidden terms Selling customer data trade secrets Underpaying employees Unethical Business Practices working conditions
FAQs
Which of the following is an unethical business practices *? ›
Some more examples of unethical business practices are: Deliberate deception – This could mean taking the credit of someone else's work, 'pulling a sicky', sabotaging the work of someone else, or misrepresenting a product all with the aim of getting a sale.
What are the 5 biggest ethical issues facing businesses? ›- Unethical Accounting. “Cooking the books” and otherwise conducting unethical accounting practices is a serious problem, especially in publicly traded companies. ...
- Social Media Ethics. ...
- Harassment and Discrimination. ...
- Health and Safety. ...
- Technology/Privacy.
An employee steals money from the petty cash drawer at work. You lie on your resume in order to get a job. Friends talk about another friend behind his back. A student takes credit for work they did not do.
What is an example of unethical practices in marketing? ›Here are some common unethical marketing practices to be aware of: Misleading advertising. Contacting people without their consent. Inciting controversy.
What is the main reason for unethical business practices? ›Some issues are more likely to lead to unethical choices. Employees are more likely to act unethically when they don't see their action clearly causing harm — for example, when the victim is far away or the damage is delayed. Unethical choices also occur when an employee feels that peers will not condemn their actions.
What are some unethical issues today? ›- Discrimination. One of the biggest ethical issues affecting the business world in 2020 is discrimination. ...
- Harassment. ...
- Unethical Accounting. ...
- Health and Safety. ...
- Abuse of Leadership Authority. ...
- Nepotism and Favoritism. ...
- Privacy. ...
- Corporate Espionage.
- Letting Clients Go. Walking away from toxic clients can be a common ethical dilemma. ...
- Responding To Employee Social Media Behavior. ...
- Keeping Employees Because Of Seniority. ...
- Accepting Job Applicants From Competitors. ...
- Creating Honest Marketing.
- Discrimination.
- Workplace safety.
- Social media use.
- Employee privacy.
In LDRS 111 you were introduced to four different ethical dilemma paradigms: truth vs loyalty, short-term vs long-term, individual vs community, and justice vs mercy.
What are unethical actions? ›Unethical behavior is when a person, a professional, or an industry does anything that is considered unacceptable because they are against the social norms. Individuals, businesses, professions, and politicians may all engage in unethical behavior.
What are the 10 most significant risks and costs resulting from unethical Behaviour? ›
The 10 most significant risks and costs from unethical behavior: (1) Increased risk of doing business and the possibility of bankruptcy and severely damaged company brand and image. (2) Decreased productivity. (3) Increased misconduct and conflict internally.
What is an example of an unethical practice in research? ›Plagiarism
Plagiarism is a huge offense in the research community. It is the practice of taking another person's research or work or even idea and inculcating it in your own writing without giving them the dual credit.
Being disrespectful, discourteous, rude, telling partial truths and hiding facts about the company's products and services would constitute unethical conduct and eventually a customer would sever ties with the company and let others know of the treatment meted out to them.
What is unethical management practices? ›Lack of moral courage can lead to unethical behaviors such as employees discussing confidential information with unauthorized people, falsifying receipts to get greater reimbursements, damaging work property, taking property from work without permission, misusing company assets and resources; and saying or doing ...
What are unethical practice in a business and the consequences? ›Some of the main effects of unethical behavior in business include loss of company credibility, the negative association between employees, failure to maintain a long-term relationship with consumers, and reduced employee productivity.
How do you handle unethical business practices? ›- 1 Create a code of ethics. Set the tone for behavior in your workplace by creating a code of ethics. ...
- Establish a protocol. ...
- Empower employees. ...
- Continuously review the code.
Unethical behavior in business refers to actions that fail to rise to acceptable standards of business practices.
What are the three areas of unethical behavior? ›The three areas of unethical behavior are deceptive practices, illegal activities, and non-customer-oriented behavior.
What are ethical dilemmas give at least 3 examples and briefly discuss them? ›Some examples of ethical dilemma include: Taking credit for others' work. Offering a client a worse product for your own profit. Utilizing inside knowledge for your own profit.
What is an example of an ethical business? ›Patagonia has built a very strong reputation for being ethical, environmentally friendly, and using ethical sourcing. This positive reputation only strengthens its brand, and gives conscientious customers more incentive to buy.
What are the 7 types of business ethics? ›
There are seven principles of business ethics including accountability, care and respect, honesty, healthy competition, loyalty, transparency, and respect for the rule of law.
What are the 7 codes of ethics? ›- Be an ethical leader.
- Use moral courage.
- Consider personal and professional reputation.
- Set the right tone at the top.
- Maintain an enquiring mindset.
- Consider the public interest.
- Consider 'the right, the good and the virtuous' actions"
The 8KQ ethical reasoning strategy, best used in groups that include outsider perspectives, encourages asking an array of moral questions — fairness, outcomes, responsibilities, character, liberty, empathy, legitimate authority and rights – to expose moral blind spots and stimulate reflection before acting.
What are the 8 ethical principles? ›This analysis focuses on whether and how the statements in these eight codes specify core moral norms (Autonomy, Beneficence, Non-Maleficence, and Justice), core behavioral norms (Veracity, Privacy, Confidentiality, and Fidelity), and other norms that are empirically derived from the code statements.
What are the 5 theories of business ethics? ›- Deontology. According to the deontological philosophy, when examining an ethical issue, people should adhere to their obligations and duties. ...
- Utilitarianism. ...
- Rights. ...
- Virtue. ...
- Morality. ...
- Justice. ...
- Care.
The most unethical clothing companies are mainly popular multinational and e-commerce brands like Victoria's Secret, GAP, Fashion Nova, Uniqlo, Forever 21, Nike, Adidas, Disney, H&M that have been exposed to multiple unethical practices – including labor exploitation and/ or forced labor.
Is McDonald's ethical? ›Fast-food giant McDonald's has been named the most unethical firm in the world because of its business conduct, including the way it treats its suppliers. The firm was ranked least ethical in an index compiled by the Fraser Consultancy, which assessed 42 brands from sectors ranging from food to fashion.
What is something unethical but not illegal? ›Cheating on your spouse. Breaking a promise to a friend. Using abortion as a birth control measure. People can not be arrested or punished with imprisonment or fines for doing these things.
What does McDonald's do that is unethical? ›Environmental Ethics
McDonald's has been accused of having a negative impact on the environment in more than one way; revolving around the fact that they have built hundreds of factories around the world to produce their products; therefore leading to pollution.
Since the 1990s Coca-Cola has been accused of unethical behavior in a number of areas, in- cluding product safety, anti-competitiveness, racial discrimination, channel stuffing, dis- tributor conflicts, intimidation of union workers, pollution, depletion of natural resources, and health concerns.
How is H&M unethical? ›
The fast fashion brand is being sued for its “misleading” sustainability marketing, The Fashion Law reports, with plaintiff Chelsea Commodore claiming H&M used falsified information on the labeling, packaging, and marketing materials for hundreds of its offerings in a practice known as greenwashing.
Does Nike use ethical business practices? ›Environmental impact
Nike uses some eco-friendly materials, including organic and recycled cotton and polyester, and has water reduction initiatives in its supply chain. The brand has also set a deadline to eliminate hazardous chemicals by 2025 and the good news is that it is on track to meet its target.
The organisation says Nestlé contributes to the unnecessary death and suffering of infants around the world by aggressively marketing baby foods in breach of international marketing standards. Nestlé's own report found 107 instances of non-compliance with its baby milk marketing policy in 2019.
What is something unethical but legal? ›The death penalty is also legal in many states, but many people consider it unethical. So trying to avoid taxes can`t be moral, but there are many legal ways to get away with it – so it`s legal, but immoral. Our own history offers the best and saddest example.
What are unethical acts? ›Unethical behavior is an action that falls outside of what is considered morally right or proper for a person, a profession, or an industry. Individuals can behave unethically, as can businesses, professionals, and politicians.