It is essential to fully understand the bright side of the business and the dark side of unethical business practices in today’s professional world. If you are looking for a complete solution to learn about ethics and mission statement ethically, then this course is for you.
Ethical business practices are the foundation of trust and a good reputation a company has to build. By following ethical practices, an organization can earn consumer trust and build a solid relationship with them. The article has highlighted top rated unethical you should know as an entrepreneur.
1. Unlawful Adverts
Fake advertising is unethical. It threatens consumer well-being by deceiving them. It also threatens consumer protection agencies and their regulatory activities, and it may intimidate the very existence of some consumer protection laws. As a general proposition, marketers should dissociate themselves from any fraudulent activity to be ethical.
While some advertising may be considered informative, direct, or even entertaining, there are certain areas where advertising crosses the line and becomes unethical. Some unethical advertising include;
- Price higher than the market price
- Failure to disclose the ingredients of a product
- Risky products to consumer
- Failure to disclose the side effects of the product
- False labeling
2. Consumers’ Exploitation
Consumer exploitation is making unfair or improper use of a consumer to benefit from their wants and needs. This practice tends to ruin the nature of business. It emphasizes on;
- Charging high prices and making small profits,
- Offering a poor value for customers
- Withholding information about pricing and quality levels,
- Taking advantage of the ignorance or need of low-income consumers, etc.
As described by the California Public Interest Research Group, a consumer should be able to rely on the fact that they will receive goods and services as represented, which can be accurately verified. Unethical business practices are activities that violate these customarily accepted standards of behavior.
3. Environmental Exploitation
The exploitation of the environment for profit is an unethical business activity and it doesn’t matter how much you do to people and their property. In addition, this act can be considered as a crime.
Exploiting the environment for profit is believed to be a defense against unethical business practices such as;
- Tax evasion
- Environmental pollution
- Creation or dumping of landfills
This kind of exploitation occurs when profit-seeking businesses pollute the air, water and soil because they do not have the right technology or infrastructure to stop them. Pollution in these countries may lead to loss of human health, natural resources and livestock, which causes economic problems for most individuals in developing countries.
4. Staffs Exploitation
The exploitation of workers is a serious issue that many unethical businesses might do. One primary way unscrupulous companies exploit their workers is by low wages. Wages are low because the company does not want to spend more money on the workers they don’t seem necessary, and they are viewed as expendable because there will always be more people looking for work than there are jobs available.
Unethical companies exploit another way workers is through child labor. Child labor is when children work without being paid in any form or when they are paid less than adults doing the same job. The last primary way workers are exploited is through forced labor or slavery, where an individual has no choice on whether they work but must do so under threat of force from someone else who may be one step higher in the chain of command or management than them.
- Moreover, some of the extra workers include,
- Unfavorable working condition
- No incentives, or pay for extra work
- Dismissal of workers without quinine reasons
5. Biased Competition
Unfair competition is a business activity that falls below the generally accepted standards of fair play in a given field or interferes with or is detrimental to an existing market. While businesses often engage in “hardcore” forms of unfair competition, such as deceptive advertising and trademark infringement, there are more subtle ways a company can practice unfair competition.
For example, an unethical business may engage in price discrimination by charging different prices to different groups of people for the same goods or services due to location, age, or other factors. It could also directly or indirectly discourage its competitors from doing business in an area by bribing public officials or creating excessive regulation.
6. Financial Manipulation
Financial manipulation is an unethical business activity in which a company uses its financial resources to generate misleading and false information about its performance. The most common form of economic manipulation is improper accounting practices, including creative accounting or aggressive accounting, or failing to report non-recurring or unusual events that would otherwise impact earnings.
Financial manipulation is misrepresenting or withholding material information from investors and others to influence the price of a security up or down. Financial manipulation may be illegal when it violates securities laws or the rules of national stock exchanges. Financial frauds can result in losses to stockholders, creditors or both. Some additional forms of financial malpractices are,
- Overstating of revenues and asset value
- Understating the expenditure and liabilities
Frequently Asked Questions- FAQs of Unethical Business Practices
How do I know if a business is unethical?
It’s difficult to tell, but businesses that engage in unlawful activity are often repeated offenders. For example, they might send out mass mailings that violate the CAN-SPAM Act; they may bill you for services they never provided or overbill you for a job they did complete.
What business terms does this policy apply to?
This policy applies to any business or individual that receives funding from an outside source, such as grants, contracts and other agreements.
Generally, unethical businesses give the impression that they are trustworthy and legitimate. It gives them a competitive advantage over other competitors that engage unethically. It also allows them to continue their activities since nobody knows what’s happening. The deception only stops when an entity gets involved in investigating. Still, it is often too late for any victims to get a fair settlement or be compensated for their damages.