What is Unethical Business Behaviour?

Unethical business behaviour can be both intentional and lax in planning. It can affect cities, towns, waterways, and masses of people. In some cases, unethical business practices can be detrimental to a company's bottom line. In other cases, unethical business practices can be detrimental to the environment and productivity. To understand what constitutes unethical business behavior, let's look at some examples.

Unethical business behaviour can be intentional or lax in planning

There are many different types of unethical behavior, from intentionally damaging clients to misrepresenting products to exploit the trust of customers. Sometimes it's a combination of both. Either way, it's unethical. Some business owners may even choose to deliberately harm their customers, which could also be a sign of lax planning. But what are the other types of unethical behavior?

Some companies intentionally cook books to mislead lenders, investors and end-consumers. In these situations, they adjust their financial reports to show inflated profits or reduced depreciation, which will entice investors to purchase more stock in their company. Examples of this include the Japanese multinational Toshiba, which inflated profits by $1.2 billion over seven years. This type of unethical behavior is also rare, but it can occur.

Businesses that engage in unethical behaviour may suffer adverse effects on their bottom line. A dip in sales can lead to a decrease in profits and a drop in stock prices. That can drive away investors and stakeholders. A negative work environment can also result in decreased productivity and employee attrition. If you're a leader in a company that encourages unethical behaviour, make sure that you enforce strict ethical standards and set consequences for unethical actions.

Unacceptable business behaviour can affect a company's reputation and long-term relationships. For example, a business that deliberately overbills customers can risk getting sued over charges for products they never provided. Some companies double bill services in the hopes that customers won't notice. In the manufacturing industry, unethical business behaviour can have adverse effects on the public's health by releasing toxins into the environment.

It can swindle investors

The world of business is littered with unethical behaviours. From big conglomerates to online projects, a lot is at stake. The cutthroat competition for survival has given rise to unscrupulous tendencies. Businesses have become all-consuming and selfish, with the duty of operating responsibly being put to the side. The result is that investors are cheated out of their money.

One recent example of unethical business behaviour is the collapse of the Trump Hotel in Toronto, which went into receivership in March. A lawsuit filed against the Trump Hotel alleged that the company had deceived its investors and ruined their money. The lawsuit also pointed to a Trump "university" in the U.S. that promised investors "secrets" to real estate investing from Trump's experts. The New York attorney general called it a "straight-up" fraud. In the end, the Trump Hotel in Toronto has agreed to refund investors $25 million in compensation.

This unethical behaviour has a negative impact on both corporations and investors. While the film Wall Street depicts Gordon Gekko as a greedy character, such behaviour can hurt both parties. TD Bank shares fell by 5.5 per cent in September after an investigation revealed that it had engaged in aggressive sales tactics. In the same month, Wells Fargo's share price plummeted 13 per cent, costing its shareholders $30 billion. Fortunately, the stocks have recovered after the scandal.

It can affect productivity levels

It is no surprise that unethical business behaviour can negatively affect a company's productivity levels. When employees feel that their leaders and co-workers are taking advantage of them, it can be easy to overlook the negative consequences of their actions. They may also end up misleading customers and putting the company at risk. Unfortunate for these employees, unethical company leaders may be unwilling to take action, due to the legal repercussions or potential financial damage. As a result, these employees may end up feeling unsatisfied and unmotivated. Furthermore, employees may experience high levels of stress and health problems.

Unethical business behaviour can also damage the company's reputation, as well as hinder its ability to attract and retain top talent. In addition to decreasing the productivity of employees, it also increases the likelihood of litigation, legal risks, and compliance issues. Unethical business behaviour can also affect employee morale, affecting morale and overall performance. A Gallup survey found that employees who felt highly engaged with their job performed 17 percent more than those who did not. Furthermore, those employees with high levels of employee engagement achieved a 41 percent lower absenteeism rate, and a 21 percent higher profitability.

When a company places its customers first, it is engaging in ethical business behavior. Moreover, it should offer the right product for the situation. Employee morale is also higher in companies that engage in ethical business practices. Therefore, if the company values the customer's needs over its own, this will translate into higher levels of productivity. Therefore, companies should prioritize employee morale and avoid unethical business practices.

It can affect cities, towns, waterways and masses of people

The effects of unethical business behaviour extend beyond individual companies. In some cases, unethical business practices affect entire cities, towns, waterways and masses of people. Unethical business practices can cause harmful toxins to leak into the environment due to lax safety standards or improper maintenance of equipment. Companies that continue to manufacture products despite the known risks to the environment are also unethical. In other cases, businesses are not paying workers a fair wage, and workers are exposed to unsafe and unsanitary working conditions. These practices are illegal, but in some cases are in accordance with federal guidelines.