Ask any business owner. The biggest goal is to maximize their profit margins. As more companies enter their cutthroat and highly competitive markets, many leaders aim to reach their goals by any means necessary. Many businesses turn to unethical practices to beat the competition. These tactics involve organizations taking irresponsible decisions that capitalize profit margins over ethics.
Most times, customers, employees, and public citizens bear the costs of their actions. Unethical practices include tactics that don’t conform to acceptable business operations standards. Whether it comes from the top or middle management, practices that gear towards unscrupulous behavior points towards an absence of business ethics.
You’ve seen all the big companies make the news about corruption and misconduct. Maybe you find it hard to believe, but many companies across the board – corporate and otherwise, are guilty of these tactics.
Here are some popular activities that point to unethical business practices:
1. Misleading Product Marketing
It’s hard to sell or make a profit without marketing and advertising. Companies must position their products as the best thing since sliced bread to convince people to buy. But here’s the thing. There’s a thin line between promoting a product and misleading customers.
Some companies market products using exaggerated or misleading information to meet the bottom line of making a profit. There have been instances of food and beverage companies wrongly pitching products as healthy for children. Other examples include false product benefits, mislabeling, concealing product risks, and unethical telemarketing. Many companies also secretly sell products with harmful side effects and present questionable products to minors.
2. Unfair Competition
Healthy competition between companies keeps the business market active. However, things get murky when organizations go to dodgy lengths to take out the competition. By eliminating their biggest rivals, some organizations seek market domination to maximize returns. Unfair competition affects consumers and other business entities.
For instance, some businesses wrongly promote their product as superior to the competition to influence consumer’s purchase decisions. Some even take the cyber defamation route to slander their competition on social media accounts. Activities like misappropriation of trade secrets, trademark theft, and defamation all fall under unfair competition.
3. Data Privacy Ethics
In 2020, media giant Facebook experienced its biggest scandal involving data breach accusations. The platform allegedly exposed data belonging to over 87 million users to a third-party research company that worked on a political campaign. This scandal raised relevant questions about data privacy.
On many platforms, users exchange their data with the promise of data protection. For these customers, data breaches feel the same as someone sharing private information with strangers. Unfortunately, some businesses misuse this information for self-serving financial interests. Outsourcing data to third parties and misappropriating employee and customer information all count as unethical data privacy practices.
4. Exploiting Workers
There’s nothing wrong with minimizing business costs to manage returns on investment. Some companies, however, cross the ethics line in their bid to save costs. For many businesses, cheap labor provides the fastest means to reduce costs.
They force employees to work long hours for unfair pay. Some manufacturers even employ workers in developing countries to bypass labor laws in their countries and enforce mass production. There have also been reports of child laborers working for some of the most profitable companies in the world.
Other examples include discriminatory practices, sexual assault, unfair working conditions, nepotism, and stressful working conditions.
5. Environmental Pollution
Let’s put aside the great debate about climate change for a second. Pollution damages the environment in various ways. From water poisoning to toxic fumes, consumers suffer the most consequences from pollution. Many companies release a significant amount of toxic waste that harms human and aquatic life. For instance, many remote oil-rich communities in developing countries lack access to clean water no thanks to spillage from crude oil drilling activities.
Companies sidestep environmental responsibility by using cheap products that cause pollution. Other examples include exploiting natural reserves, using unsustainable energy sources, and animal cruelty.
6. Financial Manipulation
Profitable businesses attract investors, lenders, and consumers. Every year, companies publish their financial numbers for this aim. However, some of them manipulate their financial statements to trick investors and present profitability status. The goal is to get more investors to buy shares despite a possible dwindling market value.
Beyond inflating profit, other ways companies manipulate their finances include understating liabilities and mishandling account reserves. Some businesses also navigate legal loopholes to avoid paying taxes while reaping the benefits of the system. Unfortunately, political affiliations and legalities keep these tax gaps open to exploitation.
7. Bribery and Corruption
It’s not unfair to label acts of bribery as illegal. However, in the business world, these cases fall under unethical practices since the aim is to seek profit through any means. Many businesses have to twist into pretzels to secure their ideal customers. Rather than competing in an over saturated market, some executives turn to bribery to bypass these hurdles.
From seeking product approval to advertising licenses, government bureaucracy in different countries can slow down the marketing process. Instead, these companies bribe government officials to speed up the process. This type of corruption can be uncovered with the help of corporate investigation services.
