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Unethical Business Practices

Unethical Practices in Business & How to Avoid Them

Examples of unethical practices in business include Bribery; misuse of confidential information; false advertising; bullying & harassment and discrimination. They should have no place in the workplace. Understanding what is meant by unethical actions in businesses and knowing how to avoid them happening is important for every business owner, HR team and workforce. In this article, we explore unethical actions in more detail and discuss how you can avoid these actions from inadvertently happening. 

 

 

What Is Unethical Practice with a Business? 

Unethical business practice is any action that goes against generally accepted moral standards of behaviour. This could involve any number of activities, from bribery and fraud to discrimination and exploitation of workers. Examples of these vary in extremes, from offering a direct payment to a person of influence on a specification to accepting even a small gift from a provider when working in the public sector.

Whilst many practices can be considered unethical, they share a common theme of having the potential to harm individuals or organisations as a whole. Unethical practices are often illegal but they can stretch beyond pure legalities. Examples of unethical practices can be damaging even if they are within the boundaries of the law.

 

Consequences Of Unethical Business Practices

Unethical practices tend to leave a serious impact on an organisation’s reputation and status which can lead to:

  • Broken relationships with suppliers, customers, stakeholders and investors, leading to a decrease in opportunities and profit.
  • Damage to the organisation’s credibility and status, leading to a loss in customers’ trust and later shutting down.
  • A decrease in employee morale and productivity becomes imminent.
  • Financial penalties and legal action are to be expected.

 

Examples Of Unethical Business Practices

If any of the incidents listed below are spotted or noticed taking place in your business environment, you are probably witnessing unethical practices and you should take steps in avoiding any involvement whatsoever. 

If you do find yourself caught up in any of the situations listed below, please seek advice from a trusted supervisor on how best to proceed.

  • Discrimination: approaching and treating people differently based on or according to their gender, disability, relationship and disability.
  • Theft and other improper activities: this includes taking an organisation’s items for their own benefit, being dishonest with the organisation, or manipulating and providing false expenses.
  • False advertising: providing false information or incomplete information on a product to entice and persuade a customer into buying such a product, thus misleading them into believing the product is of a value higher than it should be.
  • Bullying and sexual harassment.
  • Abuse of confidential information: this includes using confidential organisation information or customer’s private data for your own personal gain and advantage.
  • Exploitation of organisation personnel: taking advantage of employees and violation of employee’s rights by not providing proper working conditions and adequate pay.
  • Abuse of Company Property and Funds: misuse of company properties and funds to reap personal benefits and gain, which often involve fraudulent activities.
  • Conflict of Interest: when a personnel’s personal or financial interest conflicts with their professional duty, thus using their position or power for personal gain.
  • Bribery and Corruption: accepting or offering monetary values for preferential gains over pairs.

By learning and understanding the risks introduced by unethical practices, you can help to avoid becoming involved in them and seek to ensure that your organisation doesn’t fail to comply with accepted standards of behaviour too. 

Whether you’re a worker, manager or director of a business, it’s important that you are able to feel safe and protected when at work. Knowing how to spot the signs of unethical practices and feeling able to take action can protect you and the business from any damaging legal action. 

 

How To Avoid Unethical Practices

Unethical practices don’t just take place within a company, they can expand to involve customers, suppliers and wider society. To help manage the risk of unethical practices causing damage to these valuable relationships and processes that make up a business, it’s important to develop strategies to control these risks such as:

  • Introducing and ensuring whistleblowing practices 
  • Ensuring code of practice is in place.
  • Providing a working environment where personnel and staff feel valued and safe to speak up.
  • Ensuring your management team leads by example.
  • Setting up processes that discourage and disrupt unethical practices.

Whistleblowing Practices 

Introducing a whistleblowing policy, which is a formal procedure that allows employees to report concerns about illegal and unethical conduct without the fear of retaliation can help to create an environment where workers feel able to speak up if they see untoward actions. 

 

Ensuring A Code of Practice For Behaviour 

The best and most effective way of ensuring that unethical practices hold no place in your business is to clearly outline expected behaviours and the consequences of not following that behaviour. Policies on behaviour need to be strictly enforced to demonstrate the integrity of the operations and relationships within the company. 

 

Ensuring Conducive Process 

Setting up processes around the workplace which defers or disrupts unethical behaviour creates an organised culture of principles over profits and will encourage workers to act in appropriate ways at all levels of the business.  

 

For example, a business could set up an anonymous reporting system for unethical behaviour and investigate all credible claims or reward colleagues who demonstrate excellent standards of integrity and ethical leadership. 

Leading by Example

The kind of ethical behaviour expected and outlined in your codes of practice should be displayed at every level of the organisation from the top down.

 

What Is Ethical Behaviour?

Unethical practices are clearly defined, but what constitutes as ethical business behaviour? Ethical behaviour is based on honesty, integrity, accountability and trustworthiness. It means respecting diverse viewpoints, ideas, and creating a mutually understanding environment. When ethical behaviour is demonstrated by business personnel, it creates a positive culture with productive interactions. When decisions are made by more than just profits, you can build a reputation for operating with integrity. 

 

How To Solve Unethical Issues In The Workplace? 

Once you’ve noticed, or it has been brought to your attention that unethical behaviour exists around the workplace, you must act promptly to minimise the effect and damage caused to those involved and the business as a whole. 

  • Encourage open communication so employees can comfortably report unethical practices through proper channels.
  • Promote ethics through training and guest speakers as reminders of expected conduct. 
  • Show employee appreciation and recognize achievements to inspire engagement and integrity.
  • Reward those demonstrating ethical leadership to motivate principled decisions.
  • Educate personnel on ethical standards and the harm of misconduct. 
  • Lead by example – management should model the highest ethical practices. 
  • Clearly communicate consequences for violations of rules and protocols.
  • Conduct periodic anonymous audits to identify vulnerabilities or non-compliance issues proactively.  

When policies, processes and leadership reinforce ethical business practices, employees are empowered to make principled choices and speak up against misconduct. A culture of integrity deters the risk of reputational damage from unethical behaviour.

 

How Can Businesses Implement A Code Of Ethical Conduct?

A code of ethical conduct is a set of standards that contains the expected behaviour from all employees and personnel within a business. This will include integrity, honesty, respect, legal compliance and confidentiality. 

To successfully implement a code of ethical conduct, it’s important to create a culture of safety around reporting concerns. A policy on ethical conduct should also be in place and regular training on areas such as anti-corruption, data protection, discrimination should take place. 

This keeps the acceptable behaviours in the front of their mind and reinforces that the organisation takes these matters seriously. 

By providing employees with regular training on topics such as anti-corruption, data protection and discrimination, businesses can ensure that all staff are aware of their responsibilities in upholding the code of conduct.

 

How To Report Unethical Behaviour At Work?

Witnessing unethical behaviour in the workplace or unethical practices being brought to your attention should be acted upon swiftly. In a company usually, the first step is to alert your supervisor or HR department and make complaints that detail exactly what has been seen or heard. 

Although, in some cases, it might become necessary to introduce an external body in reporting the unethical behaviour as noticed.

In examples where you have witnessed unethical behaviour involving the very people who are responsible for handling unethical cases, you may feel deterred from speaking up. In these cases, you may want to look into legal support for whistleblowers for the most appropriate resolution to the problem. 

When reporting a case of unethical behaviour at work, you will need to provide as much information as possible. This will need to include details such as when it occurred, who was involved, what exactly happened. Remain factual in your report, not emotional or presumptuous. 

Speaking up and sharing your concern as an employee might be daunting, however, reporting any case of unethical behaviour at your workspace could ultimately save the organisation and its staff from experiencing more damage than it should.

 

What Is A Whistleblower?

A whistleblower is any individual that speaks up to report unethical, illegal or improper conduct in the workplace. They’re often putting themselves at risk by doing so, which is why whistleblowing laws are in place to protect those who speak up from harmful retaliation by employers or other bodies. 

Whistleblowing laws can vary by country so be sure to understand the governance protecting you if you find yourself in a position of needing to report unethical behaviour. 

Whistleblowing has become effective and consistent in recent years due to the rise of technology which can make it easier to report concerns anonymously. Whistleblowers have an important role to play in challenging unacceptable behaviours and they are courageous for exploding wrongdoing when no one else will. 

 

Summary

While most unethical practices in business are illegal, others are simply immoral and unacceptable. Businesses that knowingly engage in the act of unethical practices not only jeopardise their reputation, but also hinder their success and in addition might face legal actions leading to their shut down or serious financial loss.

By creating and maintaining an environment in which unethical practices will not be tolerated, businesses can enjoy a productive and ethically sound production. To do this, business leaders need to set up clear codes of conducts, deliver on-going training of key areas that can lead to corruption or unethical behaviours, and have clear methods for resolving issues if they arise. 

Taking positive steps to prioritise and promote excellent ethical standards and behaviour at work boosts not only staff morale and culture, but your external reputation too. 

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