Unethical Business Practices

Unethical business practices in today's society are the subject of great controversy and speculation. Often, business decisions involving potential ethical implications are not clear and leaders have few external resources to rely on. Some of the most highlighted and discussed unethical business practices are related to financial fraud and sexual harassment.

  1. The pursuit of greed: Oil companies are often criticized for this unethical business practice when gas prices soar. The accusation is that they deliberately "fix" the price of oil and gasoline to take advantage of fears over oil supply shortages during times of global crisis. Global oil cartels also come under fire for not increasing supply capacity during global crises.
  2. Over-charging customers: During times of emergencies related to natural disasters, local businesses are sometimes accused of this unethical business practice. It involves temporarily setting high prices to take advantage of customers in dire situations. For example, the government of the State of Florida has previously stepped in to crack down on price gouging of gasoline and hotels during mandatory hurricane evacuations.
  3. Accounting fraud: This unethical business practice involves the falsification of an organization's financial reports that investors rely on to make decisions. Companies in the past have come under fire for inaccurate financial data that led to bankruptcy and the loss of retirement funds. The U.S. government has increased regulation in order to attempt to curb some of the activity involved with document falsification.
  4. Poor treatment of employees: This is a business practice that covers a broad scope of activities. It might include unsafe working conditions, the absence of proper breaks and lunch periods, long hours for little pay, child labor, and abusive methods of discipline. Many companies that have global operations are sometimes accused of running foreign "sweat shops" that employ young workers who work long hours in substandard conditions for a salary that isn't livable.
  5. Sexual Harassment: Sexual harassment covers unwanted sexual advances, workplace materials, gestures, comments, jokes, and the exchange of sexual favors for a promotion or job-related benefit. There have been a few famous cases brought before the U.S. Supreme Court and this unethical business practice continues to be a focus in the human resources training of most companies.   
  6. Discrimination: Discrimination involves unfair hiring and promotion practices on the basis of race, age, gender, and disability status. Many companies have bylaws and complaint procedures in place to help prevent and provide recourse for this unethical business practice. Some U.S. companies have come under the spotlight for discriminating against promoting women into management.
  7. Bribery: While illegal in the United States, bribery is a common practice in some foreign countries. It involves side payments in exchange for business favors, such as allowing exports to pass customs officials. Bribery hinders the idea of fair competition and a market economy.
  8. Insider-Trading: This is an unethical business practice that uses proprietary information in order to obtain a personal financial gain. There have been a few famous cases in recent history that highlighted the dangers of using this type of information to purchase or exchange stock. It puts the general public at a disadvantage and leads to a potential devaluation of their investments.
  9. Identity Theft and Security Breaches: As more and more of the business world goes online and becomes dependent upon internet technology, who is given access to private customer information is questioned. There are numerous accounts of companies not putting into place proper security measures and thousands of customers who have had their personal data put at risk. It is considered unethical to not make an attempt to properly secure data and promptly fix any breaches of security.
  10. Invoice Fraud: This unethical business practice involves falsifying sales documents in order to either steal from customers or inflate the company's sales figures. Some companies might instruct their sales representatives to prematurely "pound the market" with excess product and inventory, while pulling any anticipated credits to make first quarter sales numbers look better than they would have.
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