Important Ethical and Unethical Business Practices

"I have always recognized that the object of business is to make money in an honorable manner. I have endeavored to remember that the object of life is to do good." - Peter Cooper, American Inventor, Manufacturer and Philanthropist

Corporate ethics are moral values and principles that determine our conduct in the business world. It revivify to commercial activities, either with other business houses or with a single customer. It can be applied to all aspects of business; from generation of an idea to its sale. Corporate use the society for its resources and functioning, thereby obligating it to the welfare of the society. While the goal of any business is to make profits, it should contribute to the interest of the society by ensuring fair practices. However, money-grubbing has led the present business scenario towards unethical business practices, legal

complications and general mistrust.

Code of Ethics

Many organizations now implement the code of ethics in their company polices, which they implement during induction and regular training. A Code of Ethics "is generally a more blanket statement of values and beliefs that defines the organization or group" (Brandi and Maguire). It is primarily for the following areas:

- Company's assets, funds and records

- Conflict of interest
- Management and employee practices

- Information on competition

Ethical Business Practices

Following are a few ethical business practices that should be followed to build an honest reputation and ensure smooth running of the organization.

Investors: Ensuring safety of their money and timely payment of interest.

Employees: Provision of fair opportunities in promotions and training, good working conditions, and timely payment of salaries.

Customer: Complete information of the service and product should be made available. Personal information of the customers should not be used for personal gain.

Competition: Unscrupulous tactics and methods should be avoided while handling competitors.

Environment: Polluting industries should ensure compliance with the government norms regarding air, water and noise pollution.

Unethical Business Practices

The financial sector is abuzz with acts of violation of norms to amass wealth in an unethical manner. Following are some of the activities that come under the ambit of unethical practice.

Resorting to dishonesty, trickery or deception.

- Distortion of facts to mislead or confuse.
- Manipulating people emotionally by exploiting their vulnerabilities.

- Greed to amass excessive profit.

- Creation of false documents to show increased profits.
- Avoiding penalty or compensation for unlawful act.

- Lack of transparency and resistance to investigation.

- Harming the environment by exceeding the government prescribed norms for pollution.
- Invasion of privacy used as leverage, for obtaining personal or professional gains.
- Sexual discrimination

Preventing Unethical Practices in Organizations

Unethical behavior and practices is essential to maintain an ethical climate in an organization. Ethical norms and conduct into all levels of the organization can be done in the following ways.

- Codes of corporate ethics must be formulated so that employees are aware of the organization's expectations regarding ethical norms and conduct.

-  process must be in place so that any unethical practice can be brought into light.

- Event like Seminars on business ethics should be conducted for employees. It will help them in understanding the importance of ethical work culture.

- Officers must be appointed to keep a check on fraud, corruption, and abuse within the organization.

-  ethical behavior, performance management system of the organization must be modified to incorporate ethical behavior as a parameter for appraisal and rewards.

Ethical Issues in Business No One Told You About

There are a million ethical problems in today’s businesses and unfortunately there is no perfect decision measurement for all these problems. Those in international organisation are much more complicated and much more delicate, along with being tenfold in numbers.
Economics advice that business and production do not go hand in hand with environmental and societal ethics, due to the two being mutually exclusive events. Why it is so, can form a subject matter of a thesis so will not be a debate matter for this particular article. This article though, discusses the various ethical issues in the business that affect all business workplaces, whether they are local or international. Let us have a look at the ethical problems in business, that are listed below in random order of importance.Business ethics, there is hardly a proper line which can be held on to like the Bible, for ethics often sacrifices profits and the idea is to find the less balance between the two, so that the business conscience is clear and the profits are reasonable.

What is Business Ethics?

Business ethics is a manner that all businesses stick to. Also known as corporate ethics or professional ethics, it incorporates moral guidelines as also the problems a business entity frequently faces. (The term ‘business ethics’ became popular in the U.S. in the early 1970s.)
The Society for corporate Ethics, a global institute that deals with business ethics and application of moral principles was formed in 1980. Businesses startup specifying their ethical principles from the late 1980s, perhaps to stay safe from scandals in businesses. 

Unregulated Self-Ethics Model

If professional ethics and values are left to the self of business houses and entrepreneurs, society may have many dead weight losses to bear. A few producers can collectively skimp on supply to increase market prices, a few strong buyers may collectively reduce demand till prices fall and a single entity can capture the entire supply chain and refuse its services to the free market and reserve them for the best price. To top it, the labor market can unite and ask for unreasonable increases in wages and the public transport unions can stand up for price hikes. Who take decision whether all this is reasonable and hence ethical, or unreasonable and thus unethical? Who said that an earner who earns lower than the minimum wages is entitled to a wage increase even by somewhat unethical measures that require some employer arm-twisting? Who decides that a person who already earns millions in profits is not entitled to reducing worker wages to earn higher margins because it is unethical? ethics changes depending on which side you view them from. What may be absolutely right for you may be a gross injustice for me.If the market is left to its own individual mechanics, the most important ethical issue of all will be that all those in strong positions will always be the ones manipulating the weaker ones. This is where business ethics comes in as a self-regulatory mechanism on the stronger players in the economy. Now move on to certain routine ethical issues that almost every business has to face.

Industry Wide Ethical Issues

The problem with ethical issues is that they are not only routine and frequent, but they are also more widespread, i.e. throughout the whole industry rather than being confined to a particular business.

Honour And Wealth : Can They Go Hand In Hand

Ethical Issues and Their Impact on Marketing


Advertisements are a great way to spread promotion of  a  product or service, but sometimes the messages in advertisements are doutable. Advertisements from the 1950s and 60s, for example, were created in an era . Today, many of these advertisment are more offensive and unethical than persuasive. If you look at an ad. for (cigarettes) from the 1950s, you’ll see a doctor smiling while holding a cigarette in his hand, and the caption, “More doctors smoke Camels than any other cigarette”. This ad demonstrates pietism, since doctors spend their careers  for healthy lifestyles. It also sends a message to society that if doctors are smoking, then it must not affect our health.

Women objection implemented in this strategy. A person is well known for doing so. Since 2000, the majority of their ad. include models eating hamburgers and wearing revealing clothing. He defends their actions by saying “We believe in putting hot models in our commercials, because ugly ones don’t sell burgers.” Because of their unethical choice to objectify women, many women believe they are not the target audience, but that males age 18 – 35 are.

Ethical and Unethical Data Collection

Before a new product is released, research is conducted to gain feedback on how well it will test in the market. A ethical marketing research strategy used to gain the knowledge is focus groups. The main aim of focus groups is to get the consumers’ opinions, beliefs, or perceptions about a product or service. This form of qualitative research consists of a moderator that interviews a small group of people, or respondents. The interview is set up in an informal way, so the respondents are free to give their stance without restrictions.
Another strategy is data collection. Many websites like Google, Facebook, and Amazon collect their users’ data, including web search habits, name and contact information, and location. They use this to build a profile of their customers which they then use to show ads for products and services that are tailored to consumers’ interests. Data privacy problems are currently a very hot topic – there is a serious trade-off between protecting individual privacy, and building more effective marketing strategies.

Ethical Standards in International Markets

Culture has a big influence on ethical principles since it refers to a set of values and attitudes that are shared among a group of people. However, not all cultures are the same which makes ethics vary among countries. Ethical standards should be relevant to international markets and should be equal in all markets, meaning that ethical practices carried out in the home country should be carried out internationally as well. Avon ( AVN)is committed to this. The marketing strategy they use to distribute their products in Asia, Europe, and South America, is the same marketing strategy they use in the United States: Direct Selling. Avon recruits many local sellers, who then market the beauty products individually to friends, professional contacts, and others. By using this direct marketing strategy, Avon tries to make sure its marketing efforts are specifically tailored to micro-markets, avoiding ethical complications.
At the same time, this same strategy has potential for abuse. Herbalife ( HLF) is constantly dodging lawsuits challenging that it operates as a pyramid scheme, making more of its money by requiring membership fees and minimum payments from its individual sellers than it does by selling its products. These lawsuits push the bounds of marketing ethics – a huge number of potential customers avoid Herbalife’s products entirely because of the allegations.