Regardless of the niche it occupies, your company’s reputation goes a long way toward determining its success. Ethical business practices will help your company develop a loyal customer base that comes back again and again. Conversely, obvious signs of unethical business practices will push customers away. In the following sections, you’ll find six examples of unethical behavior in business you’ll want to avoid.
1. Theft of Material Items and Time
Everyone has heard of employees stealing office supplies for personal use. Even though these offenses may seem minor, they do add up over time. And it’s more than just pens and printer ink that employees are stealing these days. There are also instances when employees have formed scamming rings to defraud vendors, write fraudulent checks, and redirect funds.
While these more extreme examples might be a bit easier to notice, stealing material items and employee time theft can be very hard to detect. Some employees may inflate costs on their expense reports, while others might pad their time sheets with extra minutes or hours worked in a week. This might not seem like a big issue, but these practices cost businesses a great deal of money each year.
Employees can steal company time in a variety of different ways. Doing personal things such as checking and responding to personal emails, using social media, or making personal phone calls on the clock are all examples of employee time theft. The business is still paying employees for this time even though they are not producing value for the company.
2. Misusing Company Technology
Technology has revolutionized the way we work and consume entertainment. Everything we could want is at our fingertips. As such, some people use company technology for their own entertainment or to advance personal projects that have nothing to do with their actual work.
Some employees choose to use the internet at work for activities they would rather keep off their personal computers. This includes things like gambling, visiting dating sites, and even pornography. Some employees also use company passwords or software licenses. Not only is the misuse of company property unethical, but depending on the state you live in, it might even be illegal.
3. Misrepresenting Performance
Another unethical behavior in business is misrepresenting work performance. Ethical employees take responsibility for their daily performance. Unfortunately, there are many employees who lie or misrepresent what they’re actually doing.
This misrepresentation might include lying on an application or making false claims to land a promotion. Some employees will try to take credit for completing tasks they had nothing to do with, while others fix numbers in order to seem more valuable to the company. Still, others will sugarcoat failures and successes to improve their image.
4. Sexual Harassment
Workplace sexual harassment is a serious issue. Many HR companies strive actively to combat such heinous acts by creating strict codes of conduct and directly stated moral guidelines. Even when both parties have openly consented, there are clear boundaries as to what may be considered coercion or abuse of power. For example, a manager dating an employee may seem harmless, but this can lead to the employee being taken advantage of for their work as well as experiencing social pressures due to the power dynamic present. These kinds of relationships are inherently unethical.
5. Not Adhering to Workplace Safety Standards
Many workplaces must take extra precautions for the general safety of everyone involved in the business. Owners and managers who do not prioritize the safety of their workers risk the health and safety of everyone the team. Should any incidents occur because of this neglect, it can result in legal infractions that could cost the company thousands of dollars in fines and penalties.
Another example of this occurs when employees come into the office when they’re too sick to work. This is a common practice, but it poses a triple expense threat to the company. Obviously, a sick employee is not particularly productive. Worse still, when other staff members catch the illness, they’re also less productive and eventually have to miss time.
6. Breach of Contract
It is standard for employees to sign non-disclosure agreements at the time of hire. There are clauses within these agreements prohibiting employees from sharing company information with competing businesses. This is especially pertinent with product design and proprietary technology. Any breach of this contract is unethical, particularly when done for personal gain for the employee.
The Effects of Unethical Behavior in Business
There will always be unethical behavior in business, but that doesn’t mean you have to let it run rampant. There are things you can do to minimize these harmful behaviors. Not only will preventative measures save your company money, but they’ll also improve its image in the eyes of the public. Ethical consumerism is on the rise. No one wants to support companies that mistreat workers or are known for lax business practices.
Paying attention to problem areas and taking conscious steps to encourage ethical business practices right from the start can keep you from experiencing the consequences of unethical behavior in business. Encouraging your employees to act ethically will also help them progress up the career ladder. This will motivate them to become better employees, and everyone knows good employees are the key to any successful business.
About Brandon Pfaff
Helping clients ford their financial future by powering through the currents of complexity. River City CPAs, LLC specializes in assisting individuals and small businesses with tax preparation, bookkeeping, payroll and successful business planning.