Business leaders are expected to behave ethically. Sadly, history has taught us that this is not usually the case. Although legislation has been passed to tame unethical business practices, the effects are yet to be felt. Part of the problem is the line between right and wrong, which can sometimes be very blurry. For example, while tax evasion is illegal, tax avoidance, although unethical, is not against the law. Though it is a criminal offense for one to lie in court, business leaders can still lie without getting on the wrong side of the law.
Consumers expect companies to conduct their business responsibly and not just to concentrate on making a profit. Ethical business practices have become very important in today’s world. The corporate world in the US is yet to comply despite these high expectations. Only 36 percent of Americans see business as a source of hope. The greedy, selfish and impersonal nature of Corporate America has contributed to this loss of confidence. Companies face the risk of tainting their brand and could even face legal consequences for participating in unethical business practices.
Unethical Practices that Companies Should Avoid
1. False Advertising
False advertising is not just unethical, the principles that advocate for truth in advertising are anchored in law. It is the mandate of The Federal Trade Commission (FTC) to regulate adverts. Federal law demands that ads should convey accurate messages and avoid misleading consumers. Businesses are also expected to back statements with scientific evidence when possible. A company was recently sued for advertising sugary hazel nuts as nutritious breakfast suitable for children. There was a time that adverts labeled cigarettes as “healthy.” Some businesses, however, still find a way to exaggerate desirable features and to downplay others; consequently, making their products more attractive.
Spamming has to be the most common unethical business practice online. Many companies tend to buy a bunch of emails to enlarge their subscribers’ list. They send unsolicited emails to potential consumers, endearing them to buy their products or to subscribe to their services. The FTC is mandated to implement the CAN-SPAM act. Under this law, businesses are allowed to send emails to customers without their consent only once. However, that one time can still irritate potential consumers and damage the image of your brand. Businesses should focus on generating email lists the organic way.
3. Exploiting Consumers Emotionally
It is common for companies to create adverts that ride on people’s emotions. Consumers are likely to relate to your brand more if it makes them feel nostalgic or happy for example. However, adverts that fuel rage and intentionally invoke sadness in a manner that may appear tasteless are exploiting emotions. Some companies attempt to take advantage of unfortunate events to manipulate consumers under the guise of showing sympathy. The adverts may seem innocent, but the underlying intent is to promote products.
4. Riding on Insensitive Controversy
Healthy controversy can make a brand stand out. However, this is a dangerous terrain for any business to venture. One wrong move and the company could end up making more enemies than customers. Although the intention may be good, there is every likelihood of things blowing up in your face. A perfect example is Pepsi’s controversial ad that attempted to promote a product in a Black Lives Matter protest. Although the ad sought to be positive, their attempt to venture into politics backfired.
5. Black-hat Link Building
Exposure is an important thing for any business and getting links to the company’s website is likely to improve Google search rankings. However, a firm should avoid building links unethically. This behavior may include spamming forums and comment sections or hacking other websites to add links. There are, of course, ethical ways through which a business can build links. One of them is guest blogging. Writing good content–tailored to your target audience–which cites some of your businesses’ content can effectively increase your brand mentions.
Ways to Avoid Unethical Business Practices
Unethical business practices can damage the image of your brand. It can send wrong signals about your services and products and drive away potential consumers. You should avoid such practices at all costs. Of course, you cannot avoid what you don’t know. Therefore, the first step in this process is to recognize these unethical practices as we have done. Indeed, many business owners may have engaged in unethical practices due to lack of knowledge. Here are some practices your business can adopt to avoid participating in unethical practices.
1. Creating Codes of Conduct and Practice
Organizations should invest in researching, developing and documenting policies that help in defining, identifying, and reporting unethical practices. Business leaders should share these guidelines among all employees. However, as history has shown, having policies is not enough. Case in point: The Enron Corporation was found to have engaged in accounting fraud despite having some of the most comprehensive ethics policies.
2. Reinforcing Consequences
Firms should hold employees who participate in unethical practices accountable. They should first ensure that new hires are aware of the rules. Employees who violate these policies should be warned or terminated. Punishing wrong doers will discourage others from committing the same offenses.
3. Hiring the Right People
Employing the right people can make a big difference. Organizations should be ready to perform background checks on potential employees. Interviews should also factor in ethical questions instead of just focusing on academic qualifications.
4. Leading by Example
It is not enough to talk about ethics and to adopt policies that curb unethical business practices. Leaders should be the first to demonstrate ethical conduct in business. If they exhibit unethical behavior or seem to encourage it by promoting unethical employees for examples, other employees are likely to follow in their footsteps.
The bar for ethical standards in business will only go higher as time passes. As expectations for companies to avoid unethical business practices continues to rise, businesses are going to have a hard time adapting. Business leaders should re-evaluate their business strategies and eliminate those that may be considered unethical to protect the image of their company. One bad campaign can ruin a reputation that had taken years to build.
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