Consumers are becoming increasingly aware of familiar company’s ethical practices, their reputations, and the trust that they can have in the organization. Consumers should have the right to implicitly trust that organizations and their employees behave in an honest and ethical manner. Research has demonstrated that higher amounts of the perception of unethical behavior within a company is associated with decreased customer trust (Leonidou, Kvasova, Leonidou & Chari, 2012).
Unethical behavior within a corporate or organizational structure can fall under a range of activities including the use of corporate items for personal gains or use, unethical financial behavior, practicing in the acceptance and offering of bribes, insider trading as well as several additional possible ethical violations. Companies, or employees within a company may begin to behave unethically slowly, with only minor unethical violations. However, if these violations go unchecked or unnoticed, a culture of unethical behavior within the company may begin to manifest and grow.
Unethical Behavior Becomes More Regular
As unethical behavior becomes more “regular” within an organization, employees that demonstrate high ethical standards and behavior may begin to feel helpless and frustrated with the unethical behavior of their colleagues or leadership (DeSteno, 2019). These bad feelings among employees within the organization may be compounded due to the fact that the organization does not hold the individuals behaving unethically accountable for their behavior. Employees who do conduct themselves in an ethical manner may resort to seeking an alternate place of employment, or if they remain with the unethical organization, it could have negative effects on their mental well-being and work performance (Giacalone, Promislo & Jurkiewicz, 2018).
One of the most significant negative implications of unethical behavior within a business is that the organization may not be able to create, or maintain new or old relationships with customers. Overall, organizations must make ethical behavior a primary cause for concern within their organizational culture. Any breaches of ethical conduct should be reported and the wrongdoers should be held responsible immediately before the problems are compounded.
DeSteno, D. (2019, April 09). When Employees Feel Grateful, They’re Less Likely to Be Dishonest. Retrieved June 04, 2019, from https://hbr.org/2019/04/when-employees-feel-grateful-theyre-less-likely-to-be-dishonest
Giacalone, R. A., Promislo, M., & Jurkiewicz, C. L. (2018). Ethical Impact Theory: How Unethical Behavior at Work Affects Individual Well-Being. Global Encyclopedia of Public Administration, Public Policy, and Governance, 1791-1795. doi:10.1007/978-3-319-20928-9_2252
Leonidou, L. C., Kvasova, O., Leonidou, C. N., & Chari, S. (2012). Business Unethicality as an Impediment to Consumer Trust: The Moderating Role of Demographic and Cultural Characteristics. Journal of Business Ethics, 112(3), 397-415. doi:10.1007/s10551-012-1267-9