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How Unethical Behavior in the Workplace Could Be Killing Your Credit

5 Examples of Unethical Business Behavior

Unethical behaviorWhen a business or someone within the business displays unethical behavior, it can have a long-standing impact on the company’s reputation, credibility, and ultimately, its business credit. Ethics in business, as in everyday life, is based on the recognition of certain human rights. When a company chooses to go against that natural rhythm, it is taking a risk that can ultimately backfire.

Here are five of the most common examples of unethical behavior in the business environment, and how these actions could be a detriment to the company’s credit.

Failing to Honor Commitments

When a client hires a company to do a certain job, there is an agreement made on both sides. The hiring company agrees to pay for the deliverables, and the hired company agrees to deliver the completed project according to an agreed-upon deadline. When one or the other fails to meet their obligations, it can be considered unethical behavior. This type of behavior shows the company to be untrustworthy and incapable of keeping to its word.

Deliberate Deception

Some companies will misrepresent their products or services in order to gain a sale or a project. This is a deliberate deception that can ultimately cost the purchaser or the hiring company more money in the long run.

Violation of Conscience

Sometimes, an employee may go against his boss’s wishes, because to follow those orders would be a violation of conscience. In this type of case, the boss is having the employee do something that he knows is unethical, such as forcing him to sell a faulty or a sub-par product.

Deliberate Unlawful Conduct

The most common types of business theft involve someone within the business. This activity can include padding expense accounts with non-business expenses, taking business supplies home, using unregistered software, and other bad practices. These problems cause real damage to the company’s bottom line through lost profits, and potential fines and penalties from software manufacturers if the business is caught using counterfeit software.

Disregard of Company Policies

Most companies use their policies as a means of proving their trustworthiness to their customers or clients. These policies usually clearly state the company’s position on deception, coercion, and other illegal activities. When a company is found to be breaking their own policies, it loses its credibility and its reputation will suffer. It stands to lose not only its customers, but its most valued employees and its profitability as well.

How Unethical Behavior Affects a Business’s Credit

When it is discovered that a company partakes in unethical behavior in the workplace, its profits will suffer. This loss of revenue has a trickle-down effect that will ultimately interfere with the company’s ability to pay its debts, leading to an increase in negative activity on its business credit report. Before long, the company will lose its leverage with current and future lenders, resulting in greater debt and the reality of facing a possible business bankruptcy.

Dave Donovan

Author:

Dave Donovan has written extensively for the web with a primary focus on articles targeting finance and business.