Question

What can happen to a business if ethical standards are not taken seriously?

Answer 1

Listed below are some impacts on business when ethical standards are not followed or not taken seriously-:

1.Impact on Employee Performance

A lack of ethics has a negative effect on employee performance. In some cases, employees are so concerned with getting ahead and making money that they ignore procedures and protocol. This can lead to additional paperwork and careless errors that result in the task having to be completed again. Additionally, employees who feel acting ethically and following the rules will not get them ahead in the business sometimes feel a lack of motivation, which often leads to a decrease in performance.

2. Employee Relations Are Affected and loss of respect

When a manager or head of business exhibits a lack of ethical behavior, he faces losing the respect of his employees. It is difficult to have a successful business without well-respected leaders. A lack of ethical behavior can also cause tension among employees, with some employees resenting those who do not play by the rules and still manage to get ahead. Unethical behavior in the workplace also has the potential to lead to a lack of trust among employees, which is detrimental to a business that relies on collaboration and a sense of community.

3.Damage to Company's Credibility

If a lack of ethics in business becomes public knowledge, that business loses credibility. While some businesses survive public knowledge of a lack of ethics through reimaging and advertising campaigns, many lose a key customer base. Even if a business recovers from news about its lack of ethics, it takes a lot of time and money to restore its image and consumer confidence. Customers that abandon a company because they are dismayed by poor ethical practices will find other products and services to meet their needs. Those customers are difficult to win back, even after ethical lapses are a thing of the past.

4.Legal Issues

In severe cases of unethical misconduct, it can lead to severe legal issues that result in loss of time, large fines, and other penalties with possible jail time. The cost of legal battles can go on for months to years and can lead to millions of dollars depending on the corporation’s particular situation and level of unethical behavior. In addition to this, an executive who breaks the law can lead employees to also follow in pursuit of facing criminal charges.

5.Time and Money Loss

The ethical misconduct in any company can lead to very serious consequences which can cause the company time and money in trying to repair their business reputation and any legal issues that may arise depending on the severity of the situation. Integrity breakdown can dramatically cost businesses millions of dollars and even prison time in some extremely serious cases.