Question

1. On the subject of the Industry Life Cycle as it relates to business ethics: do you see any ethical risks when a Company is transiting through he growth stage of this theory? Answer the question and list at least two risks or present two arguments why you disagree that risks do not exist at all.

Answer 1

Answer: Growth stage of the industry offers a huge potential to the companies and they are often tempted at this stage to take actions that may be unethical in nature. It is during the growth phase of the industry that the companies start to refine and modify their products/services to suit the needs of the growing markets. Therefore in this stage the one ethical risk that the company may face is of creating a false image of the brand at the marketplace. As the competitive pressures increase, the companies often use false commitments and create exaggerated images about the benefits that their products/services offer. In order to beat competition, the companies can resort to making false claims and this is unethical and is an ethical risk that the companies face. Similarly during the growth phase, the pressers on the companies increase production and service levels. Often the companies have limited resources and they are unable to meet these demands effectively. Therefore they start to exploit the employees. This is in form of increased pressures and practices like non paid overtime and hazardous working conditions. This is the second most important ethical risks that is faced by the companies during the growth phase.