Going by the rules and ethics
is the ideal way of doing business
. Unfortunately, making big profits as much as possible is the ultimate objective of small startups and big multinational corporations so achieving business
success may conflict these two schools of thought. It is competitive and cutthroat out there. Some business
owners and entrepreneurs
following business ethics
by the books won’t get you far so they try to “bend the rules.” On the other hand, unethical businesses
try to outwit, outplay, and outlast their competition through shady business practices
and black propaganda. These unfair business strategies
may work but it will irrevocably ruin a business’ reputation
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Even the so-called “world’s greatest newspaper” News of the World even fell back to earth after doing business for over 160 years because of their controversial business practices
that included the paedophile shame campaign, phone hacking, the fake ‘sheikh’ cricket scandal
, links to police corruption
, and a litany of libel actions. These unwanted publicities have tarnished the reputation
of this once-famous publication. Following the footsteps of Enron and WorldCom, Rupert Murdoch’s publication is just one of the many that fell out of the wayside. Here are the most common unethical business practices
Lifted from the pages of Ian Fleming’s James Bond, there are many spies in the world of business hoping sift out important corporate trade secrets
that may benefit their own business agendas. Some of them pretend to be customers or clients but interested in the important details on how you run and manage your business.
Professional and confidential communication line is essential in business transactions and correspondences but not answering clients and customers after initial e-mail
exchanges, telephone conversations, and business information sharing is not a good business practice
. Making excuses of being out of the office for “business trips” and other alibis.
Fake Customer Testimonials
Getting favourable reviews and testimonials can boost business reputation
and reliability. No wonder, some businesses
fake it to gain advantage over the competitors. Promoting that their products and services is effective through made-up “customer success stories” is an unethical business practice
because it is just blatantly duping customers into buying it.
Promising Something New and Better
want to be seen as hip, innovative, and trendsetter by promising new and better products and services. Many purported revolutionary products and services that are promised to outdo everything by the competition may be just the same thing they do but with a different packaging and branding. Perhaps, some are just empty promises and products of imagination.
Shady Contracts and Delinquent Payments
Contracts are important business documents and changing it frequently and not paying the dues agreed upon are mortal sins in business transactions. Unfortunately, settling business debts may take a while as every legal
action may drag your resources with it. You can hire lawyers and debt collection agents to enforce the contract but don’t expect to get it right away.
Dubious Funding Claims
Being perceived as a financially-stable company is enough to convince most investors and clients to do business but making dubious funding claims is a whole different story. An unethical business
would do it in order to convince the board directors that the finances are in order and there is a steady capital infusion from investors. Unfortunately, many companies
go bankrupt when playing this hide and seek game of financial
Bad Use of Stock Options
Many small businesses
and start-up companies
would use stock option grants as payment for services. But using it in a different way may bring your company into trouble and possible lawsuits
over contractual obligations and unethical business conveyances.
There is no better way to describe bad business practices
as breach of contract
. Getting a long-term commitment from a client and investors is a big boost to your company’s business profile but terminating a contract abruptly for made up reasons can spark legal
actions from them.
Faulty Bidding Process
If a selection has been made, what is the point of having a bidding process with different suppliers? Making potential clients as column fodders to make it look like a fair selection is sounding like one of the typical unethical business examples
and corrupt practices
that some businesses