Unethical Behaviour In Business

1615 Words7 Pages
Abstract

Globalisation has allowed for the rise of major corporations and the increased pervasion of unethical corporate behaviours, such as child labour or harming the environment. Therefore, it is crucial to explore the fundamental driving forces of these unethical behaviour. By taking a rational organisation approach, the paper examines how the rational decision making process is affected by various factors of the market and lead to unethical behaviour. I argue that profit and sustainability are the two primary goals of corporations and unethical decisions are geared towards these goals.

Introduction

Schulman (2002) mentions that rationality in business is kindred to professionalism. It is therefore assumed in this paper that corporations
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As explored in the previous section, ethical behaviours can contribute to long term profit and sustainability, whether it is through building trust of customers or avoiding legal problems. However, this is obviously not always the case. Many corporations have turned to unethical practices and since their decision making process is rational, these corporations must have reasoned that the profit of the unethical behaviour outweighs the safer, long term benefit of ethical behaviour, a view that is contrary to popular belief. This is especially true in large multinational corporations, where they have the ability(in terms of wealth and establishment) to face up to consequences of their unethical behaviour, and ultimately still…show more content…
Competition can act on corporate decisions in two ways, one is for corporations to choose ethical behaviour and increasing reputation, the other is to choose unethical behaviour that can increase profit and productivity. When the distinguishing effect of unethical behaviour outweighs ethical behaviour (which is usually the case), the rational choice would be to take the unethical behaviour. Child labour in the fashion industry exemplifies this. Over the past few years, many clothing companies like Walmart, Gap, H&M have been discovered to endorse sweatshops using child labour in developing countries. As prices of clothing are continuously driven lower, there is a need for cheap labour to avoid being overtaken by competitors who can sell cheaper clothes. The risk associated with this is a loss of reputation when behaviours are discovered. However, this did not lead to significant loss for the clothing companies. Should they have chosen to not resort to child labour, their reputation will not gain as much for the ethical behaviour than the ability to keep up with their
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