Basic Cents, Features

True Cost Of Unethical Behaviour


By Samuel Rosenberg

VOLKSWAGEN could lose between $10 and $18 billion after lying to the public and providing false information and data about their vehicles’ performances. They attempted to cover up the trail of evidence from their customers, who feel cheated after an incredible degradation of business ethics from the car manufacturer. It now appears that other vehicle makers have employed similar tactics to fool their customers.

You do not have to look only at large corporate scandals to find unethical behaviour. How often have you tried to return an item to a seller who claims there is no return policy or the warranty has expired within an impossibly short period of time? Sometimes, the seller may purposefully sell a damaged item to a customer without disclosing the problem, intent only on focusing on their profit margins. This is a prime example of how terrible business ethics are encountered within smaller businesses.

Religious people may suggest that such poor behaviour ultimately gets punished either in this world or in the world to come. In the long run, businesses that operate unethically will not survive as word-of-mouth travels quickly and once you have been bitten by unethical behaviour, you will certainly not return to be bitten again.

Social media quickly promotes bad conduct by businesses of all sizes. Human behavioural activity often reacts negatively and spreads bad news much quicker than good reviews of businesses. Because of the fast moving, short news stories, passed virally across thousands of people in a matter of minutes, social media often doesn’t tell the truth and the right to reply is not always possible or accepted.

For these reasons, small and large businesses must insist that their employees operate with a perfect ethical behavioural outlook.

Employees may not be unethical towards their customers, but may try to cheat their employer out of time, goods and money.

By arriving late for work or changing timesheets, the business may be paying for time not worked. During recent times, social media access has become acceptable during company time, but nevertheless, it is still time getting paid when not working. Known as cyber-slackers, some individuals surf the Internet for hours when they should be working. Updating your company’s Facebook page is perfectly acceptable when it is part of your stated business activities, but to check your own Facebook page and add comments and status updates, may violate your company’s Internet policy.

Where an employee takes a pencil and a pad of paper home, without the employer’s permission, this is stealing on a small scale, but still reflects negatively upon the profits of the company. The business will need to charge more to the customers to cover the cost of items being stolen from their business. Of course, small-scale theft can turn into major employee fraud, which is reported in the newspapers and social media from time to time. Each of these actions, even when covered by insurance, involves somebody paying more for the item. Turned around, this means that every unethical action you may complete within your own organisation is matched by you paying more for goods and services elsewhere.

Where a business clearly defines its ethical policies, it is one important stage closer to presenting an organisation or business that can be trusted by its customers and employees.

Samuel Rosenberg is the founder and CEO of Axcel Finance Ltd., the leading regional microfinance institution. Share your thoughts and email your questions to

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