Common ethical issues in business
Ethical dilemmas are common in business. On a daily basis, you deal with so many people, including stakeholders, employees, and customers. Conflicts of interest, discrimination, harassment, and theft are some of the most common ethical issues in businesses today.
Conflicts of interest
A conflict of interest occurs when an organization or individual chooses personal gain over their duties. A conflict of interest might occur if an employee starts freelancing for their employer's competitor.
Conflicts of interest typically have legal consequences because they can affect both businesses. Remember, employees are bound to a code of conduct and ethics to act in the organization's interests rather than for personal gain. If your employees are violating that code of conduct, they can be terminated.
Of course, conflicts of interest are fairly broad, so some employees and business owners might not even realize what they're doing. Hiring a relative to work for your company if they're unqualified counts as personal gain, even though it's not financial and can affect the health of the organization.
Meanwhile, an employee might create a conflict of interest if they start their own company offering similar services to their employer. Of course, this isn't always the case. If you disclose your actions to your employer and they approve it, it may not be a conflict of interest. However, failing to disclose this information can result in a conflict of interest and legal ramifications.
Discrimination is another common ethical dilemma in business. Making ethical decisions is often an important part of the hiring process. If discrimination occurs within your business, it can be damaging. Not only can it damage your reputation, but it can affect your sales and ability to recruit top performers.
Your HR and legal teams should be aware of anti-discrimination laws that can impact your business, including age, disability, equal pay, pregnancy, race, religion, and sex and gender laws that protect employees.
Harassment is technically a kind of employment discrimination and includes things like physical, verbal, sexual, and emotional harassment that affect an employee's well-being. Employees are protected from harassment by the law, and they can't lose their jobs for reporting it, regardless of who they report to.
Bribery is a less common unethical practice in modern businesses, but it does still happen. For example, a pharmaceutical business might bribe doctors, hospitals, or healthcare facilities with kickbacks or incentives to prescribe their drugs to patients. These are the exact opposite of ethical decisions and can impact both businesses.
If the word gets out that a business is bribing doctors, no patients will want to use their medication anymore. But, on the other hand, no one will trust doctors who accept bribes instead of prescribing better treatment options.
Intellectual property theft
Intellectual property (IP) theft is another common ethical dilemma in business today. Businesses own IPs like trademarks, patents, copyrights, logos, and so forth. When another party uses your inventions or unique ideas, they're engaging in IP theft, which can occur due to human error or hackers stealing your property.
Another common form of intellectual property theft is the sharing of trade secrets. Your business's trade secrets are considered any type of information that's not generally known to the public, such as how you do something. A trade secret can be a baker's specific process and ingredients for making cookies.
Unfortunately, your trade secrets can get out if an employee shares that information, whether it's an accident or not. If your trade secrets are exposed, it's impossible to get them back from the public, which can be detrimental to your business.