Besides employees, who else is affected when an organization acts unethically? List at least three groups and explain how each group is affected

Answer 1

Help students understand that unethical business practices have negative consequences even if an organization is not "caught" and prosecuted.

Groups that can be affected by an unethical organization:

• Customers (clients, patients, etc.) are affected when they do not receive what they have been led to expect they have purchased or contracted for (unfair pricing, shoddy merchandise, failure to deliver purchased goods or services, etc.).

• Businesses that work with the organization are affected if they are not paid for services they provide, if their reputation is tarnished by being affiliated with the organization, etc.

• The shareholders of public companies are affected because their investments (the money they lend the company by purchasing its shares) are reduced in value—or lose their entire value.

• The community is affected because the company may lose business as a result of unethical practices, resulting in job losses and lost tax revenues.

• Public agencies (and the taxpayers who fund them) are affected by having to use their limited budgets to investigate and prosecute unethical organizations.

• The family members of the organization's leaders are affected (the Madoff family, for example).

• Other businesses in the same industry are affected because of business losses they incur by not being able to compete effectively with the unethical company. They are also affected by negative publicity and increased legal scrutiny.