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When a company acts in an ethically questionable manner, what types of problems are caused for the organization and it’s customers?

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4 votes

Final answer:

When a company acts unethically, it faces reputational damage, legal issues, financial losses, and a breakdown of trust, while customers may endure product issues and potential harm. Companies should commit to corporate responsibility, including ethical dilemmas surrounding emerging technologies, and implement codes of ethics. Individual responsibility in upholding ethics can drive positive organizational and societal change.

Step-by-step explanation:

When a company acts in an ethically questionable manner, various types of problems can arise for the organization and its customers. For the organization, unethical behavior can result in a damaged reputation, legal issues, financial losses, and a loss of trust among stakeholders which includes shareholders, employees, and the community at large. For customers, such actions can lead to a decrease in product or service quality, increased prices, and potential harm if the unethical behavior involves health or safety violations.

Corporate responsibility extends to social, economic, and environmental concerns, and corporations are expected to take these seriously. Challenges in establishing ethical practices can be magnified with the emergence of new technologies, such as artificial intelligence, where the potential harms and benefits are not always immediately clear. Developing and implementing codes of ethics within organizations is crucial to guide member conduct and uphold the company's ethical standards.

Ignoring established codes of ethics not only creates an unethical environment within organizations but can also have far-reaching effects on society. Unethical practices in areas like labor or the environment, as seen in the fashion industry, have led to increased public demand for accountability. It is important for individuals within organizations to take personal responsibility for ethical behavior, as their actions can have a significant impact on initiating change and upholding ethical standards.

User Trent Earl
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When a company acts in an ethically questionable manner, the following problems are caused for the organization and it’s customers:

- customer dissatisfaction - decreased purchases from organization, the customers won't trust the company, causing a loss in sales.

- a blemished name and reputation, so the organization will have to work on improving its image again.

- decreased earnings due to negative customer views or fines imposed.


User Jeremy Jackson
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8.3k points