Question

What ethical issues affecting consumers and society as a whole are created by unfair competition? What is the role of ethics for leaders in the success or failure of an organization?

Answer 1

Before we begin, we need to understand the two concepts here. One is “unfair competition” and other is “ethical issues”.

Unfair competitions (though it appears to be) is not monopolistic practices. It is the idea of activities and business practices that involve unfair acts to cause economic harm to consumers, partners, and other businesses. By its very definition, we understand that these business practices are not very ethical in nature.

Next is ethical issues. When we speak about ethical issues, we need to keep in mind the common ethical principles that include respect for autonomy, beneficence, non-maleficence and principle of justice.

Now coming to the question, we can list (not exhaustive) the following as acts of unfair competitions,

• False advertising
• Bait and switch selling
• Substitute of one product with another
• Use of confidential information from partners or other businesses
• Trademark/copyright/IP violations

Each of these activities are a breach of ethical principles in business. For example, false advertising is a blatant lie and eventually ends in selling a product to customers that does not match the advertised property. This means that the price paid for the product is not what the customer deserved and it violates the principle of justice.

Similarly each of the above examples violate one or more of the ethical principles and causes economic damage to the society and the consumers.

In every organization, the role of leadership is well documented and understood. Irrespective of the company’s documented policies, the leadership decisions and values flows from top to bottom. This means, the actions and decision making processes of the leaders are usually followed by the subordinates and team members. As a result, we can see that, the actions taken by leaders are followed by the rest of the organization.

This means the ethical responsibility of the leaders are of utmost importance. Any unethical practice by a leader may be amplified across the organization and could make the entire organization to begin unethical practices. This may eventually result in such activities being exposed to the market or the consumers and reduce the image and the brand of the company.

Naturally, considering the repercussions that can occur as mentioned above, the role of ethics among the leadership should be

• Lay the groundwork for ethics within the organization
• Make sure that policies and practices focus on ethical approaches to problem solving
• Monitor possible activities that may breach ethical values
• Take strong action against occurrence of unethical events/practice