Business ethics provide greater awareness about the important and valuable business activities that can help enhance performance (Malachowski, 2001). The observance of business ethics assist in clarifying the business goals within an organization and the conditions that are essential in achieving them. Ethics draw the line between what are ideal business practices and what are not. Among the benefits of practicing business ethics include wasting the organization's resources on attaining its objectives while avoiding what would naturally be wrong for a business practice. The observance of unethical conduct can hurt the organization itself and may result to negative consequences.
Considering the business environment continues to evolve, negotiation has become an essential process for organizations in order to maintain the sustainability of their business. Business transactions involve negotiation. Ethical business practices are valuable for a successful negotiation process. The conduct of unethical business practices can result to several consequences that can have adverse effects to the organization. Considering that negotiation is a voluntary process that involves different individuals with various interests, strategies, and goals, it is important that these people need to adjust to their differences and find a common ground to reach into an agreement. One of the unethical conducts of a business is focusing solely on one person’s interest without considering the other parties’ interest to the negotiation process. This can lead to deception, withholding of vital information and dishonesty that consequently will result in the collapse of the negotiation. Dishonest communication is described by Alavoine (2014) as a source of unethical conduct that is viewed by the other parties involved in the negotiation as a threat, thus consequently withdrawing their voluntary and active participation in the negotiation process.
The unethical conduct during the negotiation process can also lead to costly consequences. Business losses are often rooted to unethical conduct of a business which when during the negotiation process comes unrecognized. It can even result to legal consequences to a certain extent. Hill, Eckerd, Wilson and Greer (2009) demonstrated how undetected unethical conduct of a business negotiation resulted in the loss of trust and confidence between the buyer and the supplier. The authors postulate how important a trusting relationship is and emphasized its essence in the conduct of a business. The absence of honesty, trust and confidence creates a barrier for the parties to engage in the negotiation process and the lack of motivating factors destroyed by mistrust, dishonesty and deception will create a barrier for the negotiation to become successful.
Another negative consequence of unethical conduct of negotiation is the loss of opportunities. Untruthful sharing of information usually arises in the unethical behavior of the negotiators. Because the sharing of truthful information is vital in the decision making process in a business, dishonesty and misinformation can result in the loss of opportunity of identifying winning trades due to the inaccurate information that is given during the negotiation process (Title, 2000). At times, complexities are present during a negotiation which requires truthful data and information to help the parties involved to become more competently decisive on the action to take. The negotiations that are made under unethical conduct may also produce a short term success. Rarely can you find long term productivity arising from a business negotiation made through an unethical conduct. At most, the deception or lying involved in the process of negotiation will be discovered or may produce negative consequences. It can hurt the organization’s reputation with long term serious consequences such as business losses and missed financial opportunities (Trevino and Nelson, 2011).
References:
Alavoine, C. (2014). Unethical Practices in Negotiations. The Confrontation between Internal and External Factors. France: iPag Business School.
Hill, J.A., Eckerd, S., Wilson, D. and Greer, B. (2009). The effect of unethical behavior on trust in a buyer–supplier relationship: The mediating role of psychological contract violation. Journal of Operations Management, 29: 281-293.
Malachowski, A.R. (2001). Business Ethics: Critical Perspectives on Business and Management, Volume 1. London: Routledge.
Trevino, L.K. and Nelson, K.A. (2011). Managing Business Ethics. Canada: John Wiley & SOns.
