This episode is brought to you by Skillshare. Get 2 months of Skillshare free and learn
new skills by using the link in the description. Have you ever witnessed unethical behavior
or practices in the workplace? Perhaps you have been guilty of the odd transgression
yourself? If you feel a twinge of guilt after accidently
pocketing that pencil from the office stationery cupboard, or taking an extra cookie from the
cookie jar, don’t give yourself too much of a hard time. What goes on upstairs in the corporate boardroom
will put things into perspective and probably make your toes curl. Let’s take a look at the dirty tricks played
by tax accountants and bankers to gain financial advantage. Let’s take a peek at brand bullying, price-fixing,
and creative accountancy, all common practices in the corporate world, in this episode of
The Infographics Show – Unethical but Common Business Practices. In 2015, the Washington Ethics Resource Center
stated that within the past year, almost half of us witnessed some form of ethical misconduct
in the workplace. Some of the most common unethical behaviors
include misuse of time, lying to employees, employee theft, and violating internet policies. That last one is a big problem for corporations
who coined the term Cyberslackers to brand us workers who surf the internet during office
hours. Corporations have yet to find a practical
way to tackle the multi-billion dollar problem of workers who would rather be surfing the
internet, checking their social media accounts or watching The Infographics show on youtube,
when they should be either crunching numbers or working the phone. But don’t panic. While the workforce on the lower rungs of
the corporate ladder is updating their status on Facebook, bigger matters are afoot in the
head office. In no particular order, here are 10 of the
most unethical practices in big business. Falsifying product information. Companies often band around the phrases “scientifically
proven” and “guaranteed results.” And yes, false advertising is alive and well,
and on your television screen. From breakfast cereals that claim to make
you more intelligent, to yogurts that keep you slim. While crossing the line between truth and
lies often hauls in huge profits, it can, on occasion, hit the company in the preverbial
gonads. Beganin Caraethers was one of many consumers
who brought a legal case against drinks company Red Bull, whose company slogan “It gives
you Wings,” he found misleading. Caraethers had drank Red Bull for over 10
years and had not developed “wings” nor shown any signs of enhanced mental capabilities
at all. Red Bull settled the class action case for
$13 million in 2014, and Careathers and company flew happily away into the sunset. Brand Bullying. Making a product appear superior by discrediting
rival products, otherwise known as brand bullying or advertising wars, is a common tactic that
brushes the boundaries of ethical practice. One company simply bullies another out of
the marketplace. Or maybe two companies go head to head and
toe to toe battling it out for market share. Creative advertising is fun and fiercely competitive,
but when brand marketers begin mocking their rival brands, we’re drifting into unethical
waters. Pepsi and Coke have a long checkered history
in the brand warfare trenches, as do phone manufacturers, Apple and Samsung. Lawsuits are uncommon with this type of practice. That’s due to corporate fear of waving the
white flag and admitting that they’re the target of brand bullying. If the advertising world is like a playground,
filing a lawsuit is like telling the teacher you’ve had your shorts pulled down. Best thing to do is regroup and fight back
with a superior branding strategy. Price fixing. This is the illegal agreement between industry
competitors to “fix” the price of a product at an inflated level. This industry standard unethical practice
occurs frequently and is designed to protect market share. Nowhere is price-fixing more unethical than
in the pharmaceutical industry. The deliberate pricing of drugs beyond the
grasp of those most needing them – the poor and dying – is common business practice. American president Donald Trump this year
accused the pharmaceutical companies of “getting away with murder,” and according to a recent
article, his proposed budget will combat overpriced prescription drugs. And that’s the kind of war on drugs we want
to see. Medical professionals refusing to provide
emergency treatment. This refers to the questionably ethical decisions
made by doctors who refuse to treat non-insured patients in emergency life/death situations. This is unethical, unprofessional, and reportedly
occurs in hospitals all over the United States. Doctors, after training, must take the Hippocratic
Oath, and although they can and do refuse emergency patients for many reasons, potential
non-insurance coverage shouldn’t ethically be one of them. In most places in the world, health emergency
care is delivered before insurance status is determined. Fat cat Bonus payments. The Inflated bonuses paid to the bankers and
brokers who directly or indirectly brought the Western financial markets to their knees
in 2008 is clearly unethical. An October 2008 article in London’s Independent
newspaper reported that bankers hadn’t lost a penny of their multi-million-dollar bonus
packages despite the greedy bankers causing the worst financial crash in 80 years. That same year, city workers took home 23
billion dollars, as banks failed, countries fell, and families were driven out of their
homes to go live in dumpsters. Creative accountancy. Almost every company cooks their books to
some degree. But when you have mega corporations who are
trading billions of dollars of shares every day, as Oil and Gas comapnyn Enron did in
2001, many investors stand to lose a fortune. Enron, who simply lied to its shareholders
about company performance, was hiding debt and not disclosing its actual earnings. The walls came a’tumbling down in 2002 when
it became apparent, in one of America’s largest corporate scandals, that the company
had debt it couldn’t meet, and looked set for disaster. To make matters much more unethical, the top
Enron executives (who knew just where the company was heading) sold off their stock
while the price was still sky high, leaving shareholders high and dry, and employees jobless,
once the true financial picture was realized. Tax avoidance. While perfectly legal, tax avoidance is the
use of financial tactics, not intended or anticipated by governments, as a vehicle for
tax advantage. The use of overseas tax havens, while not
technically tax evasion, is certainly operating outside the spirit of the law. Companies such as Starbucks, Amazon, and Google
have been singled out for this method of tax avoidance. But they aren’t the only ones. In 2011, Action Aid reported that 25% of the
UK’s FTSE companies avoided taxation by locating their subsidiaries in tax havens. This increased to 98% when using the US definition
of tax haven, and the UK magazine Private Eye reported that the top ten FTSE companies
pay no corporation tax at all. Other tax avoidance schemes include the setting
up of a charitable organization to funnel business earnings through. Or some rich businessmen simply enjoy living
on a yacht as a tax nomad. Price Standardization. This is where one fixed price is set for a
product or service across the world. So a cup of coffee is the same price in London
as it is in say, Bangkok. Seems like a cute corporate policy at first,
but that’s before you factor in that the hourly rate for staff in London is eight times
higher than the rate in Bangkok. Also factor in that the rental cost is as
much as 100 times more in London, meaning that such pricing strategy is either a brilliant
financial move or an unethical abuse of exchange rates, as well as labor and real estate costs,
depending on how you see it. Lobbying for Law change. Those corporations who have amassed wealth
through product branding, tax avoidance, price standardization, and creative accountancy,
position themselves closely to politicians, through campaign funding and direct donations. This allows them to influence or change laws
to suit their advantage. One of the worst offenders, according to a
Forbes 2011 article, was General Electric, who spent over $39 million on lobbying in
2010 alone, without paying any tax that same year. In fact, they received tax rebates totaling
over $4.7 billion over the three years studied, which may or may not have been attributed
to their lobbying efforts. Embezzlement. This is good old fashioned theft or misappropriation
of funds placed in one’s trust or belonging to one’s employer. This is perhaps the most common of the unethical
practices seen in the everyday business world. The world’s most famous embezzler was Bernie
Madoff, an American stockbroker who executed the largest Ponzi scheme in history, defrauding
thousands of investors of tens of billions of dollars over a 17 year period. Ponzi schemes use money from new incoming
investors to pay off existing members in the scheme, while the extra money is simply pocketed
by the administrator. Madoff had amassed $65 billion dollars before
he was sentenced to 150 years in prison for running the biggest fraudulent scheme in US
history. In order not to get scammed, maybe take a
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Infographics Show at the same time, by going to Skillshare.com/ infographics6 or clicking
the link in the description. So, these are the ten most unethical common
business practices. What are your thoughts on the subject? Is it fair that big business acts this unethically? Have you ever been unethical in the workplace
yourself? Let us know in the comments! Also, be sure to check out our other video
called Most Dangerous Jobs! Thanks for watching, and, as always, don’t
forget to like, share, and subscribe. See you next time!
