What are the Drivers of Unethical Strategies and Business Behavior?


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1.   The apparent pervasiveness of immoral and amoral businesspeople is one obvious reason why companies may resort to unethical strategic behavior. Three other main drivers of unethical business behavior stand out:

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a.   Overzealous or obsessive pursuit of personal gain, wealth, and other selfish interests

b.   Heavy pressures on company managers to meet or beat earnings targets

c.   A company culture that puts the profitability and good business performance ahead of ethical behavior

2.   Overzealous Pursuit of Personal Gain, Wealth, and Selfish Interests: People who are obsessed with wealth accumulation, greed, power, status, and other selfish interests often push ethical principles aside in their quest for self gain. Driven by their ambitions, they exhibit few qualms in doing whatever is necessary to achieve their goals.

3.   Heavy Pressures on Company Managers to Meet or Beat Earnings Targets: When companies find themselves scrambling to achieve ambitious earnings growth and meet quarterly and annual performance expectations of Wall Street analysts and investors, managers often feel enormous pressure to do whatever it takes to sustain the company’s reputation for delivering good financial performance. Once ethical boundaries are crossed in efforts to “meet or beat the numbers”, the threshold for making more extreme ethical compromises becomes lower. Company executives often feel pressured to hit financial performance targets because their compensation depends heavily on the company’s performance. The fundamental problem with a “make the numbers and move on” syndrome is that a company does not really serve its customers or its shareholders by putting top priority on the bottom line.

4.   Company Cultures That Put the Bottom Line Ahead of Ethical Behavior: When a company’s culture spawns an ethically corrupt or amoral work climate, people have a company-approved license to ignore “what’s right” and engage in most any behavior or employ most any strategy they think they can get away with.

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We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to contact@bms.co.in.

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