Ethical Challenges Facing Organizations Online

As vast number of organizations enter and continue their social media presence and online interactions, ethical issues have become apparent.  These ethical issues range from small occurrences such as an employee rating their company’s product to large scale companies selling private details of their users.  We will then take a look at what are ethical practices online, why ethical behavior is important to an organization, and some examples of unethical actions by organizations.

(Image by Robin8376 (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons)

1. What Are Online Business Ethics?

Online business ethics are the guideline in which an organization should follow to ensure that the organization maintains a lawful and fair online environment.  The core to a strong business ethic starts with ethical personal values for each the employees in the organization.  This ethical approach should start at the top of the company and continue throughout to the lowest level employee.  A typical ethical structure consists of guidelines such as fairness, respect, transparency and honesty.

Ethical structure consists of guidelines such as fairness, respect, transparency, and honesty

Fairness is an important value to guide ethical behavior as this can set the tone of your company’s practices.  TeamBank a large German financial institution found using a market analysis revealed that although customers were price-sensitive, they also wanted “fairness.”  If a customer feels that an organization does not follow fair practices they are likely to discontinue service.

Respect is another core to ethical behavior as this trait governs your interaction with customers and employees alike. Customers require respect as they are the most important aspect of an organization and its driving force. An employee should be respected as well because of the effort and possible customer interaction that can occur. This interaction can be highly influenced by an employee resulting in a possible sale or no sale.

Transparency in an organization is apparent through its business practices and can directly impact customer retention. If a customer must constantly “read the fine print” to decide if a product or service is right for them, the customer is not likely to stay with your organization.

The practice of honesty is at the core of ethical behavior in any organization. Online social honesty is the policy of being honest in one’s dealings with others. When an organization is honest it creates a trust between consumer and business which is essential to both parties.

2. Importance of Ethics Online

Ethical behavior of an organization dictates a company’s interaction with customers and other businesses. This interaction ranges from the products created, customer inquiries, to even the selection of an ad campaign. The philosophy of ethical behavior should be followed by all organizations as it has a direct effect on the image and reputation of the organization. There are also monetary factors of why ethics are important to any organization: long-term growth, risk reduction. As all organizations have long-term growth goals, ethical practices allow for the stakeholders and customers to create a sustainable environment for the organization. Ethical practices also reduce the risks involved that can become of unethical practices such as lawsuits, low reputation and harm to sales.

3. Unethical Real World Examples

Matthias Rath- Cellular Medicine

A German trained doctor, Matthias Rath, created a vitamin “formula” which he sells as a cure for diabetes, cardiovascular disease, cancer and HIV/AIDS.  His vitamins, while legal to sell and advertise as a wonder drug, are not supported by any reliable medical research or the National Association of Boards of Pharmacy (NABP). Most of his sales are derived from online customers.  This is believed by many to be an unethical business as it targets people with severe sicknesses.  While the company sells the vitamin formula legally the company has been involved in over ten major lawsuits in the U.S., England, South Africa, and Netherlands.

Wal-Mart- Employee Fine Print

In 2000, Deborah Shank a Wal-Mart employee was injured in a truck accident which left her with permanent brain damage and wheelchair bound. After a settlement with the trucking company $417,000 was put in a health care trust.  After six years Wal-Mart sued the Mrs. Shank for the $417,000 as the company spent money on Mrs. Shanks healthcare. In the fine print of her employee contract any funds won in court over an accident belonged to Wal-Mart.  The court found Wal-Mart’s contract binding.  This sparked outcry over social media and led to bad press for Wal-Mart.

Online Business Ethics

As discussed, online business ethics are an important factor for an organization.  Fairness, respect, transparency, and honesty can be used to guide ethical behavior for any size organization.  Reducing an organization's unethical behavior can lead to an increase in customer satisfaction, customer retention, the reduction of possible lawsuits, and finally, increase the organizations corporate image.

References:

• Sreenviasan, S. (1998). New York Times: Business Ethics on the Web. Retrieved from http://netcheck.com/nytimes.htm
• TeamBank (2013) Press Release: Fair Products Drive Profit. Retrieved from: http://www.bundesbank.de/Navigation/DE/Presse/presse.html
• Biography of Matthias Rath. Retrieved from:http://www4.dr-rath-foundation.org/THE_FOUNDATION/About_Dr_Matthias_Rath/dr_rath.htm
• Kaye, Randy. (2008) Brain-damaged woman at center of Wal-Mart suit. CNN.com. Retrieved from: http://www.cnn.com/2008/US/03/25/walmart.insurance.battle/

(All credit and accolades for this tremendous blog post are for Anthony Injic who is the author and content creator.