2) Types of unethical business practices

• Unfair advertising:

  Examples:

  • Criticising competitor's goods
  • Selling second hand goods as new products
  • Exploitations of children's lack of understanding
• Unfair advertising

  Challenges of unfair advertising as an unethical practice:

  • Unfair advertisements could be harmful to consumers
  • Businesses can make unwise advertising choices when under pressure to increase profits
• Unfair advertising

  Strategies to deal with unfair advertising as an unethical business practice:

  • Consumers must report unfair advertisements to Advertising Standards Authority
  • Business encouraged to keep their advertising fair and in line with constitution
• Pricing of goods in rural areas:

  Examples:

  • Inflating prices
  • Charging higher for goods of inferior quality in rural areas
• Pricing of goods in rural areas:

  Challenges of pricing of goods in rural areas as an unethical practice:

  • Business form monopolies in rural areas and increase their prices unilaterally
  • May be common practice to pay higher prices for goods of inferior quality in rural areas
  • Some consumers in rural areas have little economic power and are vulnerable to exploitation
• Pricing of goods in rural areas:

  Strategies to deal with the pricing of goods in rural areas as an unethical business

  • Charge fair/ market related prices for goods and services
  • Avoid unethical business practices to attract customer loyalty
  • Work together with suppliers to share delivery cost to remote rural areas
• Tax evasion:

  Examples:

  • Businesses that do not declare all their income to SARS
  • Falsifying business financial statements
• Tax evasion:

  Challenges of tax evasion as an unethical practice:

  • Businesses may pay heavy fines for evading tax
  • Tax evasion may negatively impact on business image
  • The accountant may charge high fees for falsifying financial statements
• Tax evasion:

  Strategies to deal with tax evasion as an unethical business practice:

  • Submit all tax returns on time
  • Keep financial records honestly and accurately