Unfair competition is a somewhat relative term. Not every competition perceived by the company as unfair is so in the light of the law. Unfair competition in this context is something completely different than disappointed feelings or a sense of injustice. Than ordinary human grievances. But how does it happen that some companies decide to act ethically questionable? Even though the consequences can be really severe. They take that risk because the stakes are high. There is fierce competition for customers. But is it worth every price?
Many of the corporate scandals in the past few years have been large-scale cases of dishonesty. Have you just thought about Volkswagen? Their scandal even went down in history as the dieselgate. It's hard to believe how deeply the lies and deceptions have penetrated organizations. Some researchers point to group decision-making processes or psychological traps into which leaders fall when justifying unethical choices. At what organizational level is the decision to take doubtful moral action taken? And does unfair competition pay off? Let's analyze.
Where is unfair competition born?
To check whether there are factors that would indicate that people inside the company will be honest, special research was carried out. Over 15 years in the United States, 3,200 interviews conducted as part of 210 organizational assessments were analyzed. The study revealed four factors - not individual character traits, but organizational issues - that played a role. So it's not like a company suddenly decides that unfair competition is the way to do business. It's a process.
The good news is that eventually the corporation can control it. And react when things go wrong. Especially since the stakes are high. Analysis 7,000 companies from 20 industries tangibly showed how the decline in shareholder confidence affects the company's financial results. More than half of the surveyed companies (54%) experienced a significant drop in confidence - due to incidents such as product recall, fraud and management errors. This is an acute loss. How to avoid it? Pay attention to these four factors.
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No clear strategy
The lack of consistency between the declared mission, goals and values of the organization and the way it is actually perceived by employees and the market is dangerous. As PR agency we are aware of it. People are then 2.83 times more likely to withhold or distort true information. It is especially easy in crisis situation. The problems are growing every day. No one in the company wants to admit that the company is in trouble. Then what?
A drowning man grabs a razor. Companies in such situations try to suddenly implement outdated strategies. They proclaim commitment to imaginary values and missions. Unfair competition begins imperceptibly. Which, in addition, begins to "tighten the loops" also on the necks of employees. They perceive the duplicity between the organisation's stated identity and actions, but ultimately begin to act dishonestly themselves. This was painfully experienced by Tesla, promising to produce a Model 3 of 5,000 cars a week. The ceiling was not reached, although the company communicated otherwise. On the occasion of this "inaccuracy", the issues of employee injuries and work safety also came to light. As you can see, unfair competition is also familiar to companies from the front pages of newspapers.
What is unfair competition to the employee evaluation system?
Unfair competition does not only apply to the activities of entire companies. It can also be committed by an employee. And it was not at all. The employee appraisal system is of great importance to their morale. Many of them have no idea why they work so hard. Employees assume that the boss has no idea what they are doing. The annual assessment involves the form being signed by the immediate supervisor and sent to the HR department. On the basis of "we pretend to talk, and then everyone goes back to their activities."
Meanwhile, when employees feel under-appreciated or feel unfairly judged, they may feel compelled to embellish their achievements. On the other hand, to hide or justify their shortcomings. This prepares the ground for unfair behavior. Research shows a direct correlation between the employee's sense of justice and a conscious choice to sabotage the organization. What to do to prevent this from happening? The first thing you should take care of is internal communication in company. She is one of the pillars of the organization's management.
Honest communication is essential
Meetings are often viewed as a waste of time. Where does this belief come from? Because it is often unclear why they are held or who is making the decisions. In one study 71% managers saw meetings as unproductive and ineffective. If you do not know why they are taking place, isn't it time to verify the competences of the leaders?
In well-managed companies, meetings are held on a regular basis in a fixed order. Their participants have a clear right to make decisions. Everyone is also expected to be honest, especially when there is bad news or different ideas. When meetings are no longer necessary - because, for example, the project has ended - they are no longer organized. Unfair competition feeds on rumors and understatements. Management based on open communication he is no medium for her. And that's it.
Unfair competition likes conflicts
When rivalry between departments or unhealthy conflict remain unresolved, the company is 5.82 times more likely to withhold or misrepresent true information. This situation leads to "duels", as a result of which one side wants to prove that it is right and the other side is wrong. Employees are loyal to each other only at the department level. Those outside the party are treated as enemies to be feared or blamed.
Sounds almost like unfair competition within the company! Conflicting goals can trigger tensions between departments. These in turn can lead to an integrity disaster. Therefore, building trust and fostering a shared commitment to the company's mission is crucial. It is also important that the various departments live on good terms. That they implement processes that enable open exchange of feedback.
By guiding these four considerations, you can greatly increase the likelihood that your business will create the culture of integrity that you, your employees and your customers crave. Contact us to implement the necessary tools in your company as soon as possible.