How Unethical Leadership Leads To Business Decline

You’ve seen them on the news, dressed in their expensive suits while being hauled away in handcuffs. You’ve probably worked for them in the past, and they’ve made your skin crawl. As a customer, you’ve likely been on the receiving end of their manipulative games. Who am I describing? The unethical business leader.

Just what makes a business leader’s behavior unethical? For starters, unethical leadership behavior can be defined as a self-serving mindset of “winning at all costs,” even if the cost is against moral or legal standards. Unethical leaders all share the flawed character traits of being narcissistic and arrogant. Why do they behave this way? Because we let them. As customers, we continue to give them our business. As co-workers, we look the other way and don’t confront their destructive behavior. As an employee of an unethical business leader, we say nothing out of fear. And, as the manager of an unethical business leader, we turn a blind eye as long as they are bringing in the results.

Unethical behaviors such as cheating customers, lying to investors, defrauding the government, evading taxes, short-changing employees, false advertising or mistreating employees will continue to occur as long as there are slimy leaders who think they can get away with it. However, no leader is slick enough to avoid the not-so-obvious costs of shady business practices that inevitably impact the bottom line.

Here are just some of the ways unethical leadership is costly to the businesses run by those who choose to play in the sandbox of dirty dealings.

When you cheat, you get cheated on.

An unethical leader sets the tone for acceptable workplace behavior. When a boss fudges the numbers, cheats, or lies, they’re giving their employees permission to behave the same way. Unethical leaders run businesses that throw away a lot of extra money on their employees’ unacceptable workplace decisions such as exaggerated expense reports, unnecessary business travel expenses and fabricated time sheets – just to name a few.

You drive away your best and are stuck with the rest.

Even if a top-notch candidate is lured into a position with a company run by a sleazy boss, they are sure to discover the truth quickly. If you know anything about turnover expense, you know that it costs between 20 to 30 percent of an employee’s annual salary to replace them. Unethical leaders spend a lot of money having to replace their best workers. Who are they left with? A “B team” of employees who are OK with staying committed to a shady boss for the long haul.

Your reputation precedes you.

When a business leader behaves badly, they are often blind to the customer base they’re throwing away. For every existing client, there are several others who opt to give their money to somebody else in an effort to protect their own professional reputation. Whether it is through word of mouth or social media, unscrupulous business dealings will spread like wildfire which takes away from the earning potential of a business run by a smarmy leader.

Regardless of the size or industry of your business, accepting unethical behavior is playing with fire. Even just one unethical leader can destroy the values and sustainability of an entire company. Often times, unethical leaders and their team of loyal employees can become lulled into a false sense of security if they haven’t been caught – yet. However, history has taught us that it’s only a matter of time before their egotistical disregard for what is right brings about their own demise and public shaming of their organization.

Whether you are an employee, customer, or investor, it’s important to protect your professional reputation, and financial or intellectual investments. Here are some clues that you might be dealing with an unethical business leader.

They take personal credit for the accomplishments of others

They lie to their employees and peers

They take advantage of people

They say one thing and do something else

They sacrifice their employees for their own personal gain

They publicly chastise or humiliate others

They make every conversation all about them

They use animated story telling as a technique to detract from a pointed conversation

They overpromise and under deliver

They avoid discussions with customers where they have to explain their fees

They avoid discussions with employees where they have to explain their failure to adhere to employment terms

They make excuses or pass blame to others

Remember, the only way an unethical leader stops their destructive behavior is when we stop allowing it. Take your business elsewhere and don’t let their bad choices destroy you.

To contact Elizabeth, email her at or visit her company’s website at