Future Business Leaders of America (FBLA) Business Management Practice Test

Why might a company legally penalize discriminatory practices?

1. It may influence employee morale

2. It could limit the company’s market reach

3. Both

4. Neither

The correct answer is: Both

A company has several valid reasons for legally penalizing discriminatory practices, and both the influence on employee morale and the potential limitation of the company's market reach underscore the importance of maintaining a non-discriminatory workplace. When discriminatory practices are allowed or overlooked, they can significantly damage employee morale. A workplace that tolerates such behavior fosters an environment of distrust and resentment, leading to decreased productivity, increased turnover, and difficulty in attracting top talent. Employees are more likely to be engaged and perform better in an environment where they feel respected and valued, regardless of their background. Additionally, allowing discriminatory practices can limit a company’s market reach. If a company is perceived as discriminatory, it risks alienating potential customers from diverse backgrounds, which can adversely impact sales and profitability. In today’s global marketplace, inclusivity and representation are not only ethical considerations but also business strategies. Companies that cultivate diversity are often more successful in appealing to a broader audience and can leverage this diversity to innovate and improve their offerings. Thus, both the impact on employee morale and the potential limitations on market reach provide compelling reasons for a company to enact and enforce penalties against discriminatory practices.