57. How Social Media Pressures Young Entrepreneurs to Embrace Unethical Business Practices

57. How Social Media Pressures Young Entrepreneurs to Embrace Unethical Business Practices

In Silicon Valley, startup culture begins to normalise unethical business practices such as manipulating share price by posting unfounded claims on social media, promoted through industry blogs and forums, and resulting in price spikes used by insiders for trading their shares. A young entrepreneur, David Chen, finds himself pressured to cut corners on ethics and mislead investors so that they keep funding the business. He is tempted to posts on Tibble expectations for exaggerated performance metrics for the business. 

Individual outcomes

David faces moral dilemmas and potential legal issues. Investors face an increased risk of potential losses. New investors may buy in based on exaggerated expectations. Small and inexperienced investors in particular are very vulnerable to such practices, and losing large amounts of money can lead to anxiety, loss of home and downgrade of lifestyle, loss of partner and family, suicidal thoughts.

Societal outcomes

Societally, it leads to a culture of unethical business practices, affecting economic integrity and consumer trust. If such practices are allowed to continue on a larger scale, it can trigger financial crisis, businesses can go insolvent and many investors may find their holdings with a fraction of their original value.

Competences involved in this scenario:

Social systems affected by this scenario:

M7. Evaluation of multiple sources
M9. Ethical considerations

Business Community
Regulatory Bodies
Educational Institutions