What potential risk does an organization face from poor ethical standards?

The potential risk that an organization faces from poor ethical standards is closely tied to legal penalties and reputational damage. When an organization operates without strong ethical guidelines, it opens itself up to a range of legal issues. Violations of laws and regulations can lead to significant legal penalties, including fines, lawsuits, and other punitive measures. Additionally, unethical practices can tarnish an organization's reputation among consumers, stakeholders, and the public.

A damaged reputation can result in decreased customer trust and loyalty, impacting the organization's brand equity and ultimately its financial performance. The ramifications of a poor ethical stance can be long-lasting, as repairing a damaged reputation often takes considerable time and effort.

While the other options suggest positive outcomes such as increased employee retention, customer satisfaction, and enhanced market competitiveness, these are generally associated with organizations that uphold strong ethical standards. Poor ethics typically lead to the opposite effects, making option B the most accurate reflection of the risks involved.