Business Ethics
Chapter 5
BEING ACTIVELY ETHICAL
Sociologists have contended that determining our own identity is not an easy thing. Many people never realize that they are able to choose who they are by the choices that are made. Certainly, we are influenced by many things, some of which are beyond our control. Even so, most of who and what we are, we determine ourselves.
Since reason is man's basic means of survival, it is not surprising that we have the ability to form who and what we are. This is called Objectivist Ethics. Since everything man needs has to be discovered by his own mind and produced by his own efforts, there are two basic elements involved in becoming the person we choose to be: thinking and actions. We decide who we will be and our actions carry out those thoughts. To be an ethical person, we must, through our thinking, choose to be so, and then productively work towards it.
If some people do not choose to make any conscience choice, they will develop by imitating and repeating the actions of those around them. This is why it is so important that agencies and management staff make ethical behavior a priority in the workplace. Those who simply repeat the actions of those around them seldom make an effort to understand their own work. Unfortunately, who is imitated is seldom a concern to these individuals. As a result, one bad apple can, in effect, spoil the barrel.
Those who choose to think out their actions and work productively towards a personal goal remain the main force in our country thankfully. They are the people who are most likely to be copied by others. Even those who survive by using brute force, or by making others their victims in some capacity, survive only because someone else was thinking and working productively. In other words, those who commit violence, steal, lie and cheat survive off the thinking efforts and hard work of others. It all comes back to those who use intelligence, logic and deliberate choice to determine their lives.
Objectivist Ethics, as a theory of ethics, holds man's life as the standard of value and his own life as the ethical purpose of every individual man. The difference between "standard" and "purpose,” as used in this context, can be important. "Standard" is an abstract principle that serves as a measurement or gauge to guide a person's choices in his or her achievements or specific goals. The goal itself or the achievements obtained become the "purpose." Probably every person has some purpose or goal in life, but not everyone would have a standard for their life.
For example, Pete was born very poor. This poverty made such an impact on him in his childhood that he now strives to become wealthy. He obtains his accumulating wealth by whatever means necessary. Although Pete definitely has a goal or purpose in life (becoming rich), he does not have any standards. There is little doubt among those who know Pete that he will become very rich. Along the way, however, Pete is not finding much happiness. He has not thought out the goals he has established. Pete knows what he is doing, but he does not understand why he is doing it. Pete would be surprised (and perhaps even laugh) if someone told him that ethics are a part of finding happiness.
What does it mean to be "Actively Ethical?"
Our history is full of wise men who wrote about the philosophies of life. While they did not necessarily agree on many points, most did agree on one: lack of ethics promotes disorganization, financial turmoil and sometimes even the demise of governments.
Individuals may sometimes feel that they have little control over others, which may actually prevent individuals from standing up for ethical issues. While it is not possible to change how others act, individuals may actually have more control than they might realize. People will often follow the lead of another individual so if an ethical person takes control it may have a positive effect. Taking control creates the ability to make our own choices, and it may also help sway the choices of others. There is little doubt that what we do on a day-in, day-out basis affects everyone we come in contact with. We are also impacted by others in the same manner.
The activities and policies of a business tell their employees what the firm's underlying values are. It will not matter what is written in the employee manuals. What the firm actually does will be the loudest indicator.
Actions reveal more about a business than does executive speeches or advertising campaigns. Additionally, employees judge their employers by the way they are treated as individuals. When Tyson’s Foods came under scrutiny for advertising that their animals were in a “comfortable environment” while actually keeping sows in inhumane gestation crates, they simply renamed the crates to “individual housing” units; same environment, different name. Just as Tyson Foods attempted to divert the situation without actually improving on the animal’s stressful lives, employees in a company will recognize when their employer tries to divert their attention from unfair or unethical work conditions.
Is the way we treat others an extension of our code of ethics? Often we forget that ethical behavior is not only connected to such things as paying our taxes fairly, following the laws or telling the truth. Ethical behavior can also be connected to how we treat others. Ethics is a code of values to guide man's choices and actions. In choosing one's own actions and even goals, we must face constant alternatives. Even such things as the manner in which we speak to others are part of our daily choices.
Some have argued than man's nature is to be selfish. In order for a person to choose various alternatives on a daily basis, he or she must have a standard of values. The term "values" presupposes an answer to the question: of value to whom or for what? This is where an inborn selfishness might be considered: what is the end goal or purpose? Who is the perceived or intended beneficiary of the action: ourselves or others?
To be selfish is to be motivated by one's own self-interests. This concept can be applied to individuals or to companies. Insurance agents are often accused of self-interest, but companies are probably the most common target of such claims. For an individual or company to center on their own self-interests, they must have considered what constitutes their own self-interests and how to achieve it. Because a selfish person or company chooses their goals by the guidance of reason, it is hard to believe that selfishness is an accident (or a lack of training in the case of insurance salespeople).
Maintaining an ethical goal over the long-term is not always easy. Who among us would not enjoy an extra $50 even if it meant depriving the rightful owner? If our boss thought we were the one who did something wonderful, who would not like to take that credit, even if it belonged to someone else?
Being ethical can be very difficult when being unethical is sometimes more rewarding from a financial or public standpoint. The public standpoint is often overlooked. If we feel strongly about something that no one else seems to, it is very easy to keep quiet. In fact, that is precisely what gets followers into trouble. When a person knows something is not right, but no one else is saying anything, it is easy for the individual to simply go along with the group.
For example, Greg works for a very large insurance agency. Greg has always had very strong religious convictions and, as a young man, took much teasing from others regarding his so-called prudish outlook. Over the years Greg simply found that keeping quiet was easier. After all, he reasoned, as long as he personally held his moral ground, what others did was their own business.
Mike is an agent working for the same agency as Greg. As time went by Greg found mounting evidence that Mike was "clean sheeting" his applications. One day in the field Greg ran across one of Mike's clients. She was an elderly woman who obviously had some mental disorder, probably dementia. She could not remember simple things and was under a doctor's care.
Back at the office, Greg asked Mike how he ever got her on that policy, which was issued only six months previously. "I would not have even attempted it, given her medical situation," stated Greg.
Mike replied "I simply stated what she told me. If she didn't say it, I didn't write it."
On two other occasions, Greg found similar circumstances in Mike's business. Greg voiced his concern to Mike: "You know those people won't be covered if something comes up. The company will simply rescind their policy."
Mike: "You worry too much."
It became obvious to Greg that Mike did not intend to change his practices.
Since Greg is not involved and is behaving in a way that he perceives to be ethical personally, does he have any moral obligation to Mike’s clients? Since Greg considers Mike to be a casual friend, does he have more obligation towards Mike or Mike's clients?
Greg was concerned about the clients so he eventually went to his manager with his findings. The company's manager told Greg that it was not his concern as did several other coworkers. In fact, most people that he talked to within the company seemed to be viewing Greg as a potential troublemaker. Greg had heard about "whistle-blowers" and he knew he could be putting himself in a precarious position with the company if he became too vocal.
Are Greg's concerns important when no one else, including the insurance agency, really seems to care? Is it the management's responsibility (rather than Greg's) to mandate ethics? Greg should document everything to protect himself, including the date and time that he notified his manager, but beyond that does he have a moral duty to go above his manager’s head?
On the surface it would be easy to say that right is right no matter what. It is likely that most people would, however, suggest a different course for others than they would suggest for themselves. Studies have shown that people are more likely to voice ethical behavior than follow it.
The truth is, our identity is established by our actions (a liar is known for his lies; a thief is known for his stealing, etcetera). A common pitfall to proclaiming ethics, but not following them, is that an identity is established. When we allow ourselves to be defined by whatever we happen to fall into, that in itself is an ethical choice. Who we are is established by what we do and even by what we do not do.
On the other hand, if Greg is doing well financially at the agency, supporting his family and making contributions to his church, would jeopardizing his job be unethical since he might not be able to continue supporting them as he now can? Does he owe more to his family than he does to the agency’s clients?
Sometimes an individual steps into the national light because what they do is so exceptional, even if not always popular. For example, during the Boston riots in April 2015 a mother was seen pulling her teenage son from the riot that he was participating in. While this had to be an embarrassment for her son and a physical risk to her for getting in the middle of the riot, she had a strong sense of ethical conduct and refused to allow her son to violate it. Her extraordinary actions became national news, even though some of the rioters probably strongly disagreed with her ethical stance.
Who we become is a gradual thing. Seldom are we formed by one single experience although one single experience, if great enough, can change our direction or focus in life. Our "becoming" is a gradual and natural thing. So gradual that people seldom notice what is happening themselves. Without even realizing it individuals form a pattern of behavior, which ends up being the ultimate basis by which he or she is judged. Whether one agrees or not with the mother who pulled her son out of the riot, most people will admire her for the convictions she displayed.
America's values seem to be changing over the generations. We have become a nation of buyers where we were once a nation of savers. Immediate pleasure is promoted in numerous advertisements, promoting personal satisfaction now instead of financial safety tomorrow. In some ways, this attitude is a natural thing. Most people would rather have something now; retirement seems far away. Without a system of personal values favoring responsibility, individuals may come to feel that society owes them a comfortable living in retirement. This rationalization allows them to spend recklessly today without worrying about tomorrow. Self-discipline and self-control have given way to self-fulfillment and material consumption. This not only applies to individuals; businesses have also fallen prey to material consumption in the past. Material consumption can often be translated into one general word: greed. Too often material consumption is the desire for more today without regard for the financial needs of tomorrow.
Keeping a company on an ethical track takes time and is often hard work, but it is possible to achieve success while building an ethical business. When success in the workplace requires compromises in ethics and values that often means that the individuals involved are allowing their employees (for businesses), employer, or coworkers (for workers) to define who we are rather than defining that role for ourselves. There is a song that states "You've got to stand for something, or you'll fall for anything." There is a great deal of truth in that lyric.
Speakers at sales meetings sometimes say that sales people are, in some ways, actors and actresses. The same, of course, may be said for many people. Each of us generally desires to be accepted by those around us. In view of this desire, we tend to put on the "front" that we feel will be accepted by those in our company. Even such things as politeness may, in some ways, be described as "acting."
In Arthur Miller's famous play, Death of a Salesman, the main character, Willie Loman, believes that the secret of success lies in the salesman's personality. This might involve many aspects of the personality, but it comes down once again to acting. Being the person the prospective buyer wants the salesman to be. If the buyer loves children, then the salesman loves children; if the buyer would like to travel, then the salesman either has traveled or wants to travel also. Common ground, we are told, is vital to the sale.
Becoming an actor or actress, especially in sales, can be a dangerous game to play. Sooner or later, it is likely that the salesperson's true identity will be exposed. The woman who tells the elderly client that she loves cats, too, will be caught smacking at the cat that attempts to climb on her lap. The man who weaves a tall tale about his traveling experiences will say something that proves him to be a liar. Sooner or later, chances are that we will blow our cover. It is simply too difficult to keep what was told to who straight. This is especially true in small towns where your clients often know each other and compare notes. Attempts to conceal an individual’s true nature will eventually become exposed. As the Bible says, sooner or later who we are "will be declared from the rooftops."
It is never too late to begin acting ethically. In fact, John Newton, the man who wrote one of our most famous songs, was the captain of a slave ship. As he came to realize that slavery was wrong, he used his experiences to bring this same understanding to many others. The song written by John Newton was Amazing Grace. Knowing this, the words of the song gain greater meaning:
Amazing grace, how sweet the sound
That saved a wretch like me.
I once was lost
But now I'm found,
Was blind, but now I see.
Of course, the most important reason to be ethical is not hard to understand: we are a reflection of our lives, our work, our families, our community and ourselves. Our children will copy us (that can be hard to believe during their teenage years), our families and our communities will be affected by our actions and we, ourselves, must live with who we were yesterday, are today and could be tomorrow. In fact, those around us, including our coworkers, are affected by our values (ethics).
Just as followers may follow the cheater, they may also follow ethical behavior. When a person is favorably defined as having character, it means he or she is someone others are proud of; it will show in the individual’s daily behavior, including their work. Receiving praise or recognition of work performance brings self-assurance, benefiting the individual in many ways. Personal integrity radiates confidence and everyone prefers to deal with people who seem confident.
A few years ago, the Howard Fischer Associates (one of New York's top executive search firms) conducted a survey of CEOs of the top one hundred companies in the New York area. They were looking for traits that are most valued by business leaders.
Of course honesty and fairness were ranked at the very top. These are the other character traits that were listed:
Never compromise on matters of principle nor standards of excellence, even on minor issues.
Be persistent and never give up.
Have a vision of where you are going and communicate it often.
Know what you stand for, set high standards, and don't be afraid to take on tough problems despite the risks.
Spend less time managing and more time leading. Lead by example.
Bring out the best in others. Hire the best people you can find, then delegate authority and responsibility, but stay in touch.
Have confidence in yourself and in those around you, and trust others.
Accept blame for failures and credit others with success. Possess integrity and personal courage.
Everyone seems to have an opinion on achieving financial and business success. Whether that advice is accurate or not it is wise to consider what the purpose of the advice is. Some individuals giving advice may have ulterior motives whether it is to sell a book or bring in an expanded sales force. So often individuals lose track of their true goals (such as rearing happy children, writing a book, or saving for retirement) and become side-tracked with making a living in a manner that makes their boss, spouse, or coworkers happy. When an individual loses track of his or her own goals, he or she might become a follower rather than thinking for themselves. For business owners, which includes many self-employed insurance agents, it is easy to become consumed by the next presentation. While it is certainly necessary to be searching for the next sale for financial reasons, that aspect of life cannot be allowed to override values.
Motivational speakers might be concentrating on goals that are actually secondary to his or her listener’s main desires. Yes, everyone probably wants to make a decent income for the benefit of their family and their future. However, there may be many more goals outside of that.
In an effort to become the super-salespeople that the company, agency or management staff promotes, people might embrace a variety of tools, including optimum time usage, aggressive sales techniques, team playing, or reward imagery. Certainly all of these tools might have advantages when properly utilized. Each method has its place in the business and sales world. Often each method that is promoted contains a certain amount of useful advice because they contain certain truths. That is precisely why these books tend to sell well. Even so, these methods, whatever they may be, also have their limitations.
Experienced agents realize that there are no sales techniques that override ethical conduct. Consumers expect professionalism and honesty. Neither of those qualities should ever be omitted from a sales presentation. Agents have complained that there seems to be something missing from many sales techniques; in some cases that might be because the reasons the products are valuable have not been addressed. Why do agents sell insurance? Certainly one reason is to earn an income, but the product’s value must also be considered. Agents who understand their products understand where they benefit clients and also when they would not. The product sold must meet the consumer’s goal. When agents do not appropriately understand their products it would be difficult to produce positive results; they have missed the reason for doing their job. When agents understand the reasons a superior job benefits others, then they can also understand and accept that ethics or values compliments selling insurance. When there is no understanding of the value of properly placed insurance products, selling agents may not realize that they are performing a valuable service. When an agent understands the role they are playing in another's life, the satisfaction gained goes hand-in-hand with ethical behavior. Clearly defined goals and purposes are essential if people are to understand what their lives in general and their work in particular are really all about.
It seems that psychology is the current rage in selling. While it may give an air of being scientific, often the "psychology" listed is more apt to resemble manipulation. When such techniques are encouraged by their employer, individual employees may feel inadequate to challenge the validity of them. This may especially be true if the concerned salesperson is not the star of the agency. Often, an individual may feel that his or her job is not secure enough to question the techniques being pushed on them by their employer. Or, if the salesperson is not the super-producer of that agency, they may simply feel that they have not earned the right to speak out. In actuality, ethics belong to everyone, not just the superstars of sales.
Salespeople are often told that merely feeling good about themselves will accomplish much in the sales field. There is validity to the concept that self-worth is tied to many of life’s successes and low self-esteem may be tied to under-achieving. However, high self-esteem in itself will not accomplish anything; it takes much more than that. Self-esteem is important to have for many reasons, but it is not likely to insure economic success unless the individual also realizes the other factors that are necessary.
It has become commonplace for insurance companies and other industries to reward their salespeople with prizes, plaques and medals for selling their products. Many companies believe their employees will respond favorably to public praise and it is important to recognize exceptional people. We all need validation for what has been accomplished, but without an ethical base recognition is not likely to produce the superstars the company hopes for. Agents certainly realize that their sales produce financial rewards for the agency and insurers. When public praise is only about the contracts sold without any regard for how they were sold, agents are not deceived about the reasons praise is given.
If agents believe praise comes only from the quantity of sales rather than the quality of sales, it can cause problems. Employees may begin to do their work for the wrong reasons. Their "ethical compass" may become misdirected. When self-esteem is tied to financial rewards, the reasons for the work performed can become lost. Of course, financial rewards are essential, but when ethical behavior is not tied into those financial rewards, many negative circumstances can develop.
Totally fulfilling work probably does not exist. For many people, commissioned sales are something to be feared. It is probably safe to say that some amount of high self-esteem must exist in order to enter the commissioned sales field. A person must feel they can succeed even to enter into such work. This brings us to another area of ethics: recruitment.
Nearly every insurance agent has, at some time or another, had a company representative promise the world. The majority of Americans do not enter commissioned sales. There must be a reason. If financial success were so easy, everyone would be doing it.
Promotional selling is part fact and part showmanship, it has been said. The man at the Costco store demonstrating kitchen appliances promotes the best qualities of the product, not the disadvantages of it. The Ford dealer is not likely to quote which vehicle models recently had recalls for safety issues. Imagine a new car salesman saying: "Oh, sure, the car looks great now, but it won't in a few years. Five years from now you'll be glad to just get rid of the car."
Insurance products are the most legislated industry in America, yet we would not expect a licensee to tell their client “This insurer pays great commissions.” Insurance is heavily legislated because it affects the buyer’s future financial stability. When an annuity is purchased to help cushion retirement against poverty we must be able to believe that the money will be there when retirement arrives. That is why licensees consider the financial stability of the life insurance company when recommending an annuity product. It would be unethical to recommend an insurer on the brink of collapse.
It is common for agents to say that they would never have gotten into the business if they had known everything. Even so, now that they are in the business, they enjoy the work. There are many aspects of commissioned sales that can scare a person out of ever entering it. Should these aspects be discussed with new recruits? There are no easy answers to these questions. It is safe to say, however, that overstating the benefits in commissioned sales is commonplace. Promoters often feel it is necessary to promise the old "chandelier in the barn" fabrication in order to bring in new salespeople.
Few, if any, jobs are totally satisfying. Certainly it is desirable to find fulfilling work, but most occupations are a mixture of fun and drudgery. In other words, there are times when the job seems extremely fulfilling and there are other times when the job seems absolutely terrible. Even fields of work that seem to be glamorous to others generally carry with them a certain amount of negatives. Even jobs that promise excitement carry stretches of boring mundane tasks.
Promotional advertising is all around us. As viewers of this, we must be aware that glamour and excitement also carries simple hard work and frustration. Look at the ads for joining the armed forces. These ads show handsome men flying planes or jets, standing on the decks of mighty ships, or visiting exotic foreign places. They do not show kitchen duty, strenuous marches, or other mundane tasks.
Advertisements for smoking came under fire for one-sided promotional activity. The public felt that cigarette companies, and eventually alcohol companies as well, should not show smoking or drinking as glamorous or exciting. The rugged cowboy who always lit up a cigarette now has cancer. Alcohol companies show young beautiful people drinking, laughing and having a good time; they do not show the car accidents caused by drunk drivers or the babies born to alcoholic mothers.
As a result of legislated requirements, we now have advertisements for pharmaceutical products that speed-talk through potential side effects. We have agents trying to explain all limitations beyond what consumers are able to absorb and getting signatures on multiple disclaimers. We are seeing advertisements from attorneys seeking clients to join class action lawsuits for every disappointing result from investments, physical or mental distress from medical procedures or drugs that were taken, and for life’s disasters that are no longer considered a life risk (it must be someone’s fault).
This is life in the fast lane.
End of Chapter 5
United Insurance Educators, Inc.