Business Ethics

Chapter 2

PUTTING THE PAST INTO THE FUTURE

  Each individual is a product of his or her past.  In some way, each of us has been affected by the past.  Even when society changes rapidly, current attitudes have their basis in the past.  Ethics are certainly a part of those attitudes.  Whether how we live today is a reflection of what we enjoyed or liked in the past or a rejection of what occurred in the past, we are still affected by it.  Perhaps it is impossible to understand current ethical considerations without having some understanding of the past and how it brought us to this point.

  Part of our desire to understand how we arrived at our current position stems from the availability of education.  The traditional values and ideology were generally sufficient in an unchanging society.  Today our society is rapidly changing and those changes have opened up education to the masses.  Education encourages questioning.  Is it any wonder that those nations, which kept slaves (including ours), did not allow education to the groups of people being enslaved?

  There is merit in looking at our past.  Higher levels of education naturally lend themselves to questioning.  It is probably this questioning that has brought about much of the change in America that has been beneficial.  Minority rights, women's rights, the rights of the disabled, plus many more groups have benefited from questioning current attitudes and even current laws.

  Ethics involves the questioning of why certain things are done or thought.  Socrates' student, Plato and later Plato's student, Aristotle, further developed Socrates' philosophy of ethics.  Some say that their thoughts on ethics was so profound and complete that nothing new has been said since Plato or Aristotle on this subject. 

 In the sixties, two major movements swept America: civil rights and antiwar sentiments.  Though primarily led by our youth, the movements were backed by the majority of our mainline churches and other organized groups.  Not all new movements have the backing of our churches.  A primary example of this is the current movement for the legal freedom to wed whomever one wishes.

  We have seen many changes in our current world, including new attitudes regarding the legal right to same-sex marriages, women’s rights and the rights of the disabled to enjoy the same standards that others receive. 

  Although the seventies saw an almost immediate decline in the revolution for change that does not mean that we have been unaware of what is around us.  Every day we are faced with starvation in many countries, energy problems, conflicts over environmental issues (jobs versus nature), inflation, run-a-way government spending and waste, high crime and drug problems, and most recently terrorism risk.  We have even experienced terrorist activities in the United States, something we never thought would happen.

  Much of the issues that America and her citizens have wrestled with are basically related to one issue: what is the right thing to do? Unfortunately the proposed answers to society’s concerns are sometimes slanted towards one group or another rather than considering what is right for every person

  As insurance representatives, we do not have the answers to the big problems, but we are often a mirror of what is going on in our neighborhoods.  If, as individuals, we are surrounded by people who are primarily concerned with themselves, it is likely that we will have that same attitude.  Therefore, if the agency in which a producer is trained stresses only sales without any other input, it is likely that he or she will lose sight of the role ethics plays in our personal and professional lives.  When ethical behavior is not deemed important by our immediate peers, it is not surprising that problems eventually materialize.

  Setting down our priorities determines our goals in life.  Ethics help us set goals that will bring about pride in ourselves and our achievements.  Regardless of our personal circumstances, it is always possible to have a moral code (a code of ethics).  Even those in dire circumstances have reported this.  Viktor Frankl, author of Man's Search for Meaning, discovered that even in the brutal confines of Auschwitz, a concentration camp, some people still chose to have a moral basis for their lives.

  It might be said that ethics are a recipe for living.  Our code of ethics gives each of us our personal rules and values, which determines the choices we make each day of our lives.  These choices affect not only ourselves but also everyone around us.  Some types of ethics tell us what not to do (it is wrong to steal, so we must not do so); others tell us what we ought to do (be kind to animals).  In addition, there are those ethics or morals that actually take us beyond the basics of moral obligations.  Mary Mahowald, a medical ethicist at the University of Chicago, called this added ethical stand virtues.  Virtues might be referred to as going beyond the call of duty.  It may also be referred to as moral excellence.  Such moral excellence includes those who have no legal or moral duty to another person, but goes to extremes to help the individual anyway.  It refers to the person who gives their life for a stranger or goes to other countries to work for people they do not know, even though there will be no financial reward or public acknowledgement.  Virtue is going beyond what we are obligated to do.

  Ethical behavior cannot be separated from an individual’s personal or professional life; it is part of everything an individual does and everything he or she says.  Ethics determine how we treat those we know and how we treat strangers.  Ethics determine our actions in financial and public matters.  Ethics belong in every profession and are especially needed in some.  Because ethics, as a subject, is so broad and complex, it may sometimes be divided into sections such as personal ethics, religious ethics, legal ethics, professional ethics, medical ethics, business ethics and so forth.  Ethical neutrality is not possible.  Rather, when ethical neutrality is stated by an individual, it might be a way of avoiding some particular issue. Perhaps the individual’s belief would not benefit or further their career, so he or she states neutrality rather than stand on a personal belief.

  In some situations individuals are supposed to be ethically neutral and keep their personal opinion or belief separate.  This might include judges, lawyers, and some types of medical professionals and sometimes even insurance professionals.  These individuals are in a position to hand down legal opinions or medical advice that must be kept neutral in order to fairly address the particular situation or advise on some financial issue that affects another person.

  Let us consider the following situation:

Andrew Agent’s mother needed nursing home care that financially wiped out his father’s savings and eventually required Andrew and his sister to contribute money to her care.  As a result of this experience Andrew Agent firmly believes that every individual after the age of fifty must buy nursing home insurance. He believes what happened in his family could happen in any family.

Andrew is invited to the home of a neighbor to discuss their various investments and offer alternatives or additions to their portfolio.  The neighbor, Carl Consumer, is 55 years old and plans to retire by age 60.  He wants to confirm that his various investments will be sufficient to cover living costs after retirement and into the coming years of retirement.

While looking at his various investments Andrew realizes that Carl does not own nursing home insurance, so he mentions it.  Andrew: “It appears that you do not have any long-term care insurance.  Am I correct?”

Carl: “If you mean insurance for the nursing home, no, my wife and I do not.  We discussed it once with an insurance agent but we felt it was too expensive since there is no direct evidence that we will ever need it.”

Andrew: “Yes, it can be expensive for a good policy but if the need arises the coverage more than pays for itself.”

Carl: “We’ve heard all the arguments for it but we simply don’t want to pay the price they charge for nursing home insurance.”

  It is clear to Andrew Agent that Carl Consumer knows about this type of coverage and does not agree with Andrew that it is a necessary part of retirement planning.  In this case, even though Andrew clearly believes it is necessary the client has already made up his mind.  Therefore, Andrew’s job is to try as much as he can to place enough assets in some type of account to cover the cost of long-term care if the need arises.  Even though he does not believe this is in the best interest of Carl Consumer, his personal opinion is not shared so he can only try to make the future as secure as he can for his client.

  In today's lawsuit prone society, the wise insurance agent or brokerage will make a point of following state regulations, but ethics actually goes beyond what is simply mandated by state or federal governments.  Ethics define the individual and even each business.  A man who tells constant lies is known to others as a "liar" (although studies show that 90 percent of us lie regularly).  A man who steals is known to others as a "thief."  An insurance agent who is unethical will also earn a reputation, one that he or she probably did not wish to earn.

Mandating Behavior

  It has been said that legal authorities may be able to mandate behavior, but not ethics.  Technically, this is probably correct.  A person who would like to steal may not do so because of the consequences such behavior brings, but that does not necessarily mean his code of ethics has changed.  Therefore, his behavior is controlled, but his ethics are not.  Although he does not steal, he would still like to.

  Controlling a person's behavior might eventually lead to an understanding of ethical behavior, but there is no certainty of that.  It is not unusual for an individual to become the person they pretend to be however.  A person who acts ethically, even if they do not desire to be, may eventually soak in the ethical behavior and adopt some of that potential.  In fact, since morality is about the way an individual lives, it is learned over his or her entire lifetime.  To think that a person who is not ethical today will never be ethical is simply wrong.  In fact, it could go the other way as well.  The person who is behaving ethically today may not do so tomorrow.  Even so, it seems to be true that most of our ethical behavior is learned during childhood and adolescence.  Perhaps that is why ethical parenthood is so vitally important in the eventual outcome of our children's lives.

  Children learn from what they see and hear.  Children tend to be very good at sensing adults as they really are.  Children also tend to imitate the behavior they see, especially if it is coming from the adults that are close to them, such as their parents and grandparents.  As a result, parents who set good moral or ethical examples are teaching their children to do the same.  Unfortunately the reverse is also true.  In homes where prejudice, racism, sexism and other immoral codes are practiced by the parents, children from those homes are very likely to act in the same manner.  Children learn from what they see, good or bad.  We have all heard adults say "Do as I say, not as I do."  The chances are, however, that their children will do as they do.

  It seems to be a popular notion that toughness is needed in the business world.  Ethics may be perceived as a quality that does not belong with toughness.  This is actually far from the truth.  As many religions will be quick to confirm, toughness is often a vital part of ethical behavior.  Children see this firsthand when peer pressure from a few individuals demean their ethical behavior with comments or outright bullying.  It takes a strong, tough child to withstand bullying tactics and continue with ethical behavior.

  To some degree, toughness is probably necessary to succeed in business.  The insurance salesperson that cannot take repeated rejection will not likely stay with the insurance industry.  At least not as a salesperson.

  Toughness that is coupled with a code of high ethics may not always experience smooth sailing, but it is likely that the combination will produce an atmosphere that promotes business and that is always desirable.  Toughness with ethics gives a passion for productivity and efficiency, along with the spirit of competition, all of which contributes to the traditional measures of economic success.

  America was founded on the beliefs of many people looking for a different and better life.  Those looking for freedom, religion, the right to work for themselves (rather than others), the right to own possessions and land, and the right to make their own decisions all came together to form America.  People came from many countries with varied backgrounds looking for the freedom our country represents.  America is not perfect but it is the best there is in many respects.

  Many Americans at least partially arrive at their code of ethics through their religion.  In fact, the Bible sets down many prescriptions for ethical behavior.  The Bible is probably the best known source of sound ethical advice.  Even so, not all have agreed with the concepts stated there.  Karl Marx, the father of communism, called religion the "opiate of the masses."  Even Sigmund Freud, the father of modern psychology, regarded organized religion as institutional "wish-fulfillment."

  As we stated, moral or ethical conduct is continually learned.  Susan Neiburg Terkel reported in her book titled Ethics, that when Mahatma Gandhi, India's beloved leader in the struggle for independence from England, was asked why he had changed his views over the course of a week, he explained, "Because I have learned something since last week."

  It is doubtful that any person is only good or only bad; each of us has shades of each.  We continue to learn as new ideas are presented and new experiences encountered.  Unfortunately, if we have been poorly educated on ethical conduct, we might be faced not only with leaning the basics of ethical behavior, but unlearning bad conduct as well.

  Ethics are not always just a matter of how an individual thinks and acts.  Often it is also a matter of character.  So many things come together to form a person’s character that all must be taken into consideration: values, principles, emotions, plus many other factors that contribute to the total person.

  There is little doubt that each person is influenced by others.  Even so, each individual must take personal responsibility for their choices in life.  Each of us has the ability to build, change, or destroy our own character.  Part of our character is, of course, our ethical guidelines.

  No single act defines an individual’s character, since there are many factors involved.  Each of us has likely participated in an act that was wrong.  That one action does not define our total character just as one kind act does not build our entire character.  Character is more a matter of adding and subtracting our actions and thoughts.  A good person can do something unkind, yet still be a good person.  A bad person can do something kind for another and yet remain unethical in general due to their acts and beliefs.  We refer to these isolated deeds as being "out of character."  An action that is not consistent with one's normal behavior is not likely to form or change the character of a person (although that single action can affect another in either a positive or negative fashion).

End of Chapter 2

United Insurance Educators, Inc.