Ethical theories

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Companies and business leaders around the world are constantly faced with a predicament of ensuring that their organizations and employees adhere to the scope of ethics and the nature of ethical obligations within their respective market industries.

The guiding and important underlying laws or assumptions required in a system of thought that supersede the choice of right from wrong are expressed and explained by ethical theories (Hartman & DesJardins 2010). For business leaders to be able to deal with any surprises and occurrences they need to be well acquainted with ethics and what it entails.

In this sense ethics refers to “well based principles of right and wrong that direct what we as humans ought to do, in terms of rights, obligations, benefits to society, equality, or particular merits. Ethical principles enjoin virtues of honesty, compassion, and loyalty” (Hartman 2006). Hence, ethical theories endeavor to be comprehensible and methodical enough to be able to provide answers to the most essential practical ethical questions.

In most circumstances ethical theories are the foundation for ethical principles and whenever actions are being defended upon, by business people it is common to find the principles and not the theories appealing. There are several theories that include: deontology, utilitarianism, casuist, virtue, kantianism, aristotelianism, consequentialism among others (Hartman & DesJardins 2010).

In the case of MetaLife, a life insurance company, it is prudent for them not to try and justify the allegations by offering excuses but to come out and offer corrective measures, so as to assure their customers and stakeholders of their integrity. The insurance sector as a whole should adhere to the set down ethical codes of conduct as the deontological theory states.

According to this theory, obligations and duties should be conscientiously supported and followed by everybody when faced with an impasse (Hartman 2006).

It is quite evident that the employees in the sales division of MetaLife are not aware of the deontological theory of ethics. This is due to the negative exposure received by the company over its deceptive practices leading it to settle huge class actions law suits. Hiding and giving of excuses will not in any way help the public image of the company.

While the Kantian theory holds that ethics is choosing the right actions, the deontological theory asserts that human beings are controlled by definite strong ethical guidelines. According to Kantianism, it is MetaLife’s obligation to own up to its wrong and try and find ways of correcting the mess. Its employees have not been keen on observing the ethical code of conduct therefore the reason for the adverse negative image.

Approaching this issue, to admit or acknowledge something is wrong, whether grudgingly or with reluctance, is the first step to cleaning up the company’s image and work ethic. Secondly, tackling the responsible people for the mess will be the next step (Hartman & DesJardins 2010).

The company’s CEO should offer a sincere apology when on being interviewed, and promise to tackle the problem with no further delays. This results to a degree of trust being built between the company, clients, and stakeholders alike (Bowie 2002).

Ethical concepts are based on ethical principles and underscore diverse characteristics of an ethical predicament leading to the most ethically appropriate resolution according to the guiding principles contained in the ethical theory itself. Hartman (2006) notes, “People usually base their individual choice of ethical theory upon their life experiences”. In life many a time one is confronted with a dilemma, where they have to decide what is right or wrong.

Especially for business, it is a choice that has to be thought over carefully as it affects many groups at once (clients, the employees, employees, investors, stakeholders and customers). Often businesses opt for unethical choices as there are no immediate repercussions but they somehow tend to catch up with the decision maker, as is the case at MetaLife.

For the MetaLife Chief Executive Officer, before going for the interview one should ask himself these questions: if he has been able to truthfully identify the dilemma; how is he able to outline the problems facing the company if he was on the opposite side; when and how did these happen; to whom is he answerable and where his loyalty lies as an employee of the organization; what has led him to make the decision to take on the ethical route; are there any implications to the decision being intended; whether the decision is a long time solution or just to make short term solutions; and finally if he is sure, and confident with his decision.

Insurance is a vital component of life today and insurance professionals are a keystone to its effectiveness. However, they are constantly ignored to an extent where they resort to unethical measures to get recognition and get the work done. MetaLife‘s problems within the sales division can be attributed to this, where cases of unethical selling of services so as to get higher commissions by employees has been the case.

The CEO and management should take this as their obligation to find out what it is and rectify it before more class action suits are awarded against the company in future (Bowie 2002). Insurance agents are part and parcel of the company and industry as a whole (Trevino & Nelson 2010).

The agent meets the public every day, and the way an agent conducts his business leaves a lasting impression on clients and customers, and relates to the insurance industry as a whole.

MetaLife’s CEO after choosing to openly admit that there is a lack of stringent sales compliance procedures within the company and offer a public apology to customers, clients, investors, stakeholders and the company’s owners should during the interview guarantee that employees within the sales division and all insurance agents strictly adhere to the code of ethics and maintain high standards by equipping them with adequate and correct information and training.

Taking liability is a great act yet very difficult, as one does not know how the action will be received (Trevino & Nelson 2010; Bowie 2002).

Conclusion

Most companies especially within the insurance sector have opted to adopt ethics after realizing that it is all for their good. Unethical methods usually tend to be costly and taint a company’s image in the long-run at least. For instance, State Farm, a well renowned insurance and financial company provider worldwide, is still growing strong today despite being in the market since 1922.

One of its principles was to offer insurance to farmers at a lower cost since fewer of them could own cars and had much lesser accidents than city drivers. This just shows the impact of ethical principles guiding decision making. Instead of charging everyone the same premiums and making abnormal profits they opted to treat each different category of people as per their characteristics.

In this business, the insurance agent is the one who is in actual contact with a client and therefore should grasp the meaning and nature of the products they are selling, be able to evaluate a customer’s needs and preferences and be conversant with contractual requirements.

References

Bowie, N. (2002). The Blackwell guide to business ethics. Malden, MA: Wiley-Blackwell.

Hartman, L. & DesJardins, J. (2010). Business Ethics: Decision-Making for Personal Integrity & Social Responsibility. New York, NY: McGraw-Hill Companies,Inc.

Hartman, L. (2006). Perspectives in Business Ethics. New York, NY: Academic Internet Publ. Academic Internet Publ.

Trevino, L. & Nelson, K. (2010). Managing Business Ethics. Hoboken, NJ: John Wiley and Sons.

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