Transcript CPCU Ethics Quarry Oaks Golf Course

Business Ethics
“Doing the Right thing, and
Making the Good Life Better”
Overview of Ethics
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What is Business Ethics?
Some moral theories
Moral Development
Professional Standards/Industry
Paradigms
Moral Decision Making
Specific Cases
Vocabulary: “Business Ethics”
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What is “Business” ?
What is “Ethics” ?
Business is inherently social
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Business has its own culture
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Business Transforms Culture
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Enron, Paypal, your office
Mutual of Omaha, FNB, community outreach
Business is about relationships
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Insurance business is about relationships
Business: Its purpose/goal
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Lone Ranger/I am an Island View:
The purpose of business is to make me
money, and increase stockholder value
(Milton Friedman)
Alternate Stakeholder View:
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Business should make money, but it has many
stakeholders– groups/individuals who have a stake in
what the business does. Owners are not the only
one’s with a stake (Freeman)
Your business makes the world
Better or Worse for people by:
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The way you
The way you
coworkers
The way you
The way you
community
treat your customers
treat your employees or
treat your boss/company
contribute to the local
Responsibilities in Business:
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To your employer
To Customers
To employees
To boss/es
To your community
To your family
To your God
The challenge:
Balancing Responsibilities
What is ethics?
“Ethics” isn’t “legal”
Difference between the Law and Ethics:
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Some legal issues are neither ethical or
unethical.
Some ethical issues have no laws to support
them.
Law often tries to encourage ethical behavior:
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Federal Sentencing Guidelines
Sarbanes-Oxley Act (SOX)
Better to have self-regulation than more gov’t
regulations
Many think Ethics is just about
what to NOT do: “Don’t do __!!”
But ethics is more than just
what not to do
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Minimal: What we shouldn’t do
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Better: What we should do (justice)
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Don’t steal, don’t kill, don’t lie
Be fair, Be honest, Fulfill duties, work hard
Best: What we could do to make things
excellent for all of us…
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Mutual of Omaha Project, Real Estate
Business can help create an
excellent life
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Example of this mindset: Midland National
Life insurance mission:
"To make life better for individuals and families…
to afford security, trust, superior value, and
peace of mind to those we serve… to offer the
best in financial resources and services.“
How does Business make life
better? Table discussion (5 min)
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How do you make life better for your
community through your business?
What are positive things you do for the
benefit of the many through your work?
Do you see these things you do for others as
being ethical?
The Point is: Realize the
good you do in society!
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Businesses do have an effect on
society and culture. Business is not
just about making money.
Moral Psychology
WHY DO PEOPLE
DO WRONG
THINGS?
Question: Why do Soccer mom’s
sometimes drive like jerks?
Question: Why do people forge
signatures and documents?
Why do people stretch or edit
the truth, or exaggerate?
Moral Development: Why do
people do unethical things?
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Why did the soccer mom drive like a
jerk?
Why did my student cheat on the
exam?
Why did people at Enron do unethical
things?
Why do insurance professionals cut
corners?
Some reasons people do wrong:
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Ignorant
In a hurry
Thoughtless
Didn’t plan ahead
Financial difficulties
Pressure from organization
Not clear communication from management
Lazy
Want a quick buck
They are a Bad evil wicked person
More Moral Psychology:
WHY DO PEOPLE
DO THE RIGHT
THINGS?
Kohlberg’s theory of moral
development
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Stage
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Obedience and Punishment
For self-benefit
For sake of reputation (good boy)
Maintain Social order
Contractual-Legalistic orientation
Conscience/Principle Orientation
moral dilemma
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In Europe, a woman was near death from a special kind of cancer.
There was one drug that the doctors thought might save her. It was a
form of radium that a druggist in the same town had recently
discovered. the drug was expensive to make, but the druggist was
charging ten times what the drug cost him to make. He paid $400 for
the radium and charged $4,000 for a small dose of the drug. The sick
woman's husband, Heinz, went to everyone he knew to borrow the
money and tried every legal means, but he could only get together
about $2,000, which is half of what it cost. He told the druggist that his
wife was dying, and asked him to sell it cheaper or let him pay later.
But the druggist said, "No, I discovered the drug and I'm going to
make money from if." So, having tried every legal means, Heinz gets
desperate and considers breaking into the man's store to steal the drug
for his wife.
Kohlberg’s theory of moral
development
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Stage
Stage
Stage
Stage
Stage
Stage
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2:
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6:
Obedience and Punishment
For self-benefit
For sake of reputation (good boy)
Maintain Social order
Contractual-Legalistic orientation
Conscience/Principle Orientation
Part 2: Ethical Principles,
and how to use them
Brief explanation of the 5 classic
ethical theories:
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Egoism:
Social Contract Theory
Utilitarianism
Duty-Based
Virtue Ethics
Egoism
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People should always do what is in their
own self-interest.
(ex: do what it takes to get repeat business)
Social Contract Theory
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Make concessions to others, but try to
get what you can
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Obey the law, respect others because you want
to be respected, etc
When driving, slow down near other schools,
not just your own kid’s school
Utilitarian:Outcome-Based
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Do what benefits the greatest number the
most
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Jump on the grenade if it benefits the most.
Do what is right if it will make for a better
society in the long run, even if you could have
short term maximization right now
I can save my client on this insurance premium
by under-reporting risks, but in the long run
this will cause the insurance company and
other clients to be at considerable risk.
We can lose our moral
conscience and concern!
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“Capacity for the nobler feeling is in most
natures a very tender plant, easily killed, not
only by hostile influences, but by mere want
of sustenance; and in the majority of young
persons it speedily dies away if the
occupations to which their position in life has
devoted them, and the society into which it
has thrown them, are not favourable to
keeping that higher capacity in exercise.”
John Stuart Mill:
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“Men lose their high aspirations as they lose
their intellectual tastes, because they have
not time or opportunity for indulging them;
and they addict themselves to inferior
pleasures, not because they deliberately
prefer them, but because they are either the
only ones to which they have access, or the
only ones which they are any longer capable
of enjoying.”
Principle/Duty-Based:
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Only act in a way that you could make your
act a universal law
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Should I lie? Would I make lying a universal
law? No. Then don’t lie!
Should I cheat on my taxes? Would I want
everyone to do that? No. Then don’t!
Principle #2
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Treat others always as an end, not as a
means to an end.
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Don’t treat checkout person as humanoid ATM
Don’t treat other drivers as obstacles in your
path
Don’t treat customer as a just a means to
money
Virtue Ethics/Nebraska
Ethics
What is the GOOD life,
and how do we achieve that?
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Aim for excellence
Moderation/Balance
-- Vice
Virtue
++Vice
(Too little)
(just right)
(too much)
Coward
Courage
Foolhardy
Being Virtuous:
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Does depend on the situation
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Does depend on the individual
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Child ‘Maestro’
Is something we must constantly strive
to upkeep, work at
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When to be witty
We can lose our touch!
It helps to have roll models: WWJD?
Virtues
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Honesty
Integrity
Responsibility
Respect/Caring
Truthfulness
Moral Principles for Living
and Working
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Banker Friend: “look in the mirror rule”
Showgirl from Las Vegas: Grandma rule
Golden Rule: do unto others…
Silver Rule: do no harm…
What rules do you use?....
Guiding Questions
Questions to help decide if the
situation or decision has ethical
dimensions
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Is it legal but unethical?
Is it necessary?
Does it involve a core ethical principle
such as honesty, integrity, truthfulness,
etc.?
Guiding Questions: Info
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Information gathering questions
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Who are the stakeholders and what are
their rights?
Consider the source, reliability, and
accuracy of all relevant information.
Who should be involved in this decision?
Do I have enough information to make a
sound ethical decision? If not, how do I
get it?
Guiding Questions: Options
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Questions to help identify and evaluate
alternatives
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Am I rationalizing to justify what I want to do?
Am I using anyone for my own personal gain?
(Who will be injured and how)
Are there conflicting loyalties to stakeholders?
What would result in the long run if everyone did
this?
Guiding Questions: Conclusion
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Questions that help in reaching a decision
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Could I defend my position before the Board of
Directors, the CEO, or the media?
What would ______________________ do? (Fill
in the name of the best role model you know.)
Will this seem to be the right decision a year from
now? Five years from mow?
Do I have the moral courage to take the more
ethical course of action? (Am I willing to pay the
price for my convictions?)
Case: Simple situation
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In discussing a premium quote with a
customer, you ask them to remind you
how far they drive to work each way.
“20 miles”, they say. “Oh, I put down
5-- I’d better change that”, you say.
The client says, “No, lets just leave it”.
How do you handle this?
Final Thoughts
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Usually, doing the right thing is clear,
even if its not easy
We tend to cut corners for short-term
apparently inconsequential issues, but
this can come back to haunt us
Having Ethical Habits takes practice,
and some thoughtfulness.
Summary:
What have we covered?
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What is Business Ethics?
Some moral theories
Moral Development
Moral Decision Making
The End