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SM 0381 Applied Business Ethics

Part A Ethical Dilemma Essay

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Part A Ethical Dilemma Essay Applied Business Ethics (SM 0381)

Ethical Dilemma Essay

Salesmanship is principally involved in my career and unavoidably ethical dilemmas ensue.


Amongst the countless ethical dilemmas encountered, the most confounding occurrence was
during my stint as a broker with a financial brokerage firm. I was appointed to a team with a direct
manager who was also one of the firms top brokers and assigned a sales target of $90,000 within
my initial 3 months of tenure as a form of quid pro quo for the fees relating to mentoring and
licensing requirements.

Being an amateur who lacked experience and credibility in financial brokering was challenging as
many clients preferred experienced brokers, concurring with Goetz, Tombs & Hampton (2005).
Furthermore, with the financial industrys rapid growth in the recent years (LIA Singapore, 2015)
has led firms to continually hire brokers in frequent spurts, translating into higher levels of
competition for a clients share of wallet from both within the firm and external rivals. With the
aforesaid dynamics, I was cognizant that I could be potentially compromised ethically for I had
contractual duties to fulfil or risked having to compensate the firm. However, I reinforced my
decision to join the profession with three intrinsic values to uphold ab initio: 1) to equitably
recommend portfolios, 2) thrive in a finance-related profession, and of course 3) to be well-
rewarded monetarily, illustrating ethics of virtue as defined by Beauchamp & Childress as as a
trait of character that is socially valued, and a moral virtue is a trait that is morally valued (p. 63).

Despite being able to pitch portfolios that I deem fit for clients; as a novice I was under the
managers tutelage and was to consult and attain his approval before pitching. Even for
experienced brokers within the team whom decide to deviate from his preferred choice of
portfolios, written explanations and justifications had to be provided. Given his proven results and
influence in the firm, we paid heed and highly valued his guidance on the assumption that
fundamental integrity was intact per the firms vision. Till this point, my career transition into the
finance industry appeared to be in alignment with my personal goals and values.

As I gradually comprehended the intricacies of financial products with ample knowledge to broker
autonomously, I soon realised that his direction were many times unjustifiable given the
parameters as there were more suitable options (and often more economical) that could have
been pitched. It was also noticeably biased towards certain institutions which coincidentally offered
fringe benefits or higher commissions. As I tried to seek internal discussion channels on this issue
which were virtually impossible, I observed that my fellow brokers practising similar fashions and
concurring with McDevitt, Giapponi, & Tromley (2007) for if the manager or an authority figure
approves of such practices, the members of the team will condone so and follow suit. This
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Part A Ethical Dilemma Essay Applied Business Ethics (SM 0381)

evoked ethical sensitivity as a financial practitioner (Jackling, Cooper, Leung & Dellaportas, 2007)
especially when clients entrusted us to act in good faith in managing their finances, resulting in
an ethical dilemma of an acceptance in recommending skewed portfolios for maximum benefits or
upholding client-first objectivity.

Seeking neutral opinions, I spoke anonymously with external veterans and comprehended that
such practices were common within the industry albeit unethical. I was cautioned that my claims
against the teams brokering practices and its legitimacy were debatable despite it infringing
professional codes of conduct. There were also potential legal implications on myself should I
choose to whistle blow as I was the acting broker whose signature was on the brokered contracts,
in addition to risking employment termination and contractual liabilities. Without firm evidence and
agreeing with Jubb (1999), I mulled over whistleblowing intentions and ceased probing as I felt
that I would be perceived as disrespectful to doubt a mentors ethics. I was also seeking to
advance to a managerial position and needed his positive reference to progress as well as build
rapport with other brokers for they appear to approve such practices under his leadership, forming
such an organisational and culture norm. At the same time, I was aware that the managers receive
a cut from brokers transacted contracts as a form of managerial incentive. Alongside industry
practice of a commission-based remuneration structure, capitalising on attractive reward
influences coincided with Kerr (1975) stating that most workers seek information concerning what
activities are rewarded, and then seek to do (or at least pretend to do) those things, often to the
virtual exclusion of activities not rewarded. The extent to which this occurs of course will depend
on the perceived attractiveness of the rewards offered (p. 7).

Between personal values, contextual factors and stakeholders which served as affecting sources
of ethical behaviour (James Jr, 2000), moral intensity surfaced. Moral intensity characterises the
level of issue-related moral imperative in a situation (Jones, 1991). I identify more with Barnetts
(2001) definition of magnitude of consequences: the degree of harm an individual believes will
result from a given action. It differs slightly but consistent with Jones (1991), focusing on the
severity of negative consequences for it was either sacrificing my personal beliefs or career with
negligible positive outcomes either way. In my scenario, the arising negative consequences varied
from implicating legal issues with hindered career opportunities as the most severe while the
losing of trust and business of a client as the least severe (malpractice upon discoverey). In terms
of proximity, the majority of my clients were personal friends whom I had known for many years
and could be considered as high social proximity (Jones, 1991) and therefore, a strong moral
intensity in revealing the truth whereas it is categorised as physical proximity for the manager who
could make an impact on my career, be it for better or worse. With social consensus, there was a
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Part A Ethical Dilemma Essay Applied Business Ethics (SM 0381)

strong degree of agreement which existed and agreed by fellow brokers, the manager and even
external parties that such practices were perceived as the norm, decreasing moral intensity. The
final dimension that I would apply to describe moral intensity is concentration of effect. Should I
choose to whistle blow, it would adversely affect the firms reputation and undoubtedly affect many
parties in the process, ranging from the manager and the firms management, as well as the team
members and myself, thereby increasing moral intensity.

There are various approaches and solutions in regards to the dilemma. Through consequentialist
theories, I can adopt an egoistic approach by promoting my long term interests such as career,
remuneration, reputation as an employee, future employability etc. as the moral thing to do
(Longenecker, McKinney & Moore, 1989) while maintaining silent about the advisory misconduct
in practice and putting aside the interests of the client; achieving my prima facie objective
(monetary) of joining the profession. Although this solution emphasises my personal interests, it
also attracts a minimal probability of putting me in a threatening position should there be a
whistleblowing case (other than myself) in the future, implicating myself in the process.

With a utilitarian approach (Lahdesmaki, 2005) which upholds an act by means of producing the
greatest net benefits or the lowest net costs for the majority; I would shelve my personal interest
and whistle blow on the malpractice while communicating the truth to clients. This would on one
hand be able to preserve my professional reputation and maintain my friendships with the clients
whom are my personal friends to begin with.

Using non-consequentialist theories, deontological ethics or ethics of duty approach is based on


concepts of duty and rights that can be demonstrated by reason alone and independent of
experience (Micewski & Troy, 2007). However, owing due to the unique situation which I had
unknowingly breached the experience, I propose to extend the usage of approach at post
dilemma discovery by insisting to the firms management in recommending the most suitable
portfolios instead of those per the managers advice, going against the managers direction and
risking personal career progress. As brokers, we had a principal duty to provide proper advice to
clients thereby exhibiting a form of ethics of duty.

In view of the circumstances and personal values, it is my opinion that either way on
whistleblowing attracts possible repercussions of differing severity. I place value on personal
integrity and the trusting relationships built between my friends and/or clients with me over other
topics and am predisposed to bring this matter to the attention of the relevant regulatory bodies
while resigning from the firm to limit my personal, moral, ethical and legal liabilities in achieving
fairness for current and future clients with an altruistic stand on shedding light on such practices.
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Part A Ethical Dilemma Essay Applied Business Ethics (SM 0381)

References

Barnett, T. (2001). Dimensions of moral intensity and ethical decision making: An empirical
study. Journal of Applied Social Psychology, 31(5), 1038-1057.
Beauchamp, T. L., & Childress, J. F. (2001). Principles of biomedical ethics. Oxford university
press.
Goetz, J. W., Tombs, J. W., & Hampton, V. L. (2005). Easing college students' transition into
the financial planning profession. FINANCIAL SERVICES REVIEW-GREENWICH-, 14(3), 231.
Jackling, B., Cooper, B. J., Leung, P., & Dellaportas, S. (2007). Professional accounting
bodies' perceptions of ethical issues, causes of ethical failure and ethics education. Managerial
Auditing Journal, 22(9), 928-944.
James Jr, H. S. (2000). Reinforcing ethical decision making through organizational structure.
Journal of Business Ethics, 28(1), 43-58.
Jones, T. M. (1991). Ethical decision making by individuals in organizations: An issue-
contingent model. Academy of management review, 16(2), 366-395.
Jubb, P. B. (1999). Whistleblowing: A restrictive definition and interpretation. Journal of
Business Ethics, 21(1), 77-94.
Kerr, S. (1975). On the folly of rewarding A, while hoping for B. Academy of Management
journal, 18(4), 769-783.
Lahdesmaki, M. (2005). When ethics mattersinterpreting the ethical discourse of small nature-
based entrepreneurs. Journal of Business Ethics, 61(1), 55-68.
Life insurance industry achieves robust performance in 2014. (2015, February 6). Retrieved
July 25, 2015, from http://www.lia.org.sg/node/4082
Longenecker, J. G., McKinney, J. A., & Moore, C. W. (1989). Egoism and independence:
Entrepreneurial ethics. Organizational Dynamics, 16(3), 64-72
McDevitt, R., Giapponi, C., & Tromley, C. (2007). A model of ethical decision making: The
integration of process and content. Journal of Business Ethics, 73(2), 219-229.
Micewski, E. R., & Troy, C. (2007). Business ethicsdeontologically revisited. Journal of
Business Ethics, 72(1), 17-25.

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