7. Ethics

Question 1

What is ethics?

Answer 1

• Governing right or wrong conduct, reflected explicitly in opinions, actions and behaviours.
• Closely related to culture, values and morals.

Question 2

What are ethical norms?

Answer 2

• Expectations or standards of behaviour in society
• Some are legally enforced, others simply concern treating people fairly and with respect

Question 3

What are ethical standards?

Answer 3

• Not always universal and can change over time;
  1. Society changes
  2. Social Trends
  3. Environmental context (war)

Question 4

What are the three main sources of ethical norms?

Answer 4

1. Ethical Universalism
2. Ethical Relativism
3. Ethics and Integrated Social Contracts Theory
   - 3 theories differ as to the extent to which ethical norms & standards are relevant across cultures, countries, industries or individual orgs; i.e., whether they are global or local, universal or specific.

Question 5

What quote explains what ethics is?

Answer 5

“Ethics is the application of general ethical principles to the actions and decisions of businesses and the conduct of their personnel” - Thompson, Strickland, Gamble, Peteraf, Janes & Sutton.

Question 6

Why is ethics important?

Answer 6

1. How organisation conduct themselves or how they should in their strategic approach.
2. General ethical principles - what is right & wrong?
3. Society & social norms tend to dictate what is acceptable behaviour in business practice, however can vary in different areas of industry, professions & countries; LOSS ADJUSTING - AVOID BRIBERY.

Question 7

For the loss adjusting industry managing ethical risk is very important and is likely to include;

Answer 7

1. Deal with conflicts of interest
2. Claims management
3. Confidentiality and disclosure of information
4. Beneficial interests

Question 8

For loss adjusters they must not only be ethical in practice but also?

Answer 8

Be seen to be conducting their business ethically by its key stakeholders, e.g integrity, fairness, objectivity, reputation, image etc.

Question 9

Who are the stakeholders?

Answer 9

1. Any groups or individuals who have a stake, interest in or expectation of an organisation, it’s activities, performance or it’s operations
2. Can be internal or external

Question 10

Is it possible to satisfy needs of all stakeholders?

Answer 10

No, prioritise most important stakeholders. Level of power stakeholders has to influence an organisation in a specific situation or strategic decision.

Question 11

Is it common for stakeholders to have conflicting interests or expectations?

Answer 11

Yes for example, the EU referendum

Question 11

Are customers stakeholders?

Answer 11

Most businesses value customers as one of the key stakeholders, therefore aspects such as customer service and good relationships are essential.

Question 12

Why have ethics become increasingly more important over recent years?

Answer 12

1. Increased stakeholder scrutiny (eg customers and media)
2. Increasing focus on CSR of organisations
3. Impact of communications/internet/social media
4. Highly publicised non-ethical behaviour of some large organisations (eg Enron).

Question 12

What industries have become a key focus on for ethical behaviours in recent years?

Answer 12

1. Accountancy
2. Insurance
3. Financial
4. Legal
5. Medical
6. Media

Question 13

Who has been given increased powers within the financial services industry and why?

Answer 13

• FCA to make organisations reform their practices, to fine them and to make them open to massive compensation claims and pay-outs.
  Because the financial services industry has been in the public spotlight