East Coast Insurance Company - Case Study Example

East Coast Insurance Company Introduction Insurance business in health care, when gets coupled with federal contracts, bores greater ethical and moral responsibilities. The dictums and rules that govern the day-to-day operations of businesses fall harder on insurance professionals and managers. The present case study is an apparent example of establishing ethics in the workplace of an insurance company, amidst reorganization and chalking out plans to provide solutions to their problems. Ethics defined Ethics, put in simple words, is “the study of individual and collective moral awareness, judgment, character and conduct”. (Petrick & Quinn 1997, p. 42). Expanding on it, ethics is an attempt to determine which of the goals and objectives are worth pursuing in the long run, keeping in mind the accepted customs, societal practices and individual beliefs. Current issues being faced As per the facts presented by the case, the company is facing increased workload of health care claims with a dearth of adept and skilled talent. The external environment also does not present opportunity to recruit professional workforce that could handle the mammoth task. Adding to the woes, apart from people problem, the company is facing hardships from infrastructure and location front too where its current office space does not suffice for its augmenting business. Recommendations made In the light of above factors, the Strategic Planning Committee has offered the following recommendations to the CEO, which they think could abate the problems of the company. A quick glimpse at the recommended offerings is: Relocation of Claims Processing Department Hiring under-employed caregivers Hiring school and college students Housing the Claims Processing Department to new building or a leased facility. Problems with recommendations No doubt, the Strategic Planning Committee has come up with a host of solutions that diffuse through financial, human resources, environmental and even competitive domains of the organization. An important and worth discussing factor in the present case is the involvement of a government agency, which can be an appropriate thriving ground for the development of the fungus of ‘non-ethical behavior’. Let us have a look at what all ethical implications do these recommendations carry: Environmental implications Looking a bit closer to the facets of the presented case, it is pretty much obvious that the major issue of the company is its increased workload due to the shortage of talented employees. As such, it is a people problem and not a place problem primarily. Even though the office space is not satisfactory, yet competent workforce in place can solve much of the problems of the company. The major operations of the company are to process the claims, where expertise of people is required and not magnanimity of the building. Keeping this in mind, the prime focus of the management should be to increase the skill level of its employees. Relocating to a new building or to a suburb facility is not the solution as it will only give rise to greater financial burden. If the company relocates, the employees will have to adjust themselves to a new environment, which will further degrade the quality and the speed of work, which is already under investigation. Similarly, investment in new premises will cut short the chances of the company to look for educated and competent employees or to provide for the training of existing ones. Financial implications Insurance business has a lot of accountability and responsibility over its shoulders. As already stated above, the company is under a traumatic condition of handling the piling up work. In this realm, creating extra financial burdens will be sheer stupidity when it is already realized the present issue emanates from dearth of talent. Moreover, entering into leased contracts or shifting to new locations could block the money of the company which at this point of time is much needed to settle the claims of customers. Insurance business runs on trust and confidence of customers on their insurance agents and the company and lack of financial capabilities can shorten this life of trustworthiness and credibility. Contractual implications What seems to be just a government contract can very soon turn into a spree of non-ethical practices if not handled carefully and tactically. Government contracting is the best feeding ground for corruption, misleading practices and defiance of ethical rules and regulations. In this case also, probability of financial corruption and lobbying of government agency officials cannot be denied, which in turn, could infect the organizational culture and working environment of the company in question (Goddard 2003). To start off with, governmental laws and certain prohibitions can alter the course of routine operations at the company. Moreover, policies regarding disclosure of information to selected people and enforcement of their specific contractual obligations on the company could result in tiding waves in the company. In general to government agencies and in particular to almost all sectors, bribery, pay-offs and gratuities are embedded deep in the governmental operating culture and chances of these corrupt practices percolating down through managerial and operational layers of the insurance company in question cannot be underestimated. Such malpractices could lead the company lag behind the competition on account of corporate social responsibility, accountability towards its customers and overall public policy. Thus, the organization has to carefully see to the fact that the business practices of the government agency do not influence the culture of the company in any negative way. Human resource implications Coming to the most crucial aspect of this case- the people. It is the actual culprit behind the furore where internal resources of the company are incompetent and the external market is not capable of providing the required talent. Moreover, the population mostly comprises of minorities. In such circumstances, investing in such a move where money and efforts seem to go in vain due to undeserving candidates and lack of managerial capability to handle diversity workforce raises further questions on the recommendations of the Committee. The success factor for an insurance business is the agent-client relationship and the service delivery, blended with communication, education and professionalism of the employees (Walton & Duska 1998, p. 282). This is the area where the company lacks and which needs revamping at the most urgent level. The Planning Committee was quick enough to suggest hiring 50 candidates each from caregivers section and collegiates. However, following concerns arise from the recruitment of such candidates which should be considered: First and foremost, when the Planning Committee knows beforehand that the available workforce is saturated and cannot fulfill the requirements, on what grounds does it recommend hiring such a big lot of candidates, which are short of any insurance experience and half of them being still in their education period? Insurance professionals are required to undergo a specific period of pre-job training where they learn the basics of communication and dealing with the customers. Are these caregivers and students equipped with this essential category of expertise? Can the Planning Committee assure the management that even though being part-time employees, the school and college students will not demand any extra privileges in terms of health and welfare benefits? Thinking on such lines defies the basic premise that young people are more ambitious of their jobs than their older counterparts. Will the caregivers be ready to invest some extra time to finish off the workload? This is doubted so because they have added responsibilities of their kids and family, along with a supplementary job elsewhere. Most important of all, is the company in a position to invest so much of time, energy and money into hiring 50 candidates each from two different sections that carry different aspirations, beliefs, demands and capacity altogether? Secondly, does the company has enough time to first hire the candidates and then teach and train them the required business conduct and working method for Processing Claims? A big question of ethics here is the fact that just for the sake of getting money out of claims and business, is it ethical to hire part time workers? They will definitely have aspirations from their job and expectations of perquisites and benefits. Is it accountable on the part of the company to crush the perceptions of the workers and think of their own monetary benefits only? Suggested solution Analyzing all the pros and cons of every single recommendation made by the Committee, it can be said for sure that none of them is free from unethical considerations. While some hit hard the employee benefits and their welfare schemes, some are against environmental responsibilities. Even financial stability of the company is jeopardized in accepting the recommendations of the Committee because they do not seem practical in the current course of action. Thus, it is advised that the Committee looks to the entire problem with a fresh view altogether and thinks of the societal concerns and welfare as well, while chalking out plans for its own benefits and profitability. Conclusion Delving deep into all kinds of pros and cons of this case, it was evident that relocation and recruitment would have given rise to greater problems pertaining to adjustability, change management, financial strength and a shock to the value system of the insurance company. It needs to, thus, look at the problem with short-term level urgency first and then going for long term plans. References 1. Goddard, C.P. Jr. (2003). Business Ethics in Government Contracting- Part I. Briefing Papers, Second Series, no. 03-6. Retrieved Aug 15, 2010 from http://www.akerman.com/documents/govcontractspart1.pdf 2. Petrick, J & Quinn, J (1997). Management Ethics: Integrity at Work. London: Sage Publications. 3. Walton, C.C & Duska, R.F (1998). Education, Leadership and Business Ethics: Essays on the work of Clarence Walton. Netherlands: Kluwer Academic Publishers. Read More