Jacob is currently working with a life insurance company as a senior sales executive (Insurance Agent).  He has been working in that company for more than five years and had earlier worked with another insurance from three years. With his eight years of experience in the insurance sector, he has gained an excellent understanding of insurance products. In addition, he has got good communication and presentation skills. He has attended several workshops on sales and marketing to enhance his skills. The company is happy with Jacob's performance and gives him a good salary besides a handsome commission on his sales policies. 

Jacob hails from a low-income family; his father is a support staff in a private company. He has two sisters. The eldest has graduated last year, and his father is looking for a suitable bridegroom for her, for which he expects adequate financial support from Jacob. Knowing this, Jacob desperately works hard to maximize his commission every month, which he keeps aside for her sister's marriage. 

Jacob has in his current job several plans to sell. One of the recently launched insurance products is a plan that is a combination of savings and insurance. Jacob has been asked to focus more on selling that plan because the plan is more profitable to the company than other plans. The company is encouraging the sales executives by giving handsome commissions on its sales. The product promises to protect the family in case of premature death as well as a good return on an investment after retirement.

However, a few days after the launch of the new plan, Jacob, after carefully going through the language used in the agreement document of the plan, found that the language was very ambiguous and hard to understand. He could also figure out that language seemed to have been purposefully put in such a manner by the company that it will almost be impossible for the nominee of the insurance policyholder to claim the death benefit in case of death of the insurance policyholder during the operating period of the policy. Usually, clients do trust sales executives and do not read the agreement thoroughly. The company knows the facts very well.  Jacob could figure out that the product is actually expensive for the target clients and provides little protection in case of premature death that too it would be difficult to claim the promised benefit by the family of the insured person. Another disadvantage of having that product is a low return on an investment after its maturity. Jacob could realize that the company has concealed several facts in the promotional leaflet and the description of the product features with a motive to earn high profit. Even in the briefing about the product features to sales representatives, the company did not disclose several facts that are not beneficial to the plan buyers.   

The company started pushing the sales of this plan as it is more profitable for the company. The company restructured the sales by assigning very high commissions and proportionately reduced commissions for most of the other products. Jacob's boss, Sundaram, started putting pressure on Jacob to sell more of this newly launched 'combination of savings and insurance' policy than the other plans. Jacob has other cheaper products to sell that can give his clients more benefits, including greater protection and return, but the commissions on sales of those products have been reduced radically. Further, 70% of his annual bonus now is linked to the selling of the new plan of the combination of savings and insurance policy.

Jacob cannot earn commission as he earned earlier if he sells products considering only the consumers' benefits. Moreover, his family would suffer, including his sister's marriage, if he thinks good for clients. When enquired with his boss about deceiving potential customers by pushing the sale of the newly launched product, his boss gave him a curt answer. "You should not try to teach the company what is right or wrong and concreate in selling the new product, or else your job will be at stake".     

Jabob is in a big dilemma about what he should do. He knows very well that he would be deceiving his customer if he sell the new product. On the other hand, if he continues to sell the old products, his earnings would not only reduce drastically, he may even lose his job. The job market is down; most insurance companies are downsizing their employee strength. It will be impossible to get another job immediately. His father is looking up to him for financial support to run the family. The marriage of his eldest sister also depends on his earnings

 

QUES-

 

1. Is there anything wrong with the business practice of maximizing profit by selling and promoting the company's newly launched plan? If yes, why? and if not, why not?

 

2. What options does Jacob have and what are the pros and cons of such options? What will be your recommendation to Jacob? Justify your answer by liking it to the theories of Values and Ethics and the concept of situation versus character                                            

 

3. What the base of power Sundaram, Jacob's boss tried to use to influence his concentrate in selling the new product?