Ethics, incentives, and conflicts of interest: A practical solution
Couched in positive agency theory, it is shown that the straight-commission compensation system (SCCS) creates a conflict of interest between the agent's and the client's self-interests. Based on this, it is hypothesized that the SCCS will encourage agents to intend to act unethically towa...
| Main Author: | |
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| Format: | Electronic Article |
| Language: | English |
| Check availability: | HBZ Gateway |
| Journals Online & Print: | Drawer...
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| Interlibrary Loan: | Interlibrary Loan for the Fachinformationsdienste (Specialized Information Services in Germany) |
| Published: |
1995
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| In: |
Journal of business ethics
Year: 1995, Volume: 14, Issue: 6, Pages: 465-475 |
| Further subjects: | B
Agency Theory
B Practical Solution B Empirical Evidence B Economic Growth B Marketing |
| Online Access: |
Volltext (JSTOR) Volltext (lizenzpflichtig) |
| Summary: | Couched in positive agency theory, it is shown that the straight-commission compensation system (SCCS) creates a conflict of interest between the agent's and the client's self-interests. Based on this, it is hypothesized that the SCCS will encourage agents to intend to act unethically towards their clients. Two hundred and forty five insurance agents in the U.S. were surveyed, with 59% responding. The results suggest that the SCCS does not significantly affect agents' ethical intentions, positively or negatively. This lack of empirical evidence may be due to the unique nature of the sample. Indeed, the company which enabled this sample appears to have found a practical solution to temper the potential negative effects of the SCCS in its commitment to selective hiring and marketing products which benefit both the client and the agent. |
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| ISSN: | 1573-0697 |
| Contains: | Enthalten in: Journal of business ethics
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| Persistent identifiers: | DOI: 10.1007/BF00872087 |