Page 1 of 13

Journal for Studies in Management and Planning

Available at http://edupediapublications.org/journals/index.php/JSMaP/

e-ISSN: 2395-0463

Volume 02 Issue 6

June 2016

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 10

Exploring the Relationship between Competitive Intensity

and Peers toward Ethical Sales Behaviour

Nor Aziza Abdul Aziz1

, Abdullah Hj. Abdul Ghani2

, Hasnizam Shaari3

1School of Business Management, University Utara Malaysia

Email: azieza1977@yahoo.com

2

Islamic Business School. University Utara Malaysia, Kedah Malaysia

Email: abd129@uum.edu.my

3School of Business Management, University Utara Malaysia

zamree@uum.edu.my

Abstract

Enhancing the moral behaviour of agent is

increasingly important, but difficult, in

today’s fast-paced and complex selling

environment. Several factors that influence

of agents sales activities and decision

making process. In order to achieve of this

study, the purpose is to investigation the

influence of competitive intensity and peers

on ethical sales behaviour in Takaful

industry with a case study in three Takaful

operators in Malaysia. Data was

distributed through self – administered of

questionnaires. Using a sample of 669 of

family Takaful agents in 170 units in

different Takaful operators, we find support

for our hypothesized model. We discuss

theoretical and practical implications of

these findings.

Keyword: Competitive intensity; peer and

ethical sales behaviour

Introduction

Recently, several research have reported of

ethical behaviour among employees in

organization or workplaces (Kaptein, 2011;

Nair & Kamalanabhan, 2011; O’Fallon &

Butterfield, 2011). Scandals in

organizations such as Arthur Andersen,

Enron, ImClone Systems, Parmalat, Tyco,

and WorldCom suggest that unethical acts

are not isolated but have become quite

pervasive (Mulki, Jaramillo, & Locander,

2006). This disclosures have shocked and

disappointed the corporate world and have

had far-reaching negative consequences on

investors, clients and employees. It has also

emphasised the need to encourage lateral

reporting of infractions by employees in an

attempt to curtail violations. Among the

functional areas of business, sales and

marketing have been the most frequent

targets of ethical criticism (Dubinsky,

Childers, Skinner, & Gencturk, 1988; Ross

& Robertson, 2003). The strong criticism of

sales practices may be rooted in the nature

of the selling job itself. Agents constantly

face ethical tension created by the dual

requirements of short-term performance

and long-term customer satisfaction

(Adnan, Saher, Naureen, Qureshi, & Khan,

2013). The issue of ethics in marketing

continues to be a concern for both

marketing practitioners and researchers

(Abromaitytė-Sereikienė, 2008; O’Fallon

& Butterfield, 2011). However, an

examination of the literature reveals

additional research is required. Ethical

decision process was viewed in different

Page 2 of 13

Journal for Studies in Management and Planning

Available at http://edupediapublications.org/journals/index.php/JSMaP/

e-ISSN: 2395-0463

Volume 02 Issue 6

June 2016

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 11

perspective in different side of study

(Ferrell & Skinner, 1988; Hunt & Vitell,

1986; Jones, 1991). Also, research on the

determinants of ethical behaviour revealed

that there are many factors affecting the

level of ethical behaviour of the employee

(Cadogan, Lee, Tarkiainen, & Sundqvist,

2009). Previous study rather widely give

different approaches how different factors

influence ethicalness of a decision making

process in forms of schemes, models.

Unfortunately, among of them do not

compare factors influencing ethicalness of

marketing and conditions when these

factors operate (Cadogan et al., 2009). A

popular belief about business and business

people is that little regard is given to ethics.

(Abratt & Penman, 2002). Agents is

frontline person in service organization that

build relationship to customer on behalf of

company. Agents focuses only on the

money to be made and ignores any

responsibilities toward the customer, the

employee or the environment. In

consequence, researchers recognize that

considered ethical choices may still be

unpopular with many in the sales

environment. Thus, an important outcome

of a subset of ethical decisions – i.e.

controversial ones – is that relevant other

stakeholders should be apprised of likely

backlash and given the opportunity to

inoculate themselves from possible

reputational damage. Due to the importance

of ethical, researchers looked at this matter

serious and in-depth research should be

done to prevent and combat this issue so as

not to spread among workers.

Literature Review

Concepts of Takaful

Takaful sector is one of the principal

mechanisms of Islamic finance. It is based

on the Taa’wun principle literarily means

cooperation and helpful for each other. The

operation of Takaful is almost similar to

mutual insurance but is quite distinguished

by the regulatory principles dictated by

Sharia’ah. It is believed that the remarkable

performance of Takaful institutions is based

on the superior ethics and values which

uphold the principle of brotherhood and

mutual assistance as a mechanism for risk

sharing pooling. A mix of Islamic and

conventional ethical considerations is

adopted for measuring business ethics in

Takaful industry. The essence is to build

reputation for Takaful industry to achieve

and uphold high standard of business ethics

beyond that of conventional insurance in

order to attract Muslim and non-Muslims

alike who placed higher premium on moral

value and social conscience. Basically, the

Takaful comprises three main principles:

(1) mutual responsibility, (2) cooperation

with each other, and (3) protecting one

another from any kind of difficulties, or

disasters, or other misfortune (Mohd Fauzi

Abu -Hussin, Nasrul Hisyam Nor

Muhamad, & Mohd Yahya Mohd Hussin,

2014). Within the increasing developments

of the Islamic financial system, the Takaful

industry has experienced significant growth

and developments, indicating a clear

manifestation of the recognition of Islamic

insurance as an important source of

enhancing the Shariah (Islamic law)

compliant protection against vulnerability

or risk arising from untoward events

(Mohamed Sherif & Nor Azlina Shaairi,

Page 3 of 13

Journal for Studies in Management and Planning

Available at http://edupediapublications.org/journals/index.php/JSMaP/

e-ISSN: 2395-0463

Volume 02 Issue 6

June 2016

Available online: http://edupediapublications.org/journals/index.php/JSMaP/ P a g e | 12

2013; Shieila Nu Nu Htay, Nur Shazwani

Sadzali, & Hanudin Amin, 2015).

Ethical sales behaviour

Ethics is a central issue in financial services

and can generate liability problems for

agent in sales department through both

intentional and inadvertent statements.

Financial institutions are vulnerable to

many legal and ethical abuses and very

expensive forms of corruption (Chen and

Mau 2009). Agents may behave

unethically, when interacting with different

stakeholders such as customers,

competitors and employers (Román &

Munuera, 2005). In the hierarchy of

stakeholder importance, it appears that

agents regard ethical transgressions against

customers as being less ethical than any

controversial actions against competitors or

their employer (Adnan et al., 2013; Weeks,

Loe, Chonko, Martinez, & Wakefield,

2006). In the context of this study, ethical

sales behaviour is defined as fair and honest

actions that enable the agent to foster long- term relationships with customers based on

customer satisfaction and trust (Román &

Munuera, 2005). Ethical selling behaviour

is a highly elusive construct and is often

situation specific (Lagace, Dahlstrom, &

Gassenheimer, 1991). Nevertheless, it can

be argued that ethics requires an individual

to behave according to the rules of a moral

philosophy with an emphasis on the

determination of right and wrong

(Gundlach and Murphy, 1993). More

specifically, ethical sales behaviour is

related to widely “recognized” societal

norms such as fair play, honesty and full

disclosure (Ingram, LaForge, &

Schwepker, 2007; Robertson & Anderson,

1993). Accordingly, the focus of this

research is on agent’s ethical behaviour as

related to interactions with their customers.

Competitive intensity and

Ethical behaviour

In the financial services industry, agents

should seek to establish and maintain long- term relationships with their customers and

to pursue long-term profit, owing to the

highly competitive environment (Chen &

Mau, 2009; Román & Ruiz, 2005; Yi,

Dubinsky, & Lim, 2012). Therefore there

are relationship between competitive

intensity and agents’ ethical behaviour

suggests that financial services agent’s

perceptions of their industry’s competition

can influence their ethical behaviour

(Schwepker, 1999; Yi et al., 2012). As

claimed by previous researchers McClaren,

(2013), Ross and Robertson (2003),

Zhuang, Herndon, and Tsang (2012) selling

arenas perceived to be less competitive,

agents might well believe that customers

have little choice other than their offering

and therefore will tolerate less than ethical

behaviour. Admittedly, although sales

channel executives have little control over

the competitive environment, they should

be aware of the potential negative effects

resulting from a less competitive

environment. If agents with little

competitive pressure conceive that they

have more to gain by being unethical, they

may well do so. By manipulating the level

of inter-firm intensity in a specific industry,

channel executives can enhance the degree

of competitive intensity so that it can

improve agents’ ethical behaviour. In

addition, providing solid sales and product

training to sales personnel, offering