Abstract:
As a service providing company image and success of the insurance industry vastly depend on the ethical behavior
of their salespersons. Because they are the persons who have direct relationship with customers which in turn builds
up the customer’s satisfaction and trust towards the organization. Therefore managers must have the knowledge of
the key determinants of unethical behavior of their salespersons if they want to ensure the ethical behavior among
salespersons. Different factors contribute to this behavior and organizational factors were more important among
them. The purpose of this research was to identify the organizational factors affecting the unethical behavior of
salespersons in Sri Lankan life insurance industry. An extensive literature review was conducted and five organizational
factors were identified as impacting on unethical behaviour of salespersons in Sri Lankan life insurance industry.
Namely, they were manager behavior, sales targets, organizational culture, code of ethics and a rewarding system. Data
were collected from 200 individual salespersons from 10 life insurance companies through the structured
questionnaire. The stratified random sampling method was used for the selection of the respondents to the sample
and data were analyzed using multiple regression. The findings of the research indicated that manager behavior, sales
targets and rewarding system significantly predict the unethical behavior of salespersons. Further, it revealed that sales
targets predict unethical behavior strongly, compared to the rewarding system and manager behavior. Findings of this
research also gave some implication on the code of ethics where there is no code of ethics in the companies or if
exists, not practiced or enforced. Accordingly, research provides recommendations that can be used to minimize the
unethical behavior of salespersons. To improve the generalization of the findings, future research should broaden the
sample by including general insurance companies and finance companies. Continuingresearch is needed to analyze the
other factors in addition to organizational factors and future research could also look at customer perspective rather
than the salesperson perspective.
