Chapter
2
Ethics First...
Then Customer Relationships
McGraw-Hill/Irwin
ABC’s of Selling, 10/e
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter
2
2-2
Main Topics
Social, Ethical, Legal Influences
 Management’s Social Responsibilities
 What Influences Ethical Behavior?
 Are There any Ethical Guidelines?
 Management’s Ethical Responsibilities
 Ethics in Dealing with Salespeople

2-3
Main Topics, cont...





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Salespeople’s Ethics when Dealing with Their
Employers
Ethics in Dealing with Customers
The International Side of Ethics
Managing Sales Ethics
Ethics in Business and Sales
The Tree of Business Life
2-4
Management’s Social
Responsibilities

Social responsibility is
management’s obligation
to make choices and take
actions that contribute to
the welfare and interests
of society as well as to
those of the organization
2-5
Organizational Stakeholders


A stakeholder is any group inside or outside
the organization that has a stake in the
organization’s performance
Stakeholders may have similar or different
interests in the organization:
Customers
 Community
 Creditors
 Government


Owners
Managers
Employees
Suppliers

CCC GOMES
2-6
Exhibit 2-2: Major Stakeholders in
the Organization’s Performance
2-7
An Organization’s Main
Responsibilities




Economic - Be profitable.
Legal - Obey the law.
Ethical - Do what is right.
Discretionary Contribute to community
and quality of life.
2-8
Exhibit 2-3: An Organization’s Main
Responsibilities
2-9
What Influences Ethical Behavior?

The Individual’s Role

Level one: Preconventional – acts in own best interest
 A few operate here

Level two: Conventional – upholds legal laws
 Most people operate here

Level three: Principled – lives by own code
 Less than 20% reach level three

The Organization’s Role
At best, most employees in firm operate at level two
 How will the situation be handled if no policies and
procedures are in place?

2-10
Exhibit 2-4: What Is Your Level of
Moral Development?

Principled - “What is the right
thing to do?”

Conventional - “What am I
legally required to do?”

Preconventional - “What can I
get away with?”
2-11
Exhibit 2-5: Moral Development
Bell Curve
2-12
Are There Any Ethical Guidelines?

What Does The Research Say?
American adults said by a 3-to-1 margin that truth
is always relative to a person’s situation
 People are most likely to make their moral and
ethical decisions based on:
whatever feels right or comfortable in a
situation

2-13
How Do You Make Your Moral-Right
or Wrong Choices? (Choose One)





Whatever will bring you the most pleasing or
satisfying results
Whatever will make other people happy or
minimize interpersonal conflict
Values taught by your family
Primarily from religious principles and
teaching or Bible content
Other
2-14
Are There Ethical Guidelines?

What Does One Do?
What if you found a bank bag containing
$125,000? Would you return it to the bank?
 Is it fear of being caught?
 Not the right thing to do?

2-15
Are There Ethical Guidelines?


Out of class, is it okay to copy someone
else’s homework assignment?
What keeps you from cheating on an exam
when the professor is out of the room?
Is it fear of being caught?
 Not the right thing to do?

2-16
Are There Ethical Guidelines?

Is Your Conscience Reliable?
We all have an internal constant standard with
which we measure right and wrong, a “moral
compass.”
 Most of us know we should return the $125,000
and not copy someone’s homework.
 But what would we actually do?

2-17
Are There Ethical Guidelines?


Is Your Conscience Reliable? (Cont’d)
If a person’s values are at “Level 2,” they
may make decisions based on the situation
and what others say and do.


Usually people rationalize their decisions; “I’ll
only copy the homework this one time.”
Many people are so accustomed to doing
things unethically that they think nothing
about it.
2-18
Are There Ethical Guidelines?

Sources of Significant Influence
Do factors influencing our decisions include
your friends, family, or things you see on
television or in the movies?
 Barna has found that the leading influences on
American ethics are movies, TV, the Internet,
books, music, public policy, law, and family

2-19
To Have Ethical Guidelines You Need

A point of reference that:
Is fixed – so that no one can change it
 Is separate from you
 No one else may influence

2-20
The Fixed Point of Reference Must Be:

Right whether people:
Believe it or not
 Like it or not
 Know about it or not

2-21
How Do You Know If What Someone
Is Saying is True Or Not?



Can it be a moral and ethical standard?
There is no way for you to know if what I am
saying is true unless you know what is the
truth.
And there is no way to know what is the truth
unless there is a truth you can know.
2-22
Exhibit 2-6: What Is a Fixed
Point of Reference?

Stars can be used for navigation because
they are a fixed point of reference separate
from you that no one can influence.
2-23
Will The Golden Rule Help?



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The “Golden Rule” concept is present in
virtually all faith-based principles.
The Golden Rule does not involve reciprocity.
“Could the Golden Rule serve as a universal,
practical, helpful standard for the
businessperson’s conduct?” (Hartman 2004)
Would you consider your faith a fixed point
that is separate from you and never
changes?
2-24
Exhibit 2-7: Examples of World Religions
Which Embrace the Golden Rule



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Hindu - “Do naught unto others what you
would not have them do to you.”
Confucius - “Do not do to others what you
would not like yourself.”
Buddhist - “Hurt not others in ways that you
yourself would find hurtful.”
Rabbi Hillel - “That which is hateful to you do
not do unto your neighbor.”
Jesus Christ - “Do to others as you would
have them do to you.”
2-25
Management’s Ethical Responsibilities


Ethics is the code of moral principles and
values that govern the behaviors of a person
or a group with respect to what is right or
wrong.
Ethical behavior refers to treating others fairly.
2-27
What is an Ethical Dilemma?

A situation in which each alternative choice
or behavior has some undesirable elements
due to potentially negative ethical or personal
consequences.
2-28
Ethics in Dealing with Salespeople

Five ethical considerations faced by sales
managers:
Level of sales pressure
 Decisions affecting territory
 To tell the truth?
 The ill salesperson
 Employee rights

 termination-at-will
 privacy
 sexual harassment
2-29
Benefits of Respecting
Employees Rights




More productive employees
Attracting good sales personnel
Reducing legal costs
Reducing wage increase demands
2-30
Salespeople’s Ethics in Dealing with
Their Employers





Misusing company assets
Moonlighting
Cheating
Affecting other salespeople
Technology theft
2-31
Ethics in Dealing with Customers



Bribes
Misrepresentation
Price discrimination
Robinson-Patman Act
 Selling the same quantity of the same product to
different buyers at different prices.


Tie-in sales
To buy a particular line of merchandise, a buyer
may be required to buy other, unwanted products.
 Clayton Act

2-32
Ethics in Dealing with Customers


Exclusive dealership
Reciprocity


Buying a product from
someone if the person
or organization agrees
to buy from you
Sales restrictions
Cooling-off laws
 Green River ordinances

2-33
The International Side of Ethics



Guidelines for conducting international
business may be different or even
nonexistent
Despite laws in other countries, U.S. firms
are subject to U.S. laws
It is important to keep up to date on the law
and be aware of how authorized
representatives are conducting business
2-34
Managing Sales Ethics







Follow the leader
Leader selection is important
Establish a code of ethics
Create ethical structures
Encourage whistle-blowing
Create an ethical sales climate
Establish control systems
2-35
Helpful Hints to Making
Career Decisions





Your employer should provide worthwhile
products.
You should be able to do what is right.
You do not have to compromise your beliefs.
People go before anything else.
Good people are desperately needed in all
types of businesses/organizations.
2-37
Exhibit 2-10: What Do You Look for
in an Employer?
2-38
Do Your Research to Find an Ethical/Moral
Employer. Is the Employer’s...





Mission to serve?
Vision based upon the Golden Rule?
Values based upon integrity, trust, and
character?
Foundation based upon service?
Cornerstone love of people?
2-39
Exhibit 2-11: The Tree of Business Life’s
Roots and Frame Based Upon Truth
T
T T
T T TT
T T T T
Builds
The Tree is rooted in:



Integrity: being honest and
without compromise or corruption
From integrity flows confidence
that one can trust the other
Integrity and trust form the
attributes often referred to as
character
Framed by:

Relationships
Ethical Service that Builds True
Relationships
Shown with T’s standing for:

Truth: facts needed to make
ethical and moral decisions
2-40
Summary of Major Selling Issues




Ethical behavior pertains to values of right
and wrong.
Ethical decisions and behaviors are typically
guided by a value system.
An important individual characteristic is one’s
level of moral development.
Corporate culture is an organizational
characteristic that influences ethical behavior.
2-43
Summary of Major Selling Issues,
cont…



Social responsibility in business means
profitably serving employees and customers
in an ethical and lawful manner.
Ethical standards and guidelines for sales
personnel must be developed, supported,
and policed.
Research suggests that socially responsible
organizations perform as well as – and often
better than – organizations that are not
socially responsible.
2-44