2 Chapter 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 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 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 Owners Government 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 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 what is right You 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 The Tree is rooted in: T T T ce rvi Se Et hi c al T T T T T T T Builds T 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 True character Framed by: Ethical Service that Builds True Relationships Shown with T’s standing for: Relationships T I Truth: facts needed to make ethical and moral decisions C 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 ... Responsibilities Ethics in Dealing with Salespeople 2-3 Main Topics, cont Salespeople’s Ethics when Dealing with Their Employers Ethics in Dealing with Customers The International Side of Ethics. .. 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... 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