4-1 The Power of Selling. 4-2 This work is licensed under the Creative Commons...

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The Power of Selling

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Chapter 4Business Ethics—The Power of Doing the

Right Thing

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Video Case

• The video, Do the Right Thing, features Paul Blake, vice president of Sales at Greater Media Philadelphia

• In the video, Paul shares his thoughts on ethics in selling and how he expects his salespeople to make a sale the right way, and to not sell it to make a sale today but to try and create a customer for life

Source: NBC Universal, Inc

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Video Ride-along Discussion Questions

• Discuss the importance of ethics in the selling process.

• In today's competitive environment, is it necessary to cheat to win? Discuss.

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Chapter Objectives

• Understand ethics and what composes ethical behavior.

• Discuss the role of values in ethics.

• Understand how you define your personal code of ethics.

• Identify how company policies reflect business ethics.

• Learn about the ethics of your résumé.

• Understand how to ask references to speak honestly on your behalf.

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What is Ethics?

• Ethics: System that defines right and wrong, and provides a guiding philosophy for every decision you make

• Two aspects to ethics:

– The ability to discern right from wrong, good from evil, and propriety from impropriety

– The commitment to do what is right, good, and proper

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What is Ethics?

• The video, Carly Fiorina - Personal Ethics and Hewlett-Packard, features former Hewlett-Packard CEO Carly Fiorina

• She discusses the importance of personal ethics in doing business, and shares her thoughts on being fired by HP

Source: FORA.tv

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Personal Ethics—Your Behavior Defines you

• Ethical dilemma : A situation in which options are presented which may be right or wrong

• You make your decision based on your personal ethics

• Your actions reflect your own moral beliefs and moral conduct

• The Golden Rule for your personal ethics: “Do unto others as you would have them do unto you”

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Personal Ethics—Your Behavior Defines you

• A highly developed set of personal ethics can guide you when you are in a situation that challenges you morally

• To develop a strong sense of ethics:

– Do what you believe in

– Take actions consistent with your principles CONSISTENTLY

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Do the Right Thing

• Unethical behavior: Acting in a way that is not responsible or deemed to be the standard of what is right, good, and fair

• Essence of ethics

– Choosing to do the right thing when you have a choice of actions

• The video, Ethics - Corporate Presentation, consists of interviews about ethics and perceptions of Eliot Spitzer and his actions

Source: Steven R. Hoover

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Business Ethics—What Makes a Company Ethical?

• Business ethics: Application of ethical behavior by a business or in a business environment

• An ethical business:

– Abides by laws and appropriate regulations

– Operates honestly

– Competes fairly

– Provides a reasonable environment for its employees

– Creates partnerships with customers, vendors, and investors

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Characteristics of an Ethical Company

• Respect and fair treatment of employees, customers, investors, vendors, community, and all who have a stake in and come in contact with the organization

• Honest communication to all stakeholders internally and externally

• Integrity in all dealings with all stakeholders

• High standards for personal accountability and ethical behavior

• Clear communication of internal and external policies to appropriate stakeholders

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High-Profile Unethical Behavior in Business

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High-Profile Unethical Behavior in Business

• Enron

– Began as a traditional energy company in 1985

– In 1996, grew rapidly due to the deregulation of energy markets

– Began to expand - borrowed money to fund the new businesses

– The debt made the company look less profitable

– Senior management created “paper companies” in order to keep the debt off the books

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High-Profile Unethical Behavior in Business

– A completely different set of financial statements were shown to shareholders (owners of the company) and the government (Securities Exchange Commission)

– This accounting made Enron look extremely profitable - more people bought stock in the company

– Lack of disclosure is against the law, as publically traded companies are required to disclose accurate financial statements to shareholders and the SEC

– On October 16, 2001 the company announced a loss of $638 million

– On October 22 of that year, the SEC announced that Enron was under investigation

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High-Profile Unethical Behavior in Business

– The stock price continued to fall and the company was unable to repay its commitments to its shareholders

– The company filed for Chapter 11 bankruptcy protection due to the unethical and illegal behavior on the part of senior management

– Innocent people lost their money and their jobs

– As a result of the Enron scandal, a new law named the Sarbanes-Oxley Act was enacted in 2002

• Sarbanes-Oxley Act: Requires tighter financial reporting controls for publically traded companies

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High-Profile Unethical Behavior in Business

• The epitome of unethical behavior - Bernard Madoff

– Convicted of running a $65 billion fraud scheme on his investors

– He reported extremely high returns on his clients’ investments, encouraging them to reinvest with even more money

– His clientele included: Actor Kevin Bacon and his wife Kyra Sedgewick and a charity of Steven Spielberg

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Ethical Dilemmas in Business

• Companies face dilemmas that are not necessarily illegal but are just as important to navigate

– Examples of unethical behavior:

• Bribing an executive

• Saying or promising things that are knowingly untrue

• Treating employees unfairly

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Corporate Social Responsibility (CSR)

• Company actions that balance the interests of all stakeholders

• Triple bottom line: When companies measure the impact of their performance along the three dimensions of social, economic, and environmental impact

• Many companies make a commitment to social responsibility and the triple bottom line

Source: Fortune

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McDonald’s Commitment to Social Responsibility

• The video, McDonald's Corporate Social Responsibility-Making Progress, showcases the efforts taken by McDonald's to improve its social and environmental performance

• To achieve this, McDonald's has worked with its stakeholders around the world-from the owner/operators who run restaurants in their local communities, to leading NGOs and third party experts

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Good Ethics = Good Business

• Companies that consistently demonstrate ethical behavior and social responsibility generate better results

• In successful companies ethics is deeply integrated into the organization; it defines how every employee from CEO to the lowest level employee behaves

• Target’s commitment to ethics and social responsibility has been impressive

Source: Target Corporation

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Ethical Behavior in Sales

• The most visible positions in any organization in terms of ethics is sales

– Because it is the salesperson that comes in contact directly with the customer

– Salesperson’s conduct is a direct reflection of the organization and its ethics; he represents the company

“Start with what is right, rather than what is acceptable” Peter Drucker Famous Management Consultant and

Author

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Power Point: Lessons in Selling from the Customer’s Point of View

• The customer is always right, except when he asks you to do something unethical

• In such situations, to uphold your ethics and maintain your relationship, SellingPower.com suggests the following steps:

– Evaluate the situation with a clear head

– Don’t jump to conclusions

– Identify the criteria you are using to make this judgment

– Seek counsel

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Understanding Values

• Values: What is important to you, they are your guiding principles and beliefs; they define how you live your life and they inform your ethics

• Family, friends, and your environment have a significant influence on you, you develop your own set of values

• HumanityQuest.com lists more than five hundred different values

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Understanding Values

• Examples of values:

– Honesty

– Open communication

– Teamwork

– Integrity

– Prestige

– Security

– Helping others

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Understanding Values

– Loyalty

– Social responsibility

– Impact on society

– Creativity

– Achievement

– Global focus

– Religion

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Values of Organizations

• Companies choose their values and communicate them to employees, customers, and vendors on the company Web site and other company communications

• You will enjoy and excel at your job if you choose a company whose values you share

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Company Value Statements

• Whole Foods Market

– http://www.wholefoodsmarket.com/company/corevalues.php

• Source: Whole Foods Market, Inc.

• Levi Strauss & Co.

– http://www.levistrauss.com/company/ValuesAndVision.aspx

• Source: Levi Strauss & Co.

• Microsoft

– http://www.microsoft.com/about/default.mspx

• Source: Microsoft Corporation

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Mission Statements: Personal and Corporate Guidelines

• Purpose of your mission statement

– It becomes your roadmap for your decisions, choices, and behavior

– Based on the company’s ethics and values, it provides a broad direction as to what the company stands for and is different than an advertising slogan or motto

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Company Mission Statements

• Harley-Davidson

– http://www.harley-davidson.com/wcm/Content/Pages/Student_Center/student_center.jsp?locale=en_US#missionstatement

• Source: Harley-Davidson, Inc

• FedEx

– http://about.fedex.designcdt.com/our_company/company_information/mission_statement

• Source: FedEd Corporation

• Aflac Mission Statement

– http://www.aflac.com/us/en/aboutaflac/missionandvalues.aspx

• Source: Aflac Incorporated

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Character and its Influence on Selling

• Character: Features and beliefs that define you

• According to Josephson Institute character is composed of six core ethical values:

– Trustworthiness

– Respect

– Responsibility

– Fairness

– Caring

– Citizenship

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Power of Your Reputation

• Reputation: Your overall character as judged by other people

• Your reactions to many of the people in your day-to-day life are affected by their reputations

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Build Your Reputation: Be an Industry Expert

• Write a blog

• Tweet regularly about industry issues

• Be a guest speaker or panelist at industry conferences or events online or in person

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You’re Only as Good as Your Word

• Not everyone in sales is ethical or honest

• The video, Honesty in the Workplace, highlights the problem of lying in the workplace

Source: NBC Universal, Inc

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Where the Rubber Meets the Road: Facing Challenges

• In a situation that challenges your ethics:

– Follow your code of ethics and the company’s code of ethics

• In a situation where you feel pressured to do something unethical:

– Talk to your supervisor about it

– Talk to someone in the human resources department (if you don’t feel that you can talk to your supervisor or your supervisor is part of the problem)

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Policies, Practices, and Cultures

• Employee handbook: Written policies of company as they relate to the ethical actions of its employees

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Company Policies

• Gap Code of Business Conduct• Source: The Gap, Inc.

• McDonald’s Standards of Business Conduct for Employees• Source: McDonald’s Corporation

• United States Government—Code of Ethics• Source: United States House of Representatives Ethics Committee

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What Company Policies Say and What They Mean

• Basic issues that are frequently encountered in sales:

– Conflicts of interest

– Bribes

– Noncompete clauses

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What Company Policies Say and What They Mean

• Conflict of interest: A situation in which a person, such as a public official, an employee, or a professional, has a private or personal interest sufficient to appear to influence the objective exercise of his or her official duties

• Family interests: When a relative of yours is either someone from whom you might purchase goods or services for your employer or when you have influence over the potential hiring of a family member of yours

• Gifts: Something received without compensation or exchange

• Private use of employer property: Using an employer’s property—cars, software, staplers, and so on—for nonbusiness purposes

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What Company Policies Say and What They Mean

• Moonlighting: Holding down a second job on the side

• Bribe: Money or favor given or promised in order to influence the judgment or conduct of a person in a position of trust; something that serves to induce or influence

• Noncompete agreement: A contract that prevents you from taking a job with a competitor after you’ve quit or been fired

• Trade secrets: Something (as a formula) which has economic value to a business because it is not generally known or easily discoverable by observation and for which efforts have been made to maintain secrecy

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Unethical Behavior is no Laughing Matter

• If you think that taking office stationery or using the company phone for personal calls is no big deal, watch the video Business Ethics, which shows how this behavior is unethical

Source: Houndville.com

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Figure 4.4 - Texas Instruments Nondisclosure Policy

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What is Whistle-Blowing?

• It is the act of publicly exposing the misconduct of a company or organization

• Whistle-blowers: One who publicly exposes the misconduct of a company or organization

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What is Whistle-Blowing?

• The best protection whistle-blowers have is the Sarbanes-Oxley Act of 2002

• You have no obligation to blow the whistle; you can simply refuse to take part in any unethical or illegal activity

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What is Whistle-Blowing?

• The video, The Insider 1999 Movie Trailer, includes highlights from the movie inspired by a true story starring Al Pacino and Russell Crowe

• The Insider tells the true story of a 60 Minutes television series, as seen through the eyes of a real tobacco executive, Jeffrey Wigand

Source: Touchstone Pictures

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What is Whistle-Blowing?

• The video, Erin Brockovich Trailer, includes highlights from the 2000 movie starring Julia Roberts

• Erin Brockovich tells the real life story of a legal assistant who nearly single-handedly exposed a power company accused of polluting a town's drinking water

Source: Universal Studios, Inc. and Columbia Pictures

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Ethics and the Law

• Examples of laws being enacted in response to unethical business practices:

– Robinson-Patman Act, 1936

– Clayton Act, 1914

– CAN-SPAM Act

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Culture and Ethics

• Different cultures have different ideas about what is ethical

• Working in a different country or with a client from another culture does not excuse you from following unethical policies

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Selling U

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Selling Your Personal Brand Ethically—Résumés and References

• To strengthen your personal brand, behave in an ethical fashion throughout the hiring process

• Lying on your résumé is unethical: sell yourself, not an exaggerated version of yourself

• Your résumé should have a brand story to tell

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Asking References to Speak about Your Personal Brand

• References: People you can rely on to speak on your behalf

– There are two types of references

• Personal: Family members or friends

• Professional: Managers, supervisors, professors, or other people who can speak about the quality of your work and work ethic

– When you choose references, make sure that the people you have in mind have good things to say about you

– When you speak to a prospective reference, be professional and specific

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Asking References to Speak about Your Personal Brand

• Once you know whom you’d like for your references, ask them personally

• Personally thank each of your references, even if you don’t get the job

• Stay positive and keep in touch with your references

• Never list your references on your résumé, unless asked by the employer

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Asking References to Speak about Your Personal Brand

• The video, How to Interview for a Job : Preparing References for a Job Interview, features Katie Roney from the Expert Village

• Katie Roney talks about how references are a clutch in interviews and how they should be prepared, by letting them know that they are probably going to be contacted

Source: eHow.com

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Figure 4.5 - Sample References

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Letters of Recommendation

• It is a letter written by a professional (supervisor, manager, professor, or other professional) to testify to the skills and characteristics of a job candidate

• Bring the letters to your interview to demonstrate the support you have from professionals

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Letters of Recommendation

• The video, The Very Best Way to Present Your References“, features Brian Krueger, President of CollegeGrad.com

• In the video, he discusses the very best way to present your references, which is to ask each of your references to write a letter of recommendation

• Brian Krueger also explains the importance and the format of letter of recommendation

Source: CollegeGrad.com

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Summary

• Business ethics is ethical behavior applied to a business situation

• An ethical dilemma is a situation that is presented with options that may be right or wrong

• Types of conflicts of interest: family interests, gifts, private use of employer property, and moonlighting

• Lying on your résumé is not ethical and can have catastrophic consequences for your career