Social, Ethical, Legal InfluencesManagement’s Social ResponsibilitiesWhat Influences Ethical BehaviorAre There any Ethical GuidelinesManagement’s Ethical ResponsibilitiesEthics in Dealing with Salespeople

Social, Ethical, Legal InfluencesManagement’s Social ResponsibilitiesWhat Influences Ethical BehaviorAre There any Ethical GuidelinesManagement’s Ethical ResponsibilitiesEthics in Dealing with Salespeople

Main Topics

Salespeople’s Ethics when Dealing with Their Employers

Ethics in Dealing with CustomersThe International Side of EthicsManaging Sales EthicsEthics in Business and Sales

Salespeople’s Ethics when Dealing with Their Employers

Ethics in Dealing with CustomersThe International Side of EthicsManaging Sales EthicsEthics in Business and Sales

Main Topics

1. A car salesman has presented a sales price and payment to a customer, who has agreed to the terms

2. A bank salesman suggests he offer the customer a lease in order to lower the payment.

3. The car salesman switches to a lease, but increases the profit instead.

1. A car salesman has presented a sales price and payment to a customer, who has agreed to the terms

2. A bank salesman suggests he offer the customer a lease in order to lower the payment.

3. The car salesman switches to a lease, but increases the profit instead.

Ethical Situation #1

The Cadillac Lease

1. A mortgage broker tells the customer he is getting the lowest rate available.

2. Between the time the customer agrees to the terms and then signs papers rates go down.

3. The mortgage salesman keeps the rate the same and is paid the difference by the bank.

1. A mortgage broker tells the customer he is getting the lowest rate available.

2. Between the time the customer agrees to the terms and then signs papers rates go down.

3. The mortgage salesman keeps the rate the same and is paid the difference by the bank.

Ethical Situation #2

The Home Mortgage

1. The bank suggests that a customer sign up for overdraft protection.

2. “It’s easy and convenient. It simply charges your credit card to cover overdrafts – no overdraft charges.”

3. Each time the customer overdraws his account he is charged $5, and the interest ticker begins on the entire credit card balance.

1. The bank suggests that a customer sign up for overdraft protection.

2. “It’s easy and convenient. It simply charges your credit card to cover overdrafts – no overdraft charges.”

3. Each time the customer overdraws his account he is charged $5, and the interest ticker begins on the entire credit card balance.

Ethical Situation #3

Overdraft Protection

1. A bank Marketing Manager calculates the actual costs of an overdraft at $1.50.

2. His manager insists that the bank “fee” be increased from $12 to $20.

3. The Marketing Manager decides to resign rather than support the increase.

1. A bank Marketing Manager calculates the actual costs of an overdraft at $1.50.

2. His manager insists that the bank “fee” be increased from $12 to $20.

3. The Marketing Manager decides to resign rather than support the increase.

Ethical Situation #3

Fees for Overdrafts

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

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:CustomersCommunityCreditorsGovernment

CCC GOMES

OwnersManagersEmployeesSuppliers

Exhibit 3-2: Major Stakeholders in the Organization’s Performance

An Organization’s Main Responsibilities

Economic - be profitableLegal - obey the lawEthical - do what is rightDiscretionary -

contribute to community and quality of life

An Organization’s Main Responsibilities

What Is Your Level of Moral Development?

Level 3

Level 2

Level 1Preconventional - “What can I

get away with?”

Conventional - “What am I

legally required to do?”

Principled - “What is the right

thing to do?”

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 situationPeople are most likely to make their moral and

ethical decisions based on:– whatever feels right or – comfortable in a situation

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 familyPrimarily from religious principles and

teaching or bible contentOther

What Do You Use For a Moral Compass?

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?

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?

Is Your Conscience Reliable?

What Does One Do?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?

Is Your Conscience Reliable?

If a person’s values are at “Level 2,” they may make decisions based on the situation and what others say and doUsually 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

Are There Ethical Guidelines?

Sources of Significant InfluenceDo 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

To Have Ethical Guidelines You Need

A point of reference that:Is fixed - so that no one can change itIs separate from youNo one else may influence

The Fixed Point of Reference Must Be:

Right whether people:Believe it or notLike it or notKnow about it or not

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

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

Will The Golden Rule Help?

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?”

Would you consider your faith a fixed point that is separate from you and never changes?

Examples of World Religions Which Embrace the Golden Rule

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.”

What Influences Ethical Behavior?

The Individual’s RoleLevel one: Preconventional--acts in own best interest

– A few operate hereLevel two: Conventional--upholds legal laws

– Most people operate hereLevel three: Principled--lives by own code

– Less than 20% reach level three

The Organization’s RoleAt best, most employees in firm operate at level twoHow will the situation be handled if no policies and

procedures are in place?

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 treatingothers fairly

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

Ethics in Dealing with Salespeople

Five ethical considerations faced by sales managers:Level of sales pressureDecisions affecting territoryTo tell the truth?The ill salespersonEmployee rights

– termination-at-will

– privacy

– sexual harassment

Benefits of Respecting Employees Rights

More productive employeesAttracting good sales personnelReducing legal costsReducing wage increase demands

Salespeople’s Ethics in Dealing with Their Employers

Misusing company assetsMoonlightingCheatingAffecting other salespeopleTechnology theft

Ethics in Dealing with Customers

BribesMisrepresentationPrice discrimination

Robinson-Patman ActSelling the same quantity of the same product to

different buyers at different prices

Tie-in salesTo buy a particular line of merchandise, a buyer

mayClayton Act

Ethics in Dealing with Customers

Exclusive dealershipReciprocity

Buying a product from someone if the person or organization agrees to buy from you

Sales restrictionsCooling-off lawsGreen River ordinances

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

Managing Sales Ethics

Follow the leaderLeader selection is importantEstablish a code of ethicsCreate ethical structuresEncourage whistle-blowingCreate an ethical sales climateEstablish control systems

Helpful Hints to Making Career Decisions

Your employer should provide worthwhile products

You should be able to do what is rightYou do not have to compromise your beliefsPeople go before anything elseGood people are desperately needed in all

types of businesses/organizationsLook for a calling, not a job*