2. Ethics First…Then Customer Relationships3
Chapter
Ethics First…Then Customer Relationships
McGraw-Hill/Irwin
Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved.

3. 3
3-3
Chapter

4. 3 Main Topics Chapter Social, Ethical, Legal Influences
3-4
Chapter
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

5. 3
3-5
Chapter
Main Topics
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

6. 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

7. 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

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

9. 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

10. Exhibit 3-3: An Organization’s Main Responsibilities

11. 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?

12. Exhibit 3-4: 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?”

13. Exhibit 3-5: Moral Development Bell Curve

14. 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

15. 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

16. 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?

17. 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?

18. 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?

19. 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 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

20. 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

21. 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

22. The Fixed Point of Reference Must Be:
Right whether people:
Believe it or not
Like it or not
Know about it or not

23. 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

24. Exhibit 3-6: 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

25. 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?

26. Exhibit 3-7: 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.”

27. What Do You Use For a Moral Compass?

28. 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

29. 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

30. 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

31. Benefits of Respecting Employees Rights
More productive employees
Attracting good sales personnel
Reducing legal costs
Reducing wage increase demands

32. Salespeople’s Ethics in Dealing with Their Employers
Misusing company assets
Moonlighting
Cheating
Affecting other salespeople
Technology theft

33. 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
Clayton Act

34. 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

35. 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

36. 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

37. Ethics in Business and Sales
Personal project for you this week:
Using the three levels of moral development, score each ethical or moral decision you make this week
Do you have a pattern of using different moral development levels for different decisions?
What is a moral or ethical issue for you?

38. 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
Look for a calling, not a job*

39. 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?

40. Exhibit 3-13: What Do You Look for in an Employer?

41. Exhibit 3-14: The Tree of Business Life
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:
Ethical Service that Builds True Relationships
Shown with T’s standing for:
Truth: facts needed to make ethical and moral decisions T
Ethical
Service
Builds
T r u e
Relationships T C I

42. Golden Rule + Tree of Life
Measure the growth of your Business Tree of Life with your Golden Rule of Personal Selling.
Ethical
Service
Builds
T r u e
Relationships T T C I

43. Ethics Rule Business

44. 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

45. 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