CHAPTER 3 CHAPTER 3 Selling Ethically

“Always do right—this will gratify some and astonish others.” Mark Twain

1 3 Moral Standards Ethics are moral standards by which actions and situations can be judged  Honesty  Fairness

1 3 What is right? What is wrong? Values congruity is a level of agreement among different people about the values that are important Salespeople interact with many different people  Reaching agreement on what is ethical can be a challenging task

1 3 Ethical Conflict Each party in a sales transaction brings a set of expectations  Which set of interests does the salesperson choose to satisfy—corporate interests or the customers’ interest?  How do the values of the salesperson affect these decisions?  What are the consequences of the various sales alternatives available to the salesperson?

1 3 Multiple Business Relationships The role as a boundary spanner requires salespeople to manage multiple relationships both internally and externally Salespeople interact with:  Their sales managers  Other marketing personnel  A variety of nonmarketing personnel within their organization (internally)  Customers and prospects in the field (externally)

1 3 Sources of Conflict Conflict may exist between salespeople and others within the sales organizational relationship  Norms represent standards of behavior that groups expect of their members (Refer to Table 3.1)  Moral types are classes of people who are grouped according to the values that they hold

1 3 Classification of Moral Types Moral TypeKey Goals In Life HedonistPhysical pleasures Profit maximizerMaking money SocialiteBeing a social butterfly/party animal PoliticianPower and glory Self-actualizerSpiritual values CraftspersonTechnical expertise Company personBelonging to the organization Games personPrestige, glory, and fame Refer to Table 3.2--Classification of Moral Types

1 3 Three Qualities for Ethical Decision-making 1.Ability to recognize ethical issues and think through consequences 2.Self confidence to seek others’ points of view 3.Willingness to make ethical decisions when there’s no obvious solution

Figure 3.1 Ethical Decision Making Framework Ethical Situation Decision Outcomes Characteristics of the Decision-Maker Significant Influences Click on each component

1 3 Characteristics of the Decision Maker Achievement motivation Need for affiliation Ego strength Locus of control Knowledge Experience Risk taking Machiavellianism Back to Framework

1 3 The Ethical Situation Opportunity Ethical decision history Moral intensity of the situation  Selective perception Back to Framework

1 3 Significant Influences Salespeople, as they attempt to build relationships, often try to fit their actions in response to others who are involved in the building of that relationship  Family/ friends  Work colleagues  Supervisors Other significant influences Role Episode Process Back to Framework

1 3 Significant Others Role ExpectationsSent Role Perceptions and evaluation of behavior of salesprofessional Attempts to influence behavior of salesperson Salesperson as Focal Person Received RoleRole Behavior Salesperson's perception of influence attempt Actual behavior undertaken by salesperson Figure 3.2 The Role Episode Process Back to Significant Influences Back to Framework

1 3 Other Significant Influences on The Salesperson The Organization Work The Law Economics Professionalism Technology Back to Significant Influences Back to Framework

1 3 The Decision Variations in decisions will occur  Some salespeople will judge actions strictly according to their perceived rightness or wrongness  Some salespeople may choose to ignore the consequences of their actions while others focus exclusively on them Back to Framework

1 3 Outcomes Performance Satisfaction Feedback Promotions Learning Back to Framework While outcomes are neither ethical nor unethical, the actions leading to those outcomes have ethical ramifications Refer to Table 3.3--Summary Framework for Ethical Decision Making

1 3 Ethical Problems Faced By Salespeople Bribery Fairness Honesty Price Deception Product Deception Personnel Decisions Confidentiality Advertising Deception Manipulation of Data Purchasing Decisions Refer to Table Ethical Issues Faced by Salespeople

1 3 CRM and Privacy Issues Five recognized fair information practices pertinent to privacy  Notice  Choice consent  Access  Security  Enforcement

1 3 Codes of Ethics Corporate benefits:  Allow salespeople to identify what their firm recognizes as acceptable business practices  Help salespeople to inform others that they intend to conduct business in an ethical way  Can be an effective internal control of behavior  Generate greater drive and effectiveness in employees  Allow a company to attract high caliber people more easily  Help salespeople avoid confusion in determining what is ethical Refer to Table 3.5--Ethical Standards Salespeople Should Follow

1 3 Codes and Excuses Four types of excuses:  “I was told to do it”  “Everybody’s doing it”  “My actions won’t make any difference”  “It’s not my problem”

1 3 Codes and Performance Does the behavior or result achieved comply with… 1.organizational standards of behavior as specified in the code of ethics? 2.professional standards of behavior as specified in an industry code? 3.all applicable laws, regulations, or government codes?

1 3 How Sales Organizations Can Support Ethical Practices Follow steps provided by the Federal Sentencing Guidelines Follow Caux Round Table (CRT) principles Establish and enforce ethical codes Provide seminars and training in ethics Consult ethics advisors

Ultimately, the individual salesperson is responsible for his actions