Presentation on theme: "Sales Ethics: Its Not An Oxymoron. Corporations Today Corporations, by charter, are immortal Corporations have multiple relationships that they are unlikely."— Presentation transcript:
Corporations Today Corporations, by charter, are immortal Corporations have multiple relationships that they are unlikely to keep secret very long – www.sec.gov/edgar.shtml www.sec.gov/edgar.shtml Magnified for media companies, because revenue depends on: – Advertisers – Subscribers/Audience size
Advertising Is Vital Large advertisers such as Verizon, P&G, GM, and Coca-Cola will be around for decades Its not smart business to bite the hands that will feed your company for the next several decades Dont lie to them or cheat them – Customers dont buy from people or companies they dont trust
Other Reasons? What are some other reasons for not biting the hands that feeds you?
Current Headlines The press loves stories about corporate dishonesty – Enron scandal – WorldCom – Ogilvy & Mather over-billing the governments Office of National Drug Control – Bear Stearns hedge fund managers lying to investors – Goldman Sachs cheating customers
Whats Going On? Greed – Wrong incentives People go along with unethical behavior because: –No one will know –If I dont take their money someone else will
Rationalization Criminals and other sociopaths typically rationalize their behavior with the last one (if I dont take their money, someone else will) A salesperson for a major media company forged a clients name on a contract so revenue would be recognized, but got caught when the client got a bill and said, We didnt sign anything! –I wont get caught.
Three Reasons There are many reasons for unethical behavior, but three common ones are: – Strong tendency to bow to authority and follow orders: just following orders. – Strong tendency to do what peer group doessocial pressure and conformity: everyone does it. – An absence of clearly defined and communicated standards: nobody told me.
Bow to authority Give up their individual free will and autonomy and turn their conscience over to someone else - Wont work – Nazis at Nuremburg trials Cave in to peer pressure in order to conform Negate their free will and autonomy and hand over individuality to the crowd - Wont work – you have a conscience, the crowd doesnt Absence of standards Organizations must create and communicate ethical standards to trump the nobody told me copout - Copout wont work – we all know what were supposed to do
Examples? Can anyone think of any other examples of recent ethical lapses?
Why? Sociopath, narcissist, excessive greed, or other personality defects? Perhaps due to extreme pressure from management Perhaps because of an absence of clearly defined and communicated standards or a code of ethics
Ethics Clearly defined standards of right and wrong set out by written codes or standards by a company Individual standards of right and wrong based on: – Deep-seated personal values – Accepted beliefs and modes of conduct by groups in which people choose to work and play
Ethics With heightened press coverage of business scandals… The public has become increasingly concerned about ethical behavior… Now, more than ever is the time to follow Peter Druckers sage advice… It is more important to do the right thing than to do things right
Salespersons Five Areas of Ethical Responsibility 1 To consumers – Customers buy a product or service. – Consumers use a product – In some businesses (retail, utilities, transportation, e.g.) the customer and the consumer are the same – In other businesses (CPG, media, e.g.) they are different Audience/readers/subscribers = consumers Advertisers = customers
Salespersons Five Areas of Ethical Responsibility 1. To consumers (audience/subscribers) – Put consumers first – Dont lie to them – Dont sell them shoddy products – Dont sell unsafe products – Dont accept advertising for products you wouldnt recommend to a relative
2. To their conscience – Doing whats right according to ones own moral standards –There is no pillow as soft as a clear conscience – Doing the right thing increases self-esteem, self- image, and self-confidence – Greed is a cancer that will kill a persons and a companys reputation and eventually kill the organism
– Some people are unethical because they believe they wont get caught – But they are playing an ethical lottery with the odds of losing extremely high – Doing the right thing every business day is the only sure way of not getting caught and of maintaining a reputation and the self-esteem that goes along with an excellent reputation
3. To customers – Customers (advertisers) dont buy from people and companies they dont trust –Under-promise and over-deliver – Dont sell customers: Something they dont need Something they cant afford Something that doesnt work
– Dont accept advertising: That is in bad taste That hurts a customers image That is misleading – Salespeople shouldnt: Give kickbacks Use bait-and-switch tactics Let customers feel like they lost a negotiation Reveal information before a campaign runs or reveal competitive information
– Salespeople shouldnt: Promise what advertising itself cannot deliver – The media can deliver potential exposure to an audience – Cant promise results--too many uncontrollable factors Promise something they cant realistically deliver: – Promotions – Merchandising – Tickets – Position – Placements – Completion schedules
4. To the community – The global community The world community, society Do no harm Suppose everybody in the world did this? – The business community To maintain faith in the free-market system Investors, regulators, general public Suppose everybody in business did this?
– An industry community The advertising-supported media – Americans get their news and often their values, beliefs, and attitudes from the media – The media can alter peoples view of the world and their prejudices – Salespeople have a responsibility to keep the media free by fueling it with advertising – Protecting democracy – A local community Dont foul your nest or cheat your neighbor Broadcasters get licenses to serve the community
5. To their company – Salespeople represent their company to customers – Especially with intangible products, a salesperson is the surrogate for the product – The salesperson is the company in the eyes of a customer – Therefore, a companys credibility depends on the salespersons credibility
Rewards to salespeople often unwittingly reinforce doing the wrong thing: – Compensation systems often reward getting orders regardless of what is best for customers – Contests often reward non-customer-centric behavior – Bonuses for making budgets regardless of what is reasonable can cause unethical sales practices
CFOs or top management sometimes recommend accounting practices thatpreserve a companys assets Too often they have the wrong assets in mind A companys and a salespersons most precious asset is an excellent reputation Protect this reputation by always doing the right thing
The Ethical Hierarchy The Five Cs – Consumers – Conscience – Community – Customers – Company
Ethics Check Is it legal? – Laws – Regulations – Company policy Is it fair? – To both sides – To all stakeholders What does my conscience say?
Ethics The New Golden Rule – Do unto customers as they would have others do unto them (not you). Kants Categorical Imperative – Act on the premise that the choices you make will become universal law – for all people for all time.