Ethics First... Then Customer Relationships

1. Ethics First... Then Customer Relationships 2 Chapter

2. 2 Chapter

3. 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

4. Main Topics, cont... • 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

5. 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

6. 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 Organizational Stakeholders • Owners • Managers • Employees • Suppliers • CCC GOMES

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

8. 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.

9. Exhibit 2-3: An Organization’s Main Responsibilities

10. 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?

11. Exhibit 2-4: 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?”

12. Exhibit 2-5: Moral Development Bell Curve

13. 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

14. 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

15. 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?

16. 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?

17. Are There Ethical Guidelines? • Is Your Conscience Reliable? • 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?

18. Are There Ethical Guidelines? • Is Your Conscience Reliable? (Cont’d) • 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.

19. 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

20. 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

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

22. 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.

23. Exhibit 2-6: 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.

24. 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?” (Hartman 2004) • Would you consider your faith a fixed point that is separate from you and never changes?

25. Exhibit 2-7: 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.”

26. What Do You Use For a Moral Compass?

27. 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.

28. 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.

29. 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

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

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

32. 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 be required to buy other, unwanted products. • Clayton Act

33. 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

34. 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

35. 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

36. 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?

37. 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.*

38. 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?

39. Exhibit 2-10: What Do You Look for in an Employer?

40. T T T T T T T T T T T Exhibit 2-11: The Tree of Business Life’s Roots and Frame Based Upon Truth 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 Service Ethical Builds T r u e Relationships T C I

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

42. Ethics Rule Business

43. 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.

44. 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.