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Chapter. 3. Social, Ethical, and Legal Issues in Selling. Chapter. 3. Management’s Social Responsibilities What Influences Ethical Behavior Management’s Ethical Responsibilities Ethics in Dealing with Salespeople Salespeople’s Ethics when Dealing with Their Employers

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  1. Chapter 3 Social, Ethical, and Legal Issues in Selling

  2. Chapter 3 • Management’s Social Responsibilities • What Influences Ethical Behavior • Management’s Ethical Responsibilities • Ethics in Dealing with Salespeople • Salespeople’s Ethics when Dealing with Their Employers • Ethics in Dealing with Customers • The International Side of Ethics • Managing Sales Ethics

  3. 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

  4. Organizational Stakeholders • A stakeholder is any group within or outside the organization that has a stake in the organization’s performance • Each stakeholder has a different interest in the organization • Owners • Customers • Community • Managers • Employees • Creditors • Government • Suppliers • CCC GOMES

  5. An Organization’s Main Responsibilities • Economic--be profitable • Legal--obey the law • Ethical--do what is right • Discretionary--contribute to community & quality of life

  6. 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 handle situation if no policies and procedures?

  7. 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 • Ethics sets standards as to what is good or bad in conduct and decision making • Ethical behavior refers to treating others fairly

  8. 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

  9. 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

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

  11. 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

  12. 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

  13. The International Side of Ethics • Guidelines for conducting international business may be different or even nonexistent • It is important to keep up to date on the law and be aware of how authorized representatives are conducting business

  14. Managing Sales Ethics • Follow the organization’s leader • Leader selection is important • Establish a code of ethics • Create ethical structures • Encourage whistle-blowing • Create an ethical sales climate • Establish control systems

  15. Summary of Major Selling Issues • Ethical behavior pertains to values of right and wrong • Ethical decisions and behavior 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

  16. 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

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