Ethics: The Foundation for Ethics: The Foundation for Relationships in SellingRelationships in Selling

Concepts and PracticeConcepts and Practice

Ethics: To PonderEthics: To Ponder

What do you think are the most common ethical What do you think are the most common ethical dilemmas that salespeople face?dilemmas that salespeople face?

How do you think the average salesperson How do you think the average salesperson performs in each of those situations?performs in each of those situations?

Making Ethical Making Ethical DecisionsDecisions

Business ethics: principles and standards that Business ethics: principles and standards that guide behavior in the world of businessguide behavior in the world of business

They help translate your values into appropriate They help translate your values into appropriate and effective behaviorsand effective behaviors

No one uniform code of ethics for all salespeople, No one uniform code of ethics for all salespeople, but many businesses, professional associations, but many businesses, professional associations, and certification agencies have established and certification agencies have established written codeswritten codes

See a primer on business ethics on the Web at:See a primer on business ethics on the Web at:

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Code of the National Association of Code of the National Association of Sales ProfessionalsSales Professionals

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FIGURE 5.1

Character DevelopmentCharacter Development

Colleges and universities are beginning to Colleges and universities are beginning to play a more active role in character play a more active role in character developmentdevelopment

Courses that focus on ethics are becoming Courses that focus on ethics are becoming quite commonquite common

Despite a growing interest in business ethics, Despite a growing interest in business ethics, unethical behavior has become all too unethical behavior has become all too commoncommon

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Enron—A Classic Case in Enron—A Classic Case in EthicsEthics

Largest U.S. corporation to file bankruptcyLargest U.S. corporation to file bankruptcy

Enron culture emphasizedEnron culture emphasized• Risk-takingRisk-taking• Personal ambition over teamworkPersonal ambition over teamwork• Earnings growth at any costEarnings growth at any cost

Dishonest practices eroded company Dishonest practices eroded company charactercharacter

But, it was listed as number5 in Fortune But, it was listed as number5 in Fortune 2002 list! Why?2002 list! Why?

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Fortune’s 2002Fortune’s 2002Company RankingsCompany Rankings

Top 500Top 500

1.1. Wal-MartWal-Mart

2.2. Exxon-MobilExxon-Mobil

3.3. General MotorsGeneral Motors

4.4. FordFord

5.5. EnronEnron

6.6. General ElectricGeneral Electric

7.7. CitigroupCitigroup

8.8. Chevron-TexacoChevron-Texaco

9.9. IBMIBM

10.10. Phillip MorrisPhillip Morris

Best to Work ForBest to Work For

1.1. Edward JonesEdward Jones

2.2. Container StoreContainer Store

3.3. Alson & BirdAlson & Bird

4.4. XilinxXilinx

5.5. Adobe SystemsAdobe Systems

6.6. American Cast Iron PipeAmerican Cast Iron Pipe

7.7. TD IndustriesTD Industries

8.8. J. M. SmuckerJ. M. Smucker

9.9. Synovus Financial Synovus Financial

10.10. Wegmans Food MarketsWegmans Food Markets

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Half-Truths Influencing Half-Truths Influencing the Erosion of Characterthe Erosion of Character

We are in it only for ourselvesWe are in it only for ourselves

Corporations exist to maximize shareholder valueCorporations exist to maximize shareholder value

Companies need toCompanies need tobe lean and meanbe lean and mean

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Factors Determining Factors Determining Ethical Behavior of Ethical Behavior of

SalespeopleSalespeople

FIGURE 5.2

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Management as Role Management as Role ModelModel

Ethical standards filter down from the top Ethical standards filter down from the top

Organization’s moral tone, set by Organization’s moral tone, set by management, is most important determinant management, is most important determinant of employee ethicsof employee ethics

Managers must infuse ethicalManagers must infuse ethicalvalues in subordinatesvalues in subordinates

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Company Policies and Company Policies and PracticesPractices

Company policies and practices can Company policies and practices can have a major impact on conducthave a major impact on conduct

Developing ethical policy statements Developing ethical policy statements forces company to take a standforces company to take a stand

Policies should include distributor Policies should include distributor relations, customer service, pricing, relations, customer service, pricing, product development, etc.product development, etc.

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Trust:Trust:The St. The St.

PaulPaul

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Mutual of Omaha’sMutual of Omaha’sValues for SuccessValues for Success

1.1. Openness and trust Openness and trust

2.2. Teamwork (win-win)Teamwork (win-win)

3.3. Accountability/ownershipAccountability/ownership

4.4. Sense of urgencySense of urgency

5.5. Honesty and integrityHonesty and integrity

6.6. Customer-focusCustomer-focus

7.7. Innovation and riskInnovation and risk

8.8. Caring/attentive (be here now)Caring/attentive (be here now)

9.9. LeadershipLeadership

10.10.Personal and professional growthPersonal and professional growth

Read more about their values at: Read more about their values at: careerlink.org.

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Ethics: To PonderEthics: To Ponder

How would you react to each of the following?How would you react to each of the following?

Your company has a set amount for mileage Your company has a set amount for mileage reimbursement, but your sales manager reimbursement, but your sales manager tells you to inflate your expense account to tells you to inflate your expense account to make up for the rising costs of make up for the rising costs of transportation.transportation.

You are meeting with a customer and he You are meeting with a customer and he asks you to take him to lunch. You get the asks you to take him to lunch. You get the impression that he wants you to pay, but impression that he wants you to pay, but your company has a strict “no gifts” policy.your company has a strict “no gifts” policy.

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Additional Policy AreasAdditional Policy Areas

Sharing confidential Sharing confidential informationinformation

ReciprocityReciprocity

BriberyBribery

Gift givingGift giving

EntertainmentEntertainment

Business defamationBusiness defamation

Use of the InternetUse of the Internet

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Sales Manager as Role Sales Manager as Role ModelModel

A salesperson’s actions often mirror A salesperson’s actions often mirror those of the sales manager those of the sales manager

Sales managers are responsible for Sales managers are responsible for interpreting company policyinterpreting company policy

Values such as integrityValues such as integrityand honesty must receiveand honesty must receiveconstant manager supportconstant manager support

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Personal ValuesPersonal ValuesValues are deep personal beliefs and Values are deep personal beliefs and

preferences, representing the ultimate reasons preferences, representing the ultimate reasons people have for acting as they do people have for acting as they do

Values serve as foundations for our attitudesValues serve as foundations for our attitudes

Attitudes serve as foundations for our behaviorAttitudes serve as foundations for our behavior

FIGURE 5.3

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When Values ConflictWhen Values Conflict

You have three basic choices:You have three basic choices:

1.1. Ignore the influence of yourIgnore the influence of yourvalues and engage in thevalues and engage in theunethical behaviorunethical behavior

2.2. Voice strong opposition to the practice that is in Voice strong opposition to the practice that is in conflict with your value systemconflict with your value system

3.3. Refuse to compromise your values and be Refuse to compromise your values and be prepared to deal with the consequencesprepared to deal with the consequences

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Laws, Contracts, and Laws, Contracts, and AgreementsAgreements

Legal environment plays a role in preventing Legal environment plays a role in preventing unethical behaviorunethical behavior

Cooling-off lawsCooling-off laws

Uniform Commercial Code—law influencing Uniform Commercial Code—law influencing buyer-seller transactionsbuyer-seller transactions

Oral and written contractsOral and written contracts

Beyond the letter of the lawBeyond the letter of the law

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The Uniform Commercial The Uniform Commercial CodeCodeTABLE 5.1

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Develop a PersonalDevelop a PersonalCode of EthicsCode of Ethics

Some general guidelines:Some general guidelines: Personal selling must be viewed as an exchange Personal selling must be viewed as an exchange

of valueof value

Relationship comes first, tasks secondRelationship comes first, tasks second

Be honest with yourselfBe honest with yourselfand othersand others

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Exercising Care with CRM DataExercising Care with CRM Data

CRM software allows storage of transaction data CRM software allows storage of transaction data and personal infoand personal info

Record facts, not opinions or conclusionsRecord facts, not opinions or conclusions

CRM data is “mobile” and otherCRM data is “mobile” and otherpeople may see or use itpeople may see or use it

Do not store anything you doDo not store anything you donot want the customer to seenot want the customer to see

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The Trust FactorThe Trust Factor

In transactional sales, the focus is on trust in In transactional sales, the focus is on trust in the productthe product

In consultative sales, the focus is on trust in In consultative sales, the focus is on trust in the salespersonthe salesperson

In strategic alliance sales, the focus is on the In strategic alliance sales, the focus is on the other company and its valuesother company and its values