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Ethics First…Then Customer Ethics First…Then Customer RelationshipsRelationships

Ethics First…Then Customer Ethics First…Then Customer RelationshipsRelationships

Chapter

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3

Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin

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Main TopicsMain TopicsMain TopicsMain Topics

Social, Ethical, Legal InfluencesManagement’s Social Responsibilities

What Influences Ethical Behavior?Are There any Ethical Guidelines?

Management’s Ethical ResponsibilitiesEthics in Dealing with Salespeople

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Main TopicsMain TopicsMain TopicsMain Topics

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

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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

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Organizational Stakeholders 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:CustomersCommunityCreditorsGovernment

CCC GOMES

OwnersManagersEmployeesSuppliers

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Exhibit 3-2: Major Stakeholders in the Organization’s Performance

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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

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Exhibit 3-3: An Organization’s Main Responsibilities

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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?

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Exhibit 3-4: What Is Your Level of Moral Development?

Preconventional - “What can I get away with?”

Conventional - “What am I legally required to do?”

Principled - “What is the right thing to do?”

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Exhibit 3-5: Moral Development Bell Curve

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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 situationPeople are most likely to make their moral and

ethical decisions based on:whatever feels right or comfortable in a situation

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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

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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?

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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?

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Is Your Conscience Reliable?

What Does One Do?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?

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Is Your Conscience Reliable?

If a person’s values are at “Level 2,” they may make decisions based on the situation and what others say and doUsually 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

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Are There Ethical Guidelines?

Sources of Significant InfluenceDo 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

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To Have Ethical Guidelines You Need

A point of reference that: Is fixed – so that no one can change it Is separate from youNo one else may influence

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The Fixed Point of Reference Must Be:

Right whether people:Believe it or notLike it or notKnow about it or not

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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

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Exhibit 3-6: 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

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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?”

Would you consider your faith a fixed point that is separate from you and never changes?

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Exhibit 3-7: 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.”

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What Do You Use For a Moral Compass?

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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

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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

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Ethics in Dealing with Salespeople

Five ethical considerations faced by sales managers:Level of sales pressureDecisions affecting territoryTo tell the truth?The ill salespersonEmployee rights

termination-at-willprivacysexual harassment

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Benefits of Respecting Employees Rights

More productive employees Attracting good sales personnel Reducing legal costs Reducing wage increase demands

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Salespeople’s Ethics in Dealing with Their Employers

Misusing company assets Moonlighting Cheating Affecting other salespeople Technology theft

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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 Clayton Act

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Ethics in Dealing with Customers

Exclusive dealership Reciprocity

Buying a product from someone if the person or organization agrees to buy from you

Sales restrictionsCooling-off lawsGreen River ordinances

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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

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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

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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?

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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*

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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?

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Exhibit 3-13: What Do You Look for in an Employer?

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Exhibit 3-14: The Tree of Business Life

IT C

TT T

T T T TT T T T

Ethi

cal Service

Builds

T r

u e

Relationships

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

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Golden Rule + Tree of Life Measure the growth

of your Business Tree of Life with your Golden Rule of Personal Selling.

IT C

TT T

T T T TT T T T

Ethi

cal Service

Builds

T r

u e

Relationships

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Ethics Rule Business

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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

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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