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Ethics, the Law,
and Sales Leadership
Topic
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Learning Objectives
Identify the more common ethical dilemmas
Distinguish between organizational policiesand practices that support ethical behavior
and those that enable unethical behavior Explain how principled leadership can foster
ethical principles and corporate culture
Develop an appropriate course of action whenyoure personally faced with an ethicaldilemma
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Who Exaggerates Least?
Professional salespeople?
Preachers?
Politicians? Professors?
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In a study where people were asked about their own
knowledge, skills, and abilities
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Approaches to Ethics
Approach Summary Pros and Cons
Golden Rule Treat others as youwould like to betreated
Personalizes ethical decisions, making it easy todetermine what to do
Fails to account for situations in which others are inconflict
Conventionalist Acts are OK as long as
its legal or if everyoneis doing it
Fails to account for gray areas, in which acts are not
specified as either legal or illegal
Protestant Ethic Do what you can,defend to a committeeof peers
Whats ethical is based on the intended, not actual,outcome
Can lead to more concern about doing what can bedefended than what is right
Market ImperativeApproach
The market willdetermine what is right
Provides clear responsibilities for individuals
Can devolve into might is right scenario
Libertine Ethic Do what you want, aslong as no one getshurt
Outcomes are important, and a responsibility for others isassumed
Can lead to problems when others are harmed indirectlyor harm is not obvious
Utilitarian Ethic Do what has the bestoutcome for allinvolved
Outcomes, and honorable intent, are important; requirestaking responsibility for others
Its unclear who gets to decide what outcomes are best
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The Golden Rule
Do unto others as you would have them do
unto you
Challenge: there are multiple others, and
their needs or wants conflict
Weakness: assumes that the way you want to
be treated is the way others want to be
treated
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The Conventionalist Approach
Suggests that people should takeany and all actions allowed bylaw or by convention Everybodys doing it, so it must
be okay
Do it until they say you cant
It is easier to ask forgiveness than permission
Weakness: doesnt consider whats ethical and
not ethical
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The Protestant Ethic
Could I satisfactorilyexplain this choice to acommittee of my peers?
Weakness: pick the rightcommittee, and you can
probably explain awayanything
Weakness: intent is more important than actions
Providing evidence of honorable intent can be difficult
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The Market Imperative
The market requires a person to act in his or her own bestinterest
Based on Adam Smiths classical economics approach to capitalism
The salesperson works for the organization, and the
organizations needs come first Counter-argument: corporation is an entity granted the right
to exist by society, so the corporation must be governed bywhat is best for society in addition to maximizing shareholderwealth
What is best for society must balance the interests of the differentpeople within it, shareholders, employees, and customers alike
Smith might say these groups should fight it out
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The Libertine Ethic
Individual freedom: oneshould be free to do whateverone wants, as long as no oneelse gets hurt Customers should be free to
make their own decisions
Weakness: identifies only thetwo parties in the transaction
as being important; conflictsamong other groups are rarelyconsidered or resolved
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The Utilitarian Ethic
Do the positive consequences outweigh the
negative consequences?
Weakness: who gets to decide the value of the
positive and negative outcomes?
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The Salesperson as
a Boundary Spanner
Boundary spanner: operates both outside of
and within an organizations boundaries
Work within their company but also work with
customers outside the company
Because salespeople are boundary spanners,
they encounter ethical dilemmas externally
with customers and internally with other
employees
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Who Does the Salesperson Represent?
The Company The CustomerThe Salesperson
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Ethics in Sales Management:
Done Right
Salesperson Dave made it clear that while
Laura worked for Travelocity, he worked for
both her and the company
Collaboration and respect made them a
successful team
When sales is done right, friendships can
develop and great things can be accomplished
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Common Ethical Issues between
Customers and Their Salespeople
Misrepresentation Salesperson exaggerates benefits or minimizes
problems, leading a customer to draw erroneousconclusions
Bribery Salesperson attempts to influence a buyer unfairly by
offering a gift or money
Privacy
Salesperson fails to protect the privacy of another customerby giving the customers confidential information toanother customer
Salesperson invades the customers privacy with spam orunwanted calls
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Ethical Issues Associated with the
Salespersons Company
Stealing Salesperson fails to work a full day, stealing time
Salesperson pads expense accounts
Claiming
Credit
Salesperson steals other peoples leads
Salespeople misrepresent location of customerto receive credit for an order belonging to someoneelse
Sexual
Harassment
Salesperson experiences unwanted sexual offers orinappropriate physical contact
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Creating an Ethical Sales Climate
Code of Ethics
Supports Salespeoples intentions to remain ethical, offering
salespeople an out when under pressure
Helps Salespeople inform others that they intend to conduct
business in an ethical manner
Provides Salespeople and other employees with guidelines and
standards for conduct
Attracts High-quality salespeople
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Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall.
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Identifying and Responding to
Ethical Breaches
Encourage
Whistle-Blowing
Use Technology
to Identify
Questionable
Activities
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Due Process Systems for Responding
to Ethical Breaches
Mediator/
Counselor
Manager investigates, leads discussions, builds consensusabout potential guilt of accused person and need for changesin organizations practices or policies
Grievance &Arbitration
Guilt and punishment investigated and discussed byprogressively higher levels of management and labor
Investigation &
Punishment
Upper manager investigates potential violations, determinesguilt, and assesses punishment to the guilty
Employee-
Board
Mediator/Counselor role taken on by board of accusedemployees peers
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Are Managers equally lenient or strict?
When a sales rep acts unethically
High performers tend to be treated leniently
Even when they have acted unethically before
Even when policy does not allow for different treatment
Even when the breach is serious
But the act is the key to the punishment, not the excuse or
reason for the act
Sources: Joe Bellizi 2008, Honoring Accounts of Top Sales Performers and Poor Sales Performers Who Have
Engaged in Unethical Selling Behavior,Journal of Global Issuesand his work from 1997 to 2003
How can a sales leader avoid variety in punishment?
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Dealing Personally
with Ethical Breaches
QuitTake a
Stand
Negotiate an
Alternative
Appear
to Agree
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Laws for Sales Managers
Labor Laws
Fair pay issues, appropriateemployee selection andretention issues
Reporting processes and legalrequirements for sexual
harassment claims
Market Lawsto Promote Fair Competition
Foreign Corrupt Practices Act
Robinson-Patman Act andantitrust acts that forbid pricediscrimination andnoncompeting agreements
Whistle-blower laws