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3-1 Ethics First…Then Customer Relationships McGraw-Hill/Irwin Chapter 3 Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 3 3-3 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 Chapter 3 3-4 Main 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 Chapter 3 3-5 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 3-6 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: Customers Owners Community Managers Creditors Employees Government Suppliers CCC GOMES 3-7 Exhibit 3-2: Major Stakeholders in the Organization’s Performance 3-8 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 3-9 Exhibit 3-3: An Organization’s Main Responsibilities 3-10 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? 3-11 Exhibit 3-4: 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?” 3-12 Exhibit 3-5: Moral Development Bell Curve 3-13 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 3-14 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 3-15 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? 3-16 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? 3-17 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? 3-18 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 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 3-19 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 3-20 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 3-21 The Fixed Point of Reference Must Be: Right whether people: Believe it or not Like it or not Know about it or not 3-22 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 3-23 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 3-24 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?” Would you consider your faith a fixed point that is separate from you and never changes? 3-25 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.” 3-26 What Do You Use For a Moral Compass? 3-27 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 3-28 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 3-29 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 3-30 Benefits of Respecting Employees Rights More productive employees Attracting good sales personnel Reducing legal costs Reducing wage increase demands 3-31 Salespeople’s Ethics in Dealing with Their Employers Misusing company assets Moonlighting Cheating Affecting other salespeople Technology theft 3-32 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 Clayton Act 3-33 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 3-34 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 3-35 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 3-36 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? 3-37 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* 3-38 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? 3-39 Exhibit 3-13: What Do You Look for in an Employer? 3-40 Exhibit 3-14: The Tree of Business Life T T T T T TT T T T T Builds 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 Relationships Shown with T’s standing for: Truth: facts needed to make ethical and moral decisions 3-41 Golden Rule + Tree of Life Measure the growth T T T T T TT T T T T Builds of your Business Tree of Life with your Golden Rule of Personal Selling. Relationships 3-42 Ethics Rule Business 3-43 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 3-44 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 3-45
