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McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter
2
Ethics First…Then
Customer Relationships
2-2
What Influences Ethical Behavior?

The Individual’s Role

Level one: Preconventional – acts in own best interest


Level two: Conventional – upholds legal laws


Most people operate here
Level three: Principled – lives by own code


A few operate here
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?
2-3
Exhibit 2.1: 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?”
2-4
Exhibit 2.2: Moral Development Bell
Curve
2-5
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

2-6
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?
2-8
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?
2-9
Are There Ethical Guidelines?

Is Your Conscience Reliable?
 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?
2-10
Are There Ethical Guidelines?
Is Your Conscience Reliable? (Cont’d)
 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
2-11
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
2-12
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?

2-17
Exhibit 2.4: 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.”

2-18
What Do You Use For a Moral
Compass?
2-19
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

2-20
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
2-21
Salespeople’s Ethics in Dealing
with Their Employers
Misusing company assets
 Moonlighting
 Cheating
 Affecting other salespeople
 Technology theft

2-24
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
2-25
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

2-27
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*

2-29
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?

2-30