Transcript Chap003

3-1
McGraw-Hill/Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
3-2
Chapter
3
Social, Ethical, and Legal
Issues in Selling
McGraw-Hill/Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
3-3
Chapter
3
Management’s Social Responsibilities
What Influences Ethical Behavior
Management’s Ethical Responsibilities
Ethics in Dealing with Salespeople
Salespeople’s Ethics when Dealing with Their Employers
Ethics in Dealing with Customers
The International Side of Ethics
Managing Sales Ethics
McGraw-Hill/Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Management’s Social
Responsibilities
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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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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
3-5
Organizational Stakeholders
A stakeholder is any group within or outside the organization
that has a stake in the organization’s performance
Each stakeholder has a different interest in the organization
Customers
Owners
Community
Creditors
Managers
Employees
Government
Suppliers
CCC GOMES
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
An Organization’s Main
Responsibilities
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Economic--be profitable
Legal--obey the law
Ethical--do what is right
Discretionary--contribute
to community & quality
of life
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
3-7
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 handle situation if no policies and procedures?
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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Management’s Ethical
Responsibilities
3-8
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
Ethics sets standards as to what is good or bad in
conduct and decision making
Ethical behavior refers to treating others fairly
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3-9
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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Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
3-10
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
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Salespeople’s Ethics in Dealing
with Their Employers
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Misusing company assets
Moonlighting
Cheating
Affecting other salespeople
Technology theft
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3-12
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
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3-13
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
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3-14
The International Side of Ethics
Guidelines for conducting international business
may be different or even nonexistent
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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3-15
Managing Sales Ethics
Follow the organization’s 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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3-16
Summary of Major Selling Issues
Ethical behavior pertains to values of right and
wrong
Ethical decisions and behavior 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…
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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
McGraw-Hill/Irwin
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.