Group 1 presents

Managing
Ethics in a
Sales
Environment

What is Business
Ethics?

 Ethics

describes the moral content of

behavior.
Business Ethics is the study of how
businesspeople behave when facing
a situation with moral
consequences.*
Sales Management Ethics is the
specific component of business
ethics that deals with ethically
managing the sales function.

Salespeople are Boundary

Spanners
Boundary

spanner is someone who

performs his or her job in the
boundary between a company and
a customer
Salespeople represent the
company to the customer and the
customer to the company.*
Sales managers have a special role
in maintaining an ethical work and
sales environment.

Customer Vulnerability
Vulnerable

meaning they are at a

disadvantage relative to the
company.
Most often, the disadvantage comes
in these forms: Ignorance, Naivet,
and Powerlessness

Sources of Potentially Unfair

Advantages and
Disadvantages in the Sales
Arena
Source of Customer
Vulnerability

Salesperson
Advantage

Customer
Disadvantage

Ignorance

Salesperson has
superior technological
knowledge

Customer is
technologically
challenged and
cannot understand
salesperson

Naivet

Salesperson allows
room for negotiation
in setting prices

Customer doesnt
understand the
negotiation process.

Powerlessness

Salesperson works for

an exclusive supplier
to the customer who
is under contractual
obligation to purchase
from the supplier

Customer represents
a small retail
company with few
assets and little
access to other
markets

Applying Professional
Sales Codes of Ethics

Codes of Ethics
It

express the values of a firm by

specifying, in writing, specific
behaviors that are consistent or
inconsistent with those values.
Codes must not only be adopted,
they must embody values truly
epitomized by top management.

Types of Codes of Ethics

1.
2.
3.

4.

Company codes that define ethical

boundaries for employees.
Professional codes that define ethical
boundaries for occupational groups.*
Business association codes that define
ethical boundaries for people engaged
in the same line of business.*
Advisory group codes suggested by
government agencies or other special
interest groups.

Generally PROHIBITED Behaviors

in Sales-Related Codes of Ethics
Bribes,

gifts, kickbacks
Conflicts of interest
Illegal political payments
Violation of laws in general
Use of insider information
Violations of secrecy agreement
Falsification of sales accounts
Moonlighting
Violation of antitrust laws
Fraud and deception
Illegal payments abroad
Justifying the means by the intended end

Ethical Philosophies
and Moral Judgments

Moral Philosophy
It

deals with the systematic ways

that individuals recognize and
resolve decisions having moral
content

Idealism
Ideals

are set of principles by which

individual determine morality.
Golden Rule is considered a widely held
moral principle or moral absolute
Moral Absolute represents a rule that should
always be applied with no exceptions or
excuses.*
Idealism as a moral philosophy deals more
with how people use these principles than
with whether individual principle itself is
universally valid.

Relativism
As

a moral philosophy, is a process

by which each individuals reach
moral decisions based more on the
actions they perceive to be
acceptable given a particular
situation
Those who are highly committed to
relativism usually reject moral
absolutes or imperatives
Relativism is sometimes called

Teleology
It

is a philosophy that defines

morality based on the consequences
of the behavior.
It allows some indiscretion based on
the argument that the good that
results is more important than the
harm caused.
The end justifies the means.

Moral Judgment
Is

a persons evaluation of the

situation from an ethical perspective
Ethical Dilemma is a situation with
alternative courses of action, each
having different moral implications

Moral Judgment Criteria

1.
2.
3.

Moral Equity*
Acceptability*
Contractualism*

Are Salesperson
More Unethical
than Anyone Else?

Creating an Ethical
Work Climate

Ethical work climate

It

is a specific aspect of the

organizational climate
Organizational climate is the way
employees perceive the
organizational culture

Four unique aspects of

Ethical Climate
1.
2.
3.
4.

Policies and rules

Trust and responsibility
Peer behavior
Bottom-line sales emphasis

Policies and Rules

It

helps sales managers and sales

people to internalize and govern
selling and marketing conduct within
the fir
Sometimes it is summarized in a
code of ethics

Trust and Responsibility

Its

dimensions defines how far

people are trusted to behave in a
responsible way and are held
personally responsible for their
actions.

Peer Behavior
As

a dimension of ethical climate, is

the extent to which employees view
coworkers as having high standards.

Bottom-Line Sales
Emphasis
Sales

emphasis is the extent to

which employees feel pressured to
prioritize increased sales, profits,
margins, or other financial returns
over all other concerns.
A strong sales emphasis or bottomline orientation, coupled with a
control system based on sales
quotas, leads to a more negative
ethical work climate

Legal Considerations in
the Sales Environment

Federal Regulation
Laws protecting companies from
each other
2. Laws and policies protecting
consumer and society from unfair
business practices
1.

Price Discrimination
The

Clayton Act prohibits a seller

from discriminating on price or terms
of sale among different customers
when the discrimination has a
harmful effect on competition.
This practice is called price
discrimination

Price Differences or Different

Terms of Sales are allowed
under two conditions:
The price differential is given in
good faith to meet a price offered
by a competitor
2. The price differential is based upon
cost savings reflecting a difference
in the cost of manufacture, sale, or
delivery resulting from the differing
methods or quantities in which
products are sold or delivered
1.

Different Behaviors Associated with

Discrimination in the Marketplace
Collusion
Price Fixing
Exclusive Dealing
Restraint of Trade
Reciprocity
Tie-in Sales
Unordered Goods
Orders and Terms of Sale
Business Descriptions
Product Descriptions

Practicing Good Ethics

Among the Sales Force

Understanding Ethics
Ethical

Maturity- it is reached when

salespeople place the moral
treatment of others ahead of shortterm personal gain

Measuring the Ethical

Cliimate
Example Item

Trust/Responsibili
ty
Peer Behavior
Policies and
Rules
Sales Emphasis

Strongl
y
Disagre
e

Disagr
ee

Neutra
l

Agree

Strongly
Agree

Sales Manager Ethics

Checklist

Thank you!