part v sales force leadership chapter 10: sales force ethics

Part V

SALES FORCE LEADERSHIP

Chapter 10:

Sales Force Ethics

Figure 10-1: A Model of Ethical Decision Making

Part A:Part A:CharacteristicsCharacteristicsof decisionof decisionmaker facingmaker facingethical choicesethical choices

DemographicsDemographics

BehavioralBehavioral

PositionalPositional

Part C:Part C:OutcomesOutcomes

JobJobperformanceperformance

Rewards andRewards andpunishmentspunishments

Feedback andFeedback andlearninglearning

RecognizeRecognizealternatives,alternatives,affected partiesaffected partiesoutcomes.outcomes.

DetermineDeterminethe morally bestthe morally bestalternative:alternative:ethical theoriesethical theoriesmoral judgment moral judgment stagesstages

ConvertConvertintentions intointentions intoaction (decisionsaction (decisionsand/or behavior)and/or behavior)

Give PriorityGive Priorityto moral valuesto moral valuesand intend to do and intend to do what is morallywhat is morallyright.right.

Part B:Part B: Moral decision structure. To Moral decision structure. To behave normally in a given situation, a person behave normally in a given situation, a person must:must:

Situation ModeratorsSituation ModeratorsSocietalSocietal PeersPeers CustomersCustomersethicalethicalstandardsstandards SuperiorsSuperiors LegislationLegislationOrganization cultureOrganization culture

TO LOOK OR NOT TO LOOK

Assume you are taking a make-up final exam in a separate room and you need an A to pass the course, otherwise you might have to go to summer school and delay graduation for three months. You are 99% certain that your professor will not check in on you while you are taking the test and you have your textbook and notes in your book bag, which is sitting next to you on the floor. You are stumped on a few questions (enough so that you probably won’t get your A). If you looked in your notes and text, you would answer them correctly.

Do you look?Do you look?

Assume the same situation, but that if you got your A on the test you would receive $5,000 (in addition to graduating).

Now would you lookNow would you lookin your notes?in your notes?

TO LOOK OR NOT TO LOOK

Examples of Pressures Facing Sales Managers

Incentives to provide favorable earnings reports

High rewards for short –term profits at expense of long-term growth

Greed

Reputation

Other?

Purchasing Agent’s Ratings of Sales Activities and Correlations With Career Impact and Supplier Choice

Ethicality EthicalityEthicality Ethicality Ethicality Ethicality Salesperson BehaviorSalesperson Behavior MeanMean CareerCareer Supplier ChoiceSupplier Choice

Gifts to Current Customers:1. Give purchaser who was one of best customers

a gift worth $50 at Christmas 1.87 .33 .532. Gave one of best customers a $25 Christmas

gift. 2.26 .57 .653. Buys lunch for a purchasing agent 3.77 .34 .254. Gives every customer a present worth

$10 at Christmas 2.77 .57 .555. Provides entertainment for purchasing agent

such as tickets to sporting events. 2.63 .59 .55

Puts Own Interest First:1. Quotes higher than normal price for product

during temporary shortage situation 1.75 .12 .522. Lets it be know he has information about a

competitor if purchasing agent is interested. 1.90 .38 .613. Hints if order is placed, price might be lower

on next order, when it is not so. 1.29 .19 .22

4. Only stresses positive aspects of product,omitting possible problem purchasing agent’s firm might have with it. 1.97 .16 .43

5. Grants price concession to purchasing agentof company he owns stock in. 1.80 .36 .64

6. Attempts to sell product to purchasing agentthat has little or no value to buyer’s company. 2.06 .38 .40

7. Uses “back-door”selling instead of goingthrough purchasing department. 1.67 .21 .44

Gifts to Prospects:1. Gave purchaser who had not done business

before Christmas present worth $10 2.13 .53 .542. Gave purchase who had not bought from

the firm a Christmas gift worth $25 1.72 .47 .613. A $50 Christmas gift sent to purchaser who

has been called on but had not placed an order. 1.63 .38 .41

Purchasing Agent’s Ratings of Sales Activities and Correlations With Career Impact and Supplier Choice Ethicality EthicalityEthicality Ethicality Ethicality Ethicality

Salesperson BehaviorSalesperson Behavior MeanMean CareerCareer Supplier ChoiceSupplier Choice

Pressure or Coercion:1. In reciprocal buying situation, salesperson hints

unless order is forthcoming, prospect’ssales to firm might suffer. 1.61 .19 .50

2. Attempts to use economic power of firm to obtain concessions from the buyer. 1.99 .29 .57

3. Attempts to get purchasing agent to divulgecompetitor’s bid in low bid buying situation. 1.64 .26 .36

4. Exaggerated how quickly order will bedelivered to get the sale. 1.68 .33 .51

Preferential Treatment:1. In shortage situation allocates product

shipments to purchasing agent he personally liked. 1.91 .40 .672. Grants concessions to purchasing manager

depending on how much he likes manager. 2.24 .35 .553. Give preferential treatment to customers who

are also good suppliers. 2.97 .67 .68

Note: 5 = very unethical; 1 = very ethical. Correlations over.25 are significant at 0.01 level.

Purchasing Agent’s Ratings of Sales Activities and Correlations With Career Impact and Supplier Choice

Ethicality EthicalityEthicality Ethicality Ethicality Ethicality Salesperson BehaviorSalesperson Behavior MeanMean CareerCareer Supplier ChoiceSupplier Choice

Recognize the DilemmaRecognize the Dilemma

Get the FactsGet the Facts

List the OptionsList the Options

Make Your DecisionMake Your Decision

Ethical Checklist

Is it a Gift or a Bribe?

* Have you or your colleagues ever offered potential clients personal gifts valued at more than $100 in exchange for their business?

88.60%

11.40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

YesNo

Is it a Gift or a Bribe?

In your opinion, would a personal gift valued at $100 - $500 given to a potential client by a salesperson constitutes a bribe?

94.00%

6.00%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Questionable/ BribeAcceptable

Table 10-1 Eight Ways to Keep You Sales Force Honest1. Get support from top management showing that they

expect you to follow the spirit and letter of the law.

2. Develop and distribute a sales ethics policy.

3. Establish the proper moral climate. If the bosses follow the rules, then the troops are apt to do likewise.

4. Assign realistic sales goals. People who try to meet an unfair quota are more likely to rationalize their way to a kickback scheme.

5. Set up controls when needed. Watch people who live above their income.

6. Suggest that salespeople call for help when they face unethical demands.

7. Get together with your competition if payoffs are an industry problem.

8. Blow the whistle if necessary.

Honesty

“The reputation of a thousand yearsis determined by the conduct of one hour.”

Japanese Proverb

“There is no pillow as softas a clear conscience.”

Blanchard and Peale

“When in doubt, tell the truth.It will confound your enemies

and astound your friends.”Mark Twain