Figure 6-2: Making Decisions on Ethical Problems General Values and Norms of Society Definition of Goals and Ethical Standards of Business Corporations Definition of Goals and Ethical Standards of Business Corporations Relationship between Corporation Values and Values of Manager Relationship between Corporation Values and Values of Manager Managerial Decisions

Figure 6-1: A Model of Ethical Decision Making Part A: Characteristcs of decision maker facing ethical choices Demographics Behavioral Positional Part C: Outcomes Job performance Rewards and punishments Feedback and learning Recognize alternatives, affected parties outcomes. Determine the morally best alternative: ethical theories moral judgment stages Convert intentions into action (decisions and/or behavior) Give Priority to moral values and intend to do what is morally right. Part B: Moral decision structure To behave normally in a given situation, a person must: Situation moderators SocietalPeersCustomers ethical standardsSuperiorsLegislation Organization culture

Purchasing Agent’s Ratings of Sales Activities and Correlations With Career Impact and Supplier Choice Ethicality Ethicality Ethicality Salesperson BehaviorMeanCareerSupplier Choice Gifts to Current Customers: 1.Give purchaser who was one of best customers a gift worth $50 at Christmas Gave one of best customers a $25 Christmas gift Buys lunch for a purchasing agent Gives a very customer a present worth $10 at Christmas Provides entertainment for purchasing agent such as tickets to sporting events Puts Own Interest First: 1.Quotes higher than normal price for product during temporary shortage situation Lets it be know he has information about a competitor if purchasing agent is interested Hints if order is placed, price might be lower on next order, when it is not so

Purchasing Agent’s Ratings of Sales Activities and Correlations With Career Impact and Supplier Choice Ethicality Ethicality Ethicality Salesperson BehaviorMeanCareerSupplier Choice 4.Only stresses positive aspects of product, omitting possible problem purchasing agent’s firm might have with it Grants price concession to purchasing agent of company he owns stock in Attempts to sell product to purchasing agent that has little or no value to buyer’s company Uses “back-door”selling instead of going through purchasing department Gifts to Prospects: 1.Gave purchaser who had not done business before Christmas present worth $ Gave purchase who had not bought from the firm a Christmas gift worth $ A $50 Christmas gift sent to purchaser who has been called on but had not placed an order

Purchasing Agent’s Ratings of Sales Activities and Correlations With Career Impact and Supplier Choice Ethicality Ethicality Ethicality Salesperson BehaviorMeanCareerSupplier Choice Pressure or Coercion: 1.In reciprocal buying situation, salesperson hints unless order is forthcoming, prospect’s sales to firm might suffer Attempts to use economic power of firm to obtain concessions from the buyer Attempts to get purchasing agent to divulge competitor’s bid in low bid buying situation Exaggerated how quickly order will be delivered to get the sale Preferential Treatment: 1.In shortage situation allocates product shipments to purchasing agent he personally liked Grants concessions to purchasing manager depending on how much he likes manager Give preferential treatment to customers who are also good suppliers Note: 5 = very unethical; 1 = very ethical. Correlations over.25 are significant at 0.01 level.

Table 6-1 Federal Legislation Regulating Business Sherman Antitrust Act (1890) Clayton Act (1914) Federal Trade Commission Act (1914) Robinson-Patman Act (1938) Wheeler-Lea Act (1938) Antimerger Act (1950) Antitrust Procedures and Penalties Act (1974) Hart-Scott-Rodino Antitrust Improvements Act (1976) Foreign Corrupt Practices Act (1977) Prohibited monopolies, contracts, or conspiracies in restraint of trade. Prohibited specified acts the effect of which may be to lessen competition or create a monopoly. Created an organization with broad powers to investigate unfair methods of competition and issue cease and desist orders. Defines price discrimination and prohibits discrimination by means of advertising allowances, brokerage fees, and special services. Broadened the powers of the Federal Trade Commission (FTC) to protect the consumer from deceptive advertising. Prevents mergers in which the acquisition may have an adverse effect on competition. Raised antitrust violations from a misdemeanor to a felony. Raised maximum fines to $100,000 and jail sentences to three years for individual defendants. Strengthened antimerger regulations by improving access to information, requiring premerger notification for very large mergers, and allowing states to sue for damages resulting from improper mergers. Made it illegal to pay foreign officials commissions or bribes to obtain business.

Table 6-1 Eight Ways to Keep You Sales Force Honest 1. 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 salepeople 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.