Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall CHAPTER 5 Ethics: The Foundation for Relationships in Selling

Learning Objectives Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall Describe how ethical decisions influence relationships in selling Discuss factors that influence character development Describe the factors that influence the ethical conduct of sales personnel 5-2

Learning Objectives Discuss guidelines for developing a personal code of ethics Describe ethical and legal issues in international business 5-3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Making Ethical Decisions Business ethics: principles and standards that guide behavior in the world of business They help translate your values into appropriate and effective behaviors No one uniform code of ethics for all salespeople, but many businesses, professional associations, and certification agencies have established written codes 5-4 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Making Ethical Decisions Character and integrity strongly influence relationships in personal selling Your character is based on your internal values Character is based on your internal values and the resulting judgments Ethical decisions you make reflect your character strength 5-5 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Code of the National Association of Sales Professionals 5-6 FIGURE 5.1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Character Development Colleges and universities are beginning to play a more active role in character development Courses that focus on ethics are becoming quite common Despite a growing interest in business ethics, unethical behavior has become all too common 5-7 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Half-Truths Influencing the Erosion of Character We are in it only for ourselves Corporations exist to maximize shareholder value Companies need to be lean and mean 5-8 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

The National Business Ethics Survey 5-9 See the Website Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Factors Determining Ethical Behavior of Salespeople 5-10 FIGURE 5.2 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Management as Role Model Ethical standards filter down from the top Organization’s moral tone, set by management, is most important determinant of employee ethics Managers must infuse ethical values in subordinates 5-11 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Timberland 5-12 Timberland CEO Jeffrey Swartz proudly points out the company’s slogan: “Boots, Brand, Belief.” See the Website Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Company Policies and Practices Company policies and practices can have a major impact on conduct Developing ethical policy statements forces company to take a stand Policies should include distributor relations, customer service, pricing, product development, etc Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Trust and Integrity: The St. Paul 5-14 See the Website Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Additional Policy Areas Sharing confidential information Reciprocity Bribery Gift giving Entertainment Business defamation Use of the Internet 5-15 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

International Bribery: Where Do You Draw the Line? The text states: “Salespeople who sell products in foreign markets need to know that giving bribes is viewed as an acceptable business practice in some cultures. However, bribes or payoffs may violate the U.S. Foreign Corrupt Practices Act (FCPA).” To learn what is acceptable and what is not, visit the FCPA Enforcement Website.FCPA Enforcement Website Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Sales Manager as Role Model A salesperson’s actions often mirror those of the sales manager Sales managers are responsible for interpreting company policy Values such as integrity and honesty must receive constant manager support 5-17 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Personal Values Values are deep personal beliefs and preferences, representing the ultimate reasons people have for acting as they do Values serve as foundations for our attitudes Attitudes serve as foundations for our behavior 5-18 FIGURE 5.3 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

When Values Conflict You have three basic choices: 1.Ignore the influence of your values and engage in the unethical behavior 2.Voice strong opposition to the practice that is in conflict with your value system 3.Refuse to compromise your values and be prepared to deal with the consequences 5-19 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Selling with Integrity 5-20 Ron Willingham says a salesperson’s ethics and values contribute more to sales success than do techniques and strategies. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Laws, Contracts, and Agreements Legal environment plays a role in preventing unethical behavior Cooling-off laws Uniform Commercial Code—law influencing buyer-seller transactions Oral and written contracts Beyond the letter of the law 5-21 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

The Uniform Commercial Code 5-22 TABLE 5.1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Develop a Personal Code of Ethics Some general guidelines: Personal selling must be viewed as an exchange of value Relationship comes first, tasks second Be honest with yourself and others 5-23 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Exercising Care with CRM Data CRM software allows storage of transaction data and personal info Record facts, not opinions or conclusions CRM data is “mobile” and other people may see or use it Do not store anything you do not want the customer to see 5-24 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

The Trust Factor In transactional sales, the focus is on trust in the product In consultative sales, the focus is on trust in the salesperson In strategic alliance sales, the focus is on the other company and its values 5-25 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Ethical and Legal Issues in International Business Culture Issues Sum total of beliefs, values, knowledge, ethnic customs, and objects that people use to adapt to their environment Cultural barriers can impede acceptance in foreign countries and interpersonal relationships 5-26 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Ethical and Legal Issues in International Business Legal Issues Doing business in global marketplaces continues to be a minefield The Foreign Corrupt Practices Act prohibits U.S. companies from using bribes or kickbacks High ethical standards depend on strong management leadership 5-27 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Ethical and Legal Issues in International Business 5-28 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall See the Website The International Business Ethics Institute believes U.S. companies have been a very positive role model for the rest of the world.

Key Concept Discussion Questions Describe how ethical decisions influence relationships in selling Discuss factors that influence character development Describe the factors that influence the ethical conduct of sales personnel 5-29 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

Key Concept Discussion Questions Discuss guidelines for developing a personal code of ethics Describe ethical and legal issues in international business 5-30 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall

5-31 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc. Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall