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1 Ethical and Legal Issues in Selling Learning Objectives Develop principles upon which to base ethical behavior. Identify the sources of influence on ethics and ethical behavior. Understand your role in maintaining the ethical position of the organization. Discover what loyalty to the company requires in the event that your employees may be involved in questionable ethical behavior. Recognize the implications of federal and local laws regarding ethical standards. Chapter 3
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2 The basic message of their book is simple: You don’t have to cheat to win! “Nice guys may appear to finish last, but usually they are running in a different race.” Cheating, lying, and short-changing the customer on service may bring a satisfactory profit today, but it is a sure way to court failure for the future. Dr. Ken Blanchard and Dr. Norman Vincent Peale Authors of The Power of Ethical Management
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3 Do Honest Salespeople Finish Last? The Origin of Ethics: Legal standards are enforced by laws and statutes Ethical standards come from society The Ethical Dilemma
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4 Two Systems to Describe Ethical Thinking: 1.Deontological uses specific rules 2.Teleological defines right and wrong in terms of end results Utilitarian: The greatest good for the greatest number Bases for Ethical Systems Ethical ambivalence results from learning that everything is relative Are there any moral absolutes?
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5 Universal Nature The Golden Rule Everybody plays by the same rules Truth Telling Trust facilitates cooperation Responsibility for one’s actions Don’t blame others for your problems The “victim” mentality Guidelines for Ethical Behavior
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6 Company Code of Ethics Government action and fear of retribution have convinced more companies to adopt a code Typical issues covered: Expense accounts, gift giving, or unethical demands by a buyer Examples Set by Colleagues and Competitors The Bottom Line Survival and Profit Groupthink Peer pressure Gamesmanship Winning for the sake of winning Influences on a Salesperson’s Ethics
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7 Responsibility to Self Responsibility to the Company Accuracy in expense accounts Honesty in using time and resources Accuracy in filling out order forms Responsibility to Competitors Responsibility to Customers Misrepresenting products and services Keeping confidences Giving Gifts and Entertaining Clients Developing A Personal Code of Ethics 7
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8 Some cultures have different expectations Global Rule of Thumb: Salespeople should follow the laws of their country and the rules of their company Operating in a Global Environment
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9 Whistle-Blowing You may be held legally accountable for inaction Recent rulings encourage whistle-blowing Ethics and Job Tenure
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10 Some incentives encourage fudging Management may not be accessible to help with ethical issues Do control mechanisms exist for: Customer complaints? Salesperson dissatisfaction? Expense accounts? Are sales goals impossible? Manage the distribution of sales territories fairly How the Company Treats the Salesperson
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11 Sexual harassment cases filed with the EEOC have gone up 230 percent over the past decade Nearly 16,000 complaints per year Look for a harassment policy including: Company leadership Immediate complaint investigation Privacy rights protected Thorough follow-up Sensitivity training Review training for comprehension Periodic refresher courses Sexual Harassment
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12 Five checkpoints in ethical decision making: 1.Is it legal? 2.Is it fair to all concerned? 3.Would I want someone else to act this way towards me? 4.How would I explain my actions to someone else? 5.How will it make me feel about myself? Ethics as Good Business
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13 Remember…
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14 Some legal traps Quality below standard specified Violation of delivery date Pricing concessions Incomplete or incorrect instructions Misrepresentation of product usage Slandering competitor Kickbacks to buyers Charges after the sale Laws fall into broad categories Monopolistic actions Deceptive actions Legal Issues Facing the Salesperson
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15 The Sherman Antitrust Act of 1890 The Federal Trade Commission Act of 1914 Unfair methods of competition in commerce Unfair or deceptive acts or practices The Robinson Patman Act of 1936 Defines price discrimination Gives FTC the right to limit quantity discounts Prohibits unfair promotional allowances Brokerage allowances only go to independent brokers Specific Antitrust Laws and Their Sales Implications
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16 Guidelines For Selling Written or verbal offers to sell may be binding Financing must be explained clearly and completely Salesperson must know legal responsibilities of both parties Warranties and guarantees Express warranties are made by salesperson or in writing Implied warranties Are a result of state law Unless a disclaimer is made Uniform Commercial Code (UCC)
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17 Cooling-Off Law
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