Dont Intentionally Misrepresent Anything free essay sample

Legal Standards are enforced 2. Ethical standards come from society Bases for Ethical Systems Deontological†¢Standards-based ethics †¢uses specific rules Teleological†¢Results-Based Ethics †¢defines right and wrong in terms of end results Utilitarianism†¢Started by Jeremy Bentham (1748-1832) †¢Tried to reform some of the unfair laws in England †¢Developed a theory that the morally correct rule was the one that provided othe greatest good to the greatest number of people. The greatest good for the greatest number Ethical Ambivalence †¢results from learning that everything is relative. †¢Are there any moral absolutes? Is the language of ethics different from other uses of language? Guidelines for Ethical Behavior Universal Nature †¢The golden rule †¢Everyone plays by the same rules Truth Telling†¢Trust facilitates cooperation Responsibility for Ones Actions†¢Dont blame others for your problems †¢The victim mentality ________________________________________ †¢ INFLUENCES ON THE SALESPERSON’S ETHICS Company Code of Ethics Government action and fear of retribution have induced more companies to adopt a code Typical issues covered†¢Expense accounts †¢Gift giving †¢Unethical demands by a buyer †¢Promises about performance or delivery Selling unnecessary products Role Modeling by Executives and Sales Managers Examples Set by Colleagues and Competitor The Bottom Line†¢Profit? †¢Survival? Groupthink †¢peer pressure †¢group develops a set of shared perspectives that may be unrealistic but are strongly supported by the members of t he group. Gamesmanship winning for the sake of winning †¢ DEVELOPING A PERSONAL CODE OF ETHICS Responsibility to Self†¢your conscience Responsibility to your Company†¢Inaccuracies in Expense Accounts †¢Honesty in Using Time and Resources †¢Accuracy in Filling Out Order Forms †¢Representing the Company Responsibility to Competitors Responsibility o Customers†¢Overselling and Misrepresenting Products or Services †¢Keeping Confidences †¢Gifts †¢Entertainment ________________________________________ †¢ OPERATING IN A GLOBAL ENVIRONMENT Some cultures have different expectations U. S. citizens are expected to follow U. S. laws ________________________________________ †¢ ETHICS AND JOB TENURE Whistle-Blowing 1. You may be held legally accountable for inaction 2. Recent rulings encourage whistle blowing 3. Sometimes the best policy may be to keep quiet until solid evidence can be accumulated against a wrongdoer. 4. A word of caution†¦ i naction can even be grounds for legal action. How Does the Company Treats the Salesperson 1. Some incentives encourage fudging 2. Management may not be accessible to help with dilemmas 3. Do control mechanisms exist for a. Customer complaints b. Salesperson dissatisfaction c. Expense accounts 4. Are sales goals impossible 5. Be sure managers fairly manage the distribution of sales territories ________________________________________ †¢ SEXUAL HARASSMENT A. Nearly 16000 complaints per year B. Look for a harassment policy including A. Company Leadership B. Immediate complaint investigation C. Privacy rights protected D. Thorough follow up E. Sensitivity training F. Review training for comprehension G. Periodic refresher courses ________________________________________ †¢ ETHICS AS GOOD BUSINESS A. Unethical activity costs business B. Check Points 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 to me? 4. How would I explain my actions to someone else? 5. How will it make me feel about myself? Remember†¦There is no pillow as soft as a clear conscience. ________________________________________ †¢ LEGAL ISSUES FACING THE SALESPERSON It is easy to violate many of the laws Some Legal Traps†¢Quality below standard specified Violation of delivery date †¢Pricing concessions †¢Incomplete or incorrect instructions †¢Price fixing †¢Delivering a different brand than that sold †¢Misrepresentation of product usage †¢Slandering competitor †¢Kickbacks to buyer †¢Charges after the sale †¢Misuse of proprietary data †¢Signin g agreements without the proper authorization Categories of Laws†¢Antimonopoly †¢Deceptive actions †¢Preserve competition ________________________________________ †¢ SPECIFIC ANTITRUST LAWS AND THEIR SALES IMPLICATIONS The Sherman Antitrust Act of 1890 Federal Trade Commission Act of 1914†¢Unfair methods of competition and 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 brokers ________________________________________ †¢ THE UNIFORM COMMERCIAL CODE (UCC) guidelines for selling 1. Written or verbal offers to sell may be binding 2. Financing must be explained clearly and completely 3. Salesperson must know legal responsibilities of both parties Warranties and guarantees a. Express warranties are made by salesperson or in writing b. Implied warranties . State law 2. Unless a disclaimer is made ________________________________________ †¢ COOLING-OFF LAW ________________________________________ †¢ How to keep out of Legal Trouble 1. Puffery vs. statements of fact. 2. Educate the customer thoroughly before making the sale 3. Know technical specs, etc. for the product you sell. 4. Know your companys literature. Challenge it if is false 5. Know the terms of sale policies. You can bind the company 6. Know federal and state laws regarding your product and its warranties 7. Dont guess at your products capabilities Common Ethical Issues for Salespeople What are the most common ethical issues facing salespeople? Many of the most common situations you could face as a salesperson involve issues such as the following: †¢A customer asking for information about one of their competitors, who happens to be one of your customers †¢Deciding how much to spend on holiday season gifts for your customers †¢A buyer asking for something special, which you could easily provide, but aren’t supposed to give away †¢Deciding to play golf on a nice day, since no one knows if you are actually at work or not Let’s examine each of the issues. In the first issue, a customer owns the information about their business. The salesperson may hold that information, such as how many cases of the product they purchase or who their customers are, but that salesperson does not have the right to share that information with the customer’s competitor. In many instances, a buyer may ask the seller to sign a nondisclosure agreement because, in order to serve the buyer, the seller will gain access to important private information about that buyer. But even if there is no nondisclosure agreement, courts are likely to agree with the buyer that the seller has an obligation to protect the buyer’s information. In the second issue, the concern is whether the gift is so extravagant that it is considered a bribe. In some companies, such as IBM and Walmart, buyers are not allowed to accept so much as a free cup of coffee from a seller. These companies do not allow their buyers to receive promotional items such as a pen or coffee cup with the seller’s logo on it because they want every vendor to have free access to sales opportunities and earn the business on their merits, not their freebies. Many buyers would question the motives of a salesperson giving too large a gift. Most salespeople agree that lavish entertainment and gifts are becoming less important in business because decision makers know these add to the costs of doing business and they’d rather get a better price than be entertained. Figure 13. 12. Lavish gifts like this watch may be nice, but many buyers will consider it too lavish and wonder about the salesperson’s motives. The third issue is tough for salespeople because there are two factors involved: a possible violation of company policy and providing an unfair advantage to one customer. Customers may not know that their special request could get the alesperson in trouble and the request may be reasonable, just against company policy. In that instance, the salesperson should not follow through on the request, though it might make sense to see if the policy can be changed. The second factor, though, is a bit more difficult because the request can be unfair to other customers, and may cause legal problems. As long as the s pecial request can be provided to anyone who asks for it, no law is broken. What if the special request is for a discount? Pricing discrimination laws could come into play if such a discount is not made available to all who ask. What if the request isn’t illegal, but other customers find out and get upset that they weren’t offered the same benefit? Then the salesperson may get a reputation for being untrustworthy. In the final issue, the question is whether the salesperson is cheating the company out of time and effort. Some argue that a salesperson who is paid straight commission (paid by the sale) is not stealing anything from the company, but others argue that even in that instance, the company is being deprived of possible sales that would be gained if the salesperson was working. Figure 13. 3. Even though it is a beautiful day for golf, a salesperson who takes time away from the job is stealing time from the company, and losing sales opportunities as well. Taking a customer to play may be a different story; such a game may be a time to strengthen a relationship, as long as the customer does not feel manipulated or obligated. These are not the only issues that salespeople face. In the Unite d States, two basic principles of business are that everyone should have an equal opportunity to earn business, and the customer remains free to make a choice. Manipulation, a form of unethical sales behavior, unfairly reduces or eliminates a buyer’s ability or opportunity to make a choice. Persuasion, on the other hand, may influence a buyer’s decision, but the decision remains the buyer’s. Manipulation can include misrepresentation, or claiming a product does something it doesn’t, but it can also include withholding important information, using hard-sell tactics, and other unfair sales tactics. However, as mentioned earlier, salespeople tend to be ethical people. The use of manipulative sales tactics is actually pretty rare. Company Safeguards Salespeople often work in the field and are therefore not under constant supervision. Even inside salespeople may be able to get away with less than ethical behavior as no supervisor can watch or hear everything. So how do companies manage ethical practices? The first step is to develop policies based on the company’s mission and values (recall these from Chapter 2, Strategic Planning) that describe what is acceptable and what is not. Good ethical policies not only list or describe appropriate and inappropriate behaviors, they also describe the underlying principles. Not all ethical dilemmas can be listed in a policy, so by detailing the principles and values that make up the reasoning behind the policies, salespeople and sales managers will be more prepared to respond appropriately. Codes of ethics, or ethics policies, can be pretty detailed. Shell’s ethics policy, for example, is a book over 20 pages long! Not only do these cover how salespeople (and other company representatives) should interact with customers, they also detail how employees should treat each other and how the company’s vendors should be treated. To see an example of a brief code of ethics for salespeople, visit Sales and Marketing Executives International’s Web site, http://www. smei. org/displaycommon. cfm? an=1subarticlenbr=16. ) A good second step is to train all salespeople and sales managers on the policy. One reason for such training is to secure greater support and application of the policy, but another reason is that, should a salesperson engage i n an unethical or illegal activity, the company is protected. The Federal Sentencing Guidelines (FSG) were first developed in 1987 and then updated in 2007, and specify what happens to companies when employees commit breaches of ethics. Companies that have solid policies and train all employees on those policies can, rightfully under the FSG, claim that any unethical employee was acting against company policies and on his or her own, should anyone file charges against the company. Solid policies and employee training can then be used as a defense against such charges, and the company would not be held liable. Yet training alone is insufficient. The company must also enforce the policy and have procedures in place that make enforcement possible. For example, a company should have a mechanism for reporting unethical activity in a way that protects the person making the report. Many companies have anonymous message boxes that enable an employee to report unethical activity. One similar and common practice is to have an ethics office, charged with investigating any complaints. The FSG requires that companies also have internal auditing procedures to ensure that misconduct can be detected. Note that these codes of ethics, the FSG, and the policies and procedures affect all employees. These were not created just because of salespeople. Marketers have faced ethics challenges in how claims are made in advertising, while supply chain managers have encountered dilemmas in dealing ethically with vendors. Managers, in any area of the firm, encounter challenges regarding equal opportunity and creating an appropriately professional work environment. Challenges Facing Sales Managers Sales managers face the same challenges in managing salespeople that all managers face. These include ensuring that hiring, compensation, and other management practices are not discriminatory, that sexual harassment finds no home in the workplace, and that employees are treated with dignity and respect. Other challenges may arise, though. For example, salespeople have to be in front of customers when customers are available. Earlier, we discussed how the number of calls made can impact a salesperson’s success. So should a sales manager schedule all training sessions on weekends, when buyers are at home and not available for sales calls? Does the answer to that question change if the salesperson is paid a salary or a commission? Recently, one sales manager reported a customer who said he wanted no Muslims calling on him. Another sales manager said when she and her salesperson (another woman) sat down with a buyer (a male), the buyer had pornography on his computer monitor. Do those sales managers assign new salespeople to the accounts? Or do they â€Å"fire† the customer? If the customer was to be fired, the salesperson would lose commission. Yet in both instances, the managers said they fired the customer, an action that both salespeople were happy with, and they were reassured that the loss of the sale wouldn’t be held against them. The loss of the commission was worth it. In sales, several laws apply that also apply in other areas of marketing but are more prominent in sales. For example, the Uniform Commercial Code (UCC) determines when a sale is a sale. Typically, a sale is a sale when the product is delivered and accepted by the buyer. In most instances, the customer can cancel the order with no penalty unless accepted. Sales managers have to be aware of such laws in order to avoid creating policies that can be illegal. Laws that affect sales operations include pricing discrimination, which we discuss in Chapter 15, Price, the Only Revenue Generator, and privacy laws, discussed earlier. In addition, laws regarding hiring practices, workplace safety, and others can affect sales managers. If global sales situations arise, the Federal Corrupt Practices Act—which prohibits bribery and other practices that might be culturally acceptable elsewhere but that are illegal in the United States—comes into play. For these reasons, sales managers should develop close working relationships with the human resources department. These professionals, along with the legal department, are charged with staying abreast of legal changes that influence management practice. Key Takeaway Salespeople are, for the most part, caring, ethical professionals. They do face unique ethical challenges because of their job, including how to handle unethical requests from customers and making sure that they know and follow all company policies for interacting with customers. American salespeople have the added constraint that what’s illegal in the United States is illegal for them in other countries because of the Foreign Corrupt Practices Act, even if the behavior in question is acceptable to those countries’ laws and practices. Sales managers have all the usual management concerns, such as fair hiring practices. According to the Federal Sentencing Guidelines, managers also have to develop policies and practices that codify ethical behaviors, train salespeople on the ethics policies, and ensure that the policies are followed. In addition, sales managers have to be aware of laws such as the Universal Commercial Code and others that govern sales transactions. Review Questions 1. Do salespeople deserve the image or negative stereotype? Why or why not? 2. Do ethics get in the way of success in sales? Why or why not? 3. What safeguards do companies enact to ensure ethical behavior among salespeople and sales managers? Ethical Selling and Sales Management A code of sales ethics is fundamental to sales success. It is the foundation on which sales techniques and strategies are built, and provides solid footing on which long-term, profitable businesses are built. Written Feb 15, 2008, read 6991 times since then. More Sharing Services | Share Sales people perform amid the convergence of three demanding masters: employer, customer and self. Each party has their own agenda and the sales person, who clearly has a personal agenda, is the arbitrator. †¢The employer/seller is seeking sales, profit margin and correctly consummated closings. †¢The customer/buyer is seeking solution, value and correctly consummated closings. †¢The salesperson has the above objectives in mind and also their own income potential. The common desire is that the sale be closed correctly. All three parties want to leave the closing feeling pleased with the final result and process that lead to it. Critical to this three-way satisfaction is the sales person saying and doing the right things and not over-promising. True and correct disclosure is the basic tenet: disclosing to the customer what the product truly is, how it can solve problems and disclosing to their employer who the customer is and what they want. It is a challenging work of communication, that can easily be confused accidentally and deliberately. The deliberate error most often is caused by money. People, including sales people, sellers and buyers all have and will act oddly for money. Money can lead us astray. Sales people have the added pressure of variable income streams and the challenge of having great months and poor months. The question is, â€Å"Will our sales people hold their ethical posture when times are bad? † Micro-management is one tool to deal with this disclosure problem and many companies now use scripts and legal approval of any and all flyers or letters that a sales person might use. Misrepresentation is embarrassing and expensive. It can result in loss of business, loss of customers and worst-case scenario, class action suits. Ethical selling is an adjunct to micro-management and an enhancement to any sales effort. Sales people need to know about the conflicted position that they are in and use their own ethical posture to bolster their customer relations and service. Ethical selling is developing trust: teaching individual sales people to act rightly, to say and print the right things; to not over-promise and make sure that buyers and sellers are fully informed. The customer is not always right. Not all customers should be sold to, and sometimes, customers should be fired. In every walk of life there are liars and thieves. Just as sales people can over-promise and not deliver, so too can customers. The promise of purchases is not the same thing as actually making the purchase. And paying for the purchase and the product performing as advertised complete the transaction. Sales people certainly know that all customers are not created equal. Some are large buyers and some are small. Some have prompt payment habits and some don’t pay at all. Though we would prefer the large buyers who pay promptly, what we must truly avoid are those customers that never pay. These are the unethical customers that should be avoided. Do our sales people know to avoid them? Quality begets quantity. If and when sale people are ethical (courteous, responsible and honest) they can and will attract similar type customers. They will also be able to identify customers that may not be so. Unethical customers are to be avoided. The customer is not always right. Ethical selling involves both sales people and their customers. Can our sales people be ethical and also find like-minded customers? Be ethical thyself and do business with same. Liars and thieves can and will play â€Å"money games† and lead a sales person astray. Are our sales people ethically secure? Competitors are not the enemy. Sometimes they will win the day and sometimes we will. No one wins every game they play, but how do we handle defeat? Do we disparage our competitors or our operations / fulfillment teams? Do we sulk and complain to anyone and everyone? Or do we examine the events and learn from them? Mistakes will happen and perfection is a very hard performance level to achieve and impossible to maintain for very long. Mis-communication does happen. Shipping delays occur and people do get sick and take vacations; all of which can cause a sale to not close correctly. Ethical sales people know this and can deal with these errors, and they can also communicate clearly what did occur and what might be done, without recrimination or assassination. Ethical selling provides a framework to accept both success and loss. Surely, success is the preferred outcome, but experience and character are most often acquired when we lose. Losing is not bad, if we learn and grow from it. Developing a personal code of ethics is critical in the development of successful sales people. I am coming from the mortgage industry, which is suffering now for many reasons and one is a market wide lack of ethical behavior. Too many players, sales people, sellers (lenders) and buyers (borrowers) are misbehaving. Too many loans have been closed that were not true and correct. Misrepresentation is not the only problem in the current mortgage crisis, but it is a contributory factor and there is truly no need for such and no excuse for such.