CHAPTER 2 SOCIAL, ETHICAL AND LEGAL RESPONSIBILITIES OF SALES PERSONNEL

I.

MANAGEMENT'S SOCIAL RESPONSIBILITIES A. Organizational Stakeholders

1.

Stakeholder any groups within or outside the organization that has a stake in the organization's performance.

B.

An Organization's Main Responsibilities 1. 2. 3. 4. Economic responsibilities Legal responsibilities Ethical responsibilities Discretionary responsibilities
a.

Discretionary

Responsibility

highest

criterion

of

social

responsibility that is purely voluntary and guided by a company's desire to make social contributions not mandated by economics, law, or ethics. C. II. How To Demonstrate Social Responsibility

WHAT INFLUENCES ETHICAL BEHAVIOR? A. The Individual's Role

1.

Level one: Preconventional individual who acts in his or her own best interests and thus follows rules to avoid punishment or receive rewards; they will break moral and legal laws if they conflict with what this type of person perceives as his or her best interests.

2.

Level two: Conventional individual who conforms to the expectations of others, such as family, friends, employer, boss, society; upholds moral and legal laws.

3.

Level three: Principled individual who lives by an internal set of morals, values, and ethics; these are upheld regardless of punishments or majority opinion; the individual would disobey orders, laws, and consequences to follow what he or she believes is right.

B. III.

The Organization's Role

MANAGEMENT'S ETHICAL RESPONSIBILITIES

A.

Ethics - a set of moral principles and values that governs the behavior of a person or group with respect to what is right or wrong.

B.

What Is Ethical Behavior? 1. Ethical behavior refers to treating others fairly.

C.

What Is An Ethical Dilemma? 1. An ethical dilemma arises in a situation when each alternative choice or behavior has some undesirable elements due to potentially negative ethical or personal consequences.

IV.

ETHICS IN DEALING WITH SALESPEOPLE A. B. C. D. E. Levels Of Sales Pressure Decisions Affecting Territory To Tell The Truth? The Ill Salesperson Employee Rights

1.

Employee rights are rights desired by employees regarding the security of their jobs and the treatment administered by their employer while on the job, irrespective of whether such rights are currently protected by law or collective bargaining agreements of labor unions.

2.

Termination-at-will rule established and upheld by the courts that allows an employer to terminate an employee at any time for any reason.

3. 4.
5.

Privacy Sexual harassment Cooperative Acceptance refers to the right to be treated fairly with respect regardless of race, sex, national origin, physical disability, age, or religion while on the job as well as when applying and regarding job security.

6. V.

Reasons for respecting employee rights

SALESPEOPLE'S ETHICS IN DEALING WITH THEIR EMPLOYERS A. B. C. D. E. Misusing Company Assets Moonlighting Cheating Affecting Fellow Salespeople Technology Theft

VI.

ETHICS IN DEALING WITH CUSTOMERS A. D. Bribes Or Gifts Misrepresentation

1.

Misrepresentation legal cause of action in which an injured party seeks damages arising from erroneous statements or false promises salespeople made regarding a product's characteristics or capabilities.

2.

Breach of Warranty legal cause of action similar to misrepresentation but differing in requirements of proof and types of damages awarded.

3. What the law says a. When a salesperson loosely describes a product, these statements do not have legal consequences. However, when a sales rep makes promises of a "factual nature" regarding a product's inherent capabilities, the law treats these as statements of facts and warranties. The subtle difference between sales puffery and statements of fact is often difficult to distinguish. An example An independent sales rep selling heavy industrial equipment was sued by a customer because the equipment did not perform according to the representations in sales literature sent prior to the execution of the contract and to statements made by the rep at the time of sale. The court ruled in favor of the customer, finding that the rep's statements were "predictions" of how the equipment would perform; this made them more than sales talk. C. D. E. F. Price Discrimination Tie-In Sales Exclusive Dealership Reciprocity
1.

Reciprocity refers to buying a product from someone if the person or organization agrees to buy from you.

G.

Sales Restrictions

1.

Cooling-off Laws laws that provide for a specified period in which the buyer may cancel a contract, return merchandise, and obtain a full refund.

2.

Green River Ordinances city ordinances that require persons selling directly to consumers to pay a fee and be licensed by the city in which they are doing business if they are not residents. (Passed in Green River, Wyoming in 1933)

VII.

MANAGING SALES ETHICS A. Follow The Leader Leader Selection Is Important Establish A Code Of Ethics
1.

B. C.

A code of ethics is a formal statement of the company's values concerning ethics and social issues.

D.

Create Ethical Structures

1.

Ethical Committee a group of executives appointed to oversee company ethics.

2.

Ethical Ombudsperson an official given the responsibility of corporate conscience who hears and investigates ethical complaints and informs top management of potential ethical issues.

E. F. G. VIII.

Encourage Whistle-Blowing Create An Ethical Sales Climate Establish Control Systems

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