BUSINESS

DEVELOPMENT
ETHICS IN SALES
Managing Ethics in a Sales
Environment

PowerPoint presentation prepared by

Dr. Rajiv Mehta
New Jersey Institute of Technology
 Agenda

• What Is Business Ethics?

• Ethical Philosophies and Moral Judgments
• Creating an Ethical Work Climate
• Managing the Ethical Climate
• Legal Considerations in the Sales Environment
• Practicing Good Ethics Among the Sales Force
 Learning Objectives

1. Define ethics and defend its importance to sales and sales

management.
2. Show how salespeople are boundary spanners.
3. Apply a code of ethics to sales and sales management situations.
4. Apply the criteria for making moral judgments.
5. Create and manage an ethical climate.
6. Observe legal regulations that affect the sales environment.
7. Model good ethical behavior among the sales force.
 Business Ethics, Sales,
and Sales Management
• Ethics describes the moral
content of behavior.
• Business ethics is the study of
how businesspeople behave
when facing a situation with
moral consequences.
• Sales management ethics is the
specific component of
business ethics that deals
with ethically managing the
sales function. Source: S. Pearce/PhotoLink
Balancing Between Individual, Professional, and
Organizational Values

Individual ethics
• personal integrity
• moral values
• social influences

Pressures
Organizational ethics Professional ethics
• profit • professional standards
• growth • group goals
• survival • prestige
 Unethical Sales Practices:
Prohibited Actions
• bribes, gifts, kickbacks • falsification of sales accounts
• conflicts of interest • moonlighting
• illegal political payments • violation of antitrust laws
• violation of laws in general • fraud and deception
• use of insider information • illegal payments abroad
• violations of secrecy • justifying the means by the
agreements intended end
 Ethical Violations

• misusing company assets

• expense account padding
• unauthorized use of company
funds
• personal use of company time
• fabrication of sales records
• manipulation of customer orders
• cheating in sales contests
Source: Digital Vision

• circumventing company policy

 Ethical Issues Regarding Treatment of
Customers
• special gifts
• entertainment
• over-promising
• over-selling
• misrepresenting, covering
up the facts, or distorting
the truth
• manipulating order forms
• disclosing confidential
information
Source: Digital Vision
• showing favoritism
• conflicts of interest
 Managing the Ethical Climate

• Sales managers should be sure of

the following:
– that salespersons are
aware of rules and policies
– that salespersons are
rewarded and
reprimanded with no
favoritism or bias
– that an ethical climate is
promoted at all levels of Source: Digital Vision

the sales organization

 Legal Considerations in the
Sales Environment: Federal Regulation
Protecting Companies from Each Other

• Laws that ensure that a

competitive marketplace exists
include the following:
– Robinson-Patman Act
– Sherman Antitrust Act
– Clayton Act

Source: Hisham Ibrahim

 Ethics and Regulation
in International Sales
• In international negotiations,
salespeople must not confuse
varying ethical standards with the
U.S. and foreign laws governing
their activities.
• In planning to sell products or
Source: Jack Star/PhotoLink
services to a foreign country, sales
representatives should contact the
commercial attaché at the U.S.
embassy for information on legal
requirements in conducting
business there.
Source: Jack Star/PhotoLink
 Practicing Good Ethics Among the Sales Force:
Maintaining a Positive Ethical Climate

• Understanding ethics
– Salespeople reach ethical maturity
when they place the moral treatment of
others ahead of short-term personal
gain.
• Measuring the ethical climate
– Monitor the ethical climate with surveys.

• Leading by example
– A positive, healthy, and moral ethical
work climate begins at the top with sales
management.
• Sales manager ethics checklist
Source: Triangle Images
 Sales Manager Ethics Checklist

• Will the action I take diminish the value

of the product we are selling?
• Will the action I take result in
inequitable or disrespectful treatment
of a salesperson?
• Will this action place a greater
emphasis on sales or profits than on the
ethical treatment of the customer?
• Will my action, either intentionally or
unintentionally, motivate a salesperson
to treat someone unethically?
• Would I be comfortable telling my
children about the way I acted in this
situation?
Source: © Jack Hollingsworth/Corbis
Reference:
SALES MANAGEMENT, BY Anderson and Hair
Houghton, Mifflin Publishing Group, 2007
Chapter 2, Managing Ethics In Sales Environment
PowerPoint presentation prepared by
Dr. Rajiv Mehta, New Jersey Institute of Technolog