3-13-1McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter

3

Ethics First…Then Customer Relationships

Chapter3

Chapter

3

3-3

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Management’s Social Responsibilities

Social responsibility is management’s obligation to make choices and take actions that contribute to the welfare and interests of society as well as to those of the organization

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Organizational Stakeholders A stakeholder is any group inside or

outside the organization that has a stake in the organization’s performance

Stakeholders may have similar or different interests in the organization:CustomersCommunityCreditorsGovernment

CCC GOMES

OwnersManagersEmployeesSuppliers

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Exhibit 3.2: Major Stakeholders in the Organization’s Performance

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An Organization’s Main Responsibilities

Economic - be profitable Legal - obey the law Ethical - do what is right Discretionary -

contribute to community and quality of life

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Exhibit 3.3: An Organization’s Main Responsibilities

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What Influences Ethical Behavior?

The Individual’s Role Level one: Preconventional – acts in own best interest

A few operate here Level two: Conventional – upholds legal laws

Most people operate here Level three: Principled – lives by own code

Less than 20% reach level three The Organization’s Role

At best, most employees in firm operate at level two How will the situation be handled if no policies and

procedures are in place?

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Exhibit 3.4: What Is Your Level of Moral Development?

Preconventional - “What can I get away with?”

Conventional - “What am I legally required to do?”

Principled - “What is the right thing to do?”

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Exhibit 3.5: Moral Development Bell Curve

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Are There Any Ethical Guidelines?

What Does The Research Say?American adults said by a 3-to-1 margin

that truth is always relative to a person’s situation

People are most likely to make their moral and ethical decisions based on:

whatever feels right or comfortable in a situation

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How Do You Make Your Moral-Right or Wrong Choices? (Choose One)

Whatever will bring you the most pleasing or satisfying results

Whatever will make other people happy or minimize interpersonal conflict

Values taught by your family Primarily from religious principles and

teaching or Bible content Other

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Are There Ethical Guidelines?

What Does One Do?What if you found a bank bag containing

$125,000? Would you return it to the bank?

Is it fear of being caught?Not the right thing to do?

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Are There Ethical Guidelines?

Out of class, is it okay to copy someone else’s homework assignment?

What keeps you from cheating on an exam when the professor is out of the room? Is it fear of being caught?Not the right thing to do?

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Are There Ethical Guidelines?

Is Your Conscience Reliable?We all have an internal constant standard

with which we measure right and wrong, a “moral compass”

Most of us know we should return the $125,000 and not copy someone’s homework

But what would we actually do?

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Are There Ethical Guidelines?

Is Your Conscience Reliable? (Cont’d) If a person’s values are at “Level 2,” they

may make decisions based on the situation and what others say and do. Usually people rationalize their decisions;

“I’ll only copy the homework this one time.” Many people are so accustomed to doing

things unethically that they think nothing about it.

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Are There Ethical Guidelines?

Sources of Significant InfluenceDo factors influencing our decisions

include your friends, family, or things you see on television or in the movies?

Barna has found that the leading influences on American ethics are movies, TV, the Internet, books, music, public policy, law, and family

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To Have Ethical Guidelines You Need

A point of reference that: Is fixed – so that no one can change it Is separate from youNo one else may influence

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The Fixed Point of Reference Must Be:

Right whether people:Believe it or notLike it or notKnow about it or not

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How Do You Know If What Someone is Saying is True or Not?

Can it be a moral and ethical standard? There is no way for you to know if what

I am saying is true unless you know what is the truth

And there is no way to know what is the truth unless there is a truth you can know

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Exhibit 3.6: What Is a Fixed Point of Reference?

Stars can be used for navigation because they are a fixed point of reference separate from you that no one can influence

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Will The Golden Rule Help? The “Golden Rule” concept is present in

virtually all faith-based principles The Golden Rule does not involve

reciprocity “Could the Golden Rule serve as a

universal, practical, helpful standard for the businessperson’s conduct?”

Would you consider your faith a fixed point that is separate from you and never changes?

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Exhibit 3.7: Examples of World Religions Which Embrace the

Golden Rule Hindu - “Do naught unto others what

you would not have them do to you.” Confucius - “Do not do to others what

you would not like yourself.” Buddhist - “Hurt not others in ways

that you yourself would find hurtful.” Rabbi Hillel - “That which is hateful to

you do not do unto your neighbor.” Jesus Christ - “Do to others as you

would have them do to you.”

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What Do You Use For a Moral Compass?

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Management’s Ethical Responsibilities

Ethics is the code of moral principles and values that govern the behaviors of a person or a group with respect to what is right or wrong

Ethical behavior refers to treating others fairly

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What is an Ethical Dilemma?

A situation in which each alternative choice or behavior has some undesirable elements due to potentially negative ethical or personal consequences

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Ethics in Dealing with Salespeople

Five ethical considerations faced by sales managers:Level of sales pressureDecisions affecting territoryTo tell the truth?The ill salespersonEmployee rights

termination-at-willprivacysexual harassment

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Benefits of Respecting Employees Rights

More productive employees Attracting good sales personnel Reducing legal costs Reducing wage increase demands

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Salespeople’s Ethics in Dealing with Their Employers

Misusing company assets Moonlighting Cheating Affecting other salespeople Technology theft

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Ethics in Dealing with Customers

Bribes Misrepresentation Price discrimination

Robinson-Patman Act Selling the same quantity of the same product to

different buyers at different prices Tie-in sales

To buy a particular line of merchandise, a buyer may be required to buy other, unwanted products.

Clayton Act

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Ethics in Dealing with Customers

Exclusive dealership Reciprocity

Buying a product from someone if the person or organization agrees to buy from you

Sales restrictionsCooling-off lawsGreen River ordinances

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The International Side of Ethics

Guidelines for conducting international business may be different or even nonexistent

Despite laws in other countries, U.S. firms are subject to U.S. laws

It is important to keep up to date on the law and be aware of how authorized representatives are conducting business

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Managing Sales Ethics Follow the leader Leader selection is important Establish a code of ethics Create ethical structures Encourage whistle-blowing Create an ethical sales climate Establish control systems

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Helpful Hints to Making Career Decisions

Your employer should provide worthwhile products

You should be able to do what is right You do not have to compromise your

beliefs People go before anything else Good people are desperately needed in

all types of businesses/organizations Look for a calling, not a job*

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Do Your Research to Find an Ethical/Moral Employer. Is the

Employer’s... Mission to serve? Vision based upon the Golden Rule? Values based upon integrity, trust, and

character? Foundation based upon service? Cornerstone love of people?

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Exhibit 3.10: What Do You Look for in an Employer?

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Exhibit 3.11: The Tree of Business Life

IT C

TT T

T T T TT T T T

Ethic

al

Service

Builds

T r

u e

Relationships

The Tree is rooted in: Integrity: being honest and

without compromise or corruption From integrity flows confidence

that one can trust the other Integrity and trust form the

attributes often referred to as character

Framed by: Ethical Service that Builds True

RelationshipsShown with T’s standing for:

Truth: facts needed to make ethical and moral decisions

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Golden Rule + Tree of Life Measure the growth

of your Business Tree of Life with your Golden Rule of Personal Selling.

IT C

TT T

T T T TT T T T

Ethic

al

Service

Builds

T r

u e

Relationships

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Ethics Rule Business