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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. - PowerPoint PPT Presentation
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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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• 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
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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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Two Systems to Describe Ethical Thinking:1. Deontological uses
specific rules2. 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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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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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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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
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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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Whistle-Blowing You may be held legally accountable for
inaction Recent rulings encourage whistle-blowing
Ethics and Job Tenure
Sometimes the best policy may be to keep quiet until solid evidence can be
accumulated against a wrongdoer. A word of caution… inaction can even
be grounds for legal action.
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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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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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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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clear conscience.
Remember…
There is no pillow as soft as a
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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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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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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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Cooling-Off Law
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