4-1 Ethical and Legal Issues in Relationship Selling 4

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Ethical and Legal Issues Ethical and Legal Issues in Relationship Sellingin Relationship Selling

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ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING

Learning Objectives

• Understand the importance of ethical behavior in relationship selling and sales management

• Identify ethical concerns facing salespeople

• Identify ethical concerns facing sales managers

• Discuss legal issues in relationship selling

• Create a personal code of sales ethics

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Ethics Begins at the Top

Source: “A Matter of Trust,” Sales and Marketing Management, March 2003, pp. 30-35; www.HomeBanc.com.

• Companies place a high value on the ethical behavior of salespeople with whom they do business

• As the point of contact, salespeople play a critical role in the overall ethical relationship between company and customer

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leadership 4.1

• Dell’s success is built on a foundation of personal and professional integrity

• The “Soul of Dell” is the statement of the values and beliefs which define the company’s shared global culture

Source: Dell corporate website, “Code of Conduct”

Code of Conduct at Dell Computer

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leadership 4.1

Source: Dell corporate website, “Code of Conduct”

•Trust •Respect

•Integrity •Courage

•Honesty •Responsibility

•Judgment

Key characteristics of Dell’s Code

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EXHIBIT Ethical Concerns for Salespeople4.2

Customers Employers

Dishonesty Cheating

Gifts, entertainment, bribes

Misuse of company resources

Unfair treatment Inappropriate relationships with employees and customers

Breaking confidentiality

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Issues with Customers

• Dishonesty – there is a line between enthusiasm for a product and providing false or deliberately inaccurate information to customers

• Gifts, entertainment, bribes • Gifts are nonfinancial presents• Bribes are financial presents given to

buyers to manipulate purchase decisions• Why do some salespeople offer bribes?

Unfortunately, it often works.

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Issues with Customers

• Unfair treatment• Special treatment of customers can be

costly• Other customers will feel as though they

are not as important

• Confidentiality leaks – any information shared by the customer must be held in the strictest confidence

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Issues with Employers

• Cheating – misrepresenting information to management

• Misuse of company resources – rule of thumb: adopt your own standard of living when traveling

• Inappropriate relationships with other employees and customers – potential negative implications

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Issues with Salespeople

• Sales Pressure – when applied too forcefully, may constitute unethical behavior

• Deception – practice of misleading or misrepresenting something

• Abuse of Salespeople’s Rights• Not following policies related to termination• Not maintaining confidentiality • Not creating a work environment free of

discrimination• Not following policies regarding performance

appraisals and compensation

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Global Perspective 4.2Differences in Negotiating between the Japanese and American Cultures

Source: Johny K. Johansson, Global Marketing, 2nd ed., 2000, Irwin/McGraw-Hill, p. 166.

Stage of Process Japanese American

Nontask sounding Considerable time and expense

Shorter period of time

Task-related exchange of information

THE MOST IMPORTANT STEP; High first offers

Brief and direct; Fair first offers

Persuasion Behind the scenes. THE MOST IMPORTANT STEP; aggressive tactics

Concessions and agreement

Holistic approach to decision making

Sequential approach to decision making

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International Ethical Issues

• Cultural Differences – every culture has its own set of norms, accepted behaviors, and beliefs

• Differences in Corporate Selling Policies – companies must adjust their selling policies to different countries

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Unlawful Business Practices

• Collusion – competing companies fixing prices, dividing up customers or territories

• Restraint of Trade – forcing a channel member to stop carrying a competitor’s products

• Reciprocity – suppliers buying from one another (illegal if it shuts out competitors)

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Unlawful Business Practices

• Competitor Obstruction – impeding competitor access to a customer

• Competitor Defamation – making unfair or untrue statements about a competitor• Slander - oral• Libel - written

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A Code of Sales Ethics

• Corporate Code of Ethics• Framework for a company’s approach to

doing business• Serves as a point of reference for

individual employee behavior• Can have a positive effect on customers

• Individual Code of Ethics – influences how a person makes decisions in certain situations

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EXHIBIT SMEI Sales and Marketing Creed (excerpts)

• I shall personally maintain the highest standards of ethical and professional conduct in all my business relationships with customers, suppliers, colleagues, competitors, governmental agencies, and the public

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EXHIBIT SMEI Sales and Marketing Creed (excerpts)

• I pledge to protect, support, and promote the principles of consumer choice, competition, and innovation enterprise, consistent with relevant legislative public policy standards

• I shall not knowingly participate in actions, agreements, or marketing policies or practices which may be detrimental to customers, competitors, or established community or social or economic policies or standards.

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Documents

4-1 Ethical and Legal Issues in Relationship Selling 4