Legal and Ethical Issues with Sales people

8/10/2019 Legal and Ethical Issues with Sales people

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Running head: UNETHICAL BEHAVIOR OF SALES AGENTS 1

Unethical Behavior of Sales Agents

Marilia Gabriela Vieira De Melo

Franklin Pierce University

Legal and Ethical Issues

Pam Little

Final Project


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UNETHICAL BEHAVIOR OF SALES AGENTS 2

Introduction

Business ethics has many issues that are relevant in many aspects of business.

This type of behavior begins mostly because of the relationship between the salesperson

and the buyer or buying organization. That relationship can be led by a great ethical

attitude, which will create a nice environment and a good brand image, or by an

unethical behavior that may do the opposite along with the time. Unethical behavior is

an issue in the business world that sales agent probably see as the easiest way to go in

the sales moment. Sales agent have to make decisions in the rush or pressure of a sales

moment in response to customers, demands, and competitive offers which may end up

creating a tendency for ethical conflicts. Ethical and unethical behavior affects

customers and companies directly but there is different types ways suggested by

studies to prevent and keep ethical behavior. This subject is by far on of the most

complex and according to the bookManagers and the Legal Environmentwritten by

Bagley The law does not prohibit all bad behavior. An action that is unethical may

nonetheless be legal (p.20).

In the article Ethical Salesperson behavior in Sales Relationship the authors

Hansen & Riggle agree that ethics deal with moral judgments, standards, and rules of

conduct, comprises a moral code of conduct governing individuals and societies in

determining what is right or wrong. The authors complete it saying that ethical

behavior in the sales relationship context denotes behaviors on the part of the

salesperson that promote the welfare of the customer (p.152).

According to the same article sales agent that behave in an ethical manner

usually are honest in everything that they say, regularly they will sell only those

products and services they believe that will benefit the customer, promise only things

that they can get done according to what was said, and keep customer information in a


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confidential manner. Also Hansen & Riggle say that ethical sales agent avoid

behaviors such as lying about product availability, selling products or services that

cannot be resold or utilized in a reasonable period of time, providing misleading

information about customers, and falsifying expense reports (p.152). Besides giving

misleading to customers (such as lying), lying about competitors information, selling

unsuitable products or services to their customers, or using high-pressure selling tactics

are definitely types of unethical behavior (Hansen & Riggle, 2009).

Ethical behavior to companies has become one of the most important factors to

create and keep loyalty customer. Bagley agrees saying that ethical business leaders

will not sacrifice their ethics to secure a short-term gain (p. 26). Ethical behavior is

always a positive point to create and keep a good image for the company, so it is

basically the key of the company success. Research indicates that salespeople who act in

an ethical manner are more effective at building strong customer relationshipstheir

customers are more satisfied with them, more trusting of them, and more committed to

them (Hansen & Riggle, 2009).

In another article written by Holme there is also points that support the first

opinion that ethical conflict is unfortunately common in the business world, especially

with sales agent. Sales agent and sales managers are faced with many types of ethical

issues like keeping the truth and do not explain everything about the product or just

completely lie about it in order to make the customer make the purchase. Those issues

and many other come through interactions between employers and customers. In any

organization, it is the individual worker's productivity that basically makes the entire

system successful. If the employers do not act in order to satisfy the client other than the

company needs moneywise; there is a huge probability that the company will have a

hard time developing (Holme, 2008).


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Causes and Effects

Ethical and Unethical behavior of Sales agent can have different types of effects

and causes to the work daily life. The article Managerial and peer influence on Ethical

Behavioral Intentions in a Personal Selling Context written by Pettijohn, Keith &

Burnett was conducted to evaluate the relationship between the ethical behavioral

intentions which shows different points of view in the role of buying and selling

relationship. One of the things that was shown on the study is that acompany has a lot

to deal with daily and it could be one of the biggest reason of why they do not pay too

much attention to their employees behaviors. Anyways, even though the company has a

lot to deal and sales agent has an unsupervised job it doesntmean that the sales agent

can lie or use any type of unethical behavior in their benefit or the company benefits.

Sometimes companies just seem to be concerned about their own needs which end up

being one of the biggest problems in terms of effects to the future of the company.

Company leaders may think everything is doing good hiding information or not

preventing unethical behavior but this is not a good way to lead a company because the

situation can only get worse.

Another effect that unethical behavior brings to the company according to the

same article the authors Pettijohn, Keith & Burnett says that stakeholder confidence

falls, competent employees may be more difficult to attract, and investors become more

skeptical(Pettijohn, Keith & Burnett, 20110. Literally the chances that companies have

to be bigger and succeed just reduce with those types of behavior. Even to other

possible partner, investor it brings up a bad image. Customers already have that greater

persuasion through lower prices, greater promotions, and so forth. Those things make

the client blind which end up creating that easy acceptancefor opinions and

suggestions. Everything that they hear in that moment become easier acceptable and


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their feelings get easier to be persuaded. Sometimes the only thing that the customer

needs is incentive; things like a good word or just hear that little detail to make the

purchase. In the heat of the moment is when the salespeople end up lying just to get the

order. Thus, unethical behavior creates an adverse environment for business success.

Several points can explain the reasons why sales agents behave unethically.

According to the article Workplace Stressors, Job, Attitude, and Job Behaviors sales

agent are often exposed to greater ethical pressures; this pressure is much more

frequently and harder to handle than individuals in many other jobs. This is a kind of

work that is done in relatively unsupervised settings; they have the responsibility of

generating the firms revenues, which at times can be very stressful. According to the

article Workplaces Stressors, Job Attitude, and Job Behavior, Research has also

shown that emotional exhaustion mediates the effect of role stress on salespersons job

attitudes, job behaviors and eventually organizational outcomes(Jaramillo, 2011).

In agreement with the author Bradford if sales agent are unable to resolve

ethical issues that they will often encounter it will increased job related tension,

frustration and anxiety resulting in decreasing performance, increasing turnover. The

mix of those feelings plus the challenging goals that they have to achieve at the end of

the day, week, month or year may cause unexpected unethical behavior. All a sales

agent wants is to get a rid of those feeling and make their goal. It means that they will

do anything to achieve their goals even if for that they have to behave unethically in

which for that job position the most common unethical behavior is ling (Bradford,

2009).Bradford also states in the same article that If sales agent did not have to deal

with this type of pressured environment; there would be a huge job satisfaction which is

related to customer-focused helping behavior.


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Perceived customer importance interacts with a salesperson job satisfaction to

positively affect customer-focused helping behavior, which is related to customer trust

in supplier (Bradford, 2009). The relationship between job satisfaction and sales

performance, though consistent, has proven to be very modest; work to determine how

job satisfaction influences job attitudes and behaviors that eventually affect

performance.

Pros & Cons of Ethical and Unethical Behavior

A study published in 2009 by Alrubaiee indicates that pros and cons about

ethical and unethical behavior. He shows in the article that ethical behavior did

increase customer loyalty; yet this effect was not direct, but mediated by customer trust

and customer commitment to the company. Clearly today ethics is one of the largest

competitive issues within the market. Ethical behavior to companies has become one of

the most important factors to create a loyalty with the customer because at the end it can

be the key point of a successful company like it was said on the beginning. With no

doubt ethical behavior is one of the biggest pros a company can carry to develop a good

future (Alrubaiee, 2009).

Unethical sales behavior may hurt customer satisfaction and trust.

Dissatisfaction and distrust will induce customers to take actions to protect themselves,

and customer loyalty will be lost. Those actions can go from a simple bad word about

the company to friends to suit the company in an extreme case of unethical behavior.

Looking towards the relationship company customer Alrubaiee agree that from

customers perspective, customers are concerned about their perceptions of the

salespersons ethical sales behavior, what their intention to maintain a relationship with

the salesperson is, and what kind of purchase behavior will be followed(Alrubaiee,

2009). The fact that the customer expect for ethical behavior from the sames agent it


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will bring a dissapointment if he find out anything related to a unethical behavior. There

are laws that protect the consumers in many ways.

According to Bagley federal and state laws protect consumers from unsafe or

harmful consumer product, unfair and deceptive trade practices, fraud and misleading or

discriminatory credit requirements(p.551).Those laws could either way be helpful at

some cases but not be helpful at all in other cases and thats when the organizations laws,

code of ethics should reinforce its principles. With that employees would know exactly

how to behave and the consequences of its behaviors. Towards sales practices there are

a number of state and federal agencies currently regulate sales practices. In a example

given by Bagley a consumer successfully argued that the fees violated the general

principles of contract law that demages assessed for breach of contract cannot be

disproportionate to the actual harm caused by the breach( Bagley, p.577).

Consumer have to be smart and guarantee their safety as much as possibe and

the use of contract could be the best option. Bagley define contract saying that it is a

legally enforceable promises or set of promises.If the promises is broken, the person to

whom the promise was made has certain legal rights against the person who made the

promise (p.172).Although some organizations enforce oral contracts, the safest

practice is to put any substantial agreement in writing. Get any promise from a

salesperson or an agent in writing, especially if there already is a written contract - even

an order form, printed receipt, or a handwritten letter of agreement or understanding. In

most cases in the sales moment many promises are made so there should be signed

document that prove all promises that was made.

Solution

A great idea of solution that could be helpful to prevent that kind of situation is

to get companies to invest more in ethics training so that their employees do not deceive


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the customers. Bagley justifies that saying that business leaders consider a code of

ethics to be one of the most effective measures for encouraging ethical business

behavior(p.36). Bagley also suggests that providing ethics training can be effective

because with that the organization will develop a general awareness of its ethics

principles and draw attention to practical ethical issues (Bagley, 37). Companies should

take the responsibility to create policies that would tell what is legal and what is not

legal, so than they will work as the rules says and any step out of that they would have a

penalty. In the worst case the employee that was caught having an unethical behavior

could be a finned or even lose their job. If that idea works and the employees,

specifically salesperson behaves ethically, people will come back, buy again with the

same person and will create a good image of the company. In that way the company will

grow and then will create more job opportunities for those that worked ethically

(Pettijohn, Keith & Burnett, 2011).

Again according to the article Managerial and Peer Influence on Ethical

Behavioral Intentions in a Personal Selling Context to prevent those problems the firm

should focus on the factors within its control; such a firm has been described as

controlling recruiting, selection, organizations policies related to policies are codes of

ethics, doing peers and the ethical climate of the firm. The authors say that In addition

to the managers influence on ethical behavior, other factors within the sales

organizations purview may affect the sales forces ethical behavior (Pettijohn, Keith

& Burnett, 2011).

Also in the book Definitive Drucker the writer point that management is about

human beings. Its task is to make people capable of joint performance, to make their

strengths effective and their weaknesses irrelevant. Drucker says that In a knowledge-

based organization, it is the individual worker's productivity that makes the entire


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system successful. When author talks about the system serving the worker, he was

talking about setting workers up towin with high stakesthe heart ofmanagement's

most important impact on people. To set people up to win, he emphasized teams and

missions, authority and independence, and playing to their strengths which in his

opinion would definitely do some difference on the daily life of the worker and in that

case on the salespeople. He basically agrees that In an organization, we can connect

individuals' strengths, minimizing their weaknesses. And across organizational

boundaries, we can connect the strengths of each corporation and provide the customer

with far greater value than can any single enterprise. Peter Drunker.

Conclusion

Laws cannot control sales agent behavior especially because there is not a specific

law towards that. Obviously there are laws to help that situation but not to control it

entirely. Behave unethically is definitely not the best to solve problems or to get away

from feeling or pressures, it will just make things worse daily. But on the other hand

sales agent should have goals that are possible to achieve in an ethical way so they will

not feel pressure to do everything just to achieve their goals. Having possible goals the

sales agent will work ethically to win the trust of the client and at the same time make

their quota. Once you win the client they will became a loyalty customer that will

recommend that company and that salesperson to all friends and people that ask about

it. With good clients and ethical behavior of all sector of the company the success will

come.

In practice, the customer is the final decision maker for maintaining a long-term

relationship with a firm and thats why it is so important to create a nice, truthful

relationship with customer from their perspective. Customers believe that they will

obtain certain benefits from the established relationship with a salesperson be clear
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about what you can really offer, avoid lies because they also expect for the company to

be honest and not cheat them. But to prevent misleading promises they can always make

sure to have a contract signed in the end of the negotiation. Companies also imagine

getting the same response the other way around. This idea of have a truthful and ethical

relationship between client and company brings harmony between all sectors and also

gives a healthy growth.

There is a famous statement that all employers must know and use in their

company. It is called the Golden Rule; and it can be defined by treat the customer as

you would want to be treated; and that in order to remain competitive, it is not

necessary to engage in questionable selling practices. For the low ethics situation, the

immediate sales manager states that anything goes; do whatever it takes to make a

sale; and in order to remain competitive, it is necessary to engage in aggressive

selling practices (Pettijohn, Keith & Burnett, 2011).

Personally I have faced ethical issues being a consumer and being a sales agent.

In the past I have lied to achieve my monthly goal for once and the result was that I lost

the client because I could not delivery the product in time. As a client I bought a

product that was promised to have a certain work functionality and it was not as

described by the sales agent. Now I have a very strong ethics behavior and I do think

that the truth creates the success in a long term but it also creates loyalty and good

image awareness. I know how I felt in both sides so now I use the golden rule as a guide

and that is how I behave towards any issues.


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References

Alrubaiee, L. (2012, January 4). Exploring the Relationship between Ethical Sales

Behavior, Relationship Quality, and Customer Loyalty. International Journal of

Marketing Studies. Http://www.ccsenet.org. doi: 10.5539/ijms.v4n1p7

Bagley, C. E. (2002). Managers and the legal environment: Strategies for the 21st

century. Cincinnati, Ohio: West/Thomson Learning.

Bradford, K. D., Crant, J., & Phillips, J. M. (2009). HOW SUPPLIERS AFFECT

TRUST WITH THEIR CUSTOMERS: THE ROLE OF SALESPERSON JOB

SATISFACTION AND PERCEIVED CUSTOMER IMPORTANCE. Journal Of

Marketing Theory & Practice, 17(4), 383-394. doi:10.2753/MTP1069-

6679170406

Edersheim, E. H., & Drucker, P. F. (2007). The definitive Drucker. New York:

McGraw-Hill.

Hansen, J. D., & Riggle, R. J. (2009). ETHICAL SALESPERSON BEHAVIOR IN

SALES RELATIONSHIPS. Journal Of Personal Selling & Sales Management,

29(2), 151-166.

Holme, C. (2008). Business ethics - part one: Does it matter? Industrial and

Commercial Training, 40(5), 248-252. doi:http://dx.doi.org/10.1108/

00197850810886487

Jaramillo, F., Mulki, J., & Boles, J. S. (2011). WORKPLACE STRESSORS, JOB

ATTITUDE, AND JOB BEHAVIORS: IS INTERPERSONAL CONFLICT

THE MISSING LINK?. Journal Of Personal Selling & Sales Management,

31(3), 339-356.

Pettijohn, C. E., Keith, N. K., & Burnett, M. S. (2011). Managerial and Peer Influence

on Ethical Behavioral Intentions in a Personal Selling Context. Journal Of


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Promotion Management, 17(2), 133-147. doi:10.1080/10496491.2011.580694

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Legal and Ethical Issues with Sales people