ETHICA

ISSUES L & LEGAL

IN SALE
S
By -

Santosh By -

Santosh
10/20/09
Pankaj
Pankaj
1
 Overview
• What is Ethical Behavior
• Management’s Ethical Responsibilities
• Ethics in Dealing with Salespeople
• Salespeople’s Ethics with their
Employers
• Ethics with Customers
• International Ethics
• Managing Sales Ethics
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 ETHICAL BEHAVIOR
• Ethical behavior is characterized by honesty, fairness &
equity in interpersonal, professional and academic
relationships and in research and scholarly activities.
Ethical behavior respects the dignity, diversity and
rights of individuals and groups of people.
• Being Honest
• Maintaining Confidence & Trust
• Following the Rules
• Proper Conduct
• Treating Others Fairly
• Demonstrating Loyalty
• Doing your Share of the Work
• Responsibility
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 MANAGEMENT’S ETHICAL
RESPONSIBILITIES
• Respect Employees
• Practice Ethical Behaviors
• Publish Company Vision & Goals
• Resolve Mutual Problems
• Promote Industry Ethical Standards
• Take a Stand on Social & Political Issues

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 ETHICS IN DEALING WITH
SALESPEOPLE
• Level of Sales Pressure
• Decisions Affecting Territories
• Honesty with Compassion
• The ill Salesperson: alcohol, drugs, or
severe illness
• Employee Rights
– Termination
– Privacy
– Sexual Harassment
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 SALESPEOPLE’S ETHICS WITH
EMPLOYERS
• Misusing Company Assets
• Moonlighting
• Cheating
• Affecting Other Salespeople
– Commission Splits
– Territory Changes
– Competition vs Cooperation
– Sales Contests

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 EXAMPLES OF UNETHICAL
TEMPTATIONS FOR A SALESPERSON
• Make exaggerated claims to counter
exaggerated claims of a competitor
• Offer a customer an unauthorized ‘gift’ in
return for their business
• Conceal information from a customer in order
to get their business and to meet your sales’
goals
• Put non business-related expenses on your
expense account
• Divulging confidential information about one
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customer to another in order to facilitate a
ETHICS WITH CUSTOMERS
• Bribes
• Misrepresentation
• Price Discrimination - same quantity @
different prices
• Tie-in Sales - to buy a product, must buy
other products
• Exclusive Dealership - buy from one
supplier
• Reciprocity - you buy from me, I buy
from you
• Sales Restrictions-3 day recision
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 INTERNATIONAL ETHICS

• Different Cultures
• Different Religions
• Different Laws
• Different Customs
• Maintain YOUR Ethics
• Practice Golden Rule
• Learn & Respect Others

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COMMON REASONS (EXCUSES) FOR
UNETHICAL BEHAVIOR
1.‘Everybody’ else is doing it.
2.It’s not that big of a deal.
3.It’s necessary (the ends justify the
means).
4.It’s not going to hurt anyone.
5.It’s for the benefit of the company or
somebody else.
6.I deserve it.
7.It’s legal.
8.Nobody will know.
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GUIDELINES FOR MAKING ETHICAL
DECISIONS (SEARS)
1.Is it legal?
2.Is it consistent with company
beliefs/values?
3.Is it right/appropriate?
4.Is it okay for others to know
about this?
5.Is it going to make me feel
bad?
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MANAGING SALES ETHICS

• Leader is the Example

• Leader Should Exemplify Ethics
• Establish a written Code of Ethics
• Create Ethical Structures
• Encourage Whistle - Blowing
• Create an Ethical Sales Climate
• Establish Ethical Control Systems

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 LEGAL ISSUES
• “Legal” does not necessarily mean
“ethical”
Protect consumers
Protect competition
Protect sales person
•

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EXAMPLES OF ILEGAL ACTIVITIES
– Quality below standard specified
– Violation of delivery date
– Pricing concessions
– Incomplete or incorrect instructions
– Price fixing
– Delivering a different brand than that sold
– Misrepresentation of product usage
– Slandering competitor
– Kickbacks to buyer
– Charges after the sale
– Misuse of proprietary data
– Signing agreements without the proper authorization
–
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 LAWS PERTAINING TO SALES
• Contracts
• Price competition
• Credit reporting
• Debt collection
• Uniform commercial code (sales)
• “Cooling off”
• Antimonopoly
• Deceptive actions
• Preserve competition
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HOW TO KEEP OUT OF LEGAL
TROUBLE
– Educate the customer thoroughly before
making the sale
– Know technical specs, etc. for the product
you sell.
– Know your company's literature. Challenge it
if is false
– Know the terms of sale policies. You can bind
the company
– Know federal and state laws regarding your
product and its warranties
– Don't guess at your product's capabilities
–
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 CONCLUSION
“A salesperson’s ethics and values contribute
more to sales success than do techniques or
strategies.”

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