Ethical and Legal Issues in Relationship Selling

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Ethical and Legal Issues in Relationship Selling

• 4

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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

• 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

Source A Matter of Trust, Sales and Marketing
Management, March 2003, pp. 30-35
www.HomeBanc.com.
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4.1
Code of Conduct at Dell Computer

• Dells 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 companys shared
  global culture

Source Dell corporate website, Code of Conduct
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4.1
Key characteristics of Dells Code
Trust Respect
Integrity Courage
Honesty Responsibility
Judgment
Source Dell corporate website, Code of Conduct
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Ethical Concerns for Salespeople
4.2
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 Salespeoples 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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4.2
Differences in Negotiating between the Japanese
and American Cultures
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
Source Johny K. Johansson, Global Marketing, 2nd
ed., 2000, Irwin/McGraw-Hill, p. 166.
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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 competitors 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 companys 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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SMEI Sales and Marketing Creed (excerpts)
4.6

• 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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SMEI Sales and Marketing Creed (excerpts)
4.6

• 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.