• CHAPTER 3
    ETHICAL AND LEGAL
    CONSIDERATIONS
    IN SELLING

    Glengarry Glen Ross
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    • What were the principal ethical predicaments which Sheldon Levine (Jack Lemmon) and his cohorts faced?
    • How could Shelley's extenuating circumstances justify his actions?
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    • What types of external pressures influenced the salespeople's unethical selling practices?
    		  
    • How did the sales manager (Kevin Spacey) and top management (Mitch & Murray) foster the unethical practices?
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    • How the nameless motivational speaker (Alec Baldwin) address the issues of ethics?
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    • How does Dave Moss (Ed Harris), rationalize breaking the law?
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    • How does George Aaronow(Alan Arkin) violate rules of ethics?
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    • What was unethical about Ricky Roma's (Al Pacino) methods in prospecting and closing James Link (Jonathan Pryce)?
    • Why was Ricky Roma's handling of Mr.Link 's cancellation unethical?
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    • How would you change the sales environment to promote ethical selling practices without compromising overall sales performance?
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  • The Power of Ethical Management
    by Dr. Ken Blanchard & Dr. Norman Vincent Peale
    The basic message of their book is simple:
    1. You don’t have to cheat to win!
    2. “Nice guys may appear to finish last, but usually they are running in a different race.”
    3. Cheating, lying, and short-changing the customer on service
      1. may bring a satisfactory profit today,
      2. but it is a sure way to court failure for the future.
  • THE ETHICAL DILEMMA:
    Do honest salespeople finish last?
    Ethical Questions
    • What method do we use to determine moral standards?
    • Why be moral at all?
    • Are there moral standards which are common to all humanity?
    • Is free will a necessary condition for moral praise or blame?
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    The Origin of Ethics
    1. Legal Standards are enforced
    2. Ethical standards come from society
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    Bases for Ethical Systems
    Deontological
    • Standards-based ethics
    • uses specific rules
    Teleological
    • Results-Based Ethics
    • defines right and wrong in terms of end results
    Utilitarianism
    • Started by Jeremy Bentham (1748-1832)
    • Tried to reform some of the unfair laws in England
    • Developed a theory that the morally correct rule was the one that provided
      • "the greatest good to the greatest number of people. The greatest good for the greatest number"
    Ethical Ambivalence
    • results from learning that everything is relative.
    • Are there any moral absolutes?
    Is the language of ethics different from other uses of language?
    Guidelines for Ethical Behavior
    Universal Nature
    • The golden rule
    • Everyone 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
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  • INFLUENCES ON THE SALESPERSON’S ETHICS
    Company Code of Ethics
    Government action and fear of retribution have induced more companies to adopt a code
    Typical
    issues
    covered
    • Expense accounts
    • Gift giving
    • Unethical demands by a buyer
    • Promises about performance or delivery
    • Selling unnecessary products
    Role Modeling by Executives and Sales Managers
    Examples Set by Colleagues and Competitor
    The Bottom Line
    • Profit?
    • Survival?
    Groupthink groupthink.gif (25338 bytes)
    • peer pressure
    • group develops a set of shared perspectives that may be unrealistic but are strongly supported by the members of the group.
    Gamesmanship
    winning
    for the sake of winning     		gamesmanship
  • DEVELOPING A PERSONAL CODE OF ETHICS
    Responsibility
    to
    Self
    • your conscience
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    Responsibility
    to
    your
    Company
    • Inaccuracies in Expense Accounts
    • Honesty in Using Time and Resources
    • Accuracy in Filling Out Order Forms
    • Representing the Company
    Responsibility
    to
    Competitors
    Responsibility
    to
    Customers
    • Overselling and Misrepresenting Products or Services
    • Keeping Confidences
    • Gifts
    • Entertainment
  • OPERATING IN A GLOBAL ENVIRONMENT
    Some cultures have different expectations

     
    U.S. citizens are expected to follow U.S. laws
  • ETHICS AND JOB TENURE
    Whistle-Blowing
    1. You may be held legally accountable for inaction
    2. Recent rulings encourage whistle blowing
    3. Sometimes the best policy may be to keep quiet until solid evidence can be accumulated against a wrongdoer.
    4. A word of caution… inaction can even be grounds for legal action.
    How Does the Company Treats the Salesperson
    1. Some incentives encourage fudging
    2. Management may not be accessible to help with dilemmas
    3. Do control mechanisms exist for
      1. Customer complaints
      2. Salesperson dissatisfaction
      3. Expense accounts
    4. Are sales goals impossible
    5. Be sure managers fairly manage the distribution of sales territories
  • SEXUAL HARASSMENT
    1. Nearly 16000 complaints per year
    2. Look for a harassment policy including
      1. Company Leadership
      2. Immediate complaint investigation
      3. Privacy rights protected
      4. Thorough follow up
      5. Sensitivity training
      6. Review training for comprehension
      7. Periodic refresher courses
  • ETHICS AS GOOD BUSINESS
    1. Unethical activity costs business
    2. Check Points 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 to me?
      4. How would I explain my actions to someone else?
      5. How will it make me feel about myself?
    Remember…There is no pillow as soft as a clear conscience.
  • LEGAL ISSUES FACING THE SALESPERSON
    It is easy to violate many of the laws    		 wpe4D.jpg (17442 bytes)
    Some
    Legal
    Traps
    • 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
    Categories
    of
    Laws
    • Antimonopoly
    • Deceptive actions
    • Preserve competition
  • SPECIFIC ANTITRUST LAWS AND THEIR SALES IMPLICATIONS
    The Sherman Antitrust Act of 1890
    Federal Trade
    Commission
    Act of 1914
    • Unfair methods of competition and 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 brokers
  • THE UNIFORM COMMERCIAL CODE (UCC)
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    1. Written or verbal offers to sell may be binding
    2. Financing must be explained clearly and completely
    3. Salesperson must know legal responsibilities of both parties
    Warranties and guarantees
    1. Express warranties are made by salesperson or in writing
    2. Implied warranties
      1. State law
      2. Unless a disclaimer is made
  • COOLING-OFF LAWwpe4F.jpg (23763 bytes)
  • How to keep out of Legal Trouble
    1. "Puffery" vs. statements of fact.
    2. Educate the customer thoroughly before making the sale
    3. Know technical specs, etc. for the product you sell.
    4. Know your company's literature. Challenge it if is false
    5. Know the terms of sale policies. You can bind the company
    6. Know federal and state laws regarding your product and its warranties
    7. Don't guess at your product's capabilities