Social, Ethical, Legal Influences

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Main Topics

• Social, Ethical, Legal Influences
• Managements Social Responsibilities
• What Influences Ethical Behavior
• Are There any Ethical Guidelines
• Managements Ethical Responsibilities
• Ethics in Dealing with Salespeople

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Main Topics

• Salespeoples Ethics when Dealing with Their
  Employers
• Ethics in Dealing with Customers
• The International Side of Ethics
• Managing Sales Ethics
• Ethics in Business and Sales

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Ethical Situation 1
The Cadillac Lease

• A car salesman has presented a sales price and
  payment to a customer, who has agreed to the
  terms
• A bank salesman suggests he offer the customer a
  lease in order to lower the payment.
• The car salesman switches to a lease, but
  increases the profit instead.

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Ethical Situation 2
The Home Mortgage

• A mortgage broker tells the customer he is
  getting the lowest rate available.
• Between the time the customer agrees to the terms
  and then signs papers rates go down.
• The mortgage salesman keeps the rate the same and
  is paid the difference by the bank.

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Ethical Situation 3
Overdraft Protection

• The bank suggests that a customer sign up for
  overdraft protection.
• Its easy and convenient. It simply charges
  your credit card to cover overdrafts no
  overdraft charges.
• Each time the customer overdraws his account he
  is charged 5, and the interest ticker begins on
  the entire credit card balance.

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Ethical Situation 3
Fees for Overdrafts

• A bank Marketing Manager calculates the actual
  costs of an overdraft at 1.50.
• His manager insists that the bank fee be
  increased from 12 to 20.
• The Marketing Manager decides to resign rather
  than support the increase.

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Managements Social Responsibilities

• Social responsibility is managements
  obligation to make choices and take actions that
  contribute to the welfare and interests of
  society as well as to those of the organization

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Organizational Stakeholders

• A stakeholder is any group inside or outside the
  organization that has a stake in the
  organizations performance
• Stakeholders may have similar or different
  interests in the organization
• Customers
• Community
• Creditors
• Government
• CCC GOMES

• Owners
• Managers
• Employees
• Suppliers

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Exhibit 3-2 Major Stakeholders in the
Organizations Performance
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An Organizations Main Responsibilities

• Economic - be profitable
• Legal - obey the law
• Ethical - do what is right
• Discretionary - contribute to community and
  quality of life

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An Organizations Main Responsibilities
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What Is Your Level of Moral Development?

• Principled - What is the right thing to do?

Level 3
Level 2

• Conventional - What am I legally required to
  do?

Level 1

• Preconventional - What can I get away with?

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Are There Any Ethical Guidelines?

• What Does The Research Say?
• American adults said by a 3-to-1 margin that
  truth is always relative to a persons situation
• People are most likely to make their moral and
  ethical decisions based on
• whatever feels right or
• comfortable in a situation

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How Do You Make Your Moral-Right or Wrong
Choices? (Choose One)

• Whatever will bring you the most pleasing or
  satisfying results
• Whatever will make other people happy or minimize
  interpersonal conflict
• Values taught by your family
• Primarily from religious principles and teaching
  or bible content
• Other

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What Do You Use For a Moral Compass?
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Are There Ethical Guidelines?

• What Does One Do?
• What if you found a bank bag containing 125,000?
  Would you return it to the bank?
• Is it fear of being caught?
• Not the right thing to do?

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Are There Ethical Guidelines?

• Out of class, is it okay to copy someone elses
  homework assignment?
• What keeps you from cheating on an exam when the
  professor is out of the room?
• Is it fear of being caught?
• Not the right thing to do?

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Is Your Conscience Reliable?

• What Does One Do?
• We all have an internal constant standard with
  which we measure right and wrong, a moral
  compass
• Most of us know we should return the 125,000 and
  not copy someones homework
• But what would we actually do?

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Is Your Conscience Reliable?

• If a persons values are at Level 2, they may
  make decisions based on the situation and what
  others say and do
• Usually people rationalize their decisions Ill
  only copy the homework this one time
• Many people are so accustomed to doing things
  unethically that they think nothing about it

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Are There Ethical Guidelines?

• Sources of Significant Influence
• Do factors influencing our decisions include your
  friends, family, or things you see on television
  or in the movies?
• Barna has found that the leading influences on
  American ethics are movies, TV, the Internet,
  books, music, public policy, law, and family

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To Have Ethical Guidelines You Need

• A point of reference that
• Is fixed - so that no one can change it
• Is separate from you
• No one else may influence

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The Fixed Point of Reference Must Be

• Right whether people
• Believe it or not
• Like it or not
• Know about it or not

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How Do You Know If What Someone Is Saying is True
Or Not?

• Can it be a moral and ethical standard?
• There is no way for you to know if what I am
  saying is true unless you know what is the truth
• And there is no way to know what is the truth
  unless there is a truth you can know

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What Is a Fixed Point of Reference?

• Stars can be used for navigation because they are
  a fixed point of reference separate from you that
  no one can influence

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Will The Golden Rule Help?

• The Golden Rule concept is present in virtually
  all faith-based principles
• The Golden Rule does not involve reciprocity
• Could the Golden Rule serve as a universal,
  practical, helpful standard for the
  businesspersons conduct?
• Would you consider your faith a fixed point that
  is separate from you and never changes?

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Examples of World Religions Which Embrace the
Golden Rule

• Hindu - Do naught unto others what you would not
  have them do to you.
• Confucius - Do not do to others what you would
  not like yourself.
• Buddhist - Hurt not others in ways that you
  yourself would find hurtful.
• Rabbi Hillel - That which is hateful to you do
  not do unto your neighbor.
• Jesus Christ - Do to others as you would have
  them do to you.

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What Influences Ethical Behavior?

• The Individuals Role
• Level one Preconventional--acts in own best
  interest
• A few operate here
• Level two Conventional--upholds legal laws
• Most people operate here
• Level three Principled--lives by own code
• Less than 20 reach level three
• The Organizations Role
• At best, most employees in firm operate at level
  two
• How will the situation be handled if no policies
  and procedures are in place?

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Managements Ethical Responsibilities

• Ethics is the code of moral principles and values
  that govern the behaviors of a person or a group
  with respect to what is right or wrong
• Ethical behavior refers to treatingothers fairly

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What is an Ethical Dilemma?

• A situation in which each alternative choice or
  behavior has some undesirable elements due to
  potentially negative ethical or personal
  consequences

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Ethics in Dealing with Salespeople

• Five ethical considerations faced by sales
  managers
• Level of sales pressure
• Decisions affecting territory
• To tell the truth?
• The ill salesperson
• Employee rights
• termination-at-will
• privacy
• sexual harassment

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Benefits of Respecting Employees Rights

• More productive employees
• Attracting good sales personnel
• Reducing legal costs
• Reducing wage increase demands

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Salespeoples Ethics in Dealing with Their
Employers

• Misusing company assets
• Moonlighting
• Cheating
• Affecting other salespeople
• Technology theft

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Ethics in Dealing with Customers

• Bribes
• Misrepresentation
• Price discrimination
• Robinson-Patman Act
• Selling the same quantity of the same product to
  different buyers at different prices
• Tie-in sales
• To buy a particular line of merchandise, a buyer
  may
• Clayton Act

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Ethics in Dealing with Customers

• Exclusive dealership
• Reciprocity
• Buying a product from someone if the person or
  organization agrees to buy from you
• Sales restrictions
• Cooling-off laws
• Green River ordinances

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The International Side of Ethics

• Guidelines for conducting international business
  may be different or even nonexistent
• Despite laws in other countries, U.S. firms are
  subject to U.S. laws
• It is important to keep up to date on the law and
  be aware of how authorized representatives are
  conducting business

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Managing Sales Ethics

• Follow the leader
• Leader selection is important
• Establish a code of ethics
• Create ethical structures
• Encourage whistle-blowing
• Create an ethical sales climate
• Establish control systems

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Helpful Hints to Making Career Decisions

• Your employer should provide worthwhile products
• You should be able to do what is right
• You do not have to compromise your beliefs
• People go before anything else
• Good people are desperately needed in all types
  of businesses/organizations
• Look for a calling, not a job