Chapter 10 Ethical Leadership. Principles of ethical decision making _ Sales ethics form a code of moral conduct that guides sales managers and salespeople.

Chapter 10Chapter 10Ethical LeadershipEthical Leadership

Principles of ethical decision makingPrinciples of ethical decision making

_ Sales ethics form a code of moral conduct that _ Sales ethics form a code of moral conduct that guides sales managers and salespeople in their guides sales managers and salespeople in their everyday activities .everyday activities .

_ Ethical decision can be based on different _ Ethical decision can be based on different moral Rules including the stakeholders and moral Rules including the stakeholders and shareholders View , Idealism , relativism , self shareholders View , Idealism , relativism , self interest of Machiavellianism or conventional interest of Machiavellianism or conventional moralitymorality

Role MoralityRole Morality

_ The moral Philosophy held by sales managers _ The moral Philosophy held by sales managers is important to maintain an ethical sale force is important to maintain an ethical sale force because managers are the ethics teachers of because managers are the ethics teachers of their organizations as they select field their organizations as they select field salespeople , provide ethical training and salespeople , provide ethical training and enforce the moral codes of the firmenforce the moral codes of the firm

Role MoralityRole Morality

_ We have two patterns of moral reasoning as :_ We have two patterns of moral reasoning as :

1.1. Relativism Relativism

2. Idealism 2. Idealism

Role MoralityRole Morality

_ Relativism_ Relativism : managers tend to reject universal : managers tend to reject universal rules and make decisions on the basis of rules and make decisions on the basis of personal values and the ramifications of each personal values and the ramifications of each situation .situation .

_ Idealism_ Idealism : accept moral codes and believe that : accept moral codes and believe that positive outcomes for all can be achieved by positive outcomes for all can be achieved by morally collect actions morally collect actions

MachiavellianismMachiavellianism

_ Focus on what’s rather than on what ought to _ Focus on what’s rather than on what ought to be ….be ….

_Machiavelli denied the relevancy of morality _Machiavelli denied the relevancy of morality in public life and regarded expediency in public life and regarded expediency

_Machiavellianism defined as the principles and _Machiavellianism defined as the principles and methods of craftiness Duplicity and Deceit methods of craftiness Duplicity and Deceit

Conventional MoralityConventional Morality

_The Philosophy is reflected in Familiar phase _The Philosophy is reflected in Familiar phase

““When in Rome , Do as Romans Do “.When in Rome , Do as Romans Do “.

_This emphasis shift from the individual to what _This emphasis shift from the individual to what society thinks about the ethical issue society thinks about the ethical issue

_The standard of morality become what’s _The standard of morality become what’s acceptable to others at a popular time and acceptable to others at a popular time and place .place .

Conventional MoralityConventional Morality

_ Problems with this approach :_ Problems with this approach :

1.1. The majority may conflict with either the The majority may conflict with either the personal moral standards or with the personal moral standards or with the company policy .company policy .

2. it’s difficult for managers to adapt to changing 2. it’s difficult for managers to adapt to changing contexts or cultures contexts or cultures

Making Decisions on ethical Making Decisions on ethical problemsproblems

_ Ethics are concerned with the effect of actions _ Ethics are concerned with the effect of actions on the individual , the firm , the business on the individual , the firm , the business community and a society as a whole .community and a society as a whole .

_ Hierarchical diagram showing the order in _ Hierarchical diagram showing the order in which ethical decision evolve which ethical decision evolve

Making Decisions on ethical Making Decisions on ethical problemsproblems

_ we noticed that ethical values and standards of _ we noticed that ethical values and standards of business Firms are derived from the general business Firms are derived from the general values and Norms of Society .values and Norms of Society .

Business Decisions Represent a synthesis of the Business Decisions Represent a synthesis of the moral and ethical principles embraced by moral and ethical principles embraced by various entities .various entities .

Making Decisions on ethical Making Decisions on ethical problemsproblems

*Conflict is common because the value of the *Conflict is common because the value of the firm as interpreted by it’s executives mayn’t firm as interpreted by it’s executives mayn’t match the values held by the individual.match the values held by the individual.

* Job Description :Set of rules or practices that * Job Description :Set of rules or practices that defines the role of an employee . It resembles a defines the role of an employee . It resembles a legal contract Because it specifies the number legal contract Because it specifies the number of hours of work , starting and stopping time of hours of work , starting and stopping time and the goals that are to be accomplished and the goals that are to be accomplished

Ethical ChecklistEthical Checklist

A comprehensive job description is a good 1A comprehensive job description is a good 1stst step , but managers often need practical step , but managers often need practical Guidelines when making difficult moral Guidelines when making difficult moral Decision .Decision .

_ we suggest a simple checklist when we _ we suggest a simple checklist when we confronted with an ethical Dilemma confronted with an ethical Dilemma

Ethical ChecklistEthical Checklist

Which contains :Which contains :1.1. Recognize the Dilemma Recognize the Dilemma 2.2. Get the facts Get the facts 3.3. List your opinionList your opinion_ Are they legal ?_ Are they legal ?_ Are they right?_ Are they right?_Are they beneficial _Are they beneficial 44. Make your decision . Make your decision

Common Sales Ethics IssuesCommon Sales Ethics Issues

1.1. Hiring and Firing :-Hiring and Firing :-_ Various Federal and state laws prohibit _ Various Federal and state laws prohibit

Discrimination in Hiring Practices .Discrimination in Hiring Practices .For example: In hiring candidates who are For example: In hiring candidates who are

relative to officers of the firm , suppose a relative to officers of the firm , suppose a sale manager must choose between a man sale manager must choose between a man and a woman for a position although the man and a woman for a position although the man has more experience but as a woman is a has more experience but as a woman is a daughter of a vice president of a company daughter of a vice president of a company

Hiring and FiringHiring and Firing

So the woman will get the Job even though she So the woman will get the Job even though she has lower qualifications has lower qualifications

_ In this example the sale manager must make a _ In this example the sale manager must make a moral choice between what’s the best for the moral choice between what’s the best for the firm and what might enhance his or her firm and what might enhance his or her position in the firm position in the firm

House AccountHouse Account

_ A touchy problem for sales managers is how to _ A touchy problem for sales managers is how to handle large and important customers .handle large and important customers .

_ These larger accounts require special attention _ These larger accounts require special attention that exceeds the time and the skills available that exceeds the time and the skills available from the salesperson assigned to the territory from the salesperson assigned to the territory

_Should these accounts be left with District _Should these accounts be left with District salesperson or shifted to headquarters as salesperson or shifted to headquarters as House Account as these accounts Generate House Account as these accounts Generate high commission incomehigh commission income

Expense AccountExpense Account

_ Most Ethical Abuse in a sales organization _ Most Ethical Abuse in a sales organization take place with expense account . Salespeople take place with expense account . Salespeople expected to spend money contacting customers expected to spend money contacting customers and then reimbursed for their expenses .and then reimbursed for their expenses .

_ sales managers must decide how tight control _ sales managers must decide how tight control on expense account should be.on expense account should be.

Expense AccountExpense Account

_ Tight control on expense account could result _ Tight control on expense account could result in salespeople not traveling to contact out of in salespeople not traveling to contact out of the way customerthe way customer

_ A good solution is to monitor the actual _ A good solution is to monitor the actual expense of some reliable salespeople for a expense of some reliable salespeople for a month every year , as this approach reduce the month every year , as this approach reduce the cost of processing expense .cost of processing expense .

Gifts for BuyerGifts for Buyer

_ Business has a tradition of giving small Gifts _ Business has a tradition of giving small Gifts for buyers to express appreciation for past and for buyers to express appreciation for past and future business .future business .

_ salespeople Give novelties and samples as well _ salespeople Give novelties and samples as well as seasonal Gifts as seasonal Gifts

_ Today purchasing manager appear to be _ Today purchasing manager appear to be willing to accept gifts of clothing , pen and willing to accept gifts of clothing , pen and calendars calendars

BribesBribes

_ A _ A bribebribe was considered to be a personal Gifts was considered to be a personal Gifts to a buyer over 100$to a buyer over 100$

One way to differentiate a Gift from a bribe is :One way to differentiate a Gift from a bribe is :

When the item is unexpected (gift) rather than as When the item is unexpected (gift) rather than as a part of an agreed –upon payment for a part of an agreed –upon payment for business (bribe)business (bribe)

EntertainmentEntertainment

_ Providing Entertainment for customers is a _ Providing Entertainment for customers is a standard practice in business , but it can lead to standard practice in business , but it can lead to ethical problems .ethical problems .

_ the issue is often (how much is too much ?)_ the issue is often (how much is too much ?)

_ Most will agree that taking a customer to a _ Most will agree that taking a customer to a lunch is fair few would argue against taking a lunch is fair few would argue against taking a client and Spouse to dinner and Night clubs client and Spouse to dinner and Night clubs

Sexual HarassmentSexual Harassment

_ The equal employment opportunity _ The equal employment opportunity commission define the commission define the sexual Harassment sexual Harassment

_ Unwelcome sexual advances , request for _ Unwelcome sexual advances , request for sexual factors and other verbal or physical sexual factors and other verbal or physical conduct of sexual nature constitute sexual conduct of sexual nature constitute sexual harassment .harassment .

Codes of EthicsCodes of Ethics

_ _ Ethic policy statementEthic policy statement : Indicates to sales force : Indicates to sales force

That the company believes in playing fair with That the company believes in playing fair with customers and competitors .customers and competitors .

_Research has shown that salespeople employed _Research has shown that salespeople employed in organization with codes of ethics perceived in organization with codes of ethics perceived their work environment to have more positive their work environment to have more positive ethical value than did other sales professionals ethical value than did other sales professionals

Ethics TrainingEthics Training

_ You should remember that simply publishing a _ You should remember that simply publishing a sales ethics code does not Guarantee that field sales ethics code does not Guarantee that field sales representatives will follow itsales representatives will follow it

_ company should offer classes to make sure that _ company should offer classes to make sure that employees know what to do in morally employees know what to do in morally situation situation

Ethics TrainingEthics Training

_ Research confirmed that younger sales _ Research confirmed that younger sales managers are less idealism and more managers are less idealism and more relativistic in their ethical decision makingrelativistic in their ethical decision making

These findings suggest the importance of These findings suggest the importance of adjusting training programs content to meet adjusting training programs content to meet the need of different age Groups the need of different age Groups

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