Chapter 2

• Ethics in sales management

  Identifying and addressing ethical challenges faced by salespeople
• Table of contents


  • Introduction
  • Ethical challenges among salespeople
  • Professional conduct
  • Professional codes of ethics on sale
  • 4 main types of ethical codes
  • Business codes of conduct
  • Creating and managing an ethical work climate
  • Improving the ethical climate involves several steps
  • Legal considerations in the sales environment
  • Unfair trade practices
  • Practicing good ethics among salespeople
• Salespeople are typically caring and ethical professionals, but their job presents unique ethical challenges, like handling unethical requests from customers and following company policies
• Sales managers must address these challenges by developing and enforcing ethical policies, training salespeople on them, and ensuring compliance
• Ethical challenges among salespeople

  • Complete product knowledge
  • Misrepresentation
  • Disclosures
  • Single-product sales vs. overall strategy
  • Keeping up with compliance
• Complete product knowledge


  Salespeople need to know everything about what they're selling to better help customers make smart choices
• Misrepresentation


  Salespeople should answer customer questions truthfully and clearly to prevent accidentally giving the wrong information
• Disclosures


  Salespeople must be transparent about everything related to the sale to avoid causing customers to lose trust and potential legal trouble
• Single-product sales vs. overall strategy


  Instead of just pushing one product, salespeople need to understand each customer's background, lifestyle, and goals to recommend the best product for that specific person
• Keeping up with compliance


  Following all the rules and regulations is important as it shows the company cares about doing business ethically and protects both the customer and the company
• Professional conduct


  Behaving professionally towards everyone involved, including customers, competitors, regulators, and colleagues, by treating people with respect, being honest, and following all laws and company policies
• Aspects of professional conduct

  • Competition
  • Pricing
  • Product
  • Research
  • Promotion
• Ethical behavior in competition

  Playing fair with other companies by being honest about products and not trying to trick customers or sabotage competitors
• Ethical pricing


  Being upfront and transparent with customers about how much they'll pay for a product or service, reflecting both the company's costs and the customer's expected value
• Ethical sales and marketing of products

  Only selling products that are safe and suitable for their intended use, providing clear instructions and good customer service
• Ethical research practices


  Respecting customer privacy, following privacy legislation, informing customers about data collection, using data only for intended purposes, and securely destroying data when no longer needed
• Ethical promotion


  Portraying offers truthfully and correctly, without linking to nice-looking lifestyles that are not applicable, and promoting based on the product's own qualities and features valuable to the target market
• Codes of ethics


  Rulebooks that express a company's values and outline specific behaviors considered right or wrong, which top management must lead by example in following
• 4 main types of ethical codes

  • Company codes
  • Professional codes
  • Business association codes
  • Advisory group codes
• Company codes


  Rules set by a company to guide its employees on what's considered ethical behavior within the organization
• Professional codes


  Rules specific to certain professions, like advertising, sales, medicine, law, etc., outlining ethical behavior for people in those roles
• Business association codes


  Rules agreed upon by groups of businesses in the same industry, outlining ethical behavior for everyone in that industry
• Advisory group codes


  Guidelines suggested by government agencies or special interest groups to help businesses understand and follow ethical practices
• Business codes of conduct

  Codes created by businesses specifically for sales, teaching their salespeople how to behave ethically by describing good and bad behaviors, encouraging high standards, reducing the risk of breaking fair trading laws, and assisting staff in making ethical decisions
• 5 main types of ethical climates in the workplace

  • Instrumental
  • Caring
  • Law and order
  • Rules
  • Independence
• Instrumental ethical climate


  Focused on self-interest, where decisions are made to benefit the company or the CEO personally, even if it means acting unethically
• Caring ethical climate


  Emphasizes caring for others' well-being, where leaders are concerned about employees' welfare and support their development
• Law and order ethical climate

  Strictly follows external laws and regulations, often ignoring employee concerns in favor of adhering to specific codes
• Rules ethical climate


  Follows internal rules and policies set by the organization, where employees know that deviating from these rules could cost them their job
• Independence ethical climate


  Gives employees freedom to make decisions and encourages creative problem-solving, but can lead to unethical behavior if employees feel there are no consequences
• Improving the ethical climate

  1. Empowerment

  2. Communication

  3. Discipline

  4. Change
• Empowerment


  Giving employees more control over their work can lead to better ethical decision-making and more creative solutions to problems
• Communication


  Improving communication between managers and employees helps clarify expectations and reinforce ethical behaviors through training scenarios
• Discipline


  Enforcing consequences for ethical violations, regardless of an employee's status, shows that ethical standards are taken seriously
• Change


  Recognizing patterns of unethical behavior may indicate a need to change rules and procedures within the organization, even if it involves short-term losses for long-term reputation improvement
• Legal considerations in the sales environment are important to ensure that businesses operate within the law
• Instrumental climate


  Decisions are made to benefit the company or the CEO personally, even if it means acting unethically
• Caring climate


  Emphasizes caring for others' well-being. Leaders are concerned about employees' welfare and support their development
• Law and order climate

  Strictly follows external laws and regulations, often ignoring employee concerns in favor of adhering to specific codes
• Rules climate


  Follows internal rules and policies set by the organization. Employees know that deviating from these rules could cost them their job