Customer Relationships - Fundamentals of Selling - Lecture Notes, Study notes of Business Management and Analysis

Download Customer Relationships - Fundamentals of Selling - Lecture Notes and more Study notes Business Management and Analysis in PDF only on Docsity! CHAPTER 3 Ethics First … Then Customer Relationships LECTURE OUTLINE I. MANAGEMENT’S SOCIAL RESPONSIBILITIES A. Social Responsibility—Management’s obligation to make choices and take actions that will contribute to the welfare and interests of society as well as those of the organization. B. Organizational Stakeholders. 1. Stakeholders—any group within or outside the organization that has a stake in the organization’s performance. 2. CCC GOMES — an acronym for stakeholders; Customers, Community, Creditors, Government, Owners, Managers, Employees and Suppliers. C. An organization’s main responsibilities: 1. Economic — producing goods and services that society wants and to maximize profits for its owners and shareholders. 2. Legal — what society deems important with respect to appropriate corporate behavior. 3. Ethical — behaviors that are not necessarily codified into law and may not serve the corporation’s direct economic interests. 4. Discretionary — purely voluntary and guided by a company’s desire to make social contributions. D. How to demonstrate social responsibility: 1. Taking corrective action before required. 2. Working with affected constituents to resolve mutual problems. 3. Working to establish industry-wide standards and self-regulation. 4. Publicly admitting mistakes. 5. Involvement in appropriate social programs. 6. Helping correct environmental problems. 7. Monitoring the changing social environment. docsity.com 8. Establishing and enforcing a corporate code of conduct. 9. Taking needed public stands on social issues. 10. Striving to make profits on an ongoing basis. II. WHAT INFLUENCES ETHICAL BEHAVIOR? A. The individual’s role: 1. People behave differently because of their: a. Worldviews - people's different beliefs about the world around them. b. Morals - people's adherence to right or wrong behavior and right or wrong thinking. 2. Individuals usually can be placed into one of three levels of moral development: a. Pre-conventional — an individual acts in one’s own best interests, and thus follows rules to avoid punishment to receive rewards. Will break moral and legal laws. “What can I get away with?” b. Conventional — individual conforms to expectations of others. Upholds moral and legal laws. “What am I legally required to do?” c. Principled — an individual lives by an internal set of morals, values and ethics. These are upheld regardless of punishments or majority opinion. “What is the right thing to do?” B. The organization’s role is often characterized by pre-conventional or conventional levels of moral behavior. III. ARE THERE ANY ETHICAL GUIDELINES? A. What does the research say? 1. American adults said by a 3-to-1 margin that truth is always relative to a person’s situation. 2. People are most likely to make their moral and ethical decisions on the basis of whatever feels right or comfortable in a situation. docsity.com 5. Would you consider your faith a fixed point of reference that never changes and is separate from you? IV. MANAGEMENT’S ETHICAL RESPONSIBILITIES A. Ethics — Code of moral principles and values that govern the behaviors of a person or group with respect to what is right or wrong. B. Ethical Behavior — treating others fairly. 1. Being Honest. 2. Maintaining confidence and trust. 3. Following the rules. 4. Conducting yourself in the proper manner. 5. Treating others fairly. 6. Demonstrating loyalty to company and responsibility. 7. Carrying your share of work and responsibility. C. An Ethical Dilemma is a situation when each alternative choice or behavior has some undesirable elements due to potentially negative ethical or personal consequences. V. ETHICS IN DEALING WITH SALESPEOPLE A. Sales Managers have both social and ethical responsibilities to their sales personnel. B. Five ethical considerations by sales managers are: 1. Level of sales pressure to place on a salesperson. 2. Decisions affecting territory. 3. Whether or not to be honest with the salesperson. 4. What to do with the salesperson who is ill. 5. What rights do employees have? a. Termination-at-will — must now have accurate records which led to an employee’s termination. b. Privacy — non-job related information is being taken out of personal files by employers. c. Cooperative acceptance — employees are protected by law from acts of discrimination and sexual harassment. docsity.com C. Company benefits of respecting employee rights: 1. Employees are more productive. 2. It attracts good sales personnel. 3. It reduces legal costs. 4. It reduces wage-increase demands. VI. SALESPEOPLE’S ETHICS IN DEALING WITH THEIR EMPLOYERS - salespeople, as well as managers, may occasionally: A. Misuse company assets – for personal gain or as bribes to customers. B. Moonlight – take a second job or college course on company time. C. Cheat – not play fair in contests. D. Affect other salespeople – the unethical practices of one salesperson can affect other salespeople within the company. E. Attempt technology theft – take customer records, after quitting or being fired for his or her or a future employer’s benefit. VII. ETHICS IN DEALING WITH OTHER CUSTOMERS A. Common problems faced in dealing with customers: 1. Bribes - There is a thin line between good business and the misuse of a bribe or gift. 2. Misrepresentation — of the product, company, company policies, prices, or delivery time in attempt to make a sale. a. Salespeople must understand the difference between opinions and statements of fact. (1) Opinions do not have legal consequences. (2) A company may be sued if its salesperson uses erroneous statements of “fact.” b. Suggestions for staying legal: (1) Understand the difference between statements of praise and statements of fact. (2) Educate customers. (3) Be accurate. (4) Know the product’s technical specifications. docsity.com (5) Avoid exaggerations about product safety. (6) Be familiar with laws regarding warranties. (7) Understand your product’s capabilities. (8) Keep current with design changes. (9) Avoid offering untested opinions. (10) Never overstep authority. 3. Price discrimination - Some customers may be given price reductions, promotional allowances and support while others are not. Violation of the Robinson-Patman Act of 1936. 4. Tie-in-sales - When the buyer is required to buy other products that are not wanted. Prohibited under the Clayton Act. 5. Exclusive Dealership - also prohibited under the Clayton Act. 6. Reciprocity - buying a product from someone if the person or organization agrees to buy from you. 7. Sales restrictions. a. FTC “cooling off” laws. (1) Within three days, buyer can: (a) Cancel contract. (b) Return merchandise. (c) Obtain full refund. (2) Law covers sales of $25 or over made door-to-door. (3) Buyer must have written, dated contract and be told of the three-day period. b. Green River Ordinance — required a license for selling direct to consumers. VIII. THE INTERNATIONAL SIDE OF ETHICS - Despite different laws in other countries, U.S. firms are subject to U.S. laws internationally. IX. MANAGING SALES ETHICS A. Follow the leader - chief executives may set the example. B. Leader selection - carefully choose managers with high levels of moral development. docsity.com