4
Ethical and Legal Issues
in Relationship Selling
4-1
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
Learning Objectives
• Understand the importance of ethical
behavior in relationship selling and sales
management
• Identify ethical concerns facing salespeople
• Identify ethical concerns facing sales
managers
• Discuss legal issues in relationship selling
• Create a personal code of sales ethics
4-2
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
Ethics Begins at the Top
• Companies place a high value on the
ethical behavior of salespeople with whom
they do business
• As the point of contact, salespeople play a
critical role in the overall ethical
relationship between company and
customer
Source: “A Matter of Trust,” Sales and Marketing Management, March 2003, pp. 30-35; www.HomeBanc.com.
4-3
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
leadership 4.1
Code of Conduct at Dell Computer
• Dell’s success is built on a foundation of
personal and professional integrity
• The “Soul of Dell” is the statement of the
values and beliefs which define the
company’s shared global culture
Source: Dell corporate website, “Code of Conduct”
4-4
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
leadership 4.1
Key characteristics of Dell’s Code
•Trust
•Integrity
•Honesty
•Judgment
Source: Dell corporate website, “Code of Conduct”
4-5
•Respect
•Courage
•Responsibility
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
EXHIBIT
4.2
Ethical Concerns for Salespeople
Customers
Employers
Dishonesty
Cheating
Gifts, entertainment,
bribes
Misuse of company
resources
Unfair treatment
Inappropriate
relationships with
employees and
customers
Breaking confidentiality
4-6
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
Issues with Customers
• Dishonesty – there is a line between
enthusiasm for a product and
providing false or deliberately
inaccurate information to customers
• Gifts, entertainment, bribes
• Gifts are nonfinancial presents
• Bribes are financial presents given to
buyers to manipulate purchase decisions
• Why do some salespeople offer bribes?
Unfortunately, it often works.
4-7
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
Issues with Customers
• Unfair treatment
• Special treatment of customers can be
costly
• Other customers will feel as though they
are not as important
• Confidentiality leaks – any information
shared by the customer must be held
in the strictest confidence
4-8
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
Issues with Employers
• Cheating – misrepresenting
information to management
• Misuse of company resources – rule
of thumb: adopt your own standard of
living when traveling
• Inappropriate relationships with other
employees and customers – potential
negative implications
4-9
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
Issues with Salespeople
• Sales Pressure – when applied too
forcefully, may constitute unethical behavior
• Deception – practice of misleading or
misrepresenting something
• Abuse of Salespeople’s Rights
• Not following policies related to termination
• Not maintaining confidentiality
• Not creating a work environment free of
discrimination
• Not following policies regarding performance
appraisals and compensation
4-10
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
Global Perspective 4.2
Differences in Negotiating between the
Japanese and American Cultures
Stage of Process
Japanese
American
Nontask sounding
Considerable time
and expense
Shorter period of
time
Task-related
exchange of
information
THE MOST
IMPORTANT STEP;
High first offers
Brief and direct; Fair
first offers
Persuasion
Behind the scenes.
THE MOST
IMPORTANT STEP;
aggressive tactics
Concessions and
agreement
Holistic approach to
decision making
Sequential approach
to decision making
Source: Johny K. Johansson, Global Marketing, 2nd ed., 2000, Irwin/McGraw-Hill, p. 166.
4-11
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
International Ethical Issues
• Cultural Differences – every culture
has its own set of norms, accepted
behaviors, and beliefs
• Differences in Corporate Selling
Policies – companies must adjust their
selling policies to different countries
4-12
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
Unlawful Business Practices
• Collusion – competing companies fixing
prices, dividing up customers or territories
• Restraint of Trade – forcing a channel
member to stop carrying a competitor’s
products
• Reciprocity – suppliers buying from one
another (illegal if it shuts out competitors)
4-13
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
Unlawful Business Practices
• Competitor Obstruction – impeding
competitor access to a customer
• Competitor Defamation – making unfair or
untrue statements about a competitor
• Slander - oral
• Libel - written
4-14
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
A Code of Sales Ethics
• Corporate Code of Ethics
• Framework for a company’s approach to
doing business
• Serves as a point of reference for
individual employee behavior
• Can have a positive effect on customers
• Individual Code of Ethics – influences
how a person makes decisions in
certain situations
4-15
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
EXHIBIT
4.6
SMEI Sales and Marketing Creed (excerpts)
• I shall personally maintain the highest
standards of ethical and professional
conduct in all my business relationships
with customers, suppliers, colleagues,
competitors, governmental agencies, and
the public
4-16
ETHICAL AND LEGAL ISSUES IN RELATIONSHIP SELLING
EXHIBIT
4.6
SMEI Sales and Marketing Creed (excerpts)
• I pledge to protect, support, and promote the
principles of consumer choice, competition, and
innovation enterprise, consistent with relevant
legislative public policy standards
• I shall not knowingly participate in actions,
agreements, or marketing policies or practices
which may be detrimental to customers,
competitors, or established community or social
or economic policies or standards.
4-17