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Relationship selling through service mkt 173 chap 2

Ethics First…Then Customer


Copyright © 2007 by The McGraw-Hill Companies, Inc. All






Main Topics


Social, Ethical, Legal Influences
Management’s Social Responsibilities
What Influences Ethical Behavior?
Are There any Ethical Guidelines?
Management’s Ethical Responsibilities
Ethics in Dealing with Salespeople



Main Topics
 Salespeople’s Ethics when Dealing with Their


Ethics in Dealing with Customers
The International Side of Ethics
Managing Sales Ethics
Ethics in Business and Sales
The Tree of Business Life



Social, Ethical, and Legal Influences
 An organization’s environment is a major influence on

how the firm sells its products.
Due to the environmental turmoil in the world of
commerce, this chapter is arguably the most important
in the entire book.
Begin by asking, “Does an organization have any
responsibilities to society?”

Exhibit 2-1

on an

Management’s Social
 Social responsibility is
management’s obligation to
make choices and take
actions that contribute to the
welfare and interests of
society as well as to those of
the organization.

Organizational Stakeholders
 A stakeholder is any group inside or outside
the organization that has a stake in the
organization’s performance.
 Stakeholders may have similar or different
interests in the organization:
 Customers
 Community
 Creditors
 Government

Exhibit 2-2: Major Stakeholders in the
Organization’s Performance (CCC GOMES)
S uppliers


C ommunity




G overnment
O wners

An Organization’s Main Responsibilities

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

Exhibit 2-3: An Organization’s Main

What Influences Ethical Behavior?
 The Individual’s Role
 Level one: Pre-conventional – 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
 Fewer than 20% reach level three

 The Organization’s 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?

Exhibit 2-4: What Is Your Level of
Moral Development?
 Principled - “What is the right
thing to do?”

 Conventional - “What am I
legally required to do?”

 Preconventional - “What can I
get away with?”

Exhibit 2-5: Moral Development Bell Curve

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 person’s situation.
 People are most likely to make their moral and
ethical decisions based on:
 Whatever feels right
 Comfort in a situation

How Do You Make Your Moral-Right or
Wrong Choices? (Choose One)
 Whatever will bring you the most pleasing or satisfying

Whatever will make other people happy or minimize
interpersonal conflict
Values taught by your family
Primarily from religious principles and teaching or
Bible content

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?

What Does One Do?, cont…
 Out of class, is it okay to copy someone else’s

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?

Is Your Conscience Reliable?
 We all have an internal ultimate moral standard we

use to measure good and evil, right and wrong –
some people call that their “conscience.”
Most of us know we should return the $125,000 and
not copy someone’s homework.
But what would we actually do?

Is Your Conscience Reliable?, cont…
 If a person’s values are at “Level 2,” they may make
decisions based on the situation and what others say
and do.

 Usually people rationalize their decisions; “I’ll
only copy the homework this one time.”
 Many people are so accustomed to doing things
unethically that they think nothing about it.

How Do You Know if What Someone Is
Saying Is True or Not?
 Can there 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.

Exhibit 2–6: How Do You Know Which Fork in
the Road to Take? You Need a Moral Compass!
“When you come to a fork in the road, take it.”

Sources of Significant Influence
 Factors influencing decisions include friends,
family, or things seen on television or in the
 Barna Research has found that the leading
influences on American ethics are movies, TV,
the Internet, books, music, public policy, law,
and family.

Three Guidelines for Making Ethical
 A standard that:
1. Never changes
2. Offers a fixed point of reference
3. Is separate from you

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