Ethical & Legal Issues In Sal Es

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ETHICA L & LEGAL ISSUES IN SALE S By -

Santosh By -

Santosh

10/20/09

Pankaj Pankaj 1

Overview What is Ethical Behavior Management’s Ethical Responsibilities Ethics in Dealing with Salespeople Salespeople’s Ethics with their Employers • Ethics with Customers • International Ethics • Managing Sales Ethics • • • •

10/20/09

2

ETHICAL BEHAVIOR •

• • • • • • • •

Ethical behavior is characterized by honesty, fairness & equity in interpersonal, professional and academic relationships and in research and scholarly activities. Ethical behavior respects the dignity, diversity and rights of individuals and groups of people. Being Honest Maintaining Confidence & Trust Following the Rules Proper Conduct Treating Others Fairly Demonstrating Loyalty Doing your Share of the Work 10/20/09 3 Responsibility with 100% Effort

MANAGEMENT’S ETHICAL RESPONSIBILITIES • • • • • •

Respect Employees Practice Ethical Behaviors Publish Company Vision & Goals Resolve Mutual Problems Promote Industry Ethical Standards Take a Stand on Social & Political Issues

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ETHICS IN DEALING WITH SALESPEOPLE Level of Sales Pressure Decisions Affecting Territories Honesty with Compassion The ill Salesperson: alcohol, drugs, or severe illness • Employee Rights • • • •

– Termination – Privacy – Sexual Harassment 10/20/09

5

SALESPEOPLE’S ETHICS WITH EMPLOYERS • • • •

Misusing Company Assets Moonlighting Cheating Affecting Other Salespeople – – – –

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Commission Splits Territory Changes Competition vs Cooperation Sales Contests

6

EXAMPLES OF UNETHICAL TEMPTATIONS FOR A SALESPERSON • Make exaggerated claims to counter exaggerated claims of a competitor • Offer a customer an unauthorized ‘gift’ in return for their business • Conceal information from a customer in order to get their business and to meet your sales’ goals • Put non business-related expenses on your expense account • Divulging confidential information about one 10/20/09 7 customer to another in order to facilitate a

ETHICS WITH CUSTOMERS • Bribes • Misrepresentation • Price Discrimination - same quantity @ different prices • Tie-in Sales - to buy a product, must buy other products • Exclusive Dealership - buy from one supplier • Reciprocity - you buy from me, I buy from you 10/20/09 8 • Sales Restrictions-3 day recision

INTERNATIONAL ETHICS • • • • • • •

Different Cultures Different Religions Different Laws Different Customs Maintain YOUR Ethics Practice Golden Rule Learn & Respect Others 10/20/09

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COMMON REASONS (EXCUSES) FOR UNETHICAL BEHAVIOR 1.‘Everybody’ else is doing it. 2.It’s not that big of a deal. 3.It’s necessary (the ends justify the means). 4.It’s not going to hurt anyone. 5.It’s for the benefit of the company or somebody else. 6.I deserve it. 7.It’s legal. 8.Nobody will know. 10/20/09

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GUIDELINES FOR MAKING ETHICAL DECISIONS (SEARS) 1.Is it legal? 2.Is it consistent with company beliefs/values? 3.Is it right/appropriate? 4.Is it okay for others to know about this? 5.Is it going to make me feel bad? 10/20/09

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MANAGING SALES ETHICS • • • • • • •

Leader is the Example Leader Should Exemplify Ethics Establish a written Code of Ethics Create Ethical Structures Encourage Whistle - Blowing Create an Ethical Sales Climate Establish Ethical Control Systems

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LEGAL ISSUES •

“Legal” does not necessarily mean “ethical” Protect consumers Protect competition Protect sales person

• •

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EXAMPLES OF ILEGAL ACTIVITIES – – – – – – – – – – –

Quality below standard specified Violation of delivery date Pricing concessions Incomplete or incorrect instructions Price fixing Delivering a different brand than that sold Misrepresentation of product usage Slandering competitor Kickbacks to buyer Charges after the sale Misuse of proprietary data

– Signing agreements without the proper authorization – 10/20/09

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LAWS PERTAINING TO SALES Contracts Price competition Credit reporting Debt collection Uniform commercial code (sales) “Cooling off” • Antimonopoly • Deceptive actions • Preserve competition • • • • • •

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HOW TO KEEP OUT OF LEGAL TROUBLE – Educate the customer thoroughly before making the sale – Know technical specs, etc. for the product you sell. – Know your company's literature. Challenge it if is false – Know the terms of sale policies. You can bind the company – Know federal and state laws regarding your product and its warranties – Don't guess at your product's capabilities – 10/20/09

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CONCLUSION “A salesperson’s ethics and values contribute more to sales success than do techniques or strategies.”

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