Ethics First…Then Customer
Relationships
McGraw-Hill/Irwin
Copyright © 2007 by The McGraw-Hill Companies, Inc. All
Chapter
2
2-3
Chapter
2
Main Topics
2-4
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
Chapter
2
Main Topics
Salespeople’s Ethics when Dealing with Their
2-5
Employers
Ethics in Dealing with Customers
The International Side of Ethics
Managing Sales Ethics
Ethics in Business and Sales
The Tree of Business Life
Chapter
2
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
have
a
Social,
Ethical,
and
organization’s
marketing
effect
Legalpowerful
(SEL)
influences
program!
Management’s Social
Responsibilities
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:
Owners
Customers
Managers
Community
Employees
Creditors
Suppliers
Government
CCC GOMES
Exhibit 2-2: Major Stakeholders in the
Organization’s Performance (CCC GOMES)
Customers
S uppliers
Employees
C ommunity
Organization
Managers
Creditors
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
Responsibilities
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
results
Whatever will make other people happy or minimize
interpersonal conflict
Values taught by your family
Primarily from religious principles and teaching or
Bible content
Other
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.”
YOGI BERRA
Sources of Significant Influence
Factors influencing decisions include friends,
family, or things seen on television or in the
movies.
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
Decisions
A standard that:
1. Never changes
2. Offers a fixed point of reference
3. Is separate from you