Brock McKinnon Feb. 12, 2004 Sales Ethics What are they and how can they be better Followed? To fully understand the nature of the question posed one must know the meaning of ethics. Webster’s dictionary defines ethics as the philosophical study of the moral value of human conduct and of the rules and principles that ought to govern it; moral philosophy, the moral fitness of a decision, course of action, etc. Basically, I believe ethics is how one makes a decision according to the social norm that surrounds him. The social norm includes not only the culture but the laws and standard procedures of the environment. These laws and norms must be fully understood before one can understand the ethical significance of one’s decision.
With that definition being stated we must look at the environment in which the activity in question occurred, a common sales exchange. The salesman obviously works for a company that governs his behaviors and measures his performance. Therefore, they provide a structure of rules for him to follow in his job. In my opinion, by breaking these rules he has acted unethically. The world of business is very complex and filled with decisions. Wither large or small they all have an effect on the final product.
Often time’s employees are monitored very heavily and are not given the change to make an unethical decision. Salesmen however are not monitored and can make decisions that greatly benefit themselves and not the company. This is the case in the example given to us. Because of the salesman’s lack of performance he has to alter his actual performance to make it seem like he is doing his job right. While this is a small and seeming insignificant procedure it can hurt a company very badly. It is not ethical and is very bad business conduct.
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Some may say that this practice is all right and does not affect a company in any way. This is not true. The losses associated with these types of unethical behavior average more than $3, 000 per employee per year in tangible, measurable costs. That doesn’t count the losses in customer confidence, damage to the organization’s reputation, loss of employee commitment to and confidence in leadership, or other, less-tangible costs.
(Navran, Frank, 1997) Companies have guidelines for a reason. If they are broken then they loose money and customers. These little variations in bookkeeping and guidelines here and there add up and quickly. Remember the story of the boiled frog? If a frog is thrown into a pot of boiling water, the frog will kick, struggle, and fight to get out of the water. If a frog is put in a pot of room-temperature water and the heat is slowly turned up, you end up with frog soup. The frog will not even know what hit him.
Workplace ethics are as invisible in submersion in organizational culture as the frog in gradually boiled water. When the corrosion finally grows to the avalanche that Enron saw, it often grabs everyone by surprise-just like the frog that finds he’s boiled. (Ross, William; Robertson, Diana, 2003) Why does this happen? Why don’t salesmen just record what they have actually done instead of doctoring books or changing orders? For one a lot of pressure is put on salesmen. Foremost among the firm’s agents who manage the economic and ethical boundaries with the firm’s customers are its salespeople.
Most firms selling to organizational customers and many firms selling ‘big ticket’ consumer products rely on their sales force to connect to the customer and the market. In such cases, the salesperson represents the firm to most, if not all, of its downstream stakeholders: customers, channel members, and even competitors. As the primary boundary spanner between the firm and its customers, the salesperson faces a constant barrage of decision-making about ethical issues. (Meyer, Charlene, 2003) A lot of pressure is put on sales people. They have to make sure that the product is sold or no one makes money. They are constantly being evaluated to make sure that enough money is being made for the company.
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With all this pressure and all the freedom, it is the easiest way out for salesmen to cheat. This problem can be combated by managers. Salesmen do not cheat on everything they do, it isn’t pathological. For example, a salesman may doctor his books to so more profit for him, but he does not doctor his taxes.
The reason the taxes are done honestly is because of consequences. (Meyer, Charlene, 2003) He knows he can get into trouble and that there are ramifications for his actions. In his work however, he does not fear getting in trouble at all, therefore he continues to do these unethical procedures to make himself more money. Managers need to take more of a responsibly trying to catch cheaters and punish them. If they have nothing to fear, then nothing will stop them. Managers can do one more thing to effectively get their salesmen to stop doing unethical things by better managing quotas and evaluations.
Here is a scenario that happens to salesmen and manages that cause salesmen to cheat. 1) The company has a sales quota for its sales representatives. 2) The quota is reasonable and all or nearly all representatives achieve the stated goal. 3) Managers, seeking to stretch the sales force (or: get them to do more), raise the quota. 4) The quota is challenging but still attainable, and all or nearly all representatives achieve the stated goal.
5) Managers ratchet the quota up another notch. 6) Some of the marginal sales reps fall short of the goal. 7) Managers threaten the sales representatives with disciplinary actions for failure to meet the goal. Managers, however, don’t offer training on how to do more, add tools or technology to facilitate doing more or develop improved products or marketing to make it easier to do more.
8) The sales representatives figure out how to ‘game’ the system to protect themselves from the threat of discipline-appearing to do more, but actually doing the same or less. 9) The reps still appear to be reaching the sales goals, so managers up the quota another notch. Middle managers may suspect that sales representatives are cheating on their results, but they fear the consequences of broaching that reality. 10) Now fully competent employees are failing to reach the goal, so they adopt the game as well. 11) Managers, seeing reports of increasing sales and a near-zero failure rate among the sales reps, assume there’s still more room for stretching and ratchet the goal once more.
Introduction For new electronic point of sale (ePOS) there are hundreds of base business requirements that should exist in the product. ... communities, sometimes even earlier. Our business requires an ePOS that caters to the various sale restrictions. In the past when ... checking identification, businesses relied on employee’s ...
12) Soon the goal is totally unreasonable even for the exemplary employee. All employees are feeling ‘required’ and therefore ‘entitled’ to cheat on their sales reporting to protect their jobs in an environment of unreasonable and unacceptable performance pressures. 13) The system is totally infected with fear, deception and distrust. (Navran, Frank, 1997) Twenty-nine percent of respondents reported that they feel pressure to engage in conduct that violates their companies’s tankards of business conduct to meet business objectives. More than one in seven said they believe that their companies’ policies encourage unethical behavior in the pursuit of business objectives. One quarter reported that their companies’ managers look the other way and ignore unethical business conduct to meet business objectives.
(Navran, Frank, 1997) If managers keep pushing and pushing then salesmen will soon not be able to keep up. They almost have to cheat to keep their job. There are many unethical practices going on in today’s business world. While they may seem insignificant they create a downward spiral that could eventually kill their business.
Both managers and salesmen need to work together to eliminate the problem. Until they do unethical behaviors will continue to occur. Works Cited Are Your Employees Cheating to Keep Up? Ed. Navran, Frank. Copyright ACC Communications Inc 1997 Do Sweat the Small Stuff. Ed.
Meyer, Charlene. Journal for Quality & Participation 26, no. 1 (Spring 2003): p. 31-32 A Typology of Situational Factors: Impact on Salesperson Decision Making About Ethical Issues.
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Ed. Ross, William; Robertson, Diana. Journal of Business Ethics 46, no. 3 (Sep 2003).