Sales Ethics

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.

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. 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