Chapter 3 Ethics The Foundation for Partnering Relationships That Create Value PDF

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Chapter 3 Ethics: The Foundation for Partnering Relationships That Create Value

3.1 True/False Questions

1) Many business organizations, professional associations and certification agencies have estab-lished written codes of ethics. Answer: TRUE Diff: 1 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO4

2) Individuals with high levels of emotional intelligence rarely display the qualities needed to be successful in sales because they appear untrustworthy. Answer: FALSE Diff: 2 Objective: LO1

3) According to the text, one of the "half-truths" that has influenced the erosion of character in business is that: "Corporations exist to maximize shareholder value." Answer: TRUE Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO4

4) It is almost impossible for management to develop guidelines for sales personnel regarding the giving of gifts to customers. Answer: FALSE Diff: 1 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO5

5) Ethical standards tend to filter down from the top of a business organization. Answer: TRUE Diff: 1 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

6) The major outcome of a business agreement based on reciprocity is a mutual exchange of ben-efits. Answer: TRUE Diff: 1 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

  7) The salesperson should use a standard entertainment activity for all customers to avoid the appearance of favoritism. Answer: FALSE Diff: 3 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3 8) Product disparagement constitutes a type of business defamation. Answer: TRUE Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

9) Most people employed in the fast-paced business world, which is constantly changing, will adopt or discard values quickly. Answer: FALSE

Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO4

10) A majority of the states have passed legislation establishing a cooling-off period during which the consumer may void a contract to purchase goods and services. Answer: TRUE Diff: 2 Objective: LO3

11) The Uniform Commercial Code is a legal guide that strives to reduce the number of telemar-keting calls. Answer: FALSE Diff: 2 Objective: LO3

12) The role of the salesperson is to diagnose buyer need and determine how to extract value from the situation. Answer: TRUE Diff: 2 Objective: LO5

13) If you are not breaking the law, then you are acting in an ethical manner. Answer: FALSE Diff: 1 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO5

  14) The primary focus of trust in transactional sales is trust in the person who sells the product.

Answer: FALSE Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

15) Culture is the sum total of beliefs, values, knowledge, ethnic customs, and objects that people use to adapt to their environment. Answer: TRUE Diff: 1 AACSB: Diverse and Multicultural Work Environments Objective: LO4 3.2 Multiple-Choice Questions

1) Which of the following is LEAST likely a characteristic of a person with a high level of emo-tional intelligence? A) self-confidence B) professionalism C) adaptability D) optimism E) empathy Answer: B Diff: 2 Objective: LO1

2) Which of the following is a point of view that has most likely eroded character in business? A) Innovation and aggressive development of markets should be rewarded. B) Respect must be earned, not mandated. C) Corporations exist to maximize shareholder value. D) Integrity may not show immediate results but will eventually return to you.

E) Teamwork is a core value of successful companies. Answer: C Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO2

3) In the partnering-style seller/buyer relationship, what is the foundation for creating value? A) emotional intelligence B) communication skills C) customer-oriented strategies D) organizational policies E) ethical decision making Answer: E Diff: 12 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO1

4) If a potential client hints that they will give you a sale if you give them a gift, you should most likely: A) give the potential customer a gift B) tell your sales manager you are giving the customer a gift in exchange for the sale C) report this to your sales manager and ask for help turning the customer down D) report the customer to the Better Business Bureau or other oversight group E) refer the potential customer to another vendor who will participate in bribery Answer: C Diff: 3 AACSB: Analytical Thinking Objective: LO2 5) Which of the following is most useful in guiding a salesperson in ethical behavior? A) official company policies on bribes and kickbacks

B) salesperson's actions at previous jobs C) role model provided by sales manager D) competitors' actions E) customer expectations and desires Answer: C Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

6) When a customer reveals confidential information about a competitor to a salesperson, the preferred course of action is for the salesperson to: A) preserve the confidentiality of information they receive B) accurately relate the details to top management C) inform the competing company about the useful information in exchange for a sale D) request that the customer not comment further because of the conflict of interest E) clarify the details to make sure the information is correct Answer: A Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

7) Which of the following statements is most likely true about conducting business in China? A) Take the initiative and move quickly to close deals. B) Bow slightly and shake hands when greeting others. C) Making a toast during a banquet is considered bad luck. D) The lowest ranking person in a room should be introduced first. E) Handkerchiefs and clocks are appropriate gifts that suggest good luck. Answer: B Diff: 2

AACSB: Diverse and Multicultural Work Environments Objective: LO3

  8) The practice of reciprocity: A) involves an illegal exchange of cash B) is monitored closely by the FCPA C) results in improved competition among sales and marketing firms D) is illegal when one company pressures another company to join an agreement E) is another name for slander Answer: D Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3 9) Reciprocity, as a corporate policy, is: A) always a breach of ethics B) illegal in the U.S., but not in other countries C) only a worry if the heads of the companies know each other personally D) easier to navigate if the companies are in different industries E) occasionally a form of corporate blackmail Answer: E Diff: 3 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

10) Which of the following would be the best application of principles regarding gift giving to customers? A) Give gifts before doing business with a customer. B) Determine the gift-receiving policy of the customer's company. C) Once begun, maintain a regular and consistent pattern of gift giving.

D) Clearly explain the conditions you expect of the customer who accepts a gift. E) Give a gift proportional to the sale you expect to make from the customer. Answer: B Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

11) Which of the following would be most helpful to salespeople in dealing with bribery? A) a well-established corporate policy on bribing B) knowing that bribery is sometimes illegal C) knowing that bribery is often unethical D) a sales manager who has given bribes in the past E) college coursework on bribery Answer: A Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

  12) Teresa Fallon sends a written proposal to a customer. In the proposal, she compares the specifications of her product and a competing product. If the information about the competing prod-uct is not true, she is using a form of defamation called: A) business libel B) business slander C) product disparagement D) puffery E) bribery Answer: A Diff: 2

AACSB: Analytical Thinking Objective: LO3 13) What form of business defamation arises when an unfair and untrue oral statement is made about a competitor? A) business libel B) reciprocity C) bribery D) puffery E) business slander Answer: E Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

14) Yukie, a salesperson for a North American car manufacturer, told one of her prospects that Honda was being investigated in Japan for unfair labor practices. Although she had heard the rumor from someone else, she was confident it was false. Yukie is guilty of: A) libel B) product disparagement C) reciprocity D) false advertising E) slander Answer: E Diff: 2 AACSB: Analytical Thinking Objective: LO3

15) Which of the following is most likely a danger of Internet usage in sales? A) changing information about products B) sorting customer information with data mining

C) using extranets to place and monitor customer orders D) providing customers with information about competitors E) sending inappropriate emails to customers or to each other Answer: E Diff: 2 AACSB: Information Technology Objective: LO3

16) If you view your employer's instructions or influence as improper, then you should most likely: A) report your company to your industry's governing body B) do what everyone else is doing C) compromise your values in order to keep your job D) voice opposition to the practice if it is in conflict with your value system E) follow the lead of your colleagues Answer: D Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3 17) According to the text, ________ influence ________, which then influence ________. A) attitudes; behaviors; values B) behaviors; attitudes; values C) values; attitudes; behaviors D) attitudes; values; morals E) morals; attitudes; values Answer: C Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

18) Which of the following most likely has the LEAST influence on a salesperson's ethical be-haviors? A) sales manager's actions B) company policies and practices C) salesperson's personal values D) consumer group statements E) behaviors of top management Answer: D Diff: 3 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

19) According to the author of Integrity Selling for the 21st Century, which of the following statements about values is true? A) Our values change frequently throughout life. B) Most people find it easy to clarify their values. C) A salesperson's values contribute more to sales success than do techniques. D) Values have only limited influence on our behavior. E) Values should be aligned with the culture of the firm. Answer: C Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

20) Harold Timmons is in a position to close a large sale if he conceals certain information that the customer needs to make an intelligent buying decision. Harold's sales manager encourages him to withhold the information and says, "You will not be breaking any law." Which of the fol-lowing statements would most likely help Harold in this situation? A) A salesperson's ethical sense must extend beyond the legal definition of right and wrong. B) Cooling-off laws prevent customers from being harmed by unethical salespeople. C) The code of ethics established by management justifies all ethical and unethical choices.

D) The firm's moral tone is established by salespeople who have daily customer contact. E) An action is ethical if a salesperson can defend it successfully to a group of peers. Answer: A Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3 21) Withholding information is most likely: A) another name for reciprocity B) legal and always ethical C) only unethical if done under duress D) the only logical course of action E) similar to lying in some cases Answer: E Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO4

22) Which of the following is a general guideline that serves as a foundation for a personal code of business ethics? A) Personal selling is a stepping stone to more legitimate careers. B) Be honest with yourself and with others. C) Tasks come first, relationships second. D) Your values should not be in conflict with those of your employer. E) Selling is about controlling the interaction and managing the relationship. Answer: B Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO5

23) Taking time to establish a proper rapport with customers will most likely lead to: A) guaranteed sales B) open communication C) a faster sales cycle D) a slower sales cycle E) lower commissions Answer: B Diff: 2 AACSB: Written and Oral Communication Objective: LO5

24) It is important to record the facts of an interaction with a customer in CRM software but not your conclusions, because: A) it is never appropriate to make conclusions from data without consulting the research depart-ment B) recording conclusions is a breach of ethics C) coworkers could use this information to sabotage your sales D) this information could become available to the customer in the future E) the competition has access to the same databases you do Answer: D Diff: 2 AACSB: Information Technology Objective: LO2 25) CRM software can most likely help a salesperson to: A) develop better presentation skills B) negotiate long-term contracts C) fulfill commitments to customers D) increase transactional sales E) implement the marketing mix Answer: C

Diff: 2 AACSB: Information Technology Objective: LO2

26) In transactional sales, the customer's primary focus is a trustworthy: A) product B) salesperson C) organization D) culture E) industry Answer: A Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

27) In consultative sales, the customer's primary focus is a trustworthy: A) product B) salesperson C) organization D) culture E) industry Answer: B Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

  28) In strategic alliance sales, the customer's primary focus is a trustworthy: A) product

B) salesperson C) organization D) culture E) industry Answer: C Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3 29) Which of the following statements about culture is most likely FALSE? A) Indirect communication is preferred in Africa. B) Harmony is highly valued in Asian countries. C) Gift giving is considered unethical in China. D) Americans value promptness for business meetings. E) Tactfulness is important when doing business in Arab countries. Answer: C Diff: 3 AACSB: Diverse and Multicultural Work Environments Objective: LO3

30) In general, U.S. ethical codes when doing business in foreign countries tend to be: A) more accepting of bribery but less accepting of libel B) more accepting of libel but less accepting of bribery C) more relaxed than the codes of other countries D) the same as the codes of other countries E) stricter than the codes of other countries Answer: E Diff: 3 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

3.3 Short Answer Questions

1) The term ________ can be defined as a mutual exchange of benefits, as when a firm buys products from its own customers. Answer: reciprocity Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

2) The major types of business defamation are business slander, business libel and ________. Answer: product disparagement Diff: 1 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

3) Business defamation incurred when an unfair and untrue statement is made about a company in writing is known as ________. Answer: business libel Diff: 1 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

4) ________ are deeply held personal beliefs and preferences. Answer: Values Diff: 1 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3 5) People with high levels of ________ tend to display the characteristics needed for success in sales, such as self-awareness, self-confidence, empathy, and adaptability.

Answer: emotional intelligence Diff: 2 Objective: LO1

3.4 Essay Questions

1) Differentiate between business slander, business libel, and product disparagement. Answer: Business slander: This arises when an unfair and untrue oral statement is made about a competitor. The statement becomes actionable when it is communicated to a third party and can be interpreted as damaging the competitor's business reputation or the personal reputation of an individual in that business.

Business libel: This may be incurred when an unfair and untrue statement is made about a competitor in writing. The statement becomes actionable when it is communicated to a third party and can be interpreted as damaging the company.

Product disparagement: This occurs when false or deceptive comparisons or distorted claims are made concerning a competitor's product, services, or property. Diff: 2 AACSB: Ethical Understanding and Reasoning Abilities Objective: LO3

2) Respond to the following idea: "Ethics are not a matter of law alone. A salesperson's ethical sense must extend beyond the legal definition of what is right or wrong." Answer: To view ethics only in terms of what is legally proper encourages the question, "What can I get by with?" A salesperson must develop a personal code of ethics that extends beyond the letter of the law. Diff: 2 AACSB: Analytical Thinking

Objective: LO5   3.5 Applied Multiple Choice Questions

1) Daniel Santiago has just taken a job as a sales rep with a family-owned company that uses its ethics as part of its marketing campaign with the slogan, "Without integrity, service means noth-ing." After calling on several clients, however, he discovers that the sales rep who previously had his territory was giving kickbacks to customers in exchange for exclusive contracts with the company. Daniel is fairly certain that his sales manager is not aware of this arrangement. What should Daniel most likely do? A) Daniel should say nothing and continue the kickback plan his predecessor started because it seems to be the norm in this industry. B) Daniel should avoid causing waves with his sales manager and go along with the kickbacks for now, but tell his clients that he will not be able to continue them in the future. C) Daniel should meet with his sales manager immediately to discuss the situation and ask for guidance in how to tell the clients that he cannot continue the kickbacks. D) Daniel should tell the clients that he cannot continue the kickbacks and say nothing to the sales manager if he loses clients that his predecessor worked to develop. E) Daniel should leave the company and look for a position in a firm that does not have a mech-anism for giving kickbacks. Answer: C Diff: 3 AACSB: Analytical Thinking Objective: LO2, LO3

2) Ron, a sales representative for a software firm, is giving a sales presentation to Mona, a buyer for a large manufacturing firm. Making a sale to Mona would double Ron's sales amount for the month and lead to a large commission. As they're engaging in small talk, Mona mentions to Ron that she's a huge fan of the local college football team. Ron's wife works at that college and can get season tickets for the games. What should Ron most likely do? A) Ron should ask Mona more about her interest in the football team to discover if she would like tickets or if she already has her own. B) Ron should ask his sales manager after the sales meeting if he should offer Mona tickets to the games. C) Ron should a...