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Cha pt e r3 :Et hi c a la ndLe ga l Cons i de r a t i onsi nPe r s ona l Se l l i ng

CHAPT ER3

Ethical and Legal Considerations in Personal Selling

MULTIPLE-CHOICE QUESTIONS Ans: b Page: 68 KeyWord: ethics defined

1.

Ans: a Page: 69 KeyWord: ethics

2.

Which of the following statements is false? a. If an action is legal, it’s probably also ethical. b. A salesperson can be dishonest and unprincipled without breaking the law. c. A salesperson’s reputation for ethical behavior and integrity is one of his or her most valuable assets. d. Once a salesperson’s reputation is damaged, it is extremely hard to repair.

Ans: b Page: 72 KeyWord: ethical behavior

3.

Which of the following behaviors is least likely to be unethical? a. Revealing confidential information to a prospect about his or her competitors b. Taking a prospect or customer to dinner, to play golf, or to attend a sports event c. Promising an unrealistic delivery date in order to make a sale d. Shifting sales orders from one period to another to win a sales contest

Ans: c Page: 70 KeyWord: ethics

4.

Which of the following statements is least accurate? a. Most salespeople are reasonably ethical. b. Door-to-door salespeople and car salespeople tend to have negative images for ethical conduct. c. Surveys show that business-to-business salespeople have rarely lied on sales calls. d. Over one-third of U.S. companies offer ethics training.

Ans: d Page: 78 KeyWord: treatment of competitors

5.

It is both unethical and illegal for salespeople to do all except which of the following? a. Damage competitors’ products b. Tamper with competitors’ displays and point-of-sale materials c. Reduce competitors’ product shelf space in retail stores d. Use a guise such as posing as a customer to obtain valuable information about competitors’ products at a trade show or on a plant tour

Ans:

6.

Quid pro quo sexual harassment is

b

Ethics are a. b. c. d.

something that is basically irrelevant to business. the study of what is right and wrong or good and bad. rules clearly outlined in the bible. simply complying with the law.

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Cha pt e r3 :Et hi c a la ndLe ga lCo ns i de r a t i onsi nPe r s ona lSe l l i ng

Page: 76-77 KeyWord: sexual harassment

a. b. c. d.

where a pattern of sexual behavior makes the job so unpleasant that the victim’s work is adversely affected. where a person in authority demands sexual favors from an employee in exchange for a job advantage, such as being hired or promoted. where a manager pays a prostitute for sexual favors provided during the manager’s normal working hours at the office. when a female manager threatens to fire a male subordinate unless he submits to her demands for sexual favors.

Ans: d Page: 71-73 KeyWord: ethical practices

7.

All of the following are common unethical practices committed by salespeople except a. giving special gifts and overpromising. b. showing favoritism and disclosing confidential information. c. manipulating order forms and misrepresenting the facts. d. getting another salesperson to help them make a sale in their territory.

Ans: b Page: 84-86 KeyWord: AMA Code of Ethics

8.

According to the American Marketing Association’s code of ethics, the basic rule of professional ethics is to a. obey the fine points of the law. b. not knowingly do harm. c. do unto others before they do unto you. d. not cause any organization to lose sales or profits.

Ans: a Page: 78-79 KeyWord: unethical practices

9.

Which of the following are unethical practices by salespeople against their organizations? a. Expense account padding b. Competitive snooping c. Showing favoritism among customers d. Favoring one salesperson over another

Ans: d Page: 78-80 KeyWord: unethical practices

10.

Which of the following is not considered an unethical practice in the treatment of competitors?

Ans: d Page: 78-79 KeyWord: unethical practices

11.

Ans: a Page: 76-77 KeyWord: sexual harassment

12.

a. b. c. d.

Disparaging competitors Tampering with competitors’ products Competitive snooping Manipulating order forms

Employees usually rationalize stealing from their own companies by giving all of the following reasons except a. b. c. d.

the company owes it to them for underpaying them. they’re just borrowing something that they will pay back later. believing that “everybody else does it.” claiming that they couldn’t “make ends meet” without stealing.

Which of the following behaviors is most likely to be considered sexual harassment? a. b. c. d.

An employee continuing sexual joking with coworkers after being asked to stop An employee inadvertently touching nonintimate parts of another employee’s body Higher-level managers repeatedly asking for dates after being refused Male coworkers refusing to listen seriously to female

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Cha pt e r3 :Et hi c a la ndL e ga lCons i de r a t i onsi nPe r s ona lSe l l i ng

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coworkers’ work-related ideas or suggestions Ans: d Page: 76-77 KeyWord: sexual harassment

13.

Which of the following behaviors is least likely to be considered sexual harassment? a. Higher-level managers promising rewards for sexual favors b. Lewd sexual comments, innuendos, and gestures made in an employee’s presence c. Lewd photographs or obscene cartoons displayed in a work area d. Coworker repeatedly asking for dates after being refused

Ans: d Page: 76-77 KeyWord: sexual harassment

14.

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when a. b. c. d.

submission to such conduct is not explicitly or implicitly required for the individual’s employment. submission to or rejection of such conduct is not used as a basis for employment decisions affecting that individual. such conduct does not have the effect of unreasonably interfering with an individual’s work performance or creating an intimidating, hostile, or offensive working environment. submission to or rejection of such conduct is used as a basis for employment decisions affecting that individual.

Ans: d Page: 92 KeyWord: ethical salespeople

15.

In analyzing ethical problems, ethical salespeople should ask themselves all except which of the following questions? a. Who is responsible to act? b. What and whose rights are affected? c. What are the consequences of action? d. What will be the economic effect on my family?

Ans: c Page: 92 KeyWord: ethical decision making

16.

From an ethical standpoint, what is the most important question to ask in making a business decision? a. Will this decision maximize the company’s sales and profits and minimize costs? b. How will this decision be perceived by coworkers, immediate boss, and top management? c. Will this decision maximize benefits, reduce harm, respect rights, and treat all parties fairly? d. How will this decision affect my reputation within the company and my chances for future promotion?

Ans: d Page: 68 KeyWord: ethics

17.

Which of the following statements about ethics is false? a. Ethics constitute a moral code of conduct governing individuals and societies. b. Ethics deal with things as they should be, not necessarily as they are. c. Ethics are an obligation to consider not only our own personal well-being but also that of other human beings. d. Ethics may be defined as the study of the way things actually are in society with respect to issues concerning right and wrong.

Ans: Page:

18.

In business, a decision that is “right” or “wrong” has usually been made on the basis of ________criteria.

b 68

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Cha pt e r3 :Et hi c a la ndLe ga lCo ns i de r a t i onsi nPe r s ona lSe l l i ng

KeyWord: business ethics

a. b. c. d.

Ans: c Page: 68 KeyWord: business ethics

19.

Ans: c Page: 75 KeyWord: TRUSTe

20.

personal economic family political

Which of the following statements about ethics is true? a. People are ethical simply by staying within the law. b. Salespeople who are dishonest, unprincipled, untrustworthy, unfair, and uncaring are engaging in unethical and illegal behavior. c. Businesspeople are likely to have two sets of ethical standards —one that they use in their personal life and one that they employ in the office. d. Ethical behavior and legal behavior are the same. TRUSTe a. b. c. d.

is a nonprofit organization that insures U.S. national banks against employee theft. is supported by the national organization of police chiefs as a public information service to warn senior citizens about criminal activity. is working to advance global trust on the Internet. grants awards to brokerage companies with the least customer complaints each year.

Ans: a Page: 69 KeyWord: ethical salespeople

21.

To counter the negative image of personal selling, salespeople must a. hold themselves and their companies to a high standard of ethics. b. avoid the appearance that only competitors’ sales forces are unethical. c. exhibit conduct that demonstrates to their customers that their word is “golden” compared to industry standards. d. seem to be honorable even if they are insincere.

Ans: d Page: 71-80 KeyWord: ethical salespeople

22.

Which of the following are least likely to present ethical issues for salespeople in the execution of their jobs? a. Customers b. Coworkers c. Competitors d. Family members

Ans: b Page: 71 KeyWord: customer relationships

23.

Engaging in unethical practices instigated by the customer will likely a. lead to a “win-win” agreement. b. eventually lead to the customer’s ending the business arrangement with the salesperson. c. lead to excellent short- and long-run business from the customer. d. enhance the long-term relationship with the customer.

Ans: a Page: 71-72 KeyWord: special gifts

24.

Which of the following “gifts” to a customer would least likely be considered illegal? a. Two tickets to a professional football game sent as a thank you for past business b. $150 incentive bribe to ensure winning a sale from a professional buyer

Co p y r i g h t©Hou gh t o nMi ffli nComp a n y .Al l r i gh t sr e s e r v e d .

Cha pt e r3 :Et hi c a la ndL e ga lCons i de r a t i onsi nPe r s ona lSe l l i ng c. d.

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Set of golf clubs as a payoff to a buyer for choosing your company over competitors as a supplier $200 appreciation kickback to a professional buyer following a sale

Ans: a Page: 71-72 KeyWord: entertainment

25.

All of the following are acceptable ways of interacting with a customer except going

Ans: c Page: 72-73 KeyWord: customer relationship

26.

Which of the following is not a customer-related ethical issue for salespeople? a. Overpromising b. Misrepresenting the facts c. Padding an expense account d. Disclosing confidential information

Ans: a Page: 76 KeyWord: customer relationship

27.

Which of the following is an ethical issue regarding salespeople’s showing favoritism toward customers?

a. b. c. d.

a. b. c. d.

on an all-expense paid cruise. golfing. to dinner. to a ballgame.

Moving a favored customer’s deliveries ahead of orders from other customers Making sure preferred customers receive scarce products while others do not Showing preferential treatment toward key account customers Servicing very small accounts via the phone and Web, but servicing large accounts with face-to-face contact

Ans: d Page: 76 KeyWord: treatment of coworkers

28.

Unethical behavior among coworkers can do all of the following except a. destroy employee morale. b. work against company goals and objectives. c. ruin the reputation of the company. d. increase salespeople’s job satisfaction.

Ans: d Page: 76-77 KeyWord: treatment of coworkers

29.

Which of the following would clearly be considered sexual harassment? a. Hazing fellow employees about their hairstyle b. Joking about gender issues c. Sexually suggestive talk d. Unwelcome sexual advances when such conduct is related to a term or condition of employment

Ans: c Page: 76-77 KeyWord: treatment of coworkers

30.

All of the following statements about sexual harassment are true, except a. experiencing sexual harassment is much more common for women than for men. b. some women fear filing a sexual harassment case because it may lead to possible job loss. c. fewer than one-tenth of salespeople report having been involved in office romances. d. rather than filing a sexual harassment suit, many women opt to leave the job.

Co p y r i g h t©Ho u gh t o nMi ffli nCo mpa n y .Al l r i g h t sr es e r v e d.

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Cha pt e r3 :Et hi c a la ndLe ga lCo ns i de r a t i onsi nPe r s ona lSe l l i ng

Ans: b Page: 77 KeyWord: stealing customers

31.

Salespeople who steal customers from another salesperson’s territory a. raise an organizational issue, not an ethical issue. b. may face reprimands from management and possible loss of their jobs. c. are probably doing a better job than the actual salesperson who’s responsible for the territory. d. can easily be avoided if all salespeople clearly know their territorial boundaries.

Ans: c Page: 78 KeyWord: treatment of competitors

32.

Initiating unethical practices against competitors a. is sometimes necessary given the ethical conduct of the salesperson’s industry. b. usually is done by very small competitors seeking to enhance their market position. c. will likely stimulate unethical retaliatory action from them and lead to accelerating aggressive activity. d. is very unlikely to lead to illegal behavior.

Ans: c Page: 78 KeyWord: treatment of competitors

33.

Tampering with competitors’ products is a. only an illegal activity. b. only an unethical activity. c. both an unethical and an illegal activity. d. necessary for small firms to protect their market share.

Ans: a Page: 78 KeyWord: competitive snooping

34.

Competitive snooping a. b. c. d.

entails salespeople’s using guises to obtain valuable information about competitors. is rarely done owing to its illegal nature. is rarely done at professional conferences, trade shows and exhibits, or on plant tours of the competition because doing so would be highly unethical. is appropriate to do because most firms engage in such activities.

Ans: b Page: 78-80 KeyWord: ethics with employers

35.

Unethical behavior done against one’s employer a. is so trivial because most organizations can afford the minor inconveniences caused by such conduct. b. can increase company costs and customer prices. c. has a minimal impact on customers in the long run. d. can actually benefit salespeople in the long run.

Ans: d Page: 78-80 KeyWord: ethics with employers

36.

All of the following are unethical behaviors conducted by salespeople against their company except

Ans: b Page: 79 KeyWord: fabricating sales records

37.

a. b. c. d.

expense account padding. unauthorized use of company resources. personal use of company time. stealing customers from colleagues.

Fabricating sales activity records a. is extremely difficult to get away with because most sales managers closely monitor those records. b. is frequently done because salespeople’s evaluations are often based on their activities and not just their level of sales. c. is likely to have minimal impact on long-run salesperson performance.

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Cha pt e r3 :Et hi c a la ndL e ga lCons i de r a t i onsi nPe r s ona lSe l l i ng d.

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is relatively cost-free to the firm.

Ans: d Page: 80 KeyWord: employer ethics

38.

Employer ethics with their salespeople revolve around all of the following issues except salespeople’s a. compensation. b. territory assignments. c. quotas. d. use of company resources.

Ans: b Page: 80 KeyWord: employer ethics

39.

Which of the following is not an ethical issue regarding company treatment of salespeople? a. Frequently inflating product prices to make it appear like they are offering customers discounts b. Selling products at high prices because those prices are what the market will pay c. Manufacturing poor product quality, unsafe products d. Poor servicing of products once they are sold to the marketplace

Ans: a Page: 83 KeyWord: ethical ideas

40.

Which of the following statements about ethics is true? a. More ethically sensitive sales personnel perform better than do their less ethically sensitive counterparts. b. Deceptive advertising, misleading product warranties, phony promotional contests, and dishonest fundraising activities are unethical but not illegal. c. Most company ethical codes are very detailed and perfectly clear about handling most any ethical dilemma that arises in personal selling. d. Research has found that salespeople are desirous of having their firms spend less effort in creating company policies and more in addressing ethical issues.

Ans: a Page: 69-71 KeyWord: ethical ideas

41.

Which of the following statements is true? a. Ethical conflicts and choices are inherent in personal selling. b. Salespeople’s managers set the tone for ethical behavior in the sales force. c. Salespeople’s value systems have little impact on their ethical behavior. d. Top management feels more pressure to act unethically than does lower-level management.

Ans: d Page: 90-91 KeyWord: international ethics

42.

Selling practices illegal in one country a. are likely to be unethical in most other countries. b. are likely to be illegal in most other countries. c. are likely to be legal and ethical in most other countries. d. may be accepted ways of doing business in other countries.

Ans: b Page: 90-91 KeyWord: international ethics

43.

U.S. salespeople a. b. c. d.

Co p y r i g h t©Ho u gh t o nMi ffli nCo mpa n y .Al l r i g h t sr es e r v e d.

must be aware of the laws in North Korea before doing business there. must obey the laws of the host country in which they are doing business. are guided by U.S. laws when doing business in foreign markets. need not be concerned about international law when

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Cha pt e r3 :Et hi c a la ndLe ga lCo ns i de r a t i onsi nPe r s ona lSe l l i ng conducting their business in foreign markets.

Ans: c Page: 90-91 KeyWord: international negot...