WEEK 2 - Lecture notes 2 PDF

Preview

Summary

3 hour lectures ...

Description

WEEK 2 Ethics First

Canadian Professional Sales Association 



The CPSA Sales Institute Code of Ethics is the set of principles and standards that a certified sales professional will strive to adhere to with customers, organizations, competitors, communities, and colleagues. www.cpsa.com

Organizations Main Responsibility   

Discretionary Ethical Legal

 

Economic Social

Management’s Social Responsibilities    

Taking corrective action before its required. Working to establish industry wide standards. Publicly admitting mistakes Donating to charities Striving to make profit

Stakeholders 

A stakeholder is any individual or group within or outside the organization that has a stake in the organization’s performance. Each stakeholder has a different interest in the organization.

Customers Community Creditors Government Owners Managers Employees Suppliers

Organization

What is Ethics? Customer Goals Personal Code of Ethics

Ethical Behaviour

Company Goals Laws Values of Significant Others

What influences Ethical Behaviour?   

Level One - Preconventional (don’t know the difference between right or wrong) Level Two – Conventional (do as you are told) Level Three – Principled (strong personal morals, start to question authority)

Ethical Dilemma? 

A situation in which each alternative choice or behaviour has some undesirable elements due to potentially negative ethical or personal consequences. Right or wrong cannot be clearly identified.

Ethics in Dealing with Salespeople Situations that may transpire. Salespeople’s Ethics in Dealing with Their Employers

Ethics in Dealing with Customers

Buyer’s View of Unethical Sales Behaviour    

Exaggerates benefits of product Passes the blame for something he or she did to someone else. Lies about product availability or competition. Misrepresents guarantee

Buyer’s View of Unethical Sales Behaviour    

Sells products that are not needed. Makes oral promises that are not legally binding. Salesperson is not interested in the customer needs. Answers questions even when he/she does not know the correct answer.

Competition Act Competition legislation is more than 100 years old in Canada. The rationale for such legislation was originally to foster competition, or to eliminate restrictive trade practice. Changes to the legislation eventually led to the Competition Act, passed in 1986, which defines many illegal practices throughout Canada. This Act, amended in 1992, tries to protect consumers from unfair business practices and to foster a competitive environment, while protecting companies from each other.

Competition Act       

Price discrimination Price fixing Bid rigging Predatory pricing Misleading advertising Resale price maintenance Refusal to deal

     

Exclusive dealing Tied sales Pyramid selling Referral selling Bait and switch Double ticketing – UPC Scanning Practices

LEGAL SITUATIONS Can the buyer sue the supplier if this turns out not to be true? “Linda, I tell you this new line of Chippewa China is the best line on the market today. Its quality can’t be beat.”



Probably not. This most likely would be considered ‘puffery’ since no specific statement about the inherent capabilities of the product was given.

Is the Sales Manager in Legal Trouble? “Sandy I want you to go to each of the hardware stores in town and buy one Amex generator this week. Then next week, go to each store and buy two more. I know they’re doing research right now, and I want to make them think their new unit really is a hit.” 

Yes this is an illegal interference with competitors.

Is the Buyer in Legal Trouble? “ I think we can do business together. I will purchase 10,000 units from you, but you’ll need to agree to buy the shipping from us. 

This is illegal. It is forced reciprocity. Reciprocity is only legal when both parties consent to the agreement willingly

Is the Salesperson in Legal Trouble? “I’d like to help you out the way the Roseate Company did, but they broke the law when they offered you 1 case free with 10 cases.” 

If the statement was untrue, then it is business defamation and is illegal.

Is the Sales Manager in Legal Trouble? “JoeBob, we’ve authorized you to give the salespeople in each retailer’s store $150.00 for each unit they sell in the next two weeks. Here’s a letter you can give to each retail salesperson – they’ll love the chance to pocket some extra cash. Just keep it hush-hush – we don’t want our competitors to find out about it.”

Is the Sales Manager in Legal Trouble? 

Push money (spiffs) is legal as long as the store owners/managers agree to it and it is offered to every salesperson.

Are the Salespeople in Legal Trouble? “You’re right, Tom. Ben really is a pain to deal with. He’s always trying to find some new way to get the siding for the houses he’s building at a reduced rate. Tell you what: from now on, whichever one of us he

calls first sets the price, and the other one agrees to match it exactly. That way we we’ll both be able to survive, but we won’t be guilty of fixing prices.”

Are the Salespeople in Legal Trouble? 

Yes, this is collusion. Competitors cannot agree to charge the same price for equipment a buyer is considering....