Introduction to Ethics in a Sales Context

Introduction to ethics in a sales context

Over the last few years with the decline in the economy the public has taken a greater interest to the corruption that has occurred in major business. The exposures of unethical practices over the last two decades has 'shaken financial markets, undermined confidence in corporate leadership and prodded the government to rethink its hands-off approach to the economy.' (Gailie and Bopst, 2006)

The exposure of unethical practices by companies such as Prudential who, 'admitted to widespread unethical sales practices called "churning" in which customers were convinced to buy new life insurance, not knowing that the purchases would erode the value of their old policies' (Gold, 1996) have had far reaching effects on the customer. Prudential defence was that the field office had acted independently; such actions were not acceptable and would be dealt with suitably. There is little doubt that the $ 2.6 billion charge (Cron and Decarlo, 2010) that Prudential received was to the satisfaction of not only those involved in the scandal but also those who have become jaded by the constant disappointment of unethical sales behaviour and companies who take advantage of their livelihood and trust. Why are sales people and unethical behaviour synonymous with each other? What if anything can be done to prevent it?

Many people believe, 'Salespeople are exposed to greater ethical pressures than individuals in many other jobs. They work in relatively unsupervised settings; they are primarily responsible for generating the firm's revenues, which at times can be very stressful; and they are often evaluated on the basis of short term objectives.' (Roma and Ruiz, 2002) This suggests that sales people often feel under pressure to reach short term performance indicators rather than looking at the benefit of long term relationship that may prove to be more beneficial both to themselves and the firm. There are a number of reasons not connected to greed, which seems to be the most popular one for people to believe. They may make unethical sales decisions due to the pressure of competing for business against a rival firm for a customer's business, so they can achieve their targets and retain their jobs and provide for their families. This may lead us to believe that some salespeople make unethical decisions as a result of the pressure that an organisation puts on them.

Sales managers are also likely to face the full range of ethical decisions from recruitment through to promotion and motivation. Savidas, E et al., (2003) speculate that when managers hire sales staff they shape the ethical climate of a company as they bring their own personal views on ethical behaviour in to play during the recruitment decision. This reasoning suggests that the company is shaped by the hiring process and therefore it is here that managers should

...