Module 4: Business Ethics

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Ethical Behavior in Sales

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Ethical Behavior in Sales
Sales Ethics

One of the most visible positions in any organization in terms of ethics is sales. That’s because it is the salesperson that comes in contact directly with the customer.

What the salesperson says and does is a direct reflection of the organization and its ethics. Personal ethics and business ethics are a part of everyday selling. It’s a good idea to remember the words of Peter Drucker, famous management consultant and author, “Start with what is right, rather than what is acceptable.” [5]

Consider this ethical dilemma if you were a real estate agent. You have just landed a fantastic listing: a home that in the hot neighborhood that will surely sell quickly and yield a nice commission for you. The seller tells you that the home inspector suspects there is insect damage to the siding of the house, but the seller says she has never had any problems. Also, the seller insists on not disclosing this information to prospective buyers. What would you do?

Although you really don’t want to lose this listing, the right thing to do is to disclose anything that affects the value or desirability of the home. Even if you think it might not be a major issue, it’s always best to err on the side of honesty and disclose the information.[1] Withholding or falsifying information is lying and therefore unethical.[2]

You are a financial planner, with a conservative investor. You have an opportunity to sell him a high-return investment, but the risk is far greater than you think he would take. Should you give him your pitch with a few factual omissions or just make the investment and tell him after the money starts rolling in? After all, he doesn’t look at his account every day. [3] What should you do?

Even though the result of the investment could be a good one, it is your obligation to provide full disclosure of the risk and let the customer make the investment decision. You should never make assumptions and decisions on behalf of your customers without their consent. Sometimes it’s better to part ways than to be tempted to behave unethically.

What if you were a salesperson for a textbook company and you are only $1,000 away from your $1 million sales goal. If you make your goal, you’ll earn a $10,000 bonus. Then you remember talking to one of the school administrators, and she mentioned the need for donations. What if you made a $1,000 donation to the school. After the donation, you would still have $9,000. This could be a good move for everyone. Would you make the donation to buy your bonus?

Although it appears that all parties will benefit from the donation, it is not ethical for the school, you, or your company to make an exchange like that. Donations should be made with no strings attached. [4]

The customer is always right, except when he asks you to do something unethical.What should you do to uphold your ethics and maintain your relationship? SellingPower.com suggests the following
four considerations to uphold your ethics:

Evaluate the situation with a clear head
Don’t jump to conclusions
Identify the criteria you are using
Seek counsel, ask for advice from a colleague

Understanding Values
Ethics are defined by moral principles; they are actions that are viewed by society as “right,” “just,” or “responsible.” [6]

Values define what is important to you: they are your guiding principles and beliefs, they define how you live your life, and they inform your ethics. While certain values might be important to you, they may not be important to your best friends or even every member of your family. While family, friends, and your environment have a significant influence, you develop your own set of ethical values.

Consider the list below, which includes some examples of values: [7]
Honesty, Open communication, Teamwork, Integrity, Prestige, Loyalty, Social responsibility

Impact on society, Creativity, Achievement, Security, Helping others

, Global focus

, Religion.

Understanding Values
Values provide your personal compass and your direction in life. When something is not in line with your values, you feel unhappy and dissatisfied. [8]

Many people feel passionately about their values and want to have their environment align with their values. Examples of this are evident during political elections when people take sides on issues such as education, health care, and other social issues that reflect personal values. You might be surprised to learn that your values are not set in stone. Your personal values will evolve and may even change based on your experiences. [9]

For example, Nikki Tsongas, wife of the late US Senator Paul Tsongas from Massachusetts, got involved in public service after the death of her husband. She is now a congresswoman from the fifth district of Massachusetts. [10]

She may have never considered serving in public office, but the death of her husband had a dramatic impact on her values.

No one can tell you what your values are; that’s something you’ll have to decide for yourself. John C. Maxwell, in his book There’s No Such Thing as “Business” Ethics, lists the values that he lives by, such as “put your family ahead of your work (having a strong and stable family creates a launching pad for many other successes during a career and provides a contented landing place at the end of it)” [11]

“take responsibility for your actions, if you desire to be trusted by others and you want to achieve much, you must take responsibility for your actions.” [12]

Values of Organizations
Just like people, organizations have values, too. Values are “proven, enduring guidelines for human conduct” according to Stephen Covey in his book, Principles. [13] Many companies choose their values and communicate them to employees, customers, and vendors on the company Web site and other company communications. Company values and personal values are important because your values motivate you to work. [14] You will enjoy and excel at your job if you choose a company whose values you share.

For example, if the environment is one of your values, it’s best to choose a company that includes a commitment to the environment as part of their values statement.

Chances are you won’t be happy working at a company that doesn’t put a priority on the environment.

Microsoft includes integrity, honesty, personal excellence, passion for technology, and commitment to customers as part of their values statement on their Web site.

Levi Strauss & Co. identifies four key values for their company: empathy, originality, integrity, and courage. Their values statement is also included on their Web site.

Whole Foods includes the following values, among others: “selling the highest quality natural and organic products available” and “caring about communities and their environment.” You can see their entire values statement on their Web site.

Corporate Gudelines
Just as your personal mission statement is a blueprint for how you make decisions in life, companies also use a mission statement to define their direction, make operating decisions, and communicate to employees, vendors, shareholders, and other stakeholders.

In fact, most companies have a formal, written mission that they include on their Web site.

The mission statement is made available for the following reasons: employees can use it to aid them in ethical business decision making, investors can evaluate the company’s ethics before making a decision about becoming involved with it, and customers can choose whom they will do business with based on their ethics and purpose.

Harley-Davidson’s mission statement is below and can be found on their Web site.

We inspire and fulfill dreams around the world through Harley-Davidson experiences. [15]

FedEx includes their mission statement along with their values on their Web site.
FedEx will produce superior financial returns for shareowners by providing high value-added supply chain, transportation, business and related information services.

Customer requirements will be met in the highest quality manner appropriate to each market segment.
FedEx will strive to develop mutually rewarding relationships with its employees, partners and suppliers.
Safety will be the first consideration in all operations.
Corporate activities will be conducted to the highest ethical and professional standards. [16]

The mission statement of the insurance company Aflac is short and to the point as shown below. It can also be found on their Web site.

To combine innovative strategic marketing with quality products and services at competitive prices to provide the best insurance value for consumers. [17]

Google’s Web site includes their mission statement:

“Google’s mission is to organize the world’s information and make it universally accessible and useful” [18], and guiding principles, for business:
Focus on the user.

It’s best to do one thing really well.

Fast is better than slow.

Democracy on the Web works.

You don’t need to be at your desk to need an answer.
You can make money without doing evil.

There’s always more information out there.

The need for information crosses all borders.

You can be serious without a suit.

Great just isn’t good enough. [19]

Character Influence
Your character is what sets you apart; it includes the features and beliefs that define you.

It’s no surprise that the word has it origin in the Latin word character, which means mark or distinctive quality and from the Greek charaktr, which means to scratch. [20] The Josephson Institute, defines character as composed of six core ethical values:

Trustworthiness, Respect, Responsibility, Fairness, Caring, Citizenship [21]

Power of Reputation
When you work in sales, you are selling yourself, when customers buy from you, they are investing in your reputation. George Ludwig, author of Power Selling, explains that “you’ve got to live out your identity consistently in every facet of your life and make sure prospective clients bump into that identity everywhere they turn.” [24] In other words, every action you take affects your reputation. If you fail to follow up, forget details, you may become known as unreliable. On the other hand, if you consistently deliver what you promise, you will be known as reliable.

In November of 2008, video game, Tomb Raider: Underworld was released. Public relations firm Barrington Harvey, in an attempt to massage the Metacritic score, asked reviewers to hold their scores until after the first weekend of the game’s release.

When asked why, a spokesperson explained, “the brand manager in the United States that’s handling all of Tomb Raider has asked that we just manage the scores before the game is out, to ensure that we don’t put people off buying the game.” [23] Eidos, the company that published the game, tried to take an ethical shortcut-they wanted to be sure that the game’s reputation could not precede it-but paid for that with a great deal of negative publicity that adversely impacted their reputation.

Your overall character as judged by other people is your reputation. [22] Consider some celebrities who have had unethical acts negatively impact their reputation:

Tiger Woods, known as one of golf’s greats has been reduced to tabloid fodder since the news of his extramarital affairs; Michael Phelps, the only person to ever win eight gold medals in a single Olympic Games, has become the poster boy for marijuana use.

Both had stellar reputations and were considered role models. Now both are working to gain back the trust of the public.

Robert L. Bailey, former chairman of US State Auto Insurance Companies, knows how important a salesperson’s reputation can be and the value of consistent ethical behavior. “Back in my corporate days I regularly met with new employees. I would tell them, Regardless of the circumstances, regardless of what the contract says, we always want you to do the right thing.

“If your actions are described on the front page of our local newspaper, will most people read the account and say, ‘I think they did the right thing?” [25] Your reputation speaks for you; make sure it’s saying what you want customers to hear.

Build Your Reputation
A great way to build your reputation in a specific industry is to become an industry expert:

Write a blog
Tweet regularly about industry issues,
Be a guest speaker or panelist at industry conferences or events online or in person

Decision makers hear and see you take on a leadership role and seek you out to gain your expertise. You can build your reputation, which, in turn, will help you build your client list. [26]


Ethics is moral principles, a system that defines right and wrong.

Business ethics is ethical behavior applied to a business situation.

An ethical dilemma is a situation that is presented with options that may be right or wrong.

Values define what is important to you: they are your guiding principles and beliefs, they define how you live your life, and they inform your ethics.

A mission statement is a roadmap of where a person or company wants to go.

Your reputation will affect how people see you throughout your life, which can have either a positive or a negative impact on your career.

Every action you take defines you; bear that in mind when making decisions.

If you find yourself in a situation that challenges your ethics, talk to your supervisor. If you don’t feel that you can talk to your supervisor, talk to someone in the human resources department.
A good rule of thumb is that if you would be ashamed to tell your boss about it, don’t do it.


Discuss the reputation of the following people. What actions has each taken that reflect their reputation?

Simon Cowell Britney Spears

Angelina Jolie Chris Brown

Discuss what you would do in the following situation. Is it ethical behavior?

You are not really sick, but you want to take the day off. What do you say when you call your supervisor?


[1] Buck Wargo, “5 Everyday Ethical Dilemmas,” Realtor, March 2007,http://www.realtor.org/archives/feat2200703?presentationtemplate=rmo-design/pt_articlepage_v1_print&presentationtemplateid=1b18c0004a12c9a4b7e1ffbdd1ec736f (accessed August 29, 2009).
[2] Gerhard Gschwandtner, “Lies and Deception in Selling: How to Tell When Customers or Prospects Are Lying to You,” Selling Power 15, no. 9,http://www.sellingpower.com/content/article.php?a=4256 (accessed March 16, 2010).
[3] Mark P. Cussen, “Ethical Issues for Financial Advisors,” Investopedia,http://investopedia.com/printable.asp?a=/articles/financialcareers/08/ethics-for-advisors.asp (accessed August 29, 2009).

[4] Shel Horowitz, “Should Mary Buy Her Own Bonus?” Business Ethics, November 11, 2009, http://business-ethics.com/2009/11/11/should-mary-buy-her-bonus (accessed February 18, 2010).
[5] Dr. Frank Crane, “The Truth in Business,” Selling Power,http://www.sellingpower.com/html_newsletter/motivation/article.asp?id=2691&nDate=November+20%2C+2006&lid=SP69444 (accessed August 29, 2009).
[6] BNET Editorial, “Understanding Your Values,” BNET, http://www.bnet.com/2410-13070_23-55147.html?tag=content;col1 (accessed August 29, 2009).
[7] BNET Editorial, “Understanding Your Values,” BNET, http://www.bnet.com/2410-13070_23-55147.html?tag=content;col1 (accessed August 29, 2009).
[8] BNET Editorial, “Understanding Your Values,” BNET, http://www.bnet.com/2410-13070_23-55147.html?tag=content;col1 (accessed August 29, 2009).
[9] “Niki Tsongas: Long Bio,” http://tsongas.house.gov/index.cfm?sectionid=54§iontree=2,54 (accessed September 1, 2009).
[10] John C. Maxwell, There’s No Such Thing as “Business” Ethics (New York: Center Street, 2003), 102–3.
[11] John C. Maxwell, There’s No Such Thing as “Business” Ethics (New York: Center Street, 2003), 93–94.
[12] Thomas E. Ambler, “The Strategic Value of Values,” Center for Simplified Strategic Planning, http://www.cssp.com/CD0402/ValuesAndStrategy/default.php (accessed August 29, 2009).
[13] BNET Editorial “Understanding Your Values,” BNET, http://www.bnet.com/2410-13070_23-55147.html?tag=content;col1 (accessed August 29, 2009).
[14] “Develop Your Personal Career Mission Statement,” CollegeGrad.com,http://www.collegegrad.com/book/Job-Search-Prep/Develop-a-Personal-Career-Mission-Statement (accessed September 1, 2009).

[15] Harley-Davidson, “Harley-Davidson Mission Statement,” http://www.harley-davidson.com/wcm/Content/Pages/Student_Center/student_center.jsp?locale=en_US#missionstatement (accessed August 29, 2009).
[16] FedEx, “Company Information: Mission, Strategy, Values,”http://about.fedex.designcdt.com/our_company/company_information/mission_statement (accessed August 29, 2009).

[17] Aflac, “Mission and Values,”http://www.aflac.com/us/en/aboutaflac/missionandvalues.aspx (accessed September 1, 2009).

[18] Google, “Corporate Information: Company Overview,”http://www.google.com/corporate (accessed September 1, 2009).

[19] Google, “Corporate Information: Our Philosophy,”http://www.google.com/intl/en/corporate/tenthings.html (accessed September 1, 2009).
[20] “Character,” Merriam-Webster Online Dictionary, http://mw1.merriam-webster.com/dictionary/character (accessed September 1, 2009).

[21] Josephson Institute, “The Six Pillars of Character,” Josephson Institute,http://charactercounts.org/sixpillars.html (accessed September 1, 2009).

[22] Mike Fahey, “Eidos Trying to Fix Tomb Raider: Underworld Metacritic Scores,” Kotaku, November 21, 2008, http://kotaku.com/5095674/eidos-trying-to-fix-tomb-raider-underworld-metacritic-scores (accessed September 1, 2009).
[23] “Reputation,” Merriam-Webster Online Dictionary, http://www.merriam-webster.com/dictionary/reputation (accessed September 1, 2009).

[24] Renee Houston Zemanski, “The Power of Your Reputation,” Selling Power,http://www.sellingpower.com/article/display.asp?aid=SP1900197 (accessed August 29, 2009).

[25] Renee Houston Zemanski, “The Power of Your Reputation,” Selling Power,http://www.sellingpower.com/article/display.asp?aid=SP1900197 (accessed August 29, 2009).

[26] Robert L. Bailey, “A Story of Two Salespeople,” BNET, April 2008,http://findarticles.com/p/articles/mi_qa3615/is_200804/ai_n25420875/pg_2/?tag=content;col (accessed February 18, 2010).