Contemporary Problem with Sales Ethics - Literature review Example

CONTEMPORARY PROBLEM WITH SALES ETHICS Table of Contents Table of Contents 2 Introduction 3 Importance of Ethics in Sales 3 Ethical Issues in Sales 4Sales People 5 Customers 5 Employers 6 Effects of Unethical Selling 7 Conclusions and Recommendations 7 References 10 Bibliography 12 Introduction In todays world, the recognition, identification and proper dealing with issues related to business ethics is one of the top priority for most of the business organizations. A significant number of business scandals that have been reported in recent years are typically the consequences of fraudulent activities carried out in various business activities performed by the organizations. Lapse of accountability and responsibility towards proper ethical and legal practices is observable in many well reputed business organizations worldwide. All these events have resulted in the need of greater amount of corporate responsibility and improved ethical practices to be followed in the business concerns (O. Ferrell, Fraedrich, & L. Ferrell, 2012, p.5). Ethical issues related to sales are one area which has been neglected in most of the organizations. However it is discernible that a major percentage of the employees in an organization are involved in sales activities of the organizations. Sales people are the direct contact point with the customers of the company. Hence the ethical issues related to sales are to be dealt with correctly by the company management people. The importance of ethics in sales, various ethical issues related to sales and its consequences on the organization have all been discussed in this study. Finally some recommendations have been discussed which could solve these problems and issues related to sales ethics. Importance of Ethics in Sales Ethics can be defined as the code of conduct followed by any individual according to the activities by him in the organization he is working for. It helps in deciding upon what is wrong or right in a particular situation (Ingram, et al., 2007, p.45). Salespeople are indulged in various ethical issues in an organization. It is the sales team who are significantly exposed to ethical pressures compared to any other professionals (Spiro, 2007, p.469). A salesperson might be involved in selling certain product to its customer which he may not satisfy its requirement. In order to sale a product successfully a salesperson might be indulged in activities of exaggerating the benefits offered by a product or service (Ingram, et al., 2012, p.38). The function of sales in an organization is considered to perform under a typical ethical culture or subculture within the companys ethical culture as a whole. It thus results in influencing managers and its associates in a company. Consequently it helps in the creation of conditions or situations that either permits or limits misconduct. There may be opportunities available for further misconducts or unethical practices if these situations result in facilitating rewards in the form of promotion, financial gain, etc. for the employees of the company. As for example, if no organizational policy exists regarding penalizing any of its employees because of breaking the rules, then it effectively results in the creation of such opportunities because individuals are not concerned about any subsequent effect of breaking the rules. Hence, various factors including organizational practices and policies contribute towards the adoption of unethical means by its salespeople (L. Ferrell, & O. Ferrell, 2009, p.261). Ethical Issues in Sales Ethical issues related to sales primarily involve three parties in an organization. They are the sales people, customers and the employers. Ethical issues concerned with each of these groups of people are motioned below: Sales People The sales people employed in an organization are involved in conducting various unethical practices due to various factors. One of the primary issues being the amount of work pressure on the sales people of the company. Excess workload can result in the adoption of unethical practices by the sales person in order to achieve their objectives. Normally different groups of sales people are assigned tasks to perform their activities corresponding to a particular territory in which they are supposed to perform their job activities. Various factors like travelling long distances to meet the customers, uncooperative customers, etc. might result in unethical behavior of sales people towards the customers. The truthfulness in the part of the sales persons are while selling the products of the company or while giving a feedback to the company management is also a significant issue. The sales people are also encouraged towards taking leave or time off from the organization with the false excuse of illness or other reasons. Another significant issue corresponding to the sales people in a company is their activities leading towards misuse or even theft of the assets possessed by the company. Sales person often get incentives or commissions for achieving certain sales targets in the organization. With the motive of gaining such commissions the sales people often are engaged in fraudulent activities in their job. Padding of the expense accounts by the sales people is also one of the significant issues faced by the organizations. Customers The customers who are involved in buying the goods and services offered by an organization are also involved in various activities which create serious ethical issues in sales. On such activity is the offering of bribes by the customers so as to get their job done quickly and conveniently according to their demand. Customers are sometimes provided with certain free gifts or stocks by the sales people that are happily accepted from them. Those gifts may not be in accordance with the sales strategy or policy of the organization, hence creating an ethical issue. Certain customers might be tempted to accept various entertainment facilities provided to them exclusively by the sales people in lieu of the products or services of the company bought by them. Some customers are also facilitated with exclusive deals provided to them by the company. Reciprocity in the form of buying goods from each other by the sales person and the customers is also a major ethical concern in sales. Customers also have to encounter other ethical issues like being misrepresented about the benefits derived from the products offered by the companys sales people. The sales people mostly exaggerate about the product performance in order to achieve their sales objective. Tie-in sales are also a significant ethical issue related to sales faced by the customers. The customers also adopt unethical practices like making conditional purchases from the sales people of the company in return of getting additional benefits from them. Employers The employers also contribute towards providing opportunity for the sales people to resort to unethical practices in an organization. Certain employers of an organization like the sales managers and other people constituting the sales management team of the company offer incentives to the sales people with the underlying condition of providing results in their favor so as to achieve short term profits for the company (Boone, & Kurtz, 2011, p.588). This might result in unethical practices being adopted by the sales people so as to earn incentives. The employers sometimes adopt strategies to encourage generation short term profits by providing high rewards on achieving the same by the sales people. This also results in creating opportunities of unethical activities being performed by the sales people in the company. Effects of Unethical Selling Unethical selling by the sales persons often results in having detrimental effects on the performance of the organization. The customers might lose faith in the organization because of the knowledge of unethical sales practices being followed by the companys sales people. This might result in the customers being reluctant to buy products or services being offered by the company and ultimately resulting in the lost sales for the company. The companies start losing its profit margins because of lower revenues being generated by them. The credibility of the organization is also lost as a result of unethical selling practices being followed by the company employees (Bizmanualz, 2008, p.83-84). The brand image of the company deteriorates. The company might be able to successfully gaining profits in the short run. However, in the long run the company may not be able to sustain its growth and performance. Hence ethics in sales is quite a significant issue concerned with every organization involved in selling its products and services to its customers and needs to deal with in a proper way so as to ensure sustainable growth of the company in future. Conclusions and Recommendations Sales ethics proves to be a major concern for any business organization and it needs to be properly identified, evaluated and dealt with the company management. The sustainability of the company in future may be at stake if the ethical issues related with sales are not dealt with properly by an organization. One of the major contemporary issues related to sales ethics of a company is the opportunity for the sales people to resort to such means because of various factors encouraging them to do so. All the subsequent ethical issues in sales are inter-related to each other. Hence the solution to such problem should be initiated at the root level. It implies the main reasons fostering such unethical activities must be eradicated from the system in an organization to prevent its subsequent detrimental effects on the organization and the corresponding society as a whole. The business world today is quite complex in nature and involves lot of decisions to be taken by lot of people concerned with the business organization. Whether it is a large organization or a small organization, the unethical issues in sales have the same ultimate effects on the final product. In the event of stringent policies being adopted by an organization towards combating the practice of unethical practices being employed by the employees of an organization, they are not provided with any opportunity to resort to such unethical means because of heavy monitoring activities followed by the company management. However the sales persons of the organization are not monitored at such stringent levels and have the opportunity to take decisions in alignment with their self benefits and not in accordance with the benefits of the company. When the sales person falters in achieving their performance standard set to them by the company management, they try to adopt unethical means to alter their performance so as to ensure that the company management feels that the job is being done perfectly by him. The sales ethics issues related to the sales persons of a company can be encountered through the incorporation of sales ethics programs in the companys policy. It is the top management officials of the company who should be responsible and accountable first for any unethical practices being followed by the sales people in the company. It is the top management people of the company who sets the trend and climate of how the business activities are conducted by other employees within the organization. Hence, a strong backup from the top management is the pre-requisite towards developing a successful sales ethics program for the company (Cron, & Decario, 2008, p.295). The sales training program of the company should be properly designed so that it addresses all the issues related to sales ethics and prevents the opportunity for any unethical means being adopted by the sales people of the company (Ingram, et al., 2012, p.189). Establishment of a code of ethics in an organization could prove to be very much effective in preventing unethical selling practices being followed by the sales persons. The code of ethics so constituted should be more of a principle based rather than policy so that it has an impact on the whole organizational culture of the company (Cant, & Heerden, 2008, p.207). Setting goals and targets for the sales persons that are realistic in nature and encouraging whistle blowing within the organization can prove to be very advantageous for an organization towards saving these ethical issues related to sales. The customers who receive the products and services from the companies can also contribute towards developing good ethical standards in selling by not encouraging any means of unethical rewards being offered to them (Seidman, 2012). The sales managers of a company who are directly accountable for the activities performed by the sales team of the company can become successful not by encouraging the sales people to attain short term profits for the company but by accepting the challenging ethical issues related to sales and addressing those issues collectively with the sales team (Thomas, 2008, p.28). References Bizmanualz, I., 2008. Sales & Marketing Procedures to Improve Sales Pipeline Management. Missouri: Bizmanualz, Inc. Boone, L. E., & Kurtz, D. L., 2011. Contemporary Marketing. 15th Ed. Connecticut: Cengage Learning. Cant, M. C., & Heerden, C. H., 2008. Personal Selling. Lansdowne: Juta & Co. Ltd. Cron, W. L., & Decario, T. E., 2008. Dalrymples Sales Management. 9th Ed. New Jersey: John Wiley & Sons. Ferrell, L., & Ferrell, O. C., 2009. An Enterprise-Wide Strategic Stakeholder Approach to Sales Ethics. Journal of Strategic Marketing, 3(4). [Pdf]. Available at: . [Accessed on June 16, 2012]. Ferrell, O. C., Fraedrich, J., & Ferrell, L., 2012. Business Ethics: Ethical Decision Making & Cases. 9th Ed. Connecticut: Cengage Learning. Ingram, T. N., et al., 2007. Professional Selling: A Trust-Based Approach. 4th Ed. Connecticut: Cengage Learning. Ingram, T. N., et al., 2012. Sales Management: Analysis and Decision Making. 8th Ed. New York: M. E Sharpe Inc. Ingram, T. N., et al., 2012. Sell. Connecticut: Cengage Learning. Seidman, D., 2012. The Ultimate Guide to Sales Training: Potent Tactics to Accelerate Sales Performance. New Jersey: John Wiley & Sons. Spiro, S. R., Management of a Sales Force. 11th Ed. New Delhi: Tata McGraw Hills Education. Thomas, W., 2008. The Sales Managers Success Manual. New York: AMACOM. Bibliography Cravens, D. W., 2011. The Oxford Handbook of Strategic Sales and Sales Management. Oxford: Oxford Handbooks Online. Desjardins, J., 2009. An Introduction to Business Ethics. 2nd Ed. New Delhi: Tata McGraw Hills Education. Jeff, T., 2009. Sales Management. 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