Ethical and Legal Issues in Personal Selling

Ethical and Legal Issues in Personal Selling

Ethics and Ethical Behavior

• Ethics: Principles that define right and wrong conduct.
• Ethical behavior:
  • Being honest and truthful.
  • Maintaining confidence and trust.
  • Following the rules.
  • Conducting yourself properly.
  • Treating others fairly.
  • Demonstrating loyalty to company and associates.
  • Carrying your share of the work with 100% effort.

Ethics and Building Relationships

• Ethical principles are crucial in personal selling.
• Distinguishing between right and wrong directly impacts sales success.

Factors Influencing Ethical Behavior

Individual's Role

• Ethics are influenced by various factors:
  • Personal experiences.
  • Culture.
  • Religion.
  • Personality.

Organization's Role

• Companies have a code of conduct to guide employee behavior.
• Objective: to reduce unethical and unlawful behavior.
• Provides a basis for determining right and wrong actions.

Ethical Areas in Sales

Dealing with Employees

• Unauthorized use of expense accounts.
• Misusing company resources.
• Moonlighting.
• Cooking the books.
• Badmouthing employers.
• Technology theft.

Dealing with Customers

• Bribes.
• Misrepresentation.
• Price discrimination.
• Favoritism.
• Reciprocity.
• Customer confidences.

Dealing with Competitors

• Criticizing the competition.
• Rearranging/damaging competitors’ products.

Dealing with Colleagues

• Sexual harassment.
• Stealing customers.
• Undermining co-workers.

Legal Issues

Contracts of Sale

• Subject to general contract laws.
• Contract: A lawful agreement made by two or more persons within their contractual capacities, with the serious intention of creating a legal obligation, communicating that intention without vagueness, and being of the same mind.

The National Consumer Protection Act (CPA)

• Aims to promote fairness, openness, and good business practice.
• Key aspects covered:
  • Cooling-off periods.
  • Contracts.
  • Language.
  • Overselling and overbooking.
  • Implied warranty of quality.
  • Prepaid certificates, credits, and vouchers.
  • Consumer rights.
• CPA gives 8 rights to consumers:
  • The right to consumer education.
  • The right to disclosure and information.
  • The right to choice.
  • The right to representation.
  • The right to redress.
  • The right to safety.
  • The right to a healthy environment.
  • The right to basic needs and services.

The National Credit Act (NCA)

• Protects consumers by reducing reckless lending.
• Credit grantors must qualify customers.
• Purpose:
  • Promote social and economic welfare.
  • Promote a fair, transparent, competitive, sustainable, responsible, efficient, effective, and accessible credit market and industry.
  • Protect consumers while balancing supplier rights.

Competition Law

• Unlawful competition: when a rival company’s conduct unlawfully interferes with a competitor’s trade.
• The purpose of competition law is to regulate the economy of a country.

Summary

• Know the differences between right and wrong when dealing with customers, employers, colleagues, and competitors.
• Always be honest, fair, and reliable.
• Adhere to the company’s code of ethics.
• Be familiar with the laws that affect the sales industry and their potential impact.