Building Value through Sales Ethics

From Journal of Creating Value

Imagine waking up to find out that your firm has been caught in widespread sales fraud. Beyond devastating consequences to the company, you and your executive team may be held personally liable for allowing fraud to occur. Negative publicity and penalties are always a threat. For example, consider GlaxoSmithKline’s $500 million fine for bribing doctors and government officials (Plumridge & Burkitt, 2014), or Honda’s $24 million fine for charging minorities higher interest rates (Wattles, 2015). Various studies show the detrimental effects of value destruction (Echeverri, 2021; PlĂ©, 2017). Thus, executives are looking for ways to protect both their companies and their personal reputations from the risks associated with unethical sales practices.

One of the methods organizations use to protect themselves is ethics training. Research has shown that providing ethics training in organizations can be an important element in creating ethical organizational cultures. This research on businesses (Delaney & Sockell, 1992), nonprofits and businesses (Craft, 2010) and military organizations (Robinson, 2007) further argues that such training is needed in far greater quantities than currently provided.

Most executives genuinely want their companies and sales teams to do the right thing. Unfortunately, establishing standard ethics practices does not guarantee an ethical sales force. Sales departments face real pressures to deliver results, meet deadlines, stay ahead of the competition, and satisfy consumer and investor demands. Those pressures are often perceived to be at odds with ethical behaviour. Simply having a code of ethics, an ethics hotline or even periodic ethics training is not enough to counter-balance those pressures. Emphasis needs to be placed on sales ethics.

Sales ethics is defined as the process of human-driven interaction between and within individuals and organizations to bring about economic exchange that legally creates value for both the seller and the customer in a mutually beneficial, trusting relationship.

In today’s competitive environment, it can seem harder than ever to meet performance goals without compromising standards. Taking a long-term view may seem like a luxury. Yet, especially in a fast-paced, technology-driven marketplace, a focus on ethics is something companies cannot afford to ignore. Successful selling requires an approach that is both ethical and effective.

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  1. Sales teams encounter significant challenges to achieve desired outcomes, adhere to time constraints, maintain a competitive edge, and fulfill the expectations of both consumers and investors.

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