PRDV217: Introduction to Sales

You might be wondering how a company guides all employees about what behavior it expects from them. Imagine a global company like Wal-Mart, which has over two billion employees worldwide." How do all the employees know what is considered ethical behavior by the company? Can they take as much time as they want for lunch? Are they able to take off as many days as they wish? What expenses qualify for reimbursement? All the policies of a company are included in its employee handbook.

Employee Handbooks: Your Practical, Professional How-To

Every company has a code of ethics governing the actions of its employees. This manual, the employee handbook (sometimes called the code of ethics or code of conduct or another similar name), outlines the company's policies concerning gift giving, nondisclosure of company information, and other areas of behavior. Starbucks' code of ethics, Business Ethics and Compliance: Standards of Business Conduct, for example, explains when employees may and may not accept gifts: "You may not encourage or solicit meals or entertainment from anyone with whom Starbucks does business or from anyone who desires to do business with Starbucks."

"Giving or accepting valuable gifts or entertainment might be construed as an improper attempt to influence the relationship." An employee handbook will also include the company's sexual harassment and nondiscrimination policies, an explanation of procedures, including breaks and scheduling principles, a list of benefits for part- and full-time employees, a breakdown of disciplinary policies and grounds for dismissal, as well as rules concerning phone, fax, mail, Internet use, and the permissible use of company vehicles. The handbook will additionally contain information like the history and goals of the company.

Figure 4.3 Starbucks communicates its expectations in terms of ethics in this handbook called Business Ethics and Compliance: Standards of Business Conduct.

What Company Policies Say and What They Mean

Whatever company you end up working for will have its own policies with which you will need to familiarize yourself. But most companies include the same fundamental issues frequently encountered in sales: conflicts of interest, bribes, and noncompete clauses. The specifics of these policies will vary from company to company, but this section will give you a good idea of what to expect, the meaning of key terms you will encounter, and some sample policies to study.

A conflict of interest is a situation where someone (a public official, politician, employee, or professional) has a private or personal interest that appears to influence the objective exercise of their official duties. There are four types of conflicts of interest that you may encounter in your career: family interests, gifts, private use of employer property, and moonlighting.

1. Family interests create a conflict of interest in situations where you might purchase goods or services for your employer from a relative or when you influence the hiring of a family member. It is best to avoid these situations since it can be difficult to make an objective decision.
   
   
2. Gifts create a conflict of interest when you receive something of value from someone you do business with. Gifts are frequently given at the holidays and can be small, such as a case of wine, or more extravagant, such as a trip.
   
   
3. Private use of employer property can include taking pens home, using your work computer to edit your vacation pictures, driving the company car on personal trips, to reporting the mileage on a corporate expense report.
   
   
4. Moonlighting is holding down a second job. While this may not sound insidious, you will probably encounter ethical issues if you work two jobs in the same field. Who gets your best ideas? Where does most of your energy go? It will also be challenging to resist letting inside information about two corporations influence your actions.

No employer wants to expose its strategy to its competitors. U.S. courts typically uphold noncompete agreements as long as they contain reasonable limits on time and geographical space – for example, you may not compete in the state for two years after your termination. Noncompete agreements are not legal in California, although there are still measures in place to protect trade secrets. Not every job will ask you to sign a non-compete agreement, but these agreements have become increasingly controversial because all sorts of companies are "forcing" their employees to sign them so they can get hired.

It is so important to read and understand anything you sign. However, even if you do not sign a noncompete agreement, you may be asked to sign a nondisclosure agreement (or confidentiality agreement), or your company may have a nondisclosure or confidentiality policy that requires you to protect your former employer's trade secrets. A trade secret is "any information that allows you to make money because it is unknown." For example, Coca-Cola's signature formula is a trade secret, as is the recipe for Kentucky Fried Chicken. Information about the internal workings of a company that could only plausibly be gained by working for that company is usually a trade secret.

If you find yourself between jobs and worry about the legality of finding another (having signed a noncompete agreement with your previous employer), remember that non-compete agreements are most likely to be enforceable if your new job is strikingly similar to your old job. If you go from the sales department at Target to the advertising department of Kmart, you are probably (legally) in the clear. Your new job is different enough that you are unlikely to be seen by the court as exploiting your knowledge of Target's sales practices. Remember, this is only a concern if you have signed a noncompete agreement. While noncompete clauses are common, they are not universal.

What Is Whistle-Blowing?

Jeffrey Wigand, former head of research and development for Brown & Williamson Tobacco Corporation (the third-largest tobacco company in the United States), is one of the most famous whistle-blowers in America. He says of himself, "The word whistle-blower suggests that you're a tattletale or that you're somehow disloyal. But I wasn't disloyal in the least bit. People were dying. I was loyal to a higher order of ethical responsibility." Wigand's testimony against the tobacco industry, his claims that executives at Brown & Williamson knew that cigarettes were addictive, lied about it under oath, and destroyed documents related to that fact, led directly to the lawsuit brought by forty state attorneys general against tobacco companies.

Whistle-blowing, the act of publicly exposing the misconduct of a company or organization, is a courageous act. Wigand's reputation was destroyed by a punitive smear campaign conducted by the industry he spoke out against, and the stress resulting from that and the trial destroyed his marriage. Brown & Williamson filed a lawsuit against him for revealing confidential company information (the suit was dismissed as a condition of the $368 billion settlement against the tobacco industry). But Wigand blew the whistle to save thousands of lives. The story was made into a blockbuster movie in 1999 called The Insider.

Of course, whistle-blowing exists on a less grand scale. If you know which of your classmates stole the answer key to an exam and you tell the professor, you have blown the whistle. Whistle-blowing doesn't always involve risking your life, and it doesn't always involve bringing a corporation to its knees. At its heart, it is an action taken to reveal wrongdoings in hopes of seeing justice done.

Only limited protection existed for whistle-blowers until recently; today, the best protection they have (unless they work for the federal government) is the Sarbanes-Oxley Act of 2002, mentioned earlier, which states that "whoever knowingly, with the intent to retaliate, takes any action harmful to any person, including interference with the lawful employment or livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any federal offense, shall be fined under this title, imprisoned not more than ten years, or both."

It is crucial to bear in mind that you have no obligation to blow the whistle. You can simply refuse to take part in any unethical or illegal activity. If you know crimes are being committed at your business, you must decide what form your refusal will take. Will you simply refuse to commit any crimes, try to persuade others to behave ethically, or decide to resign? The action you feel comfortable taking depends on your situation and your personal code of ethics.

Ethics and the Law

The ever-changing landscape of technology has created new opportunities to test ethics; spammers, scam artists, and identity thieves have created the need to clearly define legal and, in some cases, ethical behavior online. An increasing number of fraud cases are committed via social networking sites. For example, people have created Twitter profiles in the names of other people. News anchor Keith Olbermann and Tony La Russa, manager of the St. Louis Cardinals, have been victims of these hoaxes. If you are tempted by this behavior, remember you are what you tweet. Your actions will affect your reputation – make sure that you are making yourself look good.

Tightening Legal Loopholes

One of the best examples of laws being enacted in response to unethical business practices is the Robinson-Patman Act. In 1914, the Clayton Act became the first federal statute to expressly prohibit price discrimination in several forms. Large chain grocery stores used their buying power to negotiate lower prices than smaller, independent grocery stores offered. The Robinson-Patman Act was passed in 1936, during the Great Depression, as a direct response to that unfair business practice, closing the loophole. Buyers for the big chain stores weren't breaking the law when they used their influence to get better prices than small stores could, but they were behaving unethically - and the law caught up with them in the end.

Another example of how it can take the law some time to catch up to reality is the CAN-SPAM Act (Controlling the Assault of Non-Solicited Pornography And Marketing Act) of 2003. CAN-SPAM purports to take on spam - that is, unsolicited marketing e-mails, often with sexual or "STAY AT HOME, EARN $$!!!" – type messages. Perhaps the most famous arrest of a spammer came in 2005, when Anthony Greco was arrested at Los Angeles International Airport and charged with violating CAN-SPAM by sending more than 1.5 million messages to users of the MySpace instant messaging service that advertised pornography and mortgage-refinancing services.

Culture and Ethics

When you are working in a different country or with professionals from other cultures, there may be different ideas as to what is appropriate and ethical. The Japanese, for example, have a culture of corporate gift-giving; kosai hi (literally "expense for friendly relations") refers to the Japanese business practice of maintaining large expense accounts for entertaining clients and nurturing other professional relationships. This money is, for example, often used to buy golf club memberships as gifts for people with whom Japanese businessmen and women have valuable working relationships. When you come face-to-face with these different customs, it is important not to be insulting, but you cannot ignore your company's policies. "When in Rome" will only carry you so far.

A good rule of thumb is this: if you wouldn't be comfortable telling your boss about it, or if you would be embarrassed to tell your mom about it, don't do it. If you are working for a company that does business in more than one country, odds are they will have a liaison from each country that can help you to navigate the intricacies of cultural differences. In Middle Eastern countries, there is a custom of baksheesh, a word that encompasses everything from tipping to alms for a beggar to out-and-out bribery. If you are working in the Middle East, there may be an expectation that you will help to grease the wheels; your supervisor should be able to brief you on company policy in such situations.

One excellent example of the ethical struggles unique to international business can be found in Michael Crichton's book Rising Sun, which deals with the clash of Japanese and American business practices. At one point, two police officers discuss how often they are offered gifts by the Japanese: "Giving gifts to ensure that you will be seen favorably is something the Japanese do by instinct. And it's not so different from when we invite the boss over for dinner.

Goodwill is goodwill. But we don't invite the boss over for dinner when we're up for a promotion. The proper thing to do is to invite the boss early in the relationship, when nothing is at stake. Then it is just goodwill. The same with the Japanese. They believe you should give the gift early, because then it is not a bribe. It is a gift. A way of making a relationship with you before there is any pressure on the relationship." When you need to decline a gift yourself, apologize and explain that company guidelines prohibit your acceptance of the gift. You should then promptly report the gift to your supervisor.