Problem:
Provide some discussion on the following type of ethical situation. Include a specific example of how a salesperson's actions could be considered unethical in this type of situation.
Relations with the Sales Force
A substantial portion of sales managers' ethical problems relates to their dealings with the sales force. Assume, for instance, that a salesperson has built a territory into a highly profitable district. The rep may have even worked under a straight commission compensation plan and paid his or her own expenses. An executive who sees this salesperson's relatively high earnings may decide the territory is too large and therefore must be split. Is this ethical? Yet is it sound management not to split the district if the sales executive believes there is inadequate coverage of an overly large district?
In some companies, management takes over the very large, profitable accounts as house accounts. (These customers are sold directly by some executive, and the salesperson in that district usually receives no commission on the account.) The ethics here may be questionable, particularly if the salesperson spent much time and effort in developing the account to a profitable level. Yet management may feel that the account is now so important that an executive should handle it.
Ethical questions often arise in connection with promotions, termination, and references. If there is no likelihood that a sales representative will be promoted to a managerial position, should the rep be told? If the sales manager knows that the rep is working in expectation of such a promotion, to tell him means to lose him. In another instance, when a managerial position opens up in another region, a sales manager may keep a star sales rep in her present territory despite the rep's qualifications and desire for promotion. And what is management's responsibility in giving references for a former salesperson? To what extent is a manager ethically bound to tell the truth or give details about former employees?