Introduction
Ethics is the study of understanding whether what we do is good and right (Manikutty, Being Ethical p. 19). Speaking of work and business ethics, we can certainly say that it is an amalgamation of proper work policies and practices regarding several business decisions and issues that are related to production, sales and marketing. This case deals with the ethics policy of XYZ Inc. After a good and commendable effort by the company’s HR department and the top management, the company now has a dedicated Ethics Officer and a proper Code of Ethics in place. However, XYZ Inc. faces a serious ethical issue of ‘overselling’ that needs to be addressed and eliminated.
The sales staff has been driving the sales beyond the production capacity which has led to unfulfilled customer orders and increased burden on the production department. The hectic production schedule had put significant burdens on the personal lives of the production employees. Even the customers had to settle with negotiated terms as they did not have any other product alternatives (thanks to the patents XYZ had created for next 15 years). Although the company did not suffer any loss in business with such unethical and dishonest sales practice, it was running a risk of losing its credibility in the business market.
The importance of creating an Ethics program
In some cases, sales persons often take undue advantage of the fact that their customers have little knowledge or control about their product (Kotler, Marketing Management. p. 525).In order to ensure that this situation does not arise; it is extremely important and necessary to create a comprehensive and effective ethics education program that can teach and re-enforce the importance of business ethics. The ethics education program would also reinforce critical knowledge, organizational values, regulations and skills that will encourage the employee to develop a right approach towards selling their products and create a positive change in the organizational culture that has developed the problem of ‘over selling’
Creating an ethics program
Every company that is operating in a business market has to depend upon its sales team for achieving and fulfilling its long term strategic goals. A strong, focused and motivated sales team is one of the biggest strengths of any multinational organization. The sales team plays a vital role in the decision making process, long term sustainability and therefore it needs to be imparted with a proper training module. This training module does not only cover the technical part, but should also cover those aspects that are related to ethical selling and ethical decision making. In fact, it is extremely important to create a separate ethics program that focuses on ethical issues and this program must be imparted to all the employees of the organization. In case of XYZ Inc, a comprehensive and a continuous ethics program needs to be created, adopted and imparted to all the employees, with a main focus on its sales people since they are the face of the organization.
It is important to note that an ethics program must be developed based on actual, not perceived need (Creating and Delivering Ethics Education, Notes, p01). In case of XYZ Inc. a comprehensive ethics program must be created with a prime focus on ‘ethical selling’ and ‘ethical decision making’.
The following initiatives need to be taken in order to create an effective and sustaining ethics program:
- Bring the employees (especially sales people) in line the organization’s culture: As an organization grows, its members start taking things for granted (Singh, Organization Behavior, p 112), the values and norms move out from their conscious awareness. In such situation, the company needs to imbibe its code of ethics to its employees. In case of XYZ Inc, the ethics officer must start the ethics program by briefing its employees about their code of ethics and its importance. A brief presentation needs to be given that touches upon all the aspects of the company’s code of ethics and its importance. In many cases, it is possible that employees are not aware of the ethical policies and this would be quite common for XYZ Inc., as its sales personnel are dispersed across three continents. Also, the ethics officer must highlight some of the important rights of the employees such as the ‘Whistle Blower Policy’, in which any employee can disclose and highlight any illegal, immoral and unethical activity by any of the company’s employee (Singh, Organization Behavior, p 150).
- Create and impart ethical education program based on the specific department: It is extremely important to break the ethical program department wise. For example, a session of ‘effective ethical selling skills’ wouldn’t be of much help to a production personnel. In order to tackle the issue of ‘over- selling’ in XYZ Inc, a separate ‘ethical selling’ module needs to be developed and imparted to the sales personnel on a regular basis. This module would deal with the ways in which the sales personnel must sell the product to the end customers. The importance and need of developing ‘customer loyalty’ and ‘customer delight’ would be stressed in this program.
- Create country specific training module for sales personnel and take care and address any cross cultural challenges in the training program: XYZ Inc. needs to address any cross cultural challenges that it might face with its overseas sales staff who are mostly Indian and Chinese. In case of China, there is a general cynicism that dismisses ethics training as useless ( Sekerka, Ethics Training in Action, p84). Also, the ethical training needs to be complemented with the local laws of the land. For example, in India, certain companies do not allow their employees to accept any kind of gifts form their suppliers/ vendors. Such local issues must be identified and they must be included in the program. In this way, ethics officer can create a country specific ethical training program and this need to be made mandatory for all the sales personnel living abroad. This module can be completed online and their result needs to be shared with the company’s management. The major topics that would also be covered apart from over- selling would be 1. Bribery 2. Money Laundering. 3. Factory/ production conditions and worker’s rights 4. Safety Standards (Sekerka, Ethics Training in Action, p61).
- Create regular modules in order to impart ethical education on a regular basis
In order to ensure that the program is effective and increase its retentions, the ethics officer must make sure that he creates regular ‘quarterly modules’ that would be imparted to the sales personnel of XYZ Inc. By creating these modules, it can be ensured that the essence of ethical program is being imbibed by the sales personnel. In some cases, external business consultants would be hired to impart training on legal and technical aspects.
- Create a separate module for ‘over selling’ for sales personnel: This module must cover all the ethical issues that would arise due to overselling. Legal issues must also be included in this module.
Delivering and analyzing the results of ethics education
Once an ethics education program has been created, it is equally important to deliver it in a proper manner and analyze/ evaluate its results. The ethics education program can be delivered in two forms:
- Through class room training sessions: Class room training sessions can be effective for the sales employees as they need to be more interactive and forthcoming with their clients. Class room training must be ideally provided by the ethics manager.
- Online training: Online training would be practical for those sales employees who are working from abroad. Online training can be conducted over Skype or via video conferencing and it needs to be an interactive session.
The program needs to be evaluated in the following manner:
- Taking online tests based on the training content and analyzing the employee performance based on the test scores.
- Taking feedbacks from the end customers by asking them to fill questionnaires and customer feedback forms. The questionnaire and feedback form would be designed in such as manner in which it can bring forward whether the employee has acted ethically with the customer or not. For example, there can be a question: From a scale of 1 to 10 how would you rate our company’s commitment towards your need?
Conclusion
Once a proper ethics program has been created and implemented at XYZ Inc., it is a job of the ethics manager to analyze the results of the program and take necessary action. If it is found that the sales personnel are still over-selling to their customers, a stern action must be initiated. Such sales persons must be either asked to improve in a specific span of time or leave the organization.
References
Manikutty, S. (2011). Being Ethical: Ethics as foundation of business. IIM Books, India. Print.
Notes (Attached) Creating and delivering Ethics Education. Print.
Kotler, P., Keller, L., Koshy, A. (2009). Marketing Management. United States, Pearson. Print
Sekerka, L. (2014). Ethics Training In Action. United States, Information Age Publishing Inc. Print.
Singh, K. (2009). Organization Behavior. India, Pearson. Print.
