This chapter discusses the social, ethical, and legal responsibilities of sales personnel and management. It covers management's responsibilities to stakeholders, ethical behavior and dilemmas, and regulations regarding fair treatment of employees, customers, and other businesses. The chapter also explores how organizations can promote ethical practices through codes of conduct, oversight committees, and other structures to investigate issues and encourage ethical behavior.

2. C HAPTER 2 S OCIAL, E THICAL, AND L EGAL R ESPONSIBILITIES OF S ALES P ERSONNEL

4. M ANAGEMENT’S S OCIAL R ESPONSIBILITIES Social responsibility is management’s obligation to make choices and take actions that will contribute to the welfare and interests of society as well as to those of the organization.

5. Stakeholder Any group within or outside the organization that has a stake in the organization’s performance.

6. FIGURE 2.1 MAJOR STAKEHOLDERS IN THE ORGANIZATION’S PERFORMANCE

7. CCC GOMES This acronym is an effective way to remember an organizations stakeholders: Customers, Community, Creditors, Government, Owners, Managers, Employees, and Suppliers.

11. M ANAGEMENT’S E THICAL R ESPONSIBILITIES W HAT I S E THICAL B EHAVIOR? Ethical behavior refers to treating others fairly.

13. W HAT I S AN E THICAL D ILEMMA? An ethical dilemma arises in a situation when each alternative choice or behavior has some undesirable elements due to potentially negative ethical or personal consequences.

16. EMPLOYEE RIGHTS Rights desired by employees regarding the security of their jobs and the treatment administered by their employer while on the job, irrespective of whether such rights are currently protected by law or collective bargaining agreements of labor unions.

18. Cooperative Acceptance The right of employees to be treated fairly and with respect regardless of race, sex, national origin, physical disability, age, or religion while on the job as well as when applying and regarding a job.

23. Misrepresentation and breach of warranty are two legal causes of action.

33. Establish a Code of Ethics Code of ethics is a formal statement of the company’s values concerning ethics and social issues.

38. T HE B OTTOM L INE Ethics and social responsibility are hot topics for managers. Corporate social responsibility concerns a company’s values towards society. Salespeople and managers realize that their business practices, including international dealings, should be carried out in an ethical manner.