This document contains a case study about an IBM salesperson named Jack who faces an ethical dilemma. Jack sells a computer system to a customer that meets their current needs but will not be able to accommodate their future growth plans. When the customer's growth accelerates, Jack realizes the problem but does not inform the customer. The case study discusses what actions Jack should take and whether his initial actions were ethical. It also includes a discussion of ten ethical principles for salespeople, such as not lying, fixing misunderstandings, keeping promises and not speaking badly about others.

1. Ethics in Selling
MKT 508 – Summers 2022
Faculty: Faheem Vohra

2. Class Discussion on Ethics in Selling

3. Case Study on making Ethical Decision
Right for the Customer or Right for the Salesperson
Robert McMurrian, Ph.D. University of Tampa
Erika Matulich, Ph.D. University of Tampa
Salespeople have historically been challenged
with gray areas related to ethics and personal
selling. In this case study, we present an actual
event in which a salesperson was faced with such
a gray area; balancing the requirements of a sales
job with the needs of a customer.
This case abstract is representative of a real-
world scenario that the first author is familiar
with.
Jack was a very successful salesperson for
International Business Machines (IBM), a major
computer company, and was considered by his
peers and customers to maintain the highest level
of ethical behaviors.
IBM has a highly regarded reputation in the
computer industry for ethical behaviors toward
customers
Key Words: Ethics, Personal Selling

4. Case Study on making Ethical Decisions
Right for the Customer or Right for the Salesperson
Case Scenario/ Situation
 Toward the end of the year, Jack had exceeded
his annual sales goals to the extent that he
qualified for a level of compensation bonuses tied
to his annual sales attainment.
 During the latter part of September, a
salesperson from a computer forms company let
Jack know that one of the computer-forms
salesperson’s customers was getting ready to
purchase a business computer system from a
competitor of Jack’s company
 Jack immediately called the prospect and set up
an appointment.
 During the first appointment with the owner in
late September, Jack found that the prospect was
getting ready to purchase the competitor’s
system, but before doing so, wanted to see Jack’s
proposal.
Jack also discovered that the competitive system with
necessary software was priced around $30,000, which
the owner indicated was his company’s budget for the
automation project.
According to his survey, prospect would need a small
central computer with five attached workstations; three
displays/keyboards and two desktop printers.
Three workstations would be placed in accounting, 4th at
the order department, and the one at the warehouse.
One printer would be in the accounting office for daily
bookkeeping and one printer would be in the order
department/warehouse.
Additionally, Jack found that the prospect was projecting
additional growth in the business around 100 percent
over the next two years. A major factor in the prospect’s
decision was that the computer network had to be
delivered and installed by the end of the year.

5. Case Study on making Ethical Decisions
Right for the Customer or Right for the Salesperson
Task
 To generate sales & create long term partnership
with prospect keeping in my his growing business
will have an additional requirement of IBM’s
products in near future.
Actions
 Jack was somewhat discouraged in this case
scenario as he could not offer the system of that
price and his major concern was not only the
prospect’s low budget, but also the required
delivery timeframe that Jack could not meet with
any of his company’s current products.
 Jack was about the give up on the prospect as his
company announced a new business computer
that seemed to meet Jack’s prospect’s
requirements of five workstations in any
combination of displays/keyboards and had a price
under $30,000 and could be delivered in two
months.
Jack immediately configured a product solution for the
prospect consisting of the business computer, three
workstations, and two desktop printers that had a total
price of around $30,000 including the application
software for the prospect’s business.
Jack realized that his proposed business computer fit the
prospect’s current business requirements, but would not
be able to accommodate any future growth.
Jack, however, decided to go ahead and present the
proposal to the prospect but not inform the prospect that
the proposed product solution was limited to only current
needs.

6. Case Study on making Ethical Decisions
Right for the Customer or Right for the Salesperson
Results
 The prospect liked Jack’s proposal as compared to
Jack’s competitor’s proposal, and placed an order
for the business computer and software.
 Jack left the customer’s office very satisfied
because the last minute sale put him in the next
tier for bonuses for sales attainment. This sale
represented an extra $1000 in commission on the
sale.
 All went well. The business computer was
delivered and installed in December.
 Then there was good news and bad news.
 The good news was that Jack’s product solution
perfectly met the customer’s current needs and
the customer was delighted.
Then the bad news came. On the first business day
of January, the customer called Jack, told him how
happy he was with the product, and informed Jack
that he wished to move up his anticipated growth
schedule and immediately add additional
workstations displays/keyboards and printers).
At this point, Jack panicked knowing that the
product he had sold to the customer was at its
maximum capacity and could not accommodate the
customer’s growth plan, but thinking he had one or
two years to address the additional growth with
another product solution.
The customer expects Jack to set up an
appointment as soon as possible to place an order
for the additional workstations.

7. Case Study on making Ethical Decisions
Right for the Customer or Right for the Salesperson
Issue
 What should Jack do? Jack realized he could be in
trouble with both the customer and with his
company.
 The customer would probable realize the company
had purchased a business system that could not
expand to keep up as transaction volumes
increased the business grew rapidly over the next
few years.
 Jack’s company identified such sales behavior as
violating the company’s policies and grounds for
dismissal.
Discussion
1. Was Jack’s action ethical? Why or why not?
2. What would lead an ethical salesperson to act in
unethical ways? What factors (both internal and
external) possibly led to Jack’s situation with the
customer?
3. Should Jack discuss the situation with his
immediate manger?
4. How should Jack approach the customer and
what actions do you think Jack should take?

8. Case Study Discussion & Solution
Your Star Sales Person Lied,
Should he get a second chance?

9. The Ten Commandments for the Ethical Salesperson

10. 1. Don't intentionally misrepresent anything.
Never, never, never lie to a customer. About
anything. Ever. Period.
The Ten Commandments for the Ethical Salesperson

11. 2. Fix any important misunderstandings that
you can.
Your customer might form incorrect ideas about
offered products & services.
.
It's very tempting, when these misunderstandings
work in your favor, to ignore them.
That’s not acting with integrity.
When you become aware of any significant
misunderstandings your customer you need to
make sure the know the reality about it.
The Ten Commandments for the Ethical Salesperson

12. 3. Work hard for your employer.
It's easy for a salesperson to give in to the
temptation to cut corners when it comes to
working a full day, every day.
After all, who really knows if you hit your first call
at 9:00 A.M. instead of 8:30 A.M.?
And who knows if you take a 30-minute coffee
break between calls? And who knows if you make
it home by 3:00 P.M or visited a friend in office
timing.
Code of ethics is easy to live by when everyone is
watching. But it's a real test of character when
your ethics are tested in situations where no one
else knows, and you know you can get away.
The Ten Commandments for the Ethical Salesperson

13. 4. Always be willing to trade a short-
term loss for the sake of a long-term
gain.
This may be another definition of integrity --
the courage and conviction to walk away from
an unethical short-term gain in return for a
long-term gain.
In other words, always be willing to give up a
sale or some immediate advantage if you must
stretch the truth or act unethically to get it.
The ethical salesperson will correct the
customer and lose the immediate gain that
the sale would have brought. The payoff,
however, is the long-term gain in you
A long-term gain achieved ethically is always
worth more than any short-term advantage.
.
The Ten Commandments for the Ethical Salesperson
Stock Infiltration/Transshipment

14. 5. Do what you say you are going to do.
Don't over promise.
That's difficult to do when you're in the middle
of a competitive situation over a nice piece of
business, and you know the competition is over
promising to get the sale.
But, if you're going to be an ethical salesperson,
you won't over promise, because you know you
won't be able to do what you say you're going to
do.
Under Promise, Over Deliver. X
Promise what is right & deliver it.
The Ten Commandments for the Ethical Salesperson

15. 6. Give liberally.
As a distributor salesperson, you enjoy a
challenging job with a lot of freedom and a
substantial income level.
The world is full of people who would love to
have that. You're one of life's more fortunate
people.
I think that means that you have a greater than
average responsibility to give back to society.
Give in terms of:
 You Money
 Your expertise
 Your time
 Your people skills
 Your organizational skills
The Ten Commandments for the Ethical Salesperson

16. 7. Recognize those who help you
It's easy to get into the mind-set that you alone are
responsible for your success.
After all, you're out there all alone, fighting the
battle every day.
Nobody else knows what good work you did in
getting that account, or how hard it is some days
when nothing goes your way.
In spite of this, you couldn't do your job without
the support of a whole group of people back at the
office. Your manager gave you an opportunity and
nurtured you along.
All of these people, and probably dozens of others,
have contributed in significant ways to your
success.
The Ten Commandments for the Ethical Salesperson
It is just as dishonest to not recognize them as it is to
misrepresent a product.
The ethical salesperson recognizes those people who
have helped him.

17. 8. Continuously learn and improve.
You are not as good at sales as you can be. You
have yet to reach your potential.
One of the reasons why your employer hired
you for this position is that he/she saw potential
in you.
I believe you have an ethical obligation, not
only to your employer but also to yourself, to
become as good as you can be - to continuously
improve yourself.
When you decide that you are good enough,
that you know about all you need to know, you
quit learning and improving.
The Ten Commandments for the Ethical Salesperson
And when that happens, you rob yourself and your
employer of that potential you have that will not be
developed.
What a shame! It's not good business. And besides,
it's unethical.

18. 9. Never give up.
This may seem odd in a section on ethics, but I
believe that giving up is the same thing as going
home early or taking extra days off without anybody's
approval.
Both shortchange yourself as well as your employer.
When you give up prematurely on a sale, or you give
up on yourself and give into negative thinking, you're
choosing to deprive yourself and your employer of
the full benefit of your talent and time. That's
unethical.
The Ten Commandments for the Ethical Salesperson

19. 10. Don't speak badly about anyone.
In my first sales position, when I was selling
amplification equipment, there were 29
major installations purchased in my territory.
I got 28. My stomach still gets a little tight
whenever I remember one of my crucial sales
calls with the # 29 customer.
During the course of the conversation, she
stopped me and said, "You know, I really
don't like it that you're so negative about
your competitor." I was stunned,
embarrassed, and flustered. I turned beet
red, and stumbled out an apology. But that
was the end of that deal.
All because I had spoken badly about my
competitor. That was an intensely painful
lesson for me.
The Ten Commandments for the Ethical Salesperson
I resolved never to make that mistake again.
As I matured, I realized that, when you negatively
judge anyone, you really say more about yourself
than you do about the other person. Speaking badly
about a competitor, your boss, your company, or a
manufacturer, always makes you look bad. And
besides, it's unethical.