Deck 17: Ethical and Legal Responsibilities of Sales Managers

Question 1

An Ethical climate is best created by firing anyone who does something unethical.

Answer 1

False

Question 2

It is ethical to spend more than $25 entertaining any one customer at a time.

Answer 2

True

Question 3

The company's code of ethics should be in writing.

Answer 3

True

Question 4

It is important that salespeople share all information which is relevant to the buyer's decision.

Question 5

The law affects ethical standards.

Question 6

Unrealistic sales goals cause much unethical sales behavior.

Question 7

Most companies have a code of ethics.

Question 8

The ethical thing to do in a situation is usually rather clear cut.

Question 9

There is usually a generally accepted agreement about what is and is not ethical behavior in an industry.

Question 10

Entertaining customers poses many ethical problems.

Question 11

Ethical behavior is essentially a short-run question.

Question 12

Most salespeople do not give gifts over $100.

Question 13

It is easy to be ethical when no hardships are involved.

Question 14

Over 90 percent of sales reps survyed admitted to selling products to their customers which they don't need.

Question 15

It is usually ethical for salespeople to give gifts to customers.

Question 16

Commonly accepted standards of selling behavior have been established by society.

Question 17

A sales rep posed with an ethically troublesome sale should inform management about it.

Question 18

If an organization has a code of ethics,it is a concrete sign that the organization cares about whether or not its employees are behaving in an ethical manner.

Question 19

Customers consider the ethical reputation of companies when selecting vendors.

Question 20

In a survey of salespeople nearly half of them admitted to taking part in some illegal or unethical activity.

Question 21

Written codes of ethics:

A)Are an important part of developing an ethical climate.
B)Are commonly encountered in most firms.
C)Can be made into law by filing them with the county clerk.
D)All of these.
E)None of these.

Question 22

Regarding the pressure to compromise one's personal ethics:

A)Some executives believe that they have to compromise their personal ethics to achieve company goals.
B)These pressures are not found outside of sales management situations.
C)It is more difficult to be ethical when sales and profits are increasing than when they are decreasing.
D)Most sales executives believe that their peers in competitor firms would not compromise their personal ethics.
E)Most executives believe that business ethics are lower than ethics in society at large.

Question 23

Which of the following statements is most true?

A)Ethics are determined by the law.
B)The law covers just about all of the truly ethical problems that arise in business.
C)The law can not cover most of the ethical dilemmas that face business people.
D)Ethics and the law are synonymous.
E)The law can be unethical.

Question 24

Most salespeople:

A)Do not give gifts in excess of $25.
B)Do not give gifts at all.
C)Give gifts in excess of $100.
D)Give gifts only to current customers as a "thank you "for their business.
E)None of these.

Question 25

It is an unfair business practice to cut prices in order to make a sale.

Question 26

Salespeople who continue to violate codes of ethics,after being warned for previous violations,should be fired.

Question 27

Under U.S.law,facilitation payments are illegal.

Question 28

A time-tested guideline to help sales executives avoid gift giving that is unethical or in bad taste is:

A)The giving of gifts to customers and their families should only occur during the holiday season.
B)Making sure the value of gifts be kept low to avoid the appearance of undue influence on future purchase decisions.
C)Only give gifts to large prospective customers in the anticipation of an order.
D)A and B only.
E)All of these.

Question 29

Which of the following statements is true?

A)Most of us believe that we generally act in an ethical manner.
B)It is sometimes difficult to determine the ethical thing to do.
C)Most of us know down deep when we have done something that is somewhat tainted ethically.
D)All of these.
E)None of these.

Question 30

Push money is:

A)Illegal.
B)Unethical.
C)A waste.
D)All of these.
E)None of these.

Question 31

To evaluate the ethical status of a proposed action,which of the following questions is a good guideline?

A)Would I want this action publicized in a national media?
B)Would I do this to a good friend?
C)Is this sound from a long-range point of view?
D)All of these are good guideline questions.
E)Only two of A-B-C are good guidelines.

Question 32

What percentage of sales reps surveyed admit to having been involved in some illegal or unethical activity?

A)10 percent.
B)50 percent.
C)25 percent.
D)75 percent.
E)90 percent.

Question 33

Regarding business ethics and sales management:

A)Sales managers should not practice caveat emptor (let the buyer beware)philosophy.
B)It is difficult to act in an ethical manner when sales and profits are increasing.
C)Ethics are not related to standards of moral behavior.
D)A long-run point of view is of no help in solving ethical questions which arise on a current,day-to-day basis.
E)Written codes of ethics should be avoided because they become inflexible.

Question 34

Cooling-off laws apply equally to all types of customers.

Question 35

Ethical training is one effective means of reducing the occurrence of unethical behavior.

Question 36

Under U.S.law,subordination payments are legal.

Question 37

The main problem with using the Golden Rule as a basis for ethical evaluations is:

A)No problem at all.
B)Few people know what it is.
C)Few people believe in it.
D)People hold different values.
E)It's illegal.

Question 38

Salespeople are often more exposed to ethical pressures because:

A)Of their unsupervised settings.
B)They are continually faced with finding unique solutions.
C)They are often evaluated on the basis of short-term objectives.
D)They are primarily responsible for generating the firm's revenues.
E)All of these.

Question 39

Some guidelines or questions that may help a sales executive evaluate the ethical status of a proposed action include all of the following except:

A)Is this sound from a long run point-of-view?
B)Would I do this to a friend?
C)Will this increase share holder gain?
D)Would I want this action publicized in national media?
E)Would I tell others about this?

Question 40

Differences in the ethical codes of people arise from:

A)Their legal systems.
B)Their age.
C)The culture in which they were reared.
D)All of these.
E)None of these.

Question 41

Which of the following is a potential punishment for a sales manager who ignores the unethical/illegal activities of his/her reps?

A)Being fired.
B)Being fined.
C)Being imprisoned.
D)All the above.
E)None of these because it is the rep who commits the violation.

Question 42

With respect to ethical situations involving salespeople and their customers:

A)It is unethical to entertain customers in hope of making a sale.
B)Normally a sales rep should not pass on to one customer important information about another customer's marketing program.
C)Salespeople should not give gifts to their customers.
D)It is ethical for a sales rep to bribe a customer,so long as both parties are aware of what is happening.
E)Entertaining customers does not pose any potential ethical questions.

Question 43

All of the following are accurate generalizations about gift-giving and entertaining by salespeople,except:

A)Entertaining should be done to develop long-term business relationships rather than to get a one-time order.
B)Entertainment is not a substitute for a good product or effective servicing of an account.
C)Gifts should not be given before a customer does business with a firm.
D)The Internal Revenue Service does not place a limit on deductible gifts as long as the seller (gift-giver)can show that it is a legitimate business expense.
E)All of these are correct.

Question 44

What percentage of companies have ethics codes?

A)84 percent.
B)25 percent.
C)40 percent.
D)97 percent.
E)10 percent.

Question 45

Regarding ethical behavior:

A)Training doesn't do much good because questions of ethics can only be decided by the individual.
B)Training can increase ethical sensitivity.
C)Training can improve skills for dealing with unethical situations.
D)Training is not needed because most salespeople are ethical.
E)Both B and C above are true.

Question 46

All of the following are ways that management can encourage its salespeople to stay on the "straight and narrow" (that is,act in an ethical manner),except:

A)Develop and circulate a written sales-ethics policy.
B)Provide the sales reps with an unlimited entertainment expense account.
C)Set realistic sales goals.
D)Resist a prospectively shady deal.
E)Encourage the reps to call for help when they face an ethically troublesome sale.

Question 47

Sales managers and sales managers and salespeople of U.S.companies who work overseas:

A)Must obey the laws of the country they are in and not U.S.laws.
B)Must obey U.S.laws only.
C)Must obey both U.S.laws and the laws of the country in which they reside.
D)Will have immunity for minor violations of the laws of the country in which they reside.

Question 48

A facilitation payment:

A)Is illegal.
B)Is a payment of relatively small sums of cash to expedite performance of a task.
C)Is only common in the U.S.
D)Involves a larger amount of money than a subordination payment,
E)None of these are correct.

Question 49

Giving gifts:

A)Is illegal.
B)Is controlled by the I.R.S.
C)Can be effective.
D)In unethical.
E)None of these.
(Note to the instructor about answer: The I.R.S.does not control gift giving;it just limits how much one can deduct for income tax purposes for doing so.You can give whatever you want to give. )

Question 50

Which of the following statements is true:

A)One study indicated that ethics in business were definitely lower than those of the general public.
B)There are few real ethical problems in most businesses.
C)While important,ethical problems seldom cause the sales manager any real trouble on the job.
D)All of these.
E)None of these.

Question 51

It would probably be considered ethical for a sales manager to:

A)Accept a job with a competitor taking good customers with her.
B)Take large accounts away from sales reps being paid on a commission basis.
C)Fire a rep that manager did not like.
D)Give preference in territories and quotas to personal friends on the sales force.
E)None of these.

Question 52

Which statement about gift giving is true?

A)It is unethical to give gifts.
B)It is illegal to give gifts.
C)It is a waste of money to give gifts.
D)All of these.
E)None of these.

Question 53

In a sales manager's relations with the sales force,ethical considerations are least likely to arise in connection with:

A)Recruiting sources to get new salespeople.
B)The handling of expense accounts.
C)Splitting a rep's territory.
D)Giving references for a former salesperson.
E)Promotions into a better job.

Question 54

The terms la mordida in Latin America,la bustarella in Italy,and baksheesh in the Middle East all refer to:

A)Customer entertainment.
B)Using local middlemen to reach a market.
C)The word "sale" in the local language.
D)Bribery.
E)None of these.

Question 55

Codes of ethics can be effective guides to salespeople's behaviors:

A)If they prohibit all illegal acts.
B)If they were written by the FTC.
C)If they decrease role ambiguity.
D)If they are enforced.
E)They are never effective as deterrents.

Question 56

Which of the following acts is least likely to be considered unethical?

A)Salesperson offers a bribe to a purchasing agent.
B)Sales rep entertains her customers.
C)Sales manager refuses to give a star sales rep a good reference when the person takes another job.
D)Sales manager changes jobs and takes his entire customer list with him to the new firm.
E)Management regularly classifies large accounts as "house accounts."

Question 57

To encourage its salespeople to act in an ethical manner,management might do all of the following except:

A)Institute expense controls.
B)Communicate to them during training that management expects them to act in an ethical manner.
C)Pay on a straight commission basis.
D)Discuss ethical problems in company media.
E)None of these.

Question 58

A sales rep who quits the company to go to work for a direct competitor:

A)Is unethical.
B)Can not use any information gained in the previous job for the benefit of the new employer.
C)Can not take any customers with him/her.
D)All of these.
E)None of these.

Question 59

Bribery:

A)Is illegal in the U.S.
B)Can be effective.
C)Can lead to career jeopardizing incidents.
D)Can lose customers.
E)All of these.

Question 60

Regarding the business and ethical considerations involving bribes and entertainment:

A)Ordinarily entertainment in selling is not a good substitute for a good product or the effective servicing of an account.
B)Good sales reps do not use entertainment in their selling processes.
C)Entertainment is rapidly disappearing as a business practice today.
D)After the international scandals in the 1970's,bribery is no longer a problem in selling.
E)Regarding bribery,a good rule to follow is: "If it works,use it."

Question 61

Facilitation payments are:

A)Small sums of money paid to low ranking officials to expedite normal services.
B)Large sums of money paid to entice someone to commit to perform an illegal act.
C)Illegal under U.S.law.
D)Legal only in the U.S.
E)Used to supplement the international salesperson's income.

Question 62

State laws (and FTC regulations)of the "cooling off" type have the greatest effect on:

A)Misleading advertising.
B)Deceptive packaging and labeling.
C)Price discrimination.
D)Door-to-door selling.
E)Use of bribes and excessive entertainment.

Question 63

The Robinson-Patman Act is most directly related to:

A)Deceptive and misleading advertising.
B)Breaking up monopolies and combinations in restraint of trade.
C)Price discrimination.
D)Truth in packaging.
E)Misleading sales talks by salespeople.

Question 64

Sales force activities are least likely to be directly affected by the:

A)Municipal "Green River" ordinances.
B)Sherman Antitrust Act.
C)Robinson-Patman Act.
D)State "cooling-off" laws.
E)Federal Trade Commission Act.

Question 65

Deliberately misleading the customer about some relevant fact in the proposition:

A)Is a felony.
B)Is usually done in selling.
C)Can provide the basis for invalidating a contract.
D)All of these.
E)None of these.

Question 66

Regarding a company's ethical reputation:

A)Customers are often unaware of vendors' ethical reputation.
B)Customers don't care as long as the unethical behavior doesn't involve their own company.
C)It has become a factor in a customer's choice of vendors.
D)A company does not have an ethical reputation.
E)A and B are both correct.

Question 67

Which of the following management attitudes is most likely to lead to unethical selling behavior?

A)To the victors belong the spoils!
B)Make the sale.
C)Losers walk.
D)All of these.
E)None of these.

Question 68

Telemarketing may have many serious ethical problems because:

A)The buyer cannot easily say "No."
B)The face-to-face confrontation between buyer and seller breeds much mischief.
C)The sales reps sell to customers that they never see or know.
D)All of these.
E)None of these.

Question 69

A U.S.company which conducts business abroad:

A)Must pay a bribe if it wishes to do business in certain countries.
B)Should leave a "little envelope" with Italian bureaucrats in order to cut through the red tape.
C)Is subject to laws regardless of the country in which they are conducting business.
D)Must adapt to the notion of "When in Rome,do as the Romans do".
E)None of these.

Question 70

Which of the following is not punishable under U.S.law?

A)Deceptive selling procedures that result in the customer's misuse of the product.
B)Making disparaging remarks about a competitor.
C)Bribing customers in a foreign country.
D)All are punishable under U.S.law.
E)All are not punishable.

Question 71

Sales managers:

A)Should not worry about the ethical behavior of their salespeople because they have little influence over it.
B)Cannot be held responsible for the illegal behavior of their salespeople.
C)Cannot influence the ethical behavior of their salespeople.
D)Cannot be held responsible for the unethical behavior of their salespeople.
E)None of these are true.

Question 72

The various state "cooling-off" laws have the greatest effect on:

A)Discriminatory pricing.
B)Bribery in selling.
C)Door-to-door (in-home)selling.
D)Gift-giving by salespeople.
E)Deceptive advertising.

Question 73

Unfair competition can be:

A)Making misleading statements to customers.
B)Bribery.
C)Lying about the competition.
D)All of these.
E)None of these.

Question 74

Establishing an ethical climate:

A)Is not something managers on which managers can have much impact.
B)Is done by just making it clear what the company considers ethical or unethical.
C)Is done by enacting policies that discourage,monitor and correct unethical behavior.
D)Does not discourage an individual from being unethical.

Question 75

Price discrimination:

A)Is widely practiced.
B)May be illegal.
C)Can be effective.
D)All of these.
E)None of these.