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MENDOZA IN THE NEWS

Collision course

Excerpted from Collision Course, an article by Theodore B. Kinni, which appeared in Selling Power, May 2006.

Publication: Selling Power

May 22, 2006

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The Expert Says

To see how widely ethical standards vary among the nations, Dr. Patrick Murphy, professor of marketing at Notre Dame’s Mendoza (College) of Business and co-director of the Institute for Ethical Business Worldwide, suggests a visit to Transparency International (www.transparency.org). The nonprofit watchdog group releases an annual Corruption Practices Index that ranks nations according to their degree of corruption as seen by business people and country analysts. In 2005, over two-thirds of the 158 countries rated ranked in the lower “more corrupt” half of a 10-point scale.

Maintaining ethical standards in such a diverse environment requires an explicit policy, training and communication, according to Murphy. Global companies first need to establish regional and sometimes country-specific policies that take into account local business practices.

“How much entertaining is acceptable?” asks Murphy. “In Japan, they have much more of a tradition for lavish business dinners and that is the way they do business. So I think that things like gifts and entertainment are ones that companies need to look at the local norms and make sure they are not violating customs. On the other hand, there was an article not too long ago in the Wall Street Journal about a guy at Volkswagen who was setting up meetings with call girls throughout the world and that crosses the line no matter what culture.”

Ethics policies must be communicated and supported by management. “I think what sometimes happens is that the sales managers or executives at the higher levels don’t spend enough time communicating what the principles and guidelines are and then, when their people run into trouble, they say, ‘Oh, how did that happen?’ Well, part of the reason is you didn’t let them know.”

Sales training should include ethics training. “When you do your sales training for beginning level salespeople or newly hired salespeople, there should be maybe a half-day component. I would argue that it not be limited to an hour, but to have a significant amount of time to say, ‘Here are some ethical problems and here is what you do,’” says Murphy. “You give them guidance so that they are not put in between a rock and a hard place out in the field.”

An important element of that guidance is to establish lines that can’t be crossed. “There are likely to be certain principles that always should be followed,” says Murphy. “We try to communicate with our students that some business isn’t worth having. They need to realize there are places where compromises can’t be made.”

Another important element in maintaining sales ethics is the creation and maintenance of lines of communication. “The sales manager in his or her own actions has to uphold the policies of the organization and also very openly communicate that if you run into issues that I am here to listen,” suggests Murphy. “I think that their openness to allowing people below them in the organization to run things by them reduces the probability that things are going on out in the field that a) they don’t know about, or b) they wish weren’t happening.”

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