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Information Requirements and the Characteristics of Sales Situations

Published online by Cambridge University Press:  23 January 2015

Norman Mooradian
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Abstract:

The focus of this paper is the ethics of information giving in the context of complex sales. It is argued that, while current theories provide a broad framework for describing the responsibilities of sales agents, they lack adequate descriptions of the conditions characteristic of complex sales situations. Without an adequate model of complex sales, ethical theories will fail to provide guidance to sales agents facing issues that arise from features of sales situations not accounted for in the theories. To motivate this claim, I develop a brief case study in the area of information system sales. The problem can be remedied, however, if the theories take into account the features of complex sales. A tentative list of such features is presented and their relevance to the case is discussed. One of the most important to emerge is the epistemic role of the buyer as the judge of competing information.

Type
Articles
Information
Business Ethics Quarterly , Volume 14 , Issue 1 , January 2004 , pp. 123 - 139
Copyright
Copyright © Society for Business Ethics 2004

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References

Notes

1 The organization can be commercial, not-for-profit, or governmental. The important factor is that it is relatively large and not a small to mid-size business (SMB). SMBs do not usually issue requests for proposals. Also, the case requires that the request be for a proposal, not a quotation. Requests for quotations (RFQs) ask for pricing on specific items, as opposed to asking for a proposal on how to meet a need or solve a problem, and what that would cost.

2 David Holley, “A Moral Evaluation of Sales Practices,” Business and Professional Ethics Journal 5 (1986): 3–21.

3 David Holley, “Information Disclosure in Sales,” Journal of Business Ethics 17 (1998): 631–641.

4 Ebejer and Morden, Journal of Business Ethics 7 (1988): 337–339.

5 Thomas Carson, Business Ethics Quarterly 11 (2001): 275–306.

6 For a response from Holly, see “Alternative Approaches to Ethics,” Business Ethics Quarterly 12 (2002): 73–82.

7 A similar attempt to critically review certain normative theories in light of a fuller characterization of the relevant business practices can be found in Manuel Velasquez’s paper, “International Business Ethics,” Business Ethics Quarterly 5 (1995): 865–883. Velasquez criticizes certain rights-based theories of international business on the grounds that the problems caused by multinational corporations have more to do with the practices of particular business functions such as accounting than a denial of human or civil rights on the part of the corporations. My paper is also concerned with a possible disconnect between the theories and the actual business practices, though the theories I look at are narrower in scope and hence more focused on a particular set of practices. My contention is that they have focused too much on small, retail type sales and would benefit greatly by adjusting their theories to address the issues that face sales persons in large, complex sales.

8 The names of the companies and the data standard were invented for the case. If any is similar to a real name, that was unintentional.

9 It is important to note that Holley’s mutual benefit rule focuses on how much information a seller should give when the buyer is not asking questions. In such cases, the seller is faced with the question of what the buyer knows and how much effort she should make to educate the buyer. In the test case the buyer knows that he does not know whether the protocol is met and is asking the seller whether it is. This is a different situation altogether.

10 For a description of the difference between small, simple sales and large complex sales see SPIN Selling by Neil Rackham. (McGraw-Hill: 1998) The book presents research concerning the success factors of large sales and shows how they differ from those of small sales. Rackham does not depart from the traditional stages of a sales process: Preliminaries, Investigating, Demonstrating Capability, and Obtaining Commitment. Rather, he argues that each stage is addressed differently and that in large sales some stages have much greater importance (e.g., investigating).

11 The distinction I am drawing between causally simply and causally dynamic, complex products is clearly going to be oversimplified and will not fit every case. It is intended to function at the level of common sense and to be a first pass at trying to capture the complexity of some kinds of products, especially as they are open to influence from external or environmental factors. Hence, Carson’s case of an insurance sale, in which he is advised not to take on a less expensive, short term policy because he would not be guaranteed coverage from his employer-based insurance, is an example of a potentially complex product that, in this case, at least, it not overly complex. It is easy to state the pros and cons, though the decision to take a risk might be difficult. Insurance can, however, get very complicated, even for consumers, if one attempts to determine which policy is most cost effective against possible risks. The complexities come from comparing the coverage benefits in terms of what they cover, how much they cover, when they cover it, for how long, etc., for a plethora of items taken singly and as a whole. However, the issue that Carson was facing was apparently describable in an office visit.

12 For a classic discussion of the pragmatics of belief, see James “The Will to Believe” in The Will to Believe and Other Essays in Popular Philosophy (New York: Henry Holt & Co., 1912, 1–31). James argues that a person has epistemic warrant to adopt a belief over others if it is at least as probable and will lead to beneficial action. The person should not miss an opportunity to act because he is waiting for all the evidence to come in, if action is required at a given time or the opportunity will be lost.

13 The salesperson occupies a social role that recognizes a dual obligation to be an advocate of her product acting in the interest of her company and a consultant acting to promote the interest of her clients. See Holly, “Information Disclosure in Sales,” p. 633.