A question of ethics.

A Question of Ethics

If you have ever been exposed to the currently faddish parlor game "Scruples," it has probably been brought home to you how tough some everyday ethical questions can be. After a few minutes participating in this game, it becomes pretty obvious that each of us tends to develop our own standards of ethical behavior.

Individual ethics help us in handling everyday ethical questions that arise in our personal lives. However, serious conflicts may occur in our business dealings. This is particularly true in the marketing area, which provides a veritable minefield of ethical problems.

Marketers' ethics often have been described as questionable at best and abusive at worst. Whether this generalization applies to the casting industry depends largely on what particular foundry we are talking about, and the attitudes and ethical values of its management.

Good business ethics appear to pay off. Virtually all the top performing companies have at their core a well-defined set of shared values, particularly ethic values. While these are, admittedly, hard to measure, the negative aspects usually center on the concept of employing some form of deception in order not to let an opportunity slip by or avert a short-term financial loss.

Unethical Practices

Some fairly typical examples in the marketing area are trading price information with a competitor on a particular job; exaggerating operating rates to induce buyers into volume commitments and discourage price negotiation; overstating casting quality levels and QC capabilities to get a particular job; and promising unattainable delivery dates.

Add to these other practices, such as promoting rumors about competitors, off-loading work without the customer's knowledge, inflating surcharges and predatory practices with sales reps. Opportunities and temptations in the marketing area are seemingly endless.

Unethical practices also are common internally. Marketing people routinely underforecast in an effort to improve their bonus compensation. Some managements have a variety of ways in which they take advantage of sales and marketing people, frequently failing to honor commitments with respect to territories and compensation.

Enforcing ethical behavior in sales and marketing people is not easy. Many casting salesmen operate quite independently; their sales manager may not be aware of their unethical practices. On the other hand, the sales manager may choose not to discipline a heavy hitter because it could cause a serious problem.

Since sales managers are frequently rewarded on the basis of how successful their salespeople are, they may choose to look the other way, ignoring questionable ethics in some sales situations. This is the case particularly when there are no apparent negative consequences and where top sales performers are involved. They are much more inclined to get tough with a poor producer.

Sales managers who choose to ignore their people's engaging in questionable practices are courting disaster. Substantial business could be lost, a lawsuit could arise and your foundry's reputation could suffer. If your salespeople are employing unethical practices, then sales management must somehow be rewarded for enforcing ethical behavior and punished when violations are ignored.

Like handling most company problems, top management must set the example when it comes to ethical behavior. When top management creates an atmosphere that emphasizes high ethical values and takes an active role in promoting them, the ethical commitment of the entire organization will increase. Emerging will be a set of standards that delineate the right things to do and the things the company considers worth doing.

Many managers in our industry believe that ethical behavior and values are just good common sense and need no articulation. Because the top manager has a reasonably good code of ethics, it is assumed that his value system will magically trickle down through the organization. Unfortunately, it doesn't happen that way.

If employee behavior is to be influenced, ethical values must be spelled out and action programs devised to communicate rules and norms of behavior to all levels of management, and particularly to marketing people. The more marketers perceive their company's concern for ethics, acting ethically and rewarding ethical behavior, the more positive will be their commitment to ethical behavior.

Setting an Example

To succeed in the ethics game, top managers will have to give more than lip service to the task. They will have to be the standard bearers and moral leaders of their organization. They will have to show concern for and reward ethical behavior. And, above all, they will be required to define and communicate ethical principles underlying the foundry's policies, practices and goals. Top management has to articulate what it considers right and wrong.

Several ethical guidelines can be helpful in structuring those for your company. The Codes of Ethics of the American Marketing Association are good but too general to be of any real help. Far more useful will be sample codes and video training programs, such as those produced by the Ethics Resource Center, 1025 Connecticut Ave N.W., Suite 1103, Washington, D.C. 20036; 202/223-3411.

For further guidelines that will prove useful in drafting your company's code of ethics, also contact the Center for Ethics, Arizona State University, Tempe, AZ 85287; 602/965-2895.

An interesting approach to gauging ethical values of key people in your organization is SPOT, an audit designed by Training Associates, 1177 Rochingham, Richardson, TX 75080. This test also is helpful in predicting how people will react under ethical pressure.

If you have not yet become involved in developing a formal program to improve your company's ethical posture, now might be a good time to consider the many benefits of making sure at least your marketing people are on the proper ethical track.