Discuss the Ethical Behavior at Limited Supply.

CASE 4.3: ETHICAL BEHAVIOR AT LIMITED SUPPLY, INC. Bob Nolan is a sales manager for a Limited Supply, Inc., a hardware supplier based in Columbus, Ohio. Bob has been working at Limited Supply since he was a sophomore in college and worked in the shipping department loading trucks for customer orders. The industry has changed greatly since the early days. After Bob finished college, the general manager of Limited Supply gave him an account representative job. Along with this new job, he received a list of current accounts to take care of, a territory to manage, and the expectation that he build his customer list. Limited Supply’s value proposition was to help source and manage supply contacts for its customers on any type of hardware item so that the customer could get all of their needs filled with one source. Back when Bob was learning how to sell effectively in this industry, it was all about relationship selling and the ability to manage inventory at 1. Limited Supply to meet customer demands while also minimizing risk and holding cost. All that Bob needed to do his job was a suit, a daily planner, a briefcase, and a tank of gas. Over the past 15 years, the job has changed. Although Bob and his account represen- tatives spend a significant time in front of their customers and still work on the customer relationship, customer expectations are different and the tools used to meet those expec- tations have changed. Now every salesperson at Limited Supply has a list of technology devices used to “enhance their ability to make the sale. This list includes the following: 1. A company car complete with a GPS navigation system to make it easy to find the customer. 2. A smartphone with all the bells and whistles available, such as web search track- ing, call tracking, GPS location, and text tracking. 3. A laptop with a fingerprint scan connected to a mobile hot spot so that it can access the home office in over 97% of the lower 48 states. 4. A tethered barcode scanner to attach to the laptop so that the account representa- tive can take a physical inventory of the consigned goods at the customer location anytime that there is a visit. Consequently, the need to carry out this inventory is a good excuse to get an appointment with a buyer. 5. CRM software, so that with a quick search of his customer database, Bob can look at sales history, ordering patterns, forecasting, and customer personal information. Through the use of all of this technology, Bob’s team has increased sales on average 10% per year for the past ten years. The consigned inventory option has had increased inter- est over the past few years owing to the recession and the fact that customers are looking for ways to free up some cash flow. Also, it has been great for limited supply because they have been able to use this service as a way to get all of the hardware business for their customers. Bob has not researched into this, but he suspects that the increased availability of information has allowed some of his account representatives to gain an unfair advantage with customers, leading to higher sales. His southern New Jersey account representative, Ben, has doubled the size of some of his accounts in the past two years. Bob suspects that Ben has been getting access to competitor information which has allowed him to have an unfair advantage. He also suspects other account representatives of making other inappropriate use of the technology that has become available to them. Although the company ethics and use of technology policies have been clearly communicated, Bob thinks that there is some abuse going on. Unfortunately, although Limited Supply has the technical ability to track the use of technology within the sales force, the entire organization, which services 16 states, has an information systems staff of only four people. For this reason, tracking of sales force use of technology is impractical. Table 4.2 contains a list of common misuses of sales force automation (Bush, Bush, Orr, & Rocco, 2007). Bob thinks that ethics in sales must be a top priority and for this reason wants to attack any problems head-on. Bob feels that the value of Limited Supply is the service given to the customer, and the customer per- ception of Limited Supply is a key to keeping good customer relationships. He refuses to allow any degradation of the reputation of his company through unethical behavior. Table 4.2 Common misuses of sales force automation Definition Sales Force Automation Theme Sample Quote Frequency of Emergence Deception Inappropriateness Using information “Employees have gained access to the 15 technology for information gathered on clients for their personal advancement own personal uses … ranging from mere curiosity to identifying opportunities for bribery.” Using technology for “When we changed our insurance coverage 9 unsuitable policy from ‘married’ to ‘partners,’ one communication salesperson sent a mass email to the entire messages organization objecting to this.” Using technology to “We got the passwords and were able to log 13 get competitive on to the competitors’ websites to see how information we were doing. That way, we could always beat their deals.” Using technology to “Salespeople will pre-order products for the 11 falsify data customer when the customer hasn’t ordered them yet, in order to meet their quarter deadline.” Spying Manipulation Poaching 3 Salespeople jumping ship” and taking all their leads with them “The sales force gains tons of knowledge at trade shows and then salespeople jump ship and go to the competitor with it.” Surveillance Accountability 19 Using technology to “Some sales reps have been resistant to SFA 12 monitor sales force (sales force automation) due to ‘Big Brother’ behavior perceptions…” Ensuring that sales “Constant communication allows team activities are accurate members to avoid making unethical decisions by contacting management.” Limiting sales force’s “SFA has taken their (salespeople’s] 20 ability to negotiate autonomy away. We have a large turnover now, especially with the older reps.” Empowerment Source: Bush,