As the regional sales manager

As the regional sales manager

As the regional sales manager for the 5th largest sales territory for your company, representing 20% of your company’s sales and 23% of the company’s revenues, you have been asked to put together an ethics standard program for the sales organization. This program, if approved, will be included within both the company’s strategic plan and the company-wide sales strategy.

The sales structure is made up of five regional markets within the U.S. Each of the regional managers reports to the Senior Vice President (SVP) of Sales. Within each region are five sales teams headed up by a sales manager. Within each sales team, there are 5-10 sales representatives. Each sales representative has between 5-10 customers. The sales representatives (SRs) are on a salary and bonus compensation program. The bonus makes up approximately 30-50% of an SR’s annual compensation. The target bonus payout is 40%. The average annual salary is $80,000.00 per year. The bonus is awarded based on the percentage increase of sales over target for that given year.

As you begin the process of establishing an ethics program, you begin to receive pushback from two of the five regional sales managers, whose buy-in you need for the implementation of the ethics program. As you research further into the rationale or reason for this pushback, you uncover that there has been a constant shifting in customer assignments within both sales teams. It appears that many of the more senior representatives are assigned to customers that have matured in their business life cycle with the company’s products and have been assigned a higher percentage of the team’s sales targets based on historical contribution levels. Furthermore, you uncover that the less experienced sales representatives have been given those customers that have higher growth potential but have been assigned a lower sales target based on historical trending and/or future potential.

This situation has you quite concerned in terms of several ethical issues. However, you need to keep your ethics project moving forward. Key point: Both of the sales regions under question are headed by two newly appointed regional managers from outside the company. To complicate matters, both regions are furthest from world headquarters and are not frequently visited by the SVP of Sales. Each region contributes 5% and 7% of the company’s annual sales, respectively.

As one of the five regional managers, how do you handle this situation? What ethical issues are at hand within the two sales teams? How do you approach your colleagues and still get them to support your project? What other alternatives might you employ and/offer up to bring resolution to this issue? What customer relationship issues could exist? What human resource issues could the company be exposed to? What type of ethical behavior is being demonstrated and how could that impact the company’s reputation with stakeholders?
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