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Volume 4, Number 1, January – March’ 2015

ISSN (Print):2279-0918, (Online):2279-0926

PEZZOTTAITE JOURNALS SJIF (2012): 3.53, SJIF (2013): 5.085

International Journal of Entrepreneurship & Business Environment Perspectives © Pezzottaite Journals. 1614 |P a g e

ENTREPRENEURIAL ETHICS AND SALES CHANNEL SELECTION

Rajiv Kumar Dwivedi42 Dr. Devendra Kumar Pandey43 Dr. Anil Vashisht44

ABSTRACT

As we, all know that one of the most important, critical and vulnerable function of any business is sales whether the business

is small or big in nature. This function is the essential of our economy and should be given due importance for ethical

consideration. In fact, sales are and should be one of the focus areas for any entrepreneur while building an ethical culture

during critical decision-making. This is because sales is one function which bears a public image, creates brand identity,

passes marketing message and enables the sales representatives to touch the consumer and customers directly. Entrepreneurs

have the choice from a variety of sales distribution channel for offering their product and services to their customers. Whether

the option to choose an online selling option, telemarketing or direct selling, each channel has its own benefits, challenges,

and ethical considerations as well. The purpose of this paper is to put across the strategic importance of ethical consideration

for an entrepreneur

KEYWORDS

Entrepreneurship, Ethics, Sales Channel, Online Sales, Catalogue Sales etc.

INTRODUCTION

The word entrepreneurship has gained lot of importance in last two to three decades in the Indian sub-continent. The benefits,

which old generation entrepreneurs are reaping, are the major attraction to the new generation but the challenges are also there to

be conquered. Apart from lot of other challenges, one of the biggest challenges is building up an enterprise on ethical foundations.

In fact sales are and should be one of the focus areas for any entrepreneur while building an ethical culture during critical decision

making. This is because sales is one function which bears a public image, creates brand identity, passes marketing message and

enables the sales representatives to touch the consumer and customers directly. As per the economic theory of reducing or

minimizing transaction, cost a framework can be presented which is based on three critical factors:

The cost of choosing, using and disposing a sales channel.

The cost of managing the channel.

The opportunity lost cost.

Small and medium entrepreneurs, which constitute more than 70% of Indian business, face lot of ethical challenges. Few of the

challenges are listed below:

Powerful bias for action: Because of this strong attitude entrepreneur sometimes may be biased towards few immediate gains

and can adopt an unethical behavior at times

Personal values: In case an entrepreneur has a poor value system because of his upbringing, he may get entangled with unethical

practices for short term gain.

Small vision: If entrepreneurs (mainly small entrepreneur) lack a big vision then there are fair chances that he may be diverted

from his mission or goal and can adopt unethical practices at times.

Lack of brand recognition: This is one challenge, which mainly small entrepreneurs face, and sometimes because of the lack of

brand recognition, the entrepreneur faces lot of competition in the market and their survival comes at stake.

Poor cash flow: Many of the times an entrepreneur floats the firm with lot of ambition but he is stuck midway because of poor

cash flow and heavy debts. This may force an entrepreneur to go for a cash flow and adopt unethical practices.

ETHICS AND SELLING

Talking about ethics in sales function includes how sales force behave when they are faced with situation where in they are

expected to behave ethically but in many of the situation they do not do so. For example, a sales person is asked few questions

from the consumer or customers regarding the efficacy, reliability, quality and performance of a particular product, the sales

42Assistant Professor - ABS, Amity University, Madhya Pradesh, India, [email protected] 43Assistant Professor - ABS, Amity University, Madhya Pradesh, India, [email protected] 44Director, ABS, Amity University, Madhya Pradesh, India, [email protected]

mailto:[email protected]







person has the option of saying the truth or committing false promises or manipulate the facts. This a sales person does for short-

term gain (i.e. to increase the sales of his product because of one or many reasons like pressure of sales target etc.), which

normally does not match with the mission or vision of enterprise and can harm the objective of enterprise in long run. Normally

unethical behavior in sales functions include misleading someone about the product shortage, misleading someone about the

frequency of the use of a particular product, misleading someone about the multi domain uses of a product or over committing a

potential buyer about the efficacy of a product among others. The following sub functions of sales are touched in brief with

reference to the potential for unethical practices:

Catalogue Sales: Catalogue sales have grown multifold in Indian markets from the past 2 decades. It is commonly used way to

offer a bunch of products that target the need of the particular group of people who have the inclination to order from the

catalogue. Entrepreneurs use this kind of practice to target an unreachable market or a niche segment to get start off sales. With

the increasing role of e-commerce, the role of catalogue sales is diminishing day by day.

Online sales / e-commerce: With the internet revolution the online sales of e-commerce is gaining momentum day by day. Even

the large offline players are keeping a close watch on this growing segment. Lot of business conglomerates has shown interest in

this segment, which includes TATA Group (Mr. Ratan Tata) as well. Since in this kind of sales channel the sellers and buyers are

not face-to-face so the chances of unethical practices are there.

E-Sales (E-mails): Today E-sales or Sales through electronic media like Push Mails, one to one mails, E-news letters or E-

Brochures are gaining lot of acceptance as today all the corporate communication depends on this mode and also the E-commerce

companies are targeting the new generation for their products and services as the new generation is very tech-savvy. The sales

through electronic medium are growing at a very high pace and the future of this kind of sales channel is very bright but

simultaneously the possibility of unethical practice is high.

Personal Selling: Personal selling, One-to-one selling, or Face-to-face selling is an evergreen mode of selling products and

services. It is a costly but very effective way of selling the products. This has a unique advantage that a potential buyer can put up

his queries/objections and can get clarifications before buying a product. In addition, the organisations have a big USP of

developing a long-term relationship with the customer. In fact, the word Relationship building or CRM has come from this mode

of sales only. Although fake promises or over commitments are the challenges.

Tele Selling: Tele-selling is also a commonly used mode of selling now days. This mode is also working well in Indian markets

and has its due market share. This selling has also come a long way that almost every consumer is exposed to this mode of selling

almost every day. This has become possible because of the telecom revolution, which took place around late nineties in Indian

markets. This is also one sales channel, which is vulnerable to unethical practices.

An entrepreneur looking to implement a sales channel decision for his/her enterprise needs to be very careful regarding the

benefits, cost involved, challenges and more importantly the ethical challenges for the long term survival and excellence of his/her

business. Apart from keeping a check or control on the different functions or operations an entrepreneur has to keep a vigil that no

unethical practice should get unnoticed in the best interest of the business. A model has been proposed below which may help an

entrepreneur to choose a right sales channel.

Figure-1

Sources: Authors Compilation





The above model can be a good help to an entrepreneur to see and analyze the viability of different sales channels based on the

cost involved in utilizing the sales channel and the possibility of effectively controlling the sales channel operational variables. As

we can see that in the above-proposed model the different sales channels have been divided in three different categories, i.e., Low,

Medium and High Cost of using the particular sales channel and Low, Medium and High level of control on different operational

parameters.

The article intended to bring together important aspects like sales channels, ethics, and control variables with reference to

entrepreneurship. The inseparable aspect of ethics with the sales function has gained lot of importance for the small, medium and

large entrepreneurs of not only India but also for the entrepreneurs across the globe.

The paper has tried to put the different options of sales channels for an entrepreneur and the available control variables for the

same so that the entrepreneurs can have an overview of the ethical considerations beforehand. Although the option of using

multichannel combinations also lies with the entrepreneurs. Further study in this field should be carried out in which it can be

checked that having a lower control on the sales operation function increases the propensity for the seller to indulge in unethical

practices. This can be tested by collecting and analyzing information from a sample of sales people from different organizations,

which have employed their own sales people and outsourced people. Structured questionnaires can be presented to the sample to

get an idea about their selling behaviour that could measure the degree of unethical or ethical practices.

With the increasing contribution of small, medium and large enterprise towards the economy of the nation and job vacancy

offerings, the ethical consideration towards the sales channel is becoming inseparable. Entrepreneurs of this era can use ethical

consideration as a competitive advantage tool and can excel well in business.

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