Reference no: EM132896098

BUSINESS ETHICS CASE STUDY, the questions are at the bottom.

You are the manager of an independent high street shoe store, specializing in fashionable shoes for men and women. Your staff comprises a small team of eight salespeople who all take part in selling shoes, checking and maintaining stock, and processing sales and orders. You run a pretty successful operation, but there is intense competition from major shoe-store chains as well as one or two other independent stores in the city where you are located. To motivate your staff, a couple of years ago you introduced an incentive scheme that gives employees 5% commission on everything they sell. This has worked pretty well-the store has maintained profitability and the employees are all fairly well paid.

You have recently hired a new salesperson, Lola, who has made quite an impact on sales. She not only seems to be enjoying a great deal of success selling shoes, but she has also proved to be popular with everyone in the store, including the customers. Since she has arrived, though, Lola has also been giving you some cause for concern. Although no one has complained about her, you have noticed that, at times, some of her successful sales techniques do not always involve her being completely truthful.

For example, on one occasion last week you noticed that she was serving a customer who was plainly unsure whether to purchase a particular pair of shoes. Lola obviously thought the shoes suited the woman, but to create a little more urgency, she said that the model the woman was interested in was the last pair in stock and that she did not think the store would be able to get any more for another month. However, you knew for certain that there were at least five or six pairs in the stockroom, and that reordering when they were sold out should only take a week. Still, the customer eventually decided to buy the shoes, and once she had made the decision, she seemed delighted with them.

Then yesterday, Lola was serving a man who obviously wanted a particular pair of shoes that he had seen in the window. She asked him his size (which was 43), but when she got to the storeroom she discovered that there was only a 42 and a 44 in stock. She asked you if you knew whether there was a 43 anywhere but you had to tell her no-you had sold the last pair yourself only the day before. Undeterred, Lola picked up both the 42 and the 44 and took the shoes back out to the man. Giving him the 42 first, she said to him that the company did not sell 'odd' sizes and they only came in 42 and 44. The customer tried on the 42, but obviously found them too small. While he was doing this though, Lola took out the 44 and carefully placed an additional insole in the bottom of the shoe. 'Give this a go,' she said handing the shoes to the man. 'This should do the trick.' To his delight, they fitted fine and he said he would take them. At this point, Lola mentioned that because the manufacturer did not do 'odd' sizes, she had put insoles into the shoes, which would cost an additional €3. Still pleased with the shoes, the man paid for both the shoes and the insoles and left.

You were unsure what to do about the situation. Although the customers seemed pleased with their purchases, Lola was clearly lying to them. Would there be any long-term repercussions of such practices? And what would the rest of the team think about it? Would they start copying Lola's successful sales techniques?

QUESTIONS

1. What are the arguments for and against Lola's actions?

2. Do you think such practices are common in sales situations? What would you think if you were a co-worker or a customer of Lola's?

3. To what extent do you think your incentive scheme has contributed to Lola's actions?

4. How would you approach this situation as Lola's manager?