Exploring the unintended negative impact of an ethical climate in competitive environments

Abstract

To attain short-term performance, sales managers must motivate their salesforce to close deals (often through use of intra-firm competition). At the same time, to maintain long-term relationships, they must promote a highly ethical selling environment (which may be incongruent with use of intra-firm competition). The present study examines the interactive relationship between competitive psychological climate and ethical psychological climate in predicting salespeople’s ethical intentions and behaviors toward customers. A unique dyadic data set is used to predict salesperson ethical intentions and actual salesperson ethical behaviors reported by customers. For ethical intentions, an “executive control” perspective predicts improved ethical intentions toward customers. However, a “depletion” perspective predicts reduced ethical behavior during actual customer interactions. This result is provocative as fostering an ethical climate in conjunction with a competitive climate is found to reduce ethical behaviors in the eyes of customers, a finding clearly counter to what managers intend.

This is a preview of subscription content, access via your institution.

Fig. 1

References

  1. Ahearne, M., Lam, S. K., Mathieu, J. E., & Bolander, W. (2010). Why are some salespeople better at adapting to organizational change? Journal of Marketing, 74, 65–79.

    Article  Google Scholar 

  2. Ajzen, I. (1991). The theory of planned behavior. Organizational Behavior & Human Decision Processes, 50(2), 179–211.

    Article  Google Scholar 

  3. Babin, B. J., Boles, J. S., & Robin, D. P. (2000). Representing the perceived ethical work climate among marketing employees. Journal of the Academy of Marketing Science, 28(3), 345–358.

    Article  Google Scholar 

  4. Barnett, T., & Vaicys, C. (2000). The moderating effect of Individuals’ perceptions of ethical work climate on ethical judgments and behavioral intentions. Journal of Business Ethics, 27(4), 351–362.

    Article  Google Scholar 

  5. Baumeister, R. F. (2002). Yielding to temptation: self-control failure, impulsive purchasing, and consumer behavior. Journal of Consumer Research., 28(4), 670–676.

    Article  Google Scholar 

  6. Baumeister, R. F., & Heatherton, T. F. (1996). Self-regulation failure: an overview. Psychological Inquiry, 7(1), 1–15.

    Article  Google Scholar 

  7. Bellizzi, J. A. (1995). Committing and supervising unethical sales force behavior: the effects of victim gender, victim status, and sales force motivational techniques. Journal of Personal Selling & Sales Management, 15(2), 1–15.

    Google Scholar 

  8. Boichuk, J. P., Bolander, W., Hall, Z. R., Ahearne, M., Zahn, W. J., & Nieves, M. (2014). Learned helplessness among newly hired salespeople and the influence of leadership. Journal of Marketing, 78(1), 95–111.

    Article  Google Scholar 

  9. Bolander W, Zahn WJ, Loe TW, Clark M (2015) Managing new salespeople’s ethical behaviors during repetitive failures: when trying to help actually hurts. Journal of Business Ethics:1–14.

  10. Bolander, W., Dugan, R., & Jones, E. (2017). Time, change, and longitudinally emergent conditions: understanding and applying longitudinal growth modeling in sales research. Journal of Personal Selling and Sales Management, 37(2), 153–169.

    Article  Google Scholar 

  11. Brown, S. P., Cron, W. L., & Slocum, J. W. (1998). Effects of trait competitiveness and perceived intraorganizational competition on salesperson goal setting and performance. Journal of Marketing, 62(4), 88–98.

    Article  Google Scholar 

  12. Brown, S., Samaraweera, M., & Zahn, W. (2011). On the use of organizational climate in sales force research. In W. C. David, M. F. Kenneth Le, & F. P. Nigel (Eds.), Oxford handbook of strategic sales and sales management. Oxford: Oxford University Press.

    Google Scholar 

  13. Chaiken, S., & Trope, Y. (1999). Dual-process theories in social psychology. New York: Guilford Press.

    Google Scholar 

  14. Christian, M. S., & Ellis, A. P. J. (2011). Examining the effects of sleep deprivation on workplace deviance: a self-regulatory perspective. Academy of Management Journal, 54(5), 913–934.

    Article  Google Scholar 

  15. Cron, W. L. (1984). Industrial salesperson development: a career stages perspective. Journal of Marketing, 48(4), 41–52.

    Article  Google Scholar 

  16. Deci, E. L., & Ryan, R. M. (1985). Intrinsic motivation and self-determination in human behavior. New York: Plenum Press.

    Google Scholar 

  17. Fornell, C., & Larcker, D. F. (1981). Structural equation models with unobservable variables and measurement error: algebra and statistics. Journal of Marketing Research, 18(3), 382–388.

    Article  Google Scholar 

  18. Hauser, J. R., & Wernerfelt, B. (1990). An evaluation cost model of consideration sets. Journal of Consumer Research, 16(4), 393–408.

    Article  Google Scholar 

  19. Henseler, J., & Chin, W. (2010). A comparison of approaches for the analysis of interaction effects between latent variables using partial least squares path modeling. Structural Equation Modeling, 17(1), 82–109.

    Article  Google Scholar 

  20. Henseler, J., Ringle, C., & Sarstedt, M. (2015). A new criterion for assessing discriminant validity in variance-based structural equation modeling. Journal of the Academy of Marketing Science, 43(1), 115–135.

    Article  Google Scholar 

  21. Hodgkinson, G. P., & Clarke, I. (2007). Conceptual note: exploring the cognitive significance of organizational strategizing: a dual-process framework and research agenda. Human Relations, 60(1), 243–255.

    Article  Google Scholar 

  22. Howe, V., Hoffman, K., & Hardigree, D. (1994). The relationship between ethical and customer-oriented service provider behaviors. Journal of Business Ethics, 13(7), 497–506.

    Article  Google Scholar 

  23. Jelinek, R., & Ahearne, M. (2006). The enemy within: examining salesperson deviance and its determinants. The Journal of Personal Selling & Sales Management, 26(4), 327–344.

    Article  Google Scholar 

  24. Johnson, E. (2017). We are all doing it: employees at Canada’s 5 big banks speak out about pressure to dupe customers. CBC News [Online]. Available: http://www.cbc.ca/news/business/banks-upselling-go-public-1.4023575. Accessed 3/20/2017.

  25. Kohn, A. (1992). No contest: the case against competition. Boston: Houghton-Mifflin.

    Google Scholar 

  26. Little, T., Bovaird, J., & Widaman, K. (2006). On the merits of orthogonalizing powered and product terms: implications for modeling interactions among latent variables. Structural Equation Modeling, 13(4), 497–519.

    Article  Google Scholar 

  27. Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship marketing. Journal of Marketing, 58(3), 20–38.

    Article  Google Scholar 

  28. Palmatier, R. W., Dant, R. P., Grewal, D., & Evans, K. R. (2006). Factors influencing the effectiveness of relationship marketing: a meta-analysis. Journal of Marketing, 70(4), 136–153.

    Article  Google Scholar 

  29. Pocheptsova, A., Amir, O., Dhar, R., & Baumeister, R. F. (2009). Deciding without resources: resource depletion and choice in context. Journal of Marketing Research, 46(3), 344–355.

    Article  Google Scholar 

  30. Rick, S., Loewenstein, G., Monterosso, J. R., Langleben, D. D., Mazar, N., Amir, O., & Ariely, D. (2008). Commentaries and rejoinder to “the dishonesty of honest people”. Journal of Marketing Research, 45(6), 645–653.

    Article  Google Scholar 

  31. Ringle, C., Wende, S., & Will, A. (2005). SmartPLS 2.0.M3. Hamburg: SmartPLS. Retrieved from http://www.smartpls.com.

  32. Schrock, W. A., Hughes, D. E., Fu, F. Q., Richards, K. A., & Jones, E. (2016). Better together: trait competitiveness and competitive psychological climate as antecedents of salesperson organizational commitment and sales performance. Marketing Letters, 27(2), 351–360.

    Article  Google Scholar 

  33. Schwepker Jr., C. H. (2013). Improving sales performance through commitment to superior customer value: the role of psychological ethical climate. Journal of Personal Selling & Sales Management, 33(4), 389–402.

    Article  Google Scholar 

  34. Schwepker Jr., C. H., & Hartline, M. D. (2005). Managing the ethical climate of customer-contact service employees. Journal of Service Research, 7(4), 377–397.

    Article  Google Scholar 

  35. Schwepker, C. H. J., Ferrell, O. C., & Ingram, T. N. (1997). The influence of ethical climate and ethical conflict on role stress in the sales force. Journal of the Academy of Marketing Science, 25(2), 99–108.

    Article  Google Scholar 

  36. Singh, J., & Rhoads, G. K. (1991). Boundary role ambiguity in marketing-oriented positions: a multidimensional, multifaceted operationalization. Journal of Marketing Research, 28(3), 328–338.

    Article  Google Scholar 

  37. Spector, P. E. (2006). Method variance in organizational research: truth or urban legend? Organizational Research Methods, 9(2), 221–232.

    Article  Google Scholar 

  38. Victor, B., & Cullen, J. B. (1988). The organizational bases of ethical work climates. Administrative Science Quarterly, 33(1), 101–125.

    Article  Google Scholar 

  39. Welsh, D., & Ordóñez, L. (2014). The dark side of consecutive high performance goals: linking goal setting, depletion, and unethical behavior. Organizational Behavior and Human Decision Processes, 123(2), 79–89.

    Article  Google Scholar 

  40. Yi, H. T., Dubinsky, A. J., & Lim, C. U. (2012). Determinants of telemarketer misselling in life insurance services. Journal of Services Marketing, 26(6), 403–418.

    Article  Google Scholar 

Download references

Author information

Affiliations

Authors

Corresponding author

Correspondence to Bryan W. Hochstein.

Appendix

Appendix

Customer constructs

Salesperson ethical behavior

I got the impression that the associate would answer questions about a competitor’s products honestly, even if it meant not making a sale.

It seemed that the associate would be completely honest in all interactions with a customer.

I think the associate provided 100% honest information.

Salesperson survey perceived constructs

Competitive psychological climate

My manager frequently compares my results with those of other salespeople.

Every salesperson wants to finish at the top of the sales rankings.

My coworkers frequently compare their sales performance with mine.

Ethical psychological climate

Employees here are held accountable for their actions.

Employees here are expected to act first to further customer interests.

Team members acting unethically for personal gain are punished.

Salesperson ethical intention

If asked about a competitor’s product, I will answer honestly, even if it makes it more difficult to make a sale.

I intend to be completely honest in all my interactions with customers.

I will provide 100% honest information, even if it costs me a sale.

Covariates

Customer agreeableness

I am interested in other people’s problems.

I feel other people’s emotions.

I am very interested in others.

Salesperson trait customer orientation

Having empathy for customers comes naturally to me.

I achieve my own goals by satisfying customers.

I keep the best interests of the customer in mind.

All scales are 7 items (1 = strongly disagree, 7 = strongly agree).

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Hochstein, B.W., Zahn, W.J. & Bolander, W. Exploring the unintended negative impact of an ethical climate in competitive environments. Mark Lett 28, 621–635 (2017). https://doi.org/10.1007/s11002-017-9435-4

Download citation

Keywords

  • Sales
  • Ethical behaviors
  • Ethical intentions
  • Ethical psychological climate
  • Competitive psychological climate
  • Dyadic data