Information Disclosure in Sales – Case of World Camera and Electronics

Information Disclosure in Sales – Case of World Camera and Electronics

Question One

Holley endorses the mutual benefit rule. In this requirement, the seller has the responsibility of giving the buyer any information that can influence him to make a reasonable judgment. The buyer does not possess this information; hence it will impact the customer’s decision. This information should be enough to influence the nature of judgment made by the customer. The buyer is influenced to make a satisfactory decision that matches his budgets, desires, and needs (Holley, 1998). However, the salesperson still pursues the interest of selling the product, but it is limited towards meeting the customer’s needs.

Question Two

I agree with Holley’s endorsement. Firstly, both the buyer and the seller get an opportunity of pursuing their interests. The seller is only tasked with the responsibility of disclosing enough information to influence the buyer in making a reasonable choice. Therefore, the seller might not disclose all the information like what is required in maximal information rule as it can distort his role as the product advocate. The information will only be “reasonable,” like disclosing the product’s price without any comparison. Consequently, the seller will manage to sell the product, and the buyer will get the chance to buy the product that fits his interests and budget. This indicates that as per the mutual benefit rule, both the buyer and seller pursue their interests objectively..

Secondly, the mutual benefit rule protects vulnerable customers. According to this requirement, a salesperson should not encourage a customer to make choices that would be against their interests. For instance, the salesperson might disclose a defect in a product that would affect the item’s value. This would safeguard customers who are vulnerable and have little information about specific products. Besides, the reasonable knowledge that is disclosed even makes vulnerable customers make informed choices. They get to know all the important particulars of a specific product, which influences them to make choices that reflects their interests and budgets. Therefore, this is an ethical way of advancing the interests of the seller and, at the same time, ensure that the buyer’s interests are safeguarded.

Question Three

I agree with Holley; hence would not endorse any other requirement.

Question Four

According to the mutual benefit rule, the salesperson at the world camera acted unethically. Firstly, the salesperson takes advantage of a vulnerable customer. Matthew Anderson has little information about cameras. He relies on the salesperson to provide guidance on the kind of camera that suits a student. However, the salesperson exploits Anderson’s lack of information to his advantage. He introduces another camera with advanced features and which is more expensive. Since Anderson was relying on the salesperson’s expertise, he ends up purchasing a camera that is less practical to a student. This implies that the salesperson exploited Anderson’s vulnerability hence acted unethically.

Secondly, the salesperson pursues his interests by disregarding the budget and desires of Matthew Anderson. Since the sales personnel at World Camera had been promised a financial incentive of 20 percent commission, the salesperson is determined to get the commission. This is why the salesperson agrees with Anderson’s first choice that it is an ideal model but goes ahead to introduce an advanced camera. It is unethical for a seller to pursue his interests over the customer. The salesperson’s ambitions to secure a commission make Anderson purchase a camera that is unpractical for students.

Thirdly, the salesperson acts unethically by failing to disclose enough information that can influence Anderson to make a reasonable choice. As per the mutual benefit rule, the salesperson has the responsibility of revealing to Anderson the details of the camera that is practical for students. Anderson had the right to know whether the advanced features in the new camera suited a student. However, the salesperson withholds this information to advance his interest. There is a deliberate act of failing to disclose to Anderson about the advanced features in the new model. This is an unethical way of advancing the seller’s interests by disadvantaging the buyer.

Question Five

I would endorse the fairness rule. According to this alternative, the seller should give safety details and any information that would influence the buyer to make a reasonable judgment. The buyer would not be expected to have this information unless the seller informed him. In the fairness rule, the seller fully pursues his advocacy interests of selling the product. The seller’s task is to reasonably determine whether a buyer is expected to know certain information. If the seller judges that the customer is an expert, the information might not be disclosed. However, the fairness rule dictates that if the seller reasonably determines that the customer does not have certain information, disclosure is required.

In the World Camera case, the salesperson was ethically wrong. The salesperson reasonably knew that Anderson had little information about cameras. Anderson only knew about the specific model that fitted his budget and was suitable for a student. He lacked information about the advanced models of cameras and how they would suit a student. However, the salesperson disregarded this fact and went ahead to introduce a new model to Anderson. He failed to disclose the additional features due to the financial incentive promised by the firm. It was unfair and unethical for the salesperson to withhold information that Anderson would not reasonably have been expected to know.

References

Holley, D. M. (1998). Information disclosure in sales. Journal of Business Ethics, 17(6), 631-641.