Partners Behaving Badly

Last month’s CRN report, which is a periodical which provides technology news and updates for technology providers, had a startling article on how Value Added Resellers (VAR’s) are breaching ethics as a standard operating procedure to win deals in this highly competitive business environment.

We have all known of individiuals (and some companies) who endorse and embrace this behavior as the normal course of business. It goes without saying my opinion on this approach.

However, I am eager to hear what you think about this. Have you seen an uptick in this behavior in your field? What is the cause of this? What can leaders do to deter and prevent these approaches? Weigh in!

Anyway, the article touts poaching sales representatives from their competitors and urging (and in some cases making this a stipulation of the hiring contract) to bring their accounts with them. There were other examples of selling used equipment under the auspices that it was new and allowing partners to build the entire solution/proposal and then sweep in and undercut on price at zero hour – basically eliminating any cost of sales for the engagement. Finally, there were examples of spreading falsehoods about their competitors to instill fear, uncertainty and doubt (FUD), about their competitors. Apparently when things are tight, companies are doing anything they can to make their numbers, including crossing ethical and legal lines.

4 responses to “Partners Behaving Badly

  1. We come into this life with our name and we leave with our name, everything else is on loan. It’s the hard economic times and the dificult personal situations that define the individual. Everyone can be a winner in good times. Fear and greed are the fire of the ethics crucible. Those who succumb to bending the ethics rules to satisfy short term goals will always have an advantage. Often these individuals will win in the short run. However, they will forever be recognized for their misdeeds. Those who work hard and obey the rules may loose in the short term but will be eventually rewarded in the long term. Often the reward is even greater than the short term loss. The key is never loose faith and rely on Time, Patience and Perserverance.

  2. This type of situation happens even in the best of times also. From my standpoint,there are so many opportunities that we all are overlooking. I believe that For Profit and Non Profit executives should look into Hybrid Value Chains-where both groups form partnerships where both can benefit and grow while taking some of the pressure off traditional fundraising. These arrangements if strategic could provide tremendous positive impact in communities. Much more to follow on this topic.

  3. I have indeed seen a change in the ethical practices of companies. However, from my vantage point, the time interval over which the change has evolved is not limited to the “hard economic times” of the past couple years but rather began in the late 90’s boom.

    There was a time in Bell Operating Companies when contracts were sacred. Procurement personnel saw it as their job to steward and to enforce contracts once executed, and they had close ties to the large legal departments. Employees were convinced they would be fired for cause if they exposed the company to liability by violating any part of a contract.

    After Enron & MCI were exposed, the culture changed and with it the behavior of employees in the very same BOCs. The attitude was, “What are you going to do, sue me?” I’ve seen BOC procurement bring in competing vendors to negotiate $100MM deals simultaneously, leaking to one competitor concessions to the other to leverage their suppliers any way they could. I’ve also received a competitor’s proprietary pricing, placed in my hand by BOC procurement. Confidentiality is not honored. The most audacious infractions are perpetrated by the executives at the top. They are leading by example.

    My experience has been confined to the communications industry, but ethics don’t seem to be faring any better in the financial industry. I don’t know how widespread the integrity erosion is, but I could extrapolate. Interestingly, I do see a trend on the horizon that could be a game changer, and I’d be interested in your perspective on that! Those left unemployed by big business will do what most of the planet’s population does – figure out something of value to provide locally. Small business/self-employed workers will depend on their integrity to survive. Idealistic?

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