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Purchasing Ethics: 7 Sensitive Situations


PurchTips - Edition # 197

By Charles Dominick, SPSM

 

Do Your Internal Customers Consider You Ethical?

There are few things that cause purchasing professionals to worry more than the topic of ethics. And this is understandable.

Even when cross-functional teams are formed to ensure organizational buy-in of sourcing decisions, some internal customers end up unhappy with supplier selections. This unhappiness sometimes motivates the most bitter of them to - correctly or incorrectly - question the ethics of the purchasing department.

The following circumstances can serve as reasons why internal customers may make accusations that the purchasing department has behaved unethically:

  1. A purchasing team member accepted a gift - perhaps even a low-value item like a pen - from a supplier.
  2. A purchasing team member has a personal or financial relationship with a supplier or an employee of a supplier.
  3. A purchasing team member owns a supplier's stock.
  4. A purchasing team member mixes business and entertainment with a supplier, for example discussing business over a meal or a round of golf.
  5. In a competitive bidding situation, the purchasing team provided certain information to one supplier that was not provided to other suppliers.
  6. The purchasing team did not provide transparency for a supplier selection, including failing to internally share selection criteria, proposal details, and the rationale for the decision.
  7. The supplier selection criteria used was different than the criteria noted in the RFP/tender.

Now, that is not to say that all of these circumstances are inherently unethical. However, it is important to understand how these circumstances look "through the eyes of the customer."

So, you should evaluate whether any of these circumstances occur in your organization. If they do, you need to either eliminate and prevent these circumstances or educate your internal customers as to how the circumstances can exist without ethical standards being violated.

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