Procurement Ethics Practices Essay

All persons in society, whether in private or public sector, product or services industry are concerned with ethics, Ethics is defined as the discipline dealing with what is good or bad and moral duty and obligation. Thus personal ethics has been referred to as the rules by which an individual lives his/her personal life. Business ethics is concerned with truth, fairness and justice and accounting ethics pertains to the code that guides the professional conduct of aspects such as the expectation of society and customers, social responsibility, consumer autonomy and corporate behavior in the home country as well as abroad (koontz et al 1994) Business ethics has become a well recognized aspect of managing firms today . Due to an increasing interest of ,many are nowadays concerned about values like integrity and honesty and developing ethical codes to foster responsible behavior of their employees. Ethically therefore, managers must produce the greatest good for the greatest number of people in these days of pervasive globalization of business. Manager should recognize that customers and all other stakeholders of their companies have aright to quality products and services, to meet their existing and emerging needs, at affordable prices, all times, and should be guided by fairness and equity, as well as imparity. Managers must institutionalize ethics in their decisions and daily activities thus applying integrity and integrating ethical concepts with daily actions. This can be achieved by: Establishing an appropriate company policy or code of ethics, so as to institutionalize ethics, sin organizational behavior both at management and board of director’s level, using a formally established ethics committee, teaching ethics to employees. It has been established that ethical standard vary from society to society and from country to country and should therefore be taught to ensure uniformity in understanding and applicability across the world, particularly in these days of increasing and pervasive globalization. In procurement office or department the following ethics should be followed for better running of the organization. All officers who are in charge must follow some ethics for good purchasing and supplying, this will include: Honesty: People who procure on behalf of organizations cannot afford to give anyone cause to believe that their procurement behavior is not completely ethical. Spending millions of shillings for their organizations, they are exposed to temptations that most of their colleagues face. Therefore, they have to be honest when procuring goods on behalf of the organization. Enhancing Integrity :Procurement officials should never use their authority or office for personal gain and shall seek to enhance their integrity by: maintaining unimpeachable standards of integrity in all business relationship both inside and outside the organizations in which they are employee, fostering the highest possible standards of professional competence amongst those for whom they are responsible, optimizing the use of resources for which they are responsible to provide the maximum benefit to their employing organization. Conflicts of Interest: When dealing with suppliers potential conflicts of interest can sometimes arise. Instances where relatives or friends are employed by the supplier company should be notified to the Service Unit Manager. This will not prevent the Council trading with the supplier though the Council may arrange for the procurement to be handled by another officer. In instances where Members or former employees are potential suppliers it is important that they do not receive or expect to receive special consideration. If their inside knowledge appears to give them an unfair competitive advantage it may be desirable to take steps to ensure fair competition amongst all suppliers. Rewards to employees: Members and officers should avoid as far as possible dealing with our suppliers in their private affairs, particularly if this is likely to put them under some obligation to the supplier. Where such arrangements are unavoidable it is essential that they ensure that they are not offered any sort of deal which is not commonly available and which could be construed as a reward for actions taken in the course of the employment. Principles of Professional : Seeks or accepts a position as head or employee only when fully in accord with the professional principles applicable thereto, and when confident of possessing the qualifications to serve under those principles to the advantage of the employing organization, believes in the dignity and worth of the services rendered by the organization and the societal responsibilities assumed as a trusted public servant, so that organization is governed by the highest ideals of honor and integrity in all public and personal relationships in order to merit the respect and inspire the confidence of the organization and the public being served. Confidentiality and Accuracy of Information: The confidentiality of information received in the course of duty should be respected and should never be used for personal gain; information given in the course of duty should be true and fair and never designed to mislead hence making personal profit obtained through misuse of public or personal relationships is dishonest and not tolerable. Business gifts: Business gifts, other than items of very small value such as business diaries, calendars, should not be accepted, members of the staff should at no time or under any circumstances accept directly or indirectly, gifts, gratuities, or other things of value from suppliers which might influence or appear to influence purchasing decisions. Hospitality: Modest hospitality is an acceptable courtesy at a business relationship. However, the recipient shall not allow himself to reach a position whereby he might be deemed by others to have been influenced, in making a business decision as a consequence of accepting such hospitality. The frequency and scale of hospitality accepted shall not be significantly greater than the recipient’s employer would be likely to provide in return. Proper communication: Keeps the governmental organization informed, through appropriate channels, on problems and progress of applicable operations by emphasizing the importance of the facts. In case of any information which is unclear so be discussed with relevant officer without making uninformed decisions which may cost the organization. Proper control of personnel: Resists encroachment on control of personnel in order to preserve integrity as a professional manager, handles all personnel matters on a merit basis. Politics, religion, ethnicity, gender, and age carry no weight in personnel administration in the agency being directed or served. Disciplinary Action: Seeks or dispenses no personal favors, handles each administrative problem objectively and emphatically without discrimination. Any mistake committed should be dealt with without favor and the correct measure should be applied. Purchasing and supply procedure: Officers shall always seek to uphold and enhance the standing of the Purchasing and Supply profession and will always act professionally and selflessly by: maintaining the highest possible standard of integrity in all their business relationships both inside and outside the organizations where they work, rejecting any business practice which might reasonably be deemed improper and never using their authority for personal gain, enhancing the proficiency and stature of the profession by acquiring and maintaining current technical knowledge and the highest standards of ethical behavior; fostering the highest possible standards of professional competence amongst those for whom they are responsible. Competition – The nature and length of contracts and business relationships with suppliers can vary according to circumstances. These should always be constructed to ensure deliverables and benefits. Arrangements which might in the long term prevent the effective operation of fair competition should be avoided. Conclusion Managerial and appropriate ethical behavior is central to the success and effectiveness of organization anywhere in the world today. Business are so interconnected ,in terms of products and information flows, that ethical behavior in one country or in one part of the globe has an immediate impact in other countries or parts of the globe. Consequently, attempts should be made by governments and business leaders to incorporate standard management practices in their operations to enhance the efficiency of these flows. Ethical standards and codes are in this process because of the globalization of e- world business today. There is an urgent need to develop and adopt international ethical standard and codes to guide and regulate managers, globally, in running their organization effectively. These codes should include corporate governance and social responsibility practices. Reference: 1) Codes of Professional Responsibility– by Rena A. Gorlin – 1149 pg 2) Management Reform – by DIANE Publishing Company – 539 pg 3) News line KASNEB (July-sep2004) 4) Koontz et al management (1994)