Professional Documents
Culture Documents
OF
AGRICULTURE & TECHNOLOGY
JKUAT SODeL
Nairobi, Kenya
E-mail: elearning@jkuat.ac.ke
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HPS 2101: PRINCIPLES OF PROCUREMENT
This presentation is intended to covered within one week.
The notes, examples and exercises should be supple-
mented with a good textbook. Most of the exercises have
solutions/answers appearing elsewhere and accessible by
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HPS 2101: PRINCIPLES OF PROCUREMENT
LESSON 10
Procurement Ethics
10.1. Introduction
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personal ethics has a social and cultural dimension that
means that business practices such as generous gift giving,
which are perfectly acceptable in some countries, may be
utterly unacceptable in other countries.
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10.2. Dealing with suppliers
The buyer should observe the following ethical issues when deal-
ing with suppliers
Suppliers should be treated equally. For example any ad-
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it is considered reasonable to reveal certain information, it
should not be traceable back to the particular supplier
unless the supplier has given permission
The buyer shouldnt mislead suppliers
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ethical behaviour. For example there is the potential for
abuse if the same person alone is responsible for placing
orders, certifying receipt of orders and authorizing pay-
ment to suppliers. Without a good system in place this
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10.4. ISM code of ethics
10.4.1. Impropriety
Prevent the intent and appearance of unethical or compromising
conduct in relationships, actions and communications.
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10.4.2. Recommended guidelines for preventing impro-
priety
Maintain business professionalism in all communications,
including social media.
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others.
Avoid excessive discussion of personal matters.
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Recommended guidelines to avoid and manage con-
flicts of interest
Potential Conflicts: Discuss actual or potential conflict(s)
of interest with management. Reassign supply manage-
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arises.
Conflict of Interest Statements: Advocate that your em-
ployer obtain and review conflict of interest statements
that encourage employees to disclose any potential conflict
of interest upon initial employment and annually there-
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after.
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Secondary Business/Employment: Do not harm the in-
terests of your employer through a secondary business or
other employment.
Personal Business: Do not engage in inappropriate per-
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ployee to the detriment of your employer or its reputation.
10.4.4. Influence
Avoid behaviors or actions that may negatively influ-
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Is the business activity in the best interest of the employer?
How will the business activity be perceived by peers and
others?
Sources of influence can be introduced into relationships between
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Recommended guidelines for dealing with matters of
influence:
Employer Policies: Supply management professionals should
encourage and recommend the development and imple-
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Consider the frequency of giving or receiving gifts,
gratuities or entertainment and measure the collec-
tive impact.
Abide by the letter and the intent of guidelines and
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policies.
Do not solicit gifts, gratuities or entertainment for
yourself, your employer or your family.
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ducting business and are often a part of building business
relationships.
Use care to ensure a meal is for a specific business
purpose.
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Political Matters: All organizations are subject to inter-
nal and external forces and pressures. Internal forces and
pressures result from an organizations culture. External
forces and pressures result from economic conditions, laws,
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aware of their organizations position (e.g., economic size,
power, etc.) in the marketplace and ensure that market
power is not abused.
Specifications and Standards: Supply management profes-
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judgment and consideration of both legal and ethical implica-
tions.
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Avoid unauthorized use of the employers name.
Avoid using the employers purchasing power to make pur-
chases for nonbusiness use. If employer sponsored personal
purchasing programs exist, make certain that the arrange-
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Recommended guidelines for maintaining positive sup-
plier and customer relationships
Develop and implement policies and procedures for busi-
ness processes that are fair, unbiased and applied consis-
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10.4.7. Social Responsibility and Sustainability
Champion social responsibility and sustainability practices in
supply management.
Supply management professionals are in a position to lead
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Recommended guidelines for support of diversity and
inclusiveness supply base
Provide socially diverse suppliers the opportunity to par-
ticipate.
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Recommended guidelines for support of human rights
Treat people with dignity and respect.
Support and respect the protection of international human
rights within the organizations sphere of influence.
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Promote development and diffusion of environmentally friendly
(green) practices and products throughout the organiza-
tion and the supply chain.
Champion consumption of environmentally responsible prod-
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legislation.
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Bids and quotations
Product and other costs
Descriptions of formulas and processes
Designs and drawings
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Sources of supply
tion appropriately.
Use nondisclosure agreements that state the terms for use
of confidential and proprietary information.
Accept no confidential or proprietary information unless
you have the right and need to use it.
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Require that confidential and proprietary information given
to others be protected by them.
Use confidential and proprietary information only for its
intended purpose.
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10.4.9. Reciprocity
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or the organization is engaging in a practice known as reciprocity
Agreements involving a specific commitment to buy in exchange
for a specific commitment to sell also constitute reciprocity.
Use care with supplier lists and ensure they are not pro-
vided to others for their use in pursuing improper recipro-
cal agreements.
Apply and obtain accounting, legal and ethical guidance
when potential issues of reciprocity arise.
JJ II Recognize that reciprocal relationships may be an illegal
J I restraint of trade in some countries.
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10.4.10. Applicable Laws, Regulations and Trade Agree-
ments
Know and obey the letter and intent of laws, regulations and
trade agreements applicable to supply management.
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Contract and commercial laws
Electronic commerce laws
Antitrust laws
Trade agreements
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Trade regulations
Industry specific laws and regulations
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Recommended guidelines for understanding and com-
plying with applicable laws, regulations and trade
agreements
Seek training in legal aspects that govern conduct of sup-
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transacted.
Involve legal counsel early in analysis and planning to iden-
tify and avoid potential legal issues.
Understand and apply laws specific to governmental enti-
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the laws is the responsibility of legal counsel.
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Recommended guidelines for achieving a high level of
professional competence
Personally adopt and promote the ethical standards ex-
pected of a supply management professional.
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professional associations.
Earn & maintain the Certified Professional in Supply Man-
agement E.g. CIPS, KISM etc.
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Eliminates scrupulous practices
Revision Questions
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Exercise 2. What would you be able to do to justify re-
peated sourcing from a supplier in preference to other suppliers
where you have formed close friendships with that suppliers
personnel?
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References
1. Achilles information Ltd (1999).Understanding purchasing
principles, CIPS Publications
2. Andrew Hale Feinstein and John M. Stefanelli (2012). Pur-
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chasing. 6th ed. New Jersey: John Wiley & Sons, Inc.,
Hoboken.
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Prentice Hall
6. Lisa Ellam (2000), Supply Management for Value enhance-
ment, Institute for Supply Management
7. Paul Novak (2012). Principles and Standards of Ethical
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Solutions to Exercises
Exercise 1. it enhances an organizations reputation, it enables
an organization to avoid litigation due to unethical practices
Exercise 1
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