Is there ever a right kind of wrong in ethics? | by Mira Ristovich

Mira RistovichIt may seem paradoxical that procurement, often viewed as a boring and uneventful part of an enterprise, can find itself involved in events and situations that make news headlines. Ethics, or rather a lack thereof, is often the main reason for these headlines. From child labour to corruption and kickbacks in major deals, unethical procurement decisions can, unfortunately, be a source of horror stories and scandals.

In terms of business proceedings, procurement professionals are expected to conduct their business practices in an ethical manner. “Ethics”, deriving from the Greek root “ethos”, refers to the behaviour and conduct of individuals in a just and truthful manner. In our organisational world today, this extends to not only how ethical you are as a procurement (or any other kind of) professional, but also refers to how ethical the organisations you deal and do business with are. But as simple as this definition is, is ethical behaviour really clear-cut, black and white? Is there ever a time when doing the wrong thing can be right? The simple answer is no. However, we can examine how unethical behaviour rises and some ways to prevent it.

Business ethicsHow does unethical behaviour arise? Procurement is sometimes seen as being “soft” and biased towards a particular supplier. This happens for a variety of reasons, such as bribery, favouritism, illegal sourcing and so on. However, despite the motivations for these types of practices, it cannot ever be justified.

The repercussions of unethical behaviour in procurement, if those actions become public knowledge, are far-reaching – not only damaging the public’s perceptions of the company, but also impacting on the company’s bottom line.

Procurement and company leaders are responsible for making sure that their actions are ethical, as this is critical for a success of any business. One of the problems is that leaders are often unconscious of what constitutes ethical behaviour and the consequences of not practicing ethical behaviour.

The ground rules for good ethical behaviour in procurement are:

 •  Practice integrity. Remember you cannot have half-integrity. You are either ethical or you are not. There is no in-between;
 •  Circumvent conflicts of interest and personal enhancement;
 •  Treat suppliers equally and fairly;
 •  Comply with legal and other obligations.

According to many ethics gurus, the prevailing principle is “do the right thing”, even when it’s not easy. But oftentimes, a lack of understanding what the right thing is can be an issue. I once had a business partner who was very fond of a supplier. That supplier was under scrutiny for stealing IP. My business partner insisted we continue using the supplier. Her argument was that a few other big corporates and large banks were also using him. My business partner didn’t see anything wrong in stealing IP and she was very aggressive about retaining his services, insisting that the agreement had to be signed. While educating your business partners is a challenge, it is an important task for leadership in every company.

It may also be a challenge to say no to your client especially if they are a very powerful decision-maker. But, if you don’t, you are potentially bridging moral and ethical norms, which can have legal consequences. When in doubt, speak to your company’s HR about the company’s ethics policies.

Mira Ristovich is a Senior Associate at Bespoke Group Africa, with 30 years’ experience as an economist as well as exceptional procurement and business acumen - www.bespoke.co.za

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Posted on October 08, 2018