SUPPLY CHAIN MANAGEMENT BA 244
Reminders
• Next Article: Group 5 • PPP Talk: Wednesday, 15 Feb
• LinkedIn Group: Presentation Grades for Mattel and Article 2 Presentation Grades for Denver Airport and Article 3
Article 4 • Aligning supply chain strategy with corporate environmental strategy: A contingency approach
ETHICS IN SUPPLY CHAIN MANAGEMENT Does Legal always mean Ethical?
ETHICS IN SCM • Use of Information
• Fair Dealing
• Conflict of Interest
ETHICS ON USE OF INFORMATION • Provide fair, truthful, and accurate information
• Do not inflate volume to get lower prices
• Do not inflate sales to achieve targets
• Others?
ETHICS ON USE OF INFORMATION • Confidentiality of Information
• Information should not be disclosed without proper authority
• Unless there is a legal duty to disclose it e.g. money laundering or terrorist activity
• How to address?
ETHICS ON FAIR DEALING • Deception or unfairness in below situations may be perceived as unethical and potentially damaging to ongoing trading relationships:
• A supplier makes an error in quotation or invoice • There is a potential to pay late • Tender is done even if the contract has already been awarded • Some vendors are favored over others in a tender situation e.g. providing
them more info, allowing post-tender negotiation to certain vendors only
CONFLICTS OF INTEREST • When the best interests of the firm conflicts with the personal interests of the
individual. e.g. award contract on personal gain vs. best value
• Offering or accepting gifts which may – or may be perceived to – influence the recipient’s decision making
• Buyer gains from promoting a particular supplier because he has a financial interest in the supplying firm as shareholder, or as someone with a close relationship to the supplier’s management
• How to address?
GIFT GIVING • Giving of gifts is among the
common courtesies of business dealings
• Professionals should decide when such practices amount to an attempt to induce favorable treatment
• Major difficulty in the difference in perceptions between buyer and seller, which may also be a cultural issue
• As a general principle, any conflict of interest should be disclosed, so that proceedings are transparent and open to control
GIFT GIVING Bribery and Corruption
• When buyer and seller collude to ensure that the seller wins a contract, the buyer in return receiving a reward
FRAUD • Range of activities considered fraudulent
• Missing stationery • Personal telephone calls • Theft of mobile phones and computers • Accepting kickbacks
AUDIT • Is a comprehensive, systematic, independent, and periodic examination of a company’s environment, objectives, and tactics, to identify problems and opportunities and facilitate the development of appropriate action plans (Scheuing, Purchasing Management)
AUDIT CHECK OR EXAMINATION
• To monitor and enforce compliance with policies • To ensure that the organization is using best practices • To monitor and measure the extent to which resources are being used efficiently
• To support the prevention and detection of fraud, error, mismanagement of funds
AUDIT • How often does your company conduct audits?
• Government • Banking • Real Estate • Academe
End
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