Read the following Codes of Conduct, which are part of the Week 8 Learning Resources:
Chartered Institute of Purchasing & Supply. (2013) Ethical and sustainable procurement [Online]. Available from: http://www.cips.org/Documents/About%20CIPS/CIPS_Ethics_Guide_WEB.pdf (Accessed: 09 October 2014)
Institute for Supply Management. (2012) Principles and standards of ethical supply management conduct with guidelines [Online]. Available from: http://www.ism.ws/files/SR/PrinciplesandStandardsGuidelines.pdf (Accessed: 09 October 2014)
For your Key Concept Exercise, write a paper that provides an evaluation of the importance of ethics in purchasing based upon the two codes of conduct. Explain how these standards impact buyer-seller relationships. (500 words)
Importance of ethics in purchasing based upon two codes of conduct
The dignity, self-disciple, fairness, transparency, and civility of a firm’s purchasing professionals provide organization’s custom behavior in upholding social responsibilities and cultural values. Ethical purchasing involves purchasing commodities produced with possible minimal harm to human beings, animals, and the environment. Ethical purchasing leads to an ethical marketplace where the target is ethical consumers. Ethical purchasing is currently affecting the worldwide marketing in lots of ways. For instance, vendors are presently offering ethical commodities for sale over the internet.
Ethics plays an important role in procurement since it ensures that commodities purchased are ethical. Ethics in Procurement adds value to the company name in the form of efficient public relations (Chartered Institute of Purchasing & Supply, 2013). Consumers are currently assessing the ethical procurement practices of the organization in making decisions on where to put their money. Naturally, the consumers would consider investing in an organization that shows commitment to ethical business and practices that are environmental friendly. Ethical procurement practices add value to the company’s brand as an outward tool that investors use to analyze the risk potential and value of a company.
The perceived impropriety prevents the intention of an unethical situation that compromises conduct between the seller-buyer relationships. On the other hand, conflict of Interest ensures that any individual, enterprise or any other activity do not offer conflict with the interest of the employer.
Procurement officers are to carry themselves with integrity and moral values. Integrity encompasses honesty, truthfulness, and ability to avoid or free from corrupting influence. Ethics guides a procurement officer to subordinate his individual concerns and avoid putting himself in his interest where other interest of those that conflicts with the interest of the company exists. Ethics in Procurement maintains values, true relationships, justice, a washes away the unfair use of power and authority between sellers and buyers (Institute for Supply Management, 2012).
How the standards affects buyer-seller relationship
There is a general belief that honesty is the finest strategy. This belief applies to buyer-seller relationship. Honesty promotes a good relationship between buyers and sellers since it promotes understanding of the seller and buyer strategies and guidelines. Honesty provides a ground for common concern between buyers and seller through sound commercial judgment, and helps in the maintenance of agreeable level of truth and uprightness. When there is trust between suppliers and buyers, a strong relationship builds up (Northouse, 2013, 56). Though trust takes log to build, it helps in gaining visibility in the value added activities between buyers and suppliers. Ethics impacts buyer-seller relationship through customer satisfaction brought by a trust that increases through information sharing between seller and buyer. Seller-buyer relationship has a strong connection with the ethical perception of purchase and supply. For instance, a trust may also increase supplier responsiveness, financial performance and the decrease in transactional costs and perceived risks since buyers can purchase commodities through the internet without the fear of losing their money.
Leadership and respect are additional important issues that enable a healthy buyer-supplier relationship (Johnson & Flynn, 2011, 448). Leadership focuses on the path-to-goal implementation of procurement goals in meeting efficient buyer-supplier relationship. Since leaders are role models in the society, an ethical leader would acquire respect of other individuals. Transactional and transformational leaders affect buyer-supplier relationship commitment.
Chartered Institute of Purchasing & Supply. (2013) Ethical and sustainable procurement [Online]. Available from:
Institute for Supply Management. (2012) Principles and standards of ethical supply management conduct with guidelines [Online]. Available from:
Northouse, P.G. (2013) Leadership: theory and practice. 6th ed. Thousand Oaks, CA: Sage. pp 56
Johnson, P.F., Leenders, M. & Flynn, A. (2011) Purchasing and Supply Management. 14th ed. McGraw-Hill Higher Education [E-book]. Chapter 15, pp 447-456