Ethics and Procurement

Ethics can also be described as principle of conduct governing an individual or a profession. (Webster’s third new international dictionary) According to Kenneth Lyson (2006), ethics is the principle of conduct governing an individual or groups, concern for what is right or wrong, good or bad. Ethics originates from philosophy and refers to common principles associated with appropriate and inappropriate actions, moral duty and behavior. In a business context, ethics refers to the use of recognized social principles that involve justice and fairness throughout the business relationship and being ethical means following a behavior perceived as fair by the business community and wider society. For example, being ethical means treating suppliers in a just, fair, honest and fitting manner and preferential treatment or personal buying can be considered unethical. Procurement functions are in control of large budgets; hence it is expected to behave ethically more often than other parts of the organizational group (Monczka et al., 2008).

Procurement involves the process of establishing fundamental requirements, sourcing activities such as market research and vendor evaluation and negotiation of contracts. It also includes the purchasing activities required to order and receive goods.

The main principle of procurement ethics are impartiality or objectivity, openness and full disclosure, confidentiality, due diligence, competence and duty of care, fidelity professional responsibility, avoiding potential or apparent conflict of interest. These can be characterized by accountability, responsiveness, professionalism, transparency, open competition, confidentiality, non-discrimination and fair play.