Question

Explain in detail and with relevant examples how the following can affect ethics in procurement. i. corporate governance, ii. bribery, iii. discrimination, 3 iv. corporate social responsibility

Answer 1

1. Corporate governance is a term introduced in the organizations after the financial crisis of 2008. Corporate governance brings stability in working of the organizations. It gives a sense of responsibility in working of the organizations but the best means of the stakeholders and the organization's long term growth.

Procurement is a process of purchasing material or other useful products for the organization by properly tendering the process and choosing suppliers without compromising the quality and at best prices which benefit the organization.

Corporate governance governs the procurement process. It ensures that those suppliers are chosen which offer the best product and service to the organization as large amount of the company are involved. A proper tendering process will be followed.

Without it there will be insiders taking undue advantage and giving tender to their known at higher prices and may also lower the quality posing them at huge risk. an unorganized structure may come into place without corporate governance

2. Bribery is an illegal act and corporate bribery is getting strict these days and long term legal actions are being taken. Bribery may be the result of an employee taking bribes from suppliers to procure goods from them.

It may also occur when the company might bribe suppliers to give lower quality products. Corporate governance will control these acts by a proper procedure.

3. Discrimination in procurement is when the suppliers of the goods will be discriminated and certain suppliers will not be considered. Corporate governance will control these as a proper tendering process is followed and tenders are allocated on the basis of price and quality.

4. CSR is a sense of social responsibility in the business to take care of the social needs as well as the business is taking resources from the society. It is the responsibility of the business to provide a quality product to the society and at reasonable prices. Corporate governance helps procure the best quality product at best prices that would be fair to the suppliers as well without pressurizing them to supply goods at very less prices that would give them losses. It keeps in mind the suppliers well being as well as that of the buyers.