Assignment: Purchasing Ethics
Scenario I
Bradley Simmons was in his office when his phone rang. It was his wife, Julia, calling from home. Julia told Bradley that a package addressed to her had just been delivered. The package contained a beautiful, framed collectible print signed by the artist. She had already hung it over the fireplace. In fact, Julia said, "the print looks absolutely beautiful in our living room over the fireplace". Thinking the print was from a family member, Bradley asked who sent the present. She said she did not recognize the name-the print was from Mr. Howard McGinnis. Bradley immediately told Julia that she had to repack the print because it was from a supplier who has been trying to win business from his company. They definitely could not accept the framed print. Julia was very upset, and responded that the print was perfect for the room and, besides, it had come to their home, not to Bradley's office. Because of Julia's attachment to the framed print, Bradley was unsure about what to do.
Task
i. Identify the type of unethical behavior being used in this scenario and why you selected it.
ii. What should Bradley do about the framed print?
iii. Why do you think the supplier sent the framed print to Bradley's home and addressed it to his wife?
iv. Does the mere act of sending the framed print to Bradley mean that Mr. McGinnis is an unethical salesperson?
Scenario II
Cassandra Wiley thought that at long last, her company, Reliance Technologies, was about to win a major contract from Allied Instruments. Allied, a maker of precision electronic measuring devices, was sourcing a large contract for component subassemblies. The contract that Reliance Technologies was bidding was worth at least $2.5 million annually, a significant amount given Reliance's annual sales of $30 million. Her team had spent hundreds of hours preparing the quotation and felt they could meet Allied's requirements in quality, cost, delivery, part standardization, and simplification. In fact, Cassandra had never been more confident about a quote meeting the demanding requirements of a potential customer.
James Brooks, the buyer at Allied Instruments responsible for awarding this contract, called Cassandra and asked to meet with her at his office to discuss the specifics of the contract. When she arrived, Cassandra soon realized that the conversation was not going exactly as she had expected. James informed Cassandra that Reliance Technologies had indeed prepared a solid quotation for the contract. However, when he visited Reliance's facility earlier on a prequalifying visit, he was disturbed to see a significant amount of a competitor's product being used by Reliance. James explained his uneasiness with releasing part plans and designs to a company that clearly had involvement with a competitor. When Cassandra asked what Reliance could do to minimize his uneasiness, James replied that he would be more comfortable if Reliance no longer used the competitor's equipment and used Allied's equipment instead. Cassandra responded that this would mean replacing several hundred thousand dollars worth of equipment. Unfazed, James simply asked her whether or not she wanted the business. Cassandra responded that she needed some time to think and that she would get back to James in a day or so.
Task
i. The buyer at Allied Instruments, James Brooks, is practicing a certain type of unethical behavior. What is the term for this behavior? Why is it considered unethical?
ii. What should Cassandra do in this situation? Formulate her response.
Scenario III
Tom Wheeler, the purchasing manager at Savannah Products, was reviewing purchasing expenditures for packaging materials with Sherman Lee. Tom was particularly disturbed about the amount spent on corrugated boxes purchased from Phoenix Corrugated. Tom said, "I don't like the sales representative from that company. She comes around here acting like she owns the place. She loves to tell us about her fancy car, house, and vacations. It seems to me she must be making too much money off of us!" Sherman responded that he heard Phoenix Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Sherman further stated that Phoenix would probably ask for more than what was justified simply from rising paper stock costs.
After the meeting, Tom decided he had heard enough. After all, he prided himself on being a man of action. There was no way he was going to allow that sales representative to keep taking advantage of Savannah Products. Tom called Sherman and told him it was time to rebid the corrugated contract before Phoenix came in with a price increase request. Who did Sherman know that might be interested in the business? Sherman replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they use lower-grade boxes that would probably work well enough in Savannah Products' process. Sherman also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Tom told Sherman to make sure that Phoenix was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, since he considered corrugated boxes to be a standard industry item.
Task
i. Is Tom Wheeler acting legally? Is he acting ethically? Why or why not?
ii. What should Phoenix Corrugated do when they receive the request for quotation from Savannah Products?
Scenario IV
Tasha Rhemming, a new buyer at Perfection, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Chris Lehman, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Chris asked who the interested suppliers were and if she had made a decision. Tasha indicated that one supplier, Acme Tooling, appeared to fit exactly the requirements Perfection had specified in the proposal. Chris told her to keep up the good work.
Later that day Chris again visited Tasha's office. He stated that he had done some research on the suppliers and felt that another supplier, Precision Tooling, appeared to have the best track record with Perfection. He pointed out that Tasha's first choice was a new supplier to Perfection, and there was some risk involved with that choice. Chris indicated that it would please him greatly if she selected Precision for the contract.
The next day Tasha was having lunch with another buyer, Marcus Booth. She mentioned the conversation with Chris and said she honestly felt that Acme was the best choice. When Marcus asked Tasha who Chris preferred, she answered Precision. At that point Marcus rolled his eyes and shook his head. Tasha asked what the body language was all about. Marcus replied, "Look, I know you're new, but you should know this. I heard last week that Chris' brother-in-law is a new part owner of Precision. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character." Tasha was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Marcus reminded Tasha that she was replacing a terminated buyer who did not go along with one of Chris' previous preferred suppliers.
Task
i. Identify the type of unethical behavior being used in this scenario and why you selected it.
ii. Ethical decisions that affect a buyer's ethical perspective usually involve the organizational environment, cultural environment, personal environment, and industry environment. Analyze scenario 4 using these four variables
iii. How should Tasha handle this matter?