Consultant’s Report For Orion Analytics: Task-based Analysis Of Business Ethics In Procurement

Business Ethics

Business ethics is known as the system of an organization based upon the moral and ethical beliefs guiding the values, and decisions regarding the business and the employees. Few of these requirements are enforced by law, such as minimum wages and punishment against sexual harassment, others are environmental regulations (Crane and Matten, 2016).

It is the duty of the management team to set out rules and regulations for how the organization runs on a daily basis. The management philosophy and regulations must have a base of ethical practices. It is imperative that leaders use directive management principle to direct the employees through their examples. A foundation based on ethics and principle helps build long lasting stakeholder relationships, attract and retain the best in industry talent and sustaining the upbeat reputation. The principle issues to be dealt with include the accountability, operational and financial transparency and employee ethical conduct (Trevino and Nelson, 2016).

The potential risks that would affect the new Procurement Agency

1. Accountability,
2. Transparency of operation and
3. Employee ethical conduct

In 2007, Susan Fowler an Uber employee told the public via her blog that she was being sexually harassed by her manager in the workplace and also experienced gender bias during her tenure. Her blog titled “Reflecting On One Very, Very Strange Year At Uber”, mentioned her #metoo story (Murray, 2018).

It was reported in the media groups that the lowest paying clothing stores online is violating the human rights in the supply chain showcasing an unethical practice in the workplace in U.K. based companies. The companies lacked transparency in supply chain, according to law, they must report the risk pertaining to slavery and also to provide the steps concerning the issue and how they are handling the same. The companies, however, have pledged to raise the issue and steps, but the suppliers have failed to perform (Jennifer, 2016).

An unconstrained visibility is called transparency. As it has been seen in the case study and the examples of recent scams, transparency is utmost important especially in the procurement activities. The details related to the material quality, the pricing, the amount of material procured and shipped must be kept in a record to avoid any unethical treatment from the supplier to the agency and from the agency to the consumers (Fernandez, Romero, and 2014). It is required to maintain the transparency in the business process which could assist in strengthing the business process and lower down the scams (Kaptein, 2015).

1. Internal scrutiny
2. External scrutiny

Why is it Important?

The internal scrutiny is when the transparency is within the procurement agency (Orion Analytics), and U.K. Government authorities, such as, internal audits. There are compliance officers being appointed by the government, which are responsible for the tasks. On the other hand external scrutiny is when the transparency is outside the agency and the Government. When the member states for whom the company is working, the media and external auditors are responsible and they observe the practices being followed (Marquis, Toffel, and Zhou, 2016). These two scrutinies are required to undertak to increase the transparency of the process.

1. Conflict of interest: when there is a conflict of interest between the employees of the company and the between the company and states for which they are procuring.
2. Fraud: any intentionally made fake representation of the facts.
3. Corruption: when the cash is given to the procurement company to sway the action.
4. Coercion: either to harm or to threaten to affect the contract.
5. Collusion: when the suppliers they amalgamate and create a union in order to hike the prices.

1. Conflict of interest: Employees, Government officials
2. Fraud: Suppliers and PA and Government officials  
3. Corruption: Procurement officer
4. Coercion: Government officials and Procurement officer
5. Collusion: Suppliers (Neu, Everett and Rahaman, 2015).

A suitable ethical standard relating to accountability, transparency and employee conduct to be achieved by PA and monitored in practice.

With great responsibility comes along the accountability, therefore, the management of an organization is responsible to manage the transparency, business ethics and the conduct of the employees (Kaptein, 2015). It will not only lower down the ethical scandal but also assist manament to operate the business effectively in transparent manner.

1. It is the management’s responsibility to maintain the integrity to its highest standards to be dealt with each day. If there are fraud and corruption at the top level management it flow down to the roots.
2. The management needs to be a leader, so that the employees are able to follow them with integrity and respect. There must be clear indications and strict following of the correct behavior to be followed (Kaptein, 2015).
3. The management must ensure there are procedures and practices and also they are being followed by each employee and the employer for maximum security of the employees, especially the female employees at work (Hoffman, Frederick and Schwartz, 2014).

It is a formal statement having certain ethical codes for the employees. Since, the project is for ten long years, it is the duty of the procurement company to write down the code of ethics for the employees, which they must also follow. This will provide the current employees and future employees the written set of rules pertaining to acceptable and unacceptable behavior.

Activity	Required behavior
Preliminary Screening	Even before a candidate enters the premises, the applicants must provide their background information, which, along with other information must be checked (Kaptein, 2015).
The information classification and protection	There must be filing cabinets for the employees so as to maintain the security, privacy and utmost care of the important documents (Jennifer.  2016).
Data security	There must be standards followed for the data security and maintenance by the procuring agency and the scandals that have been observed so as to process the data securely and to allow transparency in the organization.
Reporting an incident	Any security issue, or any unethical practice being followed must be reported to the top management or the concerned authority.

There must be a manual given to all the staff members. There must be authorities, procedures, responsibilities and accountability along with the punishments and penalties in case of non adherence must be clearly stated. The procuring agency must avoid short term and small orders, if the company has been contracted for 10 years, they must go for taking long and big procurement tasks to limit  and avoid the unethical practices. The supplier expenses must also be verified.  The proper manual set up program not only strengthen the employee accountability and responsibilities towards the system but also assist in increasing the overall outcomes in effective manner (Jennifer.  2016). 

Leadership management of change initiative to remedy the unethical behavior

There is given a proper leadership model which could assist in supporting the ethical decision making and proper leadership model in organization. Leadership model to support the ethical organization (Jennifer.  2016).

As per the 4 V model, it is the leaders who can create a difference.

1. Values: the core values must be designed in order to follow them and they must be adhered to.
2. Vision: there must be a vision in the minds of a leader for themselves and for their followers to lead them towards the goal, together with the organizational goal.
3. Voice: an ethical leader needs to constantly motivate the employees.
4. Virtue: they have a virtuous behavior to become a role model for the staff and do the right things to be followed as it is (Neves, Almeida and Velez, 2018).

1. There must be agents to certify the seller to create authenticity and maintain security.
2. The products being sold to the hospitals and hotels must also be certified
3. In case of the child labor by the supply chain, there must be agents to identify and check whether the organizations are hiring within the age limit or hiring minors.
4. Government must provide licensing for the products being procured ( 2016).

1. There must be negative reinforcement and punishments for the employees who do not abide by the laws specified for working in the organization.
2. However, there must be a constant reward system to eliminate and remedy the unethical behavior and promote ethical behavior and activities.
3. The proper motivation theories and reinforment program should be there to help employees so that they could comply with the all the applicable rules and regulations.

References 

Crane, A. and Matten, D., 2016. Business ethics: Managing corporate citizenship and sustainability in the age of globalization. USA: Oxford University Press.

Fernandez-Feijoo, B., Romero, S. and Ruiz, S., 2014. Effect of stakeholders’ pressure on transparency of sustainability reports within the GRI framework. Journal of business ethics, 122(1), pp.53-63.

Hoffman, W.M., Frederick, R.E. and Schwartz, M.S. eds., 2014. Business ethics: Readings and cases in corporate morality. John Wiley and Sons.

Jennifer. M.  2016. Modern slavery allegations burn clothing supply chains [Online]. Available from https://www.supplychaindive.com/news/modern-slavery-clothing-retail-supply-chain/429021/ [Accessed as on 14 November 2018].

Kaptein, M., 2015. The effectiveness of ethics programs: The role of scope, composition, and sequence. Journal of Business Ethics, 132(2), pp.415-431.

Marquis, C., Toffel, M.W. and Zhou, Y., 2016. Scrutiny, norms, and selective disclosure: A global study of greenwashing. Organization Science, 27(2), pp.483-504.

Murray, C.C., 2018. No Longer Silent: How Accurate Are Recent Criticisms of Employment Arbitration?. Alternatives to the High Cost of Litigation, 36(5), pp.65-80.

Neu, D., Everett, J. and Rahaman, A.S., 2015. Preventing corruption within government procurement: Constructing the disciplined and ethical subject. Critical Perspectives on Accounting, 28, pp.49-61.

Neves, P., Almeida, P. and Velez, M.J., 2018. Reducing intentions to resist future change: Combined effects of commitment?based HR practices and ethical leadership. Human Resource Management, 57(1), pp.249-261.

Trevino, L.K. and Nelson, K.A., 2016. Managing business ethics: Straight talk about how to do it right. Australia: John Wiley and Sons.