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Ethics within the Procurement Function

Ethical Sourcing

Ethical sourcing has become an important element of supply chain management and procurement.  Companies can no longer ignore ethical considerations when it comes to both internal behavior and the behaviors of their supply chain partners.  The increase in globalization has made it even more critical for companies to monitor the ethical behavior of the suppliers and subcontractors within their supply chain, which may span multiple borders before reaching the consumer.

Ethical Companies

What is an ethical company? Ethical companies establish, monitor and maintain fair and honest standards of behavior for all company stakeholders, including their supply chain partners.  In the sphere of procurement, a key is the establishment of long-term partnerships with suppliers, which often requires a change in the culture between buyers and suppliers from adversarial to collaborative.

A strong corporate-wide attitude of ethical behavior within an organization is not possible without being driven by upper management so that all employees and other stakeholders understand the company’s policy toward incorrect behavior.   It is up to senior management to set the tone, as well as take action when unethical behavior occurs.  It is the role of procurement to ensure that suppliers meet these same standards of behavior.

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