Purchasing Ethics Essay

1322 words - 6 pages

Purchasing Ethics

CASE

Scenario 1

Bryan Janz was just arriving back from lunch when his office phone rang. It was his wife, Nina, calling from home. Nina told Bryan that FedEx had just delivered a package addressed to her. The package contained a beautiful clock now sitting over the fireplace. In fact, Nina said, “the clock looks absolutely beautiful on our living room fireplace”. Thinking the clock was from a family member, Bryan asked who sent the present. She said she did not recognize the name—the clock was from Mr. James McEnroe. Bryan immediately told Nina that she had to repack the clock because it was from a supplier who has been trying to win business from Bryan’s ...view middle of the document...

In fact, Lisa had never been more confident about a quote meeting the demanding requirements of a potential customer.
Troy Smyrna, the buyer at Sealgood Instruments responsible for awarding this contract, called Lisa and asked to meet with her at his office to discuss the specifics of the contract. When she arrived, Lisa soon realized that the conversation was not going exactly as she had expected. Troy informed Lisa that Assurance Technologies had indeed prepared a solid quotation for the contract. However, when he visited Assurance’s facility earlier on a prequalifying visit, he was disturbed to see a significant amount of a competitor’s product being used by Assurance. Troy explained his uneasiness with releasing part plans and designs to a company that clearly had involvement with a competitor. When Lisa asked what Assurance could do to minimize his uneasiness, Troy replied that he would be more comfortable if Assurance no longer used the competitor’s equipment and used Sealgood’s equipment instead. Lisa responded that this would mean replacing several hundred thousand dollars worth of equipment. Unfazed, Troy simply asked her whether or not she wanted the business. Lisa responded that she needed some time to think and that she would get back to Troy in a day or so.

Assignment

1. The buyer at Sealgood Instruments, Troy Smyrna, is practicing a certain type of unethical behavior. What is the term for this behavior? Why is it considered unethical?
2. What should Lisa do in this situation? Formulate a response.

Scenario 3

Troy Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Troy was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Troy said, “I Ben’t like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us!” Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs.
After the meeting, Troy decided he had heard enough. After all, Troy prided himself on being a man of action. There was no way he was going to allow that salesman to keep taking advantage of Southeastern. Troy called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff 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 Southeastern’s process. Jeff also explained...

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