Procurement ethics is a concern regardless of the economic climate. However, ethical issues do seem to come up more often when the pendulum swings from good economic times to bad and back.

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From when I was a newbie in the airline industry, I have countless war stories of suppliers coming to me and saying “But we did this for you when you guys were on the verge of bankruptcy. I can’t believe you are bidding out our business.” Of course, I wasn’t there at the time of near-bankruptcy and no one up my procurement chain of command was either.

There was no documented agreement that we owed these suppliers anything. Were their claims true? Were they actually negotiating schemes?

It was impossible to tell. When there is no clear obligation, a procurement team has to put its company’s stockholders first.

The bottom line is this…if you (either as a buyer or seller) feel that you are doing your counterpart a favor in bad economic times and should get “future considerations” for your efforts, put it in writing. It may not feel gentlemanly or ladylike. But without documentation, the new procurement or sales VP in five years won’t know, won’t be able to trace, and probably won’t care what you, as their trading partner, did for them in different economic times.

If you’re willing to invest without a written commitment of consideration, you need to realize that you are risking never seeing a return. It’s not because your counterpart is unethical. You need to expect the players to change. And when they do, you’ll be left to ask yourself whether you did your part to guarantee that you’ll be treated better than the average supplier/customer.

Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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