UNETHICAL BY PROXY

If you build that foundation, both the moral and the ethical foundation, as well as the business foundation, and the experience foundation, then the building won't crumble...Henry Kravis

There is unrelenting, increasing pressure on corporations to cut costs. The problem with trying to meet metrics, which are sometimes unrealistic, it  causes the people within that corporation to cut corners, to turn a blind eye, just to ensure that their boss showers them with accolades and possibly a salary increase.

But what happens when you accept a price reduction but it is because the supplier is doing something not quite on the up-and-up? You may suspect this, you may know it, or perhaps not. Regardless, you have now become unethical by proxy and the potential damage to your reputation and that of your corporation are at risk.

When reviewing the response to an RFP, most evaluators will have lots of questions when there is an obvious low-ball offer. But we often don't question when there is only a few percent point differential and as such happily go ahead and award the business. Then we can joyfully put our savings into the spreadsheet, believing that we have done a good days work. 

Yet this is not where your due diligence should end. There are some industries where there are very low margins (particularly when the client is a large corporation), things like couriers, distribution, contract labour etc., where even a few percent difference from the "pack" should give pause. 

Is there something that this lower provider does not include in their pricing that will cost you more in the long run? Or are they doing something behind the scenes that may not be illegal, but falls squarely in the unethical arena? 

In procurement, it is our role to ensure ethical behaviour by all, our internal clients and our suppliers. We cannot end up saying "well, it was them, not us." This doesn't fly and the accolades you got today, could quickly turn into jeers tomorrow. And worse yet if you've been advised that there is some funny business going on, or that you suspect it. 

By proxy you are as culpable as the culprit -- you are an enabler or as they say in criminal court you are an accessory. 

So be careful about just being metric and not ethics oriented, because otherwise your carefully constructed pyramid of savings will crumble in an instant, along with your reputation.