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NEED FOR THE APPLICATION OF ETHICS OF PURCHASING IN THE PRACTICE OF PURCHASING

ABSTRACT

This research project intends to explore the need for the application of ethics in purchasing practice I industries in Nigeria. It is also showing the meaning and the social responsibilities of ethical behaviours to the buyers and suppliers in the industries. The chapter three explains the major findings of the researcher then the summary, recommendations and conclusion. This research work cannot be said to be exhaustive due to changing nature of our industries, and it is not design to replace other views or subsequent research on this study objectives, but has gone a long way in highlighting the ways to the much advocated efficient purchasing practice which has eluded our system. 

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND to THE STUDY 

In every organization, for their activities to move well there must be one ethical code of conduct among the workers. Almost every day we are faced with ethical choices.  In other words, we find ourselves in a situation in which we must make a decision about how to act. Every profession has a code of ethics. This is a set of principles that determines how a person should behave. Lawyers must do everything they can to defend their clients in court. If they take bribe to do something that may hart their client cases, they are been unethical. In the same way, doctors and nurses agree to do everything they can to save the lives of other people. If they hurt another person or if they do not help someone who needs medical attention, they are being unethical. Journalists must tell the truth to the best of their knowledge. If they write articles that they know are not accurate or true, then they are being unethical. 

Ethics in the ordinary society covers a large spectrum. It has much to do with integrity, professionalism and discipline. Ethics refers to the standards of conduct and moral judgment as conforming to the standard of conduct of a given profession. The general business ethics, the principles and values and norms that guide the business operation and behaviours. Some of this principles and values have been seriously ignored which makes corruption and bribery are no more immoral acts. The purchasing department is one of the most sensitive departments in a company or any establishment. Professionalism calls for not only skillfulness but a standard of conduct which depicts being ethical. We will have many codes of ethics and they centered on honesty, loyalty, justice, service and fairness. Even in the public sector the public officers must have a standard code of conduct to guide their behaviours.

i. Definition of Ethics: The term ethics is defined in the dictionary as a set of principles or value. Values and principles are beliefs we hold about what is right or wrong. When we behave ethically, we behave in a way that shows those values and principles. Lysons (1981:198) defines ethics as a science of conduct. Conduct in this context means conscious and purposeful action directed to an end. 

According to Oxford Advanced Learners Dictionary of Current English, Ethics are the moral principles that govern or influence a person behaviour. Ethics can be written as the discipline that has morality as a subject matter. It is also an activity that indicates when somebody has done badly or good. ii. Moral Responsibility: Moral concerns with the principles of right and wrong behaviour. In Nigeria, the professions like law, banking according insurance have maintain moral responsibility to their client in order to improve their intergrity and competence. But most of them have thrown their professional moral consciousness to mind and embarked ethical practice with the excuse to remain alost or keep going. 

iii. Ethical Standard: Ethical standard means following to an accepted standard of good behaviour in a profession in a trade, or in any given environment. An individual cannot set ethical standard, it is normally set by a group, society or an organization. However, there are a lot of factors that influence ethic standard. Some positive factors are:

a. Environment regulation 

b. Legislation intimation 

c. Education of purchasing business manager. 

Increase in professionalism and education. Some Negative factors are:

a. Competition stress to succeed 

b. Law or decree in manager professional and education 

c. Pressure for profit from shareholder.

Therefore for a purchasing business to be effective and compete favourably it must adhere to well ethical standard.

iv. Ethical Decision-Making and Assumption: Ethical assumption are built into any decision you may ever have made about the right thing to do or the right judgment to any one else’s action. 

Ethical awareness can be developed through some methods.

A good code of ethics have to be developed and those that are concerned should be made to know the rules and regulation guiding that particular establishment. Therefore ethics in purchasing considers the principles on which people habitually act and, in business it may be considered as an extension of the commercial practices and rules which the majority of businessmen recognized as essential to good, continuing relations.

1.2 STATEMENT OF THE PROBLEM 

These are the major potholes that will make ethics not to move well in an organization and the problems are: 1. Lack of competent staff: for materials to be purchased at a reasonable price, there is need for competent staff, who understands the various methods of pricing if there is lack of ethics in the organization, it reduces the success of ethics. 2. Unreliable Suppliers: The reliability record of some suppliers fall below the required level, this bring problems to the purchasing department.  3. Poor Performance: The buyer has a wide knowledge of supplier organization in terms of their performance history and then cite situations to show this in depth knowledge. 4. No reputation: The organization may not enjoy a reputation for fair dealing and will not pay promptly. 5. Lack of Intergrity: Where the supplier lacks intergrity many suppliers competing may obtain the contracts.

1.3 THE OBJECTIVE OF THE STUDY

The objective of this research is to look at the need for the application of ethics in purchasing practice and the objectives are:

a. To investigate into the quality and quantity as well as experiences of work force as to see if this has bearing on their behaviours.

b. To know if there is a good source of supply in the organization.

c. To examine the motivational factors affecting the job performances of the workers. 

d. To examine how dealings are conducted between buyers and suppliers.

e. To investigate on the integrity of buyers and the suppliers in the industry.

1.4 THE SIGNIFICANCE OF THE STUDY 

The need of ethics in purchasing is very important in many ways and they are as follows: 1. The study is important to the researcher as a student because without it the school will not award me the National Diploma (ND).
2. It helps the researcher to know how to write projects in future and help me to have knowledge of the topic ethics in purchasing. 3. It is also important to the industries because when they look at it they will know if they are doing the right thing and if they are not, it will help them to do the right thing. 4. It helps the organization to develop a sound relationship with their suppliers.

1.5 RESEARCH QUESTION

These are the questions that helps the researcher to find out some facts in this work they are set in order to gather information, and effective ideas about the work. The questions are:

1. Do you know purchasing ethics. 

2. Does purchasing ethics has impact in the life of the buyers.

3. Do you know that purchasing ethics has impact on the behavioural conduct of the suppliers.

4. Is purchasing ethics important in the practice of purchasing.

1.6 THE SCOPE OF THE STUDY

The study is on the need for the application ethics in purchasing practices, the information a gotten from textbooks, lecture notes, and from explanations gotten from my guide. The specific area to cover is the ethics of purchasing with regard to industries and companies that practices purchasing in their organizations. The study also covers the ethical code of conduct among workers or staffs in the organization. That is relationship that exist between the industry and their suppliers from time to time. It also tells how industries can make use of ethics and its need.

1.7 LIMITATION OF THE STUDY

The researcher encountered a lot of problems in the course of carrying out this study effectively and efficiently, prominent among them are: 1. Non-disclosure of Information: Some industries find out difficult to disclose their business particulars to aliens, some of them saw it as a means of divulging their business secretes to outsiders, especially when it comes to finance and some saw it as a way of unmaking their inefficiencies and in capabilities.  2. Inadequate Finance: The researcher being a student who depends on others like family relatives for financial assistance is greatly limited in her finance to fly from school to some industries or establishments in order to get vital information about the study. This is rather difficult and tasking because of the huge transportation fare to spent and the risk involved on roads in trying to get in touch with the purchasing managers who seemed not to be keeping appointments. 3. Time Constraints: The contribution more to the problem, the researcher’s limited time was shared between scrambling for information’s her regular pressing lectures and other academic works etc not withstanding these problems, the research succeeded in getting information’s required.

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