Ethical And Social Responsibility Of The Purchasing Practice In Industries
(A Case Study Of Golden Guinea Brewery Plc Umuahia Abia State)
Ethical and social responsibility in purchasing practices within industries are fundamental aspects that underscore corporate integrity and sustainability. By adhering to ethical principles, such as fairness, transparency, and accountability, organizations can foster trust among stakeholders and promote a positive reputation. Moreover, incorporating social responsibility into purchasing decisions involves considering the impacts on various stakeholders, including employees, suppliers, local communities, and the environment. This entails practices such as sourcing from suppliers with fair labor practices, supporting local businesses, reducing environmental footprint through sustainable sourcing and packaging, and ensuring the safety and quality of products. Embracing ethical and socially responsible purchasing practices not only enhances corporate citizenship but also contributes to long-term business success by mitigating risks, enhancing brand value, and fostering stakeholder loyalty.
This research project intends to explore the Ethnical and social responsibilities of the Purchasing Practice in Industries in Nigeria.
I deemed it necessary since this research topic is unique to industries in Nigeria, an environmental practical research was carried on, in a brewery industry using Golden Guinea Breweries Plc Umuahia as a case study which was used to generalize the project objectives.
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 objective, but has gone a long way in highlighting the ways to the much advocated efficient purchasing practice which has eluded our system.
Title page ii
Approval page iii
Dedication iv
Acknowledgement v
Abstract vii
Table of contents viii
CHAPTER ONE
1.0 Introduction 1
1.1 The Background of study 4
1.2 The relevance of study 5
1.3 The scope of study 6
1.4 The objective of study 7
CHAPTER TWO
2.0 Literature Review 8
2.1 The meaning of Ethical and social responsibilities 8
2.1.1 Emergence of Ethical and social responsibilities 9
2.2 Principles of purchasing practice for buyer in Industries 10
2.3 Ethical responsibilities of the purchasing
practice for buyers in industries. 13
2.4 Social responsibilities of the purchasing
practice for buyers in industries 14
2.5 How to ensure responsible Ethical Behaviour 15
2.6 Approaches to Ethnical and social responsibilities. 18
CHAPTER THREE
3.0 Research methodology 19
3.1 Sources of data and information 19
3.2 Instruments for data collection 20
3.3 Research population 20
3.4 Method of analyzing data 21
3.5 Hypothesis formulation 21
CHAPTER FOUR
4.0 Data Analysis and Presentation of Result 22
CHAPTER FIVE
5.0 Discussion of results and findings 34
5.1 Findings/problems Identified recommendation 35
5.2 Proof of Hypothesis 36
5.3 Recommendations 39
5.4 Conclusion 40
Questionnaire 42
Bibliography 46
INTRODUCTION
Purchasing had been practiced right from ancient times. Organizational purchasing started in Nigeria Seriously after Independence. Before Independence, the Industry was mainly administrative and not manufacturing, manufacturing firm started shortly after Independence in Nigeria in earnest.
Purchasing department was developed immediately in Industries an assigned with major roles such as:
1. Finding and approving suppliers
2. Ensuring delivery at the right time
3. Warning of delays
4. Verifying invoices
5. Organizing all discussion with suppliers.
6. Speculative buying
7. Advising on prices and
8. Acting as a window on the world
These major roles cannot be achieved except purchasing principles and practice are fully employed.
Many industries failed because ethical and social responsibilities of the purchasing practice for buyers in industries were ignored. The theoretical discussion of ethical and social responsibilities naturally prescribes the behaviour that is appropriate or expected of purchasers. But the pertinent or crucial question is whether in reality purchasers are adhering ethically and socially responsible? Are purchasers attaching importance to the satisfaction of industries in acquisition of material and enhancing high level of productivity? How far in reality are buyers being ethically and socially oriented in their purchasing activities?
Looking at Nigerian industries, therefore, we observed the prevalent tensency among some of the purchasing officers who embezzle money in their purchasing activities as against the interest of their company’s use. This selfish attitude causes a lot of problems for the industry if they are not honest in discharging their responsibilities.
The purchasing principles are yet to be adopted or practiced by some Nigeria’s business enterprise. There are a lot of things being practices which negates the purchasing ethics. Ethical and social responsibilities of the purchasing practice in industries are desperately needed in Nigeria and should be adhered to or practiced by purchasing officers, especially in this era of grave economic and social ills prevalent in many transactions in Nigeria business. There are a lot of vices being committed by purchasing officers who do not have purchasing orientation. For instance, we have the following unethical practices in Industries.
1. OVER INVOICING: This unethical practice is similar to commercial bribery. In this case a purchasing officer asks the supplier to inflate the invoice value of the order place for his company use.
2. BRIBES, GIFTS OR KICK BACKS: In some organization purchasing officers demand bribes, gifts or kick-backs from suppliers and sales managers.
3. POOR QUALITY OF MATERIALS: In some organization purchasing officers embezzle money in their purchasing activities as against the interest of their company by buying poor quality materials for the company’s use.
All the foregoing practices constitute unethical behaviour. Unethical behaviour can be described as anything on the part of the purchasing officerswho betrays the confidence their employers and consumers repose on them. This unethical acts have anti-social affects on the products by Nigerian industries.
Unethical acts run counter to objectives of purchasing officers to abide by the codes of conduct of the organization or professional body.
The researcher therefore, focuses his study on how ethical and social responsibilities of the purchasing practice for buyers in industries can improve the level of productivity and the general standard of the industries performance and to erase the notion that purchasers are failures and further project the ethical and social conduct expected of a professional buyer in industries.
1.1 BACKGROUND OF THE STUDY
Golden Guinea Breweries Plc, have their major roles which cannot be achieved except purchasing principles and practice are fully employed. In many organization the need for ethnical and social responsibilities of the purchasing practice for buyers in Industries can easily be identified. This is because the Industry, we observed the prevalent tendency among some of the purchasing officers who embezzle money in their purchasing activities as against the Interest of the company’s use. Besides, for further experience on the job, which will attract more advancement and responsibilities. Infact ethical and social responsibility is important that without it the industry will suffer from managerial obsolescence.
Golden Guinea Breweries Plc being a production firm has purchasers, stores managers etc. It is a state government owned enterprise established to meet the industrial and social needs of the state to a large extent, it has been striving to achieve these goals, although there is still room for improvement to this and there fore, the background of the study is aimed at the finding out how effective the ethical and social responsibility could help in achieving this goal.
1.2 THE RELEVANCE OF STUDY
Purchasing provides services on which most economic activities depend. The extent and efficiency with which such services are provided vary among industries.
The need to keep pace with rate of development in the modern world and enjoy the economic blessings engendered in industries have led the researcher to investigate how ethical and social responsibilities of purchasing can improve the level of productivity in industries.
The research is also geared towards creating a sound ethical and social responsibilities of the purchasing function in Golden Guinea Brewery Industry. Also, this work is aimed to expose purchasers in carrying adequate purchasing practices free of unethical practices in Industry. The researcher went a step further to investigate and recommend corrective measures for adoption.
1.3 THE SCOPE OF THE STUDY
The activities of purchasing practice in industry among the industries are the same throughout the country. They have problems and objectives, except in policies and management style which are at individual industries discretions, since this project explores how ethical and social responsibilities of purchasing practice improves the level of productivity in industries. However, there are a lot of industries in Nigeria. And as a result it will be extremely difficult and impossible for the researcher to study all of them considering the time given.
The researcher, decided to use Golden Guinea Brewery Plc Industry to enable him carryout an in-depth study of the organization.
1.4 THE OBJECTIVE OF STUDY
The main objective of this researcher project is to investigate into how ethical and social responsibilities of the purchasing practice at Golden Guinea Brewery Plc can improve the level of productivity of the establishment.
It is also a pre-requisite for the award ordinary National Diploma and this will go a long way to serve as a source of reference to students and lecturers alike in institutions of higher learning.
Ethical and social responsibility in purchasing practices within industries are critical considerations that go beyond mere financial transactions. These practices encompass a range of principles and behaviors aimed at ensuring that procurement activities are conducted in a manner that is fair, sustainable, and accountable to various stakeholders. Here’s an overview of the key aspects of ethical and socially responsible purchasing practices:
1. Supply Chain Transparency: Industries must prioritize transparency in their supply chains. This involves disclosing information about suppliers, sourcing locations, and production methods. Transparent supply chains help prevent unethical practices such as child labor, unsafe working conditions, and environmental degradation.
2. Fair Labor Practices: Ethical purchasing entails ensuring that workers involved in the production of goods are treated fairly. This includes providing safe working conditions, fair wages, reasonable working hours, and the right to organize and collectively bargain.
3. Environmental Sustainability: Industries have a responsibility to minimize their environmental impact. Ethical purchasing practices involve selecting suppliers and products that adhere to sustainable production methods, reduce waste, and minimize resource consumption.
4. Avoiding Conflict Minerals: Conflict minerals, often sourced from regions experiencing violence and human rights abuses, are used in the production of many goods. Industries should strive to avoid using these minerals in their supply chains, contributing to efforts toward peace and stability.
5. Local Community Impact: Purchasing practices should consider the impact on local communities, especially in terms of economic development, employment opportunities, and cultural preservation. Supporting local businesses and communities can enhance social responsibility.
6. Supplier Diversity: Industries should actively seek to engage a diverse range of suppliers, including those owned by underrepresented groups. Supplier diversity fosters economic inclusion and can contribute to a more equitable business landscape.
7. Anti-Corruption Measures: Ethical purchasing involves preventing bribery, corruption, and other unethical behaviors within the procurement process. Establishing clear guidelines and monitoring systems helps to ensure transparency and fairness.
8. Human Rights Protection: Purchasing practices should align with internationally recognized human rights standards. Industries must avoid supporting suppliers that engage in human rights abuses or discriminatory practices.
9. Product Safety and Quality: Industries have a responsibility to provide safe and quality products to consumers. This includes verifying that suppliers adhere to appropriate safety and quality standards.
10. Long-Term Relationships: Building long-term relationships with suppliers fosters collaboration and enables better monitoring of ethical practices over time. Short-term cost-cutting measures that compromise ethics should be avoided.
11. Social Impact Assessment: Before engaging with suppliers, industries should conduct assessments to understand the potential social impact of their purchasing decisions. This helps in making informed choices that align with ethical and social responsibility goals.
12. Ethical Decision-Making: Industries should establish ethical guidelines and frameworks for decision-making within the purchasing process. This empowers employees to navigate complex situations and make choices that prioritize ethics and social responsibility.
In conclusion, ethical and social responsibility in purchasing practices within industries are integral to sustainable business operations. Adhering to these principles not only safeguards human rights, the environment, and communities but also contributes to building a more equitable and just global economy.