MAKERERE UNIVERSITY BUSINESS SCHOOL

BACHELOR OF PROCUREMENT AND SUPPLY CHAIN MANAGEMENT

ACADEMIC YEAR; 2018&2019
SEMESTER; TWO
COURSE UNIT; PROCUREMENT ETHICS
COURSE CODE; PSM2201
GROUP; J

REGISTRATION
NAMES NUMBERS SIGNATURE

OBA SAMUEL 17/U/19114

KYOMUHENDO VIVIAN
NSIIMIRE 17/U/19076

NIWAMANYA SHARIFAH 17/U/16560/EVE

AMANYA BATHSHEBA A 17/U/11656/PS

NNABADDA PAULINE 17/U/16589/PS

MATSIKO LIVINGSTONE 17/U/19081

ASABA LETICIA KOBUSINGE 17/U/11862/PS

OYAT SHARON 17/U/19247/PS

NUWENYINE SHARON 17/U/16686/PS

KATO PAUL KAYANJA 17/U/13214/PS

 SUPPLY CHAIN ETHICS

Ethics. The term ethics refers to moral principles that govern people’s behavior or the
conducting of an activity. And therefore it’s a philosophical concept that involves systematizing
defending and recommending concepts of right and wrong conduct.

A supply chain is a network of facilities that procure raw materials, transform them into
intermediate goods and then final products and deliver the goods to customers through a
distribution system.

Supply chain ethics is practice of providing goods and services to customers while subscribing
to an ethical code and also maintaining a good relationship with the parties involved in the
supply of those goods.

Supply chain ethics are integral and businesses need to understand what they are and how to
maintain them. Many customers claim that ethical standards of retailers matter to them. Indeed
all signs point to the growing importance of supply chain ethics and these companies that prove
that they play by the book are likely to rise above the rest.

However what is and isn’t regarded as acceptable is always changing and many companies may
need a super course in what they need to know about supply chain ethics.

Components of supply chain ethics.

When talking about supply chain ethics experts generally focus on the following;

Freedom of employment and association. The supply chain ethics have a provision on the right
of one being employed in an organization, institute or supply chain and also associate among
each other as supply chain activities are being carried out.

The eradication of child labor. Ethical values disregard the use of children as labor in any kind
of work, organization or institute. Therefore supply chain ethics implement the respect of
children in the society.

Safe and hygienic working conditions. Ethics provide for the wellbeing of employees of an
organization and members of supply chains at large which provide a safe and hygienic working
conditions for example provision of motivation, and training

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Appropriate pay and working hours. All workers are of a right to only give time to their duties
in the organization in the appropriate working hours for example from 8am to 5pm, other
organizations may start at 9am to 5pm according to the written agreement between the employer
and the employee.

Humane and non-discriminatory treatment. No one is to be treated differently from the rest in
case of any issues that rise up and need sorting. It is ethically wrong to treat people under the
same contract, and have similar work design UN equally.

Anti-bribery and corruption. These are areas of malpractice fraudulent practice and therefore
there is need for enforcement of ethical codes against such behavior that may lead the end of a
supply chain relationship.

Environmental awareness. Ethics reminds individuals that environmental friendly practices are
required as they carry out their activities both within the supply chain and outside it.

In the past the above ingredients of an ethical supply chain were largely governed through values
of individual businesses and countries but over the recent decades this has become codified in
international law. Organizations big and small need to be aware of the laws governing supply
chain ethics and where their own business practice fits in with it. In the present the following
supply as well

Corporate social responsibility. This is a management concept where companies integrate

social and environmental concerns in their business operations and interactions with
stakeholders. This is totally supported by supply chain ethics and entailed with in the code of
ethics for supply chains.

Customer focus. For any supply chain, the major aim ought to be satisfying the customer and
giving them value at lower costs. Ethics recognize this need and upholds it in the supply chain
code of ethics.

Integrity. This is the ability to be objective when carrying out supply chain activities. For
example procurement officers are advised not to be baist when carrying out the procurement
process. And therefore the need for such a principle to be emphasized in the supply chain ethics.

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Sustainability. For any supply chain to grow, firms or members require the ability to sustain
themselves in the chain or business. And ethics lay out guidelines on how to achieve this.

Lastly, labor wages. It is unethical to pay employees less when there work is far beyond the kind
of salary they receive. Therefore, the great need for ethics and an ethical code to assist in making
sure that labor is paid fairly.

Many businesses produce their own ethical supply chain codes which all suppliers must comply
with. For example Coca Cola Company is one of such firms and runs ethics and compliance
through the code of business conduct.

Primarily ethics in supply chains are affected by three sources culture, religion, and laws of state.
It’s for this reason we don’t have uniform or complete similar standards across the globe. These
three factors exert influences to varying degrees on entities and humans which ultimately get
reflected in the ethics of supply chains and organizations.

The supply chain code of ethics

Code of Ethics

Sometimes referred to as a Value Statement, it behaves like the Constitution with general
principles to guide behavior; outlining a set of principles that affect decision-making.

It is also referred to as an aspirational document issued by the board of directors containing core
ethical values, principles, and ideas of the organization.

Codes of ethics, also govern decision-making For example if an organization is committed to

protecting the environment and “being green”, the Code of Ethics will state that there is an
expectation for any employee faced with a problem, to choose the most “green” solution.

The supply chain code of ethics

Are the general principles to guide behavior , outline a set of principles that affect decision
making in the supply chain and as supply chain activities are being carried out.

• Ethical codes are adopted by organizations to assist members in understanding the

difference between 'right' and 'wrong' and in applying that understanding to their
decisions.

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The general contents of any ethical code are;

 The introduction which may include the preamble, objectives and principles that govern
the supply chain.
 Values
 Law and policy. This may be the different laws that an organisation follows or refers to
for example the PPDA Act 2003 amended, contracts law and many others
 Personal responsibility. This is a detailed lay out of the responsibilities of members of
the organisation and supply chain.

Key areas are;

 Customer relations. This entails the various ethics that should govern the way members
of the chain relate with the customers and how to serve them best
 Employees. These are focused on because they are directly involved in the activities of
the supply chain and also provide services and professional advice in the organisation
 Stakeholders. These are individuals or firms that directly influence the or are influenced
by the decisions of members in the supply chain.
 Suppliers. These are people that provide raw materials or goods and services to the
organizations in a supply chain
 Society. This in most cases has a say in how activities should be carried out by
organizations therefore a focus in the supply chain code of ethics
 Implementation. These are the different ways in which the code can be enforced for
example through public announcement, uploading them on the internet, publishing it or
organizing seminars and conferences specifically for that.

The supply chain code of ethics is made up of mainly three parts as explained below

Personal integrity and professionalism.

This mainly encourages or informs members to respect one another and to safe guard
confidential information and that honesty, care, and due diligence are ingredients of integrity
and professionalism that seeks for members to be professional in whatever they do.

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Accountability and transparency.

Under this members are called upon to give all necessary information when carrying out
activities and also to be able to account and take full responsibility for their actions.

Compliance and continuous improvement.

All members ought to follow and comply with the laws, principles of the organisation and supply
chain code of ethics. Also informs members that they should continuously work to improve
supply chain policies and procedures to improve their supply chain knowledge and skill levels,
and to share leading practices.

As noted above supply chains are free to adjust the code of ethics to what they want and what
favors them. Below is a detailed form of the code of ethics used by supply chains and what is
entailed in each of the three parts above.

The following are the things entailed in a supply chain code of ethics

1. Standards of conduct. Here members ought to conduct themselves in a manner that a

reasonable and informed third party would conclude as being appropriate to a professional in
supply chain management. Under standards of conduct are the following;
 Avoidance of conflicts of interest. Members should exercise professional judgment and
discretion in order to avoid any apparent or actual conflict of interest when performing
their duties
 Protection of confidential or sensitive information. Where a member has been privy (an
agreement to keep something confidential) to confidential or sensitive information it is
their responsibility to ensure that it remains so.
 Business relationships. Members should maintain relationships with suppliers and third
parties in a way that contributes to and promotes fair competition in the market and
protects the interests and reputation of his or her employer.
 Gifts gratuities and hospitality inducements. When permitted by employing organizations
members must ensure that the objectivity of their decisions is not compromised or unduly
influenced by the acceptance of gifts gratuities or hospitalities of any kind.

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  Environmental and social responsibilities. Members shall exercise their responsibilities in
a manner that promotes and provides opportunities for the protection and preservation of
the natural environment.
2. Professional principles. These are core that are to be upheld by professionals when carrying
out their activities. Members will perform their roles and duties based on the following
principles of professional practice.
 Professional competency. To maintain their professional competency by staying informed
of and complying with the best supply chain management practices
 Professionalism. To provide professional advice to their employer or any other impacted
party to the best of their knowledge recognizing that any final decision is the prerogative
of the senior authority within the employing organization.
 Honesty and integrity.to maintain an unimpeachable standard of integrity and honesty in
all their business relationships both inside and outside the organizations in which they are
employed.
 Responsible management. To optimize without prejudice, the use of resources for which
they are responsible so as to provide the maximum value as defined by the organizations
they represent.
 Serving the public good. To use their position to advance the interests and wellbeing of
the society to denounce all forms of business practice which may compromise value or
bring discredit to the organization or society.
 Compliance with legal obligations. All members of the organization have to beware of
the law that governs their behavior at work, and standards that are relevant to supply
chain management.
3. Governance and compliance. These teams mean seeking commitment while following the
regulations provided. In the event that the provisions in this section do not align with an
institute’s internal policies or by-laws, the latter will take precedence.
 Interpretation. When in doubt on the interpretation of the code, members should refer to
their institute ethics committee or other formal review structure as established within the
policies of each institute.
 Disciplinary action. A member shall not be subjected to disciplinary action through the
member’s institute or corporation.

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  Membership obtained through misrepresentation. A member shall not misrepresent his or
her professional designations or education credentials.
 Admission to membership. A member shall report to the officer of his or her institute a
fact known to that member sufficient to affect the admittance of any person whose
admission, readmission may be detrimental to supply chain management.
 Others include detrimental actions ,evidence of professional misconduct, requirement to
reply in writing, and assistance to the board.

The second part of the code includes; complaint procedures broken down into receipt of
complaint, investigation, appeals, sanctions and master plans.

Benefits of an ethical supply chain

Transparency. This allows registered partners to have access to their own effectiveness,
productivity and compliance and to take appropriate action when it needs to. Ethics help to
promote transparency in the supply chain since it’s hard to hold people accountable.

Satisfying basic customer needs. When we serve customers with respect care and their interests
at heart it bring along their satisfaction and continuity of the supply chain. Being fair honesty and
ethical is one of the basic and so every party in the supply chain network under take serious
commitment in order to meet customer expectations.

Creating credibility. This means that with the help of ethics supply chain members are able to
give credit to each other as the activities are properly handled. A supply chain that is believed to
be driven by moral values is respected and therefore it’s known for good corporate governance
and responsibility in activities and so that perception is held far and wide even by those who
even do not know what business a supply chain is into.

Securing the society. Often ethics succeed in safe guarding the society the law machinery is
often found acting as a mute spectator unable to serve the society and environment.

Helps in the use and respect of technology. For example, technology is growing at such a fast
pace that by the time law comes up with a regulation we have a newer technology with new
threats replacing the older one. Lawyers and public interest may not help a great deal but ethics
can.

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Long-term chain gains. Supply chains guided by ethics and values are profitable in the long run
though in the short run they may seem to lose money. For example Tata group one of the largest
conglomerates in India was seen on the verge of decline at the beginning of 1990s which soon
turned out to be otherwise

Collaboration. Ethics create a sense of trust among members of supply chains hence fueling
collaboration among each other when making sure the needs of the customers are well met and
satisfaction plus value have been obtained.

Encourages and makes decision making easy in supply chains. A man’s destiny is the sum
total of all the decisions that he or she takes in course of his life. The same holds true of supply
chains. Decisions are driven by values for example supply chains that doesn’t value competition
will be fierce inputs operations aiming to wipe out its competitions and establish a monopoly in
the global market.

In conclusion, the above are the components, contents of supply chain ethics, and benefits of a
supply chain code of ethics.

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