Business Ethics & Corporate Governance

SUMMARY: The purchasing function has been disregarded for a long time, but now it is being scrutinized closely because of its interaction with suppliers and external market.

The chapter has highlighted the importance of the purchasing function and the impact just-in-time has on achieving product quality through long-term contract and fair prices.

Ethical issues in purchasing- favoritism, accepting of gifts by suppliers, disclosing confidential information were also discussed. Purchase managers often favor suppliers who are also good customers. Thus developing a mutually beneficial relationship. In some cases, purchasing managers discriminate in favor of suppliers who are close to the top management so that they can gain the support and confidence of the top officials.