The Ethical and Social Responsibility of the Purchasing Practice in Industries
TABLE OF CONTENT
LIST OF TABLES viii
LIST OF FIGURES ix
CHAPTER ONE: INTRODUCTION 1
1.1 Background of the Study 1
1.2 Relevance of the study 2
1.3 scope of the study 4
1.4 objective of the study 6
CHAPTER TWO: LITERATURE REVIEW 13
2.1 Introduction 13
2.2 Ethical Purchasing 13
2.3 Ethical Purchasing practices 15
2.3.1 Transparency Purchasing practices 16
2.3.2 Accountability Practices in Purchasing 17
2.3.3 Integrity Practices in Purchasing 19
2.3.4 Confidentiality Practices in Purchasing 20
2.3.5 Purchasing Professionalism Practices 22
2.4 Performance 24
2.5 Conceptual Model 25
CHAPTER THREE: RESEARCH METHODOLOGY 27
3.1 Introduction 27
3.2 Research Design 27
3.3 Population of the Study 28
3.4 Data Collection 28
3.5 Data Analysis 29
3.6 Operationalization of the Study Variables 30
CHAPTER FOUR: DATA ANALYSIS, FINDINGS AND DISCUSSION 32
4.1 Introduction 32
4.2 Response Rate 32
4.3: Age brackets of the respondents 33
4.3.1 Length of continuous service 34
4.3.2: Length of existence of the organization 35
4.4: Ethical Purchasing practices in Golden Guinea Brewery Plc 35
4.4.1: Transparency purchasing practices used by Golden Guinea Brewery Plc 36
4.4.2: Accountability practices in purchasing used by firm in Golden Guinea Brewery Plc 39
4.4.3: Integrity practices in purchasing used by firm in Golden Guinea Brewery Plc 42
4.4.4: Confidentiality practice in purchasing used by firm in Golden Guinea Brewery Plc 45
4.4.5: Purchasing professionalism practices used by firm in Golden Guinea Brewery Plc 48
4.4.6: Performance 51
4.5 Inferential Statistics 53
4.5.1 Regression Analysis 53
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS 58
5.1 Introduction 58
5.2 Summary 58
5.3 Conclusion 61
5.4 Recommendations 63
5.5 Limitation of the Study 64
5.6 Suggestions for further Research 64
APPENDIX I: LIST OF GOLDEN GUINEA BREWERY PLC IN UMUAHIA, ABIA STATE 70
APPENDIX II: COVER LETTER 71
APPENDIX III: RESEARCH QUESTIONNAIRE 72
This research project intends to explore the Ethical 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.
1.1 BACKGROUND OF THE STUDY
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.
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 ethical 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.