Spend Management Ethics: Do the Right Thing

When times get tough, it's much easier to see the true character of individuals and even companies. Over on Spend Matters affiliate blog Metal Miner, Lisa recently posted an entry titled "Do the Right Thing". In it, she provides three recent anecdotes that call into question the ethics of buyers and suppliers alike. I'll quote the first one verbatim (you can read the other two on your own if you're curious). According to Lisa, "somebody recently told us that they have awarded a new program, an aluminum product, to a new supplier. The supplier has invested significant cost and product development time toward that new product. The client awards the business to that supplier but now wishes to benchmark the product. If there is a savings, the company intends to re-negotiate with the supplier who has developed the product."

What is the right thing in this case? It's not cut and dry based on the information Lisa has shared with us. But if a buying organization proceeded down the path of developing joint IP with a supplier without paying them for it, it's pretty clear that they should honor what appears to be a spoken agreement to source the product from them. However, going out and gathering benchmarks to make sure the price is at the market rate is not unreasonable in my book. Still, this type of behavior was part of the major problem with the US automotive OEM market for so many years. Tier one and tier two suppliers that developed IP could never be sure that their customers would not take the idea and bid it out to other suppliers who could offer the lowest price.

What do you think? In this climate, is it harder to do the right thing? Or are ethics always the same regardless of the economy? I know where I stand. And I'm also lucky enough to have had the experience of working with unethical people in the past and knowing how to spot them as early as possible based on behavior patterns -- and to extricate myself and anyone I'm party to from dealing with them.

- Jason Busch

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