The Ethical and Social Responsibility of the Purchasing Practices in Industry
Chapter One
Objective of the study
- To evaluate the current landscape of purchasing practices in industry
- To identify and analyze the key challenges and shortcomings associated with ethical and social responsibility in purchasing practices.
- To examine the existing strategies, frameworks, and initiatives implemented by businesses, industry associations, and governmental organizations to promote ethical conduct and social responsibility within supply chains.
CHAPTER TWO
REVIEWED OF RELATED LITERATURE
SOCIALLY RESPONSIBLE PURCHASING
“Purchasing or procurement is the process by which companies acquire raw materials, components, products, services, or other resources from suppliers to execute their operations”. It can also be defined as the “process in which the supplier” transports products as result of customer’s request (Chopra and Meindl, 2007). According to Van Weele (2010), “sustainable purchasing is the consideration of environmental, social, ethical and economic issues in the management of an organization’s external resources”. “In this way, the supply of all goods, services, capabilities and knowledge that are necessary for running, maintaining and managing the organization’s primary and support activities will provide value not only to the organization but also to society and the economy”. Socially responsible purchasing is an area that interests managers and scholars. It is significant in all aspect of supply chain which include customers, employees and suppliers (Carter 2004). In their work, Carter and Jennings (2004) established socially responsible purchasing to consist of “stand-alone activities” such as buying from “minority-owned suppliers”, environmental purchasing, safety, human rights and issues of philanthropy at supplier plants. They argue that “socially responsible purchasing activities are purchasing activities that meet the ethical and discretionary responsibilities expected by society”. Socially responsible purchasing is believed to concentrate on “upstream life cycle stages”, production methods and conditions such as workers/human right, wages, health and safety, minorities, gender, human rights and racial equality (Lobel 2006). Carter and Jennings (2004) posit that socially responsible purchasing can serve as a substantial source of organisational sustainable competitive advantage. They also discovered that top management leadership, employee initiatives, people-oriented organisational culture and customer pressure will lead to an increased level of purchasing social responsibility. In a related work, Salam (2009) established the significant influence of government regulations and values of employee on socially responsible purchasing. It can therefore be deduced from these authors’ argument that the drivers of socially responsible purchasing activities are important in any organisation’s move to improve its supply chain processes and to attain success.
EXPLORING SUPPLY CHAIN PERFORMANCE
In operations management, successful supply chain performance of organisations is becoming increasingly collaborative, therefore, the process of performance management should be associated with the company’s strategy (Lohman et al., 2004; Forslund, 2014). According to Chan et al. (2003), performance measurement provides improvement in performance in the pursuance of supply chain excellence. Blome and Paulraj (2013), in their research on ethical climate and purchasing social responsibility, posit that apart from addressing the social needs of the supply chain, socially responsible purchasing can also offer significant performance benefits. Similarly, Carter and Jennings (2000) were of the opinion that higher levels of socially responsible purchasing will directly improve supplier performance since there is commitment in the buyersupplier relationship. This suggests that socially responsible purchasing activities are important in the company’s supply chain performance. Carter and Jennings are also of the view that direct benefits result from socially responsible purchasing activities in the form of improved lead times, efficiency and supplier quality. However, in his research into the performance metrics in supply chain management, Constangioara (2013) found the performance metrics utilisation in Romanian supply chains to enable “inter-functional” and inter-organisational integration in management” of the supply .
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine the ethical and social responsibility of the purchasing practices in industry. Dangote cement, Lagos state form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain the ethical and social responsibility of the purchasing practices in industry. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the ethical and social responsibility of the purchasing practices in industry
Summary
This study was on ascertain the ethical and social responsibility of the purchasing practices in industry. Three objectives were raised which included: To evaluate the current landscape of purchasing practices in industry, to identify and analyze the key challenges and shortcomings associated with ethical and social responsibility in purchasing practices and to examine the existing strategies, frameworks, and initiatives implemented by businesses, industry associations, and governmental organizations to promote ethical conduct and social responsibility within supply chains.. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Dangote cement, Lagos state. Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
In conclusion, the ethical and social responsibility dimensions of purchasing practices in industry are paramount for fostering sustainable business operations and contributing positively to society. By integrating ethical considerations into procurement decisions, companies can uphold standards of fairness, integrity, and accountability throughout their supply chains. This study has highlighted several key aspects of ethical and socially responsible purchasing practices, including supplier ethics and standards compliance, fair trade and responsible sourcing, environmental sustainability, human rights protection, and community engagement and development.
Recommendation
Based on the findings of the study on the ethical and social responsibility of purchasing practices in industry, several recommendations can be made to guide companies in enhancing their procurement processes:
- Develop and implement comprehensive ethical sourcing policies that outline expectations for suppliers regarding labor practices, environmental sustainability, human rights protection, and business ethics. These policies should be communicated clearly to all stakeholders and integrated into procurement contracts and supplier agreements.
- Regularly conduct audits and due diligence assessments to evaluate supplier compliance with ethical standards and identify areas for improvement. Collaborate with third-party auditors and industry associations to enhance transparency and credibility in the auditing process.
- Actively promote supplier diversity and inclusion by sourcing from minority-owned, women-owned, and small businesses. Establish supplier diversity programs and initiatives to create opportunities for underrepresented groups and foster economic empowerment within local communities.
- Invest in sustainable procurement practices by prioritizing eco-friendly materials, reducing waste generation, and favoring suppliers with robust environmental management systems. Leverage certifications and standards such as Fair Trade, Forest Stewardship Council (FSC), and ENERGY STAR to validate sustainable sourcing practices.
- Strengthen community engagement efforts by collaborating with local stakeholders, including communities affected by purchasing activities. Support community development initiatives, promote economic empowerment, and foster positive relationships through transparent communication and stakeholder consultations.
References
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- Mohan, S. (2010). Fair trade without the froth: A dispassionate economic analysis of ‘Fair Trade’. The Economic Journal, 120(547), 793-819.
- Seuring, S., & Müller, M. (2008). From a literature review to a conceptual framework for sustainable supply chain management. Journal of Cleaner Production, 16(15), 1699-1710. Bevans, M. (2018). Socially responsible procurement: The challenges of implementing community benefits agreements. Journal of Public Procurement, 18(2), 148-172.
- Fair Trade USA. (n.d.). About Fair Trade Certified.
- International Labour Organization. (n.d.). International Labour Standards.
