Chapter 4 Flashcards
How can you prevent corruption within Supply Chain
Due-Diligence
Learning about cultures
Regulations:
Foreign Corrupt Practice Act- Abuse of Power
UK Bribery Act
What are the 3 forms of Fraud?
Advance Fee Fraud- up-front payment for undelivered goods
Corporate fraud: Fraud targets an organisation
Individual: Targets 1 person
How does Fraud affect supply chain? (Think how it affects businesses specifically)
Trust is exploited
Relationship is harmed
Huge loss of earnings
When is the difference between a primary and secondary concern?
Primary: Potential Mistreatment of people
Secondary: Negative Media Coverage
What is the signs of slavery?
Low labour costs
Evidence of workers living on site
Lack of eye contact
Poor working conditions
Long shift
What is gifts and hospitality?
Gifts given as gratitude hope of gaining favour of the receiver
Buyer must adopt a policy to combat this, specify what gifts are not acceptable, value of the goods and how goods should be received
What is bribery?
Exchange of something in value
Industries affected by Bribery more:
- Defence
- Mining
- Medical
- Property
What is Fraud?
Unlawfully obtaining funds or resources for their own benefit
Embezzlement
Perceived opportunity, pressure and rationalisation
Example of Sustainable KPIs
Waste sent to Landfill
Consumption of Energy
During the PQQ Buyers can assess the social, economic and environment. What are the key points to these areas?
Social- are the suppliers part of a trade union? Are employees trained in safety?
Economic- Has the whole TCO been considered
Environmental: Does the products harm the health.
What are the ethical codes of practice for profession, sector and company level?
Profession- governance to individuals
Sector- governance for companies
Company- publish its own code of ethics to govern actions
What is nepotism?
Unfair advantage to friends and family
It’s important that conflict of interest has been declared
What are the negative affects of Auditing?
- time wasted
- not a full understanding of the root cause
- over burdening the suppliers
What goes into root cause analysis ?
Allow buyers to address issue and it not occur again
Remedical actions: resolving conflict quick, supplier development programme
What is cultural relativism?
Cultural relativism is a perception of bad behaviour in one culture but not in another. Apply beliefs differently.
