Linking Purchasing to Ethical Decision-Making: An Empirical Investigation

Abstract

The aim of this study is to examine the decision-making processes at work among French buyers—whether beginners or more experienced individuals, when confronted with a dilemma involving an ethical or non-ethical choice to be made. We go on to illustrate these dilemmas through the use of five original scenarios that reproduce typical situations that arise in a purchasing context in relation to the environment, physical integrity, conflict of interest, or paternalism. Based on 172 participants, the results of our study show that, ethical decision-making depends very clearly on two main factors: expertise and gender. The study also reveals that there is not always a coherent link between ethical choices made and the reasons and justifications given for those choices. Ethical options chosen are not exclusively justified on the grounds of purely ethical reasons but also on the grounds of commercial or economic reasons, or else reasons of avoidance.

Appendices

Appendix 1: Presentation of Scenarios and Associated Questions

Scenario 1

Mr. HENRY, who works for an oil distribution company—REXSOLS, is in charge of the purchasing side of a contract involving the transport of petrol by oil tanker throughout France. Eight suppliers have submitted tenders for the job.

One of the suppliers offers a price, per kilometer, which is 8 % less than the other 7 as well as fulfilling all other aspects of the tender specifications, particularly in relation to delivery time scales.

Mr. Henry discovers that the price tendered is actually below the cost price this would amount to a saving for REXSOLS of approximately 780,000 euros per annum.

Nonetheless, Mr. HENRY is told by his line-manager that one of the other suppliers who has also tendered for the job- Transport Inc, is an important existing client of REXSOLS.

Mr. HENRY is asked to choose Transport Inc.

• Question 1: If you were Mr. HENRY, how strongly do you agree or disagree with this decision to choose Transport Inc.?

  • Strongly Agree

  • Agree

  • Indifferent

  • Disagree

  • Strongly Disagree

• Question 2: Please justify and explain your response in two sentences:

Scenario 2

Mr. HODOUIN is a lead buyer for a large international company, SADING, involved in the provision of educational and training services for the company.

Mr. HODOUIN’s son owns a high-class hotel-restaurant business called Le Voltaire, which also offers conference rooms and business training suites.

The hotel submitted a competitive bid to SADING’s tender process and made it onto the shortlist of companies whose references were followed up.

The hotel’s prices are in line with other competitors for provision of similar services in the sector.

Mr. HODOUIN selects and offers the tender to the Hotel Le Voltaire.

The contract involves 3 days residential courses for 12 participants.

The 3-day training periods will take place 18 times per year involving an annual budget of 144,000 euros.

• Question 1: If you were Mr. HODOUIN, how strongly would you agree or disagree with the decision to award the contract to the Hotel Le Voltaire?

  • Strongly Agree

  • Agree

  • Indifferent

  • Disagree

  • Strongly Disagree

• Question 2: Please justify and explain your response in two sentences:

Scenario 3

Mrs. TALLIERE is in charge of procurement of “raw materials” for a cosmetics group called LECTRON.

Mrs. TALLIERE has just received a report from a supplier notifying her there is a risk (average) that the ingredient they have just dispatched to LECTRON for the production of an anti-aging cream, does not conform to industry guidelines and also that there is a minor risk that the ingredient is past its “best before” date.

The end product using this ingredient has already been dispatched by LECTRON to its clients. Internal quality control procedures carried out in-house by LECTRON have not raised this matter as an issue.

• Question 1: If you were Mrs. TALLIERE, how strongly would you agree or disagree with the decision to recall the entire range of products already dispatched to clients?

  • Strongly Agree

  • Agree

  • Indifferent

  • Disagree

  • Strongly Disagree

• Question 2: Please justify and explain your response in two sentences:

Scenario 4

Mr. CLAVERIE, is a buyer, responsible for joint investment with industrial suppliers, principally in the plastic injection/molding sector.

The company wants to install a new injection machine capable of producing 64 parts per cycle and an overall increase in production.

The new machine would be used exclusively for production of parts overseen by Mr. CLAVERIE.

This increase in production is to go hand in hand with additional security and safety measures to be taken on site by a supplier in order to bring about a 5 % annual drop in workplace injuries.

However, a reduction in the cost per component part produced using the new machine will only be achieved if production runs at 80 % of available time.

Mr. CLAVERIE cannot guarantee this level of production to the supplier, the most he can assure him of is use of the machine for 70 % of available production time.

The supplier is hesitant about investing in the new machine.

The company Mr. CLAVERIE works for is financing the machine system on a temporary basis such cost to be recouped upon final production, and as a result, the final decision rests with Mr. CLAVERIE.

• Question 1: If you were Mr. CLAVERIE, to what extent do you agree or disagree with the decision to invest in the new equipment?

  • Strongly Agree

  • Agree

  • Indifferent

  • Disagree

  • Strongly Disagree

• Question 2: Please justify and explain your response in two sentences:

Scenario 5

Mr. ALBERT, a buyer with LUX, has just received a report about a new line of production that has just been introduced by one of his company’s suppliers.

The production costs involved represent a 30 % drop on current costs.

However, this new line of production does not conform to anti-pollution regulations and targets set by local authorities.

Pollution levels are 6 % higher than current agreed levels.

In order to bring itself within regulation guideline limits, the report suggests deferring production of the new product for a year.

But, there is a strong risk that competitors will install the same new method of production within that year, which would remove the current competitive advantage for LUX.

• Question 1: If you were Mr. ALBERT, how strongly would you agree or disagree with the decision to invest immediately in the new line of production?

  • Strongly Agree

  • Agree

  • Indifferent

  • Disagree

  • Strongly Disagree

• Question 2: Please justify and explain your response in two sentences:

Appendix 2

Coordinates and value of significance for each assessment category variable on the first 2 axes

	Coordinates		Value F (figures in bold—threshold at 5 %)
	F1	F2	F1	F2
Anc	2.58	0.38	8.21	1.14
FC	−0.68	−0.04	−3.75	−0.19
FI	−1.29	−0.32	−3.98	−0.94
Female	−0.30	−1.48	−1.32	−6.23
Male	0.20	0.98	1.32	6.23
Young Personnel	−0.66	−0.71	−4.92	−5.07
Older Personnel	1.24	1.35	4.92	5.07
S1—non-ethical response	−1.79	0.49	−7.50	1.95
S1—ethical response	1.09	−0.43	6.60	−2.50
S1—indifferent response	0.88	0.81	1.34	1.17
S2—non-ethical response	−1.37	0.88	−6.00	3.66
S2—ethical response	0.89	−0.67	4.31	−3.10
S2—indifferent response	0.88	−0.29	2.12	−0.67
S3—ethical response	−0.28	−1.08	−2.34	−8.49
S3—non-ethical response	−0.06	2.98	−0.18	8.38
S3—indifferent response	2.95	1.00	1.46	1.43
S4—non-ethical response	−0.12	0.35	−0.85	2.33
S4—ethical response	−0.38	−0.85	−1.28	−2.71
S4—indifferent response	1.84	0.16	1.29	0.28
S5—non-ethical response	−0.50	1.74	−1.92	6.34
S5—ethical response	0.22	−0.90	1.52	−5.93
S5—indifferent response	0.67	−0.49	0.80	−0.55
S1—commercial justification	−1.82	0.63	−6.18	2.02
S1—hierarchical justification	−0.98	−0.64	−2.30	−1.42
S1—economic justification	0.78	0.56	2.78	1.91
S1—ethical justification	1.64	−0.94	5.32	−2.88
S2—commercial justification	−1.78	1.03	−6.56	3.58
S2—hierarchical justification	2.11	0.66	3.50	1.03
S2—economic justification	0.60	0.67	1.41	1.49
S2—ethical justification	0.64	−1.09	3.13	−5.01
S3—commercial justification	−0.27	−0.92	−0.99	−3.16
S3—ethical justification	−0.74	−1.28	−2.86	−4.67
S3—avoidance justification	0.92	1.97	3.77	7.63
S4—security-based justification reason	−1.67	−1.14	−3.72	−2.41
S4—transfer of risk justification	0.83	1.51	1.94	3.36
S4—economic justification	−0.09	−0.04	−0.69	−0.28
S4—ethical justification	3.27	−0.91	4.18	−1.10
S5—risk justification	0.39	−0.90	1.89	−4.14
S5—economic justification	−0.69	1.08	−2.94	4.35
S5—ethical justification	0.51	−0.06	1.29	−0.15