Business Ethics, Leadership, and Procurement Agency Practices Report

This report provides a comprehensive analysis of business ethics, focusing on ethical practices within procurement agencies. It begins with an introduction to business ethics and its influence on organizational culture, decision-making, and employee conduct. The report delves into two significant ethical scandals: the Rolls-Royce corruption case and the JPMorgan "London Whale" incident, examining the failures in ethical business practices. It then explores potential risks in procurement, including fraud, cost, and quality issues, while emphasizing the importance of accountability and transparency. The report outlines policies and practices that guide ethical conduct within procurement agencies, such as written codes of ethics, ethical training, and regular audits. Furthermore, it discusses the ethical basis of leadership and change, referencing consequentialism, and concludes with recommendations for improving ethical practices, including the use of public relations to manage corporate reputation.

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Introduction
Business ethics plays a significant role in influencing the system that governs moral and
ethical theories that guide values, decision making and behavior of an organization. This is
achieved through developing an organization culture that is centered on ethical business
practices. (Schwartz 2007). These ethical practices in business are stated in the constitution or
regulations of an organization. In relation to ethics in leadership, the organization is responsible
in structuring the culture which is to be followed on a daily basis (Sale 2013). Ethical business
practices allow leaders to direct the employees through decision making as well as empowering
them in their duties. Besides, setting up an organization considering ethical behavior assist a
company realize sustainability initiatives as well as attracting new talent, building and
maintaining rapport in a community. Managing a business in an ethical manner strengthens the
relationships between the management team thereby enhancing stability. Business ethics is
significant not only in creating loyal employees and boosting morale but also tied to profitability
in both short-term and long-term. Moreover, business ethics contributes to corporate social
responsibility initiatives and increasing positive public image of an organization (O'Brien and
Dixon 2012).
Task 1
The UK’s Serious Fraud department conducted an investigation into Rolls Royce engine
maker for over three decades. In the case, it was determined that the company had engaged in
corruption, bribery and false accounting. Instead of the company facing prosecution, it entered
into an out of court settlement where it was liable to 671 million Euros to authorities in UK
among other countries such as Brazil and the United States. The company admitted to uncouth
behavior regarding ethical business practices that govern an organizations operations. The

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behavior influenced the company’s reputation with respect to customers, investors among other
stakeholders (McConnell 2014).
The second ethical business scandal in the UK is widely known as JPMorgan and the
London whale. JPMorgan admitted that the company lost $ 2bn in a period less than six weeks.
As a result of the scandal, the Banks’s stock tumbled significantly resulting to losses on the side
of shareholders. The CEO of the company admitted to the mistake on his part for failure to
keenly follow the trading losses. The scandal arose because a single trader in London who placed
bets large enough that prices moved $10 trillion credit securities market. The company sued the
trader and his supervisor. As a result of the scandal, the two employees left the bank (Crane and
Matten 2016).
Potential risk in Procurement Agency relates to the challenges that are likely to influence
the procurement process in terms of purchase services, products and resources. Among the
common types of procurement risk include fraud, cost, quality and delivery risk. These risks
affect a company’s operations, profitability, customers and investors. With respect to
accountability, the London whale could not be charged without any involvement of the
Company’s authorities. Therefore, the CEO had to take accountability by admitting the mistake
made by one of their traders. Further, the employee and his supervisor were dismissed and
charges filed against them as a move by the organization to be accountable (Logsdon and Wood
2005).
Based on transparency, both scandals attest to the fact that business practices should be
transparent in a manner that stakeholders can have control for purposes of decision making. The
London whale trader failed to make his trading knows and as a result led to huge losses for the
company. It implies that transparency is a significant part of ethical business practice which

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businesses should emulate to operate favorably. In regards to employee ethical conduct, it is
justified that the JPMorgan trader lacked ethical conduct which would have influenced his
decision making process and report the losses immediately before it became a scandal (Post,
Lawrence, Weber and SJ 2002).
Supplier sustainable code of conduct (Pttplc.com, 2018)
Task 2
There are several policies and practices that guide ethical practices at procurement
agency. All procurement officers must be guided by a written code of ethics that forms the
culture of an organization (Walker and Lloyd-Walker 2014). The goal of these policies to offer
an alternative ways to realize accountability, transparency and employee conduct. The success of
a policy is dependent on the work that is put to it which can be measured through project
management approach (Rolstadås et al 2014). In order to ensure procurement ethics are upheld,
various factors come into play. For instance, Orion Analytics should have a well-written policy
statement that outlines what the management considers ethical and unethical. A written policy
statement will remove the element of difference of opinion that may lead to disputes.

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Consequently, ethical training is significant in ensuring that the employees are made aware of the
benefits of ethical practices. Orion Analytics should innovate their training program increase
employee’s knowledge about ethics to deal with their day-to-day routine (Carroll 2000).
Ethical Leadership (Cleverism 2018).
Ethics policies are said to be tangible and indisputable when they are clearly written.
Besides, the firm should adopt a process with checks and balances for purposes of reviewing and
confirming that regulations are followed. Orion Analytics should ensure that it carries out
periodic audits as means of verifying procurement activities. Periodic audits are often
implemented as deterrent measure to unethical practices in the future. In order to enhance
employee conduct the business should maintain business professionalism in their communication
channel. The business should work towards identifying circumstances which may affect the
performance of the business negatively. The procurement agency should discuss both actual and
potential impropriety with the authorities. The business should promote actions that remove any
suspicion of impropriety.
Public Relation Company should be hired by the business in order to manage its public
reputation. Accountability and transparency has a huge impact on ethical practices of a business.
As a result, competency is demanded from professionals (Grayson and Hodges 2017).
Commitment in an organization is evidenced by development of business skills and knowledge

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which contributes positively to the employer, employees and suppliers. The business should
encourage employees to conduct self-assessment with regards to ethical practices required. OA
should develop a program that is designed to modifying old policies based in the existing
demands of the business. Leaders in an organization are also tasked with the responsibility of
mentoring other junior employees. The leadership of the organization should become actively
involved in various business practices such as procurement. If this were the case for the CEO of
JPMorgan, then the trader would have been identified early and minimize the losses that were
incurred. The leaders are advised to empower, support and participate in ongoing ethical training
(Goetsch, and Davis 2014). In addition, the business should undertake professional development
goals for ongoing ethical training as well as adopting and promoting ethical standards of
management.
Task 3
The ethical basis of leadership and change is pegged on the three forms of ethical
consequentialism. Altruistic consequentialism is often associated with Auguste Comte, a
philosopher who suggested that altruism concerns the welfare of as a means to an end. It further
implies that an action is considered to be ethically correct is it maximizes the important aspect
for other people other than an instigator. In this case, the Rolls-Royce scandal in the UK failed to
consider the beneficial consequences of other people than their own. Their example negates the
Theory proposed by Comte. Therefore, Rolls-Royce is recommended to ensure that it focuses on
the interest of the customers, employees and shareholders before it engages in fraud, corruption
and bribery. This is because all these unethical practices influence the reputation of the
organization with respect to customers, employees, shareholders and public image. Altruistic

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consequentialism therefore justifies that the leadership at Rolls-Royce should act in the best
interest of all other stakeholders (Rothaermel 2015).
When it comes to JPMorgan scandal, the traders should have considered the interest of
the shareholders and customers before engaging in unethical practices that jeopardized the
reputation of the firm to the public. Another theory in this category is Utilitarian
consequentialism which suggests that an action is considered right if it maximizes the beneficial
consequences of everyone. This implies that the Rolls-Royce should have considered the interest
of everyone at the time they were engaging in unethical business practices. By doing so, the
company would have avoided the mistakes that it was found culpable of committing. Also, the
JPMorgan scandal would have been completely avoided if the trader had considered the
repercussion of his actions when he was caught (Robertson and Athanassiou 2009). Had he
clearly evaluated the options before him, he probably would have chosen a different alternative
that would not affect the company negatively.
World Bank Core Procurement Principles (Pubdocs.worldbank.org, 2018)
The company should hire a public relation company as a recommendation to build its
damaged reputation among stakeholders and public (Babalola, Stouten and Euwema 2016). The
last aspect relates to individual consequentialism which indicates that an action should benefit

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the instigator and not everyone else. For this reason, leadership in both companies that
experienced the scandal should have acted in their own interest rather than other stakeholders.
Lack of a clear action taken on the culprits points to failure of business ethics. This approach
should not be recommended to the company since it supports the fact that the people responsible
in the scandals were acting for their own interest. It implies that the scandals are justified and
they are ethically correct which is not the case that should be followed based on accepted ethical
business practices applied across the Globe.

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