The Importance of Ethics in Purchasing and Buyer-Seller Dynamics

This report delves into the critical role of ethics in purchasing, highlighting how adherence to ethical standards is essential for fostering successful buyer-seller relationships and ensuring long-term business profitability. The report emphasizes the significance of honesty and transparency in procurement, demonstrating how these practices build trust, reduce costs, and enhance efficiency. It explores the impact of ethical conduct on attracting investors, suppliers, and customers, while also examining the consequences of unethical practices such as favoritism and bribery. The analysis includes references to relevant research and provides a comprehensive overview of ethical considerations in the context of procurement and supply chain management, emphasizing the need for organizations to prioritize ethical standards to achieve sustainable growth and maintain a competitive edge.

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Ethics in purchasing
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Introduction
With the current technology and customer behavior change, ethics play major role in
purchasing. Being ethical is following the standards and rules of practice set for a given
profession. Purchasing professionals should carry out their business practices in a more ethical
way. Failing to up hold ethical standards in purchasing can results into illegal and immoral
practices such as illegal sourcing, favoritism, and bribery. The aim of this work is to evaluate the
importance of code of ethics in purchasing and how it affects buyer-seller relationship (Withers
& Ebrahimpour, 2018).
Importance of Ethical standards in purchasing basing code of ethics
Honest is one of the code of practice that an organization should uphold when doing
procurement and purchasing since they deal with both external supplies and internal customers.
Honest in purchasing prevent impropriety leading to superior performance leading to long run
profits compared to impropriety organization which can make profits for a short time. According
to the research, maintaining of high integrity enables an organization to attract and maintain
investors, suppliers, customers, and employees. Since human beings are not morally perfect, an
organization need to put more effort and time to ensure high integrity and honest are maintained
by all employees (Reilly, Saini & Skiba, 2018).
Transparency in purchasing increases trust, builds relationships, and increases
productivity. Transparency purchasing increases trust in that the value and the price of the
products purchased. Research shows that Improved in transparency reduce the cost of
procurement up to 8% and this boosts the efficiency of the organization since procurement and
purchasing accounts for a large portion of the economic activity in any organization. Suppliers

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bid more aggressively when transparency purchasing is practiced in an organization. The
evaluation done shows that an improved transparency in procurement in winning bids is higher
in a upper quantile when distribution of bids are plotted compared to the lower quantile.
Transparency diverts the organization expenditure away from product that could have involved
in bribery and corruption. Thus, improved transparency in any organization reduces cost of
procurement and increases the profits (Reilly, Saini & Skiba, 2018).
Impact of ethics in buyer-seller relationships in purchasing
The relationship between buyer and seller serves as an important metaphor between firms
as it determines the trust that is built between them. In purchasing, the relationship between
buyer-seller reflects the intersection that exist between the ethical choices and the economic
interest which are the foundation of trust in a context of any business carried out. Different
opinions has been encountered about the implicit ethical obligation and the nature of trust as
different scholars describe how trust can be established. The relationship is affected by the
ethical standards uphold during the previous purchases since it affects the trust (Reilly,Saini &
Skiba, 2018).
Conclusion
As shown by the evaluation done, ethical standards are essential in any organization in
order to increase profits for a long run. Since an ethical organization build trust with the
customers and suppliers. Improved honest and transparency makes the customers and suppliers
to understand well what is going on and it enable the employees help you to solve where you go
wrong when making the purchase. Thus, ethical standards are needed in any organization
(Mankgele &Fatoki, 2018)

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References
Husser, J., Gautier, L., André, J.M. and Lespinet-Najib, V., 2014. Linking purchasing to ethical decision-
making: An empirical investigation. Journal of Business Ethics, 123(2), pp.327-338.
Mankgele, K.P. and Fatoki, O., 2018. An Analysis of the Business Practices and Work Ethics of
Native and Immigrant Entrepreneurs in South Africa. Academy of Entrepreneurship
Journal, 24(3), pp.1-12.
Reilly, T., Saini, A. and Skiba, J., 2018. Ethical purchasing dissonance: Antecedents and coping
behaviors. Journal of Business Ethics, pp.1-21.
Withers, B. and Ebrahimpour, M., 2018. The effects of codes of ethics on the supply chain: A
comparison of LEs and SMEs. Journal of Business and Economic Studies, 19(1), p.3766.