Leading and Managing People: Procurement Agency Ethics and Risks

This report, prepared for a UK-based consulting firm, Orion Analytics (OA), analyzes the ethical challenges and proposes solutions for a procurement agency (PA) operating within a GCC member state. The report begins by assessing the potential risks related to accountability, transparency, and employee ethical conduct, drawing on recent business ethics scandals. It then develops an options assessment for establishing and monitoring ethical standards within the PA, addressing areas such as financial records, transparency with stakeholders, and employee conduct. Finally, the report evaluates and justifies a suitable leadership model and philosophy to foster a sustainable ethical organization, emphasizing the importance of leadership in defining organizational values, establishing clear procedures, recognizing ethical behavior, and implementing checks and balances. The conclusion underscores the significance of ethical standards and leadership in ensuring the PA's long-term success and sustainability.

Leading and Managing People
Module number-
[DATE]
[Company name]
[Company address]

Table of Contents
Introduction.................................................................................................................................................2
Task 1:.........................................................................................................................................................2
Using research based on your analysis of two recent business ethics ‘scandals'; analyze the potential
risks that would affect the new PA in terms of its accountability, transparency of operation and
employee ethical conduct........................................................................................................................2
Task 2:.........................................................................................................................................................3
Develop an options assessment of how a suitable ethical standard relating to accountability,
transparency and employee conduct is to be achieved by PA and monitored in practice......................3
Task 3:.........................................................................................................................................................5
Critically evaluate and justify the sort of leadership model (taken from your study of leadership within
this Unit) and philosophy that would best support a sustainable ethical organization...........................5
Conclusion...................................................................................................................................................6
References...................................................................................................................................................7

Introduction
In this report, key understanding on the two recent business ethics ‘scandals’; analyses
the potential risks that would affect the new PA in terms of its accountability, transparency of
operation and employee ethical conduct has been taken into consideration. This shows the moral
set of rules that answer the question of operating a business in the most legal and transparent
manner. It shows the linkage between the transparencies, accountability and business operation
of the organization for the sustainable future. This report also divulges the key understanding of
the ethical code of conduct and governance which the company uses to strengthen the business.
In addition to this, in the end, business sustainability and leadership amendment have been
divulged.
Task 1:
Using research based on your analysis of two recent business ethics ‘scandals';
analyze the potential risks that would affect the new PA in terms of its accountability,
transparency of operation and employee ethical conduct.
The term Business Ethics is gaining grounds in the contemporary world as it becomes
ever important to drive the business in a manner that it creates the right value for all the
shareholders. Business Ethics can be defined as the moral set of rules that answer the question of
operating a business in the most legal and transparent manner. However, with the increasing
business complexities, there are several challenges and business problems which could be faced
while operating a procurement agency. The potential risk that is associated with the Procurement
agency in the domains of accountability, transparency and employee ethical conduct are as
follows (Pusti, 2017).
In the domain of accountant ability, the risk lies with the quality of the procurement services
which can be affected by bribery, favoritism or fraud. The risk lies in the improper allocation of
resources between different services. The risk also lies with the preserving of the confidentiality
of sensitive data lying with the procurement agency (García-Sánchez, Rodríguez-Domínguez,
and Gallego-Álvarez, 2013).

Under the transparency of operation, the risk of corruption lies in the choosing of the vendor for
procurement. The risk also lies with the incorrect reports and managed disclosures of data and
reports to the state. Under the umbrella of transparency, there is a strategic risk if the entire
procurement is conducted from a single overseas corporation in the lieu of bribe or some other
channel of corruption (Pittroff, 2014).
In the scandals, the companies were considered as the bribe factory. The reports of the
'Transparency International Corrupt practices index Council' the companies were found choosing
the vendor partners wherein the vested interest of the employees and/or senior officials lies. This
vested interest in generated by bribery taken by the employees (Leiva, Ferrero, and Calderon,
2016).
In the domain of employees, ethical conduct the risk lies in the formation of a preferred lobby
from the same group, community or society. The formation of this lobby creates an unethical,
environment wherein the community in subjects will have a dis-proper alignment towards the
community external to the organization. In the Procurement function, a great deal of interaction
with external companies or organizations is involved. These ill-formed communities can distort
and compromise the larger interest of the business and stakeholder to fulfill the interest of a
preferred group. This risk can, however, be minimized by fostering a diversified culture within
the organization (Pavlovich, Sinha, and Rodrigues, 2016).
Task 2:
Develop an options assessment of how a suitable ethical standard relating to
accountability, transparency and employee conduct is to be achieved by PA and
monitored in practice.
A Suitable ethical standard is one of the core requirements for good governance. Only through
this good governance, the culture of ethical business practices will lead the framework of the
development of assessment and monitoring practices.
Standards Relating to accountability includes maintaining reliable and accurate financial
records, effective internal accounting and operating controls, implementation of code of conducts

at the contractor , subcontractor, intermediaries and agents, maintaining confidentiality of
confidential information which includes intellectual property such as trademarks, Copyrights,
Marketing and Operation Plans (Saha, and Roy, 2015).
Transparency includes maintaining only professional contacts with the Contractor, subcontractor,
other transactional partners, producing and maintaining financial statements of the actual
business based on the international standards and complaining about all the legislation
requirement set by the legal agencies. Transparency also includes keeping the data clear, true and
fair to stakeholders. It is analyzed that every organization needs to keep its books of account
transparent to its stakeholders if it wants to sustain its business in the long run (Karl Grebe,
2013).
Standards related to employee code includes prohibiting the discrimination on the basis of
gender, race, sexuality, nationality or any other discriminately features, embracing the culture of
diversity and respecting the personal integrity and providing equal opportunity to all employees.
The governance of these salient features is very important in assessing the company's
performance for maintaining the codes for the entire tenure of the operation. To incorporate the
checks in the system for the assessment of the compliance of the code of conduct a framework
that clearly defines the roles and responsibilities of every individual working in the organization
in different capacities and impact levels should be formulated. This framework has been
regularly monitored for any changes or modification required from time to time depending upon
the changes in the legal, national or international systems. The framework should also be
monitored and reviewed periodically by the state or the ruling family to facilitate the assessment
of the quality of the operations and services conducted by the procurement agency (Lloyd, Mey,
and Ramalingum, 2014).
These practices should become an integral part of the operations of the procurement agency.
These practices should also be communicated to external agencies dealing with the procurement
agency in any transactions. The Framework finally should also devise a method of awarding the
ethical conduct and incentives to keep following the same behavior and punish the one who is

promoting the unethical culture or showing the disrespect to the value system instituted by the
procurement agency (Dion, 2012).
Task 3:
Critically evaluate and justify the sort of leadership model (taken from your study of
leadership within this Unit) and philosophy that would best support a sustainable
ethical organization.
Leadership plays a very vital role in creating a culture that fosters ethical behavior on the part of
the employees in the organization the leadership of the Procurement Agency should adopt the
model as detailed as following
Leadership should define first and foremost organizations value. These organizations values
should be embodied in the day to day business and other operational activities. These
organizational values should clearly define the rules about the behavior it expects of its
employees moreover these rules should be communicated to the team members on the regular
intervals emphasizing the penalties associated in the conditions of where rules are not followed.
Similar to this leadership management followings are the conclusions and recommendation for
the PA organization (Abid, and Ahmed, 2014).
The First role of leadership is to identify the trigger situation such as purchasing, hiring,
promoting, calculating remuneration. Once these situations are identified, proper standard
operating procedures have to be formulated to eliminate the possibility of decision making on the
discretion of the decision maker (Brown, and Treviño, 2014). The next step to facilitate the
change towards an ethical atmosphere is to institute a system wherein a person or employee who
demonstrate ethical behavior is recognized and appreciated. The Management should seek
consultation on ethical cases, work to resolve ethical issues on a system level, sees ethics as a
part of a quality and views organizational decisions as ethical (Othman, and Melville, 2016).
Leadership should develop multiple layered checks on decisions made by individual’s power
holders and a bureaucratic structure. The leadership of PA should work in close coordination
with the state and should declare the justifications of any decisions made which violates the

general standards. In such cases, the PA should submit a detailed written report outlining the
rationale of any deviations to the state (Salin, et al. 2017). A vigilance department is required to
be instituted onto primarily facilitating to major roles (Huhtala, et al. 2013). The first role is to
investigate any abnormality in the decision making to avoid any corruption due to favoritism and
bribery. The second role of this vigilance department should be to monitor the compliances
associated with the code of conduct at every level starting from the employees to the board level
officials. This vigilance department should comprise of the members from the state as well as the
procurement agency. Moreover, the vigilance department or the group would report directly to
the ruling family in the state (Qin, et al. 2014). Last but not the least, the leadership should adopt
the use to technology for floating the procurement requirements to the registered vendors
through e-Tendering, for calculating the cost of services, for applying filters based on the terms
and conditions set by the state and transferring the data that is used for decision making in the
correct and the most ethical way to the state (Chen, 2016).
Conclusion
After analyzing the case and given details in all three parts, it could be inferred that the company
needs to keep the transparency in its business and should follow ethical work functioning. The
leadership aspects of the Leadership should develop multiple layered checks on decisions made
by the individual's power to strengthen the positive outlook in the process. Therefore, it could be
inferred that by setting up proper ethical standards and leadership work program, the company
could easily sustain its business in the long run.

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