Unethical Procurement Practices in Wildwoods

PROGRAMME IN PURCHASING AND SUPPLY MANAGEMENT

PURCHASING AND SUPPLY MANAGEMENT

PPSM026

ANTOINETTE NIEMANDT

P.O. BOX 14159

WADEVILLE

1422

STUDENT NUMBER: 72686707

UNETHICAL PROCUREMENT PRACTICES IN WILDWOODS

Introduction

Wildwoods is one of the biggest wood furniture manufacturer that manufactures wood furniture for various companies, e.g. Guesthouses, hotels, lodges and direct sales. They specialize in luxury wood furniture. Wildwoods purchase big quantities of wood from various wood suppliers across the country. One of the suppliers that supplies Wildwoods with wood for the manufacturing of furniture is a company called Timberland. Although Wildwoods is a long established company there are no procurement procedures or contracts in place for these various suppliers. The purchaser can therefore purchase from any company that gives him the right price, quality and quantity and the right time for delivery. The purchaser at Wildwoods, Mr. John van Rooyen, is related to the owners of Timberland. John gives preference to Timberland in placing orders for wood.

Facts of the case

There are no standing contracts with any of the wood suppliers. Each order is placed at a different price, almost as to what the purchaser and supplier agrees to at that time. Therefore there is no legally binding contract that reflects the intentions and the objectives of the contracting parties and to be fair, unambiguous and legally enforceable.

There are no procurement procedures to guide the purchasing personnel in their actions. Each person works according to his own values and standards. If a procurement procedure was put in place it will ensure no leakage from the organization.

The purchaser Mr. John van Rooyen that is responsible for the purchasing of wood at Wildwoods is related to the supplier, Timberland.

He is putting his own interest before those of the employer. This purchaser Mr. John van Rooyen did not disclose the fact that he is...