LGMT 536 Mod
CHAPTER 3
PURCHASING POLICY AND PROCEDURES
Q – Why is it important to include a policy that outlines the origin and scope of purchasing authority? What might happen if such a policy did not exist? A policy that outlines the origin and scope of purchasing authority elucidates the overall authority as well as the limits of the authority granted to purchasing by an executive committee. Including such a policy is important because, it demarcates the purchasing department’s area of jurisdiction in the organization. It provides guidelines to purchasing professionals on the limits of their authority in an organization. Including such a policy also creates an awareness of purchasing authority among all the personnel and at all levels of the organization. The absence of such a policy could make room for confusion of responsibilities between purchasing and other functional groups in the organization or even between purchasing and top management. Its absence could also lead to other personnel undermining purchasing’s authority and to purchasing not doing its work. All these effects will ultimately have an overall negative effect on the companies functioning.
Q – Discuss the concept of ethics. Why is the purchasing professional particularly sensitive to this topic? Ethics are the set of moral principles or values guiding our behavior. In a business setting, ethical behavior is the use of recognized social principles involving justice and fairness throughout a business relationship. Being ethical means following a code viewed as fair by those within the profession as well as within the community. Ethical behavior requires that a buyer must act treat suppliers or potential suppliers professionally and with respect. It also requires that the purchasing professional upholds the ethical standards set forth by both their organization and the purchasing profession. The purchasing professional should commit their attention and energies for the organization’s benefit rather
PURCHASING POLICY AND PROCEDURES
Q – Why is it important to include a policy that outlines the origin and scope of purchasing authority? What might happen if such a policy did not exist? A policy that outlines the origin and scope of purchasing authority elucidates the overall authority as well as the limits of the authority granted to purchasing by an executive committee. Including such a policy is important because, it demarcates the purchasing department’s area of jurisdiction in the organization. It provides guidelines to purchasing professionals on the limits of their authority in an organization. Including such a policy also creates an awareness of purchasing authority among all the personnel and at all levels of the organization. The absence of such a policy could make room for confusion of responsibilities between purchasing and other functional groups in the organization or even between purchasing and top management. Its absence could also lead to other personnel undermining purchasing’s authority and to purchasing not doing its work. All these effects will ultimately have an overall negative effect on the companies functioning.
Q – Discuss the concept of ethics. Why is the purchasing professional particularly sensitive to this topic? Ethics are the set of moral principles or values guiding our behavior. In a business setting, ethical behavior is the use of recognized social principles involving justice and fairness throughout a business relationship. Being ethical means following a code viewed as fair by those within the profession as well as within the community. Ethical behavior requires that a buyer must act treat suppliers or potential suppliers professionally and with respect. It also requires that the purchasing professional upholds the ethical standards set forth by both their organization and the purchasing profession. The purchasing professional should commit their attention and energies for the organization’s benefit rather