Part and parcel
As the Christmas season gets into full swing, corporate gift-giving reaches its peak as a traditional aspect of business practice. Unfortunately, procurement professionals will be increasingly nervous about this as a result of the conflicting demands of their role and the existence of unclear, outdated and even contradictory policies of the company they work for.
More and more the role of buyers is becoming one of relationship management in an increasingly global environment. This amplifies the dilemma for the buyer because in many countries around the world it is traditional to mark good relations with the giving of gifts. In Asian nations in particular it is part and parcel of building relationships.
In an attempt to appear blameless, many companies took a pre-emptive strike against the practice of gift-giving by sending letters to suppliers, with just one request: “No gifts please, they’re against our principles.”
Bah humbug, I say. Regrettably some of those companies will be sending their sales reps out to deliver the very kinds of gifts they say are against their principles to their own customers.
More companies are adopting a code of business ethics which outlines their policy on staff accepting gifts from third parties such as suppliers, contractors and advisers. It is incumbent on both the supplier and the buyer to observe the policies of the company with which they do business. Should companies have a policy that covers presents? Yes, but not at the expense of relationships. CIPS has a policy, and it makes a lot of sense. And it is a policy that still allows people to receive gifts.
An outright ban on gifts or an overly rigid policy describing what an employee can accept is a policy waiting to be broken and only serves to make presents secret and cut off the organisation from some of the relationship benefits.
Do you disagree? If David Cameron and Barack Obama can exchange bottles of local beer as gifts at their recent meeting, our leaders don’t believe it is humbug.
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Dave
I think your post is potentially misleading. You say
“Yes, but not at the expense of relationships. CIPS has a policy, and it makes a lot of sense. And it is a policy that still allows people to receive gifts.”
We need to be clear – what the CIPS ethics code says is this:
“I will… not accept inducements or gifts, other than items of small value such as business diaries or calendars”
I would personally improve it this by adding ‘of no intrinsic value’at the end. But I take even the CIPS wording to mean that bottles etc are out. So yes, I disagree strongly with you (and politics is completely different). And your suggestion that giving presents will carry on and just go underground – well it won’t if you make it clear that you’ll be fired if you take a single bottle.
Why do you think suppliers want to give you gifts? To get influence, to make you feel obliged to them, to win business that they should not win. I seem to remember someone saying the same last year in SM “Oh, the odd bottle of wine is fine”. Well, its not. For a start, a bottle of Lafite 1990 is now worth £1,000. Is that OK? Just looks like a bottle of wine to me.
And even if it is a £5 bottle of Chilean Merlot, it breaks the ethical code. It is contrary to the best interests of the organisation. And it is the slippery slope that ends up with countries suffering from endemic corruption in public service leading to poverty and repression for their citizens. Now I know that sounds like I’m being a bit of a Scrooge, and over-dramatising… but this is a serious issue.
In the Private Sector I found a contradiction of us Buyers abiding by the CIPS Code, yet the budget holders and senior management, who ultimately called the shots in most areas of spend, accepting gifts and hospitality left right and centre. Can the CIPS encourage its counterpart organisations in other professions to adopt the same code?
Dave I agree with you here.
A simple idea my company works with is this: any gifts received are put into a hamper and raffled off at the end of the year to staff from across the company.
Building relationships with suppliers is vital and I’ve never felt inclined to favour one over another because of a cheap bottle of wine. See these gifts for what they are (small inducements) and base all buying on the price/value-adds etc as per normal.
Unless your buying team is of dubious moral character to begin with small gifts and trinkets should have no effect.
One bottle of cheap wine becomes a case…, etc
Playing by the ‘rules’ is fine, as long as the rest of the world is playing to the same set of rules.As your correspondent says, Asia for example has a completely different set of accepted business parameters, and you may reluctantly have to adapt the rules, (within the law), to suit the territory you trade in if you want to win the business. It’s naive to think otherwise.
Agree with Ian Tait.
A bottle becomes a case.
And if you don’t draw the lines really carefully, staff have the excuse ‘I thought it was OK’.
And anyone who thinks they can assess the moral character of their colleagues with 100% accuracy is frankly deluded. I could tell you some stories… and sometimes people I would never have expected.
See the Times today for where it can end up. All started with a few little ‘gifts’ and trips to football matches..
My logic is this:
The ‘no gifts’ policy focuses on procurement as the ‘process police’- a perception the profession is trying to move beyond.
In more mature procurement functions, where securing ‘customer of choice’ status and driving innovation through procurement are the key goals, a more entrepreneurial approach is required. This dictates a more relationship driven focus often on an international stage.
The ability for procurement professionals to reciprocate is a key requirement, as in building such relationships it is likely that both the receipt and giving of gifts will be appropriate within approved guidelines. This is not all about running an RFP processes.
So I call for procurement professionals to move their mindset away from ‘policing, and the handcuffs this places upon them and set their sights on a more entrepreneurial role targeting relationships.
Like a lot of these debates there is a rational approach lurking in amongst the arguments. When I was the CIPS Director responsible for the latest, plus the 1999, update of the CIPS Ethical Code, we aimed to produce guidance which took professionals towards the rational approach. Dave H is right about where professionals should be aiming for, plus that the passing of small gifts (no intrinsic value, Peter) helps a bit with relationship building, however they are not essential to relationship building whereas trust, honesty, commitment and can-do attitude are essential. Keep focused on these features and you will reap the real rewards – strong positive relationships which produce mutual benefit. Happy Christmas!
One bottle of cheap wine becomes a case…, etc