Corruption

Jextra Neighborhood Stores Case Analysis This report analyzes the ethical dilemma faced by Jextra’s country manager, Tom Chong, who was responsible for Neighbourhood Markets in Malaysia. Jextra Stores was a Hong Kong based company that operated retail stores in China, Hong Kong, Philippines, Malaysia, Thailand, Singapore, and Vietnam. In 2005, the company successfully entered Malaysia, operating supermarkets under the name of Neighborhood Markets (Inkpen, 2010). Jextra identified a promising site in Klang, near the capital of Kuala Lumpur, to open a new supermarket (Inkpen, 2010).

Mr. Chong needs to evaluate a proposal made by the Mayor of Kang, which might be considered bribery. In this case, Mr. Chong faces social and ethical challenges that may affect the company’s operations, performance, and competitiveness in the region as well as Mr. Chong’s career. The major social issues include those related to law, culture, and ethics. The report also analyzes anti-bribery corruption enacted by the U. K Bribery Act and the U. S. Foreign Corrupt Practices Act (FCPA).

The report concludes with recommendations to Jextra such as seeking proper legal advice, implementing an effective business code of conduct, providing inter-cultural and ethics training to managers, using a geocentrism approach and conducting an internal investigation for the Malaysian category manager. Analysis Social, Ethical, or Legal Challenges International firms operating abroad often face social challenges because they operate in markets with different legal and political systems (Daniels, Radebaugh, & Sullivan, 2010, p. 111).

Each country has a legal system that provides “the rules that regulate behavior, the processes by which laws are enforced, and the procedures used to resolve grievances” (Daniels, Radebaugh, & Sullivan, 2010, p. 111). In the case of Malaysia, the country relies on a dual legal system based on common law and theocratic law. English Common law is based on tradition and judicial precedents (stare decisis). This type of legal system is used in, among others, U. S. , U. K. , India, Canada, Hong Kong, Australia, and New Zealand (Daniels, Radebaugh, & Sullivan, 2010).

Malaysia also relies on Muslim law (or Sharia), which is based on religious precepts and beliefs. Muslim law prevails in Turkey, Kuwait, Indonesia, Saudi Arabia, Iran, etc. (Daniels, Radebaugh, & Sullivan, 2010). In developing countries, such as Malaysia, foreign companies and managers, such as Mr. Chong, may encounter legal risks due to the legal framework and the effectiveness of the legal system (Ling & Hoang, 2010). In recent years, Malaysia has opened its market towards liberalization of trade and services and globalization (Tahir & Ismail, 2007).

Like other emerging markets, such as Mexico, China, India, and Brazil, Malaysia represents an attractive market. However, MNEs are bound to face legal challenges in emerging markets because they have an inadequate commercial infrastructure, weak legal system, and high-risk environment (Pearson, 2011a; Pearson, 2011b). For instance, Malaysian civil and commercial laws regarding business payments for social purposes are not clear. It is a common practice in Klang and Kuala Lumpur to make social contributions for community projects, such as schools and roads (Inkpen, 2010). Additional legal issues that Mr.

Chong may face in Malaysia are the “insufficient legal infrastructure for enforcing legal judgment” and “uncertainty and unfairness of court justice” (Ling & Hoang, 2010, p. 157). In Malaysia, the regulations regarding foreign investment lack transparency (Inkpen, 2010) and there had been many cases of bribery involving public officials. Malaysia has a high tendency toward corruption, which refers to “the misuse of entrusted power for private gain” (Daniels, Radebaugh, & Sullivan, 2010, p. 191). According to the TI Corruption Perception Index (2010), Malaysia was ranked 4. on of a scale of 0 (more likely to pay bribe) to 10 (less like to pay bribe) (Daniels, Radebaugh, & Sullivan, 2010). Russia, People’s Republic of China and Italy precede Malaysia in terms of frequency and size of bribes (Daniels, Radebaugh, & Sullivan, 2010). Mr. Chong knows about recent cases of corporate bribery in Malaysia and in the retail industry. There had been scandals regarding foreign investors who bribed public officials or financed government programs to obtain business privileges or competitive advantage (Inkpen, 2010).

Moreover, there was a recent case of bribery involving a Jextra’s country manager in the Philippines. More likely, this manager also encountered similar ethical dilemmas like Mr. Chong. Some individual factors that may have driven him to act unethically in the Philippines could have been pressure from the company to expand and gain competitive advantage in the region. Alternatively, he might have simply wanted to advance his career as a country manager, lacked of ethics or did not know the local laws regarding bribery.

Additionally, he might not have received or requested support from the top management regarding the social and ethical issues raised in the Philippines. Mr. Chong, as an experienced manager, should have anticipated that he would encounter legal and ethical risks in Malaysia. Mr. Chong face major challenges due to the weak legal framework and wide spread corruption in Malaysia. Additionally, Mr. Chong is not familiar with Malaysian domestic law and International law. For instance, Mr. Chong does not know whether accepting the Mayor’s offer would breach Malaysian law.

It is against the International law to offer money, directly or indirectly, to officials of foreign governments (in this case the Mayor of Klang), to obtain a business advantage (help Jextra with the landing zone) (Inkpen, 2010). According to Daniels, Radebaugh, and Sullivan (2010), it is crucial for foreign firms and managers that operate overseas to be familiar with domestic law and international law. Moreover, Mr. Chong does not know the legal policies of his home country, and therefore, if contributing to obtain a business benefit would be considered illegal in Hong Kong, if it were not through the right channel (Jextra Social Fund).

Jextra Social Fund provides financing for educational and social projects (Inkpen, 2010). However, Mr. Chong is not sure whether he should go through this channel to make the contribution in order to expedite the zoning process. Additionally, Jextra’s Business Code does not help Mr. Chong to make a decision regarding this matter. Mr. Chong is not sure whether financing the primary school in Klang would be against Jextra’s Business Conduct Code. Jextra’s Business Conduct Code states “employees could not offer benefits to third parties in connection with business matters” (Inkpen, 2010, p. 3). However, Mr.

Chong does not know if the contribution would really benefit the community or individuals, such as the Mayor of Klang or his sister; the sister of the Mayor is a member of the school board. Mr. Chong also faces challenges with regard to the differences of culture between Malaysia and his home country, China. Research shows that individuals from different cultures may face challenges in understanding the behavior and values of others in the host country. Thus, this can cause a cultural clash (Tahir & Ismael, 2010). However, China and Malaysia are culturally close, so it can be expected that Mr.

Chong adjust more easily than if he were to do business in countries with more cultural distance, such as France, U. S. or Germany (Daniels, Radebaugh, & Sullivan, 2010). Both, Malaysia and China present many similarities regarding its culture. Based on Hofstede’s cultural dimensions theory, both countries have a high degree of power distance (PDI), collectivism, masculinity (MAS), and high uncertainty avoidance (UAI). (Daniels, Radebaugh, & Sullivan, 2010). Additionally, Mr. Chong may have a different level of ethical sensitivity than its counterparts in Malaysia (Chan & Cheung, 2012).

People from different cultures have different ethics, which are influenced by their beliefs and cultural values (Chan & Cheung, 2012). Other challenges that may rise are problems regarding communications. As noted by Daniels, Radebaugh, and Sullivan (2010), “cross-border communications do not always translate as intended” (p. 67) and can lead to misunderstandings. For instance, Mr Chong is not sure about what the Mayor meant when he asked to pay for the primary school; whether he asked to pay the entire cost of the school or just a part (Inkpen, 2010). Resolving the Mayor’s Requests

Accepting the Mayor’s offer and financing the project without using the right company’s channel (Jextra Social Fund) would be illegal. It also might go against Jextra’s corporate culture and Business Conduct Code. Bribery is wrong and unethical, and as noted by Daniels, Radebaugh, and Sullivan (2010), “it affects both company and country economies” (p. 192). Research shows that high levels of corruption have a strong correlation with low levels of per capita income and low national growth rates (Daniels, Radebaugh, and Sullivan, 2010). Having another bribery scandal would erode Jextra’s reputation and image.

It would compromise the legitimacy of the company worldwide and its operations (Daniels, Radebaugh, and Sullivan, 2010). It is challenging for foreign managers to avoid bribe payments when these are regarded as a usual business practice in the host country (Daniels, Radebaugh, and Sullivan, 2010). Even though, it would be easier for Mr. Chong to just pay the bribe to the Mayor of Klang and “fall back on the standard of cultural relativism” (Daniels, Radebaugh, and Sullivan, 2010, p. 195). As a manager, Mr. Chong should act responsibly and ethically, nd in compliance with local law, corporate culture and International law. The best approach for Mr. Chong would be to report to the Regional Operating Officer responsible for Malaysia, Singapore and Thailand and to the CEO, and CFO of the Supermarket and Hypermarket Divisions of the company in Hong Kong (Inkpen, 2010). Definitely, Mr. Chong should consult this issue with top management. Jextra and Mr. Chong should also receive legal advice from a reputable law firm in Malaysia regarding the legality of the Mayor’s offer, and if accepting the offer would constitute an offense under the U.

S. Foreign Corrupt Practices Act (FCPA) and the U. K. Bribery Act. If it does constitute bribery, then the best option for Mr. Chong would be to reject the mayor’s offer and proceed through formal channels to get the zoning approval (Inkpen, 2010). U. S. FCPA and the U. K. Bribery Act Even though Jextra is based in Hong Kong, the company is not exempt from the extraterritorial reach of the U. K Bribery Act and the U. S. Foreign Corrupt Practices Act (FCPA) (Arnold & Porter Advisory, 2012). The FCPA refers to legislation enacted in 1977 that outlaws bribery (Arnold & Porter Advisory, 2012).

It makes illegal bribery payments by U. S. companies to political parties and foreign officials. This legislation applies to operations in the U. S. and international operations as well, and to company’s employees and their agents abroad (Daniels, Radebaugh, & Sullivan, 2010). Not only U. S citizens, U. S companies or “issuers of securities on US exchanges” (Arnold & Porter Advisory, 2012, p. 3) are potentially liable under the FCPA, but also individuals of any nationality that make bribery payments to any foreign government official while staying in the U.

S. (Arnold & Porter Advisory, 2012, p. 3). There is lack of consistency in the provisions of FCPA. For instance, it is not legal to pay to public officials to facilitate business transactions (referred to as “facilitating payments or grease money”) (Daniels, Radebaugh, & Sullivan, 2010, p. 194). However, payments must be made to officials who are directly responsible for the transactions. In 1988, the FCPA enacted a new amendment that excludes grease money from bribery (Daniels, Radebaugh, & Sullivan, 2010, p. 194).

In that case, under the FCPA, if Jextra finances the primary school through the Social Fund and make the payments directly to the Mayor’s sister in order to expedite the landing zone, it may not be unlawful. The payments should be made to someone who is directly involved with the primary school, such as the Mayor’s sister or other member of the school board and cannot be made to the Mayor directly. The U. K. Bribery Act became effective on July 1, 2011 and as the FCPA, it has a vast jurisdictional reach (Arnold & Porter Advisory, 2012, p. 3).

The Bribery Act provides legislation regarding acts of bribery, and makes it an offense for companies that do not prevent bribery (Arnold & Porter Advisory, 2012). The jurisdictional reach of the Bribery Act is wider when companies or individuals with a close relationship to the U. K. Additionally, under the Bribery Act, foreign individuals who commit bribery overseas while residing in the U. K could also be prosecuted, commit offenses (Arnold & Porter Advisory, 2012). Foreign companies, such as Jextra, can be also subject to FCPA scrutiny; even though its business activity has little relation with the U.

S. and the company mainly operates in Asia. Non-U. S. companies could be found liable for conduct outside the U. S. that constitutes an offense under U. S. Criminal law (Arnold & Porter Advisory, 2012). FCPA incorporates extraterritorial provisions in its legislation. Therefore, as noted by Arnold and PorterAdvisory (2012), it is important that MNEs, consider “the potential liability under the FCPA to which their operations may be exposed” (p. 3), whether conducting business in the U. S. or outside. Mr. Chong should act in compliance with the FCPA and Bribery Act.

Managers are responsible when corruption is afoot and need to be vigilant with their actions. In addition, Jextra is responsible for ensuring that its “anti-corruption measures satisfy both jurisdictions” (Arnold & Porter Advisory, 2012, p. 6). In today’s global economy, international companies, such as Jextra have may worldwide connections through its suppliers and subsidiaries. Under the Bribery Act, it could be established some type of association, for instance through a Jextra’s parent company or subsidiary, so that if the company was to commit bribery it could still be prosecuted in the U.

K. Therefore, Jextra and Mr. Chong should be extremely cautios and take into consideration that both the Bribery Act and the FCPA may have direct impact on the company’s operations; even if the company has little connection with U. K and U. S. (Arnold & Porter Advisory, 2012, p. 6). Chong’s Recommendations to Jextra Malaysia lacks of a developed legal system and has a risky business environment, which make it challenging for foreign companies, such as Jextra, to conduct business in an ethical, fair, and responsible manner.

Chong’s recommendations to Jextra include seeking proper legal counsel regarding Malaysian commercial and civil laws, and payments to government officials. An additional recommendation is to implement an effective internal business code of conduct. A clear code of conduct would mitigate some of the problems that Mr. Chong faces. The code should set global policies for Jextra’s employees and any individual working for the company (Daniels, Radebaugh, & Sullivan, 2010). The code of conduct should not only be communicated to all Jextra’ s employees, but also to its suppliers and contractors.

Additionally, the code of conduct should ensure that its policies are carried out. For instance, Jextra should make employees sign a written agreement conforming that they read and understood the code of conduct (Daniels, Radebaugh, & Sullivan, 2010). Additionally, Jextra should require managers to go through a formal program that teaches them the company’s ethical code of conduct. It is vital for Jextra to implement the right measures and procedures, as well as strictly enforce these measures, to prevent bribery and other unethical behaviors among its employees.

This would help the company to avoid potential prosecution and civil litigation under the FCPA and The Bribery Act. A third recommendation would include an internal investigation regarding Mr. Alam conduct. As a category manager, Mr. Alam may be using his position in the company for personal gain (Inkpen, 2010). Mr. Chong as a supervisor of Mr. Alam need to ensure that Mr. Alam is not taking bribes or gifts from suppliers, or benefitting his father-in-law. An additional recommendation include inter-cultural training for Jextra’s managers assigned abroad.

When conducting business overseas, it is imperative that managers receive adequate training regarding the legal and political environment, international law, and national culture of the host country. Managers should also receive training in ethics to avoid unethical conduct. Additionally, when conducting international business, geocentrism is a good approach. According to Daniels, Radebaugh, & Sullivan (2010) geocentrism requires firms “to balance informed knowledge of their own organizational cultures with home- and host-country needs, capabilities and constraints” (p. 4). Jextra should integrate its own company practices, Malaysian practices, and new practices as well (Daniels, Radebaugh, & Sullivan, 2010). Conclusions and Lessons Learned Legal policies, which include domestic law and international law, play a major role in determining how global companies can conduct businesses abroad (Daniels, Radebaugh, & Sullivan, 2010). International firms should act responsibly and ensure that its employees act in accordance with the domestic law where they operate and do not commit any offense under the FCPA and Bribery Act.

By acting ethically, companies can create competitive advantage, shared value, and avoid being perceived as unethical and irresponsible by the local and global communities (Daniels, Radebaugh, & Sullivan, 2010; Porter, 2010). As a potential global manager I learned that it is crucial for global firms to set clear codes of conduct, ensure compliance with the codes (training, auditing programs), and enforce the policies in the code (Daniels, Radebaugh, & Sullivan, 2010).

However, foreign managers will still face ethical dilemmas when working in a different legal and political environment. Managers need to be knowledgeable about cultural, legal, political, and ethical factors in order to succeed in their assignment overseas (Daniels, Radebaugh, & Sullivan, 2010). Therefore, managers should receive adequate inter-cultural training and counseling about the host country’s values, norms, legal and political system. Managers should be a role model for other employees by showing cultural awareness and ethical behavior.

Feasibility study for investment in the Paper and Pulp industry in Brazil An overview of Brazil Brazil is the largest country in South America. It is the world’s fifth largest country, both by geographical area and by population, with over 192 million people. It is the only Portugese-speaking country in South America. Brazil is the largest national economy in Latin America.

It is the world’s sixth largest economy at market exchange rates and seventh largest in terms of purchasing power parity, as per the International Monetary Fund and the World Bank. Brazil has a mixed economy with abundant natural resources. The Brazilian economy has been predicted to become one of the five largest in the world in the decades to come. It has large and developed agricultural, mining, manufacturing and service sectors, as well as a large labour pool. Brazil’s current GDP is estimated to be $2. 294 trillion and Per Capita GDP $11,769

The Paper and Pulp Industry in Brazil Brazil is the largest producer of paper and pulp in South America. On the world stage, it is the 4th largest producer of pulp with a production of 13,315,000 tonnes and 9th largest producer of paper with 9,428,000 tonnes (2009). Brazil’s Pulp & Paper Production Source: Bracelpa Brazil is predominantly a tropical country. As a result, the soil and climate in most regions of Brazil are favourable to forest growth. The main geographical areas in the paper and pulp industry are the states of Sao Paulo, Parana and Santa Catarina.

Furthermore, eucalyptus trees in Brazil have short growing cycles (approximately 7 years), compared to 10-12 years in Chile and 25 years in the United States. Thus, production of wood in Brazil requires less time and a smaller growing area when compared to Europe and North America, resulting in higher yields. Industry Overview- 222 companies spread in 539 municipalities, located in 18 states. – 2. 2 million hectares of planted area for industrial use. – 2. 9 million hectares of preserved forests- Total certified forest area: 2. 0 million hectares- Exports 2010: US$ 6. billion- Trade Balance 2010: US$ 4. 9 billion- Taxes: R$ 2. 2 billion- Investments: US$ 12 billion in the last 10 years- Jobs: 115 thousand direct jobs (industry 68 thousand, forests 47 thousand) and 575 thousand indirect jobs. | Source: Bracelpa, March 2011 Macro Environmental Analysis Political & Legal environment The Foreign Direct Investment regime in Brazil has been fairly liberal and foreign capital is viewed with sympathy by the large majority of political currents and parties, who see it as a source of employment and modernization of the economy.

The 1990s saw a host of path-breaking liberalisation reforms in the Brazilian economy. Certain investment policies were formulated in the 90s to attract more FDI in to the country. The Central Bank of Brazil simplified the registration procedure for FDI inflows. This led to a decline in the administrative costs associated with the entry of FDI inflows into Brazil. A series of constitutional amendments were enacted within 1995 and 1996, which helped remove constitutional distinction among national companies and foreign companies.

In 2002 Investe Brazil was set up to promote investments in Brazil. Despite a formally well functioning business environment, corruption and bribery are still serious obstacles to doing business in Brazil, especially in business dealings with the government. Multiple corruption scandals have emerged over the years, involving politicians and bureaucrats taking kickbacks from companies in exchange for awarding public contracts. The levels of bureaucracy and lack of transparency in rules make Brazil a difficult country to do business in. Economic Environment

The paper and pulp industry is one of the mainstays of the Brazilian economy. The Brazilian paper and pulp sector is comprised of nearly 200 companies. Most companies in this sector are privately owned. Foreign-owned companies account for about 6% of the output. Therefore, there is great scope for foreign investors to enter into Pulp & Paper Industry in Brazil. Latin American Pulp and Paper Producers Composition in 2010 In recent years, there has been a marked increase in paper consumption in Brazil, which is an important indicator of the economic development of a country.

Between 1997 and 2008, the average annual rate of paper consumption increased by approximately 3% per year, reaching 9 million tons in 2008, according to estimated figures from Bracelpa. Improvements in the purchasing power of Brazil’s citizens have led to growth in the newsprint market (up to 18% in 2009). In the same year, 21% of paper and board and 33% of pulp production was exported. Brazil’s paper industry has potential for growth in both the domestic and export markets. Domestic consumption has huge growth potential, because per capita consumption in Brazil is still low when compared with other developed nations.

Consumption of paper and board in Brazil is close to 44 kg per capita. Furthermore, differences are enormous between the north and south-east parts of the country. In Western Europe, consumption of paper and board is 173 kg and in North-America 333 kg per capita. Social Environment Brazil has skilled labour in abundance. Minimum wages in Brazil are way lower in comparison to other nations. Brazilian legislation is, however, relatively inflexible and outdated in relation to labour costs, making things complicated. A continued shift towards a wealthier population has been apparent in Brazil since 2004.

There has been significant growth in the populations’ real disposable income. Strong consumption (Household consumption above 60%, Government consumption close to 20%) has been supporting Brazil’s growth profile over the past two decades. Formal job creation increased from 1. 2 million jobs in 2009 to 2 million jobs in 2010. The cost of living in Brazil is approximately 30% lower than in the UK and Europe, and for those with a foreign income there is a guarantee of value for money. Technological ; Natural Factors

Brazil’s high technology and natural advantages in forestry make it one of the world’s lowest-cost producers of pulp, and in the last 20 years Brazil has become an important pulp exporter. Brazilian exports of high quality papers to Europe are growing in volume, and expected to increase in the near future. This growing market is truly attractive and one can grab the share in this market by setting up a new industrial venture in Brazil. However, this industry sector is very competitive for reasons like state-of-the-art mills, sound management and well-established plantation forestry technologies.

Furthermore, availability of raw material is not a problem in Brazil as there is huge availability of good quality raw materials required for extracting and manufacturing pulp and paper. By analyzing the rotation and yield comparison of different pulp species in different countries, it is found that Brazil has the best rotation (years) and yield (m3/ha/year). This shorter maturing period also enables Brazilian producers to expedite the process of genetically improving the Eucalyptus species utilized Species| Country| Rotation (years)| Yield (m3/ha/year)| Eucalyptus| Brazil| 7| 44| Eucalyptus| South Africa| 8-10| 20|

Eucalyptus| Chile| 10-12| 25| Pinus spp| Brazil| 15| 38| Pinus spp| Chile| 25| 22| Pinus spp| New Zealand| 25| 22| An association named ABTCP – Brazilian Paper and Pulp Technical Association – is currently one of the most important associations worldwide in its segment. It was established with the purpose of technically qualifying the paper manufacturers in Brazil, in order to raise basis for a sustainable industry. In addition, technological development in the paper ; pulp industry has been supported by the research efforts of major producers and by financing from BNDES, the Brazilian Development Bank.

Opportunities The paper and pulp sector in Brazil is fast becoming the third largest in the world. The financial crisis of 2009 affected the Brazilian pulp and paper industry greatly. Brazil ultimately postponed its investment programmes. However, with the economy showing signs of recovery and emerging market’s increase in demand, those programmes have resumed Over the next seven years, an estimated US$20 billion is going to be invested in the nation’s forest base and in the construction of new mills. 10 new plants are due to be built in Brazil by 2020. At this moment pulp production is at 13. million annual tonnes, by the end of 2017 this is expected to reach 20 million annual tonnes. Also, during the same period, planted forest areas are predicted to grow by 25% and paper production will rise from 9. 3 million tonnes to 12. 5 million tonnes. This has all come about through the new global scenario in the pulp and paper sector. While the international financial crisis reduced global consumption, prices and raw material demand in traditional markets it also opened up opportunities to expand sales in growing markets, in particular China and India.

Challenges The pulpwood market in Brazil has gone through major transformations. From a point where it had the lowest conifer fibre costs in the world, it now is close to the global average. Any rise in fibre costs is a concern for forestry companies as the key factor determining a company’s global cost competitive position remains its raw material base. Brazil also faces a strong challenge as businesses in Brazil have to deal with a number of problems, which includes bulky tax regulations, inefficient government bureaucracy, and corruption.

Brazil has become less competitive in the last few years as a reason of this. Conclusion The Brazilian paper and pulp industry offers enormous potential to potential investors. The industry, with its advantage in terms of rotation, is expected to grow substantially in the coming few years with various investment programmes being in the phase of implementation. There is the challenge of a complex bureaucratic environment but the long term benefits outweigh the costs. FDI is thus recommended.

Bibliography

1. http://pulp-paperworld. om/ex1/item/768-abtcp. html
2. http://www. forestry-invest. com/2010/brazil-becomes-world%E2%80%99s-3rd-largest-pulp-and-paper-producer/513
3. http://www. bracelpa. org. br/bra2/sites/default/files/estatisticas/booklet_eng. p df
4. http://www. roundtownnews. com/rtn-features/rtn-money/item/36741-ten-reasons-to-invest-in-brazil. html
5. http://ftp. fao. org/docrep/fao/009/j9425e/j9425e04. pdf
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In this article Dambisa Moyo, is arguing that money, in the form of aid given to African nations has not only trapped many of these , but has started a cycle of corruption as well as slowed down economic growth and poverty. To solve this isuue Moyo suggests cutting off the flow of aid to these African nations. Many developed countries will gladly give aid to Africa, these countries do not give small donations they donate by the millions.

This continued donation of aid has only been putting Africa further in debt. What many do not realize is that aid is not given to Africa freely, the African nations receiving aid must pay this money back plus interest. Moyo provided an example of this stating that “African countries still pay close to $20 billion in debt repayments per annum, a stark reminder that aid is not free. In order to keep the system going, debt is repaid at the expense of African education and healthcare” (Moyo, 2009). This is what is slowing down economic growth and keeping those countries in poverty.

A country can not achieve econmic growth if its workforce is not educated, an uneducated workforce means the people in the country have little to no skills. Certain skills are required to get better jobs, if the people are not being adequately educated they will be forced to remain in a state of poverty. Healthcare is alo important, and the countries keep cutting the healthcare budget. If your workforce is not healthy enough to go out and work to spark the economy you can never expect to achieve economic growth. Education and healthcare budget cuts are not the only problems Moyo discussed that are keeping African nations from developing.

Other issues include corruption in the government and developed nations supplying resources for free keeping African producers out of the market. According to the African Union, an organization of African nations “In 2002, it was estimated that corruption was costing the continent $150 billion a year, as international donors were apparently turning a blind eye to the simple fact that aid money was inadvertently fueling graft” (Moyo, 2009). This is because the donations are being given with “no strings attached” so the funds are being used for everything except what they were meant for, development.

Political elites are using these funds to finace their own expidentures as well as financing their families and home life. The other problem is countries like the U. S. Implementing programs like the U. S. Food for Peace program, which buys American food and ships it overseas to African nations. This program is not helpful, it is a hinderance to Africas economic growth. By supplying American food for free, the U. S. is putting African farmers out of business. Moyo suggests that instead of purchasing American food, they U. S. ould purchase food from the African farmers to distribute to the African nations. Done this way the African farmers are benefitting from the program and are able to compete in the market. The opinions presented in this article relate to many of the concepts we have touched on in this course; views on poverty, the development, as well as the international aid system. The article opens up stating “A month ago I visited Kiberam the larget slum in Africa” (Moyo, 2009). When we hear the word slum, we perceive a negative connotation and relate this term with a place in poverty.

We can see the inequalities between developed and undeveloped nations, according to the article “a mere 2% of the country’s population has access to mobile phones compared to a wireless survey that found 91% of Americans have access to cellphones (Moyo, 2009) (Forseman, 2010). This is a huge inequality African citizens are not even close to being equal to the technology avaliable to American citizens. Another concept this article discussed is development, Africa has been trying to become a developed nation for years and after receiveing billions in aid this country has yet to become a developed nation.

The contry remaing in poverty is mainly because if the international aid system. This system continues to allow African nations to receive donations without the country even showing any signs of growth or development. This continuous acceptance of aid is keeping African nations in poverty. ‘ I agree with the author of this article in all of the arguments he gave on why foreign aid is hurting Africa. Developed countries are continously give large donations to the country year after year and there is no progress being made. However, I do not fault Africa for this lack of progress, they are only doing what any nation in their situation would do.

They are continuously being given money and not required to put the money towards efforts to achieve economic growth, they know that the aid is not going to stop being donated so it is in their best interest to remain in a state of poverty and continue receiving aid. The countries donating to Africa are not providing the country with opportunitites to become a pro-market governnment because they are donating goods for free and taking African producers out of business. The politicians in Africa are not being closely watched and are not looking out for the social welfare of the country, but are looking out for themselves.

Africa needs a more accountable government that is concerned about the people and the future of the country as well as their economy. Once these nations stop receiving aid, get better leaders, and African producers are able to tap into the market the country will be on the way to achieveing economic growth.

Works Cited

1. Foresman, C. (2010)Wireless survey: 91% of Americans use cell phones. [online] Available at: http://arstechnica. com/tech-policy/2010/03/wireless-survey-91-of-americans-have-cell-phones/ [Accessed: 15 Feb 2013].
2. Moyo, D. (2009) Why Foreign Aid is Hurting Africa . The Wall Street Journal, p. W1.

ACKNOWLEDGMENTS

I would like to acknowledge the contribution provided by the individuals and insituition mentioned below. First and foremost i would like to recognise the constant support and contribution provided by supervisor Mr Antony Tibaingana. Special acknowledgement goes to my loving aunt Nelly Karimi for her continued moral support love and care.

Special thanks goes to the staff of ministry of works and transport and amproc international for their contribution to the completion of this work. My sincere gratitudes also goes to collegues George,Nelson,Kibet,Dickson. Omar,Oscar and Nyambati who i have shared my time of study with for their support throughout the course of my study. Table 1: Showing Sample Size23 Table 2: Showing response rate of respondents25 Table 3: Showing the age of the respondents25 Table 4: Showing the Level of Education26 Table 5: Showing Marital status27 Table 6: Showing how long one has worked for the Organization27 Table 7: showing whether purchase requisition are handled on time28 Table 8: Showing whether procedures followed helps in procuring quality products29 Table 9: Showing whether products procured are of quality30

Table 10: showing whether weak enforcement measure of procurement law contributes to unethical practice31 Table 11: Showing whether moral degradation in the society is a cause of unethical conducts32 Table 12: Showing whether unethical practice of bidder contributes to unethical conduct by staff33 Table 13: showing whether the organization code of ethics contributes to quality products being procured35 Table 14: showing whether suppliers meet organization specification of quality products36 Table 15: showing whether unethical practice staff has resulted in procurement poor quality products. 36

LIST OF CHARTS FIGURE.

PAGE Chart 1: Showing gender of the respondents26 Chart 2: Findings if purchase requisition used are from the user unit28 Chart 3: Showing whether PPDA procedure is followed29 Chart 4:: Showing relationship between ethics and procurement30 Chart 5: Showing how low pay has contributed to unethical practices…………………………. 32 Chart 6: Findings if there is relationship between ethics and quality of goods procured33 Chart 7: showing whether organization have a mean of checking unethical practice of employees. 36 ACRONYMS PPDA Public Procurement and Disposal of Public assets Authority

IGGInspector General of Government CHOGMCommonwealth Heads of Government Meeting PDEProcurement and Disposal Entitity SPSSStatistical Package for Social Sciences MOWTMinistry of Works and Transport ISOInternational Standards Organisation ABSTRACT The principle objective of carrying out this study was to assess the impact of procurement ethics on the quality of products procured in the public sector a case study of the ministry of works and trasport,and to come up with particular issues that need to be addressed in order to improve their effectviness and efficiency in their procurement activities.

The study used cross section design where data was gathered just once over a period of time in the ministry of works and transport ranging from the period (2000-2010). The research used descriptive research design which describes the phenomenon it was undertaken in order to ascertain and be able to describe the characteristics of variables of interest. The study used a sample size of 37 respondents who were purposively selected. Self administered questionnaires and interview guides were the main instruments of study and data was analyzed using frequencies, percentages and charts using Microsoft excel.

Findings on procurement ethics was that there some ethical issues that arise such as bribery, nepotism, tribalism, leaking of confidential information, pressure from those in authority above, awarding of contracts to those who are not the best evaluated bidders, conflict of interest, lack of transparency and single sourcing, embezzlement of funds and also harassment this was attributed to greed and low pay offered to the employees. Findings on quality of products procured were that when the PPDA procurement procedures are followed majority of the employees were of the view that it contribute to procurement of quality products.

Recommendation on the issue of ethics and quality is that procurement officers should always be sensitized on the importance of ethics and the society as whole needs to be educated on the importance of ethics to reduce on the unethical practices by bidder

CHAPTER ONE

Background of the Study

According to (Kenneth Lyson 2007) procurement ethics is the principle conduct governing an individual or group concern to what is right or wrong.

Ethics is about fairness deciding what is right or wrong defining practices and rules which underpin responsible conduct between individuals and group it is a sense of upright both of conviction and action. (International standards organization 8402) defines the fundamental terms relating to quality concepts, it states that quality is the totality of features and characteristics of a product that bears on the ability to satisfy stated or implied needs and they go ahead to give the dimensions of quality as performance, reliability serviceability conformance durability aesthetics and perceived quality.

According to research done by (Edgar Agbar and Niegel shipman 2006) titled public procurement reform in developing countries: the Ugandan experience, procurement in Uganda consists 70% of the national budget and yet according to the inspector general of government 90% of complaints about corruption in the office are procurement related, and according to the (African pear report 2006) pubic sector losses 268. 6 million dollars directly due to unethical practices.

In 2005 procurement audit carried out by the public procurement and disposal authority in Uganda out of the 322 contracts audited only 7 of the contract were clean that is only 2% of the contract reviewed. According to the (parliamentary accounts committee report on commonwealth heads of government meeting 2009) focusing on ministry of works and transport most of the products procured by the ministry were not of the right quality. For example over one billion shillings were lost due to purchasing of poor construction materials like asphalt, sand, stones, steel which were not of the right quantity and quality.

This was attributed to the lapse in the procurement ethics and procedures. The auditor general also pointed on the poor quality of the roads and wanted the contracts for construction of those roads terminated and government money refunded or contractors make good of there works, because most of the roads constructed or reconstructed had potholes or ripped and some stretches of the roads poorly done and not of the recommended design and in some cases the roads were designed and not constructed at all for example the Manyago road (62kms) the Najjanamkumbi-Makindye road 1. km designed by MBW consulting engineers. According to the parliamentary accounts committee on commonwealth heads of government meeting 2009) the ministry of works and transport was responsible for procuring vehicles for transport. The vehicles were to include executive vehicles for the majesty and other heads of government, police vehicle and motor cycles, ambulances command and patrol vehicles at cost Shillings 20 billion.

This was supposed to be done through a competitive process and the last two best evaluated bids were by spear motors and motor care Uganda limited, spear motors had the best bid but the ministry decide to use direct sourcing and the contract was awarded to motor care Uganda limited owned by 56 percentages by a cabinet minister Hon. Kuteesa.

The company claimed to be importing BMW’S from Germany but they were importing them from Austria and Denmark the initials cost was 38,000 euro’s for a brand new BMW from Germany but the ministry of work and transport spent over 47,000 euro’s for second hand BMWs from Austria and Denmark which did not conform to the standards set by the procurement entity under the ministry. They were 204 BMWs but it is believed that 174 of he BMW’s were not of the required standard.

Also Toyota (u) limited was given a direct contract to supply ambulances at a cost shillings 2,893,469, 700 billion. The ambulances were supposed to be 23 and all of ambulances did not conform to the set standard of quality and specification. They lacked oxygen cylinders, hooks, drug cabinets, emergency lights. Although the manufacturers acknowledged these defects and the low quality of the ambulances nothing was done to rectify the situation. The committee also found out that only 21 of 23 ambulances were delivered.

Statement of the Problem

The lack of procurement planning, corruption and conflict of interest and political interference has led to procurement of poor quality products in the ministry of works and transport for example minister for works Hon Byabagambi outside of the commonwealth heads of government budget he directed the consultant engineers (M/s Multiplan) to carry out additional works which were not well stated outside the law in total disregard for the law this variation led to a loss of shillings 1. 7billion. This was flouting of the public procurement and disposal authority law.

The procurement system in Uganda varies in major way due to the fact that most projects are donor funded institutions like the world bank, international monetary fund and the European union and thus there is no consistency in the ministry of works and transport for a certain procurement system and creating loopholes for unethical staff to embezzle money through means like defining specification to fit single contractors, substituting specified goods with inferior goods selective release of information to favor contractors, charge for skills below those specified which is causing poor quality being procured. .

Purpose of the Study

The study is carried out in order to establish the relationship between procurement ethics and quality of products procured.

Objectives of the Study

1. To establish procurement procedure used/ followed under the ministry of works and transport.
2. To identify the cause of unethical conduct by procurement personnel in ministry of works and transport.
3. To assess the relationship between procurement ethics and quality of product procured.

Research Question

1. How are procurement procedures followed under the ministry of works and transport?
2. What are the causes of un-ethical conduct in procurement in the ministry of works and transport?
3. What is the relationship between procurement ethics and quality of products procured?

Scope of the Study

The scope include three major areas that is

Time Scope

The research will be done between January to June 2011 and the research intends to concentrate on the literature published between 2000-2010 in order to identify the variable problems.

Subject Scope

The study shall be done in the ministry of works and transport and shall concentrate within Kampala city.

The people to be interviewed in the study are the employees of the ministry under the procurement department. The contextual scope of this study will focus on the impact of procurement ethics on quality of products procured.

Geographical Scope

The study will be carried out in the ministry of Works and Transport in Kampala district plot 4/6 Entebbe Uganda.

Significance of the Study

The research will be significance in the following ways:

• The study will help improve my skills and knowledge as a researcher in doing research.
• The study will also help improve the ministry of Works and Transport in appreciating procurement ethics and thus improving quality of product and services offered by the ministry.
• The research will also contribute knowledge as literature review to researchers interested in the same area of research.

CHAPTER TWO LITERATURE REVIEW

Introduction

This chapter deals with review of the related literature on the study of the variables specifically procurement ethics and quality of products procured in the public sector in Uganda. . 1Ethics Moral principles that govern a person’s behavior or the conducting of an activity, It can also be described as the branch of knowledge that deals with moral principle (oxford dictionary 2001). Ethics can also be described as principle of conduct governing an individual or a profession. (Webster’s third new international dictionary) (According to Kenneth Lyson 2006) Ethics is the principle of conduct governing an individual or groups, concern for what is right or wrong, good or bad.

Procurement Ethics

The main principle of procurement ethics are impartiality or objectivity, openness and full disclosure, confidentiality, due diligence, competence and duty of care, fidelity professional responsibility, avoiding potential or apparent conflict of interest. These can be characterized by accountability, responsiveness, professionalism, transparency, open competition, confidentiality, non discrimination and fair play. (Kenneth Lyson 2006).

How Ethics is ensured in Public Procurement

Ethics in the ministry of works and transport has been ensured through a put in place code of ethical conduct in business which must be signed by employees which is listed below

1. Employees shall not use their authority for personal gain and shall seek to uphold and uphold reputation of the Ugandan government.
2. Employees shall reveal any personal interest that may impinge or might be deemed by others to impinge on employee’s business dealing. 3. (i) Employee’s shall respect the confidentiality of information received in the course of business dealing and shall never use such information for personal gain. ii) Information given by employees in the course of business dealing shall be true and fair and not designed to mislead.
3. Employees shall avoid any business arrangement that might prevent effective operation of fair competitive.
4. Employees shall not accept business gifts from current or potential government suppliers.
5. Employees shall refrain from any business hospitality that might be viewed by others as having an influence in making a government business decision. public procurement and disposal of public asset authority act 2003)
6. Also there deterrent measures put in place by the (public procurement and disposal authority act 2003)to ensure ethics are maintained in the government ministries like ministry of works and transport where in section 95 a list of offences are listed like colluding to commit fraudulent or corrupt act, exerting undue influence on any officer or employee, refusal to answer summons and on conviction one is liable to a fine of 250 currency point and each currency is worth 20,000 Uganda shillings or to a term of imprisonment not exceeding 3 years or both.

Ethical Issues in Procurement.

Corruption

One of the major factors that affect quality of products procured in the public sector is corruption; few activities create greater temptation or offer more opportunities for corruption than the public sector procurement. Hardly a day will pass by without another major scandalous public procurement activity in the papers (Pope 2000).

For example in the ministry of works and transport out of the 91 billion offered for construction of roads during the common wealth heads of government meeting 21 billion was lost due to corruption by the officers in the ministry (Parliamentary accounts committee report 2009). The main purpose of the procurement procedure is to ensure openness to all stakeholders involved in the procurement exercises. (Robert 1988) argues that corruption can be equated to the formulae = (M + D – A) where corruption equals to monopoly, discretion minus accountability. J M Ntayi 2009) on the other hand notes that corruption in least developed countries occurs when there is motive and opportunity, corruption is a crime of opportunity, the opportunity being institution inefficiencies. Corruption procurement is “grand” and at alarming levels, the integrity and ethics of procurement staff and those helping out with technical activities is highly questioned since they do not seem to adhere to any code of ethical conduct to guide there ethical responsibilities.

According to (Wade 1995) corruption may increase transaction cost by 50%. A purchaser who wants violate the law has a couple of opportunities in his possession through which he can manipulate the process in a desired direction, these include arranging the composition of a tended in such a way that one may avoid the application of tendering procedures above the threshold and instead use simplified procedures including designing the technical specification or terms of reference to favor a certain product or service or to exclude potential bidders.

Others are including the award criteria in tender evaluation which are completely irrelevant to the actual procurement and evidently discriminatory towards certain suppliers. Manipulation of the process can include using non- open tendering procedures such as restricted procedure or direct procurement , designing contract arrangement with obvious ambition to favor a certain suppliers, accepting false information and misleading documentation from bidders and manipulation of the decision making process (Westring and jadoun 2001).

The (World Bank report 2000) rates public procurement as an area of government activity in which the risk of corruption are very high. The World Bank further asserts that to offer total solutions which would continue to deliver advantages and to be responsible to the future needs of clients the key strength lie in the skills and professionalism of staff. This requires the ability to gain a close understanding of the clients business through training and capacity building.

It should be noted that corruption in procurement is not exclusive domain of the buyer who controls the purse strings but the supplier or contractor who makes an unsolidated offer can easily initiate it, corruption in procurement also takes form of tailoring specification to favor particular supplier restricting information about contracting opportunities and creating situations of emergencies and urgency so as to use single source bidding simultaneously supplier can corrupt the procurement process by colluding to fix bid prices offering bribes and interfering in the evaluation process and thus affecting quality of goods, works and supplies procured ( Pope 2000). The most frequent source of corruption public procurement takes the form of commissions paid or purchased items to officials in the procurement process.

This practice threatens sound decision making by those involved in the procurement process for the higher commissions the better the opportunities of purchasing from the firm and thus affecting quality of goods, works and supplies (Vinold journal of trade 2001). The recipients of clandestine money in the case of government contracts are not only public officials but also members of parliament, political parties and their office bearer. The national laws allow such contributions provided the payment are disclosed and are made without expectation of favors, in practice however the business firms making such payments try to obtain assurances from the recipient that they would helped by persuading the government the take decisions that would benefit there companies (Vinold journal of world trade, 2001).

The (Inspector general of government report 2005) further shows that there has been persistent flouting of the laid down procedures and guidelines by procuring entities. This has resulted into colossal loss of high sums of public funds and the procurement of goods, works and supplies that barely meet their intended objectives.

Conflict of Interest

(According to Pope 2000) conflict of interest in procurement is the order of the day. This arises when people in the public sector are influenced by personal and financial consideration when doing their jobs thereby influencing their decisions. Decisions are made for the wrong reasons in favor of people to whom they are close thus impairing the objectivity and independence of their judgments on quality specifications.

In procurement when handling a tender, all conflict should be noted recorded and the official involved should then exclude themselves from further involvement in the tender awarding decisions. (Pope 2000) further asserts that the procurement process should have clearly stated and well understood policies and procedures as well as written codes of conduct to deal with actual, potential and perceived conflict of interest. He is of the view that if a relative is unquestionably the best evaluated bidder they shall be awarded the tender if the correct procedure is followed. In the ministry of works and transport there is a precision for directing sourcing to favor one company supplying every time there is a conflict of interest either among the officers involved in procurement or when there is olitical pressure coming from above for example the ministry in 2007 opted to lease vehicles at a cost of 4. 17 billion shillings from motor care Uganda limited for use for a short period of times rather than buying vehicles from motor spears at a cost of shillings 6 billion of which the vehicles would have been completely purchased by the ministry this was a result of cabinet ministers interest in the purchase of the goods (Parliamentary account committee report 2009) Leakage of information during the tendering process is a serious ethical procurement issue. This is where some officers leak information to their preferred bidder in advance of the advertisement and afford them an advantage in the preparation of bids. Celentani and Ganuza 1989) consider a procurement problem when potential bidder have private information about their production cost since the procurement agent is also in charge of verifying delivered quality in exchange for a bribe, they argue that the agent can allow an arbitrary firm to be awarded the realization of the project and to produce a quality level lower than announced. According to (Strombom 2001) government procurement contracts for construction project such as airports deems and highways generate immense opportunities for bribes, kickbacks and other payoffs and this is the reason for the below par works done by the firms awarded the contracts.

Donor Interest

Donor interest sometimes hinders the best practices in procurement, in cases where donor favor firms from their own countries of origin even though there are other firms that can offer superior quality products. In cases of big construction and other contracts even after tenders are issued, pressure is applied by foreign government at a high political level for the contracts to be awarded to their companies it is common to hold out a promise for additional provisions of financial aid if the contract is awarded to them (Vinold journal of world trade, 2001). Procuring can conclude with contractors by omitting required advertisement or calling for bids with shortened bids submission periods.

Splitting of contracts can be done to avoid exceeding threshold set by the tender boards.

Delayment of Funds

The ( Inspector general of government report 2002) stipulates that the lack of funds on a timely basis from ministry of finance planning and economic development has also led to procurement malpractices procuring entities claim they cannot advertise tender when they are not sure of the availability of funds from the ministry of finance, planning and economic development so when the funds are received later procurement procedures are not followed in the acquisition of goods, works and services resulting in low quality of goods works and services purchased.

Entities usually cite cash flow constraint and therefore end up splitting amount which would require different methods of purchasing, contract for such suppliers are usually renewed extended for much longer period these unethical practices are the reason why the government keeps on procuring low quality goods which do not meet their objectives as a result of lack of competition in the tendering process.

Quality (International standard organization)

ISO defines quality as the totality of feature and characteristics of a product that bears on the ability to satisfy stated or implied needs and they go ahead to give dimensions of quality as performance, reliability serviceability conformance durability aesthetics and perceives quality.

Quality of Products

(According to Garvin 2007) quality of a product procured can be seen through five approaches which are as follows: Transcendent approach; quality is absolute and universally recognizable. The oncept is closely related to comparison of product attributes and characteristics. Product based approach; quality is a precise and measurable variable in this approach difference in quality reflects difference in quality of some product characteristics. User based approach; quality is defined in terms of fitness for use or how well the product fulfills its intended functions. Manufacturing based approach; quality is conformance to specification that is targets and tolerance determined by product designers. Value based approach; quality is determined in terms of cost and prices, here a quality products one that provides performance at an acceptable price or conformance to an acceptable cost.

Quality is therefore determined by balancing technical consideration such as fitness for use performance safety and reliability with economic factors including price and availability it is therefore the optimum quality for the application that should be sought rather than the highest quality. Quality of goods procured can be determined by if they meet technical specification, delivery, environmentally sound, quality assurance, and accuracy of documentation speed of response and customer service.

Determinants of Quality

According to (Kelly and Male 2003) the following are the determinants of quality in purchasing Customer satisfaction; another benchmark for quality is the ability to meet customer expectation or even exceeds them. Conformance to specification; a product is be deemed to have high quality if it conform the specification spelt like design, size, color, weight.

Product attributes: This is what leads to certain dimension of qualities for example performance, features, reliability, serviceability, durability safety and aesthetics. Budget cost; a product is deemed to be of quality if it is within cost and its performance is at an acceptable cost. Timing; product quality can also be determined by the time which it is delivered on, is it at the right time that was specified or has the product delivery been delayed. Leadership; how is the executive team and all the managers inspiring and ensuring total quality for continuous improvement in the organization. Goals/policy; how the companies goals and policies reflect the principle of total quality of products.

Public Procurement and Effective Quality Products and Service Delivery

Effective procurement practices are defined as those systems offering a high level transparency, accountability and value for money. (Ministry of defense procurement handout, 2004). The principle aim of procurement should be to obtain goods and services of the right quality in the right quantity from the right source, delivered to the right place and at the least cost and price (Lyson 2000 Telgen 2007). Successful and efficient procurement practices are those that meet the need of customer’s achieve optimum condition and value in regard to allocating of scarce tax payers resources (J. M Ntayi 2009).

The practice needs a labor force with effective management skills that develop clear and professional specifications with full knowledge of a competitive process negotiation and monitoring skill. (Hunja Steane et al 2003) continues to say that procurement system implemented with sound management practices in place ensure successful quality and service delivery to stakeholders. The sound practices demand that those responsible for implementing procurement should ensure that the objectives are clear and that quality is sustained (Walker and Sidwell 1996) continues to say performance quality should not be measure on the basis of time and cost only but also quality of product and services as well as other relevant measures.

According to research done assessing competitive procurement procedures, findings indicate that it is a fact that competition in public procurement does improve efficiency and effectiveness. Competition is the tenet of a free market economy and it is the basis for cost effective purchasing quality and timeliness. It keeps providers on their toes it is an incentive for innovation improvement in quality and reduction in cost in improves proper allocation of government resources, high quality and timely procurement and budgetary saving. (Lemke 2003)

Public Procurement

Acquisition by purchase, rental, lease, hire purchase, license, tenancy franchise or any other contractual means of goods or services by the government. (Telgen 1998).

Procurement in the Ministry of Work and Transport

Public procurement is a powerful instrument for the transformation and realization of social economic goals and open and competitive public procurement and contracting procedure begins with the government description of its requirement and initiation of suppliers to indicate their interest in the contract and there professional capacity to fulfill it. (Sigma policy brief 2000). The government identifies potential suppliers and invites them to submit bids. The process must ensure that supplier can infarct meet the specification of product quality, delivery dates and continuity. After the bidding phase most procurement system require a public declaration of competitors names and bid price of the successful bidder (Sigma policy brief 2000). The procurement cycle is often high complex process.

There is a series of closely interrelated activities between the initial identification of needs and the final delivery of quality product and services which requires coordination and quality control to achieve the best value. However this can be undermined by unethical practices by the officers in the procuring entity. (Westing and jadoun 1996) Effective procurement is considered to be a key strategic management tool in driving down cost and improving operational efficiency while ineffective procurement wastes money resources and time (Westing and Jadoun 1996).

Procurement Cycle in the Ministry of Works and Transport

The following are the procurement procedures that are followed in the ministry of works and transport as per the guidelines issued by the (public procurement and disposal of public assets authority 2003).

1. Procurement plan and budget: this procedure is undertaken by the user department, procurement unit, board/ council and the accounting officer.
2. Procurement requisition: This is the responsibility of the user department
3. Confirmation of available funds; the accounting officer is the one to undertake the function.
4. Review of specification, procurement methods; potential supply market procurement method evaluation criteria and potential supply market. This is the duty of the procurement unit and the user department.
5. Procurement methods approval; is the responsibilities of the contracts committee.
6. Preparation of bidding documents; this roles is played by the procurement unit. ) Approval of bidding documents ;This role is played by the contracts committee
7. Advertisement and invitation of bids; the advertisement is done by the procurement unit and it should be in a newspaper of wide circulation.
8. Receipt and opening of bids this is the procedure is undertaken by the procurement unit but it must be done in front of bidders.
9. Evaluation of bids; the evaluation of bids is the role of the procurement unit and the user department which will provide technical inputs.
10. Review of evaluation report ;this is the responsibility of the contracts committee
11. Award of contract; this is the responsibility of the contracts committee.
12. Signing of contract, communication of awards, administrative review; this is the work of the accounting officer he does this on behalf of all the members of procuring disposing entity.
13. Contract management and monitoring; the responsibilities of contract management and monitoring fall to the user department and procurement unit the user department shall report any departure from the contract by bidders.
14. Contract performance evaluation and report; the duties will be performed by the user department and the procurement unit.

Procurement Methods

Followed in the Ministry of Works and Transport The following are some of the methods of procurement that are used in the ministry of works and transport to ensure quality products are purchased

Open domestic bidding; this method is open to participation on equal terms by all providers through advertisement of procurement or disposal opportunity. Open international bidding; this method is open to participation on equal terms by all providers through advertisement of the procurement disposal activity and which specifically seeks to attract foreign providers. Restricted domestic bidding; is the procurement or disposal method where bids are obtained by direct invitation without open advertisement. Restricted international bidding; is the procurement or disposal procedure where bids are obtained by direct invitation without open advertisement and the invited bidders include foreign providers.

Quotations and proposals are simplified procurement and disposal method which compare price quotation obtained from a number of providers. Direct procurement is a sole source procurement disposal method which shall be used for very low value requirement. Micro procurement this method is used for very low value procurement requirement. The above methods are recommended by the (public procurement and disposal authority act 2003). According to J M Ntayi (2009) the continuing preference by the ministry of works and transport for direct procurement and micro procurement has hindered competition and thus affecting quality of products and resulting in increased cost.

Effects of Unethical Procurement

According to the parliamentary account committee on common wealth heads of government meeting report 2009)The following are some of the effects of unethical procurement – Poor quality of materials purchased. – There will be inflated prices. – Loss of government funds. – Slows down economic in economic development of a country.

Conclusion

In conclusion, the ministry of works and transport is falling behind in implementing effective procurement of quality product as a result of increasing discriminatory and non transparent means of procurement that do not favor accountability this was highlighted in the research by (Edgar Agbar and Niegel shipman 2006) titled public procurement reforms in developing countries.

According to them public procurement and disposal of public assets authority act (PPDA ACT 2003) gives the organization the mandate for the following functions advisory, data management, capacity building and audit function so as to improve good governance fight corruption and promote economic development and thus make key changes in procurement in Uganda and thus helping improve government function in the statutory bodies, central government and local government, However the organization is not autonomous enough to ensure implementation..

CHAPTER THREE

Introduction

This chapter discusses how the study will be carried out. It discusses the research design the sampling design, sources of the data, data collection methods, tools, data processing, analysis, and presentation.

Research Design

The design used will be cross section study where data will be gathered just once over a period of time in the ministry of works and transport ranging from the period (2000-2010).

The research will use descriptive research design which describes the phenomenon it will be undertaken in order to ascertain and be able to describe the characteristics of variables of interest. The research sought to explain the relationship between procurement ethics and quality of products procured in the ministry of works and transport.

Survey Population

The survey population will include the management and employees of the purchasing function and firms offering technical expertise to the purchasing function, the survey population were of 60 people.

 Sampling Design

Purposive and simple random sampling without replacement will be used.

Sampling Size

The sample size using the krejcie and Morgan (1970) method will be of 37 members, where the sample will be from the ministry of works and transport and consultant firms offering technical expertise. Table 1: Showing Sample Size |Sample group |Sample size | |Procurement office |25 | |Technical experts |12 | |Total |37 | Source: primary data.

Source of Data

Primary Data

Primary data will be obtained from the ministry of works and transport through the use of interviews and questionnaires.

Secondary Data

Secondary data will be obtained from the already existing information both internal sources which are found within the organization and external sources were collected from publication and journals.

Data Collection Methods

Observation

The researcher intends to use none controlled non participant observation where the researcher will not participate and will watch everything from a distance while watching the researcher will be noting down the phenomenon.

Survey

This will be done through collecting information about the variables that is procurement ethics and the quality of products procured in the ministry of works and transport and technical experts in the sample.

Data Collection Instrument

Questionnaire

Semi structured questionnaires will be distributed to respondents who will be given time to answer them and return them for solving and analyzing by the researcher.

Documentary review

Secondary data will be obtained from reading already existing notes and taking notes of materials that is related to the research and a conclusion was reached from them.

Interview guide

Informal interviews will be conducted using open ended questions the interview guide will help the researcher to carry out dialogue that is meaningful.

Data Processing Analysis and Presentation

Data processing

The researchers after gathering the data will edit code classify and tabulate the data.

Data analysis

The researcher will use computer programs like Microsoft excel and (SPSS) statistical package for social sciences. This will result in computation of certain measures finding the relationships transforming and modeling data in order to highlight useful information.

Data presentation.

The researcher will put the results of the research into graphs charts and tables into visual way of looking of data.

CHAPTER FOUR PRESENTATION OF FINDINGS, DISCUSSION AND INTERPRETATION

Introduction

This chapter presents analysis done in relation to the study objectives and research questions in chapter one, of this report under the topic procurement ethics and quality of products procured in the public sector case study of ministry of public works and transport.

Demographic Characteristics of Respondents

Table 2: Showing response rate of respondents |Response |Frequency |Percentage (%) | |Actual response |33 |89. 2 | |Non response |4 |10. 8 | |Total questionnaires issued |37 |100 | Source primary data: Table 2: According to Table 2 above it shows that out of the questionnaires issued the number of response was 89. % which is a good response rate which one can depend on to make conclusion and recommendation and the non response was 10. 8% Table 3: Showing the age of the respondents |Age |Frequency |Percentage (%) | |20-29 |13 |39. 4 | |30-39 |8 |24. 2 | |40-49 |6 |18. 2 | |50 and above |6 |18. 2 | |Total |23 |100 | Source: primary data

Most respondents were in the age group 20-29 comprising 39. 4 % followed by age bracket 30-39 with 24. 2% with the age bracket 40-49 and 50 and above both comprising 18. 2% this implies that most of the employees are aged 40 years and below. Chart 1: Showing gender of the respondents [pic] Source: primary data According to chart 1 above most of the respondents were male comprising 57. 5% and only 42. 5% of the respondents were female this implies more males are employed than females. Table 4: Showing the Level of Education |Level of education |Frequency |Percentage (%) | |Certificate |3 |9. | |Diploma |9 |27. 3 | |Degree |14 |42. 4 | |Post graduate |6 |18. 2 | |Others |1 |3 | |Total |33 |100 | Source: primary data From table 4 above the level of education was found to be as follows those holding a certificate in procurement were 9. 1%, 27. % of the respondents were diploma holders while majority of the respondents were degree holders 42. 4% with 18. 2% being post graduates while 3% were holding other qualification Table 5: Showing Marital status |Marital status |Frequency |Percentage (%) | |Single |14 |42. 5 | |Married |18 |54. 5 | |Widowed or divorced |1 |3. 0 | |Total |33 |100. 0 | Source: primary data From the above table 42. % of the respondents were single while 54. 5% are married with 3% being widowed or divorced this shows that most employees working for the organization are married. Table 6: Showing how long one has worked for the Organization |Number of years worked |Frequency |Percentage (%) | |Below 5 years |14 |42. 4 | |Between 5 and 10 years |11 |33. 3 | |Between 11 and 15 years |5 |15. 2 | |Above 15 years |3 |9. | |Total |33 |100. 0 | Source: primary data From the above table showing the number of years the respondents has worked for the organization 42. 4% have worked there for below 5 years, 33. 3% have worked for the organization between 5 and 10 years and 15. 2% have worked for the ministry between 11 and 15 years while 9. 1 % of the respondents have worked for the organization above 15 years. 62 Findings on how products are purchased in the organization Chart 2: Findings if purchase requisition used are from the user unit [pic] Source: Primary data From chart 2 above it indicates that 36. % of the respondents strongly agreed that purchase requisition from user units are used, 45. 5%agree that purchase requisition from user units are used while 6. 1% are not sure with 12. 1% disagreeing that requisition from user units are used while none of the respondents disagreed this means that purchase requisitions are used. Table 7: showing whether purchase requisition are handled on time |Response |Frequency |Percentage (%) | |Strongly agree |2 |6. 1 | |Agree |13 |39. | |Not sure |8 |24. 2 | |Disagree |7 |21. 2 | |Strongly disagree |3 |9. 1 | |Total |33 |100 | Source: primary data From table 7 above 6. 1% strongly agree there is handling of requisition on time while 39. 4% agree that requisitions are handled on time 24. 2% are not sure whether requisition are handled on time while 21. 2 disagrees with 9. strongly disagreeing this means that purchase requisitions are not handled on time Chart 3: Showing whether PPDA procedure is followed [pic] Source primary data From chart 3 above 21. 2% strongly agree that PPDA procedure are followed 42. 4% agree that PPDA procedures are followed 12. 7 % are not sure whether PPDA procedure is adhered to with 21. 2% disagreeing that PPDA procedures are followed while 30% strongly disagreeing with the statement this implies that PPDA procedure are followed Table 8: Showing whether procedures followed helps in procuring quality products |Response |Frequency |Percentage (%) | |Strongly agree |11 |33. | |Agree |15 |45. 4 | |Not sure |6 |18. 2 | |Disagree |1 |9. 1 | |Strongly disagree |0 |0 | |Total |33 |100 | Source: primary data According to table 8 above 33. 3 % of the respondents strongly agree that procurement procedure followed result in procuring of quality goods with 45. 4% agreeing also, 18. % of the respondents are not sure whether the procedures followed results in procuring quality goods while 9. 1 % disagree with none of the respondents strongly disagreeing this implies that the procedure followed results in procuring quality products. Table 9: Showing whether products procured are of quality |Response |Frequency |Percentage (%) | |Strongly agree |9 |27. 3 | |Agree |13 |39. 3 | |Not sure |6 |18. | |Disagree |4 |18. 2 | |Strongly disagree |1 |3. 0 | |Total |33 |100 | Source: primary data From the findings in table 9 above27. 3% of the respondents strongly agree that products procured are of quality,39. 3% also agree that the products procured are of quality while 18. 2% are not sure 12. 7% of the respondents disagree goods procured are of quality while 3. 0% strongly disagree.

Most employee’s think that me reason goods, being procured now are now are of quality is because of the PPDA procedure’s put in place this implies that products procured are of quality.

Findings on causes of unethical practice in procurement

Chart 4: Showing relationship between ethics and procurement [pic] Source: primary data The presentation from chart 4 above shows that there is a relationship between ethics and procurement because 91% of the respond agreed with the statement while 9% stated that there is no relationship, They gave the main reason being that that an ethical person is willing always to conducts himself in a moral way and this guides procurement. Ethics was defined by many as a discipline governing conduct in on organization.

Table 10: showing whether weak enforcement measure of procurement law contributes to unethical practice |Response |Frequency |Percentage (%) | |Strongly agree |9 |27. 3 | |Agree |14 |42. 4 | |Not sure |2 |6. 0 | |Disagree |4 |12. 1 | |Strongly disagree |4 |12. | |Total |33 |100 | Source: primary data According to the results of table 10 above 27. 3% of the respondents thought that weak enforcement measure of the law contributed to unethical practices with 42. 4% agreeing while 6. 0% were not sure 12. 1% disagreed and 12. 1% strongly disagreed this indicates that weak enforcement measures of the law contributes to unethical practices. Table 11: Showing whether moral degradation in the society is a cause of unethical conducts |Response |Frequency |Percentage (%) | |Strongly agree |8 |24. | |Agree |10 |30. 3 | |Not sure |7 |21. 2 | |Disagree |5 |15. 2 | |Strongly disagree |3 |9. 1 | |Total |33 |100 | Source: primary data Results from table 11 above shows that 24. 2% of the population strongly agreed that moral degradation in the society causes unethical conduct with 30. % agreeing while 21. 2% were not sure with 21. 2 disagreeing that moral degradation in society causes unethical conduct and 9. 1% strongly disagreed this means that the respondents agree that moral degradation of the society contributes to unethical conduct. Chart 5: Showing how low pay has contributed to unethical practices. [pic] Source: primary data According to the presentation in chart 5 above, 45. 5% of the respondents agreed that low pay has contributed to unethical practices with 15. 1% not being sure and 9. 1% disagreeing non of the respondent strongly disagreed that low pay does not cause unethical practices this indicates that 90. % of the respondents agree that low pay contributes to unethical practices. Table 12: Showing whether unethical practice of bidder contributes to unethical conduct by staff |Response |Frequency |Percentage (%) | |Strongly agree |10 |30. 3 | |Agree |10 |30. 3 | |Not sure |4 |12. 1 | |Disagree |6 |18. | |Strongly disagree |3 |9. 1 | |Total |33 |100 | Source: Primary data According to the results in table 12 above, 30. 3% of the respondents strongly agreed that unethical practice of bidder contributes to unethical practice of employees with 30. 3% also agreeing while 12. 1% were not sure. 18. 2% disagreed that unethical practice of leader contributes to unethical practice of employees while 9. 1% strongly disagreed this gives the implication that conduct of bidder can affect the conduct of procurement staff.

Some of unethical practices cited by the respondents include corruption, favoritism, fraud, extortion and sexual harassment, bribery with the respondents citing greed, low payment, and lack of effective reporting system as the main causes of unethical practices

Findings on the relationship between ethics and quality of goods procured

Chart 6: Findings if there is relationship between ethics and quality of goods procured [pic] Source: Primary Data Most of the respondents from the findings of chart 6 above agreed that there is a relationship between ethics and quality of goods procured comprising 94% while 6% stated that there was no relationship. According to the respondents when one is ethical it results to award of bids to best evaluated bidders and that the procurement procedures will be adhered to resulting to procurement of quality goods

Table 13: showing whether the organization code of ethics contributes to quality products being procured |Response |Frequency |Percentage (%) | |Strongly agree |9 |27. 3 | |Agree |11 |33. 3 | |Not sure |6 |18. 2 | |Disagree |4 |12. 1 | |Strongly disagree |3 |9. | |Total |33 |100 | Source: primary data From table 13 above, 27. 3% strongly agree that the organization code of ethics contribute to quality products being produced with 33. 3% agreeing while 18. 2% of the respondents were not sure, 12. 1% of the respondents disagree that the organization code of ethics has contributed to procuring of quality products with 9. 1% strongly disagreeing this implies that organization code of ethics contributes to procurement of quality products. Table 14: showing whether suppliers meet organization specification of quality products Response |Frequency |Percentage (%) | |Strongly agree |7 |21. 2 | |Agree |14 |42. 4 | |Not sure |4 |12. 1 | |Disagree |5 |15. 2 | |Strongly disagree |3 |9. 1 | |Total |33 |100 | Source primary data

The results in table 14 show that 42. 4 % of the respondents agree that suppliers meet organization specification with 21. 2% strongly agreeing while 12. 1% are not sure. 15. 2% of the respondents disagree that suppliers meet organization specification with 9. 1% strongly disagreeing this indicates that suppliers meet specification Table 15: showing whether unethical practice staff has resulted in procurement poor quality products. |Response |Frequency |Percentage % | |Strongly agree |10 |30. | |Agree |14 |42. 4 | |Not sure |4 |12. 1 | |Disagree |3 |9. 1 | |Strongly disagree |2 |6. 1 | |Total |33 |100 | Source: primary data From table 15 above 30. % of the respondents strongly agreed that unethical practice of staff have resulted in procurement of poor quality products with 42. 4% agreeing while 12. 1% were not sure. 9. 1% of the respondents disagreed that unethical practice of employees does not lead to procurement of poor quality products with 9. 1 strongly disagreeing this means that unethical practice of staff contributes to procuring poor quality products. Chart 7: showing whether organization have a mean of checking unethical practice of employees. [pic] Source primary data: According to the presentation in chart 7 above 27. 3% of the respondents strongly agree that the organization has a means of checking unethical practice with 48. 5% agreeing, 6. % of the respondents are not sure. With 12. 1% of the respondents disagreeing that the organization has a means of checking unethical conduct of employees with 12. 1% strongly disagreeing this implies the organization has means of checking unethical practice of employees.

Ethics in the Organization

An interview with the employees of the procurement Department in the Ministry of Works and Transport (MOWT) the researcher found out that the PPDA act and regulation section 49 and 87 respectively

Your manager has asked you to prepare briefing papers to explain the ethical issues the client organisation needs to consider in its operational activities (P1) Understanding Business Ethics| Understanding business ethics| Business Ethics plays an important role in business today and it can be defined as an examination of how people & institutions should behave in the world of commerce and it Ethics – is the study of the moral obligations and the difference between right and wrong.

Ethical values – the standards that are held and are set by a business or individuals that control their behavior. Business Ethics . Every activity and every profession requires that employees work with the responsibility and must respect not only general, but also the special requirements of professional morality. Since ancient times it comes to professional morality or professional ethics, emphasizing such things as professional conscience and responsibility, self-esteem and dignity.

Individuals and professionals within Coca-Cola must be ethical in the decisions they make this include: Respect other workers and managers, Using appropriate behavior Perform job competently

Act loyally

Act honestly Coca-Cola ethical activities Coca-cola always focuses on making a positive contribution to the community. Coca-cola support a lot of charities, aims to be the beverage industry leader in energy efficiency and climate protection. Also they keep trying to improve bottling plants to safely return to nature and communities an amount of water equivalent to what they use in their beverages and production.

Operational Activities

Operational activities are day-to-day actions taken by a firm to achieve its primary purpose to simplify that it is what a business actually does. Coca-cola makes soft drinks and beverage products, factories contain machinery and have people running them, it makes and receives deliveries, people travel to and from the factory. Operational management is very important and that includes controlling how a business works, so that it achieves the aims and objectives which is set by strategic management. Aims and objectives An aim is where the business wants to go in the future, its goals.

Objectives give the business a clearly defined target. Plans can then be made to achieve these targets. Without aims and objectives there is no meaning to business, it’s the aim and objectives that give meaning to subsequent activities of planning, directing, staffing, organising and controlling. Coca-cola’s aims and objectives are to: To refresh the world – in mind, body and spirit by providing the best product that they can to the public in order to create customer satisfaction and ensure that all employees are working to their highest standards.

Coca-Cola also wants to be the best beverage sales and customer service Company and make sure to never let their high standards of quality fail. To create a value and make a difference – everywhere they engage. To inspire moments of optimism – through their brands and actions Live Our Values Coca-Cola’s values serves as a compass for their actions and describe how they behave in the world. Values include: Leadership: The courage to shape a better future Collaboration: Leverage collective genius Integrity: Be real Accountability: If it is to be, it’s up to me Passion: Committed in heart and mind

Diversity: As inclusive as our brands Quality: What we do, we do well

Corporate Responsibility

Coca-Cola manages their corporate responsibility through the Public Policy and Corporate reputation council. Coca-cola also have to review Company policies and practices relating to significant public issues of concern to the shareholders. After researching Coca-cola’s Code of Conduct I found that Coca-cola said: Corporate responsibility is not just good for Coca-Cola, but for the whole world too.

Protecting resources, saving energy and encouraging recycling are serious challenges. If we all play our part in meeting them, everybody will benefit.

Corporate Governance

The Coca-Cola Company is committed to sound principles of corporate governance. The Board is elected by the shareowners to oversee their interest in the long-term health and the overall success of the business and its financial strength. The Board serves as the ultimate decision making body of the Company, except for those matters reserved to or shared with the shareowners.

The Board selects and oversees the members of senior management, who are charged by the Board with conducting the business of the Company. After researching Coca-cola’s Code of Conduct I found that the responsibility for administering the Code rests with the Ethics & Compliance Committee, with oversight by the Chief Financial Officer, General Counsel and Audit Committee of the Board of Directors. The Ethics & Compliance Committee is comprised of senior leaders representing corporate governance functions as well as operations.

Environment

Environment is very important as it’s the natural world either as a whole or in a particular geographical area. When it comes to Coca-Cola they keep trying to improve themselves and be environmentally friendly. Coca-Cola designed water programs to support healthy watersheds and sustainable programs to balance the water used throughout their production process. Also they use sustainable packaging, energy saving and climate protection. There are many bad stories how Coca-Cola had a bad impact on the environment. Negative stories – Environment

In 2004 Coca-Cola opened bottling operations in India – Kala Dera village and after factory was opened the community started to notice a rapid decline in groundwater levels and people was thirsting because of Coca-Cola. Coca-Cola has more than 50 bottling plants and six are reported that they are draining water too much, because each bottling plant extracts up to 1. 5m litres of water everyday from the ground and it takes about 9L of clean water to manufacture a 1L of Coke.

Sustainability

Sustainability can be defined as maintaining the world’s resources rather than depleting or destroying them.

This will ensure business can support human activity now and in the future. Coca-Cola is always trying to reduce and optimize the amount of materials and energy used for their packaging, also 85% of their products is delivered in recyclable bottles and cans. Coca-Cola are also trying to reduce their impact and minimize their use of water and their goal is to improve their water efficiency by 20% by 2012. So all in all Coca-Cola is keep trying to stay sustainable as possible, although they have bad stories about depleting water in India. In 2000 Coca-Cola opened a new plant at Plachimada in India and it produced 1. m litres of coke everyday which is almost 11m litres of clean water from the ground everyday. Human rights are the rights and freedoms to which all humans are entitled. Coca-Cola is constantly improving their human rights by respecting their employees and customers and protecting workplace rights. Coca-Cola had a lot of bad stories about human rights. To date, there have been a total of 179 major human rights violations of Coca- Cola’s workers, including 9 murders. In 2001 Coca-Colas bottling companies had been linked to many controversies.

These included the murder of eight union leaders. Violence, abductions and torturing of the union members were common practice in Colombia. In Code of Conduct Coca-Cola have said “We are continually advancing our understanding of human rights by engaging with experts in the field and with our peer companies. In 2007, The Coca-Cola Company joined the Business Leaders Initiative on Human Rights (BLIHR), a network of 11 multinational companies focused on identifying practical ways of applying human rights principles within the business context. ”

Corruption is to be guilty of dishonest practices and impairment of integrity. Corrupt means getting something by unfair means. It’s a major concern for every business and Coca-Cola do have a policy on corruption, although they were involved in corruption in past such as they “underhand dealing” and getting contracts not ethically and fairly.

Anti-Corruption Partnership

As a signatory to the United Nations Global Compact, Coca-Cola are actively engaged with other companies and nongovernmental organizations in the fight against corruption.

In December 2007, Coca-Cola became a signatory to the World Economic Forum Partnering Against Corruption Initiative (PACI), making The Coca-Cola Company the first food and beverage company to join approximately 140 other multinational companies in the private sector fight against corruption.

Trading fairly – is market-based approach to empowering fair trade where: * Business is carried on in an open manner * Consumers can feel secure that the goods and services that they paying for are going to be of satisfactory quality * Competition is open and fair 005 Pepsi Co had filed a case in the US accusing Coca-Cola of monopolizing the market of fountain dispensed soft drinks in the US. 2005 Coca-Cola agreed to end all its deals with shops and bars in Europe to stock only Coca-Cola. 2005 Coca-Cola were accused of poor trade practices in Mexico, because Mexicans were buying “Big Cola” rather then products from “Coca-Cola” because it was cheaper therefore Coca-Cola changed pricing strategies in Mexico and therefore started threatening the small business owners to stop selling “Big Cola”.

Coca-Cola had few bad stories for not trading fairly in past these includes not letting shops to sell other soft drinks.

Legal and Regulatory Compliance

Legal Compliance is more important than regulatory compliance. The most important statutory areas are; * Freedom of Information Acts (2000 and 2002) * Data Protection (1998) * Health and Safety * Employment Law * Human Rights (2000) * Animal Welfare Acts And Regulation * Contractual Relationships * Environmental Information regulations 009 Lawsuit was filed in regards to company flavours, of Vitamin Water. Claims say that there is 33 grams of sugar in each bottle of Coca-Cola that is more harmful than the vitamins and other additives. 2008 Coca-Cola were accused in Philippines for an unfair competition case because investigation raided three of cokes warehouses for illegally possessing imported bottles. 2008 Coca-Cola had to pay $137. 5 million to settle a shareholder lawsuit as they were channel stuffing or artificial inflation. Coca-Cola was charged in a U. S.

District Court for the Northern District of Georgia, with “forcing some bottlers to purchase hundreds of millions of dollars of unnecessary beverage concentrate to make its sales seem higher. ” Regulatory compliance is almost as important as legislative compliance. This is an important element in both good management and institutional efficiency. Elements include:

•  Funding
•  Teaching Quality Assessment
•  Research Quality
•  Financial Audit
•  Risk Management
•  Disaster Planning and Business Recovery

Coca-cola Negative Stories

Working Conditions

Working conditions can be defined as the conditions in which staff works this can include stress and noise levels, degree of safety or danger or physical environment. Coca-cola has strict working conditions to ensure that their staff is always safe. Working conditions are really important and it includes health and safety standards. Coca-cola has bad stories for its working conditions. To investigate Coca-cola’s working conditions few undercover students’ was sent to Coca-cola’s factory for temporary job during summer.

One of the student’s was beaten by staff members at the agency and student said that he was beaten by staffers at the agency after he demanded pay for his work at Coca-Cola. Coca-cola had even more bad stories relating to summer jobs these can be found in link bellow: http://www. chinadaily. com. cn/china/2009-08/20/content_8591019. htm

Business Practices

Business practices are a method, procedure, process, or rule employed or followed by a company in the pursuit of its objectives. Coca-cola has a lot of business practices and some of them was not been followed in the past.

In 2003 Indian NGO, Centre for Science and Environment has announced that they found cancer causing chemicals in Coca-Cola. 2007 Coca Cola’s products that were produced and distributed in the Indian market contained pesticides such as DDT, lindane, malathion and chlorpyrifos which all contribute to cancer and a weakened immune system of the human body. Individual Ethical responsibilities Every single worker in Coca-cola’s company must act in accordance with the law it does not matter is it staff member or is it manager all individuals should follow their own ethical principals at all time and be ethical.

Conclusion Therefore to conclude this report on ethical business culture and trade practices of Coca Cola, some basic elements that can be adopted by Coca Cola are like Develop worldwide code of ethics, by these we mean that the statement given by the company’s business culture is not true and the company should come up with a proper solution to this problems and should not tolerate any human rights infractions in any of its plants, or by any of its subsidiaries.

Consider ethical issues in strategic development, while making the strategic the company should consider ethical issue and develop its strategy according to it. Develop periodical “ethical impact statements”, when they are promoting any of its product they should make an ethical statement with it as it will help them to improve the company’s image in the minds of consumer. Recommendations

Coca-Cola Company must ensure that they keep their company always ethical and don’t have any bad stories. Although they are doing good job and not getting and bad stories about them lately, but still they should try to make their company even more ethical for people to think that it is a good company that has a good corporate image.

Source

1. Coca-cola bad stories – http://en. wikipedia. org/wiki/Criticism_of_Coca-Cola
2. http://www. ibe. org. uk/index. asp? upid=71&msid=12
3. http://www. thecocacolacompany. com/ourcompany/mission_vision_values. html
4. http://www. thecoca-colacompany. com/ourcompany/pdf/COBC_English. pdf
5. http://en. wikipedia. org/wiki/Fair_trade
6. http://www. lilesparker. com/areas-of-practice/regulatory-compliance

In Frank Conroy’s memoir, Stop-Time, he encounters many situations throughout his childhood that allow him to mature and gain knowledge of the world he lives in. As Frank grows older, he understands fear, hatred, and unfairness. He first encounters corruption when a police officer approaches him and Jean on the streets of New York and accepts a bribe from Jean. As Frank watches the police officer casually leave after taking the bribe, he feels disillusionment towards the police officer. By passively observing the officer, rather than aggressively interfering in the situation, Frank matures.

Frank’s encounter with the police officer allows him to comprehend that anyone, regardless their level of authority, is capable of setting their morals aside and cheating. Frank and Jean meet with an Italian who shows them how to bribe the cop in order to avoid a citation. In this scene the phrase “son of a bitch” is used ambiguously, since it is hard to tell who might of said this (133). By not specifying who said the phrase “son of a bitch,” it leads to the assumption that that either Frank or the Italian or both, are expressing their anger towards the police officer.

Frank and the Italian feel resignation towards the police officer. The police officer abuses his power of authority; he possesses the power to control many of the fruit vendors by forcing them to pay a small fine. The police officer is playing a game with all the fruit vendors in which only he is victorious. The ambiguity of this phrase can also stand as a representation of all the fruit vendors, they all feel that they have lost to the cop’s game and end up giving him what he wants. As the police officer approaches Jean and Frank’s fruit stand, Jean orders Frank not to watch the cop.

However Frank’s curiosity takes over and he ignores Jean and waits to see whether or not the cop accepts the bribe. Frank describes the cop’s actions and attitude as calm. The police officer was “slapping [the baton] neatly into his palm every few seconds like the piston of an engine. ” Frank compares the cop’s actions to a piston of an engine to signify his calm and repetitive actions of corruption. A piston of an engine repeatedly goes up and down with no other movement and continues until the engine is shut off. Frank’s comparison of the cop to a piston signifies that the cop routinely breaks the law.

The cop’s breaking law routine ends when he no longer wears the uniform and is off duty. This shows that the cop is like any other person; once his shift is over he looses all power of authority, just like a piston looses its power when the engine is stalled. The police officer’s act of corruption consumes Frank’s attention. Frank’s passive observance and curiosity allows him to describe the police officer with great detail. When the officer came within touching distance, Frank becomes shocked as the police officer reaches over to take the money.

Frank’s focus allows him to describe the cop’s, “big arm, covered with thick, curly, ginger-colored hair,” in great detail. The great detail he describes is due to Frank’s astonishment that a police officer, who is supposed to uphold the law, would break the law. Frank’s passive observance allows him to become more mature: Frank had many opportunities to speak up and take action to stop the cop from taking the bribe, but he remained silent and still. Before the police officer took the bribe, Frank respected the police officer, but after he took it, he was nobody.

After Frank witness the police officer take the bribe and walk away, he transforms the way he thinks of authority and regards those who break the law as nobodies. Frank strips away the Police officers power by saying, “approaching, he’d been a policeman, and now, retreating, he was just a man dressed in blue. ” (133). As Frank is experiencing this, he begins to understand that police officers who gain authority by dressing a certain way with a badge, does not necessarily mean that they will enforce the law and do the right things.

Frank takes the power away from the cop by describing him “as a man just dressed in blue,” with no special significance, as if he were just any other person rather than an authoritative policeman. Frank “couldn’t have been more astonished if [the police officer] disappeared in thin air. ” (133) Air is a representation of nothing. Frank’s reference of the cop to air signifies that the cop has no authority: the cop is just like any ordinary person. When you think of a police officer, you imagine peace and order.

When Frank encounters a police officer, he gets exposed to corruption. Being exposed to corruption helps Frank realize that the world he lives in is not perfect. Conroy learns that individuals should respect authority and not rebel when an authoritative figure performs an act of corruption. However you should question corruption rather than be oppressed by it. Frank matured by not interfering with the police officer, but he could of gain more knowledge by revolting the cop’s action and standing up for what he thinks is right.

“A Man for All Seasons” is a play written by Robert Bolt. It is inspired by true events and revolves around Saint Sir Thomas More, the Chancellor of England during the 16th century.

King Henry VIII’s wife, Catherine of Aragon (of Spain), is unable to bear a child and provide an heir for the throne. Owing to this reason, he wishes to divorce her and marry Anne Boleyn, the sister of his former mistress.

However, Saint Sir Thomas More is against this idea and refuses to approve of the King’s desire. The Pope too is against this notion as he had previously disregarded a biblical law in order to allow Henry VIII to marry his wife. What follows is the test of a man’s ability to abstain from falling prey to the temptation of bribery and corruption, even if it means having to give up wealth, luxury and power.

Thesis: A major theme in “A Man for All Seasons” is the delineation between virtue and corruption in all its aspects, political, mental, moral and spiritual, depicted primarily through the leading characters.

Robert Bolt, through the medium of the main characters in the play, has elucidates the differences between the corrupt and the conscience-driven; the immoral and the principled. The play itself is a depiction of society and its many facets.

Sir Thomas More characterizes morality. He is “a hero of selfhood”, meaning that he will not compromise on his “self” or his values simply in order to please or gratify someone. He is the antithesis of the corrupt.

The Common Man represents common individuals and society in general. He performs various roles to portray conventional characters that one would encounter in everyday life. Ultimately he begins to forfeit his moral standards and concedes to the audience that in life, a man must do what is required in order to subsist.

The character of Richard Rich is symbolic of greed and avarice. He is a man that willingly sacrifices his ethics and principles for wealth and position. He is the epitome of corruption and depravity. Through this representation of morality and its antithesis, the writer has aptly described to the audience the elements of corruption, in all its forms.

Thomas More is the kind of man that would rather sacrifice his life than his ethics. Not only the audience but the other characters too view More as a man of morals. It is due to this fact that the King wishes to attain More’s acceptance before divorcing his wife and marrying another woman.

More’s acquiescence would endow the King’s decision with morality and people would approve of it more readily. The various characters attempt to sway More’s resolution of disapproval of the King’s marriage to Anne Boleyn. His steadfastness in resisting bribes demonstrates the strength of his principles.

For instance, when the Duke of Norfolk tries to convince More to sign an oath of allegiance, trying to reform England and the Church, More responds by stating, “”And when we stand before God, and you are sent to Heaven for doing according to your conscience, and I am sent to hell for not doing according to mine, will you come along with me—for fellowship?”

The audience will notice that there exists not an ounce of corruption in the character of Thomas More. He is the representative of a noble and virtuous human being. He is beheaded because of lie told by Richard Rich and till the very end More remains a man of conscience who will not submit to bribery even if his life were to depend on it, literally. He remains a man “anchored to his principles” (36).

The Common Man illustrates a middle path between the virtuous and the unscrupulous. He depicts the base nature of an average man. The choices of an average man are governed primarily by his need to survive, whether by hook or crook, and that is exactly what the Common Man portrays through his various images.

His declaration “Better a live rat than a dead lion” in Act II Scene vii, is a perfect example of this attitude of his. Here he is playing the jailer and affirms that he’d rather live by taking bribes or resorting to corruption, than die as an honorable man who will not give up upon his morals. His actions are not guided by his conscience but by his will to live, no matter what the price.

Richard Rich is a superficial and insincere individual who epitomizes the height of corruption. He, along with other characters that include Thomas Cromwell, Wolsey and Chapuys has been used by the author to embody the corruption existing in society. Rich is willing to sacrifice anything to advance himself politically.

He yearns for position and affluence at any cost. The opening scene itself gives us a glimpse into Rich’s personality when he tells More that he should be a teacher and disregards More’s advice saying that he should not be chasing after wealth and power and must surrender his corrupt ways.

In Act I Scene viii it is insinuated that Rich has sold his soul to the devil when he divulges information about the gilded cup to Cromwell in exchange for a job. The decisive illustration of his corrupt nature is when he lies, under oath in court, and gets his friend, More beheaded for his own selfish needs.