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Posts Tagged ‘corruption’

6 more days and we will enter into a new era under a brand new Chief Executive of the HK SAR. All we are bombarded by the news these days are the various scandals going on with the two transitioning heads of state. For months, the incumbent Donald was caught repeatedly by the press in reckless spending on business trips, accepting lavish traveling and even residential favors by local tycoons, and very much to our horror, smuggling truckloads of liquor from the chief executive’s mansion to his home. On the other hand, CY, the CE-elect, was wildly skinned by the public for lying blatantly about his illegal building works at his home – an offense which he harshly accused of his rival Henry only a few months ago. These scandals have hardly anything to do with public policies or the welfare of our fellow citizens. Worse yet, they speak about our leaders’ character and integrity. Or, the lack of it.

There is a saying that our souls can be corrupted by power, and don’t act all naive and shocked when you turn on the TV news. This happens everyday at the work place and in your households. The difference is only in terms of the level of misuse for personal gains. I am never saying that any of this can be condoned. I’m just saying that while we point our fingers at those around us, we should at the same time have the decency to look at how we conduct ourselves.

In my profession I always look into areas to minimize wastage and inefficiencies. I agree, these are only fancy and politically correct words. My company charges me to make sure we tighten up our expense control measures so that no one is stealing corporate resources. That’s why I am in one of the most hated professions on the planet.

Corporate resources can be traveling guidelines so that the junior marketing manager won’t be checking in to the presidential suite like our Donald did. They can also be how the heads of departments spend our money on unnecessary external consulting firms so as to “pass on the blame” for below-par business results. Talking about how it is best to spend company’s money is challenging and confrontational alone from a third-party point of view, but nothing is even remotely comparable to the landmines of employee benefits. You can imagine the extent of it by looking at the public riots you see in the cash-trapped countries of Greece and Spain.

What are these so-called employee benefits? Alright, we have hotel categories, hotel breakfasts, hotel locations, serviced apartments, daily spending limits, flight classes, lowest cost airlines, airline lounge access, airport limousines, club memberships, blackberry models, cell phone packages, laptops, flat screen monitors, office furniture, name cards, stationery, pens, folders, giveaways, and the list goes on.

Don’t get me wrong. I LOVE nice things. I love to be pampered, and I like to think that I have earned my ranks enough to be treated nicely by my boss. However, I know what the reality is, and I know how to draw the line. I come in to work and deliver and get my pay check. Then I can spend it on nice things. I’d rather see my employer make money and then reward me with a bigger pay check. Then no one owes anyone anything. What strikes me hard is that I often see many well-off senior staff thinking very much like Donald and CY – let’s get as much out of the company/government as possible.

I am fully aware that there are blood-sucking corporations out there who take advantage of innocent workers like running a sweat shop. That’s why we protect our employees with well written policies – something which our Chief Executives conveniently omitted for themselves. We know what we are entitled to when we sign on to a job offer. From time to time, companies will want to revisit those policies due to flagging business results or other priorities, and this often creates an outroar of frustrations and resistance from everyone. In my years of experience, I often find the biggest resistance actually comes from the highest ranking staff and often the most wealthy ones. They work their way around with smart excuses, threats and pressure through their poor secretaries. The only thing they almost never do, is walk away. No, it’s not worth losing those high paying jobs, they admitted.

That to me is a complete revelation of their character, and it is eye-opening. I believe it is a competitive market out there, and every one of us should know how much bargaining power we have in all circumstances. If you truly believe you are being ill-treated by not getting the true rewards of your deliverables, walk away. There must be tons of other companies who want to grab you. You have suffered enough. Don’t bully your way through the innocent policy enforcers. Negotiate a bigger package and then take 150 days of leave a year to indulge. Don’t spend your precious time haggling over the next hotel tier or that first class window seat on your next business trip. The reality is, a business trip is a business trip. Even if you have Donald’s presidential suite, you can still hate it because your diamond shoes are too tight.

That’s why, if I am charged with attacking “greed” as one of my buying commodities, I will happily and politely defer to my fellow human resources colleagues for their professional enjoyment.

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I wrote earlier about corruption in procurement, and quite frankly this happens in just about any profession you can possibly imagine.  I really don’t get why people would find screwing up their entire careers such an easy decision.  Maybe everyone think they can outsmart others, and that no one would ever find out.  Come on, really?  Personal egos sometimes are just too compelling to overcome.

A whole team of Hong Kong based flight attendants were caught smuggling cigarettes through the Heathrow airport, without declaration of course.  Apparently it is not uncommon for flight attendants to pack a few cartons of cigarettes in their luggage and then release them to the dealers in Chinatown for a handsome profit.  We used to hear crew members buying Louis Vuitton bags in Paris for the Chinese and Japanese dealers at home, and it seems that there are now tighter restrictions on that.  Aside from obvious customs regulations, airlines have strict policies prohibiting their staff from taking airline properties from the plane and carrying illegal items on duty.  Yet, since crew bags are seldom checked at customs especially when they are in uniform, you won’t be surprised to find crew luggage filled with champagne and other spirits taken from the plane.

Again, the consequences of such actions could mean prosecution as well as termination of employment.  The team of flight attendants were detained by London authorities, and the airline offered little assistance in legal representation or logistics support.  All of them were fined and banned from ever entering United Kingdom again.  Needless to say, they were fired by the airline with immediate effect, and there should be little chance of any of them ever re-joining the inflight servicing industry, across the globe.

Is it worth it? I don’t need to interview the crew members to know the answer.  Are they evil people?  I don’t think so at all.  We are all normal people and we are all greedy in different ways.  However, we have to keep in mind that certain seemingly harmless decisions actually have detrimental effects on our lives.

But then we still hear about senior government officials scamming the authorities on housing allowances, education subsidies for their children, and tax evasions.  There must be a secret community out there for people to swap wicked ideas like that, in every workplace.  For those who have little willpower, choose your friends wisely!

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I’m Lovin’ It

Some of us may remember a former Managing Director of McDonald’s Hong Kong was jailed for 4 years and 5 months last year, who was tried for bribery charges 3 years ago.  The 47-year old MD accepted bribes for recommending and approving a Thai food company to become the corn supplier of McDonald’s.   The bribe is said to be 10% commission of total corn sales, amounting to around 330 thousand US dollars.   To cover up for the bribe, the MD advised the corn supplier to answer law enforcement officers that the money was used for a joint venture property investment in China.  The city’s Independent Commission Against Corruption, for all the right reasons and evidence, did not buy the cover up.  The MD was head of McDonald’s Philippines for 3 years before taking up the top post in Hong Kong in May 2004.  According to reports, he spent 10 years expanding McDonald’s business in mainland China.

I have no idea why senior executives would throw away their hard-earned career, naive enough to hope that their illegal acts would not be uncovered.   However I am now told that such dealings are not at all rare in the food industry.  I admit that all I am hearing are rumors with absolutely no proof whatsoever, but I am amazed as to how short-sighted these supposedly professionals are.  Is it all about the money?  Is it about the perceived power as well?  I guess it probably feels great to have potential suppliers begging for your business and even offering to provide certain concessions.  Earlier I wrote about what a fine line procurement professionals could walk while accepting gifts, and here I would like to share a question which a former boss of mine used to raise in an internal training session which I co-hosted.

For the immense support you generated to their business over the past years, your supplier delivered a gift to you during a year-end business function.  You opened it and it was an expensive Swiss branded watch – the kind that you would only reward yourself after getting a sizable bonus at work.  Since the value is way above the company’s gift policy guideline, you reported it to your boss, company management and compliance.  Now suppose that everyone has cleared you of any illicit under-the-table insinuations, your boss told you that the decision is up to you.   Nothing is illegal, and the company has endorsed it as a genuine personal gift.

Would you take the watch?

 

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Any true strategic procurement professional will realize that today’s sourcing decisions are becoming way more complicated than before.  The supply market is shrinking because of increasing mergers and acquisitions everywhere.  Our requirements and specifications are getting so much more demanding that traditional mom-and-pap vendors are no longer equipped to service us.  To make it worse, I have been encountering pressure from vendors threatening to use their purchasing power on us, in order to gain leverage on securing our business.

How so?  They, or their subsidiary companies or business units, are also buying from my clients.   My neighboring product sales teams are knocking on my door asking me to give concessions in my buying decisions, in order for them to make a sale.  There you have two competing forces on the table, within the same company, and supposedly working for the common good of us all. 

This is where each of us may take a different stand.  I am now put in a difficult position where I am supposed to save costs for user A, while sales team B is putting pressure on me to consider the bigger picture for the company with potential revenue at hand.  Some of my colleagues choose to co-operate as much as possible with sales team B, and I have nothing against that.  What I need to ascertain is that our ethics and code of conduct should never be compromised.

Not every company has a Reciprocal Trading policy.  I personally will not give anyone preferential treatment just because of any potential benefits we can bring back.  It is not something concrete that I can put in the bag, and frankly not something I can control either. Otherwise my procurement recommendation becomes redundant.  I admit that such treatment could be well warranted, which I would recommend senior management to get procurement detached from this decision altogether, and in turn handle the whole matter in a business partnership discussion, instead of complicating a conventional sourcing exercise.

One can easily imagine the amount of sensitivity and scrutiny this could bring if the other vendors discover the reasons why they lose out.  They can sue us and charge the company of suspected corruption.  Whenever I sense potential gray areas, I need to stop and be careful of how to proceed.

The fact of the matter is that this is condoned by even the biggest global corporations that I have worked for, and I have been consulting with compliance and legal all along looking for clear guidance and answers.  There has not been a very clear answer from everyone so far.   

No matter how dignified everyone is trying to label the whole deal of reciprocal trading, the only thing I know is that it leaves a bad taste in my mouth.

I like to go with my first instincts, whenever I am in doubt.  Fingers crossed.

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Sometimes people have this notion that as buyers we are on top of the world.  We get to bitch and yell at suppliers, say no to users, and enjoy all the perks and bonuses coming our way.  They couldn’t be more wrong.

As I covered in my previous post Measure Me This, there are indeed procurement people who draw a very gray line in business ethics, and I am extremely concerned over this.  Every respectable company has explicit gifts policies and anti-corruption codes of conduct. On top of that, procurement people should adhere to even stricter guidelines due to the power that we have.  We make supposedly unbiased recommendations or even decisions in deals that could worth millions of dollars.  If there is anything even remotely suspicious to being influenced by any one or more suppliers, we should get ourselves detached from that as early as possible.

I know how today’s businesses are run, and I know how difficult it is now to make a sale or even get ourselves 15 minutes in front of our targets to make a living.  Sales people, often with blessings from their management, offer all sorts of incentives to their client targets.  It can start from an innocent box of chocolates to movie tickets to holiday hamper of wine and cheese to fancy meals to golf games and to even so-called familiarization trips with business class flights and spa treatments all paid for.  Yes, I have seen many of my user departments in practically every company I work for, accepting these gifts with no remorse.  No they are not just the secretaries and junior officers who do not know any better.  They are also senior managers and directors.  They have all sat through hours of code of conduct trainings.  Their excuse?  It’s all part of building relationships with their partners and suppliers, for the good of the company.

I personally do not buy that.  I can perfectly manage fantastic professional relationships (and sometimes even personal) with my suppliers without accepting any gifts AND not hurting any of their feelings.  So don’t give me that “culture and customs” crap.  In any cultures, as long as I am sincere, humble and provide explanations as to why I cannot accept their generous offer, people are already grateful enough that I have been open-minded and helpful to them professionally.  When we start to build further business relationships and if somehow we get to become better friends personally, I don’t mind going for a drink with them while I pay my way through.  It’s THAT simple.

Sometimes suppliers send small gifts to us through courier and it lands at the reception without us having the chance to decline.  Instead of secretly sneaking those expensive hampers or chocolates home to their families or personal parties like I see time and time again in companies I have worked for, I send a broadcast e-mail to the entire office that ABC supplier has just sent in this fruit basket and everyone should feel free to pass by and grab whatever they want.  This way everyone knows that the gift is for the company and not for me.  If it is something not splitable then I report to management and decide together whether it should be donated to charity or reserved as lucky draw items at the year-end staff ball.  In all these cases, I make it formal and inform the giving supplier what I have done with the gifts they sent.  Sooner or later, everyone gets the message.

I ask my staff to brief me on how their site visit trips are arranged and paid for.  We do site visits to inspect suppliers’ plants, factories, offices, operations, or even their clients’ sites as references.  They may be located out of the country.  These are well warranted for but they should seldom be funded by the suppliers except for ground transportation, since some factories are hard to locate and there are just no efficient means of commute to and from those sites.  All other costs should be borne by the company because this is part of our job.  When a supplier loses a business, you cannot imagine the length they would go to make sure they can find any simple indication of corruption wrongdoing.   More often than not, you can kiss your career goodbye.

I am perfectly content with getting my fair paycheck from my employer without getting myself tempted by all the freebies.  After all I have a much bigger reputation to uphold for myself.  However, it’s a whole different dimension when you find yourself physically threatened by suppliers when large dollar is at stake.  Yes it does happen – and I will tell you more about it later…. from a secure location.

Now WHO says procurement is boring?

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