Bill Young |
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The role of Purchasing is to get the best value for the company,
partnership, or public service organisation. It is not to save the
world. And if some Procurement people are determined to confuse
the issues, they will enjoy a deservedly short career. Do they not
see how Purchasing’s credibility is reduced by spending more on
local organic food in hospitals instead of on reduced waiting lists?
Do they believe that the most miserable people in the world
appreciate exclusion from their preferred vendor list because they
are too dirt-poor to afford their ethical standards? Are they so
arrogant as to decide what is environmentally sound whilst the
experts and politicians cannot agree? Are they really ignorant
about the free market benefits that have contributed to the greatest
relief from poverty in the history of the world?
Disastrously, the answer appears to be ‘yes’, at least from the
pundits who have discovered a new source of income from CSR.
It is good business, they cry. Reduce the risk from bad publicity
and lawsuits. Excellent! Save money by recycling. Terrific! Create
a sense of community and team spirit in the workforce.
Motivational! Build our brand image with customers. Wow!
But what has this to do with Corporate Social Responsibility? We
used to call it enlightened self-interest and it made a lot of sense.
Any legal means that an organisation can use to improve its
effectiveness is valid and can be exploited. And when Purchasing
sees an opportunity to contribute, it must highlight and promote it.
But that is not what CSR pundits are referring to. They want to
impose an extra set of duties outside the organisation.
Professional Purchasing has one duty only, to manage external
spend effectively in the interests of the organisation. If
‘stakeholders’ can be engaged to support this, so much the better;
and stakeholders include customers, neighbours, pressure groups,
government, and anyone else. But, beyond making deals with
them, the organisation’s only responsibility to stakeholders is not to
harm or damage their interests and wellbeing. It has no duty of
care to anyone who is not defined as a beneficiary.
Of course, the owners of an organisation can spend their money
where they like, or set policy for their executives accordingly. This
policy can reflect ethical concerns or good business sense, but the
point is: it is their money. The executives, still less the employees,
cannot themselves decide to give it away or to invest it sub-
optimally. Purchasing has only to inform the board of the facts and
to implement their decision.
For further balance on this matter, you could do worse than The
Economist Survey of Corporate Social Responsibility, ‘The Good
Company’, Jan 20th 2005; and Purchasing Managers who want
clarity of thinking on the role of stakeholders and beneficiaries
should try John Argenti’s book, ‘Practical Corporate Planning’.
However, once again we turn to Adam Smith for a wisdom and
understanding of free markets that, after more than two centuries,
still informs economic debates.
“I have never known much good done by those who affected to
trade for the public good."
“It is not from the benevolence of the butcher, the brewer, or the
baker, that we expect our dinner, but from their regard to their own
interest. We address ourselves, not to their humanity but to their
self-love, and never talk to them of our own necessities but of their
advantages.”
"Virtue is more to be feared than vice, because its excesses are not
subject to the regulation of conscience"
So for goodness sake, ask the obvious questions about this CSR
stuff before we lose our hard won reputation as down-to-earth
thinkers and plain-speakers.