L2.4 Analyse the relationship between policy and process compliance and required outcomes

Question 1

What is compliance? + 8 areas covered by compliance

Answer 1

= conforming to rules and regulations

1. Standards
2. Regulations
3. Legislation
4. Control
5. Strategies
6. Policies
7. Audits
8. Risk

Question 2

Organisational and contextual drivers for structured procurement and supply processes - 3 examples of such processes
1. Ethics (covered in detail in LO3)
2. Sustainability {in terms of suppliers} + define
3. CSR

Answer 2

• important to have a STRUCTURED PROCESS for proc. and supply in an org. for…
  » consistency in processes, transparency, useful for new members of the proc. dept, ensures the org. continues to work at the same standard, traceability
• esp. important in PUBLIC SECTOR to comply

Ethics covers…
1. human slavery
2. working conditions
3. trafficking
4. bribery
5. COERCION = the art of forcing a person or org. to do sth through threatening behaviour
6. conflicts of interest

Sustainability
= sustainability holistically considers the governance of an org’s environmental, social, and economic viability to ensure org.s EXIST for the LONG TERM, and the NEEDS of the PRESENT are met w/o compromising the needs of FUTURE GENERATIONS

• in terms of supplies, sust. relates to 2 areas
  1. The supplier is performing well and likely to be in EXISTENCE for the FORESEEABLE FUTURE
  2. The supplier is ENVIRONMENTALLY AWARE and is replacing any natural resources it uses
• carry out CREDIT RATING SCORE checks
• consider the market in which the buying org. trades - is there a long-term requirement?
• talk to representatives from the supplying org. to get an understanding of culture
  » buyers should not enter into contracts w/ unsustainable suppliers due to major risk of products/services not being delivered, should the supplier go bust -> could result in reputational, financial or even legal problems for buying org.

Question 3

Organisational and contextual drives for structured procurement and supply processes - 3 examples of such processes
3. CSR
+ define
+ Carroll’s Four-Part Pyramid which outlines the purpose of a CSR policy

Case study: gold mining in South Africa now economically unsustainable
- political risk
- lower quality and shorter mine lives of South African mines -> more dangerous than newer, better-operated mines
- very high operating cost -> led to some mine closures in SA
- poor mgmt, and bad capital allocation and project execution

Answer 3

= an organisational sustainability FRAMEWORK to embed into STRATEGY and OPERATIONS and supply chains to have a +ve GLOBAL IMPACT

• when assessing sustainability, a buyer can request to view the supplier’s CSR policy, to help understand if the org. is focused on environmental issues, play a +ve part in society, fit in with the needs and strategies of the buying org?
• contains info on how the org. will be a responsible part of the community, both locally and globally

Carroll’s Four-Part Pyramid from bottom to top
1. Economic responsibility: be profitable (the foundation)
2. Legal obligations: obey the law
3. Ethical responsibility: be ethical (obligation to do what is right, just and fair; avoid harm)
4. Philanthropic goodwill: be a good corporate citizen (contribute resources to the community; improve quality of life)

Question 4

Understanding and balancing the relationship between policy and process compliance with securing added value and customer service outcomes in diff. contexts
1. 5 effects of compliance in an org.
2. 7 effects of non-compliance in an org.

Answer 4

Effects of compliance
1. Ethical behaviour
2. Sustainable suppliers
3. Effective and efficient workflow
4. Good reputation
5. Satisfied customers and consumers

Effects of non-compliance
1. Unethical behaviour
2. Unsuitable suppliers
3. PRODUCT SHORTAGES
4. Inefficient workflow
5. Poor reputation
6. Loss of customers
7. LEGAL ACTION

Question 5

Understanding and balancing the relationship between policy and process compliance with securing added value and customer service outcomes in diff. contexts
3. 5 reasons why a supplier could be deemed unsuitable & the potential consequences of selecting unsuitable suppliers

Answer 5

1. Unsustainable {as in economic viability?}
   - buying org. could be left with an UNFULFILLED CONTRACT
2. Environmental pollution
   - buying org’s REPUTATION could be tarnished through association
3. Poor ethical practices
   - buying org. could be drawn into a LEGAL CASE due to buying goods from such a supplier
4. No quality processes
   - products/services supplied may NOT BE FIT FOR PURPOSE
5. Legal jurisdiction
   - any contract dispute may have to be settled in a country where legislation does NOT OFFER the buyer the LEGAL PROTECTION they require