The Importance of Ethics in Acquisition Management - Literature review Example

Abstract

This paper focuses on the importance of Ethics in Acquisition Management. The analysis applies five major ethical theories and shows how they influence the activity in question. Utilitarianism urges an acquisition manager to obtain only those goods that are needed for the company, maintain the sufficient quality, make sure that their acquisition brings up positive consequences. Deontological Ethics argues that a company should only acquire goods from trusted parties, refrain from supporting malpractices, and promote cooperation. Virtue Ethics shows that Acquisition Management should be seen as a tool to reinforce the image of the company, set the right tone in the cooperation, and highlight its weaknesses. Ethical egoism is manifested in the decision to acquire only that is best for the company, focuses on the independence of the business entity, and supports the right to introduce changes. Finally, rights based Ethics argues that a company should take full responsibility, require quality from the counter-agents, and make them adhere to the clauses of the contract.

The Importance of Ethics in Acquisition Management

It would not be a mistake to suggest that the contemporary business world is significantly different from its counterpart from the past. Indeed, today companies are no longer fixed on maximizing the return on investment at any cost and often try to engage various scientific theories in order to boost the performance. In addition to that, one should also note that scholars analyze business activities more thoroughly and this results in the emergences of new areas. A good example is the notion of Acquisition Management. In spite of the fact that this kind of activity has existed for a considerable period of time, the interest towards it as well as theoretical models have appeared only relatively recently. Moreover, it should also be noted that the contemporary business world often makes connections to something that used to be considered outside its scope. Consider the role that Ethics plays in the business environment. All this leads to the understanding that different areas of it, including Acquisition Management, are heavily affected by it. This paper will argue that Ethics should be recognized as an important factor that influences Acquisition Management. In order to prove this, the analysis will engage five major ethical theories and apply them to show how their impact is manifested. Thus, the influence of Utilitarianism can be seen in the fact that such a manager is expected to acquire only those goods that are beneficial for the company, maintain the right quality, and make sure that these operations contribute to the development of it. Deontological Ethics conditioned the need to acquire goods from trusted parties, avoid supporting negative practices, and generally supports cooperation. Virtue Ethics shows the connection between acquisition and the company's image, how it is able to set the right tone, and improve weaknesses. Ethical egoism urges a company to acquire what's best for it and promotes independence. Rights based Ethics encourages a company to take full responsibility for its actions.

Utilitarian perspective

The first aspect of the importance of Ethics should be explored from the point of view of Utilitarianism. Daft and Marcic (2008) insist that there are several provisions of this theory that have an important impact on acquisition management. The first and the most obvious one focuses on the fact that an acquisition manager is expected to acquire only those goods that are needed. It is quite obvious that this professional may use the budget for various purposes and the outcomes will not be positive. That is why such behavior may be regarded as unethical since an acquisition manager, in this case, will be wasting money. So, in this case, the amount of good that is conditioned by these actions is outweighed by the amount of negativity that is generated. Therefore, it would be safe to say that this professional should be guided by Ethics while conducting one's duties since one is equally able to make something beneficial as well as something devastating. All this shows that an acquisition manager is capable of performing actions that have long lasting consequences for the organization and it is an imperative that they will be carried out in an ethical manner so that the organization would benefit from it the most.

The second aspect that should be carefully examined that the quality of the goods that are acquired. It is obvious that throughout ages the majority of business decisions tries to balance quality versus price pair. So, it can be stated that an acquisition manager may be willing to buy the least expensive goods in order to save some money for the organization. In spite of the fact that this does make sense to a certain extent, such approach should be deemed unethical. Even though buying goods of not sufficient quality may indeed save some money, this has long lasting negative consequences that should be avoided. As a result, such behavior should be regarded as an unethical one since it causes damage to the organization. Some might argue that one of the goals of an acquisition manager is to minimize the costs. This may be true, but one fails to realize that the quality is often more important that the price. It is rather obvious that many organizations tend to emphasize the latter over the former hoping for advantages in the short run; however, the reality shows that it may be more beneficial to sacrifice short-term benefits. That is why an acquisition manager is able to set this balance right.

Finally, a sufficient amount of attention should be paid to yet another dimension of the importance of Ethics in this case. According to Samuelson (2010), it is essential for an acquisition manager to make sure that one's work is in line with other activities in the company. In other words, acquisition of goods may be important for the organization, but it should not occupy a too big share of company's efforts. Otherwise, there will be nothing left for further development. By doing so, an acquisition manager follows the provisions of Utilitarianism in that sense it strives to bring the biggest amount of good to the biggest amount of people. This may be regarded as an extremely important strategic move since it makes sure that all areas are covered equally and there is no excessive emphasis on other of them. Therefore, it shows that if an acquisition manager follows ethical guidelines, he or she will be able to become a valuable contribution to the company. All this helps to situate this profession in the organization and justify the amount of responsibility that it granted to a person. As it has already been mentioned, some might believe that Acquisition Management has limited important to the company, but as the evidence shows, this may be a profession that has a direct impact on the future development of the organization.

Deontological perspective

If one wants to understand the importance of Ethics in Acquisition Management, one should also consider the topic from a different perspective, for example deontological. This is likely to reveal numerous aspects that may have been overlooked by the previous approaches. Thus, deontological perspective will urge an acquisition manager to acquire goods from trusted parties. This is particularly important since it shows that deception and all the negative aspects that are associated with it must be avoided. According to this ethical perspective, it is crucial to refrain from actions that have negative consequences. Deception and goods of insufficient quality may have a devastating impact; therefore, it is an imperative to avoid them by cooperating with the trusted parties. The latter have proved themselves to be worthy companions and value the business relationship with a company. That is why an acquisition manager should primarily focus on known partners and look for the new ones at a time when the old ones are not able to meet the requirements. All this leads to the understanding that this professional should be in a constant search of potential partners since if cooperation with one of them ceases to exist, a company will have to find the alternative quickly. In this case, it is crucial to have several potential suppliers.

Another point that should be mentioned is that it is particularly important for companies to refrain from supporting various negative practices that might be performed by sub-contractors. White (2011) writes that one of the most fundamental elements of deontological theory focuses on the necessity to behave properly in any situation. This means that a company may not condemn child labor and buy goods from a sub-contract that is known to be using it. In spite of the fact that many companies say that there is a line that should be drawn when it comes to responsibility, it is obvious that there are some rules that must be adhered to at all times. That is why it is an imperative for an acquisition manager to make sure that the party that a company cooperates with does not perform any negative practices. In spite of the fact that by buying goods from it, a certain company will not be blamed for performing those practices, it will surely be guilty of supporting this state of affairs. It may be too easy to claim that an organization is not involved in any negative practices since it is the responsibility of the counter-agent to check the sub-contractors; however, in the majority of the cases, this does not prevent public from holding the company accountable. Keeping in mind serious reputational losses that can occur, an acquisition manager is expected to avoid these risks.

It may also be beneficial to analyze one particular aspect of acquisition management from the perspective in question. Mildenberger (2013) holds that deontological approach determines the value of a certain action, but thinking about the impact that it would have had if it had become universal. It is obvious that an acquisition manager is expected to promote cooperation with other companies. Deontological Ethics favors this approach since its benefits all parties that are involved. Therefore, a scholar might go as far as saying that an acquisition manager conducts an ethical action when works hard to reinforce cooperation with the business partners. Indeed, the latter often rests on mutual concessions and requires people to take actions that would reinforce this relationship. So, it is not only a requirement for an acquisition manager to do this, but it is also justified from an ethical point of view since. Some might argue that the importance of cooperation goes without saying in the business world. However, it is the actions of the organizations that count, not the ideas that they proclaim. As a result, the work of an acquisition manager may be regarded as an actual manifestation of the course of a company.

Virtue Ethics perspective

Now, it may be beneficial to explore the importance of Ethics from another perspective. Virtue Ethics is often considered to be one of the most fundamental ones when it comes to understanding actions, combining the external and internal factors. Weiss (2003) points out that character plays an extremely important role in this case. Indeed, it may be rather difficult to translate this notion into the business world, but one may see that the image of a company plays a similar role. All this leads to the understanding that the actions of an acquisition manager should be aimed at reinforcing the positive image of the company that a person serves. As it has been mentioned before, it is crucial for an organization to refrain from supporting those partners which are known to be involved in various malpractices. Therefore, by doing so, a company sends and explicit message which shows its devotion to the right way of doing business. As a result, such simple action as acquisition may be open to interpretation and should be seen as an effective tool for creating the right image. Keeping in mind, that the public today pays a considerable amount of attention to the reputation of a company, it becomes obvious that Acquisition Management becomes a viable opportunity for the organization to take some valuable strategic steps towards the image that it wants to enjoy.

What is also important is that acquisition managers might be regarded as those employees which are on the frontline of the interaction with the partners. That is why they are capable of setting the right business tone and their activities have a significant impact on the manner in which the organization they work for is perceived. Indeed, it may be crucial to making sure that the individual performance of these professionals is in line with the reputation of the company. From the point of view of virtue ethics, this is extremely important since it does not only allow the organization to live up to the expectations around it, but it also helps it so see whether these expectations are achievable. That is why acquisition managers should understand the weight of responsibility that lies on their shoulders and do their best to make a valuable contribution to their company. Therefore, the work of these professionals provides a company with a set of important data that allow it to understand the state of affairs almost in real time. As a result, this activity shapes the expectations and the ideas that are promoted by the company.

It may also be quite advantageous to perceive acquisition management as some kind of litmus test. According to Calkins (2014), virtue ethics sets a unique requirement for the person who adheres to its provisions: it urges the subjects to find the Golden Mean between excess of a certain quality and deficiency of it. With this in mind, it may be useful to examine the performance of a company with regard to acquisition of goods and outline the advantages and disadvantages of it. So, it is up to the acquisition manager to see whether one's organization is doing well and report some problematic issues. Keeping in mind that acquisition of goods is carried out on a regular basis, treating this activity in this way may be quite helpful since it will always provide the company with the most accurate measurement that is up-to-date. Therefore, this shows that Ethics plays an important role in acquisition management since it contributes to the formation of the new shade of meaning of it for the organization. That is why the latter is expected to pay more attention to it and reward the professionals who are particularly helpful.

Ethical egoism perspective

It must be noted that the perspective of ethical egoism may be one of the most debatable since there is a considerable amount of criticism that is aimed against this theory. Nevertheless, the supporters of it are quite convincing in their explanation; therefore, it may be beneficial to include this perspective as well. Timmons (2012) notes that from the point of view of ethical egoism, a subject ought to perform actions that are beneficial for him or her. This is translated well into the manner in which acquisition management is performed. Indeed, a company is expected to acquire those goods which hold the most potential for it. That is why it is the responsibility of an acquisition manager to focus only on those goods which bring the positive consequences for the company. If a scholar applies this vision, one will be able to see that the activity in question is incredibly important since it serves to improve the current state of affairs. As it has already been mentioned, acquisition managers should be regarded as those employees who work at the frontline and exercise a significant impact on the organization.

What is even more important is that ethical egoism possesses a sufficient amount of explanatory power when it comes to analyzing the nature of company's actions. Thus, it is obvious that every business entity is governed by its self-interest. That is why it is generally accepted that each of them will act independently. Indeed, an acquisition manager does not perform one's professional duties because this person truly needs those goods: these operations are performed for the good of the company. So, it is the latter that makes the final call in this situation and it is a common situation from organizations to change their course of running a business. This brings up the importance of independents and guarantees. For example, two parties will adhere to the contract as long as it is beneficial for them. However, if they find a different way to achieve the same or a better result, they are likely to initiate the procedure of cancellation of it. This can happen because a company is expected to act in its best interest and it possesses a sufficient amount of independence.

All this leads to the understanding that the perspective of ethical egoism might be used to justify the desire of a company to introduce different changes in different areas of its business, including acquisition management. Indeed, many might consider the latter to be something that is stable and may not change easily. However, it is important to keep in mind that the second word should be stressed in the phrase “acquisition management”. It is understandable that that ethical egoism perspective shows that the changes in the operations are inevitable as long as the company deems them necessary. To a certain extent, it shows that the current activity of an organization ought to reflect its goals and acquisition managers are responsible for aligning the performance and the objectives. As a result, these professionals should be ready to take that responsibility and act accordingly.

Rights based Ethics perspective

Finally, there is one last dimension of analysis that should be explored. There is an ethical theory which focuses on rights and the role they play in the decision-making process. According to it, actions of the subjects are to be guided by the rights that one is entitled to. This leads to the understanding that a company that acquires goods is to take full responsibility for this action. Indeed, it may not be obvious that people often die at work. One of the major causes of death is a car accident. So, it may be possible that an acquisition manager order to acquire some goods and an employee went to pick them up but dies in the course of it. In this case, a company should be ready to take the full responsibility for this tragedy since it was it that was the most interested in the acquisition. The same applies to virtually every other aspect of the acquisition management.

Butler (2008) points out another essential aspect of this perspective; he states that rights-based ethics justifies demands of a subject and urges all parties involved to adhere to the rules. That is why it would not be an exaggeration to suggest that when an acquisition manager sets rightful demands for quality and refuses to acquire those products that do not meet these requirements, these actions fall in line with the ethical perspective at hand. So, it is an ethical duty to makes sure that the goods which are bought by a company are of the sufficient quality and it is an imperative that the manager requires the counter-agent to comply with the guidelines. This is quite important since it shows that Ethics plays a significant role in the activities of a company that are connected to the acquisition. Another point that should be mentioned is that this perspective sets the correct framework for interaction with the partners and enables every party to set forth demands that should be taken into consideration.

There is yet another aspect of the issue that should be included in the analysis. Rights based ethics claims that the actions of the subject should be guided by a set of agreed rules. If a scholar applies this to the business environment in general and acquisition management, in particular, one will be able to see that in the majority of the cases the relationship between two companies is guided by a contract. That is why it is logical that the latter should be regarded as the frame of reference that forms the framework which sets the boundaries of this relationship. Therefore, an acquisition management should keep in mind that it is essential to adhere to the clauses of the contract. The same requirement is applied to every party that is involved. So, it would not be an exaggeration to suggest that there is an ethical justification of the important role of contract as the foundation of business relationships.

Conclusion

Having examined all the points which were mentioned in the paragraphs above, one is able to come to the following conclusion: Ethics plays an important role in Acquisition Management. If a scholar wants to develop a proper understanding of it, it may be useful to apply several ethical theories and see how they are translated into acquisition management practice. The first theory that can be applied is Utilitarianism. The latter is manifested in several ways. First of all, it justified the necessity to buy only those goods that are beneficial for the company. Therefore, it must be noted that an acquisition manager is to make sure that no needless goods are bought. The sufficient quality of the latter is also a requirement. Finally, it is the responsibility of an acquisition manager to make sure that one’s activity does not prevent the company from developing. Deontological Ethics may also appear to be quite beneficial while explaining the importance of Ethics in Acquisition Management. Thus, it is manifested in the requirement to buy goods from the trusted parties. Moreover, a company should refrain from supporting malpractices and is expected to promote cooperation. Virtue Ethics also helps a subject understand the role that Ethics plays in this case. Thus, an acquisition manager is considered to be a professional who is responsible for reinforcing the image of a company, setting the right business tone and shedding the light on possible weaknesses. Ethical egoism may be successful applied to explore the fundamental elements of Acquisition Management. This perspective justified the inclination of a company to act in a way that it would benefit from. It also shows that it is an imperative to be independent. Finally, the analysis should apply rights based ethics to Acquisition Management and see that this line of reasoning can reveal a lot about this activity. Thus, it urges a company to take full responsibility for its actions, encourages acquisition managers to demand the right quality and makes it an imperative to follows the clauses of the contract.