Avoiding misconduct

through Ethical Contracting in Project Management

 

FEATURED PAPER

By Céline Julia

SKEMA Business School

Lille, France

 


 

ABSTRACT

Although Ethics can be seen as only a matter between individuals and their consciences and behaviors; a lack of Ethics, especially in a professional environment, can have deep consequences. In the following paper, we will discuss what Ethical Contracting in Project Management is and try to answer the following question: What ethical standards are considered to be “best tested and proven” practices for project managers to follow or adopt? And what is the best alternative to avoid misconduct?

Through this paper, we will identify and explain what may be alternatives to avoid misconduct; and thanks to the selection of criteria and weighting techniques, we will be able to eliminate options and concentrate on the best alternative solution: mandatory transparency. When employees are required to share information with their supervisors, misconduct can be avoided. Therefore, they are more likely to behave ethically, since their reputation, as well as their company’s, is at stake.

Keywords: Contracts moral standards; Contracting rights and wrongs; Contracts ethical standards; Planning moral principles; Ethical administration; Agreement moral codes, Organizations moral values, Unethical contracting

INTRODUCTION

According to a recent study conducted by the Ethical Consumer Magazine in 2017, “Finance is the most unethical business sector in the UK”[1]. Indeed, it has long been known that the financial industry – worldwide – is prone to scandals about illegal and unethical behaviour. One of the latest example is the Danske Bank, which is currently under investigation after illegal money laundering was revealed.

But, Finance is not the only industry pointed at. From the Oil industry to Retail and even the pharmaceutical sector, moral values have not stopped business leaders from taking unethical decisions. Can’t decent profit be earned without putting ethical standards aside?

Although unethical behaviour is often discovered only once the job is completed, it usually starts right at the beginning of a project : at the contracting stage, where owners and contractors tend to make more profit-oriented decisions in order to get the cheapest deal, rather than taking ethical aspects also into account. One example is bid shopping, which consists in “playing one bidder against another to wrangle lower prices, before or after submission of bids”[2]. By cutting costs, such practice can reduce the quality of work produced and impact owners as much as contractors.

In spite of the fact that such kind of practice is commonly considered unethical and even prevented in some US states thanks to anti-bid shopping legislation, it still remains widely performed.

Commonly, a contract is defined as “an agreement between two or more parties in which an offer is made and accepted, and that each party benefits” (Lectlaw.com). Although a contract has to be legal in order to be valid and enforceable, it does not have to be ethical.

Some ethical and moral values, such as Human Rights, are considered as universal, but most of them are cultural and personal. For example: a Fashion owner that chooses to work with factories in Bangladesh because they are the cheapest is not illegal, but yet unethical.

So what is the role of the Project Manager when dealing with contracts? Does he only have to apply what he is told (e.g. accept the contractor with the lowest bid price) or must he also try to do his best to integrate ethical aspects such as Fairness, Sustainability, Gender equality… even if not required?

The following Ishikawa diagram shows what causes Project Managers to accept unethical contracts. The three branches are: money, law and people. The causes may be intentional or unintentional.

More…

To read entire paper, click here

 

Editor’s note: This paper was prepared for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director paul.gardiner@skema.edu.

How to cite this paper: Julia, C. (2019). Avoiding misconduct through Ethical Contracting in Project Management, PM World Journal, Vol. VIII, Issue V, June.  Available online at https://pmworldlibrary.net/wp-content/uploads/2019/06/pmwj82-Jun2019-Julia-avoiding-misconduct-through-ethical-contracting.pdf

 


 

About the Author


Céline Julia

Lille, France

 

Céline Julia is a PGE Student at SKEMA Business School, currently in MSc Program & Project Management & Business Development, in Lille, France. Born near Paris, she was raised by a French father and a British & Canadian mother. After graduating from High School, she did a Preparatory class for competitive entrance into French Business School during two years in the North of France. Fallen in love with Lille, she completed a Bachelor’s degree in Management in SKEMA Business School, and then studied Global Management for 6 months in NC State University in Raleigh, NC, USA. Back in Lille, France, and after several internships in Human Resources, she realized that what she liked best was project management, especially related to Sustainable Development. In 2018, she got her Prince2 and Agile certifications.

Céline Julia can be contacted at celine1.julia@skema.edu

 

[1] Rob Harrison. (2017) Unethical sectors in the UK report. Ethical Consumer Magazine

[2] Bid Shopping definition (n/a). Retrieved from BusinessDictionary.com