Abstract
Contractor-Customer relationship is a business engagement between service providers and consumers. The relationship between them should be healthy and for the benefit of both parties. The projects are executed under favorable environments within the law to ensure statutory obligations are met as well as the rules of engagement.
Introduction
Like any other business, a contractor-customer relationship is a common type of association in today’s world. Forces and dynamics of demand and supply shape the entire business landscape. An entity, which can be an individual or an institution, is bound to seek the services of a professional to accomplish various tasks that are vital. A good example is the case of Sony Pictures which was compelled to hire cybersecurity services after being victims of a massive hack in November 2014. According to Warren C, (2014), paying for security services can be expensive. However, the costs incurred for cleanups are way dearer. The organization’s entire IT system screeched to a halt. Human resource information, healthcare details, credit card information among other confidential data found their way to the public, thanks to hackers who used their vulnerability to push their agenda. The company incurred vast sums of money hiring businesses to prevent their lost data from being distributed, which was to the tune of a whopping 100 terabytes of data! Possible lawsuits stared at the firm as staff felt betrayed by their employer for being negligent with their privacy. One of the company’s lessons was to contract a cybersecurity firm to secure their computer systems. For the company to successfully contract a security firm, several new parameters came into play.
Delegate your assignment to our experts and they will do the rest.
Ethical issues that may arise during contracting pacts
Ethics are moral principles that govern parties in a relationship. Business ethics therefore are the actions that dictate parties to have the moral duty and obligation while in association. Some of these issues can manifest themselves in the following ways.
The advantage of observing the issues thereof is a smooth and legal association in the eyes of the law. Contravention of the same puts either party on the wrong side of the law.
Integrity and trust.
Integrity is the ability to do the right thing unmanned. A contractor and a client should view each other with openness and truthfulness. A contractor, for example, should provide the services to a
client with utmost faith and goodwill. According to Smith,J(2015), ‘a contractor should have a business and ethics code’. The contractor should not take advantage of the client’s ignorance of the nitty-gritty of details of the contract. On the other hand, the client should be clear and
categorical to the contractor. He should confide to the contractor alone and not pursue other services at the same time for the same service. When integrity is observed in any contract, it leaves behind a happy customer, and the contractor enjoys an excellent reputation for future assignments.
Conflict of interest
Conflict of interest refers to the pursuance of both parties’ objectives without infringing on the rights and interests of each other. Conflict of interest is illegal in any contract and can potentially attract a legal action against either the parties. A contract should be awarded to an individual based on merit and correct procurement. If this is bypassed, perhaps for purposes of awarding the contract to a relative at the expense of the client, that becomes a conflict of interest with dire legal implications.
Compliance and governance issues
Laws of the land regulate contractors. They operate within the confines of environmental rules, federal regulations, fiscal, taxation, civil and labor laws. According to Oster K.(2017), ‘the Aluminium company of America has a policy that no one can ask its employee to break the law or go against its values . That is an example of the company’s compliance to the governments policies’. The impact of the operations of the contractor must be measurable and open to scrutiny by the state. An example is a client seeking mining services in the sea. Environmental impact assessment must be carried out. If the report indicates grave negative results, then the service may not be rendered.
Failure to observe compliance with regulators can have adverse effects on the environment. This infringement, in turn, interferes with ecosystems, weather patterns which are our niche.
Importance of effective communication between the contractor and the customer
In a Contractor-customer interaction, there are three significant steps towards accomplishing their agreement. The two parties plan, execute and evaluate. When the parties are in clear communication, then the success of the project is guaranteed. These activities are observed in any typical deal, and the following aspects will highlight the value of communication in the contract thereof.
Discussion of expectations
Different clients have different expectations in terms of quality. Proper communication between the contractor and the client ensures that the contractor satisfies the needs of the client. This guides the contractor on the pace of work.
Establishing points of contact
This facilitates a cordial relationship and rapport between parties. It promotes proper communication between the contractor and the customer throughout the entire period of association. To achieve this, both the contractor and the client need to establish a point of contact. This means that there is an office or individual from both sides that is tasked with making relevant contact with each other regarding the project they are undertaking. Long periods without communication can lead to either party deviating from the intended outcome. Setting time lines.
Regular updates
A client is entitled to periodic status updates during the execution of the project. Different clients require different frequencies of updates. A client may require hourly, daily, monthly or quarterly updates depending on the nature of the project. This is one of the advantages of a good communication channel.
Risks and responsibilities of a contractor-customer relationship.
Responsibilities
The contractor and the client both have a collective responsibility of keeping each other informed throughout the project. According to Exforsys (2006), ‘one of the general responsibilities of a contractor is plan execute and cater for all pertinent issues pertaining to the project’ A contractor should adhere to the agreement to the end. However, should the agreement be breached, both parties have a duty of informing the other of their displeasure. If the client engages in unfavorable and logical misconduct, the contractor has a duty of stopping the work within the rule of law. He should present evidence of the allegations to the relevant authorities.
The parties also have a responsibility of maintaining a good relationship outside the contract. Once the project is successfully completed, both parties have a duty of continued concern about each other. A contractor has a duty to enquire about his previous workmanship as part of an evaluation process.
Risks
Failure to complete the project timely has adverse effects. This may happen due to various reasons. This translates to inconveniences on part of the client and extra cost on part of the contractor. The contractor may attract penalties and fines which are not favorable in any business.
Labor force unrests
Contractor-customer agreement faces the risk of strikes as staffs pursue certain demands. These unrests are influenced by political forces, business rivals and euphoria from adjacent companies. In the event of the occurrence of such actions, the contractor deviates from the projects and focuses resources resolving the unrest. This is a factor beyond the contractor-customer pact.
Inflation and cost of items
As contracts take more time to be completed, risks of inflation and rise in prices of materials may have negative impact on a contractor. This may attract losses and lawsuits that may arise as a result of the inconvenience suffered by the client. It may also earn the contractor a bad name in the market therefore disadvantaging further prospects.
Change of regime
The United States of America went through a regime change in 2016 as power changed hands from Barrack Obama to Donald Trump. The former was a Democrat and the latter a Republican. A drastic change in laws and regulations are likely to affect long term contracts positively or negatively. A good example is the Obama health care scheme that has faced lots of criticism by the incumbent regime. Possibly existence of long term contracts in the medical field have bore the brunt.
In conclusion, contractor-customer relationships are vital for any economy. In the world of technology, it is wise to seek the services of professionals. Failure to foster relations can lead to losses during mending up the damages. For the case of Sony Pictures hack saga, a sound contractor-customer relationship would protect them from subsequent attacks.
References
Exforsys (2006, Oct 11), The duties and responsibilities of a building contractor, Exforsys Inc . Retrieved from < http://www.exforsys.com/career-center/career-tracks/the-duties-and-responsibilities-of-a-building-contractor.html .>
Oster. K (20107), List of ethical issues in business, Retrieved from < Chron.http://smallbusiness.chron.com/list-ethical-issues-business-55223.html>
Smith, J (2015, Feb 11), Code of business and ethics template, Govprop Retrieved from <. https://govprop.com/2015/02/11/code-of-business-and-ethics-template/ >
Waren G.(2014,Dec 4), 4 security takeaways from the epic Sony hack. Retrieved from < Mashable . http://www.mashable.com/2014/12/03/sony-hack-4-security-lessons/#PdqBy5QwGqqf>
