Contract managers ensure that all involved parties meet their responsibilities according to the contract while delivering profitable results. Besides, the contract provides conditions, maintains required standards, and defends the parties from the execution of the project to the termination. The fundamental activities include performance analysis to maximize financial and operational performance while mitigating reputational and financial risks without compromising contract terms. Therefore, the contract management community requires procurement, project, and contract management principles to exercise ethical conduct. Ethical conduct promotes worker autonomy improving performance and efficiency of the contract. Moreover, the evolving technology necessitates the digitalization of the contract management community. The current contracting environment uses technology to meet ethical requirements and virtually monitor activities. In this paper, a thorough analysis of the importance of ethics in contract management is done. Based on this research, ethics in contract management helps ensure the appropriation of resources and develop a good reputation.
Importance of Ethics in Contract Management
Contract management is a critical feature in organizational operations since it avails the necessary resources for production. Contract managers govern the procurement of the factors of production and hence ascertain continuous operations and customer satisfaction. Contract managers work closely with the finance and accounting departments in many organizations and hence handle a steady cash flow. Consequently, unethical behaviors in contract management and procurement are common and deep-rooted since many organizations lack effective auditing systems. Contract managers are often accused of unethical contracting, misappropriation of funds, and conflicting interests during the contracting process. As leaders, contract managers should hold the highest level of integrity since they are accountable to other senior managers, owners, employees, and customers.
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Background
Several project executives encounter ethical challenges in the contracting environment. Ethical challenges include difficulties like deciding whether the conduct is wrong or right. Ethical conduct has several benefits, including increased profits and worker autonomy due to ethical coordination. Besides, companies like collaborating with ethical managers to maximize the contract benefits. Contracts form the foundations of organizations and provide regulations and ethical outlines associated with the project. Morality is a primary principle in business law and influences project management. Law has incorporated some ethical standards to assign rights and duties to the involved parties (United Nations, 2012). Ethics uplift individual conduct lowers project risks, and improves business benefits.
Topic Definition
The code of ethics for contract managers covers all the contracting processes, from identifying and assessing possible contractors to contract to finance. According to the National Contract Management Association (NCMA), contract managers should be accountable and comply with the contracting laws in specific organizations. Besides, contract managers should show confidentiality with information about contractual affairs involving employers, government agents, business partners, or public entities that an organization has engaged presently or in the past. Contract managers must depict integrity, professionalism, respect, and trust (NCMA, n.d.). Besides, they must be ethical since they link production activities and the market for goods and services. Organizations can initiate reward and punishment approaches to motivate ethical contract managers and reprove unethical contract managers.
Topic Explanation
Codes of ethics in the contracting process are important for maintaining a good reputation and minimizing misappropriation of scarce resources. Codes of ethics are important since they limit the contract process within the confines of the law. Codes of ethics utilize the scarce resources in an organization and consequently lead to growth and development. Contract managers must adhere to all terms of the contract before an organization or business accepts to fund the contract. Consequently, organizations only incur the costs for resources that meet the organizational expectation and are acceptable by the customers. The code of conduct minimizes the chances of misappropriation of funds or engagement with specific contractors for personal benefits that can risk an organization’s reputation and sales.
Position’s Defense
According to the United Nations (2006), the codes of ethics in contract management maintain a good reputation and resource accountability by promoting impartiality and fairness. Contracts are only assigned to the qualified regardless of personal preferences and biases. Also, the code of conduct maintains a good organizational reputation by demanding transparency and due diligence during the contract processes. Codes of conduct ensure transparency since they require the procurement process to exceed the minimum effort, especially during the analysis of the received offers from contractors. Lastly, codes of ethics eliminate fraud and corruption due to conflicts of interest. Contract managers must show documentation for all transactions and all the considerations in the contracting process as proof of transparency.
Recommendations
Further research on the importance, ethical issues, and recent trends in project management is important. Specifically, future research should concentrate on how technology promotes ethics in project management. Application of technology promotes ethics in project management. The use of software, such as CLM, helps project managers to restrict data retrieval to authorized personnel only. Therefore, innovation of the digital contracting environment can improve security, storage, and easy retrieval of information. Therefore, further study and research on technology can provide new insights to improve contract management.
Conclusion
In conclusion, the codes of ethics are important in contract management since they ensure the appropriation of resources and develop a good reputation. Codes of ethics govern the activities of the contract managers to ascertain that they operate within the organizational guidelines. With the codes of ethics, contract managers have limited chances for impartiality or biases since the organization has protocols to verify transparency and accountability. Besides, codes of ethics discourage fraud and corruption in the contracting process that risks the organization's reputation to the customers. Ethics ensure that an organization only invests in resources that show value and facilitate production. Lastly, ethics in contract management curb the practices where managers use the contracts for personal benefits by contracting their preferred suppliers.
References
National Contract Management Association (NCMA). (n.d.). NCMA Code of Ethics . https://www.ncmahq.org/about/leadership/code-of-ethics .
United Nations. (2006). UN Procurement Practitioner’s Handbook. https://www.ungm.org/Areas/Public/pph/channels/PPH.pdf
United Nations. (2012, September). 3.10. Contract Management. https://www.ungm.org/Areas/Public/pph/ch03s10.html#d0e6945.
