An MNC should ideally expect the same standards of ethics and business practices from partners that it sets for itself and its employees – so we should not be expecting anything different from SMEs. At JCB we make earth moving equipment and are delighted that our supply partners not only supply to us in India but globally as well.
About eight years ago a company in Faridabad that made buckets for us, these buckets are for excavating, large heavy buckets, the proprietor passed away suddenly and left behind 7 daughters. The eldest daughter was in the 10 or 11th standard at that time. She took charge and we decided to work with them. Today, she is perhaps the finest; the most articulate and definitely in terms of technology the best bucket supplier.
What does this mean and why do ethical business practices matter? JCB selects its partners on the basis of their professionalism, competitive quality of their services. We aspire for a long term business relationship based on shared commitment and shared principles. It cannot be that one principle applies to the MNC and the other to the SME. We also ensure that selecting and appointing business partners is open, fair and transparent. It’s based on professional merit and not simply on the basis of personal recommendation. For this there is a process involved and should that process be violated employees face termination, there is zero tolerance in that matter.
Business partner paying any consideration to an employee in order to win a contract is prohibited. Our employees are not allowed to accept goods or services in kind either. Even things like free taxis, we have had to set guidelines, free household repair, in such circumstances we terminate employment as well as the contract. Action is taken on both sides. Those employees who are involved in the business of procurement of services have to ensure that the process is fair and transparent. They are rotated every three years so that there is no development that is detrimental to the relationship.
We always communicate our business integrity policy so that the rules of the game are set well in advance and it’s clear of what is expected of the company and what is expected of the MSME. The rules don’t change and are defined while the match is going on.
A number of SMEs came to us and said that there are times when they are harassed or put through extreme pressure for the wrong reasons. So we set up compliance council which is a way for people who deal with supply management that deliberates on any complaints in as free and fair a manner as possible. I can say that no system is perfect but in JCB we try to make it as fair, transparent and equitable as possible.
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