You ask: I run the Purchasing Department in my Company and have developed strong relationships with a number of preferred suppliers over the years. One of the supplier’s purchasing directors has become a personal friend and a few weeks ago he let slip that his company was having cash flow problems.
I know he told me this as a friend and not as his customer but nevertheless this has put me in a difficult position. Should his company go under it could jeopardise my company’s ability to meet critical customer orders.
Having realised that he should not have divulged this information he tried to recover the situation by saying that he was painting a bleaker picture than was in fact reality. I’m afraid I didn’t believe him.
I’ve made no secret of the fact that this individual and I are friends so I see no way that I can take action without revealing him as the source of my ‘insider’ knowledge. I’m also very conscious that my actions could cause his company to go under.
I feel caught between two equally undesirable outcomes and don’t feel very good about myself at the moment. I know what I should do but don’t know howto do it. What would you do?
Janet answers: To be blunt, discussing what I might do in your position, will be of little help to you. I am not the person who must take action. That, I’m afraid, is you.
Many people feel caught or trapped when faced with an ethical versus moral dilemma; the actions required to be taken are often, as in your case, clear, but the consequences seem unacceptable. Let’s unpick them.
The ethical dilemma is being in possession of privileged information about a supplier’s financial position that, if you take action, may exacerbate their problems. This really has nothing to do with your friendship with that supplier’s purchasing director; no one with an ethical conscious would want to push a company into bankruptcy. It’s not surprising that you feel uncomfortable about this potential outcome. However is it correct to assume that any action you take will worsen the supplier’s situation? Could you make some exceptional purchasing decisions that might give the supplier a breathing space to address their cash flow problem?
The moral dilemma is that taking action would firmly point the finger at your colleague and friend. The question is would it? When a company starts to suffer from cash flow problems there are usually telltale signs i.e. behavioural changes, missed deliveries, an increase in invoice collection activities. In your position you may not see this level of detail. Perhaps it’s time to carry out a review of all your preferred suppliers. Might this uncover the problem in a more acceptable manner?
I suggest as you move forward you have three objectives: firstly, not to assume that any action you take will send your supplier into bankruptcy. Secondly, to do due diligence on your feelings and ensure that you believe that you have done your best to achieve an acceptable outcome for all concerned and lastly, and most importantly, that you stop trying to solve this dilemma by yourself. Yes, you have come into some privileged information but perhaps the ‘slip’ that your colleague and friend made, consciously or sub-consciously, was a cry for help. If this is true could you live with the consequences of ignoring it?
I think before you take any action you must speak to your colleague and friend, firstly as a friend, to tell him that you cannot ignore the information that he gave you, and then as a concerned customer, to discuss and share what actions you are going to take before you take them. And considering the risks involved, you must do this without delay.
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