One of the non-executive directors of SUPER NIGERIA LIMITED is Mr Dele. A main product of this company caused its success and reputation. In the process of manufacturing the product the company should obtain two major components A and B from suppliers. Both GOLD NIGERIA LIMITED and OKOKO NIGERIA LIMITED can provide component A. To enable the purchasing department to improve bargaining power, managers decided to agree a plan that the company uses both suppliers. Mr Dele takes lunch in the staff restaurant during the days he is present in the board meetings. Mrs Oriyomi is the purchasing manager of the company. One day he starts a conversation with her. She does not know about the non-executive director concept. During his explanation of the role of himself, Mrs Oriyomi takes advantage of the opportunity to ask about his opinion on a matter that has made her feel worried. One of her responsibilities is to place orders for stock. She usually places orders of component A on a weekly basis. GOLD NIGERIA LIMITED and OKOKO NIGERIA LIMITED provide prices on a regular manner. The prices are confirmed before placing an order. Mr Oluwole, the purchasing director, has been more active in the ordering process in recent months. The manager believes that OKOKO NIGERIA LIMITED often provides better prices than its competitor, but the director prefers to place most of orders with GOLD NIGERIA LIMITED. To reduce the prices in the long term the director has been building a good relationship with GOLD NIGERIA LIMITED’s sales director. This is the statement that the director explains for the manager. The relationship has involved an invitation for the purchasing director and his family to spend a weekend on the sales director’s private boat and usual business lunches. Mrs Oriyomi explains to Mr Dele that she believes that the purchasing director ignores the company’s agreed purchasing plan and also accepts bribes. She describes that the goal of the company’s strategy is to reduce the risk of cooperating with just one supplier. What is your opinion about the report of Mrs Oriyomi? What should Mr Dele do as a non-executive director?
One of the non-executive directors of SUPER NIGERIA LIMITED is Mr Dele. A main product of this company caused its success and reputation. In the process of manufacturing the product the company should obtain two major components A and B from suppliers. Both GOLD NIGERIA LIMITED and OKOKO NIGERIA LIMITED can provide component A. To enable the purchasing department to improve bargaining power, managers decided to agree a plan that the company uses both suppliers.
Mr Dele takes lunch in the staff restaurant during the days he is present in the board meetings. Mrs Oriyomi is the purchasing manager of the company. One day he starts a conversation with her. She does not know about the non-executive director concept. During his explanation of the role of himself, Mrs Oriyomi takes advantage of the opportunity to ask about his opinion on a matter that has made her feel worried. One of her responsibilities is to place orders for stock. She usually places orders of component A on a weekly basis. GOLD NIGERIA LIMITED and OKOKO NIGERIA LIMITED provide prices on a regular manner. The prices are confirmed before placing an order. Mr Oluwole, the purchasing director, has been more active in the ordering process in recent months. The manager believes that OKOKO NIGERIA LIMITED often provides better prices than its competitor, but the director prefers to place most of orders with GOLD NIGERIA LIMITED. To reduce the prices in the long term the director has been building a good relationship with GOLD NIGERIA LIMITED’s sales director. This is the statement that the director explains for the manager. The relationship has involved an invitation for the purchasing director and his family to spend a weekend on the sales director’s private boat and usual business lunches. Mrs Oriyomi explains to Mr Dele that she believes that the purchasing director ignores the company’s agreed purchasing plan and also accepts bribes. She describes that the goal of the company’s strategy is to reduce the risk of cooperating with just one supplier.
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