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Introduction
Contract management is the sphere, which implies achieving compromises between different sides and fulfilling their interests, which may contradict each other in some cases. In this context, misunderstandings and conflicts are highly likely to arise, and in order to avoid them, the contract managers Code of Ethics has been established (NCMA code of ethics, n. d.). It involves moral guidelines, which are intended to regulate the professional activity of employees and improve the quality of their services. The National Contract Management Association has listed precise requirements, which are accountability, compliance with laws, confidentiality, good faith, integrity, professionalism, respect, and trust (NCMA code of ethics, n. d.). Violations of these principles are supposed to be reported and punished, as it is perceived as inappropriate professional behavior, which should be prevented.
Setting clear standards is considered to benefit the performance of contract managers significantly, as it regulates their behavior and professional communication. In addition, it is expected to have a positive impact on customers and partners outcomes (Ferrell et al., 2019). In addition, it is useful for avoiding violations of laws and preventing unintended insults in the process of conversations (The importance of contract management ethics, n. d.). Therefore, the purpose of this paper is to describe the Code of Ethics and explain its importance in contract management practice and for the companys performance on the basis of recent research.
Requirements for Contract Managers Ethics
First of all, it is essential to define the requirements, which form contract managers Code of Ethics. They are defined by the National Contract Management Association (NCMA), the worlds leading resource for specialists in this field, which united approximately 20,000 members (NCMA code of ethics, n. d.). In general, the purpose of creating such standardization that is discussed in the preamble implies creating public trust and confidence in the integrity of the contract management process (NCMA code of ethics, n. d., para. 2). The second section involves essential 9 guiding principles, which cover all the details of the profession and its specifics and are helpful for pursuing the set aim.
The first one is accountability, which requires members to treat their profession with responsibility. In addition, the criteria include compliance with laws and specific regulations established in this sphere. Contract managers should adhere to confidentiality in the context of spreading information about the business affairs of clients and partners (NCMA code of ethics, n. d.). Another guiding principle requires fulfilling working duties in good faith and doing best for avoiding conflicts of interest. Integrity is among the Code of Ethics requirements as well, as it guarantees the absence of deception and misleading actions in the working process (NCMA code of ethics, n. d.). The necessity to develop professional skills and update knowledge on a regular basis is also included in the code (NCMA code of ethics, n. d.). It is essential to provide the best results for partners and clients and use the most modern approaches.
In the context of present-day developments, it is vital for contract managers to stick to a respectful attitude to colleagues and partners regardless of nation, ethnicity, religion, and sex. This guideline also involves avoiding statements, which can affect other people and the profession in general (NCMA code of ethics, n. d.). Trust in the last criterion, which encourages specialists to conduct this way, which ensures confidence in their integrity (NCMA code of ethics, n. d.). In a combination, the mentioned guiding principle may supply the best outcomes for the profession without harming others. They provide essential regulation for all the aspects of professional communication, which are assumed to supply improvements in this regard.
Quality Improvement
The most evident, but crucial reasoning for the importance of the Code of Ethics in corporate management regards its contribution to quality improvement. Sakharam (2018) reflects on this issue in her critical study The Role of Ethics in Project Management, Contract and Procurement Management. The code contains fixed requirements, which are essential to be followed by all the professionals in this field. Therefore, it sets appropriate standards for the quality of performing duties. In case a contract manager sticks to confidentiality, good faith, integrity, responsibility, following laws, respectful attitude, and other criteria, he or she makes the business more competitive in the market. Sakharam (2018) marks that the Code of Ethics includes all the details about the communication of signing sides, and therefore, it is possible to improve each aspect of this duty. In the future, clients will tend to choose the company of an employee, who adheres to the Code of Ethics due to the quality of their work.
Guaranties
In order to explain the significant role of ethics in corporate management, it is essential to take into consideration the specifics of this occupation. In this context, the study of Sakharam (2018) appears to be relevant as well. The author notes that, in general, a contract implies an act of promises (Sakharam, 2018, p. 75271). Thus, both sides are interested in fulfilling their demands and being confident that their collaboration will be beneficial. It is possible to assume that law may guarantee the fulfillment of promises. However, Sakharam (2020) claims that the impact of laws established in contract management is not equal to the impact of ethical status. In addition, today, there are cases when authoritative companies may avoid penalties and punishments for law violations. The author highlights:
Relatively, the values of business ethics, in particular morality and hope, inspire contractual performance. If business executives did not have faith in the honesty of their prospective contract parties, no contract would be formed (Sakharam, 2020, p. 75271).
Consequently, whether an organization has acquired the status of an ethical company, it means appropriate guarantees for the partners interested in concluding a contract. They will understand that the risks of deception and failure in delivering promises will be minimum (Sakharam, 2018). In case contract managers stick to ethical regulations, it is evident that they are not likely to deceive their partners (Sakharam, 2018). It also means that a company is focused on the development for achieving the best results in its sphere using honest methods instead of betraying others. This way, the contract managers Code of Ethics may contribute to making a business more reliable and attractive to partnerships.
Expenditures Reduction
In some cases, unethical behavior may result in significant problems for companies. Villanova University provides an analysis of the statistics: in 2012, companies paid out nearly $8 billion in fines for poor conduct (as cited in Ethics and contract management, part 1, 2019, para. 2). The same organization mentions that approximately half of employees were noted acting in an inappropriate way at the workplace, and these figures are not comprehensible. Villanova University states that in reality, a more significant number of specialists tend to behave in an unethical manner (Ethics and contract management, part 1, 2019). Therefore, the establishment of corporate managers Code of Ethics is important for restricting workers behavior and avoiding violations of professional etiquette. As a result, companies have a possibility to reduce their expenditures on paying for their employees fines.
Corporate Social Responsibility
One of the reasons why contract management is crucial in this field implies the fact that it is helpful for corporate social responsibility promotion. This issue has been explored comprehensively by Villanova University, and although the studies predominantly focus on management in general, they mention contract conclusion as well (Ethics and contract management, part 1, 2019; Ethics and contract management, part 2, 2019). Ferrell et al. (2019) prove these conclusions and mark that today, organizations concentrate on adhering to corporate social responsibility strategies, which are considered to benefit the image of a business and its revenue in the long run. Villanova University defines this event in the following way:
CSR is an approach to business management that requires adequate attention be paid to the economic, environmental and social impact of corporate practices specifically on ways that corporations can help improve their ethical image and the legacy they leave in society (Ethics and contract management, part 1, 2019, para. 4).
Today, this aspect appears to be considered for the success of a business, as consumers tend to use the products or services of an enterprise, which have clear ethical practices. Consequently, as clients have become demanding of the ethical responsibility of organizations, businesses should adapt to these preferences in order not to lose the target audience (Ethics and contract management, part 1, 2019). Although in the past, ethical behavior was approached as a secondary aim, these days, it is an integral part of a profitable strategy.
On the other hand, corporate social responsibility promoted by an organization may be attractive for probable candidates for employment. In order to supply products and services of high quality and stay competitive in the market, an enterprise should be interested in recruiting qualified, competent, and motivated staff (Ethics and contract management, part 1, 2019). Adhering to corporate social responsibility has special meaning in this context as well (Ethics and contract management, part 1, 2019; Ferrell et al., 2019). Ethical regulations contribute to establishing a healthy and positive working environment, which encourages novices to apply for vacancies and currently stimulates employees to do their best.
These reflections on a corporate image may also be applied to the field of corporate management. Providing the Code of Ethics, employers not only improve the quality of services but also make their company more competitive in the market (Ethics and contract management, part 2, 2019). An increasing number of clients will be willing to collaborate with such an enterprise, and a range of qualified candidates will choose this workplace.
Encouraging Professional Development
Another beneficial outcome of contract managers Code of Ethics regards the fact that it encourages continuous professional development. This aspect is analyzed in the article The Importance of Contract Management Ethics (n. d.). It states: the NCMA considers it unethical for professionals involved with contract management to accept the status quo and fail to take advantage of advances in the field that enable contract performance (The importance of contract management ethics, n. d.). For instance, in the context of present-day developments, a digital contract management system is essential to be used. Apart from meeting the Code of Ethics, it appears to be helpful for increasing contract ROI (The importance of contract management ethics, n. d.). In general, contract management software has become an integral part of professional activity so far. Therefore, there is a necessity to update the competencies of contract managers in order not to lose competitiveness in the market and provide high-quality services for customers (The importance of contract management ethics, n. d.). Encouraging specialists to update their knowledge and skills, the Code of Ethics is helpful for preventing obsoletion of the managers qualifications in the long term.
Diversity
Nowadays, a healthy working environment in any professional sphere implies adherence to diversity. A member of the National Contract Management Association, which has been mentioned earlier, Anestacia Evans (2020), attempts to provide an in-depth insight into the problem of diversity in contract management. She highlights: that more than just buzzwords, diversity and inclusion are proven to improve workplace outcomes (Evans, 2020, para. 1). Evans (2020) concludes that although diverse values are advanced in the sphere of corporate management, in fact, they do not work as they are intended to do. Therefore, it is essential to take appropriate measures in order to provide everybody with equal possibilities at all levels.
In this context, the Code of Ethics appears to be a sufficient solution. In the 21st century, it is possible that people of various cultures and perceptions of ethical behavior may collaborate on working duties and projects. Consequently, their partnership may lead to misunderstandings, conflicts, and insults (Ethics and contract management, part 2, 2019). In addition, workers may admit unethical behavior pursuing the aim of improving their performance without perceiving it this way due to different opinions in this regard (Ethics and contract management, part 2, 2019). As it has been described in the first section of the paper, the code contains regulations on a respectful attitude towards customers and partners regardless of age, sex, ethnicity, and nation (Evans, 2020). Therefore, it considerably contributes to establishing a peaceful working atmosphere and avoiding possible conflicts, as it includes precise and strict rules, which are clear for each worker.
Conclusion
In conclusion, it should be mentioned that the specifics of contract management activity require appropriate standards of communication and performance in order to avoid misunderstandings and conflicts. Moreover, special regulations are necessary in order to fulfill the interests of both sides and prevent imposing ones will. For this reason, National Contract Management Association has presented the Code of Ethics, which contains moral requirements for professionals. The criteria include accountability, compliance with laws, confidentiality, good faith, integrity, professionalism, respect, and trust. The importance of adhering to professional ethics among contract managers should not be underestimated, as recent research in this field ensures its advantages.
First of all, following the mentioned moral principles allows for improving the quality of services. Secondly, it appears to be helpful for establishing the ethical status of an organization, which makes it more reliable in the eyes of customers and partners. Thirdly, it is reported that unethical behavior frequently leads to the necessity to pay fines for employees, and adherence to the code allows to reduce the expenditures on this aspect. Another positive outcome regards the image of a company, as these days, corporate social responsibility strategies play a crucial role in promoting a business. In addition, the Code of Ethics stimulates contract managers to update their skills and knowledge on a regular basis, which has a beneficial influence on the quality of performance. The last advantage implies advancing diversity in contract management, which is significant in the context of present-day developments. Therefore, it is evident that contract managers Code of Ethics is important in this sphere and guarantees considerable improvements in the long run.
References
Ethics and contract management, part 1. (2019). Villanova University. Web.
Ethics and contract management, part 2. (2019). Villanova University. Web.
Evans, G. A. (2020). Are we diverse and inclusive at all levels of contract management? NCMA. Web.
Ferrell, O., Harrison, D., Ferrell, L., & Hair, J. (2019). Business ethics, corporate social responsibility, and brand attitudes: An exploratory study./Journal Of Business Research,/95, 491-501. Web.
NCMA code of ethics. (n. d.). NCMA. Web.
Sakharam, M. C. G. (2018). The role of ethics in project management, contract and procurement management: A critical study. International Journal of Current Research, 10(11), 75270-75272. Web.
The importance of contract management ethics. (n. d.). Contractlogix. Web.
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