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Dealing Fairly With “Insider” Vendor Information

DILEMMA:

I am the director of purchasing for a large builder subcontracting firm. Recently a large vendor of ours accidentally sent my assistant confidential pricing information, from another more “core” supplier of ours (obtained by dishonest means), in an email chain to one of their internal team members. The question to me is, do I forward this information to my more important supplier in hopes of gaining “relationship points,” or do I delete the message and pretend that I never saw it? What do I tell my assistant who looks to me for leadership and guidance?

Wanting to Act Fairly

RESPONSE:

Thanks for writing. The facts you describe are sparse, but from what I can gather and surmise, this is what has occurred: (1) Vendor A sends your assistant confidential pricing information (obtained by dishonest means) used by Vendor B. (2) Vendor A’s probable motive for this is to win more of your business by convincing you that he or she can provide you with deeper discounts and/or to show you that Vendor B is somehow being dishonest with you about pricing/discount structures. (3) You are now unsure how to proceed.

It is unclear to me if you have actually opened the email and looked over the pricing information. If you haven’t, then deleting it seems to be a viable option. In doing so you will not be using the confidential information and this sets a good example to your assistant about fair dealing in business.

If you have looked at email and thereby have seen the pricing structures, I think it would be nearly impossible to pretend that you never saw it, especially if this information runs counter to verbal statements from Vendor B in the past or in the future (i.e., “you are getting our best price”). In fact, as a purchasing director, you have the responsibility (unless instructed otherwise) to purchase items at the best possible combination of cost, quality, service, and timeliness for your employer. Of course, the issue is complicated by the fact that you have confidential information originally obtained through dishonest means.

A third possible option (in addition to the two you mention) is to use the information to test Vendor B’s veracity. However, this gets you into all sorts of game playing and possibly lying about what you know.

I think that transparency with Vendor B (whether or not it gains you relationship points) is likely your best option, especially if you have seen the pricing structure. It’s not clear what the repercussions would be for the person who sent your assistant the information; however, it would probably be best to let Vendor B know what you know and move forward from there. Hopefully, this will set up a future relationship in which a more open negotiation process is the norm. This will also set a good example for you assistant to follow.

By the way, it might be wise to stick with Vendor B, even if Vendor A can get you better prices. Given the methods used to undermine your relationship with Vendor B, can you say that you trust Vendor A?

Kenman Wong
Professor of Ethics, School of Business and Economics
Seattle Pacific University

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