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Chronicles from a Caribbean Cubicle

11/13/2007

Treating Suppliers and Vendors -- an Indicator of a Culture

I recall doing business with a company that refused to honour a signed contract.

The CEO let me know in no uncertain terms that the signature of the Chairman held no water because "he didn't know what he was doing," and that "I should know that." It was an ugly situation, and I have done no business with that company since then, but their advertising that is filled with messages about how great their company culture is still reminds me of the disparity.

I have always remembered this event, and it's led me to conclude something about companies: that they are good as how they treat their vendors.

Why so?

Mahatma Gandhi said: "The best test of a civilised society is the way in which it treats its most vulnerable and weakest members."

I say that the corporate corollary is "the best test of a well-developed corporate culture is the way in which it treats its vendors."

Not shareholders, employees or customers... but vendors: suppliers, contractors and consultants.

The same company I mentioned above had a habit of beating down every price that I ever presented to it. I sometimes felt like a thief trying to get away with something, rather than a business partner.

They were proud of the fact that they put their customers first, and would very quickly interrupt a meeting with a vendor to meet with a customer who had a problem of some kind. After all, they put customers first.

However, I think they missed the point of the customer revolution, as do many companies. The point is not that customers come first, but it is that the company can treat every human being that it engages in business with respect, dignity and care. The revolution was meant to show companies that focusing on themselves only resulted in poor performance in the mid to long term.

In this sense, vendors are no less important than customers.

And, in a way, vendors are among the weakest members of a company's stakeholders as they must wait for payment from companies that lose invoices, have inefficient bureaucracies, force cuts in prices to make greater profits, and treat suppliers like thieves.

The joke is that I am also reluctant to do business with the same company as a customer, and would think twice before recommending them to a friend. I have heard other vendors express the same sentiment about the treatment they received from the company, and I imagine that they, too, would feel the same way.

I imagine that if they understood that we are all connected, and that here in the Caribbean the small size of our economies means that we cannot hide from each other, our corporations would act very differently towards its suppliers.

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