Question

A purchase manager of a company has to purchase 500 tonnes of raw material. Apart from the other suppliers in the market, his son also supplies that raw material. The manager purchases the raw material from the firm of his son at a rate higher than the market rate, which principle of management has been violated by this situation? *

A purchase manager of a company has to purchase 500 tonnes of raw material. Apart from the other suppliers in the market, his son also supplies that raw material. The manager purchases the raw material from the firm of his son at a rate higher than the market rate, which principle of management has been violated by this situation? *



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Answer 1

One of the 14 administrative principles of Fayol has been violated according to the situation.

• According to Fayol when there is a conflict between an individual's interest and organisationals interest the interest of the individual should be subordinated to the interest of the organisation.
• At all levels and at all times the interest of an individual must be given less importance than the interest of the organisation.
• The manager did a very wrong job by purchasing the raw materials from his son at a higher rate.
• In order to help or benefit his son, he violated and exploited the company's fund.
• This is not at all expected from a Purchase Manager because he is expected to utilise the resource of the company in an optimum manner.