Question:
Task
Using a set of your organisations (or one with which you are familiar) terms and conditions, explain how the
terms and conditions help the organisation ensure that:
• The risks of poor quality, extension of time, increased costs and unethical practice are managed
effectively
• The relevant performance measures are monitored and managed.
Outline the concept of the “battle of the forms” and explain how you could ensure that any agreement is
carried out under the organisation’s own terms and conditions.
Solution:
Executive Summary
This assessment has focused on the Etihad
Airways which is one of the most successful multinational entities in UAE. It
has been demonstrated that its leading role in the Airline industry prompts it
to establish ranks with entities of suppliers that offers them with goods and
services required for their diverse operations in their industry of venture.
The suppliers delivered to the company by their suppliers are critical as it
determines the quality and value of the services they deliver to their
subsequent clients. This was the rationale of evaluating the risks of poor
quality, extension of time, increased costs and unethical practices which can
be managed through an implementation of relevant performance measures which
ought to be consistently monitored and managed. Notably, this report has delved
on evaluating on the contractual relationship held by Etihad Airways which have
enabled them to establish a plausible relationship with their suppliers. Additionally, it has also focused on the
risks of supplying poor quality goods and services to the company and the
issues with increased costs. Besides, future best practice of terms and
conditions that ought to be laid down by the company in their contracts for the
purpose of keeping a good pace with their issuers linked to the inefficiencies
of their suppliers has been identified. It has been recommended that Etihad
Airways must channel resources in its litigation team to ensure that the
process is not lengthy but timely and cheap. Through this, it would be possible
to maintain a healthy commercial relationship with their suppliers. In
addition, it is recommended that through the use of CIPS, the company can
achieve in meditation and enabling the entities in keeping a constant control
over any unforeseeable disputes prevailing in their operations. Hence, the
terms and conditions in their agreements must be clearly stipulated in a way
that all the stakeholders are conversant with the expectations from the company
regarding their general practice.
Contents
2.0 Management of the Risks of Poor Quality. 5
2.1 Risk of Poor Quality in Contracting. 5
2.2 Strategies to Mitigate the Risks of Poor Quality. 6
2.3 Combating Extension of Time. 8
2.4 Management of Increase of Cost. 8
3.0 Mitigating Unethical Practices. 10
4.0 Monitoring and Management of Performance Measures. 11
4.1 Monitoring Performance Measures. 11
4.2 Management of Performance Measures. 11
4.4 Battle of Forms in Contracting. 12
1.0 Introduction
A contract is identified as a cornerstone in any business transaction. The issue of securing a supply of raw materials, components, subassemblies and finished goods and a stabilized and accurate costs is not a new phenomenon. As noted by Anupindi and Bassok (2008) this is one of the most critical issues in all industrialized entities with the challenge becoming more complicated due to the modern practice of outsourcing and decentralization. Hence, contractors are essential to an entity as they determine the success or failure of their brand based on the quality of services and raw materials. This ranges from finance, legal and other departments in an organization. In the context of Etihad Airways Company, they have a vast pool of contractors who are actively involved in their activities (Boarding area, 2015). They are participating in the provision of food, outsourcing of contractors, maintenance of technical equipment’s and other small operational activities to keep the airline in an effective running. According to Barnes-Schuster et al. (2002), contractors ought to strike a balance between their interests and that of their clients. This means that they have a duty, to be honest, and helpful and concentrate on the clients best interests. Hence, companies must ethically deal with their contractors and maintain a good rapport to the success of the company. This report has argued that Etihad being the second flagship company of UAE need to set a wide array of terms and conditions to manage risks of poor quality, time extension, increased costs and unethical practices. It is the role of the management to ensure that they set appropriate performance measures monitoring and management to improve their contracting.
2.0 Management of the Risks of Poor Quality
2.1 Risk of Poor Quality in Contracting
Currently, the major risks of poor quality management is hedged on the lack of transparency among involved parties. According to Spinler (2003) the risk of poor quality can emanate from one of the party being reluctant from provision of information form confidentiality reasons while others might lack concise personnel at the appropriate level or skills of overseeing their contract commitments. Other issues might be inclusive of inadequate or constrained processes and systems which are necessary for generating the required information. In the context of Etihad Airways Company, the provision of services and products to their clients is dependent on the quality of contractor’s services delivery. Hence, it is imperative for the Etihad Company to be conversant on the forms of services and the raw materials being supplied by their contractors. An effective management of the identified risks of contracts could directly lead to success or failure of the company operations. It is from this dimension that the company has set clear and realizable objectives of ensuring that they are careful on the services they receive from their contractors. As a consequence Donohue (2000) noted that the company had set a clear authority and department for inspecting the quality of the products and services that they receive from their contractors. Notably, the company has established a sourcing and supplier information management solutions targeting to deliver state-of-the-art technology that facilitate the airline in automating and streamlining their source-to-contract processes and efficiently integrating their new suppliers. It is, however, essential for the company to invest in more modernized structures that would see the company leveraging from new processes and capabilities as a clear visibility into its spend and contracts and provision of up-to-date information on all their contractor’s information.
2.2 Strategies to Mitigate the Risks of Poor Quality
Contracts could be successfully be used in the improving the poor quality delivered…………………………………………………………………………………………………………………………Please contact our team to receive guidance, support, and tutorial services on this assessment in full based on your organisation background, area of spend and your positionality
Email address: rankedtutorials@gmail.com