cronyism and kickbacks

Cronyism is favoritism shown to friends and associates (by hiring them for positions or awarding contracts to them without regard for their qualifications). Cronyism compromises the quality of graphic design work and also prevents graphic designers from being hired for positions they are qualified for and prevents qualified vendors from receiving contracts. Cronyism also happens when information about budgets and competitor bids are shared. The process of submitting a proposal that includes budget information is standard practice in graphic design. Information about the client’s budget and what the competitor bids are is information that is not meant to be shared. It’s cronyism when this information is shared with only a select few and is based on “who you know” and not disclosed to all parties submitting proposals. Cronyism sometimes begins unintentionally through the referral process. However, it can result an unfair practices and ultimately causes designers, vendors, and clients to suffer when decisions are based on “who you know” rather than “what you know.”

AIGA’s guidelines for designers states, “a professional designer shall not retain any kickbacks, hidden discounts, commission, allowances, or payment in kind from contractors or suppliers. Clients should be made aware of markups.” Designers are entitled to charge reasonable administration and handling charges. AIGA recommends that clients be told what these fees will be in advance. AIGA also frowns upon designers expecting payment for recommendations or referrals.

Sources:
http://www.aiga.org/content.cfm/design-business-and-ethics