IDEAS home Printed from https://ideas.repec.org/a/kap/jbuset/v195y2024i2d10.1007_s10551-024-05637-8.html
   My bibliography  Save this article

The Labyrinth of Corruption in the Construction Industry: A System Dynamics Model Based on 40 Years of Research

Author

Listed:
  • Seyed Ashkan Zarghami

    (The Australian National University)

Abstract

The academic literature has viewed drivers of corruption in isolation and, consequently, failed to examine their synergistic effect. Such an isolated view provides incomplete information, leads to a misleading conclusion, and causes great difficulty in curbing corruption. This paper conducts a systematic literature review to identify the drivers of corruption in the construction industry. Subsequently, it develops a system dynamics (SD) model by conceptualizing corruption as a complex system of interacting drivers. Building on stakeholder and open systems theories, the proposed SD model shows how the complex reinforcing relationship between authoritative, organizational, cultural, and financial drivers of corruption further increases corrupt practices. The new model also provides lessons that can be helpful in the development of policy frameworks to control corruption in the construction industry. To achieve success in the fight against corruption, the findings of this research suggest that (1) corruption must be understood at both the organizational and state levels, (2) anticorruption practices must be informed by ethically grounded stakeholder management strategies, and (3) anticorruption reforms must go hand-in-hand with strategies to tackle the economic downturn.

Suggested Citation

  • Seyed Ashkan Zarghami, 2024. "The Labyrinth of Corruption in the Construction Industry: A System Dynamics Model Based on 40 Years of Research," Journal of Business Ethics, Springer, vol. 195(2), pages 335-352, November.
    • Handle: RePEc:kap:jbuset:v:195:y:2024:i:2:d:10.1007_s10551-024-05637-8
    DOI: 10.1007/s10551-024-05637-8
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10551-024-05637-8
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10551-024-05637-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Wil Martens & Bastiaan Linden & Manuel Wörsdörfer, 2019. "How to Assess the Democratic Qualities of a Multi-stakeholder Initiative from a Habermasian Perspective? Deliberative Democracy and the Equator Principles Framework," Journal of Business Ethics, Springer, vol. 155(4), pages 1115-1133, April.
    2. Min-Yuan Cheng & Mohammadzen Hasan Darsa, 2021. "Construction Schedule Risk Assessment and Management Strategy for Foreign General Contractors Working in the Ethiopian Construction Industry," Sustainability, MDPI, vol. 13(14), pages 1-23, July.
    3. Ismail Adelopo & Ibrahim Rufai, 2020. "Trust Deficit and Anti-corruption Initiatives," Journal of Business Ethics, Springer, vol. 163(3), pages 429-449, May.
    4. Liuyang Ren & Xi Zhong & Liangyong Wan, 2022. "Missing Analyst Forecasts and Corporate Fraud: Evidence from China," Journal of Business Ethics, Springer, vol. 181(1), pages 171-194, November.
    5. Jeff Everett & Dean Neu & Abu Rahaman, 2006. "The Global Fight against Corruption: A Foucaultian, Virtues-Ethics Framing," Journal of Business Ethics, Springer, vol. 65(1), pages 1-12, April.
    6. George Watson & Farooq Sheikh, 2008. "Normative Self-Interest or Moral Hypocrisy?: The Importance of Context," Journal of Business Ethics, Springer, vol. 77(3), pages 259-269, February.
    7. McKenzie R. Rees & Ann E. Tenbrunsel & Kristina A. Diekmann, 2022. "“It’s Just Business”: Understanding How Business Frames Differ from Ethical Frames and the Effect on Unethical Behavior," Journal of Business Ethics, Springer, vol. 176(3), pages 429-449, March.
    8. M. Tina Dacin & Jeffrey S. Harrison & David Hess & Sheila Killian & Julia Roloff, 2022. "Business Versus Ethics? Thoughts on the Future of Business Ethics," Journal of Business Ethics, Springer, vol. 180(3), pages 863-877, October.
    9. Brad N. Greenwood & Ritu Agarwal & Rajshree Agarwal & Anandasivam Gopal, 2019. "The Role of Individual and Organizational Expertise in the Adoption of New Practices," Organization Science, INFORMS, vol. 30(1), pages 191-213, February.
    10. Andreas Kyriacou & Leonel Muinelo-Gallo & Oriol Roca-Sagalés, 2015. "Construction corrupts: empirical evidence from a panel of 42 countries," Public Choice, Springer, vol. 165(1), pages 123-145, October.
    11. Taslima Jannat & Syed Shah Alam & Yi-Hui Ho & Nor Asiah Omar & Chieh-Yu Lin, 2022. "Can Corporate Ethics Programs Reduce Unethical Behavior? Threat Appraisal or Coping Appraisal," Journal of Business Ethics, Springer, vol. 176(1), pages 37-53, February.
    12. Hinh Khieu & Nam H. Nguyen & Hieu V. Phan & Jon A. Fulkerson, 2023. "Political Corruption and Corporate Risk-Taking," Journal of Business Ethics, Springer, vol. 184(1), pages 93-113, April.
    13. S. Z. S. Tabish & Kumar Neeraj Jha, 2011. "Analyses and evaluation of irregularities in public procurement in India," Construction Management and Economics, Taylor & Francis Journals, vol. 29(3), pages 261-274.
    14. Paul Bowen & Akintola Akintoye & Robert Pearl & Peter J. Edwards, 2007. "Ethical behaviour in the South African construction industry," Construction Management and Economics, Taylor & Francis Journals, vol. 25(6), pages 631-648.
    15. Paul Anthony Bowen & Peter J. Edwards & Keith Cattell, 2012. "Corruption in the South African construction industry: a thematic analysis of verbatim comments from survey participants," Construction Management and Economics, Taylor & Francis Journals, vol. 30(10), pages 885-901, October.
    16. Devine, Avis & McCollum, Meagan & Orlova, Svetlana, 2022. "Cleaning up corruption and the climate: The role of green building certifications," Finance Research Letters, Elsevier, vol. 47(PA).
    17. Heidi Rapp Nilsen, 2024. "Code Red for Humanity: The Role of Business Ethics as We Transgress Planetary Thresholds," Journal of Business Ethics, Springer, vol. 189(1), pages 1-7, January.
    18. Roan Alexander Snyman, 2022. "Games of Truth in the Age of Transparency: International Organisations and the Construction of Corruption," Journal of Business Ethics, Springer, vol. 181(1), pages 83-96, November.
    19. Sarah Hudson & Helena V. González-Gómez & Cyrlene Claasen, 2022. "Societal Inequality, Corruption and Relation-Based Inequality in Organizations," Journal of Business Ethics, Springer, vol. 181(3), pages 789-809, December.
    20. Paul Bowen & Peter Edwards & Keith Cattell, 2015. "Corruption in the South African construction industry: experiences of clients and construction professionals," International Journal of Project Organisation and Management, Inderscience Enterprises Ltd, vol. 7(1), pages 72-97.
    21. Xiaomei Deng & Yuhong Wang & Qianqian Zhang & Judy Xiye Huang & Jingjing Cui, 2014. "Analysis of fraud risk in public construction projects in China," Public Money & Management, Taylor & Francis Journals, vol. 34(1), pages 51-58, January.
    22. Shem Sikombe & Maxwell A. Phiri, 2021. "Institutional factors influencing institutionalised supplier development initiatives in the construction industry in Zambia," Cogent Business & Management, Taylor & Francis Journals, vol. 8(1), pages 1935184-193, January.
    23. Harrison, Jeffrey S. & Wicks, Andrew C., 2013. "Stakeholder Theory, Value, and Firm Performance," Business Ethics Quarterly, Cambridge University Press, vol. 23(1), pages 97-124, January.
    24. Leyla Orudzheva & Manjula S. Salimath & Robert Pavur, 2020. "Vortex of Corruption: Longitudinal Analysis of Normative Pressures in Top Global Companies," Journal of Business Ethics, Springer, vol. 163(3), pages 529-551, May.
    25. Sumaiya Haque & Hesam Mahmoudi & Navid Ghaffarzadegan & Konstantinos Triantis, 2023. "Mental models, cognitive maps, and the challenge of quantitative analysis of their network representations," System Dynamics Review, System Dynamics Society, vol. 39(2), pages 152-170, April.
    26. Andrew Ebekozien & Mohamad Shaharudin Samsurijan & Godpower C. Amadi & Andrew I. Awo-Osagie & Matthew Ikuabe, 2022. "Moderating effect of anti-corruption agencies on the relationship between construction corruption forms and projects delivery," International Planning Studies, Taylor & Francis Journals, vol. 27(4), pages 336-353, October.
    27. Kanti Pertiwi & Susan Ainsworth, 2021. "“Democracy is the Cure?”: Evolving Constructions of Corruption in Indonesia 1994–2014," Journal of Business Ethics, Springer, vol. 173(3), pages 507-523, October.
    28. Christian Hauser, 2019. "Fighting Against Corruption: Does Anti-corruption Training Make Any Difference?," Journal of Business Ethics, Springer, vol. 159(1), pages 281-299, September.
    29. Zhao Zhai & Ming Shan & Amos Darko & Albert P. C. Chan, 2021. "Corruption in Construction Projects: Bibliometric Analysis of Global Research," Sustainability, MDPI, vol. 13(8), pages 1-21, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhao Zhai & Ming Shan & Amos Darko & Albert P. C. Chan, 2021. "Corruption in Construction Projects: Bibliometric Analysis of Global Research," Sustainability, MDPI, vol. 13(8), pages 1-21, April.
    2. Bag, Surajit & Sabbir Rahman, Muhammad & Choi, Tsan-Ming & Srivastava, Gautam & Kilbourn, Peter & Pisa, Noleen, 2023. "How COVID-19 pandemic has shaped buyer-supplier relationships in engineering companies with ethical perception considerations: A multi-methodological study," Journal of Business Research, Elsevier, vol. 158(C).
    3. Xiaowei Wang & Wuyan Long & Meiyue Sang & Yang Yang, 2022. "Towards Sustainable Urbanization: Exploring the Influence Paths of the Urban Environment on Bidders’ Collusive Willingness," Land, MDPI, vol. 11(2), pages 1-14, February.
    4. Chen Ma & Maoyong Cheng & Gerald J. Lobo, 2024. "How Do Tax Agents Respond to Anti-corruption Intensity?," Journal of Business Ethics, Springer, vol. 190(1), pages 137-164, February.
    5. Xiaowei Wang & Kunhui Ye & Taozhi Zhuang & Rui Liu, 2022. "The Influence of Collusive Information Dissemination on Bidder’s Collusive Willingness in Urban Construction Projects," Land, MDPI, vol. 11(5), pages 1-14, April.
    6. Ceric Anita & Ivic Ivona, 2021. "Network analysis of interconnections between theoretical concepts associated with principal–agent theory concerning construction projects," Organization, Technology and Management in Construction, Sciendo, vol. 13(2), pages 2450-2464, January.
    7. Bilal Manzoor & Idris Othman & Juan Carlos Pomares, 2021. "Digital Technologies in the Architecture, Engineering and Construction (AEC) Industry—A Bibliometric—Qualitative Literature Review of Research Activities," IJERPH, MDPI, vol. 18(11), pages 1-26, June.
    8. Tolu Olarewaju & Jagannadha Pawan Tamvada & Sharin McDowall, 2021. "Generalised Trust and Relation Centrism for Corruption: Evidence from Low- and Middle-Income Countries," Discussion Papers 21-01, Department of Economics, University of Birmingham.
    9. Manish Bansal, 2024. "Unpacking the drivers of earnings management in CSR firms: influence of investor risk perception," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 21(1), pages 127-142, March.
    10. Temitope Omotayo & Alireza Moghayedi & Bankole Awuzie & Saheed Ajayi, 2021. "Infrastructure Elements for Smart Campuses: A Bibliometric Analysis," Sustainability, MDPI, vol. 13(14), pages 1-32, July.
    11. Francesco Gangi & Mario Mustilli & Lucia Michela Daniele & Maria Coscia, 2022. "The sustainable development of the aerospace industry: Drivers and impact of corporate environmental responsibility," Business Strategy and the Environment, Wiley Blackwell, vol. 31(1), pages 218-235, January.
    12. Ferry, Laurence & Zakaria, Zamzulaila & Zakaria, Zarina & Slack, Richard, 2018. "Framing public governance in Malaysia: Rhetorical appeals through accrual accounting," Accounting forum, Elsevier, vol. 42(2), pages 170-183.
    13. Alain Devalle & Simona Fiandrino & Valter Cantino, 2017. "The Linkage between ESG Performance and Credit Ratings: A Firm-Level Perspective Analysis," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(9), pages 1-53, August.
    14. Laura Corazza & Simone Domenico Scagnelli & Chiara Mio, 2017. "Simulacra and Sustainability Disclosure: Analysis of the Interpretative Models of Creating Shared Value," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(5), pages 414-434, September.
    15. Michiel Vries & Iwona Sobis, 2014. "Reluctant Reforms: The Case of Kazakhstan," Public Organization Review, Springer, vol. 14(2), pages 139-157, June.
    16. Andrew West, 2016. "Applying Metaethical and Normative Claims of Moral Relativism to (Shareholder and Stakeholder) Models of Corporate Governance," Journal of Business Ethics, Springer, vol. 135(2), pages 199-215, May.
    17. He, Guanming & Li, Zhichao & Yu, Ling & Zhou, Zhanqiang, 2023. "Contribution to poverty alleviation: A waste or benefit for corporate financing?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 89(C).
    18. Victoria Crittenden & Richard Hanna & Robert Peterson, 2009. "Business students’ attitudes toward unethical behavior: A multi-country comparison," Marketing Letters, Springer, vol. 20(1), pages 1-14, March.
    19. Mauro Sciarelli & Mario Tani & Giovanni Landi & Ornella Papaluca, 2019. "The Impact of Social Responsibility Disclosure on Corporate Financial Health: Evidences from Some Italian Public Companies," International Business Research, Canadian Center of Science and Education, vol. 12(3), pages 109-122, March.
    20. Jean-Marie Nkongolo-Bakenda & Elie V. Chrysostome, 2020. "Exploring the organizing and strategic factors of diasporic transnational entrepreneurs in Canada: An empirical study," Journal of International Entrepreneurship, Springer, vol. 18(3), pages 336-372, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:jbuset:v:195:y:2024:i:2:d:10.1007_s10551-024-05637-8. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.