Abstract
In the real world, as lived and experienced by real people, the demand for human rights and dignity, the longing for liberty and justice and opportunity, the hatred of oppression and corruption and cruelty is reality.
Transparency International is an organization whose sole aim is to shine a light on corruption and to realize ‘a world free of corruption’. For Transparency International, corruption is quite simply stated as the abuse of power for private gain, and can take on various forms. For example, grand corruption is committed at the highest levels of the state and can affect its very functioning to benefit those in power at the expense of the public good. Petty corruption, which is more common, is the abuse of power by low- and mid-level public officials in their interactions with ordinary citizens, who often are trying to access basic goods or services in places such as hospitals, schools, police departments and other agencies. Political corruption is the manipulation of policies, institutions and procedures in the allocation of resources and financing by political decision makers, who abuse their position to sustain their power, status and wealth. 1 There are also many other forms of corruption, however; for example, the abuse of power for sexual gratification can also be considered a form of corruption.
Corruption is one of the biggest challenges facing the private, public and third sectors globally. As an example, in March 2014 the IACCM published a piece in Contracting Excellence Journal responding to the EU anti-corruption report. 2 Corruption in the EU was described as breathtaking, costing the EU economy over £99bn annually; according to the IACCM, corruption accounts for approximately 20–25% of the total contract costs, and in some cases closer to 50% of total contract costs. As such, the issue of corruption has become a core concern for the IACCM and our members.
In a recent survey on corruption titled The US Corruption Barometer 2017, conducted by Transparency International, 3 it was found that 44% (n = 1,005) of survey respondents believed corruption in the White House is pervasive, up from 36% last year. Also, 70% of respondents believed the government is failing to fight corruption, up from approximately 50% last year. Over half the respondents said they would not report corruption for fear of retaliation, and while one in five of the respondents believed the police force was highly corrupt, one in three African-Americans believed this to be the case. In addition to this is the finding that 44% of respondent believed the president and officials in the presidential office to be corrupt. More relevant to JSCAN audiences is that almost a third of people who responded believe corporate executives to be corrupt. Perhaps more positively, however, over 74% of respondent believe individuals can make a difference in fighting corruption.
There is no doubt that globally there has been a loss of trust in our traditional institutions, partly driven by the perceived constant breaking of psychological, legal and economic contracts by those in power. While anecdotally many who are further to the right or left of political ideology blame globalization for this loss of trust, the reality is that it is the corrupt behaviors that are motivated by the large sums of money that come with projects and relationships often involved in global trade and economic development. While some nation states appear to prosper under high levels of corruption, this is in spite of, rather than because of corruption. 4 Indeed, the damages of corrupt behavior can be devastating well beyond their direct economic impact. What schooling you receive, the medical care you get, how you are treated in the legal system both as a victim or perpetrator of crime, what projects you can bid for, and so on are all dependent on how much you are prepared to pay, and the reality is that there is always someone prepared to pay more than you, or who has more power than you. Corruption is insidious, but it is also a reality of everyday trade and negotiations for many people and businesses.
In terms of commercial contracting, corruption can occur in many different ways – for example, through contract inflation, which refers to the common act of stealing by inflating prices of projects, products or service delivery, among other practices. Corruption can occur at any stage or process of a project, from financing all the way through to maintenance and repair of infrastructure. 5 While a large body of reports by government, NGOs (such as Transparency International) and the media have shone a light on serious systemic corruption in countries across the globe, much of that work focuses on corruption and its impact in developing nations and development projects. Addressing corruption in developing nations poses several challenges to global economic growth and stability. Corruption does not only occur in developing nations, however, and we know through the numerous high-profile cases in the media that corruption exists in several areas of industrialized economies in North America, Europe, Asia and the Asia Pacific. This corruption takes on many forms and is often located in and around public infrastructure and major construction projects. There is a critical need to grow and promote high-quality, rigorous research into the practices, conditions, reasons, antecedents and consequences of corruption – especially in contracting and in the commercial management process. More importantly, this research also needs to enable policy makers (be they in government or in business) to garner insights and use frameworks for how we can design, negotiate, execute and manage contracts to minimize corruption, if not eradicate it. It is no longer enough to say corruption exists, but we need to unabashedly offer ways in which it can be dealt with. For example, studying corruption in mega-events such as the Olympics, Matheson, Schwab and Koval (2018) provide insights into the parts of the bidding and preparation stages of the Olympic Games that are vulnerable to illicit behaviors and offer advice on how we can better manage the process at various stages.
While the amount of research and writing into corruption has grown over the last two decades, research has had a modest impact on corruption (Fazekas and Kocsis, 2017). A large body of research is published within the fields of political science, economics and sociology (see for example Fazekas and Tóth, 2018), and increasingly in project management journals (see for example Locatelli, Mariani, Sainati, et al., 2017). While not as common, there is a body of scholarly articles written about corruption in the management and business journals focusing on diverse areas of interest such as, but not limited to, the impact of corruption in foreign direct investment (Brouthers, Gao and McNicol, 2008), why organizations perpetuate and accept corruption (Anand, Ashforth and Joshi, 2004), or the antecedents of corrupt behavior appealing to the darker side of charismatic leaders (DeCelles and Pfarrer, 2004), just to name a few.
Relatively speaking, however, the amount and scope of research on contracting and corruption is less expansive. By way of illustration, a Google scholar search for the Boolean terms ‘leadership’ AND ‘corruption’ yields over 1 million results, whereas a search on ‘contracting’ AND ‘corruption’ yields a mere 123,000 results. To put this into perspective, a Google scholar search for ‘leadership’ yields 3.9 million results. There is, of course, good reason for this differential result. Studying corruption is a very difficult and problematic endeavor, and so the majority of the work relies on secondary data sources and panel data to glean the level of corruption. Further, where more qualitative and primary survey data is used, the work tends to focus on people’s experiences or perceptions of corruption. The actual practice of corruption and its relationship to contracting is much more difficult to observe and study. It is exceptionally rare for an individual, group or organization to say to a researcher, ‘we are corrupt, we constantly flout our contractual obligations, come and study us’. As such, the study of corruption requires creativity in how research is designed to study the practice and process of corruption, bravery in order to pursue often difficult and sometimes very contentious and emotive areas of research, and very importantly, I believe you need an ability to withhold moral judgment about those you study. Your job as a researcher is not to judge someone as corrupt or as a criminal, but to make sense of what it is they do, how they do it, and why they do it in order to provide insights into how we can avert or even stop such behaviors in the future – through practical and useable research, and by using the insights from research in the teaching of future managers and leaders.
As such, I close this editor comment with a call for research on contracting and corruption. At JSCAN we are very keen to talk to you about your work, and how we can help you develop it for submission to JSCAN. We are especially keen to help you disseminate your research through not only JSCAN, but also through engagement with IACCM to an audience of over 43,000 people. If you are working in the area of corruption at any stage of the contracting process – from negotiation and design to execution and evaluation – we welcome your submission. If you are also working in the area of how technology can enable or inhibit corruption we are especially keen to talk to you. We will not privilege any methodological or theoretical approach or tradition; however, we would like to see empirical, research-led pieces that seek to make a difference.