The Culture of Construction Organisations: the Epitome of Institutionalised Corruption?

Andrew Oyen Arewa,Peter Farrell

doi:10.5130/ajceb.v15i3.4543

Abstract

The culture of an organisation is a vital element of business competency that must align with its strategic goals, and enhance peoples’ perceptions, feelings and behaviour in adapting to the world around them. Organisational culture may also bring about negative practices such as dishonesty and unethical behaviours. Recently the culture of some construction organisations has been called into question. For example, major construction projects around the globe have become involved in allegations of fraud and corruption. The cost is currently estimated at US$860 billion globally; with forecasts that it may rise to US$1.5 trillion by 2025. Hitherto, the role of the culture of construction organisations in fraud and corruption activities has been largely hidden. The study aim is to establish whether the culture of construction organisations promotes corrupt practices in the UK construction and infrastructure sector. The study employed mixed research methods with qualitative interviews supported by a quantitative questionnaire and examination of five case studies in different countries. Findings show that the culture of construction organisations together with the nature of the industry promotes fraud and corruption. The study subsequently highlighted key cultural factors that support fraud and corruption in a way that is almost institutionalised. Key words: construction, corruption, culture and organisations

Highlights

Fraud and corruption is arguably a pervasive trait in doing business; and there is a growing worldwide concern over a high level of corrupt activities among corporate organisations
The culture of most construction organisations is such that the use of lengthy supply chains and complex contractual arrangements are customary
Corruption may involve the activities of individuals who act for personal gain without the knowledge of their companies

Summary

Introduction

Fraud and corruption is arguably a pervasive trait in doing business; and there is a growing worldwide concern over a high level of corrupt activities among corporate organisations. The nature and traits of fraud and corruption show that the acts are closely linked to culture, organisation values and beliefs that people hold. The way construction organisations operate tends to make them vulnerable to corrupt practices. The culture of most construction organisations is such that the use of lengthy supply chains and complex contractual arrangements are customary. Corruption may exist in the context of inappropriate activities of organisations with perhaps the knowledge of many individuals in those organisations, but with no personal gains. Corruption may involve the activities of individuals who act for personal gain without the knowledge of their companies.

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