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Explicating factors for companies’ inclination towards corruption in Operations and supply chain management: An exploratory study in Germany

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  • Arnold, Ulli
  • Neubauer, Joerg
  • Schoenherr, Tobias

Abstract

The literature on corruption is rich in works focusing on individual and organizational aspects. However, existing research is void in studies that specifically deal with factors for a company's inclination towards corruption in operations and supply chain management. The present paper fills this gap by explicating why some firms are more prone to corruption than others. Within this context it is our objective to explore the structural and organizational bases for companies, especially their purchasing units, to engage in corrupt business practices. Grounding our work in principal-agent theory and the fraud triangle, we suggest that the factors of organizational complexity, corporate culture, internationality and functional complexity all influence a firm's inclination towards corruption, which in turn should manifest itself in the presence or absence of corruption control- and prevention mechanisms. This framework is tested with data collected from 104 purchasing managers in Germany, and implications for both theory and practice are highlighted.

Suggested Citation

  • Arnold, Ulli & Neubauer, Joerg & Schoenherr, Tobias, 2012. "Explicating factors for companies’ inclination towards corruption in Operations and supply chain management: An exploratory study in Germany," International Journal of Production Economics, Elsevier, vol. 138(1), pages 136-147.
    • Handle: RePEc:eee:proeco:v:138:y:2012:i:1:p:136-147
    DOI: 10.1016/j.ijpe.2012.03.011
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    2. Mu, Enrique & Carroll, James, 2016. "Development of a fraud risk decision model for prioritizing fraud risk cases in manufacturing firms," International Journal of Production Economics, Elsevier, vol. 173(C), pages 30-42.
    3. Felipe Barrera & Marina Segura & Concepción Maroto, 2022. "Sustainable Technology Supplier Selection in the Banking Sector," Mathematics, MDPI, vol. 10(11), pages 1-21, June.
    4. Jandhyala, Srividya & Oliveira, Fernando S., 2021. "The role of international anti-corruption regulations in promoting socially responsible practices," Journal of Economic Behavior & Organization, Elsevier, vol. 190(C), pages 15-32.
    5. Alexandra V. Orlova & Veselin Boichev, 2017. "“Corruption Is Us†: Tackling Corruption by Examining the Interplay Between Formal Rules and Informal Norms Within the Russian Construction Industry," Journal of Developing Societies, , vol. 33(4), pages 401-427, December.
    6. Wang, Hong, 2020. "Quality manipulation and limit corruption in competitive procurement," European Journal of Operational Research, Elsevier, vol. 283(3), pages 1124-1135.
    7. Richard Kasa & Gábor Réthi & György Hauber & Krisztina Szegedi, 2023. "Simulation of Corruption Decisions—An Agent-Based Approach," Sustainability, MDPI, vol. 15(3), pages 1-18, January.
    8. Kaynak, Ramazan & Sert, Tuba & Sert, Gurkan & Akyuz, Bulent, 2015. "Supply chain unethical behaviors and continuity of relationship: Using the PLS approach for testing moderation effects of inter-organizational justice," International Journal of Production Economics, Elsevier, vol. 162(C), pages 83-91.
    9. Huang, He & Li, Zhipeng, 2015. "Procurement auctions with ex-ante endogenous bribery," Economic Modelling, Elsevier, vol. 47(C), pages 111-117.

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