Corruption and factors influencing the viability of micro, small and medium scale construction firms (MSMCFS)

Abstract

Purpose This paper aims to identify and assess the features and relationship of corruption in factors that influence the survival of construction firms, particularly micro, small and medium-sized construction firms (MSMCFs). Design/methodology/approach A total of 59 MSMCFs that were awarded building contracts in federal health and tertiary institutions were surveyed, and 31 firms first rated 37 criteria that affect the viability of construction enterprises. The mean item score and factor analysis were used to analyse the data. Based on existing publications on corruption in the construction sector, this study then reviewed and evaluated the elements determining MSMCFs’ viability and identified and explored in detail those that can be undermined by corruption. Findings Corruption in the construction industry can have an adverse effect on 25 out of 37 factors, including the top five factors influencing firms’ viability. The viability of MSMCFs was described by the eight component factors (CFs) that comprised all of the variable elements. According to the research currently available on corruption in the construction sector, corrupt acts and practices in the sector have the potential to compromise four of the CFs and at least two variables in each of the other four CFs. Research limitations/implications A limitation of this study is the constraint of accommodating construction stakeholders’ views on the impact of corruption on the viability of MSMCFs. Despite this, the study provides a foundation for future research on corruption and the viability of construction firms. Practical implications This paper concludes that construction project conception, inception and implementation were susceptible to the widespread corruption in construction. It recommends that for MSMCFs to survive, there must be a conscious effort made to reduce or eradicate corruption in the construction industry. Originality/value This paper fulfils the need for identifying and assessing factors influencing the viability of MSMCFs in relation to their susceptiveness to corruption endemic in the construction industry.