Prevention of corruption at workplace. A nexus of good governance and effective procurement


Academic Paper, 2020
37 Pages

Excerpt

ABSTRACT

The desideratum of this discourse was to unpack the nexus of good governance, effective procurement and prevention of corruption at workplace. Money can corrupt the virtuous. Efficient public procurement is key to enhancing state portfolio in infrastructure, health, education and other public services, making it central to state efforts to enhance living standard. Efficient public procurement has a nexus with good governance. The questionnaire method was considered appropriate to collect and analyse data from the respondents. Different questionnaire and interviews were administered to every respondent. Collusion and corruption are distinct challenges within public procurement, yet they may regularly occur in tandem and have mutually added fuel to the fire impact. A good example of collusion and corruption is the alleged chain effect of the Fish rot scandal in Namibia. They are optimally perceived, therefore, as concomitant threats to the integrity of public procurement. We should accept the hypothesis that states: There are possible challenges to a rigorous tendering process in the procurement of learning support materials. We discovered that 61.5% of the respondents stated that the procurement process has made it much worse in curbing corruption. While 15.3% indicated that it had made it a little worse in curbing corruption. 7.6% of the respondents highlighted that the procurement process had made it the more or the same in curbing corruption.15% of the participants specificed that the procurement process has made it better in curbing corruption.We recommend that installing motion sensitive cameras in places of procurement meetings will address corruption issues.

Keywords

Nexus, Good Governance, Prevention, Corruption and Procurement

CHAPTER ONE

1.0 INTRODUCTION

SADC is shattered for sure because the leaders have succumbed to rapacious and megalomanias and pure speculation with no values. The time has come to expose them and tell the truth about this greediness. The ideologies of good governance are articulated in the King III report. According to the King III report, plethoric of the principles of good governance can be contextualized to suit circumstances in public sector organisations such as Municipality. Applying the principles of good governance to public sector organisations serves to endorse the basis of democracy on which modern states are founded. It is now shared human capital that responsible and accountable governance is a wobbling feature of measuring the performance of publicly traded corporates. By enhancing the management roles of the board of directors, corporates are more likely to succeed in protecting the interests of a broad spectrum of stakeholders, thus achieve sustainability (Ageres, 2014).

Efficient public procurement is key to enhancing state portfolio in infrastructure, health, education and other public services, making it central to state efforts to enhance living-standards (IGC , 2017). Efficient public procurement has a nexus with good governance. However, state procurement in developing states is often plagued by high rates of corruption and waste. The public procurement process is governed by public procurement laws and regulations in all states and differs from one state to another. In South Africa, public procurement is enshrined in Section 217 and 33 of the constitution of the country. COMESA has developed a model strategy for public procurement reform to standardise procurement and tendering process which are done within the stock market (Quinot & Arrowsmith, 2013).

The public procurement policy of Namibia focuses on the liberalisation of the provision of textbooks together with other learning support materials relevant at High Schools through sustainability and transparency in methods of procurement (Geller, Slot, & Yikona, 2011). According to UNAC (2010),” an effective procurement process ensures that there is the procurement of the germane learning materials, supplied at the right place and at the right time”. Public procurement should emphasise the legitimate use of budgetary resources to procure the relevant materials for effective utilisation by the learners (Thai, 2014).

2 LITERATURE REVIEW

Contemporary deliberations relating to the issues of Corporate governance is mainly based on the Kings Report III and the OECD Principles of Corporate Governance which were drafted in 1998 and changed in 2004. OECD (2004) has recognised five (5) main Principles of Corporate Governance:

- Rights and impartial treatment of shareholders
- Interests of other stakeholders
- Role and responsibilities of the board
- Integrity and ethical behaviour
- Disclosure and transparency (Black, 2014)

Anglo-US Model at Workplace

The significant players in the Anglo-US model embrace management, directors, shareholders, state agencies, stock exchanges, self-regulatory Societies and consulting corporation which advise business and shareholders on corporate governance and proxy voting (Jeffers, 2005). Of these, the three chief players are administration, directors and shareholders. They form what is frequently referred to as the "corporate governance triangle." This developed within the setting of the free market economy, which undertakes the separation of ownership and control in most publicly held corporations (Fernando, 2015).

Japanese Model at Workplace

Bergloef (1993) articulates that the Japanese system of corporate governance is many-sided, entering on the main bank and a financial/industrial network or keiretsu. He further proclaims that the central bank system and the keiretsu are two different, yet intersecting and complementary, rudiments of the Japanese model. Almost all Japanese establishments have a close relationship with the main bank. The bank furnishes its corporate client with loans as well as services related to bond issues, equity issues, settlement accounts, and related consulting services. The central bank is commonly a significant shareholder in the corporation (Clarke, 2016).

Integrity and ethical behaviour at the Workplace

Zig Ziglar unravels that with integrity you have nothing to fear, since you have nothing to conceal. With integrity you will do the right thing. OECD (2004) further articulates that the corporate governance framework should endorse transparent and efficient markets, be unswerving with the rule of law and clearly articulate the division of accountabilities among different supervisory, regulatory and enforcement authorities. The corporate governance framework should be crafted with an understanding of its effect on overall economic performance, market integrity and the incentives it creates for market participants and the advancement of transparent and efficient markets. The legal and regulatory requirements that impact corporate governance customs in a jurisdiction should be dependable with the rule of law, transparent and enforceable (Khoza, 2013).

Disclosure and transparency at the Workplace

There can be no faith in the state if our highest offices are inspected from scrutiny. When corruption is syndrome transparency is the central part of its treatment. The corporate governance framework should make sure that timely and precise disclosure is made on all material matters concerning the corporation, comprising the financial situation, performance, ownership, and governance of the corporation. Disclosure should include, but not be limited to, material information on:

1. The financial and operating results of the corporation.
2. Company objectives.
3. Significant share ownership and voting rights.
4. Compensation policy for members of the board and key executives, and information about board members, comprising their qualifications, the selection process, other company directorships and whether they are considered as autonomous by the board.
5. Related party transactions.
6. Conceivable risk factors.

Types of Fraud Committed at Workplace

Edgar Allan Poe laments that all religion my friend is simply evolved out of fraud, fear, greed, imagination and poetry. The most shared way to organise fraud is to divide frauds into those committed against a corporation and those committed on behalf of an association (management fraud). Occupational fraud comprises employee embezzlement, vendor fraud, and customer fraud. Management fraud comprises financial statement fraud and investment scams, with the former being the concentration of this section.

In financial statement fraud, top management is convoluted, and stockholders, creditors, and others who depend on financial statements are the victims. Here, financial facts are misrepresented. The motivations behind fraudulent financial statements differ and include: (1) to advocate a high stock price on a recurrent basis, (2) to advocate a bond or stock offering, (3) to receive big bonuses from increased profits, profits, and stock prices, (4) to protect management's net worth from the corporate stock ownership, and (5) to meet the stock market's higher prospects of financial results. One way to preclude and detect fraud is to conduct fraud audits, independent administration reviews and investigations, and fraud self­assessment reviews occasionally and proactively to send a strong message to employees that fraud is not tolerated (Vallabhaneni, 2016).

External Fraud at Workplace

External fraud from a corporate perspective pertains to outside threats fashioned to obtain corporation assets deceitfully. These assets can be in the form of financial gain, unlawfully obtained corporate property, or payment for non-delivery or under-delivery of product. A common of external frauds begin with a person who is in a nonemployee status steering the business. This same person can target the enterprise for fraud and endeavours to be hired by the organisation. In conclusion, the individual working in an external capacity can solicit the support of a current employee and the two work together to defraud the corporation. No matter the direction of the fraud endeavour, it is vital for all businesses to develop a thoughtful and aware of the threats faced. The goal of a corporation as it develops a fraud prevention policy is to comprehend the path of least resistance. This understanding has to be based on knowing that persons who want to commit external fraud will look for flaws in the business operation and procedures. (Rick, 2016)

Challenges in the procurement process

Thai (2014), argues that in developing states, public procurement practitioners have and will face many challenges, but each state has its own economic, social, cultural and political milieu and each state's public procurement consultants face different types of challenges. As well articulated as the legislation and policy, maybe it has not come with the available pecuniary and human resource capacity to assist with the execution. Schutz, Erben and Batran (2017) highlight some of the challenges facing the public­sector procurement milieu encapsulates: A deficiency of proper knowledge, deficiency of transparency, dexterity and capacity. Insufficient planning and networking of demand for budget availability. Non­compliance with supply chain management policy and legislature. Deficiency of accountability leading to fraud, corruption and unethical behaviour (Schutz, Erben, & Batran, 2017).

Governance and Ethical challenges

Research by Osman (2014) Ethics is principles and acts delineating our behaviour in conducting goods or wrong actions or manners by our perceptions and efficacy. Ethical procurement precludes employees from any attempt to realise personal gain through conducting immoral act during proper discharge of the employee's duties (Osman, 2014). Ethical issues are always related to two first parameters of construction- procurement and transparency. Should corporate succeed in upholding ethical values in procurements, the intended purpose of value for money in public procurement shall be achieved. Kultegen (2010) through their survey on professional ethics in the education industry reveals that all the respondents had witnessed or experienced some extent of unethical conduct, in the form of unfair conduct, negligence, conflict of interest, collusive tendering, fraud, confidentiality and propriety breach, bribery and violation of environmental ethics. These tenets ended up resulting in loss of money (Kultegen, 2010). The Gupta scandal on the acquisition of services led to state capture inquiry in South Africa, the issue of Eskom in the acquisition of coal contract in which they paid for services and products not delivered

Collusion and corruption

Research by Soreide and Rose-Ackerman (2014) asserts that mounting body of empirical evidence unpack that collusion and corruption go hand in glove in procurement. Collusion and corruption are distinct challenges within public procurement, yet they may regularly occur in tandem and have mutually added fuel to the fire impact. A good example of collusion and corruption is the alleged chain effect of the Fish rot scandal in Namibia. They are optimally perceived, therefore, as concomitant threats to the integrity of public procurement (Soreide & Rose-Ackerman, 2014). Public procurement constitutes state purchasing of goods and services required for state tasks, the fundamental purpose of which is to secure the utmost value for public money (Laurie, 2014). In both developed and emerging economies, however, the efficient functioning of public procurement may be distorted by the challenges of collusion or corruption. Collusion encapsulates a convergent and divergent relationship between bidders in public procurement, who are in cahoots to remove the component of competition from the process. The borders members also collude through receiving bribes from those people needing services (Geller, Slot, & Yikona, 2011). Bid rigging is the archetypal mechanism of collusion in public contracts: the bidders determine between themselves who should “win” the tender, and then arrange their bids - for example, by bid rotation, complementary bidding or cover pricing - in such a way as to make sure that the ostensibly competitive process selects the designated bidder

Lack of transparency in the procurement process

Research by Georgieva (2017) highlights corruption eventuate where state officials use public powers for personal gain, for example, by taking a bribe in exchange for giving the nod for a tender in most cases it is due to deficiency of transparency. While typically occurring during the procurement process, instances of post-award corruption also emanate. Corruption fudge together a vertical relationship between the public official concerned, acting as a buyer in the transaction, and one or more aspirants, acting as sellers in this instance (Georgieva, 2017). Corruption is generally out of bounds by the state criminal justice rules, legislation on ethics in public office or by the specific public procurement regulations (OECD, 2015). The assessment findings suggest that a need exists for additional. Both written guidelines and sensitisation activities should aim at creating a general awareness of the legal framework and institutional setup guiding procurement in Namibia as well as the main principles of sound, fair, transparent and efficient procurement. Research by Abelle, Monard & Maritz (2014) concurs that in line with the assessment conclusions, it is, also, recommended that rules and procedures relating to specific subjects be given attention when developing procurement guidelines and sensitisation activities on transparency.

People commonly abuse the system through evergreen deals the state capture scandals in South Africa and other SADC countries is a good example. However, the various survey reveals that even after the enactment of various procurement principles, losses of public funds due to the procurement of goods, works or services have endured. The need to make the process transparency becomes without recourse, by inviting a journalist to report on the whole process of procurement especially of awarding large tenders and even installing cameras inside the places where these decisions are made (Taylor & Yulek, 2017). Transparency can also be armour-plated by appointing many experts or contingent team only known by internal management which can be called just before the process of procurement to avoid bribes to those officials needing the services (Tatrai & Piga, 2015).

Tendering processes affect organisational performance.

While selling to the state may assist firms to enhance their performance, the study finds that this positive linkage is attained as the share of total sales to the state rises. A turning point is attained when two-thirds of total disposals are to the state. Moreover, state demand appears to matter more for corporate with lower levels of productivity, which is constant with the finding that positive correlations between public procurement participation and performance arise for smaller corporates - these enterprises are more likely to be at the bottom of the productivity distribution (Acevedo, Rivera, Hwanga, & H, 2010).

Electronic tendering can make short a typical manual tendering process by half, thus lessening the procurement cycle time and transaction cost. E-procurement is most beneficial because of its speed and coverage, and when executed correctly, it has accelerated transparency in the tendering process and will allow most, if not all, tenders above the needed threshold to be openly advertised (Schutz, Erben, & Batran, 2017). Economic efficacy is achieved when a corporate spend a realistic amount of its pecuniary on goods and services; this may access or exceed 80% depending on corporates. Goods and services are then procured economically and operatively subject to the state requirements of the procurement. In the process of meeting performance, targets incorporate, conflicts may take time to time as these targets, incentives and bonus schemes occur in the purchasing process. At all times, the procedures should be adhered to, and where conflicts occur, it should be reported with the appropriate procedures (IGC , 2017).

Conclusion

Procurement is the process through which a project team comes to conclude one or multiple contracts for the furnishing of goods, works or services which are part of deliverables. The most significant frequently employed theories in procurement are Balance Score Card, contract theory, principal-agent, transactions cost, institutional, supply chain management, Value chain and competitive bidding theory. Some of the challenges facing the public-sector procurement milieu include A deficiency of proper knowledge, deficiency of transparency, dexterity and capacity. Insufficient planning and networking of demand for budget availability. Non-compliance with supply chain management policy and legislature. Deficiency of accountability leading to fraud, corruption and unprincipled behaviour. This paper consequently fills the gap in conducting such research in Namibia.

3 RESEARCH METHODOLOGY

Research Paradigm

At one end of the philosophical paradigm is the critical research paradigm, defined by Oates (2006) as being concerned with identifying power relations, conflicts, contradictions and empowering people to eliminate them as sources of alienation and domination. Comstock ( 1982) presents a comparison between the positivist paradigms with a critical research paradigm. He suggests that the positivistic paradigm is concerned with identifying problems, gathering data, hypothesis testing than confirming or revising theoretical understanding. The critical research paradigm, on the other hand, looks at ideological distortions in groups that are dominated and frustrated by present social conditions and proceeds with analysis to inform the emancipation of these groups. Thus, this approach advocates not only disciplined analysis intending to understand the world but also change it.

Critical research advocate for change to create a better society through empowering themselves and others by taking an interest in investigating exploitation, repression, unfairness, unbalanced power due to gender, race, class and other such classifications were bringing to consciousness the restrictive conditions of the status quo (Orlikowski & Baroudi, 1991). Pragmatists focus their efforts on finding solutions to problems and aim to use research as a practical outcome-oriented method of inquiry­based on iterations of action to eliminate doubt (Johnson & Onwuegbuzie, 2004) leading to beliefs that allow humanity to adapt to its environment (Almeder, 2008).

Interpretivism is summarised as having an internal reality of subjective experience where an empathetic and subjective observer builds knowledge. Interpretive research is a form of research that allows us to gain a better understanding of reality by trying to understand phenomena through the meanings that those involved assign to them. Interpretivism assumes that reality is socially constructed, subjective and is subject to change (Orlikowski, Baroudi, & J., 1991). Interpretive researchers reject the notion of a single universal truth held by positivistic researchers, arguing that the truth depends on one's position. While the researcher agrees with the assertion that positivism is a research strategy and approach that is rooted on the ontological principle and doctrine that the truth and reality are free and independent of the viewer and observer” (Aliyu, Bello, Kasim, & Martin, 2014, p.3).

Research Design

There are three research designs, namely: qualitative research design, quantitative research design and mixed research design (Creswell, 2014). Creswell (2014) specifies that research designs are types of inquiry within qualitative, quantitative, and mixed methods approach that provide specific direction for procedures in research. The research design is, therefore, a blueprint that provides answers to the research questions. Research designs ensure that the evidence obtained enables us to answer the initial questions as unambiguously as possible (David & Sutton, 2011). A mixed research approach, based on survey design, was adopted for this paper. A quantitative research paper is an objective, systematic plan, crafted to gather quantitative data. This study sought to unpack the nexus of good governance, effective procurement and prevention of corruption at workplace. A survey was conducted to gather information from a sample of participants by employing a questionnaire.

Sample size and Sampling Procedures

The schools employed in this discourse for study were Acacia, Eldorado, Cosmos, Rocky Crest High Schools. This discourse used the stratified random sampling modus operandi. For feasibility, the researcher was not able to use all the target population in Windhoek. As a result, the study used a representative sample of 50% of the target population as a sample. This was obtained, as shown in the table below:

Table 1 Sample

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Details

Title
Prevention of corruption at workplace. A nexus of good governance and effective procurement
Author
Year
2020
Pages
37
Catalog Number
V518484
ISBN (eBook)
9783346116598
ISBN (Book)
9783346116604
Language
English
Tags
prevention
Quote paper
Prof. David Rewayi Mpunwa (Author), 2020, Prevention of corruption at workplace. A nexus of good governance and effective procurement, Munich, GRIN Verlag, https://www.grin.com/document/518484

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