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Developing a Corruption-Vulnerability Index for Organizations: A Study of Indian State-Owned Enterprises

Author: VINAYAN JANARDHANAN and RANJEET NAMBUDIRI
Published in PAQ, Vol. 43 No. 3

This is a scholar-practitioner effort to develop a tool for assessing the anti-corruption preparedness of organizations. This study aims to develop an index to measure corruption vulnerability of organizations, drawn from an extensive review of the literature, field data from state- owned enterprises, and qualitative data through interviews with practitioners and domain experts. Extant literature and practitioner studies indicate the absence of a framework which works in an ex-ante, preventive mode to analyze organizations in terms of the preparedness of their systems and routines against organizational corruption. We examined paradigms that are considered moderators and precursors to organizational corruption. Drawing on existing theory we identified certain core Ethics Resources (ERs) of organizations and argue that these are the fountainheads of ethical behavior in an organization. These variables were linked with data on real-life corruption cases in state- owned enterprises (SOEs) drawn from a national-level oversight body, to develop the conceptual framework. Thereafter, using semi-structured interviews with practitioners and through the assistance of domain experts we constructed from this framework, a Corruption Vulnerability Index. Finally, using a structured instrument administered to a sample of vigilance officers from SOEs, we tested the index in 46 organizations. The result is a predictive and preventive tool that can be used by top managements, oversight bodies, and industry associations to predict vulnerability of organization systems and routines to misuse and abuse; and to compare and grade various organizations on this count. Streams for continued research and practice are identified.

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