TECHNICAL NOTES Unethical Practices in Nigerian Engineering Industries: Complications for Project Management O. E. Alutu1 and M. L. Udhawuve2 Abstract: The purpose of the paper is to establish the unethical practices in engineering industries and identify the various factors that could encourage unethical practices in the nation’s life with a view to highlighting the ? ndings for corruption-free management of projects. A sample of 226 was randomly selected for the study from a population of 12,230 workers from selected companies in the manufacturing and construction industries in Lagos state.
The data were analyzed using simple percentages and the chi-square statistics. The results revealed that organizations have a code of conduct that should generate in the workforce values such as accountability and integrity and that there are disciplinary and control measures to check malpractices, yet individuals still engage in unethical practices. Of all the 34 unethical practices studied, “people want to acquire wealth by all means to enhance public status” ranked highest, followed by “people are driven by their inherent greed for money.
The factor that contributed most to the unethical practices is economic pressures, followed by societal practices, vested interests of stakeholders in contracts, and last organization’s practice. The result also showed that there are vested interests in design, award, execution, and commissioning of projects by stakeholders of the projects and that unethical practices have serious negative impact on project management. DOI: 10. 1061/ ASCE 0742-597X 2009 25:1 40 CE Database subject headings: Ethics; Construction management; Nigeria; Africa.
Introduction Corruption is a dangerous societal disease, more dangerous than cancer or HIV/AIDS is to human beings Akintude 2001 . The level of corruption has gone so high in Nigeria that corrupt practices have been blamed for the instability of successive governments in Nigeria since the ? rst republic Obasanjo 2000 . Thus, between 1960 and 1966, the period immediately after independence, corrupt practices were gradually planted into the Nigerian society. Between 1966 and 1979, the generals of the ? rst military incursion urtured it to full-grown status. The civilians between 1979 and 1983 watered it and it started to blossom. Finally, the military generals between 1983 and 1999 institutionalized it and made it a way of life, to the extent that Nigeria earned the reputation of being the second most corrupt nation in the world. At present, Nigeria is steep with corruption and it has affected every facet of the nation’s life. One of the aftermaths of corruption is the raising of the cost of construction to an embarrassing level.
The prevalence of poor precontract planning, inept/ incompetent contractors, incompetent consultants/professional advisers, fraud, poor project funding/delayed payments, late appointment of relevant professionals, nonapplication of due process in contract awards, hasty preparation/award/execution of Faculty of Engineering, Univ. of Benin, Benin City, Nigeria. Faculty of Engineering, Univ. of Benin, Benin City, Nigeria. Note. Discussion open until June 1, 2009. Separate discussions must be submitted for individual papers.
The manuscript for this technical note was submitted for review and possible publication on April 5, 2005; approved on May 17, 2007. This technical note is part of the Journal of Management in Engineering, Vol. 25, No. 1, January 1, 2009. ©ASCE, ISSN 0742-597X/2009/1-40–43/$25. 00. 2 1 projects, adverse market forces/inconsistent government policies, design inadequacies, choice of contractual arrangement/form of contact, and in? ation have been identi? ed as the causal factors responsible for the very high cost of construction in Nigeria NIQS 2003 .
For example, an of? ce block, three-star hotels, and industrial buildings in Nigeria will cost 50%, 155%, and 130%, respectively, more than what they would cost in South Africa NIQS 2003; Alutu 2004 . These situations have been sources of worry and embarrassment to many Nigerians. The Nigerian Society of engineers has identi? ed the issue of corruption in the engineering Industry as topical and has launched a crusade in 1997, which it tagged, “ethical professional revolution” in engineering. The present civilian government has realized this problem too.
A quote from Obasanjo 2000 underscores this point: “We realize that if the war against corruption is not fought and won, there will hardly be any sustainable technological development and political stability. ” According to Obasanjo 2001 , unethical practices could occur at any stage of engineering project implementation from inception to the commissioning stage. The most noticeable and common ones in running of engineering projects include lack of patriotism, violation of professional code of ethics in contract awards, and lack of moral considerations.
Sometimes, Lagos, by virtue of political decisions, has eroded the engineering standards, making immoral and unethical values to enhance corrupt practices the more. Unethical practices studies among University of Benin civil/ structural engineering undergraduates, revealed startlingly that the two most prevalent unethical practices in the Nigerian construction industries are that “Contractors get vital information on the 40 / JOURNAL OF MANAGEMENT IN ENGINEERING © ASCE / JANUARY 2009 contract by paying agreed sums of money to of? ers of awarding organizations” and that “Contractor must include ‘kick-backs’ in his tender or else he will not win the contract” Alutu 2002 . Moreover, the laws, codes of conduct, disciplinary, and control measures are in place in Nigeria, yet, individuals still engage in unethical practices. Meanwhile, the corrupt practices are fast becoming the way of life of the people, to the extent that, the younger generations are beginning to think that corrupt ways of the nation are the right values.
There is, therefore, this need to replicate the University of Benin study in a wider society to pinpoint those practices in the engineering industry that are regarded as unethical. It is by knowing the practices and the factors that in? uence them that a solution can be addressed. The purpose of this study is to identify the various forms of unethical practices prevalent in the engineering industries and to determine those factors that may be encouraging them, with a view to highlighting the ? ndings for corruption-free management of projects. dents that agree or disagree.
In Table 2, the numbers in parentheses are the average number of respondents. Items 1 to 35 give unethical practices, which are grouped under factors that may have in? uence on them. These are: organizations practices, items 1 to 6; societal practices items 7 to 12; economic pressures, items 13 to 16; stakeholder’s interests, items 17 to 36 comprised of committee/board’s interests, items 22 to 25; contract of? cer’s interests, items 26 to 31; and engineer’s/ architect’s/quantity surveyor’s interests, items 32 to 35. Discussion The discussion of the survey results is undertaken by giving a treatment of the complications of the ? dings on project management as follows: Complications of Unethical Practices for Project Management Nigeria had the highest number of abandoned projects in subSaharan Africa. According to Aliyu 2000 , the total estimated abandoned state-owned projects are valued at $12. 65 billion. Revaluing the projects now, means Nigerians would require more than twice this amount to complete the abandoned projects. From the ? ndings of this study, contractors try to compensate themselves for one form of “kick backs” or the other, which they have paid to of? ers of the awarding organization either by use of low quality materials, or supply of incomplete materials/ equipment or insistence on contract upward review or under certain conditions, simply abandon the project. These practices make project management extremely dif? cult or rather impossible. Thus, there will hardly be any sustainable technological development in any nation that is riddled with corrupt practices. In view of the factors that sustain unethical practices discussed in this paper, all stakeholders including boards/committee members, contract of? ers, contractors, engineers, architects, and quantity surveyors need to come together to address this malaise that is plaguing our engineering/construction industries. The society must be educated about the high level of moral ethics required in contracting. Government and the Nigerian society of engineers need to device ethical revolutionary strategies to teach stakeholders due process in conception, design, and construction of projects. Nigerians should be compelled through this process, to acquire assertiveness skills to choose to do what is right.
Project managers, members of boards, and awarding committees should learn to apply psychologically oriented therapeutic measures to help change contractors’ attitudes toward corrupt practices. A contractor who has a favorable attitude toward corrupt practices likely has irrational beliefs reinforcing it, for example, ‘‘If I don’t give ‘kick back,’ I will not get the job,’’ or “those who get big contracts must have connections with people at the top. ” A contractor with an unfavorable attitude towards corrupt practices may hold beliefs such as, “If my tender is adjudged least evaluated and if I am found competent, I will surely get the job. If the cognitive component of attitudes towards corrupt practices in engineering projects is restructured, the affective and behavioral components will likely be positively affected. Project managers, consultants, members of boards, and members of awarding committees, being aware of the implications of unethical practices in project management, will tell a contractor straight at due process meetings, just before collecting the tender documents or during the interview: “This board/committee wants Method of Study
It being a cosmopolitan city, a major port, the most industrialized city in Nigeria, seat of Lagos state government, former capital of Nigeria housing large populations of all ethnic groups in Nigeria is selected for this study. For this reason, it is assumed that samples selected from Lagos will be, as much as possible, a representation of the Nigerian society. Three local government areas of Lagos state were selected randomly from the 20 local government areas, bearing in mind their level of industrialization. These are Ikeja, Ogba-Ijaiye, and Lagos Mainland.
The companies operating in the study area, which include Cadbury Nigeria Plc, Nigerian Bottling Co. Plc, OM Oil Nigeria Ltd, Nigerian Ports Authority, and their associated civil engineering contracting companies have a staff strength of 1,840, 1,200, 8,900, 110, and 180, respectively. These gave a total population of 12,230. A sample size of 226 was then proportionately selected from the companies and used for the study. The targeted subject for this study were engineers/technologist, constrictors, quantity surveyors/architects, and accounting/management practitioners whose duties are related to project management, contracts, and supplies.
To assess the respondent’s perception of the unethical practices, the researchers adopted the unethical practices in the Nigerian construction industry questionnaire Alutu 2002 . The questionnaire, which had 20 items was modi? ed and expanded to consist of 49 items with section A biodata , B ethical/discipline , i. e. , organizational values/discipline/control measures, and Section C unethical practices . Section D gave suggestions for corrective actions. The data analysis was carried out using simple percentage and chi-square statistics and tested for criticality at 5% con? dence level. Results
The results are given in Tables 1 and 2. The Tables give the response patterns of the survey pool of the subjects used in the study. Columns 1 and 2 of each table show the item number and item description of the table, respectively, while columns 3 and 4 of each table indicate the percentages of the surveyed subjects that agree or disagree with the items listed in each of the two tables. The items in parentheses indicate the number of respon- JOURNAL OF MANAGEMENT IN ENGINEERING © ASCE / JANUARY 2009 / 41 Table 1. Unethical Practices S/N 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 8. 19. 20. 21. 22. 23. 24. 25. 26. 27. Practices Despite threats of punishment in the work place, individuals still engage in corrupt practices. Offences that merited summary dismissal are sometimes not so treated for reasons of connections and are converted to lesser punishments. Unethical practices are not deservedly punished because of protection from top management for such offenders. Protection from top is due to the fact that such top managers have interest in the gains from such practices. Protection from top management could be due to the relationship between the manager and the offender.
Despite contract value limiting control, individuals still spend more than the limit speci? ed. Military incursion into politics made governance and political, public, and private jobs to be very unstable. Instability in the society tends to make unethical behavior in the society to be very great. The military rule has very high corrupting tendency on the citizenry. The civilian rule carries with it its own corrupting tendency on the citizenry. Often individuals are punished for corruption but sooner, the punishments are reversed and offenders are evenly compensated.
Our various societies/communities celebrate riches and award titles, even when such riches are unexplainable. People are driven by their inherent greed for money. People corruptly acquire wealth by all means to satisfy certain needs such as public status. The glori? cation of sudden wealth by the society encourages the youths to desire wealth by hook or crook. Salaries of workers are delayed either intentionally or unintentionally and this action tends to promote corruption. The chief executive can award a contract without the approval of the committee set up for such functions.
One or two members of the board can arrange to in? uence the award of the project to a company where they may have interest. The chairman can dictate the direction of the decision of a board to approve spending or award a contract. Members of committees sometimes agree to ignore excessive prices on a bid because of their interest of sharing in the contract sum. Committee members can also agree to award and share contract s among themselves at in? ated prices. Contract of? cers tend to leak vital information on pricing to companies where they have interest.
In presenting bids to the boards, contract of? cers tend to put forward bids having their interest. Contract of? cers sometimes negotiate with contractors their own percentage share of the contract in advance. Despite having knowledge of current prices, contract of? cers often ignore excessive prices in the bill due to their interest of sharing in the contract sum. Contractors get vital information on a contract by paying various sums of money to of? cials of the awarding organization. Contractors generally in? ate the prices of items in the bill in order to take care of “kick backs” to of? ers of the awarding company. In wanting to make excess pro? t, contractors indulge in the following practices: Use of low quality materials. Supply of incomplete materials. Abandoning of projects. Insistence on contract upward review. Engineers/architects tend to include in their drawings, materials or structures not required in the project due to interest in sharing in the excess cost. Because of certain pact between the supervising team and the contractor, use of incomplete and/or low quality materials and certain jobs not done, are ignored. Completion certi? ates are sometimes issued to the contractor to enable collection of payments, even when jobs are incomplete or sometimes abandoned. In preparing the bill of quantities, engineers tend to in? ate prices, especially when they are to supervise the project with the intent to collude with the successful contractor. % Agree 74% 151 76% 155 56% 114 65% 131 60% 122 53% 107 93% 188 90% 90% 77% 76% 183 183 157 160 % Disagree 25% 52 24% 48 44% 89 35% 72 40% 81 47% 96 7% 15 10% 10% 23% 21% 20 20 46 43 94% 191 96% 19 100% 203 93% 188 86% 174 70% 142 82% 166 69% 140 84% 171 60% 65% 72% 79% 122 131 146 161 % 12 18% 9 0% 0 7% 15 14% 29 30% 61 15% 37 31% 63 16% 23 40% 35% 28% 21% 81 72 57 42 70% 140 89% 180 92% 187 31% 63 11% 23 8% 16 28. 29. 30. 31. 32. 33. 34. 35. 92% 88% 63% 56% 56% 187 79 128 117 114 8% 12% 37% 42% 49% 16 24 74 86 88 75% 152 73% 149 78% 158 25% 50 26% 54 22% 44 42 / JOURNAL OF MANAGEMENT IN ENGINEERING © ASCE / JANUARY 2009 Table 2. Factors Affecting Unethical Practices S/N 36. 37. 38. 39. Factors Organization’s practices. Societal practices. Economic factor. Vested interest of stakeholders % Agree 62% 87% 93% 74% 130 177 189 150 % Disagree 8% 13% 7% 6% 73 26 14 53 your minimum tender; we do not require ‘kick backs’ to do our work, so do not come to thank us. ” This will instill con? dence in the contractor to do what is right, and by so doing, develop a more negative attitude toward corrupt practices in contracting. The Nigerian Society of Engineers should hold regular conferences/seminars supported by government on engineering ethics. The Federal Ministry of Works and Housing should publish “due process rules” as a handbook and make available to contractors, practicing engineers, architects, and quantity surveyors.
These rules should be made part of civil engineering practice and construction management syllabuses in the universities. By so doing, all forms of vested interests will be removed from contracting, and project management will take its normal course. • • • Conclusion From the ? ndings of this study, the following conclusions are drawn: • There are values, disciplinary, and control measures put in place in every organization to check malpractices, yet unethical practices that merited summary dismissal are sometimes not so treated for reasons of connections or in? ences and or sometimes committed to lesser punishments, hence, encouraging people to engage in unethical practices; • Military incursion into polities, instability/insincerity in the society, allowing offenders to get away with illgotten wealth and celebration of riches and awarded of titles are factors that support unethical practices in the engineering industries; • Greed, acquisition of wealth by all means to enhance public status, glori? ation of wealth, delayed salaries or nonpayment of salaries are some of the economic pressures responsible for unethical practices in the engineering industries; • Awarding of a contract single handedly by a chief executive of? cer, in? uencing of award of contract to a choice company by one or two members of the board for sel? sh reasons, dictation of direction of decision of board to approve/disapprove spending single handedly by an individual or chairman, ignoring of excessive prizes on a bid because of interest in sharing in the contract sum, sharing or awarding contract to members themselves at in? ted prices are some of the committee/ board’s practices that encourage unethical practices in the engineering industry; Leaking vital information on pricing to companies, putting forward to awarding committee bids having one’s interests built in, negotiating one’s own share before the bids are prepared, ignoring excessive prices quoted in the bids due to interest in sharing in the contract sum, are some of the practices by some of the contract administrators, which encourage unethical practices in the engineering industry; Resorting to getting vital information on contract by paying various sums of money to of? ials, in? ating the prices to accommodate “kick backs” are some of the practices by contractors that encourage unethical practices; Including materials or costs not required in the project for personal bene? t, ignoring low quality materials, or overlooking poorly executed work because of certain pacts between contactor and supervisors, issuance of completion certi? cate even when project is yet to be completed, and in? ating prices in the bill of quantities with the hope of bene? ing when supervising same project are some of the practices by engineers/ architects/quantity surveyors that encourage unethical practices; and The factors that contributed most to the malpractices in the engineering industries are economic pressures, followed by societal practices, vested interests of stakeholders in contracts, and last organizationals practices. References Akintunde, I. 2001 . “Corruption in engineering projects—The way out. ” Proc. , Anti-Corruption Seminar of 19th June, 2001, Nigerian Society of Engineers, Abuja.
Aliyu, O. A. 2000 . “Abandoned projects: Question of maintenance or planning? ” Proc. , Construction and Civil Engineering Senior Staff Association CCESSA Seminar, CCESSA Newsletter, Lagos. Alutu, O. E. 2002 . “Unethical practices in Nigerian construction industry: The prospective engineer’s viewpoint. ” Civil Engineering Dept. , Univ. of Benin, Benin City, Nigeria. Alutu, O. E. 2004 . “Keeping contract prize under control—The importance of a fairly accurate in-house estimate. ” Civil Engineering Dept. , Univ. of Benin, Benin City, Nigeria.
Nigerian Institute of Quantity Surveyors NIQS . 2003 . “High cost of construction projects in Nigeria: Causes and solutions. ” NIQS Publication Service No. 2, Lagos, Nigeria. Obasanjo, O. 2000 . “Address on the occasion of formal signing into law of the Corrupt Practices and Related Offences Act 2000. ” Times Press Ltd. , Abuja, Nigeria. Obasanjo, O. 2001 . “Keynote address. ” Proc. , Seminar on Campaign against Corruption in Engineering Projects, Nigeria Society of Engineers, Abuja, Nigeria. JOURNAL OF MANAGEMENT IN ENGINEERING © ASCE / JANUARY 2009 / 43
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