Modelling the Impact of Organization Structure and Whistle Blowers on Intra-Organizational Corruption Contagion

TL;DR

This study models how organizational structure and whistle-blower presence influence the spread of corruption within organizations, revealing that flatter structures resist contagion better but may have higher final corruption levels.

Contribution

It provides a quantitative simulation framework analyzing the effects of organizational parameters on corruption contagion, which is a novel approach in this context.

Findings

Flatter organizations have a lower corruption spread threshold.

Tall organizations end with a higher proportion of corrupted individuals.

A critical whistle-blower threshold of 5% can significantly curb corruption spread.

Abstract

We complement the rich conceptual work on organizational corruption by quantitatively modelling the spread of corruption within organizations. We systematically vary four organizational culture-related parameters, i.e., organization structure, location of bad apple, employees propensity to become corrupted (corruption probability), and number of whistle-blowers. Our simulation studies find that in organizations with flatter structures, corruption permeates the organization at a lower threshold value of corruption probability compared to those with taller structures. However, the final proportion of corrupted individuals is higher in the latter as compared to the former. Also, we find that for a 1,000 strong organization, 5 percent of the workforce is a critical threshold in terms of the number of whistle-blowers needed to constrain the spread of corruption, and if this number is around 25 percent, the corruption contagion is negligible. Implications of our results are discussed.