Corruption in interaction: the role of social capital in private–public relationships

Abstract

Purpose This paper aims to explore corrupt exchange as a type of socioeconomic interaction in private–public relationships and its effects on material flow in connected private-private relationships. Design/methodology/approach The paper is based on a case study of a private–public network of an import firm in Russia. It focusses on corrupt exchange in routine interactions between the firm’s managers and officials in three regulatory authorities. Findings The study reveals how different types of corrupt exchange between firm managers, officials and intermediaries serve as a problem-solving tool that facilitates material flow through bureaucratic gates. Research limitations/implications The paper contributes to the industrial marketing and purchasing research by showing how the social capital concept is useful for explicating mechanisms of socioeconomic interaction in business networks and how the interaction context conditions actors’ roles and interdependencies. Practical implications The paper raises practitioners’ awareness of corrupt exchange in business networks and enables them to anticipate and manage upcoming challenges in bureaucratic procedures. Social implications The study shows how networks’ non-transparent and manipulative tendencies may provide favourable conditions for corruption in the business landscape. Originality/value The study provides a unique empirical insight into the socioeconomic mechanisms of corrupt exchange in business networks. It contributes theoretically by conceptualising corrupt officials as taking on the role of quasi-business actors in the personal possession of administrative authority as a resource and by using a novel conceptualisation of social capital to study private–public interaction in business networks.