(companies bribe government officials for contracts or services) only occupies a minor proportion
(Transparency International, 2009). Different researchers study corruption from varying
perspectives like culture, economy and politics. Lack of systemic research on corruption led Ullah
and Arthanari (2011) and Ullah et al. (2012) to integrate variables related to corruption in various
realms into a holistic system. These studies present a high-level system dynamic model of the
complex interactions among such variables. Corruption is a matter of concern, also due to the
disastrous impacts and penetration over the whole SC. However, research works on corruption
from the perspective of SCs are rather limited (Arnold et al., 2012; Webb, 2016). Prevention of
corruption involves high cost (United Nations Global Compact, 2010). Low cost-effectiveness of
preventive strategies motivates exploration of ways to mitigate corruption’simpactonSCs.
The complexityof SCs arises from interrelationships and interdependenciesamong entities
in the supply system(Ghadge et al., 2013). Such interdependencies lead to uncertainty (Pfeffer
and Salancik,1978), and SCs are thus exposed to disruptions in various processes.Corruption
would increase the complexity of disrupted SCs. The effect of SC disruptions could be
modified in the presence of corruption. However, the impact of corruption on SCs is lack of
elaborate research; also, no research focuses on how to mitigate corruption’simpactonSCs.
Proactive and reactive strategies are recognized to improve resilient ability of firms
(Wieland and Wallenburg, 2012, 2013), i.e., robustness (proactive) and agility (reactive).
Wieland and Wallenburg (2012) suggest more robustness studies are needed, and
robustness is defined as “the ability of a supply chain to resist change without adapting its
initial stable configuration.”A robustness strategy cannot deal with all SC disruptions,
and “robustness against something”is highlighted as an important aspect in Monostori’s
This paper investigates robustness against an external factor –corruption, which
modifies the effect of internal factors (i.e. supply chain risks (SCRs)) and consequently
modifies supply chain performance (SCP). This adds to robustness research by offering a
new perspective. Meanwhile, enhancing SC robustness against corruption complements the
purpose of mitigating corruption’s impact on SCs.
As a sensitive topic, corruption within SCs has not been well elaborated in industrial
practices. The nature of this topic determines the difficulty of data collection. The sensitivity
inhibits participants from free expression of their perceptions. Choosing New Zealand (NZ),
one of the least corrupt countries, is beneficial to reducing sensitivity in the process of data
collection. In terms of businesses, NZ still needs to fight against corruption, since there is
little relationship between national corruption level and actual bribery performed by its
firms ( Jeong and Weiner, 2012). Further, we collected empirical data in NZ dairy industry to
operationalize this research. Consecutive crises in the dairy sector result in heightened
concerns in firms and individuals about product quality and safety. NZ is an international
leader in producing and exporting dairy products, with more probable exposure to
corruption. Its dairy industry forms a large portion of export, taking up 3.5 percent of the
national GDP (Ballingall and Pambudi, 2017). NZ dominates 28 percent of the international
dairy trade, and only less than 4 percent of the production of milk is served to the domestic
markets (Shadbolt and Apparao, 2016).
The purpose of this study is to provide a ground study for robustness analysis against
corruption, with empirical data collected from NZ dairy firms. There are three major
RQ1. What types of SCRs exist in the NZ dairy industry?
RQ2. How does corruption modify the effect of dairy risks and SCP?
RQ3. How does a firm improve SC robustness against corruption from the perspective of
a holistic system?