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Construction Companies and Ethics

The construction industry experiences many challenges. Some of these challenges include bid shopping, reverse auctions, false claims, threats as well as employee misappropriation. The construction professionals feel that the industry is ruined by an increase in unethical behavior. The role of construction ethics is to ensure that ethical practices and concerns are addressed in the industry. This means that a construction company is bound by ethics to stay away from all unethical behaviors that may taint the company’s name. There is no justification to do the wrong things because that is what ethics is all about.

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Construction ethics surveys, as well as theories, have been put forward to examine how the construction industry deals with ethical behaviors. Research has shown that homeowners, engineers, architects, consultants, and even managers have experienced or witnessed unethical behavior within the industry. This clearly shows that the industry has a lot to do and deal with in terms of unethical behavior. It is also clear from the research that the workers in the construction industry participate in projects with unethical contractors because they do not have a choice. Other workers realize that the contractor is ethical or unethical when the project has already begun. It is evident that the industry does not put a lot of effort when it comes to construction ethics thus many companies are tainted with a bad image.

Many people in the industry practice illegal acts which include bribery, harassment, and alcohol abuse during working hours. In the construction sector, ethical behavior is determined by the quality of honesty and truthfulness that is portrayed by the company as well as how the people in the company conduct business in their everyday lives. One problem that poses a threat in the construction industry is the relationship that exists between the owners, general contractors, and subcontractors. The subcontractors who are at the lower level in the industry feel that they are subjected to unethical behavior more than all the other groups. The most critical issues they deal with include bid shopping, payment games, reverse auctions, over-billing, unreliable contractors as well as changeover issues. In most cases, the contractors withhold payments for the subcontractors even though they have received money on time thus creating a rift between them.

The other problem that is facing the industry is the issue of bid shopping. This mostly occurs when the solicited bids are revealed as a way to motivate the contractors to bring down their prices. This creates an edge between the owners and the contractors because what the contractor may perceive as unethical is not to the owners. The company should be able to do away with this issue by doing consultations with delivery techniques such as design-build as well as an integrated project. To avoid unethical behavior, the relationship between all the people involved should be strengthened for them to work as a team. The issue of reverse auctions brings a lot of controversy in the construction industry. This is viewed by some people as another form of bid shopping while others like the owners may feel it is good. This should also be examined well so that the issues can be sorted to avoid problems of dishonesty.

Overbilling is another issue that poses a threat to construction ethics. The subcontractors may feel that the contractors who withhold funds are the ones creating problems. Many professionals in this industry advise that the contractors especially the subcontractors should unbalance the bid of the project even though they may receive funds on time. This is because if they do not unbalance the bid, the difference in the money paid out and the money received in a project can be very large and hence may go unnoticed since most of the accounting systems may not identify this error. In this case, they may find they are financing labor and some other costs without being paid on time.

Unethical behavior also in the construction industry interferes with the cost of the projects being built. This is mainly because money is lost during the project in unethical behaviors that would have gone a long way to improve the company image. Companies that wish to improve the ethical policies should begin from the top with well-defined ideas with the help of senior management. Policies should be enacted with a vision in mind and rewards given to those who do not break the code of ethics as well as punishment for unethical behavior. (Parson)


Most companies do not make ethical issues a priority in their mission statement or even in the strategic plan. It is also clear that many construction companies do not have an ethical program at all. People in the company must undergo training to understand the ethical standards that have been set. Levels of warning should also be included in case people go against the ethical standards set. Clear and adequate policies should be set both to the owner and the contractor level. The construction company should also be enforcing ethical issues of justice, fairness as well as honesty.

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Works Cited

Parson, Ellen. The Construction Industry’s Ethical. 2005. Web.

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