A FRAMEWORK FOR UNDERSTANDING ILLEGAL BUSINESS ACTIVITIES, FROM COMPETITION TO CORRUPTION - THE CASE OF SNC LAVALIN

摘要

Markets go from early stages of entrepreneurial firms, linked to ecosystems to late stage value chains dominated by mature firms. In early stages, pure competition dominates with plenty of market space available to distance the firm from direct competitive pressures and whenever these pressures materialize, the firm can reposition somewhere else in the market and pursue its destiny based on its own competencies. As the market develops and firms start to mature, the competition is partially supplemented with cooperation. The first steps are taken towards common capabilities, or the grouping of several firms' competencies. When these capabilities harden by the time the market reaches the cluster stage, the informal coordination is slowly replaced by active and deliberate collaboration and the first prototype of the value chain emerges. By late stages when market boundaries firm up and the market growth is exhausted, the competitive game becomes a zero sum and firms start displaying strategies of harm towards each other. After a wave of massive M&A. the market is reduced to an oligopoly, where strategies of collusion start to happen. If these activities breach the principles of transparency and accountability, and are abetted by crumbling corporate values, corruption can take hold. This paper will explore the market conditions, external factors and societal tolerance that leads to active and contagious business corruption. We shall rely on the Canadian SNC-Lavalin case to illustrate many points.