Integrity as Performance Increasing Factor within the Real Estate Industry

Abstract

Integrity is a performance-increasing factor – also in the real estate industry! This positive view is in contrast to widespread beliefs since the adherence to moral and ethical standards is frequently seen as a performance costing aspect. Even if it is clear to people that honesty and soundness of moral character is desirable in a perfect world, certain ‘compromises’ might be seen as necessary to achieve personal and business targets. Therefore, sticking to restricting ethical standards would reduce the range of options and consequently performance. However, in a dynamic setting of interactions there is a different outcome to the performance effect of integrity: As Michael C. Jensen put it: “Integrity: Without it nothing works”. This is due to new opportunities that would not exist without integrity. Real estate is an industry linked with corruption scandals. In studies of the watchdog organization, Transparency International, the real estate industry scores high in the “Bribe Payers Index”. Consequent-ly, the industry has to increase its efforts in strengthening the integrity of its participants. This paper examines the real estate situation and why parts of the industry might be prone to lack of integrity. Furthermore, it is discussed how to establish and foster integrity despite an embedded challenge: Integrity is invisible. Most capabilities and skills can be learnt through observation and imitation. However, what you cannot see, you cannot imitate. Consequently, education is central to address this issue and to increase awareness and understanding. Professional bodies have also to address this issue and to support lifelong education to ensure its members’ integrity.