The 2016 state capture report, conducted by the former Public Protector Thuli Madonsela, uncovered numerous cases of state capture, shedding light on instances where private interests unduly influenced government decisions and policies. At the core of state capture in South Africa was the involvement of an elite group of influential business people influencing the society (Myburgh 2017). As a result, state capture has weakened the governance processes and the developmental agenda in South Africa (Momokhere 2018). This is also coupled with the prevailing uncertainty that has already been happening within the business sector (De Koker & Du Plessis 2020). A response is required by businesses even to those factors not within their control, especially in view of the level of uncertainty (McIntyre 2018).

As a result of findings from the State Capture Commission, a nuanced response by different business sectors started to emerge. For instance, the first report led to a broad conversation within the accounting profession about the need to improve issues related to regulatory monitoring and compliance (Small 2022). One area of interest was the discussion around the efficacy and transparency of the tender system in South African society (Molepo 2024), particularly in relation to government contracts and procurement processes. Munzhedzi (2016) makes a broader argument about the need to monitor and strengthen public sector procurement capabilities, as these are possible outlets where corruption manifests. Monitoring the progress of the South African State Capture Commission becomes essential. Since the release of the Zondo reports, there has been a need for the public to continue monitoring interventions that promote the recommendations of the reports (Pienaar & Bohler-Muller 2023).

The literature makes three clarion calls, as informed by the release of reports from the South African State Capture Commission. Firstly, at a general global scale, there is an acknowledgement of the challenges posed by corruption to society (World Bank 2023). Growing calls are noted to not only understand the challenge of corruption but also enforce strategies as responses to such challenges (Leib et al. 2021). Secondly and related to the first point, a need exists to continually understand the nature of corruption in South African society to assist with improving aspects related to governance. Such an effort can include assessing the responses of varying sectors of society to the recommendations of the South African State Capture Commission (Dassah 2018). This is a noted issue internationally, and there are calls to understand how anti-corruption policies and responses can be implemented for society’s benefit (Castro & Gradillas-Garcia 2022). Thirdly, the construction industry in South Africa is argued as important in enhancing the competitiveness of the nation (Matarirano et al. 2019) and an important vehicle for local economic development (Construction Industry Development Board 2018). There are growing calls to understand how such sectors potentially contribute further to the ideals of the developmental state in view of the noted challenges related to corruption (Majikijela et al. 2025). The focus of this proposed research is on South African small businesses within the construction sector in view of these calls.

There is recognition of the need to study the impact of state capture on businesses. There is a lack of empirical research on the work of the Commission (especially from a cross-disciplinary perspective), offering a multi-layered interpretation of the work of the State Capture Commission. Therefore, this study has aimed to fill this gap by studying the impact of state capture on the construction business in East London, South Africa. Two objectives guided the study. Firstly, the study explored the understanding of the findings of the State Capture Commission from the vantage point of a sample of small business owner-managers in the construction sector. Secondly, the study also proffers suggestions for how South Africa can enhance the construction sector, informed by how small business owner-managers interpret recommendations from the State Capture Commission.

Regarding theoretical literature, this study focused on issues related to dynamic capabilities. The dynamic capability view suggests that firms and businesses must be responsive to an ever-changing world (Chwilkowska-Kubala 2019). In essence, dynamic capabilities explain why some organisations perform better than others when there is change (Zott 2003). Dynamic capabilities manifest in processes that happen in organisations, such as the formation of alliances, product development and strategic decision-making (Eisenhardt & Martin 2000). These capabilities are heavily influenced by changes happening in the business environment, resulting in opportunities and complexity as threats (McIntyre 2018). One such factor that potentially emerges as essential within the current business climate of South Africa is the role and influence of what has been described as state capture.

Another theoretical consideration for this study was the institutional theory of agency (Seal 2006). At the core of this theory is understanding how business responds to institutional arrangements and rules (Baldwin & Cave 1999). Through the institutional theory of agency, the argument is that businesses not only respond to regulatory change but also create structures in response to such change (Al-Hadi & Habib 2023). This may include putting processes and systems in place to ensure compliance with regulations and changes. In essence, such measures also assist in combatting any form of corruption or maleficence (Sarhan & Gerged 2023).

There is a growing body of research centred around the findings of the South African State Capture Commission (Swanepoel 2021). The range of these studies is prescriptive in view of the challenges unearthed by the South African State Capture Commission. For instance, general suggestions are made to resuscitate and recapitalise anti-corruption efforts in society (Pillay et al. 2023). Others call for the need for individuals and firms implicated through the South African State Capture Commission to be blacklisted and face criminal charges (Momokhere 2018).

Chipkin (2022) emphasises the need for the professionalisation of public service, citing it as a crucial factor in addressing the challenges stemming from state capture. Additionally, strategies are needed to strengthen governance structures to ensure effective and efficient service delivery, especially at the municipality level (Mudzusi, Munzhedzi & Mahole 2024). The clarion call from spheres of government is to foster corruption-combatting measures (Ferry, Funnell & Oldroyd 2023). Such measures potentially result in businesses also having what has been referred to as institutional logic in partnership with interest groups around the business as compliance with government regulation (Min, Chen & Tien 2022).

There is an acknowledgement that corruption exists as a context-influenced challenge (Vilanova, Milfont & Costa 2022). Given this, responses can only be contextually influenced to mitigate challenges that may emerge from corruption, especially within the business sector (Kang, Kim & Kim 2023). This can also be done by implementing corruption-combatting measures that ensure effective management controls (Musvota & Mukonza 2021). Several state-owned enterprises in South Africa have been encouraged to incorporate such measures (Soko 2022). This trend is also noted and argued for as crucial in other African countries (Kimani et al. 2021). The argument is that state-level regulations play a crucial role in influencing behaviours within the market, especially at a business level (Al-Hadi & Habib 2023). This responsibility also positions the state as a key driver in promoting governance standards that reach the business sector (Chen et al. 2024).

The study narrowed its focus to understanding how small businesses in the construction sector understand the findings of the State Capture Commission. This focus is important as there are growing calls for the need to expose how corruption, weak oversight and politicised procurement undermine fair competition and ethical governance in South Africa (Swanepoel 2021). Issues of governance, competition and competition are deemed important to the success not just of the construction but also the small business sector (International Monetary Fund 2023). Such a focus becomes helpful to assist in strengthening governance and accountability (Majikijela et al. 2025). From all this, nuanced responses can be proposed to combat corruption (Sargiacomo et al. 2024).

The findings of the State Capture Commission are deeply relevant to the South African small business construction sector, which depends heavily on public procurement and infrastructure projects. The Commission exposed how corrupt networks manipulated tendering processes, inflated contract values and sidelined legitimate emerging contractors (February & Mirzoyev 2024). These practices distorted fair competition and undermined transformation efforts intended to empower small, Black-owned enterprises. Understanding these dynamics is essential for construction small, medium and micro enterprises (SMMEs) seeking to align with ongoing procurement reforms and to operate transparently within a recovering governance environment (Martinez & Pfister 2023). The desired focus is the need to re-build integrity in procurement systems that can enhance access for smaller firms while curbing corruption risks that drive inefficiency and financial exclusion (International Monetary Fund 2023).

The government’s implementation of Zondo recommendations, such as digitalising tenders and professionalising oversight, presents both compliance obligations and new opportunities for ethical small businesses (Swanepoel 2021). Thus, engaging in the Commission’s findings is not merely a moral duty but a strategic imperative. For the construction sector, the need is to re-build credibility, secure equitable participation and contribute to a fairer, more sustainable post-capture economy. All these are ideals not just for good governance (Majikijela et al. 2025) but also ‘a driver for socio-economic development’ (South African Department of Trade and Industry 2023:2).

The study relied on the use of a non-probability sample of small business owner managers operating in the construction sector in the local economies of the Eastern Cape Province of South Africa. The sample was drawn from delegates attending a national construction sector summit in East London, South Africa. A total of 25 participants took part in the study. Inclusion criteria existed for taking part in the research.

Firstly, the participants in the study had to occupy a decision-making capacity on behalf of their firm. This is consistent with previous research where this capacity is deemed crucial in making sure that participants in a study are aware through experience of the phenomena the research is about. For this study, the use of small business owner managers was deemed suitable in terms of decision-making capacity.

Secondly, all delegates to the national construction sector summit were recruited from the session focussed on the small business sector. The definition adopted of the small business sector encompassed the guidelines as set by the National Small Enterprise Act (Act No. 102 of 1996, amended in 2004) and the Government Gazette No. 42304 (2019) that an enterprise is classified as small based on its number of full-time employees, annual turnover and gross asset value. Focussing on the construction sector, this would include small businesses that consist of sub-contractors, artisans, builders, electricians, plumbers and project managers who play a vital role in local infrastructure development and employment creation (Construction Industry Development Board 2024). Thirdly, all participants to the study had to be based in any of the local economies of the Eastern Cape Province of South Africa. Table 1 shows a description of the 25 participants who took part in the study, including some of their biographical characteristics.

Interview questions were created informed by a reading of the literature, which generally referred to an understanding of state capture as a society-wide challenge. The interview guide was structured following a three-fold strategy. Firstly, questions sought to establish a general understanding of what state capture means for small business owner managers. Secondly, the interview guide explored how small business owner managers were affected by the idea of state capture. Thirdly, a round of questions was formulated to solicit responses on how the small business owner-managers would like recommendations from the State Commission Report to be implemented.

Interviews lasted between 45 and 60 min and were conducted on the sidelines of the national construction sector summit in East London. A total of 10 interviews were conducted during the week-long event, and the other 15 interviews were conducted online over 3 months. Interview data were recorded with permission from the participants.

Firstly, ensuring data integrity was the recording of data. This process assisted in having a point of reference to transcribe all data in preparation for the data analysis. Secondly, interview transcripts were sent to the participants to confirm that the transcriptions were an accurate recording of what had been said. This also allowed for participants to add or remove any information. Thirdly, the research attempted to space the data collection over 4 months, allowing for time to be able to collect data, including the work of transcribing the data.

A qualitative thematic analysis approach was utilised. Over the 8 months of data collection, the interviews were transcribed soon after each interview. The transcripts were then entered into the qualitative solutions and research (QSR) NVivo 9 data analysis and management software (Reuben & Bobat 2014). The software was used to code each of the transcripts’ paragraphs into themes and sub-themes. The coding was done using the participants’ own words wherever possible. However, the researchers relied on more than just the software to develop the themes. Thematic analysis was utilised to analyse the qualitative data by identifying and examining common patterns within the data using widely established norms (Braun & Clarke 2006). In analysing the data through thematic analysis, the six steps advocated in the literature (Braun et al. 2019) were utilised, as shown in Table 2.

An application for full ethical approval was made to the University of Fort Hare Institutional Inter-Faculty Human Research Ethics Committee and ethics consent was received on 22 March 2024. The ethics approval number is CHI001-24. All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki Declaration and its later amendments or comparable ethical standards. The researchers complied with regulations stipulated that include written informed consent, the right of participation and confidentiality and anonymity of the research participants. The researcher sought to avoid prejudice and ensure all participants enjoyed equal rights and participation in this critical project. Pseudonyms were used to avoid identifying the participating individuals and their small businesses.

Participants in the study pointed to the need for continued efforts to establish and enforce a code of practice for the construction sector and how it interacts with government. This appears to emerge from recommendations that also came out of the State Capture Commission. One participant expressed this as something needed, especially where big projects are being put in place:

Another participant also expressed the need to establish and enforce an ethical code, given the changes happening in the construction sector:

The enforcement of the ethical code, in the view of some of the participants, was not happening. Probed on why this was so, participants flagged the existence of a ‘smoke screen’ effect:

Table 3 reports on additional quotes supporting narrative one with a common thread of appreciation of existing edicts and an ethical code. Table 3 also illustrates concerns around the need for the enforcement of such.

The second theme shows that it is important to create clear ways for people to report ethical rule violations without giving their names. A common feature of such reporting concerned the necessity for anonymity:

Related to the point of anonymity, others called for the need to protect those who blow the whistle in exposing construction sector corruption cases:

And another participant added:

Table 4 reports on additional quotes supporting thematic finding two, linking how the State Capture Commission model could assist in enhancing not just the exposure of corruption but also protecting those who expose such corruption.

The third theme that emerged from the data highlights the need to establish a framework for ethical practices, especially concerning procurement issues. Participants in the study flagged the need to improve aspects related to procurement. A consensus was first an appreciation of the importance of a ‘well-oiled’ procurement process, especially within the construction sector:

Participants also cited the challenge related to procurement, especially when dealing with the state. Most of the perceptions around dealing with the state appear to show a level of mistrust as to the transparency of the process of procurement:

Concerning procurement, participants also flagged challenges of doing business with the government. Many of the construction firms taking part in the study cited the government as their primary client. The perennial challenges of the government taking too long to pay were flagged. However, the possibility of government officials’ interference with the procurement process, especially the tender process, was an issue of concern:

Table 5 reports on additional quotes supporting finding three.

The third theme emphasises the importance of ensuring transparency and fairness in the sourcing process, which can significantly impact organisational integrity and stakeholder trust, ultimately fostering a culture of accountability within procurement activities.

The study contributes to the growing body of literature seeking to understand issues related to the State Capture Commission. This contribution is in line with a range of international calls made through exposing case experiences of how state capture has happened in these countries (Sargiacomo et al. 2024). The research exposes the sense-making around the findings of the State Capture Commission from an essential sector, namely that of construction (Martinez & Pfister 2023). In driving towards the construction sector being a crucial socio-economic player as espoused (South African Department of Trade and Industry 2023), the findings magnify aspects of how the sector can be improved to achieve this ideal.

Drawing from the study findings, several implications can be proposed. Firstly, there is a need to continuously prioritise the conversation around state capture by embedding it within public discourse, professional training and policy review processes. This entails sustained engagement between government, business and civil society actors to reflect on lessons from the State Capture Commission, ensuring that ethical governance becomes a routine agenda item rather than a reaction to crises (Chipkin 2022). Secondly, incorporating the principles and findings of the Commission into organisational ethics frameworks, procurement guidelines and capacity-building initiatives can cultivate institutional memory that discourages systemic abuse of power (Mudzusi et al. 2024). Thirdly, higher education institutions, industry associations and regulatory bodies can integrate case studies and training modules on state capture into their curricula and professional development programmes, nurturing a new generation of ethical leaders (Min et al. 2022). Fourthly, continuous public reporting and civic dialogue around anti-corruption reforms will help sustain vigilance, transparency and accountability, thereby insulating the construction sector and broader public institutions from the recurrence of capture-like dynamics.

The study has limitations. The chosen sample consisted of owner-managers of construction firms operating in the Eastern Cape Province of South Africa. However, the sample is not representative of all construction firms in the Eastern Cape Province or even nationally. Secondly, participants were asked to reflect on the State Capture Commission and its implications for the construction sector. Directly, the State Capture Commission saw an interplay of state-owned enterprises and the context in which they worked. The experiences of the construction sector owner managers who took part in this study were not directly affected by the issues at play at the State Capture Commission. Thirdly, qualitative studies are usually subjective. Based on these limitations, caution should be exercised when interpreting the findings of this study.

Based on the findings of the study, future research can be proposed. Firstly, even within the construction sector, a need exists to widen the reach. This could, for instance, be done by conducting a national study aimed at understanding the issues. Secondly, future research could be conducted in other sectors of business. Thirdly, future research could also narrow its focus on understanding how public management processes and practices can be used to enable a culture of business. This can include ascertaining the strategies in place within the public management context, including the role of municipalities in fighting elements of corruption. Future research could also explore the governance mechanisms needed to make sure that those things exposed by the State Capture Commission do not happen again.