Based on evidence from press articles covering 39 corporate fraud cases that went public during the period 1992-2005, the objective of this article is to examine the role of managers' behavior in the commitment of the fraud. This study integrates the fraud triangle (FT) and the theory of planned behavior (TPB) to gain a better understanding of fraud cases. The results of the analysis suggest that personality traits appear to be a major fraud-risk factor. The analysis was further validated through (...) a quantitative analysis of keywords which confirmed that keywords associated with the attitudes/rationalizations component of the integrated theory were predominately found in fraud firms as opposed to a sample of control firms. The results of the study suggest that auditors should evaluate the ethics of management through the components of the TPB: the assessment of attitude, subjective norms, perceived behavioral control and moral obligation. Therefore, it is potentially important that the professional standards that are related to fraud detection strengthen the emphasis on managers' behavior that may be associated with unethical behavior. (shrink)

To date, theory and research on corruption in organizations have primarily focused on its static antecedents. This article focuses on the spread and growth of corruption in organizations. For this purpose, three downward organizational spirals are formulated: the spiral of divergent norms, the spiral of pressure, and the spiral of opportunity. Social Identity Theory is used to explain the mechanisms of each of these spirals. Our dynamic perspective contributes to a greater understanding of the development of corruption in organizations and (...) opens up promising avenues for future research. (shrink)

In researching women’s involvement in economic crime, the concept of the ‘economic’ is problematic. Women’s crime for economic gain and women’s crime in economic terms are inadequately catered for. In reviewing criminologists’ uses of the notion of ‘economic crime’ I suggest that criminological understandingin relation to crime for economic gain is poor and that gender freedom/blindness/specificity variously operate. This article provides an original feminist reading of contemporary work on crime and markets and rational choicetheory and relates this to feminist economic (...) critiques in order to achieve agendering of the economy. The broad aims of the article are to illustratethe problematics of economic classifications and definitions in criminologyand to mount an argument that suggests the whole notion of the economic within criminology demands (feminist) critique. (shrink)

Research has found many positive benefits to person‐organization (PO) fit, for both individuals and the organization. However, PO misfit has received far less attention in the literature. In this article, we look specifically at PO misfit caused by the differing political values and beliefs of the CEO and employee. We argue that CEO activism influences employee perceptions of ideological misfit (IM), whereby differing political beliefs between employees and their activist CEO can impact workplace outcomes. We consider how peer group reactions, (...) ethical climate, external needs fulfillment, and moral identity serve as boundary conditions for perceptions of PO misfit and related organizational outcomes. We also examine antecedents of CEO activism. Drawing on academic literature from both the micro and macro perspectives of management research, we introduce a conceptual model and discuss implications for the firm and its employees. (shrink)

This study explores how financial executives retrospectively account for their crossing the line into financial statement fraud while acting within or reacting to a financialized corporate environment. We conduct our investigation through face-to-face interviews with 13 former C-suite financial executives who were involved in and indicted for major cases of accounting fraud. Five different themes of accounts emerged from the narratives, characterizing executives’ fraud immersion as a meaning-making process by which the particulars of the proximal social context and individual motivations (...) collectively molded executives’ vocabularies of fraud immersion. Our executives’ narratives portray their fraud entanglement as typically occurring in small, incremental steps. Their accounts expand our understanding of the influence of socialization on executive-level financial fraud beyond the individualized focus of the fraud triangle model. (shrink)

Recent scandals in the business world have intensified the demand for an explanation of the causes of corporate wrongdoing. This study empirically tests the effects of mutual fund management fees and control structures on the likelihood of illegal activity within mutual fund organizations. Specific attention is given to the presence of agency duality issues in the mutual fund industry and how this influences the motivations and decisions of fund managers. Findings provide support for the hypothesized relationship that higher levels of (...) management fees decrease the likelihood of illegal behavior. Additionally, control of the mutual fund by external management is found to have a negative impact on the likelihood of illegal activity while also acting as a moderator of the management fee-illegal behavior relationship. (shrink)

Organizations continue to show renewed focus on managing their ethics programs by developing organizational infrastructures to support their ethics implementation efforts. An important part of this process has been the creation of an ethics officer position. Whether individuals appointed to the position are successful in the role or not may depend on a number of factors. This study presents a suggested framework for their effectiveness. The framework includes a focus on personal, organizational and situational factors to predict performance in the (...) role. The study examines the complex nature of the role. These include task complexity, low task visibility, role conflict, and role ambiguity. Personal, organizational and situational factors that can serve as buffers against the complexities associated with the role are presented. The study suggests that individuals with certain competencies and orientations may be better suitable for the ethics position, and firms need to consider key organizational and situational issues critical to the performance of an ethics officer. The research and practice implications of the study are given. (shrink)

This paper addresses the problem of how scientific knowledge, which is always locally generated, becomes accepted in other sites. The analysis suggests that there are a small number of strategies that enable scientists to resituate knowledge and that these strategies are generic: they are not restricted to specific disciplines or modes of doing science but rather are found in a variety of different forms across the sciences.

This paper presents a comparative analysis of three American and three European corporate failures. The first part of the analysis is based on a theoretical framework including six areas of ethical climate; tone at the top; bubble economy and market pressure; fraudulent financial reporting; accountability, control, auditing, and governance; and management compensation. The second and third parts consider the analysis of these cases from fraud perspective and in terms of firm-specific characteristics and environmental context. The research analyses shed light on (...) the fact that, despite major differences between Europe and U.S. in terms of political institutions, laws and regulations as well as managerial practices, there are significant similarities between six groups. The analysis also demonstrates that, the ethical dilemma has been coupled with ineffective boards, inefficient corporate governance and control mechanisms, distorted incentive schemes, accounting irregularities, failure of auditors, dominant CEOs, dysfunctional management behavior and the lack of a sound ethical tone at the top. Significant similarities were also observed in the analysis from the fraud triangle perspective. However, there are several major differences between the six corporate failure cases particularly with regard to ownership structure, coverage in media, and legal, regulatory and governance frameworks. This research study may have several academic and practical contributions, particularly because of multidisciplinary, international features, and comparative analyses used in the paper. (shrink)

Critiques of case studies as an epistemic genre usually focus on the domain of justification and hinge on comparisons with statistics and laboratory experiments. In this domain, case studies can be defended by the notion of “infirming”: they use many different bits of evidence, each of which may independently “infirm” the account. Yet their efficacy may be more powerful in the domain of discovery, in which these same different bits of evi- dence must be fully integrated to create an explanatory (...) account with internal validity. (shrink)

This paper presents the results of an empirical study of attitudes towards ethical questions in business life among managing directors. They study covers more than 240 Swedish firms of all sizes, from different lines of business, and it is based on a solid theoretical framework. It should be seen as a part of the author''s effort to develop a model explaining ethical organizational behaviour. Among the most important conclusions of the study is the concept of corporate moral view. It seems (...) possible to distinguish between the humanitarian morality versus the organizational morality, depending on who''s interests the decision maker prefers to take in a moral dilemma. (shrink)

Using a 2×2×2 experimental design, the effects of situational and individual variables on individuals' intentions to act unethically were investigated. Specifically examined were three situational variables: (1) quality of the work experience (good versus poor), (2) peer influences (unethical versus ethical), and (3) managerial influences (unethical versus ethical), and three individual variables: (4) locus of control, (5) Machiavellianism, and (6) gender, on individuals' behavioral intentions in an ethically ambiguous dilemma in an work setting. Experiment 1 revealed main effects for quality (...) of work experience, Machiavellianism, locus of control, and an interaction effect for peer influences and managerial influences. Experiment 2 showed main effects for all three situational variables and Machiavellianism. Neither experiment supported gender differences. Limitations, future research, and implications for management are discussed. (shrink)

Straipsnyje aptariami filosofiniai, istoriniai ir socialiniai korupcijos aspektai. Autoriai tiria, kaip korupciją suvokia skirtingos baudžiamojo teisingumo paradigmos – klasikinė, pozityvistinė ir konstrukcionistinė, kuriose korupcija atitinkamai interpretuojama kaip yda ir nuodėmė, blogas elgesys arba konfliktas tarp viešojo ir privataus intereso. Straipsnyje pateikiama analizė leidžia formuluoti išvadą, kad korupcijos kriminalizacija turi savo teisinę logiką ir yra priklausoma nuo konkretaus socialinio bei kultūrinio konteksto, todėl negali būti laikoma universaliu viešųjų ir privačių interesų konfliktų sprendimo įrankiu.

In this paper, we investigate a large-scale financial statement fraud to better understand the process by which individuals are recruited to participate in financial statement fraud schemes. The case reveals that perpetrators often use power to recruit others to participate in fraudulent acts. To illustrate how power is used, we propose a model, based upon the classical French and Raven taxonomy of power, that explains how one individual influences another individual to participate in financial statement fraud. We also provide propositions (...) for future research. (shrink)

Finance programs around the world have been revising their curricula following the Global Financial Crisis (GFC). While much of the debate has centred on the dominance of scientific and quantitative pedagogical approaches to finance education in business schools, one of the most egregious aspects uncovered during the deleveraging of the financial system was the scale and scope of finance crime and financial fraud (including the Madoff scandal, described as the largest Ponzi scheme in history). This paper argues that those “on (...) the inside”, the professionals within the finance industry, have a central role to play in safeguarding the ethics and integrity of financial markets. It is our conjecture that prevention and earlier detection of finance crime and financial fraud may be addressed, in part, by better educating finance professionals about these issues. We posit that the enormity of illegal activity uncovered in the wake of the GFC demands, as a matter of priority, the integration of criminological and criminal justice theory into the finance curriculum. (shrink)

The prevalence of white-collar crime casts a long shadow over discussions in business ethics. One of the effects that has been the development of a strong emphasis upon questions of moral motivation within the field. Often in business ethics, there is no real dispute about the content of our moral obligations, the question is rather how to motivate people to respect them. This is a question that has been studied quite extensively by criminologists as well, yet their research has had (...) little impact on the reflections of business ethicists. In this article, I attempt to show how a criminological perspective can help to illuminate some traditional questions in business ethics. I begin by explaining why criminologists reject three of the most popular folk theories of criminal motivation. I go on to discuss a more satisfactory theory, involving the so-called “techniques of neutralization,” and its implications for business ethics. (shrink)

Abstract:Vice is a neglected concept in business ethics. This paper attempts to bring vice back into the contemporary dialogue by exploring one vice that is destructive to employee and organization alike. Interestingly, this vice was first described by Aristotle asakolastos. Drawing extensively on the criminology literature, the findings challenge both common sense and popular images of white-collar crime and criminals. While not all instances of employee betrayal are attributable to vice, some most certainly are, and the paper offers a description (...) of those violations of trust in which vice may play a role. (shrink)

Abstract:This essay examines how normative theories of enterprise can be strengthened by incorporating the empirical study of motivation into the theory-development process. The link between moral conduct and motivation in the literature is reviewed, the framework for Motivational Appeal Analysis introduced and applied, and implications for theory and research are discussed.

. Moral innatism, connatural ideas, and impuissance in daily affairs: James Q. Wilson's acrobatic dive into an empty pool. Criminal Justice Ethics: Vol. 13, No. 2, pp. 77-82.

This paper introduces a new conceptual framework for studying moral climate in business firms, offering an alternative to other theoretical models currently in the literature. The framework integrates recent advances in organizational climate theory into a new conceptualization of the moral climate construct that explains how moral climates evolve in organizations and suggests moral climate change.

One of the most significant developments in the latter part of the 20th century and the first part of this new millennium has been the triumph of short-term over long-term thinking. We are increasingly a culture that looks neither to the past nor to the future, but only to the next “quarter,” or to the next Delphic pronouncement by Alan Greenspan. This cultural construction of time has given rise to social, political and personal problems of unprecedented magnitude. The short-term focus (...) of contemporary American capitalism is causing us to behave, both individually and collectively, in an increasingly irrational and thus self-destructive manner. Ours is now the most violent, crime-ridden society in the industrialized world. Capitalism is sometimes blamed for this, yet there are other capitalist societies that do not suffer the same evils we suffer. I argue that we can learn from these societies how to correct some of the ills of our own system and in this way construct a new paradigm of the market, a paradigm for the new millennium, a more mature, rational version of capitalism that would focus on the long rather than the short term. (shrink)

This article analyses the reconceptualization of the notion of “internal enemy” in the 21st century, as well as the current reconfigurations of the use of criminal law of the enemy as a mechanism of repression, criminalization and punishment of social movements in Guatemala, thus raising questions and argumentative lines that could also be applied to other Latin American countries. The analysis relies on the role played by the monopoly of "legitimate" violence in the reason of the State, as well as (...) on the increasing relevance of multinational corporations and their “lex mercatoria” against the sovereignty of the State, not just as mere economic agents, but as forms of political authority. _Received_: 04 September 2019 _Accepted_: 24 February 2020 _Published online: _Articles in press 03 April 2020; No. 5 26 June 2020. (shrink)

Individual and/or co-offenders fraudulent activities can have a devastating effect on a company’s reputation and credibility. Enron, Xerox, WorldCom, HIH Insurance and One.Tel are examples where stakeholders incurred substantial financial losses as a result of fraud and led to a loss of confidence in corporate dealings by the public in general. There are numerous theoretical approaches that attempt to explain how and why fraudulent acts occur, drawing on the fields of sociology, organisational, management and economic literature, but there is limited (...) empirical evidence published in accounting literature. This qualitative inductive study analyses perceptions and experiences of forensic accountants to gain insights into individual fraud and co-offending in order to determine whether the conceptual framework developed from literature accurately depicts the causes of fraud committed by individuals and groups in the twenty-first century. Findings from the study both support and extend the conceptual framework, demonstrating that strain and anomie can result in fraud, that deviant sub-groups recruit and coerce members by providing relief from strain, and that inadequate corporate governance mechanisms both contribute to fraud occurring, and provide the opportunity for fraudulent activities to be executed and often remain undetected. Additional factors emerging from this study were also identified as contributors to fraud, particularly relevant to the twenty-first century, and consequently, a refined conceptual framework is presented in the discussion and conclusion to the paper. (shrink)

We examine crime that emerges from the global restructuring of agriculture and food systems by employing the case of the Australian “Ship of Death,” whereby nearly 58,000 sheep were stranded at sea for almost 3 months in 2003, violating the Western Australia Animal Welfare Act of 2002. This case demonstrates that the acceleration of transnational trade networks, in the context of agri-food globalization, victimizes animals and constitutes a crime. Herein, we examine this case in depth and show how economic restructuring, (...) driven by a “logic of capital” orientation, can exert pressure on the state causing it to fail to enforce its own regulations and in this way engage in criminal actions. (shrink)

Secrecy and “social cocooning” are critical mechanisms allowing the normalization of corruption within organizations. Less studied are processes of normalization that occur when corruption is an “open secret.” Drawing on an empirical study of Greek public-sector organizations, we suggest that a second-order normalization process ensues among non-corrupt onlookers both inside and beyond the organization. What is normalized at this level is not corruption, but its tolerance, which we disaggregate into agent-focused tolerance and structure-focused tolerance. Emphasizing the importance of non-corrupt bystanders, (...) we claim that second-order normalization helps corruption persist in situations where its presence is openly acknowledged. This adds an important new dimension to normalization theory and we unpack its implications for both future research and practice in this area. (shrink)

Fraud literature suggests that the presence or absence of fraudulent intentions can be assessed by a close scrutiny of human behaviour. This can help identify prospective fraud perpetrators. Given this consideration, the present study qualitatively explores the observations and views of people who have personally investigated or closely observed a fraud/fraudster. Twenty-six interviews help condense a checklist of behavioural red flags of fraud. The themes of strong ambition, social aloofness, extended working hours, dissatisfaction with current job, justifying unethical behaviour, personal (...) problems and living standard disproportionate to current means are central to the articulations of the experiences of the respondents. Findings of the study have been integrated with the theory of the fraud triangle. This research displays the complementarity between a primary data based ex-post analysis of the behaviour of fraud perpetrators and existing literature on the subject. The results are likely to help improve professional standards related to frauds, both from an organizational and regulatory perspective. (shrink)

This research, relying on companies continuously listed on the Fortune 500 over a five-year period (n=384), provides an empirical assessment of two hypotheses. Based on 334 violations over the period the results indicate: (1) gross differences in illegal activity based on corporate size, and (2) similar differences in corporate recidivism also based on size. Discussion includes a number of size related dynamics which may account in part for such results.

ABSTRACT:We combine prior research on ethical decision-making in organizations with a rational choice theory of corporate crime from criminology to develop a model of corporate offending that is tested with a sample of U.S. managers. Despite demands for increased sanctioning of corporate offenders, we find that the threat of legal action does not directly affect the likelihood of misconduct. Managers’ evaluations of the ethics of the act, measured using a multidimensional ethics scale, have a significant effect, as do outcome expectancies (...) that result from being associated with the misconduct but not facing formal sanctions. The threat of formal sanctions appears to operate indirectly, influencing ethical evaluations and outcome expectancies. Obedience to authority also affects illegal intentions, with managers reporting higher prospective offending when they are ordered to engage in misconduct by a supervisor. (shrink)

The subprime mortgage crisis which was caused to a large degree by questionable mortgage lending and securitization practices that were furthered by deregulatory policies devastated the economy, led to large scale unemployment, and caused the foreclosure of millions of homes. There is evidence that numerous mortgage companies, financial firms, rating agencies, and high-level professionals were involved in unethical and often fraudulent business practices leading to the most severe economic meltdown since the Great Depression. In spite of the great economic and (...) social harm, there was a lack of criminal sanctions against those companies and individuals, who were involved in creating the crisis that reached even global dimensions. This article analyses the reasons for and the possible social impacts of the lack of criminal sanctions against those who crossed the line between unethical and criminal business practices. (shrink)

ABSTRACT:We combine prior research on ethical decision-making in organizations with a rational choice theory of corporate crime from criminology to develop a model of corporate offending that is tested with a sample of U.S. managers. Despite demands for increased sanctioning of corporate offenders, we find that the threat of legal action does not directly affect the likelihood of misconduct. Managers’ evaluations of the ethics of the act, measured using a multidimensional ethics scale, have a significant effect, as do outcome expectancies (...) that result from being associated with the misconduct but not facing formal sanctions. The threat of formal sanctions appears to operate indirectly, influencing ethical evaluations and outcome expectancies. Obedience to authority also affects illegal intentions, with managers reporting higher prospective offending when they are ordered to engage in misconduct by a supervisor. (shrink)