Management Fraud - Its Social Psychology and Relation to Management Practices (From Management Fraud, P 171-184, 1980, by Robert K Elliott and John J Willingham - See NCJ-70386)

• NCJ Number: 70392
• Author(s): M M Greller
• Date Published: 1980
• Length: 14 pages
• Sale Source: PBI
• Language: English
• Country: United States of America

Annotation

Social psychology perspectives of management fraud are discussed, and suggestions for detecting and deterring it are provided.

Abstract

Donald Cressey has identified two factors related to fraudulent business behavior-- a perceived unshareable problem and a supporting rationalization for the illegal behavior. Such factors have implications for the individual-organization relationship in any discussion of how to deter management fraud. The atmosphere of an organization frequently discourages the sharing of personal problems. By placing a premium on competency and a negative value on problem-creating behavior, companies may discourage the dynamics of psychological support and mutual aid in problem sharing between employees. The alienation of the potential fraud perpetrator may therfore be reinforced by the pattern of individual-organization relationships. A condition of alienation between employee groups and the general organization may also foster rationalizations in support of fraud against the company by groups of perpetrators. Fraud for the company is supported when reinforcements for employee loyalty, aggressiveness, and teamwork are used to feed rationalizations for illegal business tactics. In such an atmosphere, anything done in the company interest (profitmaking) is labeled 'good.' Given the role of the dynamics of individual-organization relationships in affecting employee behavior, fraud deterrence strategies should aim at creating in businesses positive reinforcement for nonalienating behavior and the channeling of employee aggressiveness and loyalty to the company within appropriate ethical and legal mandates. Footnotes are provided.