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How can we explain the unresponsiveness of Internal Audit (IA) amid signs that fraud is arising and spreading within an organization? Internal auditors are entrusted with the formal responsibility of sounding the alarm about the risk of fraud and organizational wrongdoing. However, internal auditors failed to respond as the cross-sell fraud at Wells Fargo’s Community Bank (CB) Division unfolded over more than a decade, growing into a massive, full-fledged scandal. We examine IA as a profession and explore how the interpretation of three classic tenets of auditing (scope, compliance and materiality) may enable organizational wrongdoing to fester unattended until it erupts into yet another scandal. We conclude with implications for the socialization and practice of internal auditors, emphasizing the need for reflexivity and moral judgment in the interpretation and application of tenets so deeply ingrained in the IA profession.

Unethical leadership represents one of the most serious obstacles to the development of organizations and societies. Although a range of empirical studies have investigated unethical leadership behaviour in different contexts, studies on this issue are almost non-existent within the Algerian context. This study aims to explore the role of social and organizational factors in shaping unethical leadership behaviour within Algerian public organizations.

A series of in-depth interviews were conducted with 15 leaders from public organizations. The collected data were analysed using a thematic approach with ATLAS.ti 8 software.

The reported social and organizational factors fall into five themes: social values, organizational culture, corruption, peer influence and political environment.

Given the grave consequences of unethical leadership behaviour, this study contributes to our understanding of the role of social and organizational factors in shaping unethical leadership behaviour in an understudied context. This can help in mitigating the factors that lay the ground for these destructive and unethical behaviours in public organizations.

Focusing on the individual unit of analysis, we explore how workplace identification can explain why individuals engage in unethical behavior that benefits an organization (unethical pro-organizational behavior; UPB). Social identity theory (SIT) stipulates that we want membership within high status organizations and, at extreme levels, may put the organization’s needs above all else. In taking a holistic approach to identification, we investigated how a strong occupational identification can mitigate this desire to unethically help an organization; occupations are a separate identity source and contain codes of conduct that guide ethical behavior. Utilizing a sample of 236 accountants and financial professionals, results indicated that organizational identification and occupational identification alone did not significantly predict UPB, however, the interaction of these identities did. More specifically, organizational identification significantly positively predicted UPB only when occupational identification was extremely low in strength. This effect was found after controlling for relevant personality and cognitive mechanisms related to unethical behavior. Implications for a multidimensional identification view of unethical behavior are discussed.

This study aims to build on the well-documented case of the Olympus scandal to dissect how social networks and corporate culture enabled corporate elites to commit fraud across multiple generations of leaders.

A flexible pattern matching approach was used to identify matches and mismatches between behavioural theory in corporate governance and the patterns observed in data from diverse sources.

The study applies the behavioural theory of corporate governance from different perspectives. Social networks and relationships were essential for the execution of the fraud and keeping it secret. The group of corporate elites actively created opportunities for committing misappropriation. This research presents individuals committing embezzlement because the opportunity already exists, and they can enrich themselves. The group of insiders who committed the fraud elaborated the rationalizations to others and asked outside associates to help rationalise the activities, while usually individuals provide rationalizations to themselves only.

The social processes among actors described in this case can inform the design of mechanisms to detect these behaviours in similar contexts.

This study provides both perspectives on the fraud scandal: the one of the whistle-blowers, and the opposing side of the transgressors and their associates. The extant case studies on Olympus presented the timeframe of the scandal right after the exposure. The current study dissects the events during the fraud execution and presents the case in a neutral or a negative light.

Researchers and practitioners recognize whistleblowers and the media as disparate control agents to uncover fraud and corruption in and by organizations. However, whistleblowing is mainly studied in relation to individual and organizational antecedents. Social norms and in particular the media as a form of social norm influence or norm conveyer on whistleblowing are largely unexplored. In this paper, I study the influence of perceived critical media coverage (i.e., whether media are perceived as criticizing fraud and corruption) on whistleblowing intentions (WBI) on fraud and corruption. I draw on norm activation theory to develop a moderation-mediation model of whistleblowing to highlight how the media can convey social norms influencing WBI. Using a cross-national survey of employees from China, Germany, and Russia (n = 1,159), I hypothesize and find that media directly influence employee attitudes toward fraud and corruption as well as the likelihood to whistle blow. Critical media coverage also reduces the influence of descriptive norms by co-worker misconduct on attitudes and the negative influence of fear of retaliation on WBI. This paper is the first to highlight the importance of critical mass media on whistleblowing decisions. My findings suggest that the media influence potential whistleblowers in a way that can be described along the lines of “I report if they report.”

This paper aims to challenge the fashion of ubiquitous artificial intelligence (AI) and the effects which it will have upon society. In doing so it argues that the effects of AI will be minimal but important.

This argument is based upon the Socratic method and explores the Utilitarian background in which AI is based while drawing upon classical literature and other examples to illustrate the argument.

The findings are encompassed in the argument and show that we need to be more open and careful when considering AI and its effects. We also need to be more realistic when considering potential benefits.

This argument has significant implications for the adoption of AI.

The social implications are equally profound and will impact upon our application of AI solutions to current problems and upon humanity more generally.

This is the first paper which relates AI to human successes.

When organizations engage in misconduct, social control agents play a crucial role in sanctioning them to show the enforcement of societal norms and reduce the risk of future deviance. We study the interaction between the government and the media, two key social control agents, in the evaluation organizational misconduct. While past work has focused on the influence of the media on the government, we theorize the influence of the government on the media. The government is a social control agent with supreme formal authority to punish misconduct, and thus its actions are of particular interest to the media as they form evaluations of misbehaving organizations. However, the government, tied by conflicting demands, sometimes turns a blind eye to misconduct and supports misbehaving organizations for the greater societal good, instead of punishing them. How is the media’s perception of misbehaving organizations affected by such government actions? We explore this question by looking at the case of the 2008 government bailout of investment banks in the United States, after those were caught red-handed for their involvement in the sub-prime financial crisis. Carrying out a content analysis of newspaper reporting (2007–2011), we show that the negative perception of investment banks and their misconduct is attenuated when they receive government support. Our work contributes to the emerging literature on the social construction of organizational misconduct and illuminates the interaction between government and media in the evaluation of behavior as organizational misconduct.

A growing number of organizational scandals, including Apple slowing old devices to increase the sales of new ones, and research on unethical pro-organization behaviors (UPBs) have heightened the need to explore the phenomenon. Extending the current understanding, the study's major purpose is to investigate individual-level factors that may shape their willingness to engage in UPBs. It also inquires whether moral disengagement processes influence this association.

After testing the reliability and validity of the latent constructs and ensuring common method bias did not contaminate the data, the study used the PLS-SEM approach to analyze the primary data collected from 408 full-time Pakistani employees.

Results add to the current understanding by revealing that individual-level dark factor Machiavellianism (MACH) significantly influences employees' willingness to engage in UPBs. Accordingly, affective commitment is another individual-level factor that encourages employees to be a part of UPBs. Lastly, results unveil that employees with a higher moral disengagement are more prone to engage in UPBs.

The study measured employees' willingness or intentions to engage in UPBs, not their actual involvement.

Results clarify to the top management that individuals high on MACH, affective commitment and moral disengagement are more prone to be involved in UPBs.

This study is among the preliminary ones that assess the direct associations between MACH, affective commitment, and UPBs, especially in the Pakistani context. Moreover, exploring the moderating role of moral disengagement between the above associations is also an under-researched phenomenon.

It has long been recognized that overwhelmed employees of bureaucratic organizations use a variety of strategies to cope with demand for their services, often at the expense of their clients. One such strategy involves discouraging clients from taking action by making references to complex bureaucratic procedures and routines. While the public management literature has a well-developed research program focusing on the mobilization of such administrative burdens, organization theory seems to be lagging behind in the analysis of that type of misconduct. In this chapter, we explain how references to the representational dimension of routines can be used to discourage clients from taking action, what are the boundary conditions of such a strategy, and its possible consequences for clients.

The Volkswagen (VW) emissions scandal was one of the largest examples of organizational wrongdoing in corporate history, costing the firm immense damage to its reputation and over $33 billion in fines, penalties, financial settlements, and buyback costs. In this paper, we draw on the concept of boundary work to provide insight into the causes of wrongdoing at VW. Supplementing other work on the scandal, we show how the ways in which boundaries became established in the organization resulted in an internal context that defined “in” and “out” groups, normalized certain behaviors, and limited communication across intraorganizational boundaries. This allowed wrongdoing to not only become established but also to go unchallenged. We provide contributions to broader understandings of organizational wrongdoing and to the temporal unfolding of boundary work by theorizing how a combination of cognitive, horizontal, and vertical boundaries can create an infrastructure of organizational design that permits organizational wrongdoing, prevents it being challenged, and ultimately normalizes it in everyday activities.