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Ethical leadership: the case for building a fraud-resistant organization

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Ethical leadership: the case for building a fraud-resistant organization

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Content Ethical Leadership: The Case for Building a Fraud-Resistant Organization

Rosalind Sullivan
Rossier School of Education
University of Southern California
A dissertation submitted to the faculty
in partial fulfillment of the requirements for the degree of
Doctor of Education
May 2024

© Copyright by Rosalind Sullivan 2024
All Rights Reserved

The Committee for Rosalind Sullivan certifies the approval of this Dissertation
Maria Ott
Sreenivas Koka
Patricia Tobey, Committee Chair
Rossier School of Education
University of Southern California
2024

iv
Abstract
Financial misconduct remains a significant risk to every organization. Small to medium-sized
entities (SMEs) are particularly vulnerable as they have insufficient resources to absorb these
losses and jeopardize their existence. There is also scarce research on fraud scholarship involving
SMEs. This study fills the void by utilizing an SME as an organizational study with Bandura’s
social cognitive theory as a framework. Through a qualitative methodology, one-on-one
phenomenological interviews were conducted with 10 employees and stakeholders in the
organization under study. The interviews explored their lived experiences as they underwent an
organizational change resulting from financial misconduct. Findings confirmed that all three
elements of social cognitive theory, environment, person, and behavior played essential roles in
an organization’s antecedents to ethical versus unethical behavior. The findings also
substantiated 10 recommendations to be implemented through the McKinsey 7-S change model.
By integrating ethics as the shared value and core of the model, ethical principles are woven into
the fabric of the organization to effect ethical outcomes and mitigate instances of financial
misconduct. This study contributes to current SME fraud scholarship by providing a
comprehensive approach to supplement mechanical controls with soft elements of staff, skills,
and style to create a more ethical and accountable organization.
Keywords: social cognitive theory, ethical leadership, financial misconduct, causal loop
diagram, McKinsey 7-S change model

v
Dedication
To my beloved family, I dedicate this doctoral study.
To my parents, who always believed in me and pushed me to aim for the stars. I know you are
watching over me from heaven with pride.
To my husband, for being the solid foundation during challenging moments in my professional
and personal life.
To my three loving boys, for their understanding and patience as they supported me through a
seemingly endless academic journey.
To my two elder brothers, who were my guiding lights in my early years.

vi
Acknowledgment
Completing this dissertation has been one of the proudest endeavors in my personal and
professional journey. I am immensely grateful to my dissertation chair, Dr. Patricia Tobey, for her
guidance, advocacy, and mentorship throughout this journey. Her expertise played a pivotal role
in shaping the course and rigor of this research. I appreciate her positivity and enthusiasm in our
meetings, which renewed my passion for the study and motivated me to approach each research
phase with direction and diligence.
I also extend my heartfelt appreciation to the members of my dissertation committee. Dr.
Maria Ott, my professor in the leadership class, inspired me to choose ethical leadership as my
dissertation topic. Her extensive leadership experience provided expert instruction and
thoughtful perspectives. Her valuable insights and recommendations helped refine my scholarly
thinking. Dr. Sree Koka has an impressive background in academia and leadership. I am honored
to call him a friend and mentor. He consistently offered kind words of encouragement, honest
feedback, and prudent advice. The wisdom, perspectives, and scholarly guidance of the entire
committee have significantly enriched the quality of this study.
My sincere gratitude goes to the study participants whose experiences formed the core of
this study. Their willingness to share their perspectives was invaluable and deeply appreciated.
To my cohort, who supported and encouraged me throughout these past years, their
partnership has been a constant source of strength. Finally, many thanks to the faculty for
dedicating substantial time, energy, and expertise both inside and outside the classroom to
enhance my academic and critical thinking competencies, laying a strong foundation that
contributed significantly to this process.

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Table of Contents
Abstract .......................................................................................................................................... iv
Dedication ....................................................................................................................................... v
Acknowledgment ........................................................................................................................... vi
List of Tables .................................................................................................................................. x
List of Figures ................................................................................................................................ xi
Chapter One: Introduction to the Study .......................................................................................... 1
Context and Background of the Problem ............................................................................ 1
Purpose of the Project and Research Questions .................................................................. 3
Importance of the Study ...................................................................................................... 4
Overview of Theoretical Framework and Methodology .................................................... 5
Definition of Terms............................................................................................................. 7
Organization of the Dissertation ......................................................................................... 7
Chapter Two: Literature Review .................................................................................................... 9
Historical Context ............................................................................................................... 9
Past Research and Frameworks Used ............................................................................... 20
Social Cognitive Theory Framework ................................................................................ 25
Application of Social Cognitive Framework .................................................................... 29
Conclusion ........................................................................................................................ 49
Chapter Three: Methodology ........................................................................................................ 51
Research Questions ........................................................................................................... 51
Research Methodology and Design .................................................................................. 52
Sample and Population ..................................................................................................... 53
Instrumentation ................................................................................................................. 54
Data Collection ................................................................................................................. 57

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Data Analysis .................................................................................................................... 58
Validity and Reliability ..................................................................................................... 59
Credibility and Trustworthiness ........................................................................................ 60
Positionality and Power .................................................................................................... 62
Ethics................................................................................................................................. 63
Limitations and Delimitations........................................................................................... 64
Conclusion ........................................................................................................................ 65
Chapter Four: Results and Findings .............................................................................................. 66
Participants ........................................................................................................................ 66
Results and Findings: Research Question 1 ...................................................................... 70
Quantitative Analysis ........................................................................................................ 70
Qualitative Analysis .......................................................................................................... 73
Summary ........................................................................................................................... 84
Results and Findings: Research Question 2 ...................................................................... 85
Quantitative Analysis ........................................................................................................ 85
Qualitative Analysis .......................................................................................................... 87
Summary ........................................................................................................................... 94
Results and Findings: Research Question 3 ...................................................................... 95
Quantitative Analysis ........................................................................................................ 95
Qualitative Analysis .......................................................................................................... 97
Summary ......................................................................................................................... 103
Conclusion ...................................................................................................................... 104
Chapter Five: Discussion ............................................................................................................ 105
Findings........................................................................................................................... 105
Research Question 1: Environment ................................................................................ 115

ix
Research Question 2: Person .......................................................................................... 118
Research Question 3: Behavior ....................................................................................... 120
Organizational Change Model ........................................................................................ 122
McKinsey 7-S Change Management Model ................................................................... 122
Recommendations for Future Research .......................................................................... 130
Conclusion ...................................................................................................................... 130
References ................................................................................................................................... 133
Appendix A: Email Solicitation .................................................................................................. 160
Appendix B: Survey Protocol ..................................................................................................... 162
Appendix C: Interview Protocol ................................................................................................. 167
Appendix D: Breakdown of Survey and Interview Questions .................................................... 171

x
List of Tables
Table 1: Data Sources ................................................................................................................... 55
Table 2: Pre-survey Results Relating to Industry Competitiveness and Performance Goals ....... 71
Table 3: Presurvey Results of Eight Statements Used to Explore Environmental Factors .......... 72
Table 4: Presurvey Results of Three Statements Used to Explore Personal Factors .................... 86
Table 5: Presurvey Results of Three Statements Used to Explore Behavior Factors ................... 96
Table 6: 7-S Model and Associated Recommendations ............................................................. 124
Appendix B: Survey Protocol…………………………………………………………………..162
Table C1: Interview Protocol…………………………………………………………………...168
Appendix D: Breakdown of Survey and Interview Questions………………………………….171

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List of Figures
Figure 1: Application of Social Cognitive Theory........................................................................ 30
Figure 2: Breakdown of Participants’ Gender .............................................................................. 67
Figure 3: Breakdown of Participants’ Age ................................................................................... 67
Figure 4: Breakdown of Participants’ Rank.................................................................................. 68
Figure 5: Themes Identified From Interviews Utilizing the SCT Framework ........................... 112
Figure 6: Ethical Leadership Causal Loop Diagram ................................................................... 114
Figure 7: McKinsey 7-S Change Model ..................................................................................... 123

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Chapter One: Introduction to the Study
Financial fraud continues to be a substantial threat to all organizations. According to the
Association of Certified Fraud Examiners report (ACFE, 2022), financial misconduct caused
over $3.6 billion in lossesin 2021, and organizations lose 5% of their revenue to fraud each year.
Occupational fraud in the United States remains a hazard to financial markets despite
implementing various anti-fraud legislation, most notably, the Sarbanes-Oxley Act in 2004 and
the Public Company Accounting Oversight Board (PCAOB)’s Accounting Standard 3101
(Donegan & Ganon, 2008). Literature shows that fraud is growing in severity and complexity. In
2021, the Security and Exchange Commission (SEC) filed enforcement actions against large and
well-known corporations, including General Electric, Wells Fargo, Under Armor, and over 600
other companies and individuals of financial wrongdoing (SEC, 2022). In 2018, the medical
technology company Theranos was shut down, and its top executives were found guilty in 2022
of defrauding investors (O’Brien, 2022).
External auditors find less than 5%, and internal auditors discover only 15% of fraud cases
(ACFE, 2022). Financial misconduct that remained undetected meant that these figures were
understated, and the core problem may be even more substantial. According to Dyck et al.’s
(2021) research on the pervasiveness of corporate fraud, the study estimated that 11% of public
companies engage in financial fraud each year, which amounts to 1.7% or $744 billion in equity
value.
Context and Background of the Problem
Scholars and practitioners have studied and researched fraud prevention over the last few
decades with various signature frameworks. Theoretical models utilizing criminological theories
were first adopted to study the phenomenon of financial misconduct (Severson et al., 2019). The

2
most often referenced framework is Cressey’s (1953) fraud triangle theory (FTT), which was
borne out of the study of white-collar crimes (Sutherland, 1940). Multiple professional
organizations have extensively used the FTT for potential explanations of financial wrongdoing.
The FTT consists of three elements for fraud to occur: pressure, opportunity, and rationalization
(Cressey, 1953). Since then, extensions to the FTT were introduced, including the fraud diamond
(Malimage, 2019; Wolfe & Hermanson, 2004), the fraud pentagon (Crowe, 2011; Sorunke,
2016), M-I-C-E model (Kranacher & Riley, 2011), fraud scale (Lokanan, 2015), and A-B-C
model (Ramamoorti et al., 2013). Unfortunately, these expanded frameworks are not
comprehensive enough to cover a wider range of fraud research. According to the ACFE’s
Occupational Fraud 2022 report, financial fraud cases involving more than one perpetrator have
increased. The FTT’s underlying paradigms should be broadened to integrate a more inclusive
theory of co-offending (Free & Murphy, 2015). Furthermore, recent studies show that the fraud
triangle model is inadequate to explain and detect fraud (Dorminey et al., 2012; Lokanan, 2015).
Individual incentive-laden motives may not be the only driving force for perpetrators to commit
crimes, but rather, complex social processes may be the key to deviant behaviors (Suh et al.,
2020). Therefore, there is a need to expand the characterization of fraud away from
individualistic explanations to a broader sociological perspective.
Ethics should be at the heart of an organization. Pure mechanical controls are an
incomplete and latish approach to fraud prevention. Combating financial misconduct should not
only be the responsibility of gatekeepers like auditors or accountants. “Fraud is not an
accounting or administrative problem, it is complicated trickery” (Maulidi, 2020, p. 256).
Corporate America’s competitive landscape pressures organizations to meet shareholders,
analysts, and other stakeholders’ expectations of unattainable performance (Schatterly et al.,

3
2018). Zona et al. (2013) termed this an imbalanced corporate strategy where companies strive
for over-stretching goals while sacrificing long-term performance and success. The challenge is
that many organizations have ethics as an espoused value. However, those are often not reflected
in actual behaviors when the focus is mandated on growth, profitability and market share, at all
costs (Chen & Chen, 2021).
Small Business Administration (SBA)’s report found that small businesses comprised of
44% of U.S. economic activity (SBA, 2023). Unfortunately, this critical segment of our economy
is also one of its most vulnerable. Occupational fraud continues to channel significant funds from
businesses, with smaller companies being impacted the most (Drew, 2018). According to ACFE
(2022), fraud contributes considerably to the failure of small businesses. Despite these troubling
trends, fraud in small to medium-sized entities (SMEs) has been overlooked in academic
research and the media (Zainal et al., 2021).
Purpose of the Project and Research Questions
The purpose of the study is to contribute to the knowledge of financial misconduct,
specifically as it relates to deterrence and intervention in SMEs. This study utilizes World Grade
Engineering Inc. (WGE) as an organizational study. World Grade is a privately held SME in the
United States. The company was on the brink of bankruptcy due to financial misconduct,
prompting an immediate and drastic organizational change. After the organizational change, the
company was turned around and exited years later, earning over 2000% return on investment.
Using the lens of social cognitive theory (Bandura, 1986), this qualitative study aimed to
explore how social processes in an organization can promote ethical versus unethical behaviors.
The study contributed to organizational behavior literature by reviewing parts of social cognitive

4
theory's triadic reciprocity, simultaneously investigating personal factors, organizational
contexts, and ethical outcomes.
This study utilized social cognitive theory as a framework for analysis through the three
elements of environment, person, and behavior. The following three research questions guide the
study:
1. How are individuals influenced by environmental factors relating to ethical versus
unethical behaviors?
2. How are individuals influenced by personal factors relating to ethical versus unethical
behaviors?
3. How are individuals influenced by behavioral factors relating to ethical versus
unethical behaviors?
Importance of the Study
Unethical behaviors to outright criminal financial acts are important to address because
while we see these high-profile cases in mass media, less noticeable moral transgressions, both
large and small, permeate all aspects of business operations (Ackroyd & Thompson, 2016).
Damage from financial fraud extends from business closures, employees’ job and pension losses,
supply and service chain disruptions, and shareholders’ investment losses, affecting local and
global economies (ACFE, 2022). According to the ACFE’s Occupational Fraud 2022 report,
losses due to fraud are measured in the trillions, which represent funds that could have been
deployed for job creation and production as well as providing public and social services and
initiatives, rather than in the hands of contemptible fraudsters. In addition to the trillions of
dollars lost directly, indirect costs are unsurmountable from loss of productivity, reputational

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tarnish, damaged business relationships, and other destructive social psychological processes
driven by such deeds (Cialdini et al., 2004).
Overview of Theoretical Framework and Methodology
This study applied Bandura’s (1986) social cognitive theory to examine the problem of
practice. The social cognitive theory proposes that learning is a social setting where we learn
new behaviors by witnessing the behavior of others and the results of their behaviors (Schunk &
Usher, 2019). This theory also operates within a structure of reciprocal interactions among these
three sets of factors: environment, personal, and behavior, which all influence each other. The
social cognitive theory was appropriate to address the interactions between the environment,
employees, and behaviors demonstrated.
Social cognitive theory (Bandura, 1986) was applied as a theoretical framework to focus
on the effect of personal and environmental factors on behavior. Individual behavior is explained
through an interactionist paradigm in which environmental settings, personal factors, and
behavior function as interacting elements that influence each other bi-directionally (Bandura,
1986). Based on the three tenets of social cognitive theory, the conceptual themes to examine are
person, which includes self-efficacy, self-regulation, motivation, and tone at the bottom;
behavior, which includes peer-to-peer behaviors, moral disengagement, slippery slope,
followership, and tone in the middle; environment, which includes macro factors, business
strategy, corporate culture, tone at the top, power, and groupthink.
The scope of this study utilized a qualitative research method to explore how social and
individual processes in an organization can promote or prevent unethical behaviors or financial
misconduct. Qualitative research is an inductive approach to discovering and comprehending the
meaning of individuals or groups attributed to a social phenomenon, and researchers seek to

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understand actions occurring as a result of human experiences (Creswell & Creswell, 2018).
Qualitative inquiry allowed for open discussion, exploration, and a personal connection to the
participant and phenomenon.
The phenomenological inquiry was used in this study to uncover the meaning and the
lived experiences of employees and stakeholders of WGE as they went through an organizational
change resulting from financial misconduct (Creswell & Creswell, 2018). The lens of social
cognitive theory focused on their perceptions of the triadic relationship between person,
behaviors, and environment (Bandura, 1986). It gave a voice to the participants for sharing
conscious experiences and promoting the researcher's and participants' involvement (Merriam &
Tisdell, 2016).
The case or the bounded system and unit of analysis to be studied is WGE. Participants
included employees and stakeholders in WGE through purposeful sampling. Purposeful
sampling was appropriate as the study intended to explore, understand, and learn from a sample
from which we gain the most insight into their unique experiences (Merriam & Tisdell, 2016).
The study focused on a time when there was an organizational change. Therefore, utilizing
criterion-based selection (LeCompte & Schensul, 2010), the included population is composed of
only employees and stakeholders who were employed or involved with the company during the
period of change. The participants provided an understanding of the matter and the ability to
draw from their experiences.
Two instruments are used for data collection: pre-survey and one-on-one interviews.
There was a lapse in the temporal domain of the study. Pre-survey questions with closed-ended
questions provided contexts in abstract themes and aided memory retrieval. Open-ended
interview questions allowed participants to describe and provide meaning to their lived

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experiences (Creswell & Creswell, 2018). An inductive approach is conducive to gathering
different evidence components and searching for common concepts, themes, and patterns in the
data (Merriam & Tisdell, 2016).
Definition of Terms
The following key terms and definitions clarify their use throughout this study.
Association of Certified Fraud Examiners (ACFE)
The Association of Certified Fraud Examiners is the world's largest anti-fraud
organization and premier provider of anti-fraud training education and certification.
Key Performance Indicators (KPI)
Key performance indicators are the critical (key) quantifiable metrics to measure progress
toward an intended result.
Small to Medium Sized Entities (SME)
Small and midsize entities are businesses with revenues, assets, or employee headcount
below a certain threshold. For this study, the criteria consider non-publicly traded entities with
fewer than 1500 employees.
Social Cognitive Theory (SCT)
Social cognitive theory is a psychological and behavioral theory developed by Albert
Bandura (1986). It emphasizes the role of social interaction, observational learning, and
cognitive processes in shaping human behavior and the reciprocity of these three factors:
environment, person, and behavior.
Organization of the Dissertation
The dissertation follows a traditional five-chapter model. Chapter One provides an
outline of the study. Chapter Two highlights the relevant literature and the conceptual framework

8
for the study. Chapter Three addresses the research methodology. Chapter Four presents the
findings and results. Chapter Five summarizes the study and details the proposed
recommendations with an organizational change model.

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Chapter Two: Literature Review
This chapter introduces and discusses relevant literature associated with the phenomenon
of leadership ethicality and financial misconduct. This section starts with the historical context of
financial misconduct, especially in the United States, and delves into financial misconduct in
small to medium-sized organizations. The review then discusses ethics and ethical leadership,
followed by past research associated with financial misconduct. This study then suggests
challenges and limitations in extant scholarships in financial misconduct theories. Finally, the
chapter focuses on using SCT and discusses how this framework helps to examine ethicality and
financial misconduct. The analysis unpacks SCT into its triadic reciprocal interaction between
environment, person, and behavior. It explores the moderating effects of organizational factors
and personal attributes on ethical conduct (Bandura, 1986).
Historical Context
This section provides a background context to the phenomenon of financial misconduct.
Corporate financial misconduct in the United States remains a persistent and growing problem
despite the implementation of various anti-fraud legislations (Donegan & Ganon, 2008). It also
particularly affects SMEs due to their need for more resources to absorb losses. The section
further dives into the context of ethics and how ethical leadership and ethical culture can be a
supplemental avenue to deter financial misconduct in addition to the current strategies used for
mitigation and prevention.
Financial Misconduct in the United States
Financial misconduct continues to be a significant risk to all organizations. The Report to
the Nations published by the ACFE (2022) showed that fraud caused $3.6 billion in losses, and
companies lose 5% of revenue to fraud annually. External auditors discover less than 5%, and

10
internal auditors detect only 15% of fraud cases (ACFE, 2022). Financial misconduct that remains
uncovered means that the core problem may be even more significant. According to Dyck et al.’s
(2023) research on the pervasiveness of corporate fraud, the study estimated that 11% of publicly
traded firms commit fraud each year, which amounts to 1.7% or $744 billion in equity value.
Literature shows that fraud is growing in severity and complexity. In the early days, fraud
consisted of trading snake oil for a silver coin or cash a person gave in exchange for a bad check
(Yallapragada et al., 2012). The litany of misconduct extends from embezzlement and asset
misappropriation to insider trading, Ponzi schemes, corruption, and fraudulent financial
reporting. An unprecedented wave of financial misconduct was committed in large publicly
traded companies at the turn of the 21st century. Executives from Enron, Adelphia, Global
Crossing, HealthSouth, Quest, Tyco, and WorldCom were found guilty of financial crimes
(Yallapragada et al., 2012). These scandals took down companies like Enron and its external
auditor, Arthur Andersen, with over fifty thousand jobs lost and billions in employees’
retirement and savings dissipated (McLean & Elkind, 2003). However, the total impact of
financial fraud cannot be measured only in monetary terms. Fraud also emotionally affects its
victims, wiping away employees’ morale and productivity (ACFE, 2022).
According to ACFE (2022), perpetrators have collaborated more in the past decade, with
a rise of 38% of cases surveyed involving two or more offenders. Collusive schemes show higher
velocity and larger total loss (ACFE, 2022). The Securities and Exchange Commission (SEC)
lists financial reporting enforcement actions related to administrative proceedings and civil
lawsuits. The Commission filed 760 new enforcements in the fiscal year 2022 and 434 new
enforcement actions in the fiscal year 2021, representing a 9% and 7% increase year over year,
respectively (SEC, 2022). Three of the top four accounting firms also conducted surveys to

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suggest that corporate fraud is rising. According to PWC (2022), 46% of surveyed organizations
reported experiencing fraud in the last 24 months, and asset misappropriation remained among
the top three most significant threats. Furthermore, there is a rising trend of formerly law-abiding
employees joining external perpetrators, and collusion between internal and external actors has
increased by 24% in the last 2 years (ACFE, 2022). Respondents to EY’s 15th Global Fraud
Survey (2023) conducted with over 2,500 executives also noted that fraud and corruption
continue to pose risks to their businesses. KPMG’s (2022) fraud outlook study confirmed that the
three interconnected threats, compliance, fraud, and cyber-attacks, are rampant and have
increased both in occurrence and severity. Recent cases of prominent scandals include Wells
Fargo, which was fined $185 million in September 2016 for opening millions of bogus accounts
without knowledge or consent from its customers (Cohan, 2016). Then, in 2018, the medical
diagnostics company Theranos was shut down after its executives lied about the effectiveness of
their products. They were indicted and found guilty of defrauding investors of nearly $1 billion
(O’Brien, 2022). Although these high-profile cases made it to front page news, less publicized
misconduct and transgressions permeate all organizations (Ackroyd & Thompson, 2016; Hirsh et
al., 2018).
Small to Medium Sized Entities
According to the U.S. Small Business Association (SBA, 2023), 99.9% of all United
States organizations are considered small businesses with fewer than 500 employees. Small
businesses accounted for 62% of all new jobs created between 1995 and 2020—12.7 million
compared to 7.9 million by large organizations. Small businesses comprised of 44% of U.S.
economic activity (SBA, 2023). Occupational fraud continues to channel significant funds from
businesses, with smaller companies being impacted the most (Drew, 2018). Smaller

12
organizations have insufficient resources to absorb the loss or implement controls for fraud
prevention and detection (Kramer, 2015). Fraud significantly contributes to the failure of small
businesses with fewer than 100 employees and less than $50 million in revenues (ACFE, 2022).
According to ACFE, small businesses had the largest median loss of $150,000, which will
adversely affect a small organization more significantly. PWC’s 2022 fraud survey reported that
38% of small businesses with less than $100 million in revenue experienced fraud, and 22% of
those companies had over $1 million of financial impact.
Despite these concerning trends, the media focuses on financial misconduct involving
large companies with substantial monetary losses. Academic research has also concentrated on
studying those larger companies involving significant financial statement fraud (Kramer, 2015).
The study on fraud in SMEs is deficient, and future research is suggested to conduct fraud
studies involving SMEs (Zainal et al., 2021).
Ethics
In light of the continued alarming trends in financial misconduct stemming from
unethical behaviors, ethics has become one of the most critical issues facing all organizations.
These growing trends highlight the urgency for organizations to promote ethics and encourage
ethical behavior to mitigate unethical conduct (Mitchell et al., 2020). The term “ethics” came
from the Greek “ethos,” which refers to the norms that regulate the moral behavior of individuals
in society (Northouse, 2022). Ethics relate to high-level standards of right and wrong that
advocate what humans ontologically should do regarding obligations, benefits, or fairness to
society (Sorunke, 2016). Ethical values encompass integrity, equity, credibility, authenticity,
temperance, righteousness, and courage, which maintain the standards that differentiate the right
things that are worthwhile to do (Sorunke, 2016). Personal ethics influence how an individual

13
understands, follows, observes, supports, or rejects these values (Sorunke, 2016). Making ethical
decisions is viewed as meeting a society’s moral and legal standards (Jones, 1991; O’Connor et
al., 2020). Business ethics are based on an individual’s understanding of what is morally right
when faced with an ethical dilemma in making managerial decisions and taking actions (Lewis,
1985; Steiner et al., 1980). These decisions are based on fairness, honesty, and integrity
(Fleming, 1985; O’Connor et al., 2020).
Another term used interchangeably with ethics is morality. According to Cohen et al.
(2014), moral character relates to an individual’s cognition, feelings, and actions associated with
ethical and unethical behavior. The author stated that moral character is a multidimensional
construct incorporating a variety of attributes primarily related to three elements: consideration
of others, self-regulation, and moral identity. Consideration of others indicates a motivational
disposition towards prioritizing others’ needs and interests and how one’s behavior affects others
(Cohen et al., 2014). The author further suggested that self-regulation, or conscientiousness,
represents evaluating one’s actions regarding positive short-term gain but negative long-term
costs for all. Lastly, moral identity relates to the motivation, willingness, and ability to do good
and strive to be a kind person with self-discipline (Cohen et al., 2014).
One of the most seminal works in moral scholarship is Kohlberg’s stages of moral
development. There are six stages in Kohlberg’s (1969) cognitive moral development theory.
Stages one and two represent the pre-conventional level; the self-interested yet externally
focused individual determines what is right based on the need to be obedient to avoid
punishment (Stage 1) or an exchange to fulfill their needs (Stage 2; Kohlberg, 1969). In the
middle two stages of the conventional level, moral judgment is more outward-driven and strives
to live up to their immediate circle’s expectation (Stage 3) or to their community and society

14
(Stage 4; Kohlberg, 1969). Lastly, at the highest post-conventional stages, the individual orients
towards utilitarian principles and internalizes justice, equity, and human dignity (Kohlberg,
1969). Research has found that most individuals are in the middle stages of the conventional
level, with their moral decision-making influenced by expectations of significant others and
societal laws (Kohlberg, 1969). As a result, promoting moral conduct through environmental
factors, including organizational climate, culture, leadership, incentive structure, peer and norm
behavior, becomes salient.
Kohlberg’s approach was further expanded by James Rest (1986), an American
psychologist who concentrated on moral reasoning, which has become the focus of significant
scholarly research. He developed the model of the ethical decision-making process. The model
includes four steps: moral sensitivity, moral judgment, moral focus or motivation, and finally,
moral character to act. According to the author, moral sensitivity represents identifying the
presence of an ethical concern or dilemma. Individuals cannot solve or be attentive to a moral
problem unless they are aware of its existence. The author explains that moral judgment is the
means of selecting a course of action and determining the right thing to do in a particular
circumstance. The third step is moral focus, which relates to the motivation to follow through on
the choice selected driven by moral ownership, moral courage, and moral efficacy. The last step
is moral character and the execution of the plan, which takes competence and a sense of duty
(Rest, 1986).
On the contrary, unethical conduct is defined as an action outside of normative
appropriate behavior, such as cheating, lying, or stealing (Reynolds & Ceranic, 2007). Kilduff et
al. (2016) focused on unethical behavior directed to harm, limit performance, or benefit oneself
at the expense of others. Utilizing Rest’s (1986) moral decision theory, Gino (2015) proposed

15
two types of unethical behavior: intentional and unintentional. Unintentional unethical behavior
happens when individuals engage in unethical conduct beyond their awareness, whereas
intentional unethical behavior happens when individuals are aware and make a conscious
decision they know to be wrong (Gino, 2015).
Ethical Leadership
Considering the significant impact of financial misconduct within all corporations,
abundant research has been conducted on ethical leadership. Ethical leaders demonstrate the
ability to choose between right and wrong when faced with a moral dilemma (Liu et al., 2015).
Being an ethical individual is essential but is not sufficient to be regarded as an ethical leader
(Trevino et al., 2000; Trevino et al., 2003). The studies provided two dimensions in building a
foundation for ethical leadership: moral person and moral manager (Trevino et al., 2000). As
moral individuals, ethical leaders are trustworthy, authentic, and have genuine concern for the
well-being of others when making managerial decisions (Trevino et al., 2000). The moral
manager element is crucial in modeling generally accepted norms of moral behaviors,
communicating about ethics, and using positive and negative reinforcements to promote ethical
behaviors among employees (Marquardt et al., 2021). Ethical leaders not only demonstrate
behaviors through personal conduct as examples but also build trust and relationships with
followers that they want to replicate and reciprocate (Brown et al., 2005). Ethical leadership
models high ethical standards, equitable treatment of employees, and holding employees
accountable for these standards (Arel et al., 2012). Furthermore, Brown et al. (2005) highlighted
the importance of demonstrating altruistic behaviors that employees consider normative instead
of selfish motivations.

16
Ethical leaders are equally concerned about their followers and the process or the means
that jobs get done, not simply on the end or bottom-line outcomes and results (Trevino et al.,
2003). As a result, an organization led by ethical leaders has a more trustworthy, equitable, and
collaborative working environment. It intrinsically motivates employees to do what is morally
right for the individual, company, and society as a whole (De Cremer & Vandekerckhov, 2016).
Lawton and Paez (2015) proposed that leadership has an ethical frame that promotes various
cultures or methodologies of ethics. Ethical leaders make bold decisions in difficult situations
that are aligned with their values (Trevino et al., 2003). Schaumberg and Flynn (2012) suggested
that ethical leaders are characterized not merely by doing the right thing but by their response to
take responsibility when they do something wrong. These elements tie back to Kohlberg’s (1969)
highest stages of moral development.
Ethical Organizational Cultures
Ethical leadership breeds ethical cultures, and culture perpetuates ethical behavior.
Ethical leadership is a key antecedent to an organization’s ethical culture (Shin, 2012).
Falkenberg and Herremans (1995) suggest that ethical culture in the form of informal and formal
control systems or organizations drives ethical behavior. The authors also discovered that the
informal system of modeling, values, and traditions has a more substantial effect on behaviors,
while formal policies and procedures serve as guidelines. Therefore, proper alignment between
the informal and formal systems is pivotal to a robust ethical culture (Falkenberg & Herremans,
1995). Hartman et al. (1999) proposed that an organization’s ethical culture influences ethical
behavior through employees’ perception of procedural and distributive justice. Caldwell et al.
(2010) addressed the framework of ethical stewardship, defined as sustainable organizational
success and increased stakeholder trust and loyalty through sound and effective governance.

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Ethicality and Legality
Being illegal and unethical are often intertwined but are not synonymous, as unethical
behaviors violate societal norms, and illegal acts violate laws legislated by regulatory agencies.
Laws are enacted to deter unethical behaviors, and most unethical behaviors are illegal (Bommer
et al., 1987; Robertson et al., 2012). The Pyramid of Corporate Social Responsibility depicted by
Carroll (1991) shows the hierarchy of responsibilities in the order of economic as the base and
then legal, ethical, and philanthropic. This hierarchy suggests that laws reflect a society’s
minimum standard of enforceable conduct, and to be ethical, obeying the law is a prerequisite.
Other authors posit that certain illegal activities may be unethical (Bono, 2019; Young, 2019).
According to Hirsch and Morris (2010), there is also a temporal element in legality when
behaviors that were legal in one era may be deemed unlawful in another. Trevino and Nelson
(2021) visualize the relationship between the law and ethics in a Venn diagram with considerable
overlap between ethical and legal behaviors and areas where unethical acts are legal and vice
versa. According to Young (2019), ethical inquiry should not be confined to merely following the
law to avoid wrongdoing; it is more about asking what is right.
Definition of Financial Misconduct
Financial misconduct is where illegality and ethicality overlap, as it involves breaking the
law, rules, or standards. Multiple terms and definitions describe financial misconduct, including
fraud, occupational fraud, white-collar crimes, financial crimes, and scandals. From a behavioral
and legal perspective, fraud is an abstract and multifaceted concept (Reurink, 2018). Andre et al.
(2014) defined fraud as personal gain by using an occupational position deliberately to misuse
the company’s resources. Cohen et al. (2010) explained that fraud is the intentional misstatement
of financial information subject to an audit. The Federal Bureau of Investigation includes fraud

18
under the umbrella of financial crimes. The agency defined fraud as crimes that are absent of
physical harm but still comprise of deceit or a violation of trust to obtain personal or business
gain, including insider trading, embezzlement, money laundering, and tax evasion. According to
the ACFE (2022), occupational fraud is a financial crime committed against organizations,
including corruption, asset misappropriation, and fraudulent financial statements. White-collar
crime, a term phrased by sociologist Sutherland (1940), involves criminal activity committed by
business professionals of high social status and respect in their community. Berghoff and
Spiekermann (2018) defined six elements of white-collar crime. The six elements include higher
education and status of the offender, non-violent nature, the economic gain of the unlawful act,
breach of trust, enablement via bad corporate culture, and harm exerted to direct and indirect
victims (Berghoff & Spiekermann, 2018). Lastly, van Driel (2019) defines scandal as a public
outrage stemming from a morally or legally wrong action or event.
Focusing on the components of financial misconduct found in the definitions provides the
foundation for understanding the phenomenon. Establishing an effective process to mitigate
financial misconduct requires that the leader understand the types present in an organization and
properly align those processes. Certain recurring themes are noted from the various definitions:
lying, cheating, stealing, direct or indirect personal gain, information asymmetry, and breach of
trust and position. This study considers financial misconduct as unlawful acts of intentional
embezzlement, financial statement misstatements, and corruption committed against the
perpetrator’s organization.
Current Mitigation Strategies
Strategies to mitigate any financial loss have historically fallen on the shoulders of
accounting gatekeepers. After the wave of financial scandals in the early 2000s, the House and

19
Senate passed the Sarbanes-Oxley Act (SOX) in 2002, developed by Senator Sarbanes and
Representative Oxley (Cascini et al., 2012). SOX resulted in the establishment of the Public
Company Accounting Oversight Board (PCAOB) in charge of oversight, regulations,
inspections, and disciplinary actions of accounting firms in their duties as external auditors of
publicly traded companies. SOX also provides additional regulations to strengthen governance
and internal control, auditor independence, and enhance financial disclosure. While SOX has
been deemed adequate by scholars and practitioners (Cohen et al., 2013), the regulations apply
only to publicly held companies.
Most privately held companies may still be required to have an external financial
statement audit conducted at least annually. External auditors provide a gatekeeping and
protection function guided under the American Institute of Certified Public Accountants and
Generally Accepted Auditing Standards rules to obtain reasonable assurance that the financial
statements are free of material misstatement, whether due to unintentional error or fraud.
Practitioners have stated that traditional and standard auditing procedures are insufficient to
detect financial misconduct (Huang et al., 2017). According to Kramer (2015), fraud surveys
consistently showed auditors’ primary responsibility is not to detect fraud. A financial audit is a
statistical process using confidence to sample evidence of economic activity, and auditors
confirm procedural and regulatory compliance (Love, 2012). Absolute assurance is unattainable,
especially given how fraud intends to conceal and circumvent auditing procedures in instances
like collusion, forgery, and omissions (Kramer, 2015).
The primary responsibility in detecting financial misconduct should lie with management
and the company, not external auditors (Kagias et al., 2022). Organizations should have a strong
foundation of internal controls to protect the organization to mitigate fraud risks (Rodgers et al.,

20
2014). A strong internal control system is a vital element in fraud prevention (Moffett & Grant,
2011). COSO (2013) and the American Institute of Certified Public Accountants provide robust
internal control frameworks and procedures to guide companies in implementing, reporting, and
complying with these systems. According to the ACFE (2022), 49% of occupational fraud can
probably be detected through proper implementation and adherence to internal controls.
Financial misconduct is only noticed after the fact. Having external audits and internal
control systems are rudimentary tactics. Therefore, organizations should consider taking
proactive steps to expand beyond mechanic controls and incorporate a holistic approach to deter
and mitigate financial misconduct.
Past Research and Frameworks Used
Theoretical models surrounding behavioral aspects of criminological theories were first
utilized to study the phenomenon of financial misconduct. Severson et al. (2019) explained
white-collar crime utilizing several theories of criminality. Those theories include the rational
choice theory, a general theory of crime, and the general strain theory.
Criminological Theories
Paternoster and Simpson (1996) applied the rational choice theory to white-collar crime
and proposed that offenders evaluate benefits and costs of their behavior and their moral beliefs
before the act. Personal ethics is often a mitigating factor for offenders to commit the act
(Severson et al., 2019). The benefits are usually obvious when committing white-collar crimes,
which may consist of monetary or personal gain. At the same time, costs include informal
consequences of loss of self-worth and reputation or formal penalties of incarceration, job
termination, or fines (Severson et al., 2019). Skyes and Matza’s (1957) techniques of
neutralization allowed offenders to minimize their liabilities from costs to benefits in their self-

21
interests. The five categories of neutralization are responsibility disavowal, injury denial, victim
renunciation, denouncing the condemners, and a higher loyalty appeal (Skyes & Matza, 1957).
Klenowski and Dodson (2016) provided two more neutralizations: “Everyone is doing it” and
entitlement.
Gottfredson and Hirschi’s (1990) general theory of crime asserts that self-control is
crucial in influencing individuals’ decisions to commit crimes. The author postulated that there
are six characteristics of individuals with low self-control: inconsiderateness, myopia,
impulsivity, physical activity preference, high risk-taking, and non-verbal communication, and
these elements can be applied to white-collar crime. However, other research has noted that
white-collar crimes are beyond the realm of self-interest but are planned, intentional, and require
a higher level of self-control (Reed & Yeager, 1996).
Robert Agnew (1992) introduced the general strain theory, which included three sources
of strain. The three strains are the inability to accomplish goals (wealth, status, etc.), the absence
of affirmative stimuli (property, relationships, etc.), and the presence of negative stimuli (toxic
environment or abuse). When individuals cannot cope positively with these strains, they may
revert to misconduct to flee, avenge, or relieve those strains (Agnew, 1992).
Fraud Triangle
The most often referenced framework is Cressey’s (1953) fraud triangle theory (FTT).
Edwin H. Sutherland (1940) was the first to coin the term “white-collar crime” by incorporating
business economic activities with crimes of the upper white-collar class. Around this time, he
mentored a doctorate student, Donald R. Cressey, who was working on embezzlement behavior
research (Dorminey et al., 2012). Cressey (1953) hypothesized three criteria for fraud to occur:
(a) a non-sharable financial problem, (b) awareness and the ability to violate a position of trust,

22
and (c) rationalization to reconcile that such behavior is not unlawful. These three prongs thus
form the fraud triangle, the foundational framework to study the antecedents of fraud. The nonsharable financial problem will result in pressure that creates the motive for the crime as the
individual may have a strong sense of pride to seek help or share the problem (Dorminey et al.,
2012). An opportunity arises when the likelihood of detection is low due to a lack of supervision,
effective controls, or the capability to circumvent controls (Dorminey et al., 2012). Lastly,
“rationalization” is the internal justification of the misconduct. According to Cressey (1953),
individuals desire to remain congruent in their moral self and consider this action a special
exception, not a violator of trust. Rationalization also aligns with Hollinger and Clark’s (1983)
research that job dissatisfaction and unfavorable working conditions influence employees to
offend. Based on studies of 212 fraud cases perpetrated in the 1980s, Albrecht et al. (1984)
introduced the fraud scale, which modified the original three tenets by substituting
“rationalization” with personal integrity (Dorminey et al., 2012). Individuals with higher levels
of integrity would be less likely to rationalize and justify misconduct (Dorminey et al., 2012).
Extensions to the Fraud Triangle
Several studies utilized the fraud triangle as a platform and augmented additional
elements to the three prongs to explain financial misconduct. The “fraud diamond” proposed by
Wolfe and Hermanson (2004) added “capability” to create a fourth tenet to fraud theory.
According to Wolfe and Hermanson, the presence of the three factors is only meaningful if a
person has the ability to exploit the opportunity. This ability stems from function, access,
position within the organization, intelligence, competence, and the capacity to manage stress
(Dorminey et al., 2012).

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Other fraud studies added a fifth tenet to the geometric model that gave rise to the fraud
pentagon. Crowe (2011) added “arrogance” as an additional element. Arrogance arises because
of self-interest and information asymmetry in management and, thus, has a positive effect on
financial misconduct (Crowe, 2011). Sorunke (2016) argued that personal ethics is the main
factor in the perpetrator’s motivation. A limited qualitative study was conducted that showed
individuals with high personal ethics will not likely perpetrate fraud even when put under dire
pressure; on the other hand, a person with low personal ethics will commit fraud regardless of
need (Sorunke, 2016). Sorunke integrated “personal ethics” as the fifth tenet of the fraud
pentagon model.
Additional studies were done to supplement the original tenets of the fraud triangle.
Ramamoorti (2008) identified that not every misconduct involves a non-shareable financial need
but may be caused by social status comparisons. Coleman (2001) proposed that competition may
be another pressure point for individuals to preserve an identity image. Kranacher and Riley
(2011) incorporated these additional factors with the M.I.C.E. model to supplement the
“pressure” tenant of the fraud triangle. M.I.C.E. stands for money, ideology, coercion, and ego.
Money and ego can be explained by the case histories of Madoff, Enron, and WorldCom
(Dorminey et al., 2012). Ideology represents perpetrators who are focused on the result
regardless of the process and believe they are achieving some greater good. Coercion relates to
an unwilling individual pressured to participate in a scheme (Kranacher & Riley, 2011).
Ramamoorti et al. (2013) introduced the bad apple, bad bushel, or bad crop syndrome (AB-C model) that recognized the interaction between the individual, collusion with others, and
environmental factors that influence misconduct. The bad apple is the individual, the bad bushel
addresses collusion or management circumvention and specific group dynamics that facilitate

24
misconduct, and the bad crop refers to organizational mechanisms (Ramamoorti et al., 2013).
The A-B-C model expanded the understanding of misconduct incidents from individuals to
groups and macro-oriented contextual perspectives. Lokanan (2015) suggested that financial
misconduct is multifaceted and that fraud inquiry should expand from the fraud triangle to
include psychological, sociological, and environmental factors that affect behavior.
Limitations in Extant Fraud Theories
The fraud triangle and its subsequent versions of fraud diamond, fraud pentagon, fraud
scale, and the M.I.C.E. model (Kranacher & Riley, 2011) have been subject to several criticisms
as these models focus only on individual factors contributing to fraud while overlooking
organizational and environmental factors. M.I.C.E. model provided an expanded framework to
examine additional facets of pressure or motivation. This model is consistent with Ramamoorti et
al.’s (2013) A-B-C model, where it is noted that motivations are complex.
Cressey’s (1953) work focused on embezzlement. Embezzlement is only one subset of
financial misconduct; thus, the model may not adequately capture all the elements of fraud
theory. The multidimensional nature of financial crimes must be accounted for in a more
comprehensive model to understand, dissect, prevent, and identify offenders (Huber, 2017). The
fraud triangle is inadequate to address the many facets of fraud effectively (Lokanan, 2015).
According to Cressey’s (1953) research, embezzlement is a crime committed by a lone
individual for personal financial benefit and has breached a position of trust. Cressey’s limited
view only provided an individualistic account based on the individual’s psychology (Berger,
2011; Lokanan, 2015; Morales et al., 2014). Donegan and Ganon (2008) critiqued using the
fraud triangle as the explanatory model for financial misconduct as it only addresses individual
propositions but excludes group-level factors. Trompeter et al. (2013) suggested a more

25
comprehensive approach to risk assessments to include the role of social systems and social
networks, which are missing in the fraud triangle.
Suh et al. (2020) discussed the confining aspect that fraud is centered on the individual's
weak moral compass but not as an effect of broader environmental factors. Financial misconduct
is a multi-dimensional phenomenon whose diverse factors may not be attributable to a confined
model; therefore, the fraud triangle is an insufficient and unreliable framework for anti-fraud
professionals (Huber, 2017). According to Cieslewicz (2012), Hofstede’s (1980) power distance
in culture and societal level factors play a crucial role, which the fraud triangle failed to address.
Individualistic explanations may not be adequate to address the phenomenon of financial
misconduct. Ramamoorti et al.’s (2013) A-B-C model recognized external factors of “bad
bushel” and “bad crop.” Huber (2017) proposed additional elements of fraud studies to expand
from personal factors to include a macro level of organizational, political, economic,
sociological, cultural, and legal/regulatory dimensions. Therefore, a more comprehensive
framework is better suited to study the problem of unethical behaviors that will ultimately result
in fraud and financial misconduct.
Social Cognitive Theory Framework
Albert Bandura developed the social learning theory (1977) and broadened the concepts
that emerged into the social cognitive theory (1986). SCT proposes that learning is a social
setting where we learn new behaviors by witnessing the behavior of others and the results of
their behaviors (Schunk & Usher, 2019). Schunk and Usher also suggest that this theory operates
within a structure of reciprocal interactions among three sets of factors: personal, behavior, and
environment, which all influence each other. SCT purports that personal attributes and
organizational settings affect individual actions. Individual behavior is explained through an

26
interactionist paradigm in which environmental contexts, personal factors, and behavior function
as interacting elements that influence each other bi-directionally (Bandura, 1986; Bekiaris &
Papachristou, 2021).
Overview of Social Cognitive Theory
SCT highlights that individuals learn and behave in social environments. Through these
social environments, individuals acquire knowledge, skills, and attitudes (Schunk & Usher,
2019). Individuals learn about the relevance, pertinence, and outcomes of their actions and
behave following their perceptions of their abilities and the expected consequences of their
conduct (Schunk & Usher, 2019). Personal attributes are dispositions to act in a certain fashion,
and activating a trait's behavioral expression requires a trigger of that attribute by relevant
environmental conditions (Bekiarus & Papachristou, 2021; Tett & Guterman, 2000). According
to Bandura (1986), these interactions generate mutual causations through the interchange of
thought, action, and social factors. The author also mentioned that personality traits and
environmental conditions affect an individual’s behavior. The triadic reciprocity among these
factors determines that the organizational context may interfere with the causal relationship
between personal traits and their attitudes, moderating their effects (Bandura, 1986; Bekiarus &
Papachristou, 2021). Within SCT’s triadic reciprocal framework, self-efficacy affects
achievement behaviors, behaviors also affect self–efficacy, environmental feedback can affect
behavior and self-efficacy, and behavior can also affect the environment (Schunk & Usher,
2019). Several key SCT constructs include self-efficacy, vicarious learning, symbolic
forethought, self-regulatory, and motivational processes.

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Self-Efficacy
Self-efficacy is a critical element in SCT. Self-efficacy is an individual's expectation
about their capabilities to achieve a particular outcome (Bandura, 1986). According to Bandura
(1986), self-efficacy is impacted by environments and behaviors but also influences them. Selfefficacy is vital in individuals’ learning, motivation, and accomplishments (Schunk &
DiBenedetto, 2016; Schunk & Usher, 2019).
Vicarious Learning, Symbolic Forethought, and Self-Regulation
Individuals learn actively through action or performance and vicariously through
observation (Bandura, 1986). SCT posits the vital element of human agency in which individuals
have control over their cognition, emotions, and behaviors (Schunk & Usher, 2019). The authors
suggest that individuals purposefully immerse themselves in positions and environments to learn
vicariously. Vicarious learning capability is acquiring knowledge, behavioral patterns, and beliefs
through observation. There are three types of vicarious processes: response facilitation, inhibition
and disinhibition, and observational learning (Bandura, 1986). Response facilitation relates to
individuals imitating actions after observing modeled behaviors (Schunk & Usher, 2019).
Inhibition and disinhibition refer to the strengthening or weakening of the individual’s
motivation to act after witnessing the associated positive or negative outcomes (Schunk & Usher,
2019). Observational learning occurs when individuals perform new behaviors by observing
models (Bandura, 1986). Observational learning requires individuals to be motivated and
attentive and have the ability to retain and translate modeled actions into behaviors (Schunk &
Usher, 2019).
Symbolic processes refer to an individual’s capacity for symbolic representations
involving language, cognition, and imagery to signify events and their relationships to the

28
environment (Bekiarus & Papachristou, 2021). The authors further proposed that forethought
capability enables individuals to interpret actions and consequences and guide future behaviors
based on these symbolic processes. Individuals are active agents who set their goals and future
project outcomes and avoid negative consequences (Bekiarus & Papachristou, 2021).
Self-regulation is a prominent tenet of SCT. Self-regulation relates to the individuals’
activation and sustainability of thoughts, actions, and effects that lead to goal attainment (Schunk
& Usher, 2019). Self-system is a self-regulation construct related to a set of mental models,
including self-awareness and self-concept (Galperin et al., 2011). Self–concept is a person’s
perception of himself or herself (Mazar et al., 2008). An individual’s behavior is moderated by
an interface of self-influences, self-awareness, and external outcomes (Bekiarus & Papachristou,
2021). Through self-regulation, an individual can constrain a dominant response (Galperin et al.,
2011).
Observational or vicarious learning, symbolic forethought, and self-regulation are
capabilities that motivate individuals to cultivate a concept of personal agency (Schunk & Usher,
2019). Certain mental constructs motivate behavior to achieve an outcome. These mental
constructs are motivational processes; they include goals, outcome expectations, and social
comparison (Schunk & Usher, 2019).
Motivational Processes
Goals motivate individuals to invest time and effort and persevere at the task. Goals that
are specific, proximal, and have a reasonable difficulty level are more effective motivators (Lock
& Latham, 2013; Schunk & Usher, 2019). Goals can be differentiated between learning and
performance goals (Schunk & Usher, 2019). The author describes a learning goal as knowledge,
skill, or behavior individuals are to obtain, while a performance goal relates to task completion

29
or valued outcomes. Learning goals lead to higher self-regulation and greater self-awareness,
promoting higher self-efficacy (Schunk & Usher, 2019).
Outcome expectations are another source of motivation. According to Schunk and Usher
(2019), outcome expectations can be internal (positive feelings), external (achievements), or
learning. Individuals witness behavioral consequences through personal experiences or
observation of others (Schunk & Usher, 2019). The author states that values are individuals’
beliefs of the importance and relevance of learning, and they behave following outcomes they
value and evade conduct that is incongruent with their beliefs.
Social comparison relates to individuals who evaluate their attitudes, opinions, and
abilities through a comparison with their peers, especially when there is a lack of information or
cues (Schunk & Usher, 2019). Learning is enhanced when the model is perceived as analogous to
the observer and can raise self-efficacy (Braaksma et al., 2002). Motivation may be enhanced
when objective information rather than comparative information is available to evaluate the
individual’s progress (Schunk & Usher, 2019)
Application of Social Cognitive Framework
It is instructive to use SCT to study the phenomenon of ethicality and its role in
mitigating financial misconduct. First, it sheds light on the cognitive routes associated with
unethical behaviors. It also extends beyond the personal factors, which are limitations in current
fraud theories and expands into the environmental factors. It connects an applicable lens to
position personal cognition and environmental factors to predict unethical behaviors. Lastly,
utilizing SCT’s triadic reciprocal framework on ethical phenomena provides a comprehensive
study that moral beliefs, ethical conducts, and social contexts operate as interacting factors that

30
impact each other bi-directionally in shaping ethical outcomes. Figure 1 provides various
environmental, personal, and behavioral factors that influence ethicality.
Figure 1
Application of Social Cognitive Theory

31
Environment
According to SCT, in addition to personal attributes, environmental factors influence
individuals’ ethical behaviors (Bandura, 1986). Social mechanisms influence financial
misconduct in organizations through diffusion, socialization, and normalization (Albrecht et al.,
2015; Palmer, 2013). Environmental and organizational settings are the vital antecedents of
corporate misconduct, and the top leadership team moderated those effects (Daboub et al., 1995;
Zona et al., 2013). In an organization, positive macro effect, company culture, tone at the top,
groupthink, and power dynamics affect employees’ ethical attitudes and influence them to act
ethically.
Macro Environment
According to Zahra et al. (2005), macro variables have a significant effect by creating
environments or situations that may pressure organizations and encourage or enable financial
misconduct. The authors described the concept of environmental hostility, which refers to the
firm’s undesirable competitive position in the industry. They explained that hostile environments
are characterized by demand degradation, stringent regulations, low profitability, and a high
percentage of company failures, and organizations feel pressured to commit misconduct by
artificially inflating financial results. The authors also suggested that there will be heightened
pressures to commit misconduct in industries where aggressive competition exists. On the
contrary, there will be less propensity to offend when the industry has a norm of mutuality and
cooperation (Zahra et al., 2005). Other studies have also shown that competition may promote
unethical behavior. According to Feltovich (2019), the intensity increases when individuals are
against rivals than non-rivals. Due to increased psychological stakes regarding self-worth and
status, individuals work harder and put in significantly more effort against rivals. Individuals are

32
pressured and subject to dishonest behavior, deceptive practices, and unethical negotiation tactics
(Feltovich, 2019).
Business Strategy
Business strategies driven by top management affect ethicality. According to Zona et al.
(2013), an imbalanced strategy is the continued pursuit of overzealous and far-stretched goals at
the expense of long-term organizational sustainability and success. History of past successes will
reinforce the companies’ tendency to commit to higher-risk actions, resulting in the undertaking
of imbalanced corporate strategies, which fosters unethical behaviors (Zona et al., 2013).
Schnatterly et al. (2018) discussed how organizational characteristics may increase
pressure on CEOs to engage in financial misconduct. High-performing organizations influence
the CEOs’ confidence and the desire to misstate financial performance to feed an increasing ego
(Chen, 2010). Trompeter et al. (2013) stated that demands or strains from the social environment
are antecedents to pressure-driven fraud. It is prevalent that outside investors and stakeholders
influence wrongdoing due to their unattainable expectations, which compel leaders to make
decisions not of their own volition but only to placate these expectations (Schnatterly et al.,
2018). According to Chen and Chen (2021), performance pressures in meeting these unattainable
goals are associated with unethical pro-organization behavior. DenNieuwenboer et al. (2017) also
posited that pressure created from unachievable goals motivates managers to encourage
employees to commit unethical conduct. Organizational environments that encourage
entrepreneurial orientation motivated by risky behaviors are positively associated with corporate
misconduct (Karmann et al., 2016).
An organization’s goal-oriented behavior provides signs to employees about their
organization’s ethical leadership (Marquardt et al., 2021). A leader’s emphasis on the bottom line

33
and financial goals to increase profits is a common objective for most corporations. However,
this serves as a frame for employees regarding the importance of meeting financial targets. A
bottom-line mentality may encourage dysfunctional and unethical behavior (Babalola et al.,
2020; Mitchell et al., 2020). Malimage (2019) indicated that corporations focused on achieving
goals without regard to ethical standards have a high probability of committing fraud. When
leaders emphasize performance goals rather than learning goals; employees may be prone to
unethical behavior (Marquardt et al., 2021). When leaders focus on failure avoidance and
minimize the importance of learning and development, employees may engage in misconduct
(Marquardt et al., 2021).
Loss aversion is also noteworthy in ethicality scholarship to further the discussion of
failure avoidance. According to Kahneman and Tversky (1979), individuals see losses as more
detrimental than gains of an equal extent since their self-interests are more significant when
faced with a loss. Losses are considered more damaging than gains are considered more
pleasing; therefore, individuals are subject to higher-risk activities to avoid the unpleasantry of a
loss (De Cremer & Vandekerckhove, 2016). The author also posited that high-risk tolerance often
leads to selfish and unethical intentions and behavior. An organization is prone to financial
misconduct when individuals make risky decisions to prioritize and sustain their self-interests.
Corporate Culture
Culture, according to Hofstede (1980), is the collective cognitive programming that
exhibits not just in values but through symbols, stories, and rituals. Each organization’s culture is
unique, encompassing its history, current atmosphere, and future vision. Organizational culture
should also foster an environment where ethics are prioritized (Lawton & Paez, 2015). Ethical
climates relate to beliefs about value systems (right versus wrong) in an organization that

34
provides behavioral guidelines for employees (Martin & Cullen, 2006). For organizations to
foster a culture of integrity, a values-based system needs to be internalized by employees to
achieve moral success (Verhezen, 2010).
In addition to culture, formal codes of conduct and incentive systems standards help
employees navigate the organizational environment (Palmer, 2013). Codes of conduct provide
ethical guardrails and convey to employees that unethical conduct is not allowed, thereby
mitigating opportunity and rationalization for the potential commission of those acts (Kagias et
al., 2022). According to ACFE (2022), codes of conduct reduce the loss of fraud by 51%. These
formal structures to promote and reinforce positive behaviors reduce rationalizations and may
redirect employees to resolve their challenges through appropriate means (Kagias et al., 2022).
Incentive systems have their limitations, as individuals may not respond to incentives as
expected (Palmer, 2013). Awarding incentives for ethical conduct may not increase the behavior
as the existence of the incentive may undermine the altruistic value of the act (Trevino &
Youngblood, 1990). Tenbrunsel and Messick (1999) posited that weak incentives are worse than
having no incentives in rewarding ethical conduct, as individuals view the decision as a business
transaction instead of ethical value-based gratification.
Consistent communication of a strong ethical culture indicating appropriate behavior
expected through modeling from leaders, informal norms, and incentive systems are associated
with improved ethical decisions in organizations (Kish-Gephart et al., 2010). Instituting rewards
and disciplinary actions associated with conduct are essential responsibilities of a moral manager
(Trevino et al., 2000; Trevino et al., 2003). The second dimension of ethical leadership of a
moral manager, Kish-Gephart et al. (2010) further suggested that consistent enforcement of

35
incentive systems and codes of conduct is more important to shaping behavior than their mere
presence.
Procedural justice is the perception of transparency and parity of organizational decisions
relating to rewards and sanctions (He et al., 2014). An effective code of conduct must be more
than a façade; organizations can convey this to employees through visible sanctions and
discipline of offenders (Albrecht et al., 1984). Perception of procedural justice improves
employee performance, increases motivation, and enhances compliance with rules and laws (He
et al., 2014).
From an employee standpoint, talking openly about ethics is associated with
organizational ethical behaviors (Trevino et al., 1999). Conversely, organizations depicted by
ethical muteness appear to condone ethical misconduct (Bird & Waters, 1989). Trevino et al.
(2006) posited that open ethical conversations creates an enhanced sense of moral awareness and
ethical decision-making.
Groupthink
A strong company culture fosters group cohesion, improving team performance through
higher efficiency and productivity. However, according to Janis (1982), high team cohesion may
also result in poor decision-making processes, especially when external pressures are present in
given situations. Janis (1982) coined the term “groupthink,” which refers to group-cohesioninduced censorship or self-censorship. It happens when individuals' desire for in-group
membership and social conformity overrides their desire to evaluate different paths of action.
The author posited that organizations that promote such environments have a pattern of defensive
avoidance and strive for unanimity, dependent, and homogenous thinking. The author also
suggested that top executives with social connections likely have similar perspectives and values,

36
so followers are more hesitant to question those decisions. Sims (1992) theorized five cognitive
defenses, which include failure to investigate serious consequences, misjudgment of warnings,
invention of new arguments, failure to properly interpret risk factors, and misperception of
imminent threat. In-group unquestioning blind loyalty and the illusion of invulnerability will
result in poor information search, an incomplete survey of alternatives, failure to reassess risks of
preferred choice, information processing bias, and lack of contingency planning (Janis, 1982;
Sims, 1992).
Other authors have provided theories on how groupthink can impact ethicality. Sims
(1992) proposed that these strong organizational dynamics may increase employees’
responsibility to behave ethically. On the other hand, these dynamics may also diffuse
responsibility, leading to unethical misconduct (Sims, 1992). According to Palmer (2013),
groupthink prohibits group members, even themselves, from critical thinking, reality testing, and
opposing points of view, which may lead to immoral actions. Li (2023) also theorized that group
members tend to possess an indisputable belief in their accuracy and collectively rationalize and
acquiesce to sub-optimal and even unethical decisions; therefore, has a higher probability of
committing financial misconduct.
Power Dynamics in Organizations
A considerable amount of scholarship has referenced how power dynamics in an
organization’s culture are a factor in an organization’s ethicality. One of the most seminal works
was Milgram’s (1973) experiment in delivering (bogus) electrical shocks to subjects under the
directives of participants with modest prodding and stating that it is a requirement of the
experiment. Compliance with formal or legitimate power is most apparent in organizations with
a formal hierarchy structure (Palmer, 2013). French and Raven (1959) suggested five sources of

37
power: legitimate, reward, coercive, referent, and expert. Milgram’s (1973) experiment
demonstrated legitimate power in exercising one’s position, a scientist in a formal white lab coat,
to direct behavior exerting a legitimacy of authority. Reward and coercive powers are similar to
the “carrot and the stick” scenario, which refers to the ability to determine and direct punishment
and incentives (French & Raven, 1959). Referent power is the amount of an individual’s holding
power or relationship that someone identifies with, and expert power relates to a perception of
special knowledge, skill, or proficiency (French & Raven, 1959).
Palmer (2013) suggested that managers who control scarce resources also possess the
power for individuals to give in to their requests. Information asymmetry happens due to the
increasing complexity of organizations; management has accumulated knowledge and expertise
that affords them this advantage over their shareholders and employees (Van Driel, 2019).
Possession of power changes individuals, which increases their propensity to offend. When
individuals have more power, there is a higher likelihood that they feel superior, thereby treating
others dishonestly (Palmer, 2013). Furthermore, power tends to heighten the perception of
opportunity, lessen susceptibility to external pressure, and increase the rationalization of selfinterest (Albrecht et al., 2015). These power biases may influence an individual to accomplish a
goal at all costs, even initiating unethical behavior that ultimately leads to financial misconduct
and enlisting others to participate and assist in the plan.
Studies of power provide valuable insight into CEO hubris as an antecedent to financial
misconduct. The CEO's power can encourage and mandate employees to engage in myopic,
unethical behavior (Li, 2023). CEO power is also tied to higher risk-taking and weak
governance, and when the organization is put under performance pressure, sub-optimal decisions
leading to financial misconduct are made (Li, 2023).

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Tone at the Top
If the tone at the top signals an ethical leadership culture, it infiltrates the organization.
The perception of the ethicality of leaders creates the tone at the top. Ethical leadership creates a
culture in which ethics play a pivotal role as the perceived ethics of leaders rub off others, and
these social norms create a virtuous environment where ethics begets ethics (Mittendorf, 2007).
The tone at the top is the starting point of an organization’s value system and the
development of a culture that lies with an organization’s top management (Bussmann &
Niemeczek, 2019). According to COSO (2014), the tone at the top is the ethical atmosphere that
has a trickle-down effect from the organization’s leadership to immediate middle management
and supervisors and then to the company's employees. This assertion aligns with the social
learning theory that the proper tone will inspire individuals to emulate the behaviors of ethical
leaders (Bandura 1977, 1986). It involves an attitude or environment that starts with the
leadership team setting the pace, example, or norms of ethical behavior throughout the entire
organization (Patelli & Pedrini, 2015). Leaders are also visible authority figures in an
organization who gain the employees’ attention and influence their behaviors through social
learning (Trevino et al., 2006). Ethics cannot be delegated as ethical leadership includes the
dimension of a moral manager where top leaders need to “walk the talk” (Trevino & Brown,
2004).
On the contrary, senior leaders who commit institutionalized misconduct indicate that
unethical behavior is accepted and condoned as the standard (Lokanan, 2015). Organizations
with leaders who have disregarded, encouraged, and even involved in misconduct will likely be
recidivists (Huang et al., 2017). In the long run, ethical misconduct may become normalized.

39
Person
Employees are attentive to their environments. They gather information to ascertain what
is valued and to behave accordingly. As a result, the actions and words of leaders are sources of
information that serve as guidelines for an organization’s normative ethical actions to achieve its
goals (Babalola et al., 2020; Mitchell et al., 2020). Psychological and behavioral ethics studies
show that even good people can do bad things, as Bazerman and Banaji (2004) phrase these
frequent cases of “ordinary” unethical behaviors. Outside environmental and social elements are
not the only routes in which employees’ behaviors and perceptions are developed. Employees’
priority towards the importance of individual and collective moral identity also moderates
unethical behavior (Mitchell et al., 2020). Self-efficacy, self-regulation, motivation, and the
trickle-down effect of tone at the bottom provide additional insights into how individuals may be
predisposed to ethical or unethical decision-making.
Self-Efficacy
Self-efficacy is a fundamental tenet in SCT's person element. Self-efficacy relates to an
individual’s choice of a task, the belief in his/her ability to accomplish the task, the amount of
effort to exercise, and the length and time the individual will persist to complete the task
(O’Fallon & Butterfield, 2012). As a form of self-efficacy, moral efficacy relates to the belief and
capacity of individuals to behave ethically when faced with an ethical situation (Hannah &
Avolio, 2010). This inner moral compass encourages them to take responsibility for their
behaviors and enhances their moral self-regulation processes (Liu et al., 2021). In many respects,
individuals’ actions are better explained by reference to moral principles and not triggered by
self-interest (Rabin, 1998).

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Self-Regulation
Self-regulation pertains to an individual’s activation and maintenance of thoughts,
actions, and outcomes that result in accomplishing goals (Schunk & Usher, 2019). Ethical
behaviors are impacted by the strength of an individual’s self-regulation (Eisenberg, 2000;
Trevino et al., 2006). Cognitive self-regulation is salient in predicting unethical behaviors
(Maulidi, 2020). According to Trevino (1986), ego strength is a similar element that influences
ethical behavior. Ego strength represents an individual’s capacity for self-regulation to resist
outside influences and the conviction to follow one’s beliefs (Trevino, 1986).
Motivation
Motive precedes behavior. Motivation is associated with an individual’s wants, needs,
aspirations, and actions (Raval, 2018). In an organizational context, motivation for economic
incentives to offend exists within all businesses (Cohen et al., 2010). The M-I-C-E framework
(Kranacher & Riley, 2011) identifies the four main motives for individuals to commit fraud:
money, ideology, coercion, and ego. Positive reinforcements or punitive consequences can drive
motives.
Individuals are not only agents of behaviors but also engage in self-assessments of their
own volition. According to Bandura (1991), moral conduct involves moral thought and moral
judgment that sets the standards to regulate influences. Individuals are motivated by selfsatisfaction and self-worth and act in alignment with their moral standards (Bandura, 1991). The
author also suggested that self-regulatory efficacy is essential in vanquishing societal pressures
to act ethically.
Individuals define themselves concerning their social settings to attain and preserve a
positive social identity. According to social identity theory (Tajfel & Turner, 1979), social

41
identity relates to an individual’s self-concept from their identity through affiliation to a social
group, which entails value and emotion attached to the group. Tajfel and Turner further posited
two fundamental subprocesses: categorization and distinctiveness. Categorization enables
individuals to make sense of their social environment, allowing them to delineate and
differentiate others from themselves. Distinctiveness happens when the individual thinks,
behaves, and preserves following the group’s perceived characteristics, different from other
groups (Tajfel & Turner, 1979). Individuals determine whether the observed behavior aligns with
their social identity and whether unethical conduct is part of the group norm, which increases the
propensity of committing unethical conduct (O’Fallon & Butterfield, 2012). Social identity
theory may strengthen organizational commitment, leading to prosocial rule-breaking (Morrison,
2006), where employees offend to help or benefit the organization or coworkers. Workplace
environments provide spiritual support and a sense of community, which may drive unethical
pro-social, pro-organizational behaviors (Maulidi, 2020). Lastly, Adams’ (1965) equity theory
posited that discontented individuals attempt to even out the perceived imbalances of their
outcome/effort ratios with others and will be subject to unethical means to reconcile those
differences (Gino & Pierce, 2009).
According to social comparison theory, individuals assess their attitudes, opinions, and
abilities by comparing them to their peers, especially when there is a lack of objective
information or cues (Festinger, 1954). The two central tenets of social comparison theory are the
unidirectional drive upward and the similarity hypothesis (Festinger, 1954). Unidirectional drive
upward refers to the individuals’ aspirations to improve themselves to excel and surpass others
(Festinger, 1954). Under the similarity hypothesis, individuals gravitate towards comparing
themselves with similar persons as it is more relevant (Festinger, 1954). According to O’Fallon

42
and Butterfield (2012), individuals may react negatively to unfavorable comparisons when they
perceive that their peers reaped the benefits from unethical conduct. These negative emotions
and perceived deprivation will increase the propensity for individuals to conduct unethical
behavior to “even the score” (O’Fallon & Butterfield, 2012). According to Wang et al. (2021),
anger triggers unethical behaviors while guilt moderates. To compensate for their loss or unmet
self-interest needs and alleviate emotional distress, individuals may commit unethical conduct
(Wang et al., 2021).
Trickle-Down Effect: Tone at the Bottom
According to Ewelt-Knauer et al. (2022), social norms are comprised of injunctive
norms, which represent the expectations of others, and descriptive norms, which represent the
behavior of others. The authors discussed descriptive norms as normal behaviors demonstrated in
the environment. The authors explained that injunctive norms are rules guiding employees in the
behaviors that are condoned and expected and will lead to social rewards or discipline
accordingly. They further suggested two essential injunctive norms to communicate downstream
the expectations to employees: rules of conduct and incentives to encourage performance. An
organization’s rules are formal directives of right and wrong from top management’s viewpoint
(Ewelt-Knauer et al., 2022; Tyler & Blader, 2005). When stakes are high and there is substantial
pressure to perform, leaders create a strict environment through incentive structures that may
ultimately affect employees’ ethical behaviors (Pickerd et al., 2015).
Corporate rules of express directives and indirect reward systems may guide behavior
only when there is a consistent signal; this is when the concept of tone at the bottom becomes
relevant (Ewelt-Knauer et al., 2022). According to the same authors, the tone at the bottom
relates to values the immediate work surroundings convey. Under the theory of self-concept

43
maintenance, corporate rules have to be internalized by employees to guide their behavior and
serve as a reference or standard to assess the proper behavior to maintain a positive self-concept.
Secondly, these rules must be triggered and deemed relevant by employees (Cialdini &
Goldstein, 2004; Ewelt-Knauer et al., 2022). When these norms are not aligned, competition will
occur between one social norm and the other. Factors like salience, tangibility, credibility, power,
immediacy, and the conformity of other employees, one norm, will have a stronger influence on
behavior (Ewelt-Knauer et al., 2022). Furthermore, if social sanctions for deviations are directly
observable, employees will strive to meet the expectations of others or injunctive norms in their
proximate surroundings (Ewelt-Knauer et al., 2022).
Behaviors
SCT posits that individuals play an active role in their attitudes and motivation within this
framework of reciprocal causation (Bandura, 1986; Bekiarus & Papachristou, 2021). Employees’
ethical behavior results from two factors: environmental context and the individual’s attributes.
Unethical behavior becomes a product of a multifaceted interplay of both influences (Hunt &
Vitelli, 1986; Trevino, 1986).
Through vicarious learning, individual behavior may converge toward organizational
norms. According to Bandura (1977), social learning theory posits that individuals utilize their
observations and internalize learned behavior to guide their actions. Through these observations,
individuals learn normative acceptable behaviors and imitate those actions via modeling to
reproduce those behaviors demonstrated by the model (Bandura, 1977). Through vicarious
learning, peer misconduct is directly associated with observers’ unethical conduct (O’Fallon &
Butterfield, 2012). Personal ethics may drift over time due to these outside influences via ethical
spillovers (Pierce & Snyder, 2015). The following factors of peer-to-peer behaviors, tone in the

44
middle, cognitive dissonance, slippery slope, and followership provide additional cues in shaping
an individual’s conduct.
Peer-to-Peer Behaviors
Environmental factors that influence ethical behavior can come from the top and coworkers via social networks in the workplace. According to Dimmock et al. (2018), the ethical
behaviors of individuals are impressionable and may be contagious through the misconduct of
their peers to co-offend. Co-offending relates to the commission of misconduct by cooperating
with more than one willing participant with pooled resources to commit unethical, even illegal
acts (Free & Murphy, 2015). Extant research has continuously shown that peer effects
significantly influence unethical decision-making and behavior. First, peer influence may
transpire via social learning (Bandura, 1977). Individuals can learn about the advantages and
monetary gains of misconduct as well as the strategies, thus lowering the risk of detection
(Dimmock et al., 2018). Secondly, the contagious effect can also be attributable to social utility
when individuals engross the culture and social norms and adapt their behavior to gain
acceptance (Dimmock et al., 2018). Individuals may also be subjected to coercive power and fear
that they may be punished and treated as an outcast or even job loss (Albrecht et al., 2015). The
strength of peer effects directly correlates to the frequency and amount of contact with peers
(Zey-Ferrell et al., 1979).
According to Free and Murphy (2015), established relationships facilitate opportunities
for co-offending and strengthen motivations or rationalizations. These trust dynamics take the
form of mutual dependence, reciprocity, and strict adherence to their code, as a breach would
have negative consequences for everyone (Free & Murphy, 2015). In organizations, high
cohesion is gained through in-group networking and outgroup antagonists like competitors, Wall

45
Street, and regulators, using organizational survival or success and diffusion of responsibility as
rationalizations.
On the contrary, peer effects may have a positive influence on individuals. It underscores
the significance of moral affirmation from one’s peers and its impact on how people make ethical
decisions (Jones & Ryan, 2001; Trevino et al., 2006). Peer ethical behavior operates as a role
model for individuals to conduct ethical behavior (Trevino et al., 2006). Ethical individuals’
presence and their beliefs can limit the number and magnitude of potential collusive associations.
Tone in the Middle
A crucial aspect of tone at the top is its diffusion into lower company levels. It is salient
to study how employees react to tones at multiple organizational levels as employees observe
their immediate supervisors and peers who expect compliance and behave ethically (EweltKnauer et al., 2022). Success at different levels can create an atmosphere to promote an ethical
environment for the entire organization (Bussmann & Niemeczek, 2019). Justice, fairness, and
positively perceived behaviors modeled by direct supervisors positively influence employees'
ethicality through social learning (Brown et al., 2005). According to Bussman and Niemeczek
(2019), influential company culture not only rests on its highest leadership team but is a complex
and multifaceted task that must incorporate all organizational levels. Ethical behavior will only
be evident with the proper diffusion of the tone from the top and the ethical modeling of the
direct supervisor (Bussmann & Niemeczek, 2019).
Cognitive Dissonance and Moral Disengagement
Morality is critical to a person’s identity and self-awareness. According to Bandura
(1991), moral actions are functions of self-sanctions and social sanctions. Unethical behaviors
from moral lapses happen when self-sanction is disengaged and clouded with competing

46
conflicts (Bandura, 1991). Cognitive dissonance relates to the tension and emotional discomfort
when a person holds two conflicting thoughts (Festinger, 1957). Rationalization is an
individual’s mechanism to compromise cognitive discord (Rodgers et al., 2014). This process
shields the guilt or eases the individual’s conscience and attempts to reconcile ethical dilemmas
with normative accepted moral principles (Lokanan, 2015).
One psychological process that neutralizes the effects of cognitive dissonance is the
concept of moral disengagement (Bandura, 1991). Moral disengagement is a buffer for
individuals to remove themselves from feelings of guilt through cognitive reconstruction
(Bandura, 1991). Unethical behaviors are more likely to occur when individuals disengage from
moral thoughts (De Cremer & Vandekerckhove, 2016). Murphy and Dacin (2011) proposed three
psychological paths to misconduct utilizing the context of moral disengagement and cognitive
dissonance. The three paths are justifying that the perceived advantages outweigh the costs,
intuition and rationalization, and lack of awareness. Individuals use these pathways to normalize
organizational misconduct (Murphy & Dacin, 2011).
Moral inclusion and exclusion are a salient extension of moral disengagement. Moral
inclusion relates to applying considerations and fairness to another individual (Opotow, 1990;
Trevino et al., 2006). Moral exclusion emerges when individuals are outside the realm of moral
rules to be applied (Opotow, 1990; Trevino et al., 2006).
Rationalization resulted in categorizing individuals who commit unethical behavior into
two categories: first-time offenders or accidental fraudsters and repeat offenders or predators
(Kagias et al., 2022). Opportunistic events trigger predators and they do not feel a need to
rationalize the behavior due to their lower sense of morality and integrity (Kagias et al., 2022).
According to the ACFE report (2022), accidental fraudsters are more common who feel a need to

47
rationalize their behavior, ultimately leading to unethical actions. Typical rationalizations for
financial misconduct may include, “This is our only option,” “Everyone is doing it,” “It is only
short-term or this one-time,” “It is in the best interest of the company, or the employees, or the
society, or the greater good” (Albrecht et al., 2015). These excuses defer the perception of
unethicality to a more utilitarian ideal, “social weighting,” or denial of harm justifications
(Albrecht et al., 2015; Palmer, 2013)
Slippery Slope
Welsh et al. (2015) posited that moral disengagement might increase unethical behaviors
gradually over small increments of transgressions. The slippery slope or escalation effect extends
the temporal perspective of ethical misconduct from a single point in time to be reconsidered to a
series of gradually changing and declining ethicality (Welsh et al., 2015). Individuals justify
minor unethical behaviors as they do not have to change their self-concept (Gino et al., 2009;
Mazar et al., 2008). Financial misconduct goes from one innocuous incident to actions with more
significant consequences as these transgressions become more serious over time (Marquardt et
al., 2021). Individuals engage in minor infractions up to a certain threshold until the behavior
becomes too egregious that the internal psychological cost outweighs the external benefit from
misconduct (Welsh et al., 2015).
Other studies have reviewed the slippery slope concept in evaluating ethical erosion in
committing ethical misconduct. As discussed earlier in Milgram’s (1973) experiment in
delivering (bogus) shocks to subjects, potential reasoning of compliance was mainly due to the
dynamics of power and obedience but also the incremental nature of the task, which allowed
individuals to morally disengage over time rather than abruptly (Welsh et al., 2015). According
to McLean and Elkind (2003), the Enron scandal was originated out of a gradual decline in

48
ethicality, values, and behaviors that started years before their eventual bankruptcy, and the
executives found guilty and sentenced to prison (Welsh et al., 2015)
These studies demonstrate that individuals are aware of what constitutes ethical
behaviors. They are trying to be rational. However, the incremental nature of the course drives
them to commit financial misconduct that they otherwise may not have undertaken.
Followership
While there has been abundant research on leaders and leadership, followership is often
ignored in leadership dynamics scholarship (Uhl-Bien et al., 2014). Followership can describe
how individuals respond to leaders’ behaviors and their impact on followers’ ethical conduct.
Based on Padilla’s (2007) toxic triangle theory to study destructive leadership using three
components: destructive leadership, conducive environment, and susceptible followers.
Thoroughgood et al. (2012) expanded their research on susceptible followers. The authors
categorized two types of followers: colluders who actively contribute to the leader’s missions
and conformers who do not engage in unethical behavior alone. These followers are, in essence,
collaborators who accepted and internalized unethical behaviors. Colluders are further grouped
into acolytes and opportunists. Acolytes collaborate with unethical leaders motivated by goal
internalization and value-based and power triggers. Instrumental triggers and characteristics of
greed and low-impulse control drive opportunists (Thoroughgood et al., 2012). Prior research has
focused on the conformer side of followership, involving studies related to obedience (Blass,
1999) and bystander behavior (Zyglidopoulos & Fleming, 2008). Thoroughgood et al. (2012)
proposed three confirmer sub-groups: authoritarians, lost souls, and bystanders. Power, role
legitimacy, and an unwavering cognitive disposition motivate authoritarians. Lost souls are
driven by external and internal self-concept motivation due to low self-esteem, unmet needs, and

49
high personal distress levels, fueled by referent power and leader identification triggers
(Thoroughgood et al., 2012). Bystanders are triggered by instrumental motivation, internal selfconcept, and low extroversion with a vulnerability of cowardly prosocial disposition.
Thoroughgood et al. (2012) and Padilla et al. (2007) provided a cohesive framework to explain
susceptible followership. Barbuto (2000) further studied influence triggers to understand
follower compliance. Utilizing three primary triggers-influence triggers: power, relations, and
values, Barbuto (2000) theorized how these would interact with motivations to commit unethical
behaviors. Barbuto and Scholl’s (1998) posited five sources of motivation: instrumental (external
tangible outcomes), external self-concept (self-affirmation and social acceptance), internal selfconcept (reinforce internal standards and values), intrinsic process (enjoyment), and goal
internalization (pursuit of goals consistent with one’s values). Unethical leaders may not be able
to commit misconduct alone without the assistance of susceptible followers or co-offenders.
Therefore, followership research provides additional insight into the diffusion of norms and
culture relating to a company’s ethicality.
Conclusion
Financial misconduct in all forms remains a hazard to all organizations. In light of the
significant impact of financial misconduct, there has been a plethora of extant research on ethical
leadership. This chapter provides a synthesis and analysis of pertinent published literature on
financial misconduct and ethical leadership. Multiple fraud theories are discussed to provide a
foundational understanding of the phenomenon of financial misconduct. More recent research is
now broadening its characteristics away from individualistic explanations to a much larger
ecosystem of sociological and environmental factors. The chapter introduces SCT and how it
provides a more robust and comprehensive framework to study the problem of financial

50
misconduct from the standpoint of ethical leadership. The review dissects the three interactive
conditions of behavior, person, and the environment and their roles in fostering ethical
leadership. Within the triadic reciprocity model, ethical leadership breeds ethical cultures, and
culture perpetuates ethical behaviors. Ethical behaviors, in turn, regulate the ethical norm; this
ultimately may cultivate a virtuous mechanism to prevent and deter financial misconduct.
.

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Chapter Three: Methodology
The literature review discussed how financial misconduct continues to be a significant
threat to all organizations. There is also scarce research on fraud studies involving SMEs (Zainal
et al., 2021). Therefore, utilizing world grade engineering (WGE) as an organizational study was
constructive. WGE was an organization classified as an SME. This study explored the lived
experiences of employees and stakeholders at WGE as they went through an organizational
change resulting from financial misconduct. Findings from the study will contribute to extant
knowledge on financial misconduct, specifically regarding deterrence and intervention for SMEs.
This chapter outlines the research questions, research design, and methodology. Next, the
population, sample selection, instrumentation, data collection, and data analysis are discussed.
Lastly, positionality, power, ethics, limitations, and delimitations are addressed to ensure the
study produces valid and reliable knowledge with trustworthiness and rigor.
Research Questions
This study utilized SCT as a framework for analysis through the three elements of
environment, person, and behavior. The following three research questions guided the study:
1. How are individuals influenced by environmental factors relating to ethical versus
unethical behaviors?
2. How are individuals influenced by personal factors relating to ethical versus unethical
behaviors?
3. How are individuals influenced by behavioral factors relating to ethical versus
unethical behaviors?

52
Research Methodology and Design
The lens of SCT focused on the participants’ perceptions and lived experiences of the
triadic relationship between person, behavior, and environment in WGE and its ethicality pre and
post-organizational change. This study was more conducive to utilizing a qualitative
methodological design. Qualitative research emphasizes discovery, meaning, context, and insight
(Merriam & Tisdell, 2016). Phenomenology relates to the study of how individuals describe their
lived experiences through their senses (Patton, 2015). A phenomenological inductive approach is
applicable to seeking a greater understanding of an existing social phenomenon and generating a
large amount of data from a small sample (Creswell & Creswell, 2018). Open-ended responses
provide sources of insight and discovery via a more penetrating and reflective approach (Van
Maanen, 1979). Utilizing a phenomenological inductive approach with open-ended responses
offered deep insights into participants’ experiences relating to WGE’s ethicality as they went
through the organizational change.
Pre-surveys and one-on-one phenomenological interviews answered the three research
questions posted. These two methods provided triangulation to mitigate bias and increase
validity and reliability through improved memory recall. The organizational change resulting
from financial misconduct occurred years before the commencement of this study. Starting the
research with a pre-survey provided more context and highlighted relevant concepts to assist in
active memory retrieval.
Qualitative interviews, also known as depth interviews, dive into a participant’s emotions
and cognitions (Johnson & Christensen, 2015). Phenomenological interviews seek to understand
the essence of a person’s lived experience (Seidman, 2013). Interviews were suitable as this
method provided a gateway to enter the participants’ world and understand their perspectives

53
through their lived experiences in WGE. Both survey and interview questions were congruent
with the three main research questions to explore participants’ perceptions of the triadic elements
of environment, person, and behavior.
Sample and Population
This research was an organizational study. The bracketed spatial and temporal domain
relates to the place and time under study (Van Maanen, 1979). For this study, it was WGE preand post-organizational change. WGE was a privately held for-profit SME founded over 20 years
ago and grew into a sizable business. Due to financial misconduct, the company was on the brink
of bankruptcy, which prompted an immediate organizational change. After the organizational
change, the company made a complete turnaround and successfully exited a few years later,
earning over a 2000% return on investment.
Since the case or the bounded system and unit of analysis to be studied was WGE, the
population included employees and stakeholders of the company. Nonprobability sampling is
reasonable for discovering what occurs, the implications, and the relationships connecting events
(Merriam & Tisdell, 2016). The most common form of non-probabilistic sampling is purposeful
sampling, a term coined by Patton (2015). Purposeful sampling is appropriate as the study
intends to discover, understand, and gain insight from a sample from which we can learn the
most about their unique experiences and competencies (Merriam & Tisdell, 2016). The authors
further suggested that purposeful sampling can maximize learning from the participants and
provide the best avenue to understand, explore, and gain perspective. The study explored the
environment, person, and behaviors in WGE from employees’ and stakeholders’ perspectives;
therefore, capturing their unique involvement and experiences was crucial. Patton (2015)

54
explained that purposeful sampling emphasizes the in-depth understanding of specific cases. The
case utilized in this study was WGE.
The study focused on a time when there was an organizational change due to financial
misconduct. Therefore, utilizing criterion-based selection (LeCompte & Schensul, 2010), the
included population was composed of only employees and stakeholders who were employed or
involved with the company during the period when there was a change in leadership. The
appropriate sample size was the adequate number of participants to answer the research
questions posted until a point of saturation or redundancy (Merriam & Tisdell, 2016). The
sample size was 10 participants.
Initial participants were recruited through personal networks and existing contacts within
the target population. They were informed about the study and the process of referring others
who may fit the study’s criteria. Convenience sampling was used as an additional avenue to
recruit additional participants. This process involved selecting individuals who were readily
accessible and willing to participate. Participants were contacted by personal email. Due to the
expected time required for the pre-survey and interview, a gift card with a nominal amount was
given to participants as a token of appreciation for their time. Appendix A presents the
solicitation email.
Instrumentation
This study utilized pre-surveys and one-on-one phenomenological interviews to answer
the three research questions posted. According to Castillo-Montoya (2016), alignment between
survey and research questions can enhance the research’s utility and solidify its purpose and
necessity (see Appendix D). In addition to sending interview questions to participants in
advance, incorporating a pre-survey provided more concrete perspectives and concepts to assist

55
in memory recall. A pre-survey was the first step in data collection before the one-on-one
interviews. The pre-survey reset and refocused participants’ mindsets to better prepare for the
interview. Table 1 outlines the data sources to answer the three research questions of this study.
Table 1
Data Sources
Research questions
Presurvey Interview
RQ1. How are individuals influenced by environmental factors
relating to ethical versus unethical behaviors?
x x
RQ2. How are individuals influenced by personal factors
relating to ethical versus unethical behaviors?
x x
RQ3. How are individuals influenced by behavioral factors
relating to ethical versus unethical behaviors?
x x

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Pre-survey
Out of the four types of questions that can be measured in a survey (Robinson &
Leonard, 2019), three attribute questions were asked as introductions and demographics. The rest
of the questions inquired about respondents’ thoughts. No questions were asked involving
abilities. The remaining thirty-two questions addressed and aligned with the three interactive
elements of SCT: environmental, person, and behavior. The survey contained all closed-ended
ordinal questions utilizing a Likert 4-point scale to counteract survey fatigue (Robinson &
Leonard, 2019). Open-ended questions were deferred to be asked during the one-on-one
interviews. Appendix B presents the survey protocol.
Interviews
The next step was the phenomenological interviews. The pre-survey results allowed
revisions and refinement in the interview questions and whether there were different focus areas
or gaps observed in the pre-survey. Phenomenological interviews aim to uncover individuals’
lived experiences (Seidman, 2013). Interviews are conducted with semi-structured questions
designed to probe participants’ lived experiences and perceptions (Creswell & Creswell, 2018).
Structured interviews were too restrictive, but unstructured ones may not provide the needed
focus to answer the intended questions; therefore, a semi-structured format was more desirable.
A script was prepared in advance, as Castillo-Montoya (2016) suggested, to support the goal of
having a natural conversation.
The interview consisted of 25 open-ended questions. Participants can describe and
provide meaning to their lived experiences through open-ended inquiry (Creswell & Creswell,
2018). Probes allow for exploration, further details, and clarifications (Merriam & Tisdell, 2016).
The interview questions involved all the six types of questions that Patton (2015) suggested. The

57
interview started with the background and demographic questions. Opinion and values questions
inquired about the participants’ viewpoint of ethics. Knowledge questions addressed the
situations they faced in WGE relating to the circumstances of the change in leadership. The
interview focused on the other three types of questions: experience and behavior, feelings, and
sensory questions to learn more about their perceptions and experiences. Those 25 questions
aligned with the three interactive tenets of SCT: environmental, person, and behavior.
Congruency between the interview and research questions can increase the interview's usefulness
in confirming the research purpose and ensure the necessity of the process (Castillo-Montoya,
2016) (see Appendix D). In the end, I closed with thanks and inquired about intentions for
follow-up. Appendix C presents the interview protocol.
Data Collection
The data collection for the initial survey was first completed via University of Southern
California (USC) Qualtrics. Electronic surveys’ relative ease of use for researchers and
respondents was a main advantage. It also provides secure processing with simple reports and
notifications of completion (Robinson & Leonard, 2019).
The qualitative data collection for this study was completed via Zoom interviews with
employees and stakeholders of WGE. According to Weiss (1994), a good policy is to provide the
most comprehensive report as long as it is productive. Each interview lasted around an hour but
was scheduled for one hour and 15 minutes to allow for additional time as needed to maximize
the opportunity to get more data. Weiss (1994) also mentioned that second interviews typically
outweigh the costs. The interviewees were asked in advance for their availability should a second
interview be needed. No second interviews were conducted. Interview times were set after work
hours or on weekends.

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Three data collection methods were used to ensure the trustworthiness of the interview
process. The Zoom platform operated from a laptop, recorded and transcribed the interviews. As
an additional backup, the conversation was recorded using Otter.ai, operated out of a cellphone. I
also took written notes as a third backup in case of any technological malfunction. Zoom
platform and Otter.ai provided verbatim notes and increased the fidelity of the transcripts of
electronically recorded data (Weiss, 1994).
Data Analysis
The pre-survey results were used as a tool to refine the interview questions, and the
results were compiled into statistics and aggregated into functional reports. After summarizing
and organizing the survey results, the next step was to review interview transcripts. The goal of
data analysis of a qualitative study is to make sense of the voluminous text and data collected
(Creswell & Creswell, 2018) through thematic analysis. The process suggested by Creswell and
Creswell (2018) is described below.
After completion of each interview, an initial review and comparison of transcriptions
from Zoom and Otter.ai were conducted for accuracy and triangulation. References to individual
names or organizations in the interviews were redacted or de-identified. Revised transcripts were
sent to participants for member checking. I then studied the transcripts to understand the overall
meaning and the ideas that the participants conveyed.
Coding was the next step. Coding is a method to organize, bracket, and segment data
collected into categories or themes (Merriam & Tisdell, 2016). The analysis started with the
generation of a priori descriptions and themes. Following the three tenets of SCT, the main
themes fell under environment, person, and behavior. I further broke them down into elements
that were identified under these three interactive themes. Evidence from participants was

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gathered through direct quotes and grouped into existing themes, subthemes, and new emergent
themes. Within each theme, a detailed assessment was performed to review different
perspectives from participants and whether certain themes should be collapsed into fewer and
more comprehensive categories (Merriam & Tisdell, 2016). Lastly, I completed an advanced
analysis to view all the data collected throughout the study holistically to determine whether
there was data convergence or divergence.
Validity and Reliability
Validity in surveys relates to measuring what it is intended to measure (Robinson &
Leonard, 2019). Internal validity looks at the congruence of findings to reality (Merriam &
Tisdell, 2016). Creswell and Creswell (2018) listed various threats to internal validity; the one
pertinent threat in this study is history.
Robinson and Leonard (2019) state that memory deterioration is a known factor over
time. Due to the length of time that had lapsed, the study needed to be mindful of respondents’
ability to retrieve or recall relevant information from long-term memory. Robinson and Leonard
(2019) suggested having a retrieval strategy with cues and inferences and phrasing survey
questions, which can assist and trigger recall. Per Lenzner (2012)’s suggestion to reduce
cognitive effort and response error, the survey questions are short and do not have an option of
“do not know.” Emotions, especially stronger ones triggered by events, are more easily retrieved
(Robinson & Leonard, 2019). Consequently, the survey questions focused more on respondents’
perceptions and feelings rather than facts.
According to Creswell and Creswell (2018), reliability relates to consistency and stability
and suggests the need to document the procedures and protocols. Merriam and Tiswell (2016)
explained that reliability refers to whether the research results can be repeated. The study

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involved detailed documentation of the research procedures and protocols. The study also
provided an audit trail and a process log, as suggested by Lincoln and Guba (1985). These
records provided a detailed account of how the research was conducted and how the data was
analyzed.
Credibility and Trustworthiness
The researcher is the filter that the data collected goes through and the instrument of data
collection and analysis (Bowen, 2009; Maxwell, 2013). According to Creswell and Creswell
(2018), qualitative validity is based on determining the accuracy from the researchers’,
participants’, and readers’ standpoints. The same authors recommended using multiple validity
strategies so that the researcher has an assurance of the accuracy of the findings and the ability to
convey them to the readers. Three strategies, triangulation, member checking, and rich and thick
description, were used to enhance the credibility and trustworthiness of this study (Lincoln &
Guba, 1995).
Memory played a role in this study, which may affect the accuracy of the respondent’s
answers. Creswell and Creswell (2018) recommended using multiple strategies so that the
researcher has an assurance of the accuracy of the findings and the ability to convey them to the
readers. The survey was only the first data collection method for this study. Qualitative one-onone phenomenological interviews followed the survey to allow more in-depth discussions of the
participants’ lived experiences. To further aid in memory recall, the questions were sent to
participants in advance so they could better prepare for the interview. Participants demonstrated
a strong ability to recall a multitude of events and offered detailed, rich descriptions of their
experiences.

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Triangulation examines evidence from different data sources to build a consistent theme
(Creswell & Creswell, 2018). Most questions were designed to follow with additional probes of
asking for an example, which may provide a better opportunity to triangulate between
interviewees. Utilizing triangulation of diverse data sources counters threats to trustworthiness,
such as reactivity and biases from researchers and participants (Bowen, 2009).
Member checking or respondent validation is the determination of accuracy by verifying
participants' final report or themes (Creswell & Creswell, 2018). After the initial interviews and
compilation of transcripts, interviewees were contacted to confirm the findings’ accuracy and
completeness. Interviewees may edit the responses to ensure their intentions were captured
correctly.
Rich and thick description relates to detailed narratives of the settings to provide a more
realistic and deeper understanding of the shared experiences (Creswell & Creswell, 2018). The
interview questions were primarily open-ended, with further probes to allow participants to dive
deep into their lived experiences as employees or stakeholders of WGE. Utilizing electronic
transcription, copious notes were provided verbatim to capture all the details from interviewees.
Conducting interviews that provide participants with privacy, confidentiality, and
anonymity can also enhance credibility and trustworthiness (Creswell, 2014). Participants were
informed of the confidentiality and anonymity of this study from recruitment and presurvey to
the interview. All participants used a pseudonym for the presurvey and interview.
Lastly, reflexivity is important to address because of the inherent powers in conducting
qualitative research (Merriam & Tisdell, 2016). I have been a financial executive for 30 years
and have accumulated professional experience witnessing or learning about ethicality and
financial misconduct. My biases and positionality had a significant impact as I was the primary

62
instrument for data collection and analysis. Being aware and cognizant of each step, ensuring
established protocols were followed, and utilizing the above strategies to enhance credibility and
trustworthiness mitigated these effects.
Positionality and Power
Power or perceived power can impact data collection (Burkholder et al., 2019). I
emphasized my role as an outsider and aimed to learn from their experiences as a researcher and
a doctoral student. Burkholder et al. (2019) recommended consideration of the setting. The
invitations to participants were sent to their personal emails. The interview times were scheduled
outside of work hours. USC Qualtrics, a third-party software, conducted the survey. The USC
Qualtrics account was under USC and had the USC banner and branding throughout the survey.
The Zoom account was under USC with the USC virtual background. These settings deferred the
mental minds of participants away from WGE and allowed them to frame their thinking as
individuals.
Burkholder et al. (2019) mentioned the importance of encouraging honest answers and
thoroughly explaining the purpose and usefulness of the research. I emphasized and reiterated
these messages in the email invitation, consent form, and the script I read before the interview, in
particular, regarding confidentiality and privacy due to the sensitive nature of the subject matter.
I was cognizant of the messaging in the recruitment process to refrain from exerting power so
participants did not feel obligated to be part of the study. On positionality, I was mindful of
projecting neutrality (Patton, 2015) and objectivity in my verbal and nonverbal communication
with interviewees.

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Ethics
Research should be conducted with integrity and involve the researcher's ethical position
(Merriam & Tisdell, 2016). According to Glesne (2011), with qualitative research utilizing
human subjects, the priority must be protecting participants. Ethical research practices can be
situational or relational (Merriam & Tisdell, 2016).
Situational Ethics
Situational ethics relates to protocols or practices, including informed consent, data
management, and confidentiality. A vital part of working with human subjects was obtaining
informed consent. The informed consent adhered to the University of Southern California’s
Institutional Review Board. The Information Fact Sheet for Exempt Non-Medical Research was
sent to the participants when scheduling interviews. The information sheet conveyed to the
participant the potential risks involved in the study, and the process was entirely voluntary. They
can skip questions they felt uncomfortable answering and were free to leave the study anytime.
Data handling was maintained by securing electronic data in password-protected computers and
third-party software that required two-factor authentication for login. All data collected from
interviews, including digital recordings, transcribed documents, audio files, and handwritten
notes, will be deleted or shredded at the conclusion of my studies in the OCL program. Member
checking ensures the intentionality of participants’ responses (Creswell & Creswell, 2018).
Relational Ethics
Relational ethics relates to being cognizant of my role and impact on relationships.
Research participants were members of the organization and may not be forthcoming or
apprehensive about providing honest information. The confidentiality and privacy of the
participants and the organization were critical. All discernable information was de-identified to

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protect the participants. Strict confidentiality during and after the study was conveyed to
participants and reiterated during recruitment, email communications, and interviews. The
purpose of the study, the projected investment in time, how the data will be used, and how the
findings will be reported were communicated to the participants during the recruitment process
and the actual interviews.
Limitations and Delimitations
Limitations are inherent design constraints and external elements that cannot be
controlled by the researcher or mitigated by research design (Merriam & Tisdell, 2016). The
qualitative nature of this study allowed for opportunities for human error and biases that may
affect the research. The study was designed to elicit in-depth experiences from a narrow
subgroup as they related to the employees’ and stakeholders’ perceptions of WGE’s ethicality.
The number of participants limited the study, and broad generalizations may not be relevant. The
study was dependent upon the honesty and openness of the participants. Due to the sensitive
subject matter, participants may not have been forthcoming and withheld their responses.
Participants may have had difficulty recalling exact facts and perceptions due to the time lapse
between the occurrence and the time of the study. However, participants demonstrated strong
recall of the events and provided vivid details of their experiences and perceptions.
Delimitations are design choices made by the researcher that may have implications for
the study (Merriam & Tisdell, 2016). Inclusion criteria for participants and the scope, number,
and nature of the research design questions were some of the delimitation factors. One major
delimitation element was that the research was an organizational study of WGE. The data
collected from interviews and document analysis represented a narrow case study of WGE and
may not be generalizable to other organizations. However, the research findings may provide

65
additional insights to practitioners and researchers about financial misconduct deterrence and
prevention for SMEs.
Conclusion
This chapter discusses the design and methodology used to conduct the study. The
research design started with a pre-survey with all closed-ended questions followed by qualitative
individual interviews. A qualitative phenomenological research method was appropriate when
the goal was to elicit employees’ and stakeholders’ perceptions of the company’s environment,
person, and behaviors in ethicality. The data collection methods, including surveys and
interviews, were discussed with the sampling technique and data analysis process. I addressed
methods to enhance the study’s validity, reliability, creditability, and trustworthiness. The
chapter ends with the approaches of positionality, power, ethics, limitations, and delimitations to
ensure the study produced valid and reliable knowledge with trustworthiness and rigor.

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Chapter Four: Results and Findings
This chapter presents the results and findings of the study. The purpose of the study is to
contribute to the knowledge of financial misconduct, specifically as it relates to deterrence and
intervention in SMEs. This study applied SCT as a framework and utilized WGE as an
organizational study. Participants completed a presurvey with basic demographic information
and thirty-two closed-ended ordinal questions with twenty-eight statements utilizing a Likert 4-
point scale. Participants were then scheduled for one-on-one interviews. The results and findings
are organized by research questions, starting with a quantitative analysis derived from the presurvey and then a qualitative analysis based on the interviews. Within the qualitative analysis, a
discussion of themes that pertain to each research question is addressed. The following three
questions guided the study:
1. How are individuals influenced by environmental factors relating to ethical versus
unethical behavior?
2. How are individuals influenced by personal factors relating to ethical versus unethical
behavior?
3. How are individuals influenced by behavioral factors relating to ethical versus
unethical behavior?
Participants
Participants included 10 individuals who were employees or stakeholders at WGE.
Figures 2, 3, and 4 outline the summary of their demographics. The participants of the study
provided a representative sample from varied demographics and backgrounds in terms of gender,
age, tenure with the company, rank, and status with the company. Additional descriptions of each
participant are also provided after the figures.

67
Figure 2
Breakdown of Participants’ Gender
Figure 3
Breakdown of Participants’ Age

68
Figure 4
Breakdown of Participants’ Rank
Bobby joined WGE before 2010. What attracted him to be associated with WGE was his
compensation. He was responsible for managing a division of WGE and grew that department
both in revenues and staff with his expertise. He worked with former management and continued
to work with new leadership after the organizational change.
Joey joined WGE between 2010 and 2014. Stable hours and free lunches attracted her to
be associated with WGE, and the company was “straightforward in the beginning.” She worked
in different departments during her tenure at WGE.
Lily joined WGE before 2010. She was introduced to WGE by her prior coworker. She
worked in different departments during her tenure at WGE. She is no longer associated with
WGE.

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Lynn joined WGE before 2010. What attracted her to be associated with WGE was that
she knew former employees. Her primary role was to provide professional services directly to
clients. She did not work as closely with leadership before the organizational change but became
integral to the leadership team after.
Mark joined WGE between 2010 and 2014. The opportunity to grow with the company
attracted him to be associated with WGE. He started at a staff level but was then promoted to
department management.
Natasha joined WGE before 2010. What attracted her to be associated with WGE was the
industry and the lifestyle that was afforded by the profession. She worked her way up to be the
manager of a department. She is currently no longer associated with WGE.
Steve joined WGE before 2010. What attracted him to be associated with WGE was the
opportunity and the ability to utilize his prior experience and education to help the business
grow. He worked with former management and became integral to the leadership team after the
organizational change.
Sonia joined WGE between 2011 and 2014. What attracted her to be associated with
WGE was the industry, as she intended to further her studies in this field. She joined WGE at a
staff level but gradually moved up the corporate ladder and has been heading up a department for
a few years.
Tracy became associated with the company between 2011-2014. What attracted him to
WGE was the industry’s opportunities and growth. He worked with the management team
throughout his tenure at WGE. He is currently no longer associated with WGE.

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Results and Findings: Research Question 1
The first research question asked the following: How are individuals influenced by
environmental factors relating to ethical versus unethical behavior? This question seeks to
understand the backdrop of WGE’s environmental factors through the experiences of the
employees and stakeholders. The following a priori factors were examined: the macro
environment, business strategy, accountability, company culture, power dynamics, groupthink,
and tone at the top.
Quantitative Analysis
Two ordinal questions in the pre-survey addressed the macro environment and business
strategy factors. Participants perceived an enhanced level of competition in the marketplace and
experienced higher pressure to perform after the organizational change, as outlined in Table 2.
Seven participants stated that the company faced strong competition and pressure after the
organizational change. The second question addressed the company’s performance goals. One
participant answered that he was unaware of any goals before the organizational change. The
stretched but achievable goal option increased by two. Overall, participants indicated that the
achievability of the goals was not materially different after the organizational change.

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Table 2
Pre-survey Results Relating to Industry Competitiveness and Performance Goals (N = 10)
The level of industry competitiveness and pressure the company faced Before
org
change
After org
change
Low competition and pressure 1 0
Moderate competition and pressure 6 3
Strong competition and pressure 3 7
Performance goals of the company
Easily achievable 2 1
Stretched by achievable 5 6
Farfetched and hard to achieve 3 3
Participants were then asked to rate additional statements using a 4-point Likert scale.
Eight statements were used to explore environmental factors, and the summary is outlined in
Table 3. Participants noted the most improvements, as evidenced by the decrease in the mean in
the company’s business and financial stewardship (3.2 to 1.4), financial discipline (3.3 to 1.4),
and demonstration of responsibility (3.1 to 1.5). All participants agreed or strongly agreed that
the company had strong stewardship, discipline, and responsibility after the organizational
change.

Table 3
Presurvey Results of Eight Statements Used to Explore Environmental Factors (N = 10)
Survey statements Strongly
agree
Agree Disagree Strongly
disagree
Mean
Before organizational change
The company had strong business and financial stewardship. 1.0 1.0 3.0 5.0 3.2
The company was financially disciplined in making sound
business decisions.
1.0 0.0 4.0 5.0 3.3
The company demonstrated responsibility for its actions. 1.0 0.0 6.0 3.0 3.1
The company followed rules and regulations. 1.0 4.0 4.0 1.0 2.5
The company had codes of conduct (formal or informal). 1.0 3.0 4.0 2.0 2.7
The company communicated about doing the right thing. 1.0 1.0 7.0 1.0 2.8
The company cared for the employees and created a positive
working environment.
3.0 2.0 3.0 2.0 2.4
The company took feedback and took necessary actions. 1.0 1.0 5.0 3.0 3.0
After organizational change
The company had strong business and financial stewardship. 6.0 4.0 0.0 0.0 1.4
The company was financially disciplined in making sound
business decisions.
6.0 4.0 0.0 0.0 1.4
The company demonstrated responsibility for its actions. 5.0 5.0 0.0 0.0 1.5
The company followed rules and regulations. 4.0 5.0 1.0 0.0 1.7
The company had codes of conduct (formal or informal). 2.0 8.0 0.0 0.0 1.8
The company communicated about doing the right thing. 2.0 6.0 2.0 0.0 2.0
The company cared for the employees and created a positive
working environment.
2.0 5.0 3.0 0.0 2.1
The company took feedback and took necessary actions. 4.0 3.0 2.0 1.0 2.0
7
2

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Participants noted a moderate improvement after the organizational change in following
rules and regulations, having codes of conduct, communicating about doing the right thing and
taking feedback. The mean for following rules and regulations increased from 2.5 to 1.7. The
mean for having codes of conduct increased from 2.7 to 1.8. Participants moved from neutral to
affirmative positions for these two statements. The mean for communications about doing the
right thing, increased from 2.8 to 2. The mean for acceptance of feedback increased from 3 to 2.
Participants noted these statements as a result of an overall disagreement to an agreement after
the organizational change.
Lastly, participants noticed a slight improvement after the organizational change in caring
for the employees and creating a positive environment. The mean went from 2.4 to 2.1.
Participants responded with a neutral position to a more favorable position.
Qualitative Analysis
After the pre-survey was completed, participants were invited to complete one-on-one
interviews. Seven interview questions addressed environmental factors. Participants were also
prompted to elaborate further on the pre-survey results. Five themes were identified through
these interviews: external pressure, financial accountability, performance incentives, company
culture, and openness to feedback.
Theme 1: External Pressure
Participants noticed a heightened level of competition in the marketplace and perceived
higher pressure to perform after the organizational change. Lynn mentioned being in survival
mode as the company was “really in trouble financially … and it kind of crumbled.” Sonia
shared, “It was almost like a pressure to work more hours … like working longer hours trying to

74
grow and get the numbers to where they needed to be, so it was definitely a switch in just the
pressure applied.” Mark stated:
We started implementing systems in place for various departments such as KPIs; before
then, there really wasn’t a strict amount of work that needed to be performed within a given
amount of time. It was that kind of like the main difference. And pressure was obvious.
Things came in where things where structures were created, where there wasn’t anything
like that before.
Lily stated that the company “became a little stricter with the management we had to meet a new
deadline…increasing the pressure to give quicker deadline.” Bobby commented on the reason
the company attracted more competition:
The growth that put us in multiple states put us on a competitive target … we were
becoming a bit of a force to be reckoned with … we are now a national player, and we
quietly crept up on people.
Industry competitiveness and financial instability may create performance pressure.
Participants noted a higher pressure to perform after the change. The reasons were due to the
financial distress that WGE encountered due to financial misconduct. Then, as the company
began to set its growth plans, it attracted more competition. Theme 2 below reviews WGE’s
financial accountability.
Theme 2: Financial Accountability
Participants noted significant improvement in the company’s business and financial
stewardship and discipline. The employees also perceived the increased sense of accountability
by after the change. Lynn stated that, “they have broken the trust and a fiduciary responsibility to
the company.” Before the organizational change, finances were mismanaged; as according to

75
Steve, “the company really was never solvent…the numbers were really bad.” Natasha
commented, “They had a reputation of financial irresponsibility …. They were not being
responsible with the money, with the money management.” Mark noted, “They could spend
money out of the company account and do whatever they wanted with.” Joey mentioned that
“money was just being spent like whatever.” Bobby commented on the company’s financial
irresponsibility:
There was a lot of money that flew through there that wasn’t business-related. There were
definitely times when money was tight. And it wasn’t just once in a while. It could be
multiple times a year. And I know that as soon as that money was deposited, it got spent
immediately.
According to Tracy, “People did whatever they wanted. They spent money wherever they
wanted. They didn’t have controls in place …. They just didn’t really care.” Natasha, Bobby, and
Lynn also commented that there were a few instances where payroll was almost delayed due to
the diversion of funds. Natasha shared: “If we didn't hit numbers … we weren't gonna get
paychecks …. There were times when certain people with bigger salaries were asked to not get a
paycheck when it was payday because we didn't have enough to pay everyone else.” Bobby also
noted that the company “tried to get people to hold off being paid …. Management was asked in
an email, can we not pay you for another week or two.” Lynn shared that accounting “was
getting very scared because they knew they couldn’t make payroll.”
After the organizational change, Sonia felt the company was cleaned up and was “back
on track” and “decisions that should have been made all along.” Sonia further commented that
there was more “urgency” and “a group effort to get everything back on track…. It wasn’t just
holding one person accountable. It was holding the entire company accountable.” Steve noted

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that the “new paradigm shift was pretty substantial, there wasn’t a lot of spending on excess
things.” Lynn stated that, “you couldn't spend over $100 without getting approval.” Mark
commented, “I think it changed definitely. People got held to a much higher standard post
change. So, they’ve implemented KPIs, implemented different structures around management.
Implemented different structures around employees.” Tracy mentioned, “there were controls in
place and created a sense of responsibility.” Bobby shared the difference after the change:
“Never once was there an indication that we wouldn’t have money to pay the employees … Did
money get tight? Yeah. … Frivolous stuff didn’t happen. Money wasn’t squandered. Employees
felt taken care of.”
Most participants said the company’s financial stewardship and discipline dramatically
improved after the change. Before the change, the company lacked financial accountability due
to funds diversion and misappropriation. After the change, strong controls and a solid financial
structure were in place. WGE also instituted a performance management system that is discussed
in theme 3.
Theme 3: Performance Incentives
All participants noted that there was no formal performance management and incentive
system in place before the organizational change. Bobby mentioned that there was none “other
than, sell, sell, sell.” Kelly commented on the various events like “pizza parties, fajita days …
potlucks … and taco days,” but these were not tied to any metrics.
After the organizational change, some participants stated that the company instituted a
bonus and incentive system for managers based on KPIs. Bobby commented, “Metrics were
firmly in place. … It became an even greater expectation on KPIs across all the departments. All

77
the salespeople had forecasts, and they were accountable for that. And we're able to track things
more clearly.” Joey shared:
The annual review for me was important because they can actually either improve your
work ethic or not, and they’ll let you know what areas you can improve on, instead of just
letting you go. And you got a chance to request for a raise.
Joey also commented that the company was “big on giving out gift cards” when certain
performance metrics were achieved. Steve stated that there were “policies and procedures that
made it so that everyone consistently got raises.” Tracy stated, “there was better responsibility
and more about everybody understanding what direction we were heading and pulling in that
direction.” Natasha noted:
I think the rewards were feeling like we were a team and hitting numbers. … It wasn’t as
much of a blame game to the managers it was more of as a whole, as a company, of what
we could have done better.
However, Mark mentioned that the KPIs were “consistent … but way too stringent.” A few
participants noted that raises were not automatic and they had to ask for a raise, which may not
always be granted.
As addressed in Theme 2, WGE did not have any financial planning and performance
measurement in place before the change. After the organizational change, a structured
performance management plan, which included KPIs and annual reviews, was put in place with
incentives aligned so that the entire company was able to progress towards the same goals and
direction. Theme 4 addresses company culture.

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Theme 4: Company Culture
Company culture related to what participants experienced or perceived about the WGE’s
values and beliefs. Four themes emerged from the interviews with the participants. The four
themes were social culture, ethical culture, authenticity and transparency, and communication
about ethics.
Social Culture
All participants described the culture before the organizational change as casual and
unstructured. Lily, Kelly, Lynn, and Sonia mentioned that it has a “family” feel. Mark noted it
was “a pretty lax environment to work in.” Steve described the culture as “gregarious, and over
the top.” Tracy commented about the “locker room behaviors, locker room talk, and fraternity
house type culture.” Bobby said it felt like a “fraternity … lots of parties … very lax.” Lynn
noted a lot of “partying and social interactions.” Natasha noted that the culture was “superficial.”
After the organizational change, participants felt the culture was more structured and
regimented. Lily said it was “more business” and “more corporate.” Kelly mentioned that the
culture was more “professional.” Joey commented that it was “more strict, and there were goals
and quotas. … They think of you as a worker.” Sonia noticed a more “corporate vibe.” Bobby
mentioned that it was more “conventional business, some joking, after-hour drinks, but nothing
crazy.”
Ethical Culture
Most participants stated that there were no ethics or that the company was not ethical
before the organizational change. Sonia mentioned that ethics was “nonexistent,” the company
“was very cutting corners and what we can do to make it look better on paper.” Tracey stated,
“there were no rules of engagement at the company … and to do at all costs. And hide the money

79
in the financials and put things in different buckets.” Steve noted, “anything goes, short of capital
crimes … accounting rules were flexible … HR was untenable.” Bobby stated that the company
at the time was “outright malicious, and the company did not care if you have to sleep with
clients to get business … it was a do whatever you got to do” mentality and it was said outright.
Natasha said that the company “didn’t care as long as we hit numbers. … It was no holds
barred.” Joey commented there were “lots of drinking in the office … and office relations
between employees, which shouldn’t happen but that was not frowned upon, it’s talked about
and laughed about. It’s not something that they think was wrong.” Mark mentioned that the
company’s “ethical boundaries were kind of stretched.”
After the organizational change, most participants noticed an improvement in the
company’s ethical culture. Sonia commented that the company was “very by the book …
followed a code of conduct … a code of ethics and making the right decisions that we should
have been making … not fluffing up the numbers.” Steve mentioned, “there were policies in
place to promote ethical behavior.” Natasha noticed, “it became more ethical, everyone kind of
straightened up with our ethics … what was okay then was now frowned upon.” Lynn said that
there was a “strong, good culture. …We were trying to do the right thing the right way. … We
did not entertain or buy business, or make someone feel they owed us. …We are going to show
them good customer service.” Mark noted that the company “got better after the financial hurt,
and issues eventually got checked off.” Tracy stated that “100% that the culture changed. … The
company created a sense of responsibility, caring for the employees and doing what’s right.”
Sonya shared, “I 100% thrive in an environment when there’re rules and you follow the rules and
the rules are the same for everybody.” Steve stated, “this stability was really good for everybody.
And the other was just a game.” However, one participant did not notice any difference after the

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change. She felt the company was always professional and “never felt I didn’t want to work
here.”
Authenticity and Transparency
Most participants noticed no authenticity and transparency before the organizational
change. Bobby stated, “Authenticity and transparency hardly existed previously.” Sonia
commented that she had “no idea when things were happening, why things were happening,” and
the company “held close to the vest.” Tracy noted, “people did not know what was going on.”
Kelly felt like “I could always use more communication because sometimes I might be the last
person to find out.” Joey mentioned, “there was no communication backbone. … Nothing about
what’s going on, nothing about the future and nothing about where we may go.” Lynn shared
that “there should have been a lot of authenticity. … I was very upset about the lack of
authenticity. … It was a huge betrayal.” Steve said that the company “really did a good job of
putting a blindfold of everybody's eyes” to appear as employee friendly, “it was really a magic
trick.” Natasha commented that they were “good at making people feel like they cared … felt
like it was family … they put on a show,” the company “was in a very bad place, it was fake, we
were in shambles.”
After the organizational change, according to the participants, there was an enhanced
level of authenticity and transparency. Steve and Mark stated that it was more “open-door
policy.” Natasha mentioned, “there was transparency in how we were going to get back on
track.” Sonia shared:
They were very transparent in the roles and what the expectations were and making sure
that everybody was being true to their selves while also following the paths that were laid
out and were expected and what the goals were.

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Joey commented on the quarterly “company coffee break” that was instituted after the
organizational change, that everybody was encouraged “to ask anonymous questions and the
[executives] would answer during that break. It’s live real-time, so everybody gets to hear.”
According to Joey, the new initiatives of the coffee break and newsletter created a better sense of
transparency and communication in the company.
Communication About Ethical Behavior
Before the organizational change, Tracy, Natasha, Joey, and Steve all commented that
there was no communication about rules. Steve further mentioned, “Before, it wasn’t even a
conversation.” Natasha shared, “I don’t think they were communicated as far as ethics or being a
good human. … We didn’t really have expectations how we could speak to people and not speak
to people.” Sonia mentioned having rules but those were not followed, “before the change, these
are the rules … just you make this exception … oh, that’s okay … it’s fine … so it was definitely
like making exceptions and breaking the rules for certain people.” Rather than communicating
about proper behavior, Tracy stated, “to a certain extent, that behavior was accepted. … I think it
was cancerous to the organization.”
After the organizational change, participants noticed more structure and clarity in roles
and responsibilities. Steve mentioned that “the right thing was interpreted as … pretty
straightforward goals of what was expected, and everybody knew their roles in that.” Natasha
mentioned:
There was more guidance. … These are your numbers, and this is why we need to hit
them. There was more explanation behind the things that we were doing. There were
metrics that we were given. We were given more tools to hit goals.

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Natasha further commented that after the change, “it was made very clear that we would not
speak to people or treat people in a certain way anymore. … Certain things that we were doing
would no longer be tolerated. It was very clear.”
The four subthemes above, social culture, ethical culture, transparency and authenticity,
and communication about ethical behavior, were examined under the larger factor of company
culture. Most participants perceived improved ethical culture, transparency and authenticity, and
communication about ethical behavior. Participants experienced a more professional and
regimented social culture and a few participants lamented the loss of the more fun and familylike feeling they had before the change. Theme 5 addresses the company’s openness to feedback.
Theme 5: Openness to Feedback
Before the organizational change, participants noticed a lack of openness to feedback
from the company. Sonia commented that:
Before, you could make a suggestion, but it kind of fell on deaf ears, and it was very
much like, no, we doing it this way, because this is the way to do it, and we know how to
run a company … it was a lot of we don’t need outside help and clearly that didn’t work.
Bobby stated that the company “did not listen, people tried, but they did whatever they wanted
to.” Kelly shared that her suggestion to management was ridiculed and “was made fun of.” Tracy
shared:
They were definitely set in their ways. …You would give them feedback, and they would
tell you it’s a great feedback, and we’ll implement it, but then they never implemented it.
And they would make up excuses to not implement it and things would just continue to
get out of control.

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Lynn shared, “they made an effort to make me feel like I was involved,” but in reality, she
“couldn’t break into it.”
The majority of the participants perceived a more open environment after the change.
Joey and Lynn mentioned the monthly newsletter that an employee suggested. It was
implemented, which allowed better communications about the company, special celebrations,
and recognitions, and also featured a different employee every edition. Lynn commented that the
company valued her experience and listened to her feedback: “Each of us had our strong point.
… I had more knowledge about the business. They did defer a lot to me.” Sonia mentioned:
After, it was a complete 180, like everything that you suggested was actually being
listened to and thought through. And it was a great feeling when suggestions you made
were actually being implemented … so definitely a night and day difference from before
and after.
Sonia also indicated that the company “took a lot of suggestions … and leaned on the people that
did have the experience so that you could help and make it a better company and help them
grow.” Bobby mentioned, “They at least listened to me … I wouldn’t expect to get satisfaction
every time.” Bobby further shared that he took over the management of a team a year later.
There were enhanced inclusion efforts, as noted by the participants. The company
received feedback from employees and stakeholders and took necessary actions after the
organizational change. The inclusion efforts related to not only ideas but also to structuring roles
and positions in the management team. This allowed opportunities for employees with the best
skills and experiences to be part of reshaping the future path of the company.

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Summary
Research question one explores the environmental factors that employees and
stakeholders experienced before and after the organizational change at WGE. The first theme,
the macro environment, establishes the conditions that pressure companies to operate unethically
to meet expectations or simply to survive. Participants perceived a higher level of competition in
the marketplace and experienced enhanced pressure to perform after the organizational change. It
was due to the weak financial condition at the time of the change as well as the subsequent
growth of the company. Based on the participants’ perceptions, the company tackled this
challenge not through unethical means, but by creating a performance management and incentive
structure. Most participants rated the performance goals as stretched but achievable,
supplemented with KPIs and collaborative alignment with incentives.
The lack of financial discipline and stewardship, which led to financial misconduct,
prompted the drastic need for WGE’s organizational change. Not surprisingly, participants
noticed the most improvement in this area after the change. As shared by the participants,
structure and consistency were built into all levels of management and employees, with an
enhanced sense of responsibility and accountability for everyone in the company. The company
demonstrated a relinquishment of top management power and was more open to accepting ideas
from employees and stakeholders. Professional and ethical behaviors were also clearly
communicated through guidance and modeling of actions.
Most employees mentioned that the prior social culture was more fun and more “family,”
which was subsequently changed to a more regimented and professional setting. Participants also
talked about the lack of authenticity and transparency. Also notable from the director-level

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employees who knew the behind-the-scenes dynamics, these nice gestures were more windowdressing tactics.
The above elements of proper financial discipline and stewardship, authenticity and
transparency to everyone in the organization, building a sense of accountability, communication
about ethical behavior and goals, and inclusion signal a culture of ethical leadership. This created
the ethical tone at the top that permeated the organization. After the organizational change, it was
evident from participants that the tone was drastically different as prior unethical behaviors were
no longer tolerated. The new tone of openness, transparency, authenticity, and accountability was
visibly communicated throughout the company.
Results and Findings: Research Question 2
The second research question asked the following: How are individuals influenced by
personal factors relating to ethical versus unethical behavior? This question seeks to understand
the employees’ and stakeholders’ personal perceptions and feelings throughout the
organizational change at WGE. This study examined three a priori themes of self-efficacy, selfregulation, motivation, and tone at the bottom.
Quantitative Analysis
Three statements were used to explore personal factors using a 4-point Likert scale. The
summary is outlined in Table 4. Based on the pre-survey, participants noted a higher sense of
motivation and pride after the organizational change, as evident from the increase in the mean
from 2.6 to 1.8.

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Table 4
Presurvey Results of Three Statements Used to Explore Personal Factors (N = 10)
Survey statements Strongly
agree
Agree Disagree Strongly
disagree
Mean
Before organizational change
I felt motivated and proud as an
employee of the company.
1 3 5 1 3
I knew what was expected of me to
do the right thing.
2 6 2 0 2
I was held accountable for my
actions.
3 4 3 0 2
Total 6 13 10 1
After organizational change
I felt motivated and proud as an
employee of the company.
4 4 2 0 2
I knew what was expected of me to
do the right thing.
6 4 0 0 1
I was held accountable for my
actions.
5 5 0 0 2
Total 15 13 2 0
Participants also perceived a higher level of expectation to do the right thing after the
organizational change. The mean increased from 2.0 to 1.4. All participants agreed or strongly
agreed that they were expected to do the right thing after the organizational change.
Lastly, participants sensed an increased level of accountability after the organizational
change. The mean increased from 2.0 to 1.5. All participants agreed or strongly agreed that they
were held accountable for their actions after the organizational change.
In viewing the three statements that addressed the personal factors, participants noticed
increased motivation and pride, expectation, and accountability after the organizational change,
as demonstrated by the 15 counts that participants selected as “strongly agree” compared to six
counts before the organizational change.

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Qualitative Analysis
Eight interview questions addressed environmental factors. Participants were also
prompted to elaborate further on the pre-survey results. Through these interviews, five themes
emerged: morale, personal ethics, self-regulation, sentiments about organizational change, and
personal impact.
Theme1: Morale
Participants had varied opinions about morale before and after the organizational change.
Lynn commented that morale was “pretty good, because there were a lot of parties, it was pretty
easy, there was not a lot of pressure.” Lily stated that “even if they spent a lot of money, they
spent money on employees as well; they showed us they appreciated us, a lot more than after the
change.” Mark shared that “it was a pretty chill environment to work, and they fed us weekly,
and some of the other benefits were nice to have.” A few participants talked about the multitude
of parties being held ranging from holidays, birthdays, and other celebrations with raffles, prizes,
and gift cards being awarded. Kelly mentioned, “the parties to me were exciting; it’s simple; it
let me know that they acknowledged how hard we’ve been working.”
Other participants shared other perceptions on morale. Sonia mentioned that the
environment “was very cliquey, it was every man for their team and themselves …. I couldn’t go
to somebody on another team for something.” Natasha shared that “superficially, morale was
great … they didn’t care about us, but they make sure they felt like they cared about us. Morale
financially, that was never great. … There was always kind of a little cloud of darkness.” Steve
and Bobby mentioned that morale was “up and down.” Steve elaborated:
I felt before that the morale at different times was good, but it would get toxic at times
because of whatever behavior was going on. A lot of times we'd have to do layoffs

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because of the money, so business was going great for six, seven months and everybody
was happy doing stuff. And then … and business goes bad. So, we laid a bunch of people
off. … And so, it was a very up-and-down thing. And it was a lot of this game playing
like I said so. People thought it was a fun place when it really wasn't.
Joey and Mark commented on morale from a job security perspective. Joey stated that
with employee terminations, “there were no warnings before they let them go. They didn’t
reprimand. So, they didn’t get to fight for themselves because they didn’t get a chance to explain
themselves if it was their fault or not.” Mark shared, “We’re aware of when people are
terminated, and I knew how quickly they acted with terminating employees…we might cut an
entire department of like 10 people.”
After the organizational change, the free lunches were discontinued and the parties were
more sporadic and conservative. The staff level employees felt slight bitterness and loss of
morale due to the diminished benefits in lunches and parties. Joey commented, “after the change,
there was some complaining because the company didn’t just spend a lot of money on social
events.” Mark noted:
Just taking away like lunches and stuff like that. That might be an extra fifty bucks a
week. That’s 200 bucks a month. It adds up, right? And that’s especially for our
employees that meant a lot of them. … That factors into how much they make and their
perception of the company.
On the other hand, Mark also noted, “I think morale was better with the old management. But did
they understand how close we were to having to close the doors … that was behind the scenes.”
Bobby shared after the change, “even if we had a dip, morale still seemed to be good. Everybody
was putting forth effort for success. … We were just in a much better place, all around,

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financially, mentally.” Joey commented, “If there was something wrong with an employee, they
would give warnings … and a third warning, that’s when they let you go.”
Sonia commented:
I felt it was a great switch, I felt like everybody was on a level playing field like
everybody. Kind of got to get to know one another outside their own departments and
create a little more team spirit, and team bonding. I felt that did wonders for the company
morale.
Sonia further noted that with the new leadership team, “I feel like I connected more and I think
that made my morale better.” Natasha shared, “I had the opportunity to work hard and make sure
I was valued. … My morale was great and finally seeing money in our pockets. … Money makes
people have more morale.”
Participants showed diverse perceptions of company morale. Most of the staff level
employees looked towards the free lunches and parties as a morale factor. Others assessed
morale from job security and teamwork perspectives. Based on the findings, the lunch and party
benefits were reduced but improvements were made in developing team collaboration and
coaching efforts after the organizational change.
Theme 2: Personal Ethics
All participants noted that ethics meant “doing the right thing.” Kelly, Natasha, and
Steve mentioned, “doing the right thing when no one is watching.” Lily talked about “doing the
right thing morally and responsibly.” Mark commented about “doing right legally and morally,
non-refutable.” Joey shared, “doing your work right … don’t play around, you don’t get lazy,
you don’t pretend, you play by the rules, and you’re kind to people … you don’t do anything
behind anyone’s back.” Lynn, Steve, and Bobby mentioned about “integrity.” Steve noted,

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“making the right decision where you’re not fundamentally breaking any laws or rules that could
be called into question later … conducting yourself, you wouldn’t care if everybody in the whole
company saw it …doing it above board for a consistent manner.” Bobby shared “morally
responsible … person of your word … cannot do underhanded stuff or finagling numbers … as it
will ultimately lead to failure as can be seen.” Tracy commented about “do unto others as you
would have them do to unto you.” Sonia talked about “loyalty … not to do down the wrong path
… go by the book … following those help you guide it … make you a better person.” Kelly
noted “strong sense of value, self-respect, respect for others.”
All participants have strong notions of personal ethics. Theme 3 below addresses selfregulation. Self-regulation often relies on individuals’ underlying ethical principles to guide
behavior and decision-making.
Theme 3: Self-Regulation
The participants all presented a strong sense of self-regulation to power through this
tumultuous period. Even though the company did not demonstrate accountability before the
organizational change, personal accountability was critical to a few participants. Natasha
commented, “I don’t think we were always held accountable to do the right thing. … It made me
a hustler. … I was always trying to work harder than everyone in the room to prove myself to
them.” Lynn shared, “I had a personal commitment to the company and I had a lot of the most
important people that worked for me their whole career. So, I have felt a huge responsibility to
them … I never thought about not standing.” Kelly mentioned, “my reputation … is very
important to me … and I want my superiors to always know that they can count on me, and I'll
always do an awesome job for them, and not just the bare minimum.” Joey stated, “as long as I
do what is expected of me, I know I’m in a good position … I knew I was doing my job; just

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focus on doing a good job.” Lily said, “I did exactly what I was supposed to do, and however
management wants to change it, that was up to them.” Mark shared, “I still had a job to do; none
of that really affected me.”
All participants lived through the prior regime and weathered through the organizational
change. It was through the qualities of self-regulation and personal accountability that they
remained aligned with their self-concept. Theme four addresses the participants' sentiments
about organizational change.
Theme 4: Sentiments About Organizational Change
Most participants felt “shocked” about the organizational change as it happened very
abruptly. However, they had diverse emotions immediately after the change. Lynn had the
strongest reaction; she shared that she did not see it coming and felt a sense of “betrayal” and “a
breach of trust.” Other employees, like Bobby, Sonia, Joey, Mark, and Natasha were concerned
about job security and the uncertainty of the company’s future. Mark mentioned, “I see how
quickly people are terminated, I am just worried if my name will be called that day.” However,
the remaining management team did provide comfort to the employees that it was business as
usual, which alleviated some of the staff’s concerns. Bobby commented about his team: “if I was
comfortable, they were comfortable. I was able to reassure them. Things were fine. We were in a
good place.” Lynn noted that she reassured her team: “that we would take really good care of
them. We shall just go forward. … We had a really strong plan.” One participant did not notice
anything different. Kelly shared, “we just kept working and doing our job. … It seemed like
nothing really changed.”
Sonia, Steve, and Lynn mentioned the turnover after the organizational change; this was
due to employees being loyal to the former leadership team, “misfits with new culture,”

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“employees who did to want to be in the turmoil,” and former leadership team “hiring employees
away.” Steve shared that after the organizational change,
a lot of people struggled, going from this terrible, laissez-faire type of attitude to, a more
structured, that really was hard on a lot of people. … And then there were the misfits.
And those people were let go because they didn’t stick with the new culture of the
company. Yeah. There was turnover, and it was specific misfits.
Tracy mentioned that “quite a few people had to depart because they sort of band together…they
fed to that toxicity.” Joey noted, “when people left, it was like a chain reaction.” Sonia stated that
the change prompted people:
To figure out your individual growth and what you wanted to do, and where you wanted
to be. And I think I took it as the opportunity to … reprove myself … starting from the
ground up … to show them … what I was made of what I could do.
Natasha also shared similar feelings, “Every day, I log into work, I say to myself, I’m gonna
work harder than everyone at this company. … I just always tried to prove myself.”
As expected, it was a sudden and drastic change; participants felt a strong sense of
uncertainty and fear, and one participant experienced a severe sense of betrayal. Participants at
the management team level were stunned but not surprised as they were more aware of the
ongoing issues. However, they had to put their emotions in check and be positive towards other
employees for reassurance and to provide comfort and stability. The company also went through
a cleansing phase at that time to realign the culture of the workforce.
Theme 5: Personal Impact
While most participants discussed the shock and surprise and went through some
challenges throughout the organizational change, they became appreciative of the final outcome.

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Bobby mentioned that it helped with his career and gave him new opportunities. Joey
commented, “I was unhappy when it happened. … Looking back, it was good that it happened
because if not, we wouldn’t have the company at all.” Steve shared that it “was a dream come
true… to be able to grow with the company, sharpen my own skills, had a very good mentor … I
literally can’t buy the education I got out of it.” Sonia mentioned:
It made me grow, not only in my professional life but as a person, to see both sides of a
way that a company is run … if you run a company the ethical right way, you can reap
the benefits … you can grow the company. … If you build a brand and treat your clients
with respect, you will get loyalty from those clients.
Participants also noted that there were lessons learned throughout this process. Mark
mentioned that if he were to consider other employment opportunities, “I would probably do a
little bit more look into their financial history … and make sure it’s stable and financially solvent
and profitable and that they don’t view technology as a cost center.” Tracy shared that when he is
in an interview, he would “place a lot more emphasis on personality … and get a sense that they
got some ethical standards behind them and they will do the right thing.” Lynn commented that
she is now “more aware of things that were going on. … It made me more professional … more
aware of my part in things and when I should say something.” Natasha said that she learned to
“get in good with the right people … made her work harder than anyone in the room.”
Many participants noted that the change process was painful and unpleasant. Bobby
noted, “To say that we all weathered the storm is an understatement.” However, all of them
noted a positive outcome from personal growth to professional growth, as well as lessons
learned.

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Summary
Research Question 2 examined the personal factors of employees and stakeholders before
and after the organizational change at WGE. There were eight interview questions and three
survey questions. The themes that emerged through the pre-survey and interview included
morale, personal ethics, self-regulation, sentiments about change, and personal impact.
The first theme, morale, explored the enthusiasm and sentiments about the participants’
perceptions of the company and job satisfaction. The findings were varied. Different participants
have preferences over what was important to them. Certain participants valued the lunches, the
parties, and the benefits, and their morale declined as a result of a reduction in these events.
Others noted improved morale due to job security and a higher level of teamwork and
collaboration after the organizational change.
Theme 2 addressed participants’ personal definitions of ethics. Theme 3 examined selfregulation. These two themes are closely related concepts that played a significant role in the
participants’ decision-making processes and behaviors. All participants have solid models of
what ethics meant to them. The strong sense of personal ethics was the driving force to exercise
self-regulation to uphold their ethical standards. Practicing self-regulation empowered
participants to align their actions with their self-concepts, especially when faced with
challenging situations in the case of the toxic environment before the change.
Theme 4 analyzed participants’ sentiments about organizational change. The
organizational change at WGE was sudden and drastic and took everyone by surprise. Change
evoked strong emotions such as fear, anxiety, and resistance for the participants. Participants at
the managerial level were able to regulate their emotional responses to change and remained
positive, open-minded, and resilient throughout those times of uncertainty and disruption. They,

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in turn, modeled these attitudes towards their employees. The change also speaks to participants’
adaptability. Adaptability is also a significant component of self-regulation, which involves the
discipline to adhere to new norms and navigating a different and possibly unpredictable
environment.
Theme 5 discussed the participants’ personal impact. Participants shared their lived
experiences throughout the tumultuous period in WGE’s history. The company experienced a
downward spiral in ethicality to a point where the company was in jeopardy of survival. This
prompted a drastic and immediate organizational change. Most participants communicated their
tribulations going through such a harrowing process. However, at the end of it all, most of them
found the experience rewarding as they appreciated the personal and professional growth and the
knowledge that they gained.
Results and Findings: Research Question 3
The third research question asked the following: How are individuals influenced by
behavioral factors relating to ethical versus unethical behaviors? This question seeks to
understand the employees’ and stakeholders’ perceptions of behaviors throughout the
organizational change at WGE. This study examined the a priori themes of peer-to-peer
dynamics, tone in the middle, moral disengagement, slippery slope, and followership.
Quantitative Analysis
Three statements were used to explore the behavior factor using a 4-point Likert scale.
The summary is outlined in Table 5. Based on the pre-survey, participants noted a higher sense
of ethical behavior from their peers and a high level of communication and action from their
managers after the organizational change.

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Table 5
Presurvey Results of Three Statements Used to Explore Behavior Factors (N = 10)
Survey statements Strongly
agree
Agree Disagree Strongly
disagree
Mean
Before organizational change
I believed most employees
demonstrated ethical behavior.
1 5 3 1 2
I felt that my manager took my
concerns seriously and take
necessary action.
1 5 2 2 3
I was able to communicate my
thoughts and feedback to my
manager.
1 6 2 1 2
Total 3 16 7 4
After organizational change
I believed most employees
demonstrated ethical behavior.
4 5 1 0 2
I felt that my manager took my
concerns seriously and take
necessary action.
3 6 1 0 2
I was able to communicate my
thoughts and feedback to my
manager.
5 5 0 0 2
Total 12 16 2 0
Participants perceived a higher level of ethical behavior demonstrated by their peers after
the organizational change. The mean increased from 2.4 to 1.7. Participants sensed an increased
ability to communicate their thoughts and feedback to their managers, and their concerns were
taken seriously and followed up with action as needed. This is evident from an increase of the
mean from 2.5 to 1.8 and 2.3 to 1.5, respectively. All participants agreed or strongly agreed that
they were held accountable for their actions after the organizational change.
From the presurvey of the three statements that addressed the behavior factor,
participants noticed an increased level of peer ethical behavior and more openness from their

97
managers to communicate their thoughts and actions. Participants also perceived that appropriate
actions were taken from their feedback and concerns. This is demonstrated by the 12 counts that
participants selected as “strongly agree” compared to three counts before the organizational
change.
Qualitative Analysis
Seven interview questions addressed behavior factors. Participants were also prompted to
elaborate further on the pre-survey results. Through these interviews, four themes were
identified: employee behaviors, slippery slope, favoritism and nepotism, and tone in the middle.
Theme1: Employee Behaviors
Many participants noticed unprofessional conduct with office pranks, offensive jokes,
and as serious as sexual harassment and inappropriate office relationships. Joey shared that
people “always ask me for help, and I would do the work, and then I forward it to them, and then
my name gets deleted everywhere, and it looks like they were the ones working on it.” Joey
further commented that people were “milking” their time, people “don’t clock out at 5 … they
hang around … there’re no managers … and then they ask … I need overtime from their
managers. … That’s not right.” Natasha commented that people “like to have a good joke at
other people’s expense. … There were full-blown conversations and trying to make people not
so great about themselves.” Natasha further shared that “jokes were inappropriate. There were
things that were borderline sexual harassment that were happening.” Bobby mentioned, “there’s
a lot of joking … there should have been at least 30 sexual harassment losses.” Steve commented
about “harassment, inappropriate work relationships, drug use.”
Participants felt that a sense of privilege and greed caused the more egregious behaviors.
Mark mentioned a sense of entitlement, a “still mine” mentality; people put in “blood, sweat, and

98
tears that went into it … got hung up … their heads were bigger than they were.” Five
participants perceived that the motivation was due to greed. Bobby commented, “Greed caused
callousness, unethical behavior, deception, a habit that they did not know to do anything
differently,” Natasha mentioned that people “were just superficial … they liked to be flashy.
They liked to be the most liked person in the room.” Lynn and Tracy mentioned people’s
intention to “keep up with the Joneses” from a financial perspective. Lynn shared that people
“wanted to be so much more successful, wanting to have more money.” Tracy stated that people
“felt like they wanted to have money. Felt like they served to have money than they had and was
materialistic … without working for them.” Sonia said, “People don’t think they will ever get
caught …. If you do stuff that you shouldn’t be doing … you’re gonna get caught and I think it
just caught up to them.”
After the organizational change, Joey noticed that employees “have to ask permission to
get approval for overtime. They don’t just get it. They don't just pretend to work, till whenever…
there’s some sort of control.” Tracy stated earlier that a few employees who fed into the toxicity
were terminated. Tracy further mentioned, “We got to a point where everybody understood that
from a financial reporting perspective, everything had to be done right. And from an HR
perspective, there were controls put in place that adhered to appropriate HR guidelines within the
company.” Steve shared that the company “installed values … better teamwork … good
communication, that open door policy, and that the lack of any bs that goes on there, behaviors
that we want and desired.”
Participants noticed a significant improvement in employee behaviors after the
organizational change. The offenders who contributed to the toxic culture and behaviors were no

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longer with the company. Furthermore, various systems were put in place to eradicate those
unethical behaviors. Theme 5 addresses the slippery slope.
Theme 2: Slippery Slope
When inquired whether the unethical behaviors were consistent with any prior patterns,
most participants noticed a gradual decline throughout the years. Tracy noted: “It was fairly
consistent throughout the years … something was off … once people get away with it, it
continued to escalate … the behavior started to get worse.” Sonia mentioned, “I definitely think
it progressed, and they definitely, I don’t think necessarily follow a real ethical code.” Steve and
Natasha shared that this always existed. Lynn said that it “escalated. … I think it just started
rolling, It started steamrolling, and then you couldn’t stop it”. Lily said that people “just have
bad habits.” Bobby agreed and said people “never changed their spots. … Those habits …
ultimately led to the demise.”
Most participants perceived a deterioration in ethical behaviors over time. These
behaviors may have been considered as benign or innocuous early on. However, this conduct
progressively became detrimental until they threatened the survival of the company, which
prompted a drastic impetus for immediate change.
Theme 3: Favoritism and Nepotism
A few participants noted that there were cases of favoritism and nepotism, especially
before the organizational change. Steve commented:
There were certainly the favorites, and some of that I tried really hard to shield people
from a lot of that crap because it you know it. It's what you can imagine. We'd have two
people doing the same job, and the friend would get paid forty grand more a year than the
other person and stuff like, I mean, just yeah, really crappy things.

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Lily mentioned that a relative of an executive “yelled at me one time, and I ended up crying.
Obviously, he was not going to be fired. … He left 2 years after due to a drug problem and went
to rehab.” Bobby commented that a relative of an executive “reported to me for a period of time
… I wrote him up for not performing properly … I was blackballed for a while.” Bobby also
shared a relative of an executive was promoted and was put in charge of a department: “We had
two people leave immediately.” Natasha shared her feelings of bitterness and resentment that
someone “with no experience … and get this fancy title … while we were at the bottom
wondering how we missed an opportunity or a job description of that person and opening.” Tracy
said that there was a relative of an executive “involved in the organization who was toxic to the
organization and sent some nasty communications to other employees. And wasn’t reprimanded
for that communication.” Tracy also stated that there was favoritism toward vendors and it was
not about better service; they “paid certain vendors quicker because they were friends … allowed
them to charge us more money because they were friends.” Favoritism and nepotism did not
affect everybody. Kelly shared that “There is always going to be people who get along better
with certain people. I don’t think anyone’s ever done favor … before or after the change.” Joey
shared, “the favoritism didn’t bother me, because it didn’t affect me directly.”
Most participants noticed that after the organizational change, instances of favoritism and
nepotism were significantly reduced. Mark noted, “Definitely nepotism before the change, and
there were family members involved in the operation. … A lot of that disappeared after. It took a
little bit of time for that stuff to work itself.” Sonia shared,
If you are on the good side, or you know you were one of the favorites, it was much more
of a who’s who game before the change than it was after the change. It was more about
your work and your performance, and the ability to grow the right way.

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Natasha commented, “It opened up so many more positions for the staff who had been there for a
long time and actually knew how to do the job to be promoted and rewarded financially.” Sonia
shared that the favorites “were because they were relatives or because they knew them from a
previous job. I can definitely say that the favorites all fizzled out … they couldn’t perform their
jobs.” Lily noticed that some friends of the newer leadership team were hired after the
organizational change and “lasted for a while … they end up firing them.” Lynn stated, “There
were always people that somebody hired that somebody else knew. As long as you’re doing your
job. I don’t care.” Bobby stated, “There’re always groups or clicks … as long as they are
overseen properly … it does not get out of hand.”
Favoritism and nepotism promoted partiality and lowered morale that some participants
experienced. Participants noticed improvement in this area after the change. Theme 4 addresses
tone in the middle.
Theme 4: Tone in the Middle
A crucial aspect of company culture is its diffusion into lower company levels, where
employees observe their immediate environment with their direct supervisors. As managers, they
either were a direct conduit to the tone at the top or created a different culture for their immediate
employees. Steve commented:
I was the buffer between leadership and the employees. My job is to always try and keep
everybody happy but have to deal with reality leadership .... It was very draining …. I put
up with a lot of crap … it was personally damaging.
Lynn mentioned that she was “trying to pull everybody up out of it out of the trenches. …
Having a relationship with employees based on being friendly, being honest.” “I had to build the
trust with them that I would be accountable to them.” Sonia shared that

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I feel like I did a good job of sheltering my team … I could keep my spirits up for my
team, so that they weren't affected and try to keep them happy and content so that their
morale stayed up, cause I liked to not have a big turnover, and I feel like when you get a
lot of negative morale is when … turnover starts to happen.
Bobby commented about his team, “If I was comfortable, they were comfortable. I was able to
reassure them. Things were fine. We were in a good place.” Natasha shared, “to be kind … and
to always try to work harder than your team. I want my team to know that I’m willing to get
down in the trenches with you.”
Participants also noticed the positive environment created by their immediate supervisor
when the company’s overall culture may be untenable. Sonia shared that she worked with her
manager directly, “I remove myself from those situations to not make myself uncomfortable.”
Lily commented:
I know that I was just very fortunate in the company to always just have a manager who
always respected my work and my performance, and they valued my opinion and what I
had to say, and I was just fortunate to always have a manager that did that while I was
working there. … As long as I had a good boss, I was always happy.
Kelly mentioned, “I think I believe what my manager told me was true, and it's always turned out
to be true, so I've always trusted and believed in her.”
The tone in the middle is just as crucial as the tone at the top in motivating individual
behaviors. As noted by a few participants, the managers created a secondary and more positive
environment, shielding the team from a toxic culture. Vicarious learning played an important
role as well. Middle managers became more ethical role models for employees to mimic ethical
behaviors. As Sonia shared, she was insulated from the larger negative culture, and in turn, she

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created a more positive environment for her team. Natasha also shared, “I felt I had a mentor or
someone guiding me to manage the right way.”
Summary
Research Question 3 examined the perceptions of behaviors that participants observed
before and after the organizational change at WGE. The study had three pre-survey questions
and seven interview questions. The themes that emerged through the pre-surveys and interviews
included employee behaviors, slippery slope, favoritism and nepotism, and tone in the middle.
The first theme explored the employee behaviors that participants observed. Most
participants noticed a slew of unethical behaviors before the organizational change. Those
ranged from minor offenses in cheating time and work to more severe transgressions of sexual
harassment behavior and financial misconduct. After the organizational change, those behaviors
were mitigated with a change in personnel and various policies in place.
Theme 2 addressed the concept of slippery slope. Understanding how these unethical
behaviors could crumble a company that has been operating for more than a decade was salient.
Most participants noted that offenders did not have a solid ethical foundation initially and they
continued to go down a path of increasing moral compromise or the slippery-slope effect. Minor
infractions early on may appear insignificant but certain habits prevailed and became more and
more severe where ethical and legal lines were crossed.
Theme 3 examined favoritism and nepotism. Favoritism and nepotism are both forms of
bias and unfair preferential treatment to employees motivated by family ties or friendship. Most
participants noted cases of the toxic culture that was created due to favoritism and nepotism
before the organizational change. This phenomenon created resentment, demoralization, and
erosion of trust.

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Theme 4 discussed tone in the middle. The tone in the middle represents the ability of
middle management to navigate the complex and dynamic relationships between the leadership
level and staff-level employees. Participants at the management level mentioned their challenge
in striking a balance between conveying directives from upper management and creating a
culture of empowerment and support towards their staff. Most notable was their ability to shield
their teams from the dysfunctional environment before the organizational change that allowed
the staff to persevere through those times as well as being a more ethical role model for their
staff through vicarious learning.
Conclusion
This chapter summarized this study’s results and findings, focusing on WGE’s
employees’ perceptions and experiences using Bandura’s SCT framework. The chapter is
organized to report the findings to answer each of the three research questions related to the three
tenets of SCT: environment, person, and behavior. The findings from the experiences and
perceptions of the participants illuminated the nature of the SCT model: the reciprocal
interactions between the environment, person, and behaviors.
WGE came out of the organizational change not only with tremendous financial success,
but most participants noticed the positive impact that this process had afforded them. Many of
them experienced personal and professional growth and were appreciative of the knowledge and
insights gained. The organizational change was the catalyst to resurrect and transform WGE.
Based on the participants, the company made significant improvements in the areas and themes
discussed. However, they also mentioned some areas that the company may be able to fine-tune.
These suggestions, together with research and literature review, are addressed in Chapter 5’s
discussions.

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Chapter Five: Discussion
This final chapter of the study provides a summary of findings and recommendations.
Next, an organizational change model is presented to provide an actionable plan to implement
the recommendations. Lastly, the chapter ends with a recommendation for future research.
This study utilizes SCT as a framework to analyze the three interactive elements of
environment, person, and behavior. The findings and recommendations are structured according
to these three elements. The following three questions guided the study:
1. How are individuals influenced by environmental factors relating to ethical versus
unethical behavior?
2. How are individuals influenced by personal factors relating to ethical versus unethical
behavior?
3. How are individuals influenced by behavioral factors relating to ethical versus
unethical behavior?
Findings
The study’s findings focused on WGE’s employees’ perceptions and experiences before
and after the organizational change. Before the organizational change, the company was fraught
with ethical and legal issues to the brink of closure. The findings supported extant research on
factors that set the stage for financial misconduct and unethical behaviors. After the
organizational change, the findings illustrated the ethical steps that were taken to transform WGE
into a success story not only financially but also validated by the positive impact that the change
process had on the employees. The findings are organized into the three tenets of the SCT
framework: environment, person, and behavior.

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Environment
According to SCT, environmental factors influence individuals’ ethical behaviors in
addition to personal attributes (Bandura, 1986). The findings documented through the
participants’ interviews provided insights into the setting before and after the organizational
change. They highlighted environmental factors that were antecedents to misconduct before the
organizational change and transformation changes made after that were critical elements to an
ethical organization.
Before the organizational change, the findings suggested that the company lacked
financial discipline and accountability and needed to improve in financial planning and
performance measurement. The company had an imperceptible ethical culture with no rules of
engagement and a “doing what it takes” mentality. Tracy commented, “People did whatever they
wanted…. They didn’t have controls in place.” These types of organizational settings pave the
way for corporate malfeasance. According to Karmann et al. (2016), work environments
motivated by risk-taking mindsets are positively associated with financial misconduct. Natasha
shared that the company “didn’t care as long as we hit numbers. … It was no holds barred.” A
bottom-line mentality may also encourage counter-productive and unethical behavior (Babalola
et al., 2020).
According to the findings of this study, the company had no authenticity and
transparency and lacked openness to feedback. Organizations depicted by ethical muteness
appear to condone ethical misconduct (Bird & Waters, 1989). The unwillingness to accept
feedback was due to top management hubris and power. Tracy mentioned that the company was
“set in their ways,” and Sonia shared, “It was a lot of we don’t need outside help.” Top
management possessed an unquestionable belief in their accuracy and failed to heed the

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warnings, thereby committing misconduct (Li, 2023). Possession of power contributed to the
perception of superiority and disregard for ethical norms (Palmer, 2013).
Lastly, the findings from this study noted that the company had a weak tone at the top.
Occurrences of various unethical conduct were talked and laughed about but were never
addressed. Natasha mentioned, “I don’t think there were communications as far as ethics or
being a good human.” Tracy stated that unethical “behavior was accepted. … I think it was
cancerous to the organization.” Ethical misconduct became normalized. Senior leaders who
commit ethical misconduct signal that illegal behavior is accepted and condoned as the norm
(Lokanan, 2015).
The findings suggested that there was substantial improvement in all of the above factors
after the organizational change. However, the participants noticed an enhanced level of
competition and perceived higher pressure to perform after the organizational change. The
company managed these challenges through various ethical business initiatives. Some of these
initiatives included setting stretched but achievable performance targets and instituting a
performance management and incentive system.
Mark mentioned, “People got held to a much higher standard…they implemented KPIs,
implemented difference structures around management, implemented different structures around
employees.” The company also demonstrated a strong sense of financial discipline and
stewardship and implemented a code of conduct. Sonia stated that the company was “very by the
book … followed a code of conduct.” Consistent enforcement of incentive systems and codes of
conduct is essential to shaping ethical behavior (Kish-Gephart et al., 2010).
The findings noted clear communications about roles, responsibilities, and appropriate
behaviors. Communication is vital to an organization’s ethical infrastructure (Trevino et al.,

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2006). Consistent communication of the strong ethical culture and expected appropriate behavior
through modeling from leaders, informal norms, and incentive systems are associated with
ethical decisions in organizations (Kish-Gephart et al., 2010).
The findings also suggested a culture of open communications and an inclusive
environment. These inclusion endeavors are related to idea generation as well as structuring
roles. Sonia stated that the company “took a lot of suggestions … and leaned on people that did
have the experience.” Power dynamics in an organization’s culture are factors in its ethicality.
Ethical leaders can abstain from exerting their power and influence and instead encourage
genuine debate and suggestions (Sims, 1992).
Lastly, the findings noted that the company had a strong ethical tone at the top. The tone
at the top is the value system’s starting point and the development of a culture that lies with an
organization’s top management (Bussman & Niemeczek, 2019). Critical elements that were
implemented were: financial discipline and accountability, transparency, inclusion, and clear
communications about ethical behaviors and goals, harmonized to create a potent ethical tone at
the top. According to Mittendorf (2017), ethical leadership creates a culture in which the
perceived ethics of leaders rub off on their followers, and these social norms create a virtuous
environment where “ethics begets ethics.”
To conclude, organizations are faced with an increasingly competitive and dynamic
operating environment with compounding pressure to perform at high levels (Chen & Chen,
2021). These external pressures are antecedents to corporate misconduct, but ethical leaders
moderated these effects (Daboub et al., 1995). The findings supported extant research on
environmental factors promoting ethical versus unethical behaviors. Responsible stewardship,
integrity, authenticity, teamwork, implicit and explicit messaging about roles and expected

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conduct, and reinforcement through rewards and incentives are all antecedents to a strong ethical
environment.
Person
Employees are attentive observers of their environment, searching for information to
understand values and norms and behave accordingly. An individual’s orientation toward the
importance of individual and collective moral and moral identity also moderates behaviors
(Mitchell et al., 2020). The experiences and perceptions documented through the participants’
interviews highlighted these concepts.
The findings revealed the participants' strong notion of personal ethics. Together with
self-regulation, they played an essential role in their decision-making processes and behaviors.
Descriptive norms that represent the behavior of others may affect employees’ ethical behavior
(Ewelt-Knauer et al., 2022; Pickerd et al., 2015). An individual can constrain a dominant
response through self-regulation (Bekiarus & Papachristou, 2021; Galperin et al., 2011). Kelly
shared, “My reputation is very important to me … I want my superiors to always know that they
can count on me.” Before the organizational change, when unethical behaviors were pervasive,
the participants’ strong personal ethics was conducive to their self-regulation to maintain their
ethical standards. Natasha commented, “I don’t think we were always held accountable to do the
right thing. … It made me a hustler … to work harder than anyone.” After the organizational
change, when the organization operated with proper codes of conduct in an ethical environment,
participants no longer felt conflicted with their positive self-concept as they aligned with the new
ethical norms (Ewelt-Knauer et al., 2022). Steve shared that the company “instilled values, better
teamwork … good communications … behaviors that we want and desired.”

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The findings revealed that participants had varied opinions about morale. Staff-level
employees valued the free lunches and the more casual setting. Lily stated, “They spent money
on employees … they showed us they appreciated us.” Others assessed morale from teamwork
and job security perspectives. Sonia mentioned, “a little more team spirit and team bonding. I felt
that did wonders for the company morale.” High morale can positively influence motivation, and
motivated individuals have a strong sense of purpose, including high performance and adherence
to ethical principles.
Behavior
Individuals’ behaviors are shaped by external incentives and are driven by inner
impetuses. According to Bandura's (2001) human agency theory, individuals have choice and
control over their actions. Individuals behave based on the consequences they prioritize and
refrain from actions that conflict with their values (Schunk & Usher, 2019).
The findings indicated that unethical conduct was prevalent before the organizational
change. Peer effects significantly influence unethical decision-making and behaviors through
social learning (Bandura, 1977). Natasha shared, “I’ve been a part of being under someone who
was very unethical, and then you almost start to mimic them, or you feel like you need to.”
Individuals can learn about the advantages and monetary gains of misconduct (Dimmock et al.,
2018). However, as noted in the findings, the participants did not get involved with those
behaviors through high self-ethical efficacy and self-regulation.
The findings suggested that the misconduct that took place resulted from the slippery
slope effect. Innocuous misbehaviors progressively escalated in severity until they became
detrimental and threatened the company’s survival, which prompted immediate organizational
change. Lynn shared that it “escalated … I think it started steamrolling, and then you couldn’t

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stop it.” According to Welsh et al. (2015), the slippery slope effect extends the temporal
perspective of ethical misconduct from a single point in time to be reconsidered to a series of
declining ethicality. Individuals rationalize minor unethical behaviors while not having to update
their self-concept negatively (Gino et al., 2009).
The findings revealed the importance of tone in the middle in moderating the ethical
behaviors of employees. Participants in management positions navigated the complex and
dynamic relationships between leadership-level and staff-level employees. According to Brown
et al. (2005), positive behaviors modeled by direct supervisors positively influence employees’
ethicality. Vicarious learning was at play as middle managers became ethical role models for
employees to mimic ethical behaviors. Individuals learn vicariously through observation
(Bandura, 1986).
Summary
The findings under each tenet of the SCT framework, environment, person, and behavior
validated extant literature on antecedents to ethical versus unethical behavior (see Figure 5).
They provided a practical blueprint for what not to do (before the organizational change) and
what to do (after the organizational) to become an ethical organization. The findings from the
experiences and perceptions of the participants illuminated the nature of the SCT model: the
triadic reciprocal interactions between the environment, person, and behaviors.

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Figure 5
Themes Identified From Interviews Utilizing the SCT Framework
Before the organizational change, former employees’ unethical conduct created a toxic
culture without communication, transparency, and authenticity. The negative culture also was a
contributor to low morale. Participants remained hopeful through their strong personal ethics,
which became the driving force for self-regulation. The tone in the middle, where managers
Person
• Morale
• Personal Ethics
• Self-Regulation
• Sentiments about
Change
• Personal Impact
Environment
• Enternal Pressure
• Financial
Accountability
• Performance
Inventives
• Company Culture
• Openness to
Feedback
Behavior
• Employee Behaviors
• Slippery Slope
• Favoritism and
Nepotism
• Tone in the Middle
ETHICS

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shielded their employees from the tumultuous atmosphere, also contributed to the tenacity of the
participants who endured the prior regime or were unaffected at all. Former employees’ slippery
slope unethical behaviors eventually became detrimental to the organization’s survival. WGE’s
financial distress put tremendous pressure on the company to continue to operate.
After the organizational change, the company had a robust sense of financial
accountability, which led to better performance. Even though the company was subject to more
performance pressure, personal ethics from leaders mediated those effects. Ethical leadership
also created an ethical tone at the top and permeated down to the tone in the middle, ultimately
resulting in ethical conduct. The performance management system encouraged teamwork and
goal setting to enable the company to get back on track gradually. Stronger teamwork fostered
higher morale and positively influenced the culture, which promoted ethical conduct. On an
alternate path, the company became more fiscally accountable through the new performance
management system promoting ethical behaviors. These ethical behaviors created a positive
culture for employees. The positive culture, reinforced by ethical behaviors and eradicating
unethical behaviors and personnel, created a truly transformed organization. The causal loop
diagram in Figure 6 outlines certain themes within the framework. Environment factors are
illustrated in black, personal factors in purple, and behavioral factors in green.

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Figure 6
Ethical Leadership Causal Loop Diagram
The organizational change was the catalyst to resurrect and transform WGE. Based on the
findings, the company made significant progress in the areas and themes that were discussed.
However, participants also mentioned other areas that the company may be able to improve.
These suggestions, corroborated by current research and literature, are addressed below.

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Research Question 1: Environment
Environmental and organizational settings affect employees’ ethical attitudes and
influence them to act ethically and refrain from immoral and fraudulent activities. Macro factors,
like market competitiveness and earnings expectations, have a significant effect by creating
conditions that may pressure organizations and encourage or enable financial misconduct (Zahra
et al., 2005). Ethical leaders may moderate these effects by implementing various strategic
initiatives.
Recommendation1: Set SMART Targets
Ethical leaders should set SMART targets and goals that will stretch employees to
challenge them and provide them with the tools and resources needed to reach those goals.
SMART is an acronym that stands for specific, measurable, attainable, realistic, and timely
(Doran et al., 1981). High-performance pressures when goals are unachievable, especially with a
lack of support and resources, may induce employees to rationalize cheating or cutting corners as
a necessary evil to hit the goals (DenNieuwenboer et al., 2017). When discussing business
effectiveness and efficiency, leaders should include another “e” in all conversations, which is
ethicality (Hess & Cottrell, 2016). Leaders should explicitly emphasize the importance of
accomplishing all business goals through ethical means. Leaders should also be explicit about
prohibiting unethical pro-organizational behavior and allow employees to provide feedback
channels to communicate difficulties in meeting performance targets due to the new realities of
any changing business conditions (Chen & Chen, 2021). Leaders should also refrain from a
bottom-line mentality and focus only on monetary rewards, but instead, emphasize long-term
sustainable outcomes, not short-term gains.

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Recommendation 2: Cultivate an Ethical Environment
Ethical leaders should cultivate an environment of integrity and ethical behaviors through
their actions and decision-making processes. Under SCT’s framework, leaders should emphasize
the importance of ethical modeling and social learning in fostering an ethical culture in the
organization. Bobby stated, “Employees will aspire and respond to the positive good behavior
approach that upper management displays.” Leaders set the overall tone at the top and act as role
models for employees to emulate, especially if such behaviors are the social norms (Mayer et al.,
2010). Natasha shared, “Ethics trickle down from the top to the bottom … having a good leader
so everything is trickling down is very important.”
Recommendation 3: Institute a Performance Management System
Ethical leaders should institute a fair and consistent performance management and
incentive plan. A performance management system with incentives alignment is critical for
improving organizational performance and channeling employee contributions to achieve
strategic goals (Biron et al., 2011). Having a company-wide incentive program can also promote
better teamwork. There is a strong correlation between effective performance systems and
employee satisfaction (Shrivastava, 2018). Tracey shared earlier, “There was better
responsibility and more about everybody understanding what direction we were heading and
pulling in that direction.”
Recommendation 4: Implement an Internal Control System and Code of Conduct
Ethical leaders should institute a robust internal control system and a strong code of
conduct. Companies may enlist assistance from their outside audit firm to review their internal
controls to ensure adequate corporate governance, leadership oversight, organizational processes,
structure, policies, and procedures to prevent and mitigate misconduct. Strong internal control

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systems prevent financial misconduct and strengthen the overall organizational structure (Quick
& Henrizi, 2018). Implementing and championing a code of conduct written in layman’s terms
congruent with the company’s values can signal to the company that ethics matters (Hess &
Cottrell, 2016). It is important that rules are to be applied and enforced consistently (see
recommendation ten), which will deter misconduct, develop employee trust, and inspire ethical
behavior. As Sonia shared earlier, “I 100% thrive in an environment when there are rules, and
you follow the rules, and the rules are the same for everybody.”
Recommendation 5: Foster Open Communications
Leaders should provide clear communication channels that are both transparent and
authentic to develop trust. Leaders should foster open communication between employees and
managers as it allows for resolving issues and sharing ideas. Cosier and Schwenk (1990)
suggested instituting conflict into the group decision-making process to ensure that decisions are
challenged and alternative creative ideas are generated to solve problems.
A trusting and open environment will prevent organizational silence and ethical muteness
(Bird & Waters, 1986). Peer pressure and fear of retaliation are often reasons for not-reporting
misconduct (Latan et al., 2019). Ethical leaders should institute whistle-blowing policies as
another medium to deter and detect corporate malfeasance and promote trust. Whistleblowing is
the most effective form of detection of financial misconduct (ACFE, 2022). To create a positive
approach, policies and procedures should incorporate whistleblowing remedies through
anonymous channels. Effective whistleblowing policies need to be complemented by the
leadership team that models ethical behavior, as employees may feel a duty to report any
unethical behavior to preserve the ethical culture (Liu et al., 2015). Trevino and Weaver (2001)
suggested that employees are more open to communicate issues if they perceive strong

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organizational justice (see recommendation ten). These policies should also extend to include
reporting about the executive leadership team. Tracy mentioned, “Having someone in HR and
having someone in finance who's confident enough in themselves that if the CEO is doing
something wrong, they’ll pick up the phone and call the board.”
Research Question 2: Person
“A company is only as good as its people,” phrased by numerous scholars and thought
leaders, epitomized the importance of having the right people in the organization. One
suggestion Mark made was to have a more “employee-centric culture” and to put “employees
first … then customers.” Recruiting the right employees is the first step, but organizations should
also center efforts on retaining and upskilling their workforce.
Recommendation 6: Construct a Robust Recruiting Process
Ethical leaders should invest in their human resources efforts to screen, recruit, and retain
talented individuals who share the same ethical values as the organization. Most recruiters look
for the appropriate knowledge and skills for the position. It is just as important to seek an ethical
culture fit. According to Tyler and De Cremer (2009), the perception of an ethical organization is
essential to attract the same kind of employees who present the same ethical standards.
Recommendation 7: Increase Employee Morale
Ethical leaders should promote an environment to increase morale. Employees are better
workers if they feel valued, appreciated, and have a purpose in their workplace. Lily commented,
“It is very important to feel appreciative of your work. Every company should realize your
business only succeeds when your employees are working hard for you.”
The performance management and incentive plan improves organizational performance
and also serves as a morale booster. It ensures that employees understand how their work

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contributes to the company's success (Biron et al., 2011). It also fosters employee growth and
development through targeted training, coaching, and recognition for a job well done. According
to Bersin & Associates (2012), companies with recognition programs with strong executive
support are twelve times more likely to have strong business results.
There are also other strategies to improve morale. An inclusive and psychologically safe
environment where employees can share feedback in decision-making can make them feel
valued and engaged (Frazier et al., 2017). Participatory decision-making will increase job
satisfaction, trust, and commitment (Guinot et al., 2021; Pacheco & Webber, 2014). It is also
essential for organizations to act on legitimate and constructive feedback. Organizations should
provide continuing education and skill development to allow career growth for employees.
According to the Execu Search Group survey, 86% of professionals will leave their current
employment for better professional development opportunities elsewhere (Keswin, 2022).
Recommendation 8: Conduct Ethics Training
Ethical leaders should implement a comprehensive ethics training program in addition to
trainings targeted toward job-specific skills. According to Warren et al. (2014), ethics training is
a crucial element in institutionalizing business ethics in an organization and for employees to
learn about the organization’s values. These training programs focus on developing ethical
competencies and skills will positively affect employees’ ethical behavior (Kreismann &
Talaulicar, 2021). According to Warren et al. (2014), employees will learn to identify moral
dilemmas and be presented with normatively appropriate models and responses to ethical
dilemmas. Providing information about rules and regulations will also improve moral judgment
(Warren et al., 2014). As discussed in Recommendation 5, a comprehensive values-oriented
training program integrates ethical behavior into employees’ frame of role identities and

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encourages reporting unethical behaviors (Weaver & Trevino, 1999). Lastly, there is also a need
to periodically retrain employees through refreshers as the training programs’ efficacy is
expected to degrade over time (Richards, 1999).
Research Question 3: Behavior
Outcome expectation is a source of behavior motivation. Individuals witness behavioral
consequences through personal experiences or observation (Schunk & Usher, 2019). Middle
management has an influential role in shaping their employees’ behaviors. Behaviors of others
impact how individuals respond to ethical dilemmas (Jones & Ryan, 2001). Organizational
justice builds ethical climates by explicitly communicating and following through on the
consequences of misconduct as well as decisions on rewards and advancements.
Recommendation 9: Develop Middle Management
Ethical leaders should highlight the importance of developing their managers. According
to Ewelt-Knauer et al. (2022), an organization’s ethical culture is moderated by middle
management, showing a considerable effect relating to employees’ direct work environment.
Employees are more responsive to their direct surroundings than the overall organization.
Leaders should ensure consistent expectations and behaviors in employees’ proximate work
environment that align with the company’s overall goals (Bussman & Niemeczek, 2019). Clear
communications with middle management, as well as additional workshops, meetings, and
training with them may improve culture congruence. In turn, middle management can become
additional role models due to proximity, allowing employees to emulate and reinforce the
organization’s ethical culture (Brown & Trevino, 2014).

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Recommendation 10: Establish Organizational Justice
Ethical leaders should establish organizational procedural justice. The enactment of fair
procedures and disciplinary actions promotes perceptions of trust and legitimacy (Tyler, 1997).
Limits and consequences should be determined, and organizations should not tolerate
undesirable or unaligned behaviors. Company’s cultures are defined by what they tolerate
(Emerson, 2018). An organization’s response to ethical lapses, or the “follow through” concept,
captures employees’ perceptions of an organization’s ethical efficacy (Trevino & Weaver, 2001).
Therefore, offenders are to be reprimanded accordingly to strengthen an organization’s ethical
culture. Tracy mentioned, “slow to hire … quick to fire.” When performance or behavior issues
arise, organizations should promptly address them through coaching, feedback, and performance
improvement plans. If the situation does not improve, organizations should decisively take
appropriate steps for termination.
Employees’ morale is strongly linked to an organization’s ability to demonstrate fairness
and equity based on performance. Ethical leaders should be mindful and limit instances of
nepotism and cronyism in the organization. Hiring decisions and advancement opportunities
based on pre-existing familial relationships promote lower employee commitment and trust and
greater employee dissatisfaction and anxiety (Pearce, 2015).
Rules and policies need to be consistently applied. Procedures in employee and
promotional opportunities should be transparent and applied fairly to all employees (Vveinhardt
& Bendaravicine, 2022). Decisions in rewards and advancements should be based on
meritocracy. Effective communication in these areas will reduce intergroup tension and promote
a positive organizational climate (Vveinhardt & Bendaravicine, 2022).

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Organizational Change Model
The recommendations, as presented above, necessitate changes in organizations to instill
a culture of ethicality through the SCT framework. The organizational change at WGE was a
drastic and sudden event triggered by egregious unethical behaviors and financial misconduct,
which was lethal to the company’s survival. Based on the findings, although the result was
triumphant, the change was arduous and disruptive. It evoked strong reactions from employees,
such as fear, anxiety, uncertainty, and resistance. This serves as a reminder that organizations
must be proactive and intentional rather than wait for a crisis to surface that threatens their
survival. This study utilizes the McKinsey 7-S Change Model as an assessment and alignment
model.
McKinsey 7-S Change Management Model
The McKinsey 7-S change management model (see Figure 7) was developed by
McKinsey partners Robert Waterman and Tom Peters and was featured in the 1982 best-seller,
“In Search of Excellence” (McKinsey, 2008). The model is used as a diagnosis tool to design,
assess, implement, and monitor organizational change strategies. The model effectively
compares the present state against the desired state and demonstrates how the elements are
intertwined and how change can be implemented (Singh, 2013).

123
Figure 7
McKinsey 7-S Change Model
As implied by the name, there are seven “S” factors that provide a comprehensive view
of organizational performance (Waterman, 1982). There are four factors considered as soft “S”,
which include shared values, skills, staff, and style (McKinsey, 2008). The remaining three
factors are classified as hard “S”: strategy, structure, and systems. These seven elements must
work together and be synchronized for effective change management. Similar to the
interactionist nature of SCT, the 7-S model also demonstrates the interconnectivity of each
factor, reinforcing each element to effect change. Therefore, the McKinsey 7-S Change
Management Model is particularly appropriate and relevant for this study’s implementation. The

124
seven factors are outlined below, together with recommendations discussed earlier in this
chapter, as outlined in Table 6.
Table 6
7-S Model and Associated Recommendations
7-S model Recommendations
Shared values Ethics
Strategy 1. Set SMART targets
Structure 3. Institute a performance management system
Systems 4. Implement an internal control system and code of conduct
10. Establish organizational procedural justice (disciplinary actions)
Staff 6. Construct a robust recruitment process
7. Increase employee morale (engagement and appreciation)
10. Establish organizational procedural justice (meritocracy)
Skills 7. Increase employee morale (advancement)
8. Conduct ethics training
9. Develop middle management
Style 2. Cultivate an ethical environment
5. Foster open communication

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Shared Value (Ethics)
Shared values, also considered as superordinate goals, determine organizational destiny
(Waterman, 1982). Shared values are factors that are centered at the core of the 7-S model
(McKinsey, 2008). The shared values are every organization’s foundation and belief system that
guides employee behaviors and company actions (Ravanfar, 2015). These belief systems should
be the jumping-off platform for developing organizational change (Kaplan, 2005). Ethics should
be at the nucleus of the organization's culture and values. Ethical considerations should serve as
the driving force behind all aspects of the 7-S model. For the ethical change model to be
successful, an integrated harmony among the remaining six “S” factors needs to be achieved to
support and reinforce ethics (Kaplan, 2005).
Strategy
The strategy element represents the coherent action plans, the sustainable competitive
advantages, and the adaptive and dynamic evolution of the organization (Waterman, 1982).
Ethical considerations should be embedded within the organization's strategic planning process.
These considerations involve aligning the organization's goals and objectives with ethical
principles, such as transparency, fairness, and authenticity.
Market competitiveness is significantly affected by creating conditions that may pressure
organizations to engage in misconduct (Zahra et al., 2005). Customer outcomes and value
propositions via ethical means should be at the core of the organization’s strategy (Kaplan,
2005). Sonia shared, “If you build a brand and treat your clients with respect, you will get loyalty
from those clients.” Linda also commented earlier to “not entertain or buy business or make
someone feel they owed us. … We are going to show them good customer service.” Per
Recommendation 1, as mentioned earlier, organizations should set SMART targets and goals that

126
will challenge employees and provide them with the resources and support they need to reach
those goals. Organizations should focus on long-term sustainable outcomes rather than myopic
short-term gains.
Structure
The structure refers to the different functions, departments, and divisions that make up
the organization, creating synergies (Kaplan, 2005). The structure also defines roles,
responsibilities, authority, and accountability (Singh, 2013). The organizational structure should
support ethical behavior and decision-making, which includes having clear lines of responsibility
for ethical compliance and accountability.
Per Recommendation 3, as stated earlier, instituting a performance management system
will improve operating results and foster teamwork and collaboration. Aligning it with an
incentive structure will also channel employee contributions to achieve and support the
organization’s strategic goals. Furthermore, it will develop trust from employees and inspire
ethical behaviors.
Systems
An organizational system is about the informal and formal flows and processes that show
an organization’s daily activities and how they are done (Pospisil & Zavodna, 2022; Waterman,
1982). This includes standard protocols and procedures employees follow (Singh, 2013). Ethical
systems and processes should be implemented to ensure compliance with laws and regulations,
as well as with the organization's ethical standards.
Per Recommendation 4, implementing an internal control system and a code of conduct
will mitigate organizational risks and educate employees about the expected norms of ethical

127
behaviors. Organizations should establish procedural justice by enacting fair procedures and
disciplinary actions, as discussed in recommendation 10.
Staff
This element relates to the recruitment, training, retention, and motivation of the
workforce (Ravanfar, 2015). Values of prospective employees should be reviewed and used in
making selection or promotional decisions. Ethical considerations should be a factor in hiring,
promoting, and retaining employees (Bekiarus & Papachristou, 2021).
As discussed in Recommendation 6, organizations should invest in their human
resources efforts to recruit and screen talented individuals who share the same ethical values as
the organization. Furthermore, organizations should promote an environment to increase morale
through aligned incentive programs and means to make them feel engaged and valued per
Recommendation 7. Lastly, policies relating to recruitment and promotions should be applied
equitably and based on meritocracy as suggested in recommendation 10.
Skills
This element is related to the organization’s capability and competencies through its
employees’ skills to achieve its objectives (Kaplan, 2005). It also refers to institutional skills and
the ability to perform as a whole, so it is imperative to identify if there is a deficiency
(McKinsey, 2008). Employees should be equipped with the necessary skills and knowledge to
make ethical decisions in their roles. Ethical training and development programs can help build
these skills of ethical capacities (Kreismann & Talaculicar, 2021). Ethical rules of the road must
ensure that they are stated, shared, and understood (Warren et al., 2014).
Per Recommendation 8, ethics training is crucial in institutionalizing business ethics in an
organization and for employees to learn about the organization's values (Warren et al., 2014).

128
Providing employees with technical, industry, and ethical training can be a morale booster per
Recommendation 7. Lastly, the development of middle management is vital to culture
congruence, and middle management can become additional role models for employees to
emulate and reinforce the ethical culture of the organization, as discussed in Recommendation 9.
Style
This factor represents the leadership style and the decision-making processes within the
organization. Style also includes informal rules of conduct and unconscious symbolic acts
demonstrated by leaders (Kaplan, 2005). Leadership style should promote and exemplify ethical
behavior. The tone at the top implies that ethical behavior is not only expected by the senior
leadership but modeled for others to follow (Patelli & Pedrini, 2015).
As discussed in recommendation 2, organizations should cultivate an environment of
integrity and ethical behaviors through their actions and decision-making processes. Leaders
should set an ethical tone at the top and lead by example in all ethical matters. Fostering open
communications throughout the organization from top down to bottom up will promote a
positive climate, as suggested in Recommendation 5. Developing clear communication channels
that are both transparent and authentic will increase employees’ trust. Implementing a
whistleblowing channel for employees to report misconduct anonymously will allow early
detection to mitigate further losses.
Implementation
A multidimensional approach is required for effective organizational change (Kaplan,
2005). The seven elements presented above may be effective, but a synchronized approach is
essential for optimal organizational change and alignment (Ravanfar, 2015). The model suggests

129
including all seven elements from the beginning to reduce the potential risk of change resistance,
leading to more effective planning and implementation (Ravanfar, 2015).
Ravanfar (2015) suggested five steps for implementation. First, assess the current state.
With ethics as the shared value, diagnose where the organization is for each of the six elements.
Review each element and identify any gaps and weaknesses. Second, map out the plan for each
of the elements. Third, strategize on an action plan. Decide where and what changes should be
made. Fourth, implement the changes. Lastly, evaluate and monitor those changes.
Change will only be sustainable with the periodic review and reassessment of those
improvements against the ever-changing environment to ensure those initiatives are still relevant
and practical (Kotter, 1986). The model can also foster greater trust and collaboration between
various levels of management within an organization, especially if employees are involved in the
design and implemention of the change process (Piderit, 2000). It allows employees to
understand their roles and how much they can contribute towards the organizational change
process and successful implementation.
Summary
The rigor and explicitness of this model provide a comprehensive framework to
understand how the change process affects all areas of the organization, which will produce the
most effective results possible. By integrating ethics as the shared value within the McKinsey 7S
model, organizations can ensure that ethical principles are woven into the fabric of the
organization, influencing its strategy, structure, systems, skills, staff, and style. This approach
helps foster and sustain a more ethical organizational culture.

130
Recommendations for Future Research
The information contributed by the participants provided valuable insights and
information. The participants shared their lived experiences and perceptions of the organizational
change relating to ethicality at WGE. The results and findings of the study are limited to the
individuals in one organization with a small sample size. Single case studies may need more
rigor and generalization in communicating outcomes (Yin, 2018).
There are several areas researchers can investigate to build upon the scope of the study.
First, conducting a study with a larger sample size may be beneficial, which can be accomplished
by using a larger SME or including multiple organizations in the study that have experienced an
organizational change due to financial misconduct. Secondly, there was a time lapse between the
organizational change and the timing of this study. Conducting a study utilizing an organization
that experienced a more recent change may be timelier. Thirdly, the current study only included
participants engaged with the company throughout the organizational change to explore the
differences between those two periods. This unintentionally created a survivorship bias to
exclude employees or stakeholders who left before the organizational change or engaged with
the company after the change. Further study may include a broader population of employees to
understand each phase on a stand-alone basis rather than via a comparative lens. Lastly, under
the personal tenet of social cognitive study, the study focused on personal experiences and
perceptions of individuals. Investigating individuals’ traits may be an alternative means to
conceptualize the theory.
Conclusion
Financial misconduct remains a significant risk to every organization. Damages from
corporate malfeasance extend from business closures, employees’ job and pension losses, supply

131
and service chain disruptions, and shareholders’ investment losses affecting industries and even
local economies. The purpose of the study was to advance the knowledge of financial
misconduct, specifically as it relates to deterrence and intervention in SMEs. This study
contributed to extant research in three ways:
1. Present fraud research emphasized individual factors contributing to misconduct
while ignoring social and organizational factors. This study utilized SCT as a
framework that extended beyond the personal factors and provided a comprehensive
interaction perspective encompassing all three elements of environment, person, and
behavior.
2. There is scarce academic research and media reports on fraud studies relating to
SMEs. The research methodology of this study utilized an SME that went through a
successful organizational change prompted by financial misconduct. The findings
provided valuable insights into the actual conditions as to what happened and how it
happened as well as explored the improvements made. These discoveries provided a
real-world blueprint for what not to do before the organizational change and what to
do after the organizational change to transform into a more successful and ethical
organization.
3. Current prevention strategies are heavily focused on internal controls and utilizing
gatekeepers, which have proven inadequate. This study provided 10
recommendations that are incorporated into each of the elements of the McKinsey 7-S
Change Model. The 7-S model is a holistic approach to supplement the “hardware” of
strategy, structure, and system with the “software” of staff, skills, and style, with the
shared value of ethics at the core.

132
From the framework applied, the research methodology, the findings, and the
recommendations and change model, this study provided a comprehensive yet alternative lens to
address the problem of financial misconduct. This study also underscores the importance of
organizations being deliberate and proactive in implementing change, rather than merely reacting
to crises that jeopardize their survival. Ethics should be at the heart of any organization. This
study introduced a refined approach that can create a more ethical and accountable organization,
resulting in long-term sustainability and success, mitigating instances of corporate malfeasance
and unethical conduct while maintaining the trust and respect of employees and stakeholders.

133
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Appendix A: Email Solicitation
Dear xxx:
Thank you for your interest relating to this research study.
My name is Rosalind Sullivan, I am a doctoral student at the University of Southern
California in the Organization Change and Leadership program. I am conducting a study on
organizational change and ethical leadership. The study centers around the experiences of
employees who have been working at an organization when there was a change in leadership.
The study will contribute to understanding organizational change and ethical leadership in small
to medium-sized companies.
I would like to assure you that I am here to conduct a study without any commercial
interests and am strictly wearing the hat of the researcher. What this means is that the nature of
my inquiry is not evaluative or judgmental. My goal is to understand your perspective and your
very own experience. This study is strictly confidential. Your name and any other identifiable
names will not be shared with anyone outside of the research team. A pseudonym for the
organization and aliases will be used for participants.
The study starts with a survey, which normally takes around 15 minutes. After the
completion of the survey, I will then schedule an interview with you conducted via Zoom, which
takes about an hour, but we set aside time for an hour and fifteen minutes. The pre-survey is a
tool to assist with memory recall. As you go through the statements and questions, please jot
down separately any relevant information, emotions, or incidents that the survey may have
helped to trigger your memory. When we conduct the interview, you may then be able to provide
richer descriptions of your experiences and perceptions during that time.

161
Thank you for your participation. For your time investment in the survey and
the interview, you will receive a $50 Amazon gift card as a token of my appreciation. Please
respond to this email if you have any questions.

162
Appendix B: Survey Protocol
Question Open/
closed
Level of
measurement
Response
options
Concept
being
measured
Do you consent to take the
survey?
Closed Ordinal Yes, no n/a
The alias that I would like
to use for this study?
Open – – –
1 Age? Closed Nominal 21–30, 31–40,
41–50, 51–60,
61 and over,
prefer not to
answer
Demographic
2 Year joined the company? Closed Nominal 2010 and before,
2011–2014,
2015 and after
Demographic
3 Position in the company? Closed Nominal I do not
supervise
anyone, I am a
supervisor or
manager, I am
director of
above, other
Demographic
Questions relating to your
perception of the
organization BEFORE
the change

4 Describe the level of
competitiveness and
pressure the company
faces before the
organizational change.
Closed Ordinal Strong pressure
and competition,
moderate
pressure and
competition, low
pressure and
competition, no
pressure/
competition
Environment

163
Question Open/
closed
Level of
measurement
Response
options
Concept
being
measured
5 Describe the company’s
performance goals
before the organizational
change.
Closed Ordinal Farfetched and
hard to achieve,
stretched but
achievable,
easily
achievable, not
informed of
goals
Environment
6 The company had strong
business and financial
stewardship.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
7 The company was
financially disciplined
and principled in making
sound decisions.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
8 The company demonstrated
responsibility for their
actions.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
9 The company followed
rules and regulations.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
10 The company had codes of
conduct.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
11 The company
communicated doing the
right thing directly or
through its actions.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
12 The company took feedback
from its employees and
stakeholders and took
necessary actions as
needed.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
13 The company cared for the
employees.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment

164
Question Open/
closed
Level of
measurement
Response
options
Concept
being
measured
14 I was able to communicate
my thoughts and
feedback to my manager.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Behavior
15 I believed employees
demonstrated ethical
behaviors in
performance of their job
responsibilities.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Behavior
16 I felt motivated and proud
as an employee or
stakeholder of the
company.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Person
17 I knew what was expected
of me to do the right
thing.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Person
18 I felt my manager/colleague
took my feedback and
concerns seriously and
took necessary actions as
needed.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Behavior
19 I was held accountable for
my actions and was
rewarded or disciplined
accordingly.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Person
Questions relating to your
perception of the
organization AFTER the
change.

165
Question Open/
closed
Level of
measurement
Response
options
Concept
being
measured
20 Describe the level of
competitiveness and
pressure the company
faces AFTER the
organizational change.
Closed Ordinal Strong pressure
and competition,
moderate
pressure and
competition, low
pressure and
competition, no
pressure/
competition
Environment
21 Describe the company's
performance goals
AFTER the
organizational change.
Closed Ordinal Farfetched and
hard to achieve,
stretched but
achievable,
easily
achievable, not
informed of
goals
Environment
22 The company had strong
business and financial
stewardship.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
23 The company was
financially disciplined
and principled in making
sound decisions.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
24 The company demonstrated
responsibility for their
actions.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
25 The company followed
rules and regulations.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
26 The company had codes of
conduct.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment

166
Question Open/
closed
Level of
measurement
Response
options
Concept
being
measured
27 The company
communicated doing the
right thing directly or
through its actions.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
28 The company took feedback
from its employees and
stakeholders and took
necessary actions as
needed.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
29 The company cared for the
employees.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Environment
30 I was able to communicate
my thoughts and
feedback to my manager.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Behavior
31 I believed employees
demonstrated ethical
behaviors in
performance of their job
responsibilities.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Behavior
32 I felt motivated and proud
as an employee or
stakeholder of the
company.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Person
33 I knew what was expected
of me to do the right
thing.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Person
34 I felt my manager/colleague
took my feedback and
concerns seriously and
took necessary actions as
needed.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Behavior
35 I was held accountable for
my actions and was
rewarded or disciplined
accordingly.
Closed Ordinal Strongly agree,
agree, disagree,
strongly disagree
Person

167
Appendix C: Interview Protocol
Introduction to the interview:
Once again, thank you for your time and for agreeing to participate in this study. I
received the survey results and appreciated the time you took to complete the survey. The
interview takes about an hour, just want to make sure this still works for you.
My name is Rosalind Sullivan, I am a doctoral student at USC in the Organization
Change and Leadership program. I am conducting a study on organizational change and ethical
leadership. The study centers around the experiences of employees who have been working at a
company when there was an organizational change. I will be discussing with multiple
employees. The study will contribute information to understand organizational change and
ethical leadership in small to medium-sized companies.
I would like to assure you that I am here to conduct a study without any commercial
interests and am strictly wearing the hat of the researcher. What this means is that the nature of
my questions is not evaluative or judgmental. My goal is to understand your perspective and
your very own experience.
This interview is strictly confidential. Your name and any other identifiable names will
not be shared with anyone outside of the research team. I will not share names with other
employees or anyone who is a participant in the research. The data for the study will be compiled
into a report but pseudonyms will be used to protect your identity or other names that you
mention during the interview. While I may use direct quotes from you as needed, none of the
data will be referenced back to you. The data will be kept in a password-protected computer and
all data will be destroyed after my completion of the program.

168
You may decline to answer any questions that you feel uncomfortable with or you may
withdraw from this interview at any time.
Do you have any questions about the study so far? With this zoom session, I would like
to record the session so that I can accurately document what you share during this interview. The
recording is for the research’s completeness and validity and will not be shared with any outside
party other than the research team. The transcripts of the session will not be shared and will not
be part of any published works. May I have your permission to record this zoom session?
Again, as a reminder, this interview is all about your lived experience, your perception,
and your own feelings. There are no right or wrong answers.
Table C1
Interview Protocol
Interview questions RQ Key concept
addressed
1 Tell me about yourself – Small talk and
rapport
2 How did you become involved with WGE? – Background
3 What was your initial impression of the
company?
2 Person
4 Can you share what you knew about the
circumstances of the organizational change?
1 Situation context/
Environment
5 Was the behavior/phenomenon consistent with
any prior patterns?
3 Behavior
6 How were you impacted by the change in your
responsibilities?
3 Behavior
7 How did you feel about the change? 2 Person

169
Interview questions RQ Key concept
addressed
8 How did other employees feel about the
change?
3 Behavior
9 How would you describe the overall culture of
the company?
1 Environment
10 What does ethics mean to you? 2 Person
11 How would you describe the ethical culture of
the company?
1 Environment
12 Was doing the right thing communicated
throughout the company? If so, how?
1 Environment
13 Can you talk about the overall employee
morale?
2 Person
14 How did the morale affect you? 2 Person
15 How were employees motivated and
accountable to do the right thing?
3 Behavior
16 What behaviors were rewarded? 3 Behavior
17 How did the reward system affect you? 2 Person
18 Can you describe the peer to peer dynamics in
the company?
3 Behavior
19 Can you comment on the authenticity and
transparency of the company?
3 Behavior
20 How was the company compared to your initial
impression?
3 Behavior
21 What can the company do to make it an ethical
work environment?
1 Environment
22 Which factors do you believe were antecedents
to the unethical behavior that took place?
1,2,3 All three factors
23 How had this experience impacted you in your
current professional work?
3 Behavior

170
Interview questions RQ Key concept
addressed
24 What other insights about ethical leadership
that I may not have covered today, if any?
– Wrap up
25 What should I have asked you that I didn’t
think to ask?
– Wrap up
Conclusion to the interview:
Thank you for sharing your experiences and thoughts with me today! I greatly appreciate
your time and our conversation today. What you have shared today is very helpful for me in
getting an understanding of your experiences in the study. As part of the research protocol, I will
send you a copy of today’s transcript to ensure we capture the intention of your responses. You
have the option to review the transcript should you choose to.
Will it be acceptable if I reach out to you if I have any follow-up questions or areas that I
may need clarification on after I spent some time with the data?
Again, thank you so much, I will send you a gift card as a small token of my
appreciation.

171
Appendix D: Breakdown of Survey and Interview Questions
Research questions Presurvey Interview
Demographics/introduction 1, 2, 3 1–2
RQ1. How are individuals influenced by
environmental factors relating to
ethical versus unethical behaviors?
4–13, 20–29 4, 9, 11–12, 21–22
RQ2. How are individuals influenced by
personal factors relating to ethical
versus unethical behaviors?
16–17, 19, 32–33, 35 3, 7, 10, 13–14, 17,
22
RQ3. How are individuals influenced by
behavioral factors relating to ethical
versus unethical behaviors?
14–15, 18, 30–31, 34 5, 6, 8, 15–16, 18–
20, 22–23

Abstract (if available)

Abstract Financial misconduct remains a significant risk to every organization. Small to medium-sized entities (SMEs) are particularly vulnerable as they have insufficient resources to absorb these losses and jeopardize their existence. There is also scarce research on fraud scholarship involving SMEs. This study fills the void by utilizing an SME as an organizational study with Bandura’s social cognitive theory as a framework. Through a qualitative methodology, one-on-one phenomenological interviews were conducted with 10 employees and stakeholders in the organization under study. The interviews explored their lived experiences as they underwent an organizational change resulting from financial misconduct. Findings confirmed that all three elements of social cognitive theory, environment, person, and behavior played essential roles in an organization’s antecedents to ethical versus unethical behavior. The findings also substantiated 10 recommendations to be implemented through the McKinsey 7-S change model. By integrating ethics as the shared value and core of the model, ethical principles are woven into the fabric of the organization to effect ethical outcomes and mitigate instances of financial misconduct. This study contributes to current SME fraud scholarship by providing a comprehensive approach to supplement mechanical controls with soft elements of style, staff, and skills to create a more ethical and accountable organization.

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Asset Metadata

Creator Sullivan, Rosalind Joan (author)

Core Title Ethical leadership: the case for building a fraud-resistant organization

School Rossier School of Education

Degree Doctor of Education

Degree Program Organizational Change and Leadership (On Line)

Degree Conferral Date 2024-05

Publication Date 03/27/2024

Defense Date 12/07/2023

Publisher Los Angeles, California (original), University of Southern California (original), University of Southern California. Libraries (digital)

Tag ethical leadership,financial misconduct,fraud prevention,McKinsey 7-S change model,OAI-PMH Harvest,social cognitive theory

Format theses (aat)

Language English

Contributor Electronically uploaded by the author (provenance)

Advisor Tobey, Patricia (committee chair), Koka, Sreenivas (committee member), Ott, Maria (committee member)

Creator Email dr.rsullivan@yahoo.com,rosalindjsullivan@yahoo.com

Permanent Link (DOI) https://doi.org/10.25549/usctheses-oUC113858382

Unique identifier UC113858382

Identifier etd-SullivanRo-12716.pdf (filename)

Legacy Identifier etd-SullivanRo-12716

Document Type Dissertation

Format theses (aat)

Rights Sullivan, Rosalind Joan

Internet Media Type application/pdf

Type texts

Source 20240327-usctheses-batch-1131 (batch), University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the author, as the original true and official version of the work, but does not grant the reader permission to use the work if the desired use is covered by copyright. It is the author, as rights holder, who must provide use permission if such use is covered by copyright.

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus MC 2810, 3434 South Grand Avenue, 2nd Floor, Los Angeles, California 90089-2810, USA

Repository Email cisadmin@lib.usc.edu