Formation Mechanism of Corporate Scandals by Chain of Organizational Fraud

Abstract

The purpose of this paper is to clarify the mechanism of organizational fraud, which is fostered by the chain of intentions and actions of individuals in an organization. In this paper, organizational fraud is classified into four types based on the existence or non-existence of the intention to commit fraud in the planning department and the existence or non-existence of the intention to commit fraud in the implementation department. Through the case studies of the Suruga Bank fraudulent loan problem and the Leopalace21 construction deficiency problem, we showed that the former corresponds to “intentional organizational fraud” and the latter to “unconscious complicity organizational fraud”.