Date of Degree

6-2014

Document Type

Dissertation

Degree Name

Ph.D.

Program

Criminal Justice

Advisor(s)

F. Warren Benton

Subject Categories

Criminology | Criminology and Criminal Justice | Organizational Behavior and Theory

Keywords

Bureaucracy, Bureaupathology, Corporate Crime, Fraud Hotlines, Organizational Theory, White Collar Crime

Abstract

This dissertation examined the effect of organizational bureaucracy on fraud hotline performance. Fraud hotlines are used to receive anonymous fraud tips from employees in all sectors to prevent and detect fraud. This work contributes to the research on fraud hotlines, which today is very light. This work also examined individual hotline performance against organization theory, which is absent in the literature. The literature also doesn't include studies using social media data to determine organizational climate. This work contributes to that literature by providing a collective case study examination of the fraud hotlines in six organizations. Their hotline performance was examined in light of the Theory of Bureaucracy. According to the literature, the condition of organizational bureaupathology can result in crime concealment, reduced fraud reporting, and/or reduced hotline performance.

To determine the presence and level of dysfunctional organizational bureaucracy and bureaupathology with respect to employees, the primary audience of fraud hotlines, this study qualitatively measured employee perception of specific bureaucracy and bureaupathology indicators in their workplace by examining their company review submissions in social media. Hotlines were evaluated using their individual level hotline metrics/statistics and also by examining their specifications, metrics, functionality, and adherence to best practices. Interviews with hotline administrators, an evaluation of the level of reported organizational fraud, and consideration of the historical context was also considered in evaluating the overall performance of the hotlines.

This study ultimately determined there is no consistent relationship between organizational bureaupathology and hotline performance. At times, where an organization had more bureaupathology, the hotline tended to perform better, in terms of its metrics, functionality and adherence to best practices. At other times, hotlines with lower levels of bureaupathology tended to perform worse than their counterparts. These organizations were in the private sector, so the sector where a given hotline is operated may be a factor.

This study further found better functioning hotlines didn't have less internal fraud. Organizations where employees perceived a high presence of the bureaucracy indicators "Insistence on the Rights of Office" and "Impersonal Treatment" tended to have a better adherence to hotline best practices, yet had a higher instance of internal fraud in comparison to organizations. In other words, the conditions that contribute to a successful hotline may also give rise to fraud, and or inhibit fraud reporting, in the same organizations.

This study further determined fraud hotlines might not prevent fraud. Regardless of hotline performance, including the number of calls received, all of the subject organizations experienced employee crime.

These results are contrary to expectations but consistent with bureaupathology theory, which says that employees in excessive bureaucracies adhere strongly to organizational rules and procedures and may be incapable of responding to unpredictable events.

As a result of the aforementioned findings, organizational hotline assessment methodology should consider external factors, such as the historical context, presence of internal fraud and employee sentiment as factors in assessing organizational fraud, in assessing hotline performance.

 
 

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