The Fraud Triangle and Model of Criminogenesis

Abstract

The fraud triangle (FT) predominantly focuses on individual perpetrators and ignores the complexity and diversity of causes of delinquency in business organisations. To this end, this article discusses the limitations of the FT in practice to analyse misconduct in the organisational context. The paper also provides suggestions to remediate conceptual weaknesses of the FT by addressing the realm of criminogenic antecedents facilitating, enabling and promoting illegal and unethical behaviour in organisational settings. In discussing the reasons as to why the FT fails to comprehensively explain the root-cause of misconduct displayed in businesses, this paper draws on relevant literature and theoretical perspectives on employee criminal and unethical conduct in the organisational context. The model of criminogenesis introduced in this article aims to evaluate the source of employee criminal and unethical activities. Thus, it reveals that employee behaviour is influenced by individual, organisational and environmental dynamics, including for instance: personality traits such as narcissistic, Machiavellian, and hubristic traits; criminogenic organisational settings; unethical organisational culture; poor leadership and social pressure. Employees lacking morality and self-regulation capabilities might be vulnerable to the influence of criminogenic forces, processes and conditions that increase individual propensity for unlawful and unethical practices. The general aim of the article is to contribute to the discussion on the causation of illicit and unethical acts carried out in, and by business organisations by connecting three different domains (environment, organisation, and individual) and addressing the effect of criminogenesis at the micro-, meso-, and macro- levels.