Determinants of Tone at the Top, Ethical Values and The Role of the Whistleblowing System on Employees’ Fraudulent Intentions in the Malaysian Workplace: the Moderating Effect of the Organisational Culture

Yap, Calyn Kai Ling (2023) Determinants of Tone at the Top, Ethical Values and The Role of the Whistleblowing System on Employees’ Fraudulent Intentions in the Malaysian Workplace: the Moderating Effect of the Organisational Culture. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

In Malaysia, fraud has progressively blossomed into a prevalent issue in these few years. The occurrence of fraud cases rises year by year, it has always been a problem for organisations worldwide, causing an increasing number of losses, either financially or non-financially. In this study, it intends to examine the determinants of employees’ fraudulent intentions in Malaysian workplaces which are influenced by the tone at the top, ethical values and the role of the whistleblowing system. This study further examined the influence of the organisational culture on the determinants that induce employees to commit fraud in the Malaysian workplace. The conceptual framework has been developed based on Agency Theory, Fraud Triangle Theory and Green Tape Theory. With that, a quantitative research and cross-sectional analysis were conducted by collecting primary data through electronic questionnaires involving 473 working adults who work in Malaysian companies to answer the research questions and research objectives. Thereafter, data collected were analysed using Statistical Package for Social Sciences (SPSS) and SmartPLS. Upon analysing the data collected, the research findings indicated that ethical values (EV) and the role of the whistleblowing system (TRWS) are negatively related to employees’ fraudulent intentions (EFI) in Malaysian companies. Besides, the findings of this study revealed that fostering a positive organisational culture will moderate the relationship between the tone at the top, and employees’ fraudulent intentions as well as the ethical values, and employees’ fraudulent intentions. At the final stage of this study, four out of six of the research questions were supported and justified based on the statistical analysis and literature review. This study prompts Malaysian companies to implement robust fraud prevention and detection policies and procedures, provide ethical training programmes, highlight the role of the top management and research raise the awareness of the employer or leaders to re-examine their organisational culture in order to cultivate an ethical climate and mitigate unethical behaviour in the Malaysian workplace. Despite the valuable contributions of this study, it is important to acknowledge several limitations, including potential limited insight and knowledge of respondents regarding whistleblowing systems, possible response errors and distortions due to the adoption of online survey questionnaire, sensitivity of disclosing fraudulent intentions as well as demographic and geographical constraints in terms of representation. To address these limitations, future researchers are advised to employ a combination of qualitative and quantitative methods. A balanced representation of respondents should be targeted based on race and geographical areas in Malaysia.