Workplace Stress, Organisational factors, and Employees’ Fraud Intentions in Malaysian SMEs: the Mediating Role of Job Dissatisfaction

Ooi, Shu Eun (2025) Workplace Stress, Organisational factors, and Employees’ Fraud Intentions in Malaysian SMEs: the Mediating Role of Job Dissatisfaction. Masters thesis, Tunku Abdul Rahman University of Management and Technology.

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Abstract

In recent years, counterproductive workplace behaviour (CWB), such as corporate fraud, theft, and resource misappropriation has been on the rise, posing significant threats to organisational integrity, employee well-being, and long-term sustainability. Malaysian SMEs, which form the backbone of the national economy, are particularly vulnerable due to their lean structures, limited governance capacity, and heightened exposure to workplace stressors. As these enterprises strive to remain competitive in a rapidly evolving business landscape, employees often face increased workloads, job insecurity, and pressure to adapt to new technologies, all of which contribute to a stressful and unstable work environment. While traditional research has primarily focused on financial motives or individual traits behind fraudulent behaviour, there remains a critical gap in understanding how organisational and psychological factors influence employees’ intention to commit fraud. Addressing this gap within the context of Malaysian SMEs, this study investigates the determinants of employees’ fraud intention by examining perceived job insecurity, technostress, job dissatisfaction, effective internal control systems, and ethical organisational culture. Specifically, it explores the direct effects of two workplace stressors (perceived job insecurity, technostress) on fraud intention, with job dissatisfaction posited as a potential mediating mechanism. Furthermore, the study assesses the direct influence of two organisational factors (effective internal control systems, ethical organisational culture) on fraud intention. In total, seven direct relationships and two mediation pathways are tested, forming a comprehensive model that integrates psychological and organisational determinants of fraud intentions. Grounded in Fraud Triangle Theory and Social Exchange Theory, this study employs a quantitative cross-sectional design using an online survey methodology. Data were collected from 230 full-time employees in the SME sector and analysed using SPSS Version 25.0. The findings reveal that perceived job insecurity, technostress, job dissatisfaction, effective internal control systems, and ethical organisational culture significantly influence employees’ fraud intention. Notably, the positive direct relationship between technostress and employees’ fraud intention becomes insignificant when job dissatisfaction is introduced as a mediating variable, indicating full mediation. In contrast, job dissatisfaction does not mediate the relationship between perceived job insecurity and fraud intention. Additionally, both effective internal control systems and an ethical organisational culture exhibit significant negative effects on fraud intention, emphasising their role as essential organisational safeguards. The practical implications of this study highlight the importance for SMEs to implement strategies such as providing ICT training, developing user-friendly systems, and conducting regular job satisfaction assessments to alleviate workplace pressures, including job insecurity, technostress, and job dissatisfaction. Furthermore, the findings underscore the critical role of effective internal control systems and ethical organisational culture as a means in eliminating employees’ intention to commit fraud. The study concludes by acknowledging its limitations and offering recommendations for future research. Keywords: Employees Fraud Intention; Perceived Job Insecurity; Technostress; Effective Internal Control System; Ethical Organisational Culture; Counterproductive Workplace Behaviour (CWBs); Small and Medium Enterprises (SMEs); Occupational Fraud; Fraud Triangle Theory; Social Exchange Theory; Corporate Governance