In: Operations Management
Fraudulent behavior of employees occur due to ethical and moral issues.
Failure in ethical system of employees that govern and shape their behaviors could be of many types. Two of them are Deontological and Teleological ethical system.
Deontological ethics has its root in the Greek word deon, which signifies “duty”. It is also known as a nonconsequentialist ethical system. It focuses on the action itself, regardless of the result that it produces. For example, a person whose belief system is based in deontology would say, “I will/will not do X because doing otherwise would be wrong—I do not care what the consequences are to me or to anyone else.”
Thus for fraudulent behavior to be occured from deontological ethical system, employees fail to perform their moral duty. Actions that they are explicitely or impliedly told to do when are not carried out creates fraudulent behaviors.
On the other hand, Teleological ethics is different from deontological ethics in its focus. Deontological ethics has as its primary focus the decision or the action, while teleological ethics focuses almost exclusively on the results or the outcome of a decision or action. For a person who follows teleological (also known as consequentialist ethics), an action is morally right (or ethical) if the consequences of the action are more favorable than unfavorable.
Therefore when employees make choices which result in the incorrect consequences, then they are acting immorally and are showing fradulent behaviors out of teleological system.