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The impact of Compliance Commitment on Economic Crime

Tommas Kaplan

 

Injustice in companies can cause counter-productive behaviour.

An employee’s understanding of justice can, depending on their perception of the situation, influence their work-specific attitudes and behaviour patterns and produce counter-productive behaviour.

  • Counter-productive behaviour can be seen as the precursor to non-compliance and ultimately lead to economic criminal behaviour.
  • Counter-productive behaviour is difficult to recognize and becomes noticeable in the cases of employees who work too slowly, take prolonged breaks, waste work materials, incite bad talk about colleagues and the company, etc.

Numerous studies (Robinson & Bennett, Liebig & Schöpf) show that decisions that are unfair / unjust are more likely to lead to counterproductive behaviour in the long run. This allows the employee to develop a negative attitude towards the company, which can then be reflected in a reduced commitment (organizational commitment) to the company. The organizational commitment expresses itself if the employee identifies with the company and feels well integrated. The commitment can, in turn, be differentiated into the affective (emotional attachment of the employee to the company) and normative (individual beliefs and values ​​of the employee of executives, groups and the company). The theory of Affective Commitment states that employees derive a part of their identity from their affiliation with the company or group in order to maintain their positive self-image, whereby they tend to identify with the company that treats them fairly. On the other hand, the Normative Commitment affects the psychological work contract, which describes the subjective expectations between the employee and the organization or its representatives (managers) and thus makes a positive or negative influence on their feelings of loyalty. The outcome if the employee feels himself treated unfairly is that his or her organizational commitment can be weakened.

As a result, voluntary acceptance of organizational rules and the instructions of superiors are less likely to occur to the extent that the employee has the impression of being excluded or not treated as an individual.

 

If the Compliance Commitment disappears as a consequence of this, then it can lead to economic criminality.

A breach or a weakening of the commitment to compliance may arise at an early stage. This can be caused by a superficial internalization of the norm which is positively or negatively influenced by the degree of maturity of the employee’s sense of right and wrong.

 

A high sense of right and wrong presupposes that the law to be observed is known, understood, and recognized as legitimate.

 

For compliance practice, this means that the employee is not only informed about the compliance rules and given an awareness of the content, but also that acceptance must follow in order to ensure effectiveness.

How do you achieve a high level of right and wrong among the employees and which compliance measures are necessary?

This question will be addressed in the second part of the article in the next newsletter.

 

Business Ethics as a mediator

 

Author:

The author is head of compliance of a medium-sized company in the real estate sector. His main focus is the design of CMS, the conduct of internal investigations, HR compliance and the strategic approach to non-compliance.

Book publications: “Influence of Organizational Culture and Organizational Justice on Economic Crime: Implementing a Compliance Committee”

If you want to hear more about Compliance and our Expert Tommas Kaplan, feel free to read his book: http://www.verlagdrkovac.de/978-3-8300-9228-5.htm?lang=english

Article done in cooperation between Elyas Bozan, our Managing Director Germany and Tommas Kaplan, one of our Experts in Compliance and HR.

If you want to share ideas with our contact, please feel free to contact us: ebozan@morganphilips.com

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