Anti-fraud strategy in tourism destination organizations: The role of leader integrity, ethical leadership, trust in the leader

Abstract

Fraud has enormous negative consequences, not only for enterprises but also for stakeholders and society. The study of fraud prevention has increased in importance to determine how businesses' strategies can prevent fraud and what factors influence the effectiveness of fraud prevention strategies. In an organization that manages tourist attractions, leaders have a critical role in preventing fraud. Built on the social exchange theory, this research investigates the relation between leader integrity, ethical leadership, trust in the leader, and anti-fraud strategy in the tourism sector in Madura Island, Indonesia. Multi-source data was collected from 193 members of groups that are aware of the importance of the tourism sector (kelompok sadar wisata/pokdarwis) in 4 tourism destinations organizations across Madura Island, Indonesia. Findings from structural equation modeling confirmed that leader integrity, ethical leadership and trust in the leader all contribute to a successful anti-fraud strategy. It is also proven that there is a positive association between leader integrity and ethical leadership and a connection between leader integrity, ethical leadership, and trust in the leader. This research offers a significant contribution to tourist management by presenting a theoretical model that connects elements of leadership and anti-fraud strategy.