The Mediating Effect of Overcompensation of Rationalisation on Instrumental Climate and Escalation of Corruption Relationship

Ertambang Nahartyo,Lufi Yuwana Mursita,Frida Fanani Rohma

doi:10.21315/aamj2020.25.2.1

Ertambang Nahartyo, Lufi Yuwana Mursita + Show 1 more

Open Access

https://doi.org/10.21315/aamj2020.25.2.1

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Abstract

This paper employs cognitive dissonance theory to investigate the mediating effect of Overcompensation of Rationalisation (OCR) on instrumental climate and escalation of corruption relationship. Moreover, this study examines the role of loyalty as a moderator to reduce the impact of instrumental climate on OCR. This study uses laboratory experiments with 94 master’s degree students as participants. The results show that OCR fully mediates the relationship between the instrumental climate and the escalation of corruption. Instrumental climate leads an individual to OCR, which impacts on the corruption escalation. The analysis also shows that loyalty can moderate the effect of instrumental climate on OCR. It indicates that a level of loyalty enables an individual to filter the impact of instrumental climate on OCR. Besides, the intention of corruption also contributes to the escalation and snowballing effect of corruption. Surprisingly, it is also found that individuals with their experiences tend to be more expert, skilful, and efficient in committing acts of corruption. Those enable the perpetrator to be corrupt smoothly; the amount of corruption, in aggregate, is more massive without the increase of maximum scores so it can lead the evaluator on.

Highlights

Fraud scandals happening nowadays have attracted many of the researchers’ attention (Voliotis, 2017)
Some research works have identified other factors contributing to fraud scandals, such as corruption, e.g., instrumental climate (Murphy & Free, 2016), normative standard (Voliotis, 2017), entrepreneurship orientation (Karmann et al, 2016), inequality of hierarchy and power (Rosenblatt, 2012), and loyalty (Hildreth & Anderson, 2018)
The result of the analysis shows that there is a correlation between respective loyalties indicators toward the total scores of loyalty construct

Summary

Introduction

Fraud scandals happening nowadays have attracted many of the researchers’ attention (Voliotis, 2017). Surveys have shown that corruption is the crucial factor in increasing fraud scandals within the last three years (Murphy & Free, 2016). That has encouraged streams of research about corruption in an organisation. Zyglidopoulos et al (2009) have succeeded in identifying two main factors supporting an individual to corrupt. Some research works have identified other factors contributing to fraud scandals, such as corruption, e.g., instrumental climate (Murphy & Free, 2016), normative standard (Voliotis, 2017), entrepreneurship orientation (Karmann et al, 2016), inequality of hierarchy and power (Rosenblatt, 2012), and loyalty (Hildreth & Anderson, 2018)

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