2.2 Fraud Triangle – Rationalisation

Figure 1. Fraud Triangle (Cressey, 1973)

Let’s focus on rationalisation. Studies have focused on pressures and opportunities but little remains known about rationalisation.

How do fraudsters convince themselves that they are doing nothing wrong ?

By understanding the techniques that allow fraudsters to justify their fraudulent activities, this may provide us with better understanding of rationalisation (Minthchik and Riley, 2019). Individuals who behave unethically usually experience guilt and discomfort before committing the fraud, and they try to reduce this guilt through rationalisation.

There are 4 broad categories of fraud rationalisation. Examples are provided in Table 1.

  • A focus on the bigger mission is one of the most effective technique as it removed any self-censure and presents the behaviour as heroic or moral.
  • A focus on responsibility is by e.g. denying or diffusing responsibility.
  • A focus on consequences enables fraudster to assert that the effects of the fraud are trivial.

A focus on the victim – the fraudster shifts the blame to the victim. This is also a popular rationalisation when the victim is not known or is physically distant.

Type of Rationalisation

Examples in Food Industry

Focus on bigger mission

  • I need to do this for my boss / team
  • I don’t want to disappoint my Technical Manager
  • It’s better to substitute with x product and make sure our business stays afloat

Focus on responsibility

  • I was instructed to do this
  • Every other supplier does it
  • It was my manager’s decision
  • It’s beyond my control

Focus on the consequences of the act

  • The customers will not notice the difference
  • It’s just a little bit of dilution
  • No one eats them all the time

Focus on the victim

  • They shouldn’t be eating this everyday anyway
  • The consumers deserve a cheaper product