Why doesn’t the “We’re a family, there’s no abuse here” rhetoric work in companies?
Although the mindset in companies that “We are a family; there is no fraud here” may seem, at first glance, like a well-intentioned message of belonging, research shows that it can be a blind spot that increases the risk of fraud and abuse.
Why Can’t the “Family” Rhetoric Prevent Abuse in Companies?
Employees in private sector companies view fraud as a serious threat, but they highlight weak internal controls and a lack of ethical values as the most fundamental risk factors (Siregar & Tenoyo, 2015). The “we are like family” statement is particularly risky in three respects:
- Unquestioned trust: When institutional internal relationships are defined through the family metaphor, the assumption that “one of us” would not make a mistake or commit abuse allows controls to be relaxed. However, when financial pressure, opportunity and rationalisation come together, even the most reputable institutions can become scenes of fraud cases (Schuchter & Levi, 2016; Mandal & S., 2023).
- Complaint and reporting reluctance: Employees may avoid reporting irregularities under a perception of “family affairs issues”. Experts state that most of the time it is facilitated by more than one person, and that those who remain silent also nourish it (Chapple et al., 2020; Schuchter & Levi, 2016; Serrano et al., 2025).
- Professional loss of distance: Excessively candid culture, role and responsibility boundaries by blurring them creates conflicts and “minor favouritism” can be normalised; which can over time become systematic abuse (Chapple et al., 2020; Serrano et al., 2025; Mandal & S., 2023).
Studies based on qualitative interviews show that opportunity alone is not sufficient; that organisational culture is decisive for pressure, rationalisation and the “inner voice” (Schuchter & Levi, 2016; Mandal & S., 2023). In short, if the environment allows it, good people can also make bad decisions.
Culture, Ethics and Fraud in the Private Sector
Studies in private sector companies show that ethical culture and internal controls significantly reduce the risks of fraud and abuse:
- In private companies listed on the stock exchange, core ethical values, ethical programmes and ethical leadership, which form corporate ethical culture, were found to reduce corporate fraud (Zulkiffly et al., 2025).
- Although companies view fraud as a major threat, a significant proportion of cases are linked to weak internal controls and ethical deficiencies; ethical codes and codes of conduct are reported to be seen as the most critical risk management tool (Siregar & Tenoyo, 2015).
- Analyses conducted on a large sample indicate that companies with high levels of corporate social responsibility (CSR) have both a lower likelihood of fraud and a lower severity of actual cases (Harjoto, 2017). Firms that invest in ethical values and stakeholder sensitivity move away from fraud as managers’ moral standards rise (Harjoto, 2017).
- A recent study on professional misconduct (particularly the misuse of assets) emphasises that not only technical controls, but also ethical climate, organisational commitment and cultural consistency are necessary, and that the most effective approach is a “two-pronged” fraud prevention strategy that combines these two dimensions (Serrano et al., 2025).
These findings show that the private sector needs to adopt a “We are a transparent and ethical institution, no one is left un-audited!” mentality instead of “We are a family, we don’t have it”.
Corrective Recommendations
- Reframing the family discourse: “Belonging is good, but control should not be relaxed. A healthy organisational culture is built on both trust and accountability” (Siregar & Tenoyo, 2015; Chapple et al., 2020; Zulkiffly et al., 2025; Serrano et al., 2025).
- Making ethical culture visible:
- Written code of ethics and conduct rules (Siregar & Tenoyo, 2015; Zulkiffly et al., 2025) – Regular ethics and fraud awareness training (Siregar & Tenoyo, 2015; Serrano et al., 2025) – Consistent role modelling by senior management (Chapple et al., 2020; Zulkiffly et al., 2025; Mandal & S., 2023) – Safe reporting mechanisms: Whistleblowing hotlines and independent investigation processes that reduce fear of retaliation and manage the process transparently are critical for detecting internal fraud, such as asset misappropriation, at an early stage (Chapple et al., 2020; Serrano et al., 2025).
- Ethics performance business results linking: CSR and ethics culture investment by companies that fraud-related reputation and financial losses are lower by; this also contributes to long-term profitability (Harjoto, 2017; Zulkiffly et al., 2025; Serrano et al., 2025).
In conclusion
True professionalism in the private sector is only possible in organisations that can sincerely balance oversight with confidence and transparency. Merely saying “we are a family” is not enough; it only becomes sustainable and secure when combined with a robust ethical and control framework.
References
Harjoto, M. (2017). Corporate social responsibility and corporate fraud. Social Responsibility Journal, 13, 762-779. https://doi.org/10.1108/srj-09-2016-0166
Siregar, S., & Tenoyo, B. (2015). Fraud awareness survey of private sector in Indonesia. Journal of Financial Crime, 22, 329-346. https://doi.org/10.1108/jfc-03-2014-0016
Chapple, E., Walsh, K., & Shen, Y. (2020). Corporate Culture and Fraud. https://doi.org/10.1108/978-1-78973-417-120201006
Schuchter, A., & Levi, M. (2016). The Fraud Triangle revisited. Security Journal, 29, 107-121. https://doi.org/10.1057/sj.2013.1
Zulkiffly, N., Nazri, S., & Zolkaflil, S. (2025). The Quantitative Approach of Corporate Ethical Culture in Reducing Corporate Fraud. International Journal of Research and Scientific Innovation.
https://doi.org/10.51244/ijrsi.2025.120800232
Serrano, J., Rodríguez, M., Iglesias, I., & Pérez, R. (2025). Misappropriation of assets: a quantitative and qualitative analysis of occupational fraud management in organizations. Journal of Financial Crime. https://doi.org/10.1108/jfc-01-2025-0016
Mandal, A., & S., A. (2023). Fathoming fraud: unveiling theories, investigating pathways and combating fraud. Journal of Financial Crime. https://doi.org/10.1108/jfc-06-2023-0153