2024 Volume 57 Issue 4 Pages 126-144
Unlike street crimes, corporate crimes occur due to power rather than personal motives. Hence, the following question arises: what are the types of power and mechanisms that make employees commit corporate crimes? Previous research has examined this power dynamic between two individuals; however, only a few studies have comprehensively considered the power mechanism among multiple stakeholders involved in organisational crimes. Furthermore, among the various types of corporate crimes, data falsification crimes without economic incentives or hierarchical power relations have received little attention despite their pervasiveness and significance. This study examines 35 data falsification crimes that occurred between 2015 and 2022 in Japan to address these gaps. The resulting fraudulent power model identifies 11 types of power grouped into three core categories: formal, norm, and neglect. The findings reveal that the most common mechanism for data falsification crimes is the combination of norm and neglect power, supported by organisational dysfunctions. Data falsification can happen without any formal power. This newly identified mechanism behind data falsification contributes to research on fraud models and organisational power literature. Practically, firms may refer to these types of power as fraud risk indicators to assess their status quo and implement preventive measures.