Study reveals how founder influence and employee loyalty enable startup fraud to persist
By
University of St. Gallen
Summary
A study published in the Journal of Management by researchers from the University of St.Gallen, Grenoble Ecole de Management, and the University of Notre Dame examines how startup fraud persists despite close employee oversight. The research identifies three key factors: concentrated founder influence, limited organizational safeguards, and strong employee loyalty to the startup's mission. These elements interact to embed fraudulent behavior within startup culture, making it difficult for employees to raise concerns or stop misconduct.
Source
bskyStudy reveals how founder influence and employee loyalty enable startup fraud to persistunisg.linkKey quotes
· 3 pulledA new study shows that the answer lies not only in the actions of a fraudulent founder.
Startup fraud can become embedded through the interaction of concentrated founder influence, limited organizational safeguards, and employees' strong loyalty to the startup and its mission.
The study examines how founders shape employee responses to fraud and how employees react as their concerns
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