A Case Study of how SMEs Protect Themselves Against Fraud

  • Kay Linnell

    Student thesis: Doctoral Thesis


    Small and medium-sized businesses do not appear to put sufficient measures in place for the reasonable protection of their enterprises from fraud. There is no compulsory reporting or consistent recording of fraud, so the true level of fraud is not known. Little research exists from the perspective of victims on the incidence of fraud, nor of the attitudes of such business owners to the risk of fraud or to the protective measures that they have installed and maintained.
    Large organisations were avoided to enable a holistic view to be taken of each business, and the Wine & Spirits Trade Association (WSTA) provided introductions to six of its senior executive members, with whom in-depth interviews were conducted. Data was collected by semi-structured interviews on a saturation basis with supporting documents. Analysis was initially undertaken using Eck’s development of the fraud triangle of place theories (Eck & Weisburd, 2015), with a second stage of analysis using the pragmatic constructivism paradigm (Nørreklit et al., 2010). Themes were mapped using the dimensions of value, threats, opportunities, collaboration, possibilities and communication.
    An important finding was the discovery of the strong private communication network that existed between key players and competitors within the WSTA industry. This network warned WSTA members of potential external threats to be countered by joint action, to protect each other’s businesses and the reputation of the WSTA. The attitudes of those running these businesses and other trading entities are crucial in identifying the key factors to set performance and control targets. It is the efforts to achieve those targets that influence decisions about the risk of fraud, and the effect on operations of the introduction of fraud prevention measures.
    Pragmatic constructivism and auto ethnography suggests that WSTA members had no confidence in ‘authority’ within society to protect them or to enforce regulations that would reduce threats, or to assist them as victims of fraud after any incident of fraud. Instead of reliance on external authorities, although WSTA members comply with regulations and legal requirements as good citizens, the WSTA members have formed a closed protective member-based society to protect each other and themselves against fraud threats – a reversal of anomie.
    This ‘reverse anomie’ or ‘aternomie’ is a new theoretical development that excludes the financial and monetary motives added by Merton to Durkheim’s theory. Private and closed-rank WSTA communication that excludes all outsiders, even those in authority, enables discreet and cost- effective fraud prevention measures to be maintained. These involve a subjective identification and evaluation of the risks and consequences of fraud on WSTA operations, compared to the cost of introducing and maintaining formal fraud-prevention measures that attract attention.

    Date of Award18 Apr 2024
    Original languageEnglish
    Awarding Institution
    • University of Portsmouth
    SupervisorLisa Jack (Supervisor) & Imad Chbib (Supervisor)

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