Social Identity and the Spiral into Corruption


Imagine this. Alice, new to her workplace, is given a company credit card for expenses such as client entertainment and work-related travel.

She notices that other employees use their credit cards to purchase lunch, even when they’re not entertaining clients, and has heard a couple of people saying that they use it to buy petrol for their family cars.

Alice is told by her workmates that everyone does it, no one ever checks and that the company expects and budgets for it. So Alice starts buying her lunch with her company credit card and uses it to buy petrol for personal vehicle use.

Alice has just stepped onto a slippery slope, spiralling into corruption. And this kind of ‘harmless’ activity can cost an organisation millions of dollars.
What is social identity?
Social identity stems from peer group pressure.

If the ‘in’ or popular group within a workplace is engaging in corrupt activities, some workers will identify with them and go along with the activities, help to cover up the activities, or simply remain silent.

Their need to be accepted as part of the group is a higher priority than their own personal values.

Enforcement of social norms

Like Alice, a worker can be unwittingly drawn into corruption. The attitude that “this is how we do things” can normalise the corrupt behaviour.

When the norms are enforced by the group, further issues can arise, the most common one being bullying, especially group bullying. This can occur when:

  • A group of workers gangs up on one worker.
  • One worker is carrying out the bullying while others passively witness the behaviour but don’t stop or report the conduct.

An example of group bullying is the spreading of gossip or rumours about an employee.

Another way that employees unwittingly join in corrupt activity is when they don’t wish to rock the boat. They may feel pressured to take part, or keep quiet about it, because they fear being bullied.

Management acquiescence

Sometimes, management may be aware of corruption but decides to ignore it because the corrupt group is performing well and meeting targets.

Highly skilled workers remain a big issue for organisations as well, because they are so valuable that potentially they may be able to get away with corruption. It can be extremely difficult to bring these employees back into line without losing them to competitors.

There’s also the issue of losing highly skilled employees because they are being bullied. This could be damaging to an organisation, not just because of the loss of the expertise, but also because of any potential workers’ compensation claim for stress, or any application made under the anti-bullying provisions of the Fair Work Act.

What can be done?

Organisations need to identify what causes corruption in the first place. Usually one of the biggest causes is opportunity – if no one checks up on employee activities, the opportunity exists. Employers need robust systems for accountability.

Another cause can be workplace culture. If employees are unhappy in their work environment and see others benefitting from corrupt activities, they may more readily commit corruption. Employers need to educate staff about unacceptable behaviour, and foster a positive work environment.

Anti-bullying measures are also very important.
An employee reporting corruption is often the only way that it can be detected and stopped, particularly if it is embedded.

The federal government leads the way, with legislation that allows employees to report corruption via a whistleblowing hotline without fear of retaliation or reprisal.

Employers can also set up internal whistleblowing systems to encourage reporting.

Employee corruption in the workplace can be a difficult and complex issue. The reasons an employee may engage in corruption are not clear-cut and may highlight underlying issues.

If you suspect employee corruption or would like to take steps to prevent it, WISE Workplace can help with education about corruption and prevention strategies, including a mechanism to allow employees who witness corruption to report it.


of people experiencing
bullying or harassment
do not report it


do not report for
fear of negative


of fraud is
committed by


of businesses will
experience economic crime
in next 12 months

A confidential Whistleblower Hotline
is an essential part of your risk prevention strategy.