Structures Without Substance - A comparative case study of governance-culture interaction in corporate fraud

Sammanfattning

Corporate fraud persists within organisations that appear well-governed by conventional measures, raising fundamental questions about why formal mechanisms fail. This thesis examines how governance structures and organisational culture interact to enable or sustain fraudulent corporate behaviour and its unsustainable outcomes – where fraud is understood not merely as a compliance failure but as a threat to the long-term economic sustainability, going-concern viability of firms, as well as the stakeholders dependent on them. A qualitative multiple case study design applies framework-guided process-tracing analysis across two German corporate fraud cases – Volkswagen AG and Wirecard AG – guided by an analytical framework operationalising six formal governance and five cultural mechanisms, with an interaction layer distinguishing reinforcement, symbolic decoupling, and cultural amplification as the three states through which governance and culture jointly shape fraud outcomes. Both cases reveal that formal governance mechanisms were not absent but rendered substantively ineffective through their interaction with cultural conditions. Symbolic decoupling emerges as the dominant interaction state, with performance pressure, normalised deviance, and organisational silence determining whether structures were genuinely enacted or merely adopted symbolically. Cultural amplification was co-present in both cases, indicating that culture actively accelerated fraud rather than merely neutralising governance. The study contributes an integrative framework that repositions agency theory: formal mechanisms go inert not through poor design alone but through the cultural conditions of their enactment. For practitioners, governance effectiveness is a cultural achievement: the diagnostic question is not whether structures exist but whether the conditions allowing them to function genuinely are in place.