The effect of decision making related rationalization on fraud and the mediating role of psychosocial work environment

Abstract

This study aims to examine the influence of the psychosocial work environment on the proclivity for asset misuse in the context of local government management, with a focus on the perceptions of administrators in Central Sulawesi Province. Employing purposive sampling, a total of 39 government units constituted the study's population, with a final sample size of 114 participants, comprising administrators, officers, and managers. WarpPLS software was employed to analyze the data. The findings reveal a positive relationship between rationalization and the inclination toward asset misuse. Additionally, rationalization exhibits a negative impact on the psychosocial work environment. Finally, the psychosocial work environment demonstrates a negative influence on the propensity for asset abuse. These outcomes suggest that the psychosocial work environment plays a pivotal role in mitigating the inclination for asset misuse within the local government of Central Sulawesi Province. This research sheds light on the significance of fostering a positive psychosocial work environment to enhance decision-making processes and reduce the likelihood of fraudulent activities in the management of government assets. Understanding these dynamics is crucial for the development of strategies to promote ethical and responsible asset management in local government entities.