Ethics in sports: what conditions are conducive to fraud

The phenomenon of cheating has been particularly investigated in the business world. The reasons that lead to financial fraud have been investigated, Three broad and different categories have been identified: conditions, organization structure, and choice, and they can also be applied to this particular type of fraud that is doping.

The first condition, concerns motivations and pressures to use the fraud. Pressure on the company to achieve its intended goals plays an important role in taking this route. In this situation, executives deliberately commit illegal actions to deceive investors and creditors in relation to poor or unfavorable financial performance. In the world of sports, the need to achieve results at any cost and the pressures exerted on athletes to do so represent situations similar to those highlighted in the world of finance, not the least of which relate to the possibility of seeing one’s compensation rise by virtue of sporting success.

The second relates to the organizational structure that can foster the development of an environment in which fraud has a good chance of success. In this regard, in the cases that were uncovered, it was found that these were environments characterized by irresponsible and ineffective leadership. This was possible because the highest corporate level was directly involved. The corporate governance attributes that characterize these illegal situations are aggression, arrogance, cohesion, loyalty, blind trust, ineffective controls, and gamesmanship. The first two concern attitudes and motivations of managers who want to be the leaders in that type of business or even exceed the earnings expectations formulated by analysts. Cohesion, loyalty, and gamesmanship increase the likelihood of not looking at the books, of not sensing the warning signs. These combined with blind self-confidence and ineffective controls can undermine the work of internal controllers themselves and block their role in preventing and detecting fraud. In sports this has been found in those cases that have been referred to as “state doping,” but this has also involved the omertà and connivance that have been highlighted within specific sports circles.

The third category concerns the manager’s decision-making process and intentionality in implementing the fraud. The choice is between properly and ethically pursuing business objectives and instead using illegal strategies to blow the company’s stability and growth out of proportion. Management can be urged to exercise illegal actions in the presence of certain favorable conditions concerning:

  • Personal financial advantage – management’s gain is linked to company performance through profit sharing, stock compensation or other forms of benefits.
  • Willingness to take risks – desire to make decisions that may also involve criminal or civil risks.
  • The opportunity to defraud – corporate organization is such that it seems possible to activate financial fraud procedures.
  • Pressure from third parties – pressure is exerted internally and externally to the organization in order to maximize shareholder value.
  • Ineffective controls-the chances of getting caught are very low

Purely in sports, the intentionality of the athlete to want to use illicit substances to improve his or her athletic performance plays an essential role. Money, fame and success are at the root of this kind of fraud, and if you add to that the ineffectiveness of controls and pressure from third parties … it is really hard to resist.

0 Responses to “Ethics in sports: what conditions are conducive to fraud”

  • No Comments

Leave a Reply