The Abcs Of Reinforcement Theory Business Essay

This chapter begins with the theoretical foundation essential for this research and identification of significant independent, dependent, mediating and moderating variables, which are put together into a conceptual framework. Subsequently, relevant hypotheses are developed.

3.2 Theoretical Foundation

Theory is defined as an official collection of concepts that provides a summary of findings, organizes observations and conclusions, supplies a tentative explanation for phenomena and a basis to make predictions. Though the employers follow many policies to prevent or reduce employee theft, still it continues leading to shrinkage in almost all retail organisations. Hence understanding the employee theft behaviour is very important before the organisations make an attempt to implement policies to prevent or reduce employee theft. A theoretical approach is to be made to understand this behaviour. The following three key theories provide the framework for this study.

1. The Theory of Planned Behaviour (TPB)

2. Equity Theory and

3. Reinforcement Theory

These Theories are applied in this study to explain retail employee theft behaviour.

3.2.1 Theory of Planned Behaviour (TPB)

In the year of 1980, Icek Ajzen and Fishbein developed a theory named the Theory of reasoned Action (TRA). Five years later, in the year of 1985, Icek Ajzen extended their model to Theory of Planned Behaviour (TPB). TPB is a theory which links attitudes and behaviours (Ajzen, 1991). Initially, the purpose of the development ofTRA was to examine the relationship between attitude and behaviour of a person. Two main variables of TRA are attitude towards behaviour and subjective norm, which significantly affect the behavioural intention and lead to an actual behaviour. Attitude towards the behaviour is based on the person’s belief that the behaviour of the person would lead to a certain outcome. The person will also evaluate the outcomes as to whether it is for or against that behaviour. The person’s perceptions are influenced by the family members and friends who are likely to think about the person's behaviour and the extent where they could comply with others. Subjective norm refers to the person’s subjective judgment for a given behaviour. According to the concept of behaviour intention defined by Fishbein & Ajzen (1975), the individual's attitudes and beliefs is the factors that motivates him or her to engage in that specific behaviour.. It also indicates the level of commitment of a person to perform such behaviour; that is, the higher the commitment, the more likely is the person to perform the behaviour.

TPB was extended by Ajzen (1985, 1991) by incorporating perceived behavioural control since TRA was criticized that the model is neglecting the social factors that influence an individual’s behaviour. Perceived behavioural control, as defined by Ajzen (1991), refers to the perception of the individual on the level of difficulty to engage in certain behaviour. Perceived behavioural control includes both internal control (e.g. the abilities of a person) and external constraints (e.g., opportunities) needed to perform the behaviour.

According to Ajzan (1991),TPB may be the most powerful and popular social-psychological model developed to explain and forecast how human behaves in a specific conduct..

In order to understand different behaviour, many researchers have applied the TPB in varied situations as given below in Table 3.1:

Table 3.1: Application of TPB

Researcher/s and year


Ajzen and Driver (1992)

To predict college students' leisure intentions and their behaviour .

Parker et al., (1992)

To investigate the intentions of drivers to engage in different behaviours like speeding, driving under the influence of alcohol, close following and overtaking another vehicle in a high-risk circumstance.

Sheeran and Taylor (1999)

To explain the use of condombehaviour.

Heath and Gifford (2002)

To explain the use of public transportation.

Santhanam (2002)

To explain information systems used by the employees of the Company.

Hansen, Jensen and Solgaard (2004)

To study online grocery buying intentions.

Cunningham and Kwon (2003)

To understand consumers’ intentions to attend hockey.

Tonglet (2002)

To explore shoplifting behaviour in the retail setting.

Seale, Polakowski and Schneider (1998)

To assess software piracy in the workplace.

In a study in USA, Bailey (2006) applied TPB to explain the retail employee theft. As the employees’ theft behaviour involves attitude, intention and behaviour, the TPB could be applied to understand the reason behind the theft behaviour. Thus the TPB has received strong empirical support for its prediction of numerous behaviours. Practical application of the TPB is most appropriate, when the target behaviour is under the volitional control of the individual. The TPB is a powerful tool to explain the variations in intentions. It provides a simple model which is useful in explaining and understanding the studies that were carried out in the past ethical behaviour in organisations.

3.2.2 Equity Theory

In the year 1963, John Stacey Adams, who was a behavioural psychologist, introduced the Equity Theory, well-known among other behavioural psychologists as Equity Theory of Motivation. This Equity theory contemplates that all employees with equal level and amount of work should be rewarded equally (Adams, 1965). The equity theory was developed on the principle that employees keep fairness among their co-workers and the organisation, when they consider that there is a fair treatment, or a perception of fair treatment, among all employees by the management. Employees consider equity in the working environment based on the ratio of inputs to outputs; inputs being employees’ perceived contribution in terms of skill, experience, time devoted, etc. for the benefit of the organisation and outputs being recognition and appreciation of the employees’ inputs and financial compensation. Equity theory further states that if employees consider that they are under rewarded for their efforts, they feel disturbed (Adams, 1965). Such a feeling of distress leads these employees to engage in deviant behaviours like theft.

Equity theory is a process theory, which focuses on how the employees perceived fairness of the outcomes of their work and their inputs. In other word, the employees would strive hard to maintain the ratios of their rewards to their contributions to the Company. They would want their ratios to be at least equivalent to others' ratios.

Table 3.2: Equity Equations


Outcomes (self) = Outcomes (other)

Inputs (self) Inputs (other)

Underpayment Inequity

Outcomes (self) < Outcomes (other)

Inputs (self) Inputs (other)

Overpayment Inequity

Outcomes (self) > Outcomes (other)

Inputs (self) Inputs (other)

Source: Adams, J. S. (1965), Inequity in social exchange. In L. Berkowitz (Ed.), Advances in Experimental Social Psychology (vol. 2, 267-299), San Diego, CA: Academic Press.

In the business world, the equity theory of employee motivation clarifies the relationship between the perceptions of the employee on how fairly he or she is being treated and how hard he is motivated to work in his or her working environment. Peter Drucker (1909-2005), who is an author that has the expertise in economics, is the first person to propose the linkage between the Equity theory and employee motivation.

Based on the Equity Theory, an employee that is highly motivated is the one who perceives the total rewards that he or she would receives are equivalent to his or her contributions to the Company. If the case when he or she feels that he or she is working and being compensated with more or less the same rate as his or her other co-worker, he or she will concludes and feelsthat he or she is being treated fairly by the Company.

Thus equity theory advocates that employees’ deviant behaviour is due to injustice or unfairness at the workplace. When employees feel that they are being treated unfairly in their working environments, the employees will be forced to resolve this unfairness through deviant acts, including theft. Previous researches found out a relationship between procedural, distributive, and interactional justice and workplace deviance (eg., Aquino, Lewis & Bradfield, 1999; Greenberg & Barling, 1996; Skarlicki & Folger, 1997). As per the study of Wilkin (2011), the goal of individuals who are paid unfairly would be to equalize outcomes with individuals who receive fair pay. One way to do so is to engage in harming behaviour such as theft.

3.2.3 Reinforcement Theory

According to B.F. Skinner (1974), the reinforcement theory refers to the process of moulding the person's behaviour by controlling the consequences or results arising from that behaviour. Reinforcement theory exploited the use of rewards to reinforce expected behaviour or uses punishments to extinguish unwanted behaviour.

Reinforcement is the key to the reinforcement theory. Reinforcement may be positive or negative. Positive reinforcement strengthens the probability of the individual to repeat the expected behaviour. Negative reinforcement, on the other hand, results when an undesirable behavioural consequence is withheld. This method of reinforcement is sometimes called "avoidance" as it aims to have the individual to avoid the negative consequences for performing the desired behaviour. Hence, both positive and negative reinforcement would affect the probability of a specific behaviour to be learned and repeated. For example, punishment for theft attempts would decrease the probability of the invidual to steal again. Punishment acts as the administrator of the individual to mitigate the occurance of undesired or unwanted behaviour. Punishment is popular among the reinforcement-theory strategies, however, many learning experts have suggested that punishment should only be exploited if both positive and negative reinforcement failed. This is because punishment posts many potential negative side effects to the individual. Researchers like Gross-Schaefer, et al., (2000), Bandura (1986) and Schmidtke (2007) favored a severe punishment for theft, which would spread a strong reinforcement message to other employees.

Reinforcement theory is a functional theory. There are three basic principles of this theory, which are also called the rules of consequences.

Consequences which give reward increase a behaviour.

Consequences which give punishments decrease a behaviour.

Consequences which give neither rewards nor punishments extinguish a behaviour. ABC’s of Reinforcement Theory

1. Antecedent: The antecedent is the event that happens before the behaviour occurs. Antecedent is a impulse that gives rise to the behaviour and it is often in the form of cues from the surrounding environment.

2. Behaviour: An apparent action like filing a report to the superior, coming to work punctually, indulge in some deviant behaviour including theft, or any one of multitude of behaviours in which an employee engages in getting a job done.

3. Consequence: Consequence is the event that happens after an employee behaves in a certain manner in the working environment.

Thus while the Theory of Planned Behaviour (TPB) supports the individual factors, intention to steal and workplace theft behaviour, the Equity Theory and the Reinforcement Theory provide a strong background and support for the organisational factors of this research.

After an extensive literature review, the researcher interviewed ten internal and external auditors of the supermarkets and ten supermarkets' retail supervisors in order to identify specific variables in relation to the theft behaviour of supermarkets' employees happening in the workplace. The findings illustrated that the key influence resulting to the theft behaviour in the workplace is the intention to steal and the key factor that restricted the the theft is a strong and sound internal control system in the workplace. Based on literature review and interview, 60 items were formulated to assess the independent, dependent, moderating and mediating variables. As the study comprises of accounting principles and behavioural perspectives, a two-person expert judgment panel comprised of one ACCA member, and one Psychology Associate Professor analyzed and discussed the various issues involved in the constructs. The researcher eventually decided to incorporate only those items that both judges agreed in the conceptual framework.

3.3 Conceptual Framework

The theoretical framework refers to a conceptual model of how an individual makes a theory or makes logical sense of the relationships among the several factors that have been identified as important to the research problem. The theoretical framework also discusses the relationships among the variables that are deemed to be integral to the dynamics of the situation that was being investigated (Sekaran, 2000).

The variables as reviewed in the literature have been used to form a diagrammatic view of the conceptual framework as shown below. This has been adopted from Bailey (2006) with new variables added.


to steal










Ethical Work


Co-worker theft and punishment





































Workplace theft behaviour

Figure 3.1: Conceptual Framework of the study

The conceptual framework provides an elaboration on the relationships among the variables, explains the theory behind every relationship and the nature and direction of the relationships. Consequently, it alsoprovides the logical base for develop testable hypotheses.

3.4 Development of Hypotheses

A hypothesis can be defined as a logically conjectured relationship between two or more variables expressed in the form of a testable statement. Relationships are concluded on the basis of the network of associations established in the theoretical frame wok formulated for the research study (Sekaran, 2000).

3.4.1 Individual Related Factors Influencing Intention to Steal

Individual related factors include both dispositional and demographic variables relating to individual retail employees.

Many researchers applied the Theory of Planned Behaviour (TPB), to study the behaviour of individuals in a given situation. As determined by the past studies, the key influential factors leading to retail employee theft is the attitudes, intentions and opportunities of the employees to engage in this behaviour. Hence, it is more appropriate to apply the TPB to understand the theft behaviour. As retail theft takes away a part of profits of the retail organisations, retail managers and supervisors should understand this activity in a better way and also able to identify those factors which precipitate this behaviour. Then they will be able to develop more effective solutions to prevent or reduce the retail employee theft. Thus, the TPB is applied to explain the relationship between the individual factors and workplace theft behaviour. Need versus Intention to Steal

Majority employees commit fraud to meet their financial obligations (Cressey, 1953). Social needs also can lead to employee theft (Caudill, 1988). Greedy employees steal more (Wells, 2001). According to Kennish (2000), oemployee theft could also happen as a result of excessive gambling by the employee, high personal debts, financial losses, involvement in extramarital affairs with others and related blackmail, and excessive use of alcohol and controlled substances. Most of the individual nowadays possess uncontrollable psychological disposition to achieve personal material wealth to satisfy personal needs (Tucker, 1989). Theories explaining employee theft encompass basic employee greed apart from managerial misconception, wages and benefits they were awarded and its inequity, and social inequity (Gross Schaefer & Cassidy, 2006). Jerdon (1997) in his study concluded that under the 20/20/60 rule, some 20 percent of employees will never steal, 20 percent of the employees will always steal regardless of the circumstances, and 60 percent of the employees will steal if they have the need and opportunity to do so. As per Greenberg (1990) study, employee theft is the result of attempts to ease financial pressure. Some of the determinants of employee theft are inadequate income and extravagant living standards (Hair et al., (2010). Albrecht, Wernz and Williams (1995), in their study concluded that frustration among the employees themselves also is the reason behind 5 to 10 percent of the employee theft despite the financial pressures of the employees being the most influential factors in most of the crimes.

The theory of reasoned action (TRA) posits that attitude toward the behaviour is determined by the beliefs of the individual that his or her behaviour would resulted to a certain outcome and the individual’s evaluation of that outcome, whether it is favourable or unfavourable. On the other hand, subjective norm derives from the perceptions of the individual on whatrelevant to the others, such as their family and friends, or co-workers, are likely to think about his or her behaviour, and the extent to which the individual wants to comply with those relevant others. Therefore, attitude toward the behaviour and subjective norm are the key factors that could influence an individual’s intentions to engage in certain behaviour. In addition, intention is predictive of engagement in the behaviour (Ajzen & Fishbein, 1980). As an extension to the TRA, Ajzen (1985, 1991) developed the TPB. This TPB postulated that intentions are also influenced by the perceived behavioural control. In other word, intention is depends on how an individual perceives on the level of difficulty to engage in certain behaviour. TPB also allows for additional variables in the model (Ajzen, 1991). Later, Bailey (2006) proposed a model using TPB to explain the reasons for employee theft. His model proposed additional variables, for examples, the organisational commitment and the moral norm of the employeeare also likely to post an impact leading to the retail theft (Bailey, 2006).

Employees steal money or merchandise to solve their financial problems on medical, educational and other important family needs. The present study proposes to test how an employee behaves when there is a financial need for him. It is also intended to test on the intention of an employee to steal or not to steal as contemplated in the TPB when there is a financial pressure for money. Greenberg (1990) considered that employee theft is the result of financial pressure. He also found out that when the financial need of an employee is more, then the intention to steal money or inventory also increases.

This discussion leads to the first hypothesis:

H1: There is a positive relationship between need and intention to steal. Opportunity versus Intention to Steal

Hollinger and Clark (1983b) reported that employee theft was linked to opportunity. Every employee could steal if given the chance (Astor, 1972; Lipman, 1978).Employee theft rates to a large extent depend on employee’s opportunities to steal (Boye & Jones, 1997). Employees in occupations got more access to valuable things, money and merchandise and hence the more likely to steal Hollinger and Clark (1983b). Opportunity certainly correlates positively with theft (Kantor, 1933; Lydon, 1984). The longer an employee has been with a company, the more he understands the business, or the more likely he has been promoted to a position of trust in which he has the opportunity to commit and conceal larger frauds. Employees steal because of an opportunity to do so and if the employees perceive if the opportunity of getting caught is low (Walsh, 2000).

Kimiecik and Thomas (2006) further explains that. when there is a theft conducted by an employee, it should be considered that the employee has taken advantage of the opportunity given under the circumstances, because the employee perceives a low probability to get caught. Here the TPB comes to play. When the employee intends to take advantage of the opportunity, his intention to steal gets increased. Because he perceives lesser chances to be caught, his intention to steal also goes up as posited by the TPB’s perceived laxed behavioural control. Astor (1972) considered that every employee would steal if he is given the chance and also suggested that when the opportunity to steal increases the intention of any employee to steal would also increase. The perceived behavioural control construct of the TPB is the perception of control over performance of a given behaviour. Control beliefs include perception on the availability of skills, resources, and surrounding opportunities (Chuttur, 2009).

From the above discussion it could be predicted that when an employee gets an opportunity, his intention to steal increases manifold. This study proposes to test the intention and behaviour of an employee as considered in the TPB when there is an opportunity to steal cash or merchandise without being caught.

This discussion leads to the second hypothesis:

H2: There is a positive relationship between opportunity and intention to steal. Personal Characteristics versus Intention to Steal

Employee theft is also attributed to bad individual characteristics and moral laxity of employees, especially among younger workers (Merriam, 1977). Today’s employees do not have the trustworthy and dependable qualities of previous years. More employee theft has been noticed among the younger employees (Franklin, 1975; Hollinger & Clark (1983b). Individuals with dangerous and forbidden activities are more likely to steal (Hogan & Hogan, 1989). Gang operations are nowadays infiltrating organisations and increasing merchandise theft (Negley, 1996). Many employees working in government and business steal money to do gambling activities Kelly and Hartley (2010).

Fleeson (2001) considered the following as the bad personal characteristics of an individual:

1. Dishonesty

2. Greed

3. Rationalization

4. Irresponsibility

5. Selfish

6. Deceiving

7. Liar

8. Rude

9. Crude and

10. Malicious

Bailey (2006) concluded that there is a direct and positive correlation between an employee’s dishonest attitude toward retail theft and the employee's intention to engage in such act. When an employee is having the aforesaid bad personal characteristics, his intention to steal money or merchandise increases. Greenberg (1996) considered deviant background of an employee has got a direct and positive relationship with the employee theft.

TPB, being a more complex model, can have several independent variables that could capture various aspects of an individual’s belief (Chuttur, 2009). A new variable, personal characteristics, is added as an independent variable in the model to test the intentions in the TPB. When an individual is having bad personal characteristics, he perceives laxity in behavioural control. It is predicted that when an employee is having bad characteristics, his intention to steal increases. This discussion leads to the formation of the third hypothesis that there is a positive relationship between dishonest characteristics and intention to steal.

This discussion leads to the third hypothesis:

H3: There is a positive relationship between dishonest characteristics and intention to steal.

3.4.2 Organisational Related Factors Influencing Intention to Steal

Another objective and purpose of this study is to examine the impact of the organisational factors on the intention to steal in supermarkets in Malaysia Organisational factors are the one related to an organisation. These organisation oriented factors may come up from any sources of an organisation, including the organisation’s human resources policies, technology applied, pay overtime and incentive policies, structure and size of the organisation, etc. Compensation versus Intention to Steal

The TPB is the fundamental theory for this study. According to TPB, the way an individual perceives a behaviour is predictive of the individual’s intention to engage in such behaviour (Ajzen, 1991).The rationale for this study is that if employees’ attitudes toward employee theft could be determined, employers could predict their employees’ intention to commit employee theft. If employers can determine their employees’ intention to commit employee theft, employers can institute preventive measures to reduce employee theft (Emilus, 2012).

Equity theory is found on the belief in fair treatment by the organisations in terms of equally rewarding all the employees doing equal amount and level of work (Adams, 1965). Equity theory advocates that employees’ deviant behaviour is due to injustice or unfairness at the workplace. When employees feel that they are being treated unfairly, the event would gives rise to a resolution to resolve such injustice and one viable option is through deviant acts including theft. Greenberg (1990, 1993), in his study applied the Equity theory and concluded that theft is linked to underpayment for work performed. Hollinger and Clark (1983a) explained that the predictor of theft was employee attitudes and feelings of being exploited by the company or its officers. Similarly, as per the study of Clark and Hollinger (1981), job burnout and job dissatisfaction are associated with employees' admissions of theft. Equity theory has been applied by many researchers to explain the underlying relationship between organisational factors and workplace deviance (e.g., Greenberg & Scott, 1996: Ambrose et al., 2002; Crosby, 1984). Hence, it is more appropriate to apply the Equity theory to explain the relationship between the organisational factors and workplace theft behaviour.

Greenberg (1990, 19993) noticed that some kind of theft is linked to less compensation and underpayment for an employee’s work performed. He noticed that stealing is a response to unfair pay. Low rank in the organisation, low wages and little opportunity for advancement also cause theft by the employees (Trucker, 1989). Hollinger and Clark (1983b) explained that feeling of the employees of being exploited by the company is also one of the causes for employee theft. Bassett (1993) found out that most employees in nursing homes steal as they felt they are underpaid. Wells (2005), in his study found out that employees who like their jobs are less likely to engage in deviant behaviour, including fraud and theft. Inequitable pay, or distributive injustice, has long been cited as an antecedent to employee dissatisfaction and lack of motivation (Adams, 1965; Greenberg & Scott, 1996). Martin (1981) noted that fraternal deprivation sometimes can result in more dramatic effects than simple equity disputes, ranging from political attempts to alter the system to violence.

Normally, an employee would think that he or she has a psychological contract with the Company where both the Company and himself or herself have mutual obligations. These reciprocal obligations are formed on the basis of perceived promises that are not necessarily recognized by the Company. When the employee feels that the Company is unable to meet those obligations within their psychological contract, the employee would think that there is a breach of contract by the Company. Morrison & Robinson (1997) states the two conditions that meet the model of a violation of a psychological contract. First, reneging occurs when the Company breaks a promise made to an employee knowingly. Second, incongruence occurs when the employee and the Company have a very different understandings about a promise made previously. Therefore, in the event that one of the two condition occurs, the employee would perceives that there has been a breach of contract and that his or her contributions to the Company have not been reciprocated appropriately (Morrison & Robinson, 1997).

Thus the unfair compensation pressurizes the intention of an employee to steal by the influence of both TPB and equity theories. It is predicted that when there is perceived inequity in compensation, the intention of an employee to steal also increases. This study proposes to empirically test the intention and behaviour of an employee as contemplated in the TPB in a situation when there is inequity in perceived compensation and rewards in the organisation.

This discussion leads to the fourth hypothesis:

H4: There is a positive relationship between unfair compensation and intention to steal. Justice versus Intention to Steal

Skarlicki and Folger (1997) argued that if the organisational decisions are perceived to be unfair or unjust, the employees would indulge in some deviant behaviour like theft. Giacalone and Greenberg (1997) considered that theft is the result of employee’s frustration against the deemed unfairness of the organisation. Hollinger et al., (1992), reported that old, young and even long tenured employees steal when they consider the employer to be unfair. Jones (2008) observed that justice develops productive behaviour and procedural justice explains the most unique variance in counter productive work behaviour directed toward one’s organisation. Christopher (2003) in her study concluded that employees steal because they feel that they are not treated right and not respected for their skills and ideas. When employees feel that they are being treated unjustly or unfairly, they would be motivated to resolve such injustice through acts of deviance like theft (Greenberg & Barling, 1999). Organisational justice is a promising perspective for understanding workplace deviants like theft (Ambrose et al., 2002).

Among the most frequently studied antecedents of employees’ intention to steal are perceptions and judgments of fairness which have been defined by means of organisational justice (Jones, 2008). An employee who feels being treated unjust might intend to steal in an attempt to take revenge of the organisation (Adams, 1963). Organisational justice has been identified to influence people in three forms namely through the fairness of outcome distribution or in short distributive justice (Lind & Tyler, 1988), the fairness of the procedures used to determine outcome distribution named procedural justice (Skarlicki & Folger, 1997) and interactional justice which captures the quality of interpersonal treatment that the employees receive in those procedures (Greenberg, 2002). Greenberg and Barling (1999) identified that the quality of interpersonal treatment people receive in interactions and encounters with supervisors can be an important determinant of people’s justice judgments and their reactions to those.

Injustice is an organisational factor which increases the individual’s attitude towards intention to steal. This study proposes to empirically test the intention and behaviour of an employee as contemplated in the TPB in a situation when injustice, favouritism and partiality prevail in the organisation.

This discussion leads to the fifth hypothesis:

H5: There is a positive relationship between injustice and intention to steal. Ethical work climate versus Intention to Steal

Kamp and Brooks (1991) found out that an organisation’s ethical work climate helps to reduce the workplace theft. Peterson (2002) examined how organisational factors especially ethical work climate helps to reduce the theft behaviour. People worked in an unethical work climate admitted to regularly stealing from their employers and felt that they had not done anything wrong Hollinger and Clark (1983b). Employee’s theft will be more likely in organisations that do not make their anti-theft policies explicit (Gibbs, 1975). Kaptein (2008), in his study on organisation culture, validated and refined the business code of ethics that expresses normative criteria for the ethical culture within an organisation. The findings of his study supported the existence of transparency of supervisors and congruency of management in assessing the culture of an organisation. Kulas et al., (2007) formed an hypothesize that the climate for theft would interfere the relationships between employee's satisfaction and theft and employee's satisfaction and time theft. They concluded that climate for theft comprehensively explained the relationships between employee's dissatisfaction and theft and employee's dissatisfaction and time theft.

The organisation should create the ethical climate to guide the employees toward performing ethical behaviour and maintain the bond of the society, inherently reducing unethical and negative behaviour. Ethical climate should involve organisational variables related to the individual and the environment. As employees join the organisation, they begin to acquire some recognized behaviour principles in the process of formal or informal socialization; hence, the ethical climate in the organisation will affect and guide the employee in executing organisational and individual decisions (Kamp & Brooks, 1991). When an ethical climate exists, this can lead to more cohesion and/or morale within a work group or organisation and this cohesion/morale translates into positive bottom-line returns (Kaptein, 2008).

TPB proposes that intentions are the best forecasters of human behaviour and that individual’s attitudes, feelings of social pressure, and perceived control predict intentions (Ajzen, 1991). The unethical work climate prevailing in an organisation increases the intention of the employees to indulge in unethical deviant behavioural activities including theft. This study intends to empirically test the intention and behaviour of an employee as contemplated in the TPB at a situation when there is an unethical climate prevails at all levels of the organisation.

This discussion leads to the sixth hypothesis:

H6: There is a positive relationship between unethical work climate and intention to steal. Co-worker Theft and Punishment versus Intention to Steal

Punishments that are inconsistent may encourage theft (Dumaine, 1988). Employees make decisions about theft mainly based on the history of handling past offenders (Boyes & Jones, 1997; Parilla et al., (1988). Employees notice their co-worker theft behaviour and punishment given to them and decide their theft behaviour. Muir (1996) noticed that dismissing an employee for theft is not only a punishment for the dishonest employee but also a signal to other employees to defer from theft. Kisamore et al., (2010) in their study found out that interpersonal conflict in the workplace is associated with employee engagement in counter productive work behaviour. Victor et al., (1993) in their study concluded that the probability of employees of the Company to lodge a report on their co-workers is higher only when they think that their workgroup would suffer consequent to the theft and that their co-worker should be the one that receive the punishment instead. Observers who personally witness the theft may idolizes these individuals as role models and may attempt to imitate their theft behaviour (Manz & Sims, 1981). Bandura (1986) considered that human beings have the ability to learn a lesson after witnessing rewards and punishments received by others. In the case of theft comducted by the employee, the probability of the observers of the employee theft decreased when they perceived that they would receive similar punishment as the co-worker that engaged in the stealing. (Schmidtke, 2007).

Reinforcement theory, developed by Skinner (1974), uses a combination of rewards and/or punishments to reinforce preferred behaviour or mitigate and diminish unwanted behaviour. Positive reinforcement, i.e. rewards, would results to an increase in the likelihood of such behaviour to be repeated; negative reinforcement, on the other hand, would results to a decrease in the likelihood of such behaviour to be repeatedGross-Schaefer, et al., (2000) observed that companies must handle an employee appropriately once he or she is caught abusing the company's provisions. The management should reinforce the consequences of theft repeatedly through standing orders. Manz and Sims (1981), Bandura (1986), and Schmidtke(2007) applied the Reinforcement theory in explaining how the punishments for theft help to reduce the theft behaviour among the employees. Thus, it is also appropriate to apply the Reinforcement theory to explain the relationship between the organisational factors and workplace theft behaviour.

Negative reinforcement refers to eliminating a negative outcome to a behaviour in order to promote the same behaviour. An example could be a boss encouraging feedback from his employees without becoming anymore upset for the interruption. In this theory, "extinction" refers to getting rid all types of reinforcement in order to eliminate a behaviour. In the workplace, an example of this could be a staff's non-responsiveness to a co-worker's constant off-topic remarks. "Punishment" in the reinforcement theory involves providing a negative outcome after the demonstration of a behaviour (Skinner. 1974). The TPB assumes that people rationally calculate the costs and benefits of engaging in action (Ajzen, 1991). When an employee intends to steal, he takes into stock of the outcome, the punishment, his co-worker has received for a similar theft; If the punishment for the co-worker is severe, he refrains from stealing and if the punishment is not severe, his theft intention becomes actual theft behaviour. Here severe punishment for the co-worker theft acts as a perceived behavioural control.

This study proposes to empirically test the intention and behaviour of an employee as contemplated in the TPB at a situation when there is laxity in punishment for an employee theft and there is no reinforcement of the punishment through frequent reminders and warnings as proposed by the Reinforcement theory.

This discussion leads to the seventh hypothesis:

H7: There is a positive relationship between laxity in punishment for co-worker theft and intention to steal.

3.4.3 Intention to Steal versus Workplace Theft Behaviour

Next objective of this study is to examine the impact of the stealing intention on the supermarkets' employees theft behaviour in the working environment in Malaysia. Intention is defined by the English Dictionary as "a course of action that one intends to follow". Thus intention to steal is a course of action that one intends to pilfer. Individual’s engagement in a behaviour is determined by the intentions to engage in the actual behaviour. Bailey (2006) concluded that intention of an employee to conduct a retail theft is foretelling of his actual behaviour. Many authors noticed the intention of an individual to engage in the actual behaviour. Tonglet (2002) also illustrated the evidence that shoplifting behaviour is most likely impacted by the consumers’ attitudes and moral norms and values. Ajzen and Driver (1992) predicted the leisure intention of a group of college students before the actual behaviour. The concepts of intention and behaviour has also been used by many other researchers like Sheeran and Taylor (1999); Heath and Gifford (2002); Cunningham and Kwon (2003).

TPB assumes that an individual’s attitude toward a behaviour could be predicted in accordance with the individual's intention to conduct such an act. If the individual develops a favorable attitude towards his or her behaviour, it is more likely that he or she would want to engage in the behaviour. Bailey (2006) also states that the intention of an employee to engage in the theft is predictive of the actual behaviour. Thus, he applied the TPB in examining the intention in retail theft behaviour. This study also examines the relationship between intention to steal and workplace theft behaviour by applying the TPB. In workplace set up, employee’s intention to steal is influenced by his attitude, subjective norms and perceived behavioural control and in turn the workplace theft is influenced by his intention (Bailey, 2006). When the intention to steal of an employee is high, it becomes the actual theft behaviour.

The above discussions lead to the eighth hypothesis:

H8: There is a positive relationship between intention to steal and workplace theft behaviour.

3.4.4 Individual and Organisational Factors, Intention to Steal and Workplace Theft Behaviour

In order to examine the mediating effect of intention to steal between the individual and organisational factors and workplace theft behaviour relationship of the employees in supermarkets in Malaysia, the following arguments are put forth. . The Theory of Planned Behaviour argues that an individual’s attitude toward a behaviour can be predicted by analysing the intention of the individual to engage in that behaviour (Ajzen, 1985, 1991). Attitude towards a behaviour is decided by an individual’s belief of a certain outcome (Ajzen & Fishbein 1980). Thus, the individual and organisational factors, before they influence the workplace theft behaviour, have a direct effect on the person’s intention to steal, which acts as a mediating factor between the individual factors, organisational factors and workplace theft behaviour. This intention to steal becomes actual theft behaviour when the individual perceives there are no controlling factors like internal control systems. If the individual perceives that there are some controlling factors, then the intention to steal will no longer become actual theft behaviour.

The higher the level of employee’s organisational commitment due to comparable compensation and perceived justice, the lower the employee's intention to engage in the retail theft (Bailey, 2006). In the study conducted by Abdul Rahim (2008) in Malaysia, it has been empirically proved that organisational and the work-related variables posed a vital tool to influence the attitude of the employees and deviant behaviour at the working environment.

TPB, Equity theory and reinforcement theory are applied to examine the mediating effect of intention to steal on the relationship between the individual and organisational factors and workplace theft behaviour as studied by Bailey (2006), Greenberg (1993), Victor et al., (1993). The attitude, subjective norm and perceived behavioural control as studied in TPB, the perceived inequity as studied in the equity theory and the severe punishment reinforcement as studied in the reinforcement theory all have an influencing effect on the intention of the employee to steal

The above discussions lead to the ninth and tenth hypotheses:

H9: Intention to steal mediates the individual factors to workplace theft behaviour relationship; and

H10: Intention to steal mediates the organisational factors to workplace theft behaviour relationship.

3.4.5 Internal Control Systems, Intention to Steal and Workplace Theft Behaviour

The foremost objective of this study is to examine the moderating effect of internal control systems between the supermarket employee's intention to steal in the workplace and workplace theft behaviour relationship in Malaysia. The internal control systems include the procedures, practices and policies adopted by the management and act as a shield to protect the organisation’s assets. The internal control systems also control consumer and employee theft. Formal monitoring will deter employee theft (Chen & Sandino, 2007). Internal control systems have a moderating effect on the relationship between employee's perceptions of organisational justice and fraud conducted by the employees (Rae & Subramaniam, 2008). Formal monitoring lessens employee theft indirectly by dimnishing the strength of the relationship between the turnover of the employees and theft conducted by the employees (Chen & Sandino, 2007). Internal audit function is an important tool to protect criminal behaviour (Nestor, 2004). The likelihood of organisations with a sound and strong internal audit function to detect fraud is higher as compared to those organisations without an internal audit function (Coram et al., 2008). Control environment has an influence both on fraudulent behaviours and counterproductive workplace behaviour (Ahmad & Norhashim, 2008). Most organisations suffer as internal auditing procedures are inefficient or nonexistent (Drinkard, 1996). Mutual monitoring is likely to decrease employees’ stealing (Greenberg et al., 1987: Victor et al., 1993).

TPB is also applied in studying the moderating effect of internal control systems between the relationship between stealing intention and employee theft behaviour in the workplace. Perceived behavioural control due to laxed or tighter internal controls refers to the perceptions of an individual on the level of difficulty in performing a behaviour. Hagger, Chatzisarantis, and Biddle (2001) argued that perceived behavioural control reflects the individual’s assessment of the capacities and the limiting or facilitating factors in relation to the behavioural engagement before engaging in actual theft. In her study, Tonglet (2002) established a relationship between the perceived behavioural control and intention in engage in shoplifting behaviour. Thus, the likelihood of the employees engaging in the actual retail theft is higher when they perceive that it is easy to commit a retail theft without any internal control mechanism

The above discussions lead to the eleventh hypothesis:

H11: Internal control systems moderate the intention to steal to workplace theft behaviour relationship.

3.5 Summary

This chapter explained how various constructs are related and also the consequences. Then hypotheses are set to investigate the relationships according to the research objectives. In the next chapter, the research methodology to collect and analyze data and also the methods to investigate the hypothesized relationships are discussed.