The Dark Side of Routines: Enacting Fraudulent Routines in Cryptocurrencey Investments
We know little about how informal groups, such as coalitions, influence routine performances and their outcomes. Coalitions, which form to temporarily pursue unsanctioned goals, may act in secret if their routine performances violate typical organizational rules. These performances, such as fraud or other criminal acts, have been referred to as the dark side of routine dynamics. Routine participants plotting to commit fraud face a challenge: recruiting new members can bring questionable activities into the open, yet the large-scale proliferation of fraud depends on the formation of coalitions. Existing research offers little guidance on how new members are recruited because the secretive nature of the transactions makes it difficult to study empirically. We draw on a 13-month inductive study of a distributed financial organization, CryptoTradingGroup, to understand how a coalition emerged and deviated from the organization’s legitimate activities by engaging in market manipulation. Our analysis unpacks the micro routine actions that drove the recruitment of new members and proliferation of fraud through a construct that we refer to as the “deceptive recruiting routine.” We advance our understanding of secretive processes involved in fraud which enables us to contribute new knowledge to the dark side of routine dynamics.