The displacements behind Indonesian newly started companies’ ethical pitfalls – Academia
2 mins read

The displacements behind Indonesian newly started companies’ ethical pitfalls – Academia

He Efishery -fraud scandal has drawn global review and revealed deep deficiencies in Indonesia’s corporate governance and supervisory surveillance. Jakarta Post reported January 22 that Efishery blew up its 2024 revenue with almost $ 600 million and exaggerates its fish feed operations and claimed 400,000 units instead of verified 24,000.

With large international media that covers the case, Indonesia’s reputation as a thriving starting hub has taken a serious hit and raised urgent issues of financial liability and legislation. But Efishery is not an isolated case – many founders work under extreme pressure, where ethical lines can blur in the race for financing and growth.

Fraud among newly started founders is rarely the result of deliberate evil. Instead, it is evident from cognitive prejudices, personal history and environmental press that distort ethical assessment. During such pressure, deeply intervened prejudice and past experiences form their decisions – sometimes they lead them to motivate unethical behavior.

Understanding these mechanisms provides insight into both the causes and means to prevent it.

At the heart of this issue is a series of cognitive prejudice as warning decision -making. Many newly started founders develop an overwhelming bias and believe that they can handle small ethical decay without long -term consequences, provided that future success will justify current fraud.

The fear of financial failure triggers loss version, which makes the prospect of failure in investors’ eyes, employees or competitors feel unbearable. These press grounds founders to manipulate financial reports to maintain stability.

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Even more about how social pressure affects the founders’ decision. The start-up ecosystem, often competitive and opaque, creates an environment where social evidence can justify fraud. Founders who perceive that “everyone inflaces their numbers to survive” feels less moral conflict when they do the same.