NCJ Number
53004
Journal
Security Management Volume: 22 Issue: 12 Dated: (DECEMBER 1978) Pages: 28,30,31
Date Published
1978
Length
3 pages
Annotation
THIS ARTICLE DESCRIBES BUSINESS PRACTICES THAT ENCOURAGE WHITE-COLLAR CRIME AND SUGGESTS PRACTICAL PREVENTIVE MEASURES TO SAFEGUARD ASSETS AND PROFITS.
Abstract
CHIEF EXECUTIVES, DIRECTORS, AND OTHER PROFESSIONALS CAN NO LONGER ESCAPE RESPONSIBILITY FOR BUSINESS DISHONESTY BY CLAIMING LACK OF KNOWLEDGE OF THE OPERATING PRACTICES OF THEIR RESPECTIVE COMPANIES. WHITE-COLLAR CRIME ACCELERATED AS A RESULT OF MERGERS, ACQUISITIONS, DECENTRALIZATION OF OPERATIONS, COMPUTERIZATION, AND DISPLACEMENT OF OWNER MANAGERS. BUSINESS PRACTICES SET UP BY MANAGEMENT TO PROMOTE BUSINESS, INCLUDING INCENTIVE PROGRAMS, VARIABLE COMMISSIONS, CASH SALES, LIBERAL RETURN PRIVILEGES, PREMIUMS, ADVERTISEMENT ALLOWANCES, AND UNAUDITED EXPENSE ACCOUNTS, ARE EXPLOITED BY EMPLOYEES. EMPLOYEES ARE OFTEN AWARE OF KICKBACKS, EMBEZZLEMENTS, CONFLICTS OF INTEREST, AND FALSIFICATION OF RECORDS BUT CHOOSE TO WITHDRAW FROM A SITUATION THAT MAY INVOLVE FRIENDS AND ASSOCIATES, OR FOR WHICH THEY MAY BE CRITICIZED. OPPORTUNISTS ARE OFTEN ABLE TO BYPASS CONVENTIONAL ACCOUNTING CONTROLS, AND SUPPLEMENTING WITH UNCONVENTIONAL TECHNIQUES MAY REDUCE A FIRM'S VULNERABILITY. EMPLOYEE DISHONESTY HAS CAUSED MANY EXECUTIVES TO RESORT TO THE INDISCRIMINATE USE OF LIE DETECTOR TESTS, CLOSED CIRCUIT TELEVISION, AND GUARD SATURATION. SUCH TECHNIQUES, HOWEVER, HAVE PROVED COUNTERPRODUCTIVE AND ADVERSELY EFFECT EMPLOYEE PRODUCTIVITY AND MORALE. AT THE TIME OF THIS WRITING, IT IS ESTIMATED THAT THERE IS BETTER THAN A 50 PERCENT CHANCE OF SIZEABLE DISHONESTY EXISTING IN AN ORGANIZATION DISPLAYING NO SURFACE EVIDENCE, AND A 75 PERCENT CHANCE THAT COSTLY MALPRACTICES OCCUR. DISHONESTY IS FREQUENTLY A BAROMETER OF MISMANAGEMENT. THE EFFECTIVE EXPOSURE OF THEFT IS INITIATED BY A THOROUGH EXAMINATION OF THE FIRM'S OPERATIONS. THE FOLLOWING PREVENTIVE MEASURES ARE SUGGESTED TO REDUCE DISHONESTY IN BUSINESS: ESTIMATE EMPLOYEE CAPABILITIES AND SET REALISTIC PERFORMANCE STANDARDS; REALIZE THAT EMPLOYEES ARE NO BETTER THAN THEIR SUPERVISOR; BE UNPREDICTABLE IN SETTING UP AND ENFORCING CONTROLS; MAINTAIN UNIFORM POLICIES; AND MEASURE WORK OUTPUT AND EVALUATE EMPLOYEE PERFORMANCE REGULARLY. COMPANIES ARE ALSO ADVISED TO USE FIDELITY BONDS WHICH PROVIDE BOTH FINANCIAL PROTECTION AND A PSYCHOLOGICAL DETERRENT TO THEFT. (KJM)