adminPatrick Bhunu
EDWIN Sutherland (1939), one of the earliest criminologists attributes crime to behaviour that can be learnt through association. Individuals learn criminal techniques through associating with criminals, the behaviour is learnt just like any other skill that has to be learnt.
Business organisations have more often fallen prey to criminal behaviour, mostly attributed to their employees than outsiders. For so many times we have witnessed businesses crumpling as a result of employee theft, for example. Employee theft in layman’s language is any stealing, use or misuse of an employer’s asset without permission. Although no official statistics may be available, it is a given fact that millions of dollars could be lost annually in Zimbabwe as a result of employee theft.
There are quite a number of criminal behaviours in organisations, ranging from petty larceny to bank fraud. In this regard businesses need to be on guard to prevent the impacts of criminality from affecting their profitability to such an extent that the going concern status of the organisations become questionable. Crimes committed against businesses are not a new phenomenon, and there are much more important things than cash that can be targeted by the criminal employees.
The most common crimes that are committed by employees are, but not limited to, theft, skimming, fraud, corruption and misuse of company resources or assets. Businesses that do not have safeguards against criminal activity usually become vulnerable. It is very important for those tasked with the designing of internal control systems of organisations to formulate policies and procedures that prevent and detect these criminal activities.
Theft involves the stealing of cash or other company assets such as inventory. There are two categories of theft that can be perpetrated by employees of a company. The first one is larceny, which is the outright theft of cash or property from the employer. This kind of theft occurs when money or property has already been received by the company and it has already been entered in the books or in the company records. A typical example of larceny would be an employee from one department who passes through the cashier’s desk and finds the register or cash-box open. The employee then snitches, say, a $20 note from the open register or cash-box. This money has already been recorded as received by the company and as such the employee is liable to be charged with theft — larceny.
There are quite a number of reasons that lead people to steal and it would be prudent for the systems and policymakers to establish some of the most prominent causes in order to come up with solutions that are both preventive, detective, corrective as well as compensating.
Dr D R Casey, in what he termed the Fraud Triangle, came up with three factors that he attributed to commission of theft. The first factor is the employee’s need for money. This need may be emanating from some financial pressures at home or for social purposes such as alcohol, drugs or gambling.
The second factor that needs to be present for an employee to commit theft is the opportunity that would have presented itself. Taking the above example of an open cash-box, it is an opportunity which the employee found too tempting to ignore. This usually happens where companies do have enough safeguards or where they become too trusting to employees. There is nothing wrong with an organisation trusting employees but the trust should know some boundaries especially where standard operating procedures are involved.
Rationalisation, which is the third factor, is simply the justification that the employee would want to give to their action. We have often heard of people who steal from their employers and when they are arrested and brought to court, they justify their action by alleging that the company owed them and they were entitled to recover their dues.
Embezzlement is more or less the same with theft/larceny. The only difference is that embezzlement is theft by someone in a position of trust and legally allowed access to the cash or property they are stealing. If we are to use the same cashier example, this time it is the cashier who takes out the $20 from the register or cash-box. Embezzlement affects businesses seriously because it at times goes undetected for years.
Skimming is another form of crime in business organisations that is among the most common vices. This is the opposite of larceny or embezzlement.
Skimming is stealing money from the company before it has been recorded. It is also commonly known as the “off-book crime”. This form of crime is most prevalent among cashiers, sales people or tellers. The money is simply taken from a customer and is not recorded to indicate that a sale has taken place.
Fraud and corruption are the other forms of crime in business organisations. Due to their broadness and prevalence, I will make them subjects for discussion separately in the weeks to come.
Abuse of resources or assets by the employees is another form of crime which is prevalent, and if left unchecked may bring an organisation to its knees.
When assets are misused or abused they tend to wear off faster and may not reach their life expectancy. Ultimately the assets would experience frequent breakdowns, resulting in increased maintenance costs, decreased productivity and finally impacting on the profitability of the institution.
As a solution to curb theft and embezzlement, skimming and abuse of assets an organisation may carry out thorough background checks on all employees that they wish to hire. This will give assurances that the company is employing people of the right standing and chances of them becoming criminals are slim. There should also be accountability for every position in the company. In addition, there should be checks and balances, ensuring that no position has broader power to authorise things without the approval of another individual.
Standard operating procedures should be put in place at every work station and they should be religiously followed and monitored. Any form of deviations should be met with punitive measures that are more than the rewards of the deviations. Meetings and anti-crime awareness meetings should also be held regularly to remind employees of the consequences of criminal behaviour. Lastly, but certainly not the least, organisations may employ situational strategies. Situational strategies refers to surveillance techniques using employees themselves, alarms, CCTVs, biometric access control or vehicle tracking systems.
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