Businesses are vulnerable to a variety of internal and external crime that affects an organization’s performance. White-collar crime is a problem affecting businesses in the U.S. and around the world, costing billions of dollars in lost revenue every year. This paper will identify the types of employee crimes focusing on theft and the perpetrators; examine the impact to businesses and explore how business can deal with these offenses.
Mr. Smith places some extra highlighters and colored paper in his briefcase from the office’s supply closet for young Billy to use on his school project. Joanne has returned to her desk a 15 minutes late from her lunch break and is now surfing the web ...view middle of the document...
In the fictitious examples above, Mr. Smith stole office supplies. While taking a few supplies here and there may not seem like such a big deal consider this, a 2007 report showed office equipment theft totaled $656,982,032 (Bressler, 2011). Another example is Joanne who is stealing time and using company resources for personal gain. These small infractions add up quickly when we consider that they are not the only employees that are doing the same thing. Death by a thousand paper clips is a contributing factor to why up to 30% of businesses fail (Kuratko). The illustrations of Leonard and Mrs. Swindle are blatant acts of embezzlement that can potentially go on for years that if and when discovered should lead to termination and hopefully criminal charges. Inventory shrinkage, a softer term used to describe employee theft of merchandise and equipment, is yet another challenge organizations face.
So, who steals from work and why? “Given that 75% of people admit to stealing from their place of employment at some point in their lives, it seems likely that everyone can be a potential thief”(Appelbaum, 2006). Research shows younger, unmarried employees who may only work part-time or otherwise have few ties to the business are more likely to steal. “Conversely, white-collar criminals have been found to be college educated, in their thirties and married” (Appelbaum, 2006). Regardless of the demographic to the person stealing, the triad of every crime must be fulfilled: means, motive, and opportunity to commit their act couple with a lack or warping of ethics. And of course, they think they will get away with it.
Dr. Appelbaum, 2006 suggests some theories of how individuals rationalize their crimes into different categories. The first, equity theory, whereby they feel the company owes them based on their perception of an unequal relationship between work or effort performed versus what value the organization recognizes. Second, work-climate dimension where company policies and attitudes convey an air of inevitably that employee crime will happen and making allowances for it is part of the cost of doing business. Lastly, having a low level of cognitive moral development, with those individuals only attaining pre-conventional or conventional moral values; where the new ‘Golden Rule’ is what’s in it for me (Appelbaum, 2006).
“Business Crime costs the U.S. economy at least $186 billion annually” (Kuratko, 2000). Just because a business is small, with few employees and under a few million in gross revenue annually does not mean they are immune for employee theft. In fact, most business in the U.S. are classified as small businesses employing more than half the workforce. “The association for Certified Fraud Examiners indicates 39% of reported instances of fraud occur in companies with 99 or fewer employees (Bressler, 2011).
In a perfect world, employee theft would not be an issue. To mitigate the effects of employee crime,...