Employees are eating away at company’s money, in bad times too!
Indeed. When it comes to corporate crimes, nothing has created more buzz than an Enron or a Madoff scandal. It’s a known fact that many companies, most of the times, typically let go their internal perpetrators scott-free with just a mere warning. Since the company suffers damage in both monetary and non-monetary terms, it's virtually impossible to exactly calculate the loss it had suffered due to corporate crimes. However, in bad times, when the companies are already bleeding with losses, employees' leave no opportunity to further deteriorate the condition. Or rather, leave no opportunity wherein they can exploit the on-going fragile situation and turn them their own personal benefit.
Going by recent PricewaterhouseCoopers' (PwC) biennial survey of economic crime (for the uninitiated, PwC itself was involved in numerous fraud cases, including the Satyam scam) for the past ten years, one-third of the target audience reported that they went through at least one economic crime in the past one year. The survey further revealed, “43 per cent of all corporate victims of crime and 56 per cent of those in financial services reported an increase”. There was a notable addition in the frauds committed by middle managers – a whopping 50 per cent. Around 56 per cent of Canadian companies have been the victims of economic crimes in the last 12 months. Every kind of crime, be it an accounting fraud, a money laundering or bribery, are deep-rooted in the country’s corporate culture. The direct fraud losses in the victimised corporations were greater than $500,000, on an average. Moving from developed countries to developing countries: According to KPMG Malaysia fraud survey, there has been an increase of 33 per cent in the respondents companies experiencing fraud in their organisations. Another survey by Kroll, a risk-consulting firm, shows that 36 per cent of senior corporate executives believe that the general risk of fraud has increased because of the recession.
Thanks to recession and performance-related pay (which is largely practised across the world), most of the middle level executives were not able to achieve their target and thus turned towards criminal path to fulfil their targets.
However, in order to fight recession (and the corporate crimes) and encourage entrepreneurship, many countries are adopting innovative schemes to attract young talent. The UK has nearly 3,000 events designed to inspire and educate aspiring entrepreneurs that eventually helps in creation of mini-enterprises.
Entrepreneurs do act as job creators but it comes with multi-faceted benefits. Not only it helps a young brain to enter the market economy, but also decreases the incidences of corporate crimes in the long run. Of course, countries need to tighten their corporate laws to check the growing corporate crimes and take appropriate actions against the culprits. Along with promoting entrepreneurship, respective governments should also ensure strict laws so that up-coming entrepreneurs do not get scope to make money on the cost of others and decay the corporate culture of the country further!
Going by recent PricewaterhouseCoopers' (PwC) biennial survey of economic crime (for the uninitiated, PwC itself was involved in numerous fraud cases, including the Satyam scam) for the past ten years, one-third of the target audience reported that they went through at least one economic crime in the past one year. The survey further revealed, “43 per cent of all corporate victims of crime and 56 per cent of those in financial services reported an increase”. There was a notable addition in the frauds committed by middle managers – a whopping 50 per cent. Around 56 per cent of Canadian companies have been the victims of economic crimes in the last 12 months. Every kind of crime, be it an accounting fraud, a money laundering or bribery, are deep-rooted in the country’s corporate culture. The direct fraud losses in the victimised corporations were greater than $500,000, on an average. Moving from developed countries to developing countries: According to KPMG Malaysia fraud survey, there has been an increase of 33 per cent in the respondents companies experiencing fraud in their organisations. Another survey by Kroll, a risk-consulting firm, shows that 36 per cent of senior corporate executives believe that the general risk of fraud has increased because of the recession.
Thanks to recession and performance-related pay (which is largely practised across the world), most of the middle level executives were not able to achieve their target and thus turned towards criminal path to fulfil their targets.
However, in order to fight recession (and the corporate crimes) and encourage entrepreneurship, many countries are adopting innovative schemes to attract young talent. The UK has nearly 3,000 events designed to inspire and educate aspiring entrepreneurs that eventually helps in creation of mini-enterprises.
Entrepreneurs do act as job creators but it comes with multi-faceted benefits. Not only it helps a young brain to enter the market economy, but also decreases the incidences of corporate crimes in the long run. Of course, countries need to tighten their corporate laws to check the growing corporate crimes and take appropriate actions against the culprits. Along with promoting entrepreneurship, respective governments should also ensure strict laws so that up-coming entrepreneurs do not get scope to make money on the cost of others and decay the corporate culture of the country further!
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