Fraud in Organization Essay

Submitted By Shubham0069
Words: 724
Pages: 3

Fraud in Organizations
Bigger the organization, Greater is the chance to commit Fraud.
Organizations lose an estimated 5% of annual revenues to fraud (ACFE 2010).

Less supervision leads to major scams
The organizational frauds can be a result of less control on the workers. Small firms have a proper hierarchy of control and guidance to be followed whereas the big renowned companies have proper maps or itinerary but these companies are not concerned what is being followed in real scenario. (De More, Rosemary, 2005) If the workers are not getting proper directions they can be easily distracted from their tasks and that might lead to malpractices such as committing fraud and misbehavior. (Greenlee, Janet et al, 2006) Non Profit Organizations are the areas that are more prone to frauds and cheatings because there is a lack of monitoring and direction. Also, they don’t consider order of control or systematic flow of power as an important factor for operating those organizations. In those companies the power is unevenly distributed among its associates. Another example of less supervision is in the companies that are inherited from father to their son/daughters and they are not interested in running the organizations thus they divide work among people, those people can use the company’s resource for their personal use under the name of the company’s owner.

Dissatisfaction and lack of motivation among employees
Job dissatisfaction is the major reason due to which employees in a firm get distracted from the work assigned to them. They are not afraid of being fired because they are not comfortable with their job and that is why they indulge in false practices. When people don’t get handsome salary and are not respected in their position, they feel less motivated to achieve their targets and leading to procrastinating their work. People are not motivated when there work is not appreciated and they are not rewarded or given any perks at work. (Vangel, Kristine, 2011) Individuals don’t feel like coming to work, they expect to get paid without making efforts. Even if they want to leave their job, they cannot, because of their need to earn money because of financial situations and thus they drive themselves to take risk and follow the wrong path and get involved in the practices like scams, cheating and fraudulence.

Big organization might have Decentralization of power

Misuse of Authority
Either its need or greed that leads to misuse of power. Top level managers and supervisors have control on their juniors to a large extent, they consider that they have got all the rights to exploit the people working under them such as making them work overtime, paying them less and not giving any bonuses. Higher officials who have control over the confidential information of the firm like the Accountants; General Managers are more likely to create defects in organizational working…