An Area of the Contemporary Business and Management Environment in Relation to Theoretical Concepts - Essay Example

Fraud and Abuse of Employees Introduction Employee abuse and fraud is one of the recent contemporary business management issues which have significant impact on the business environment and significant increase or decrease in organizational outcome. It has been called as one of the significant contemporary issues that the companies have to deal with for the removal of several functional and non-functional barriers. Employee and staff misbehaviour would be highly regarded as prominent features which are significant to the organizational behaviour. The specific part of organizational behaviour would be concerning the tightening of the management control over the entire job process and systems, job satisfaction and the under quality management regimes. It is regarded that employee misbehaviour is one of the crucial aspects which is caused due to negative work environment and bad behaviour from the employer. Employee and labour process continues to thrive on the organizational process and also help in the eradication of the functional and non functional process (Action Fraud, 2013). The study will highlight the different dimensions of employee, employer misbehaviour and its impact on the entire organizational outcome. Employee abuse and fraud not only pollute the entire workings system, but also has a considerable amount of influence on the employer and top management approach. The misbehaviour from both sides not is a major approach in organizational behaviour. It is also influenced by the external and internal force of the industry which directly affects the design of the pervasive core features and helps in the development of the smooth organizational systems. Organizational misbehaviour affects the smooth process of the existing systems and disrupts the continuous flow and stability of the organizations. Finally, the study would conclude with the critical appraisal of the impact and the outcome of the organizational behaviour and fraud on the entire organizational systems and community. Fraud, Employee, Employer Misbehaviour & its Impact Organizational misbehaviour is directly influenced by several ranges of sociology and its impact on the overall organizational outcome. Misbehaviour is facilitated by both the employer and employee and that in turn sabotages the organizational climate. The employee and employer misbehaviour is a matter of time, complexity, product and identity. According to several theorists, the main focus of the organizational misbehaviour would lead to breaking down of the rules, regulation, policies and procedures. It is also regarded as a significant process which involves an amount of collective action and helps in cooperative action that helps in the development of overt, organized and principled Human Resource (HR) strategies (Bierman, 2008). It triggers certain normative disagreements which in turn lead to ground breaking policies and procedures of the organization. There have been several occurrences of verbal and non verbal abuses which have been pervasive to a large extent. There are usually four types of work abuses; neglecting, ongoing, chronic and acute scapegoating. In neglecting scapegoating, the employee needs and requirements are not met and they are even penalised for expressing their needs and requirements. In chronic scapegoating, the employee is chosen to be abused from the group and every employee along with the employer joins to vent out their negative feelings at him. In acute scapegoating, the employee receives negative and inferential treatment from the employers because their behaviour does not match with group policies and norms (Coram, Ferguson and Moroney, 2007). Acute scapegoating would be to receive negative treatment when the individual employee behaviour does not match with the group norms and methods (Coram, Ferguson and Moroney, 2007). All of these negative treatments would lead to the same and unified condition which would spark off a negative run of events. There have been various incidents which have led to tarnishing of the image of the company and also have prevented community development. One of the most controversial accounting scandals was the “Enron scandal” in which Enron Corporation, a Houston based energy, service and Commodities Corporation filed for bankruptcy in October 2001. The shareholders of the company lost $74 billion and thousand of employee had lost their retirement accounts and jobs (Bierman, 2008). The CEO of the company, Jeff Skilling and former CEO, Ken had not envisaged the huge debt amount in their balance sheet. In October 2000, the share price of the company skyrocketed to $90 per share and later in the November, 2000 the stock price dipped to $1(Bierman, 2008). Critical Appraisal of Fraud & Employee, Employer Misbehaviour & its Impact Organizational behaviour has different kind of impacts on the organizational outcome which may lead to the different ways of functioning within the inter-departmental organizations. For example, in social organizations, there have been various such instances (Dunphy, Benn and Griffiths, 2003). The various business operations encompass issue which require adhering with the anti-fraud regulators, possession and also covering up various aspects of the management system. It is also observed that for business operations there have been severe violations of laws and regulations which have led to the most common form of conflict. This demands the need to deceive either of the accounting parties to gain benefits and to acquire maximum advantage. This includes various other corporate frauds like expense report preparation; manipulate financial statements, mortgage fraud and manipulation of financial statements. For business operations, the entrustment of the employers with resources and capabilities is a necessity. But when they manipulate the system, it occurs to them that the range of possible fraud schemes has to be in accordance to their self-made developed scheme and also needs to focus on the misuse of the financial statements and various other fraud schemes. The process of internal audit adds significant value by preventing fraud accounting within the company and improving financial control (Accounting Degree, 2013). This also prevents the employees from taking substantive drugs and other similar intakes. Internet abuse is very much prevalent in each and every organization which includes the violation of several policies altogether. Internet abuses in the workplace are of different characters and have the potentiality of complicating matters (Enomoto, Kimura and Yamaguchi, 2013). One of the biggest forms of internet abuse is the access to the pornographic and other prohibited websites. As per the survey conducted by Smith, Gabrell and Russell, there has been 70 percent traffic to pornographic websites during the office work hours (Smith, Gambrell and Russell, 2013). This is also one form of abuse conducted by both employers and employees which leads to the violation of ethical rules and policies in the workplace. They have been allowed access in order to perform their company duties and obligations. Although the employers have chosen to believe that the employee would be performing their tasks in a systematic way without violating the rules and regulations, yet there are a huge number of cases proving otherwise (Gray and Manson, 2007). Fraud is one of the serious issues which are faced by mostly all organization and the problem of abuse is getting bigger and severer (Hill and Stoil, 2000). Fraud and abuse differ in their meaning and therefore have differing impact on the organizational outcome. It typically involves the violation of rules and regulations and includes the inappropriate usage of internet at the corporate resources for personal reasons. This kind of organizational behaviour is often derived from the certain normative work values which are not yet a deciding factor (Idowu and Çaliyurt, 2012). A broader view of the factors of the violation of the organizational behaviour would encompass the unequivocal reference towards the development and enhancing of organizational climate. The organizational behaviour is directed towards the intentional behaviour of the employees which is contrary to the legitimate interests and the actions of the employees. These have negative consequences on the individual, group and the organization itself (Jones, 2007). Organizational misbehaviour is pervasive in all the companies and is a derived consequence of the deliberate errant actions and also of the entire organizational employees (Jones, 2011). Although, norm and regulations are different in different organizations, the result and the outcome are very much influenced by the same negative connotations. Different theorists had viewed organizational behaviour belonging to different kind of nature and arising out of several potential conflicts which have the potentiality of sabotaging relations among the organizational members and breaking the smooth rhythm of the interaction process among the organizational members. One of the most important forms of conflict would be the fraud accounting procedure (Klapproth, 2011). Sometimes, the fraud accounting procedure can not only lead to confusion in the accounting procedure but also leads to tarnishing of the image of the company. The procedure of using fictitious accounting transactions which are generally prevented by the GAAP (Generally accepted accounting principles) is known as fraud accounting. It also occurs when the internal auditor fails to prepare timely reports, improper assessment of risk management, non-detection of misappropriation of funds etc. Misbehaviour is often represented as one of the micro and macro informal class struggles which arise out of organizational behaviour (Larson, 2008). It is also considered as a destructive phenomenon which is typically depicted in the organizational misbehaviour process as the one which puts forward varying difficult consequences. It is often regarded that an intentional activity by the members of the organization leads to the violation of several rules and regulations of the company. The actions are made to inflict pain and cause damage to the other organizational members and cause damage to decrease their organizational outcome. These acts are made to decrease the deformity that is existent in the organizations. Comparison between fraud and employer and employee misbehaviour have been an integral part of every organization which has resulted in an unsystematic and uncanny relationship between the variables. The negative connotation is associated with each and every variable that infringe upon the expected variables like norms and values of the organization. The growing numbers of misbehaviour among the organizational members and employee – employer has given rise to potential conflict and the continuous fluctuation in the employee satisfaction. Employee misbehaviour and sabotage is also regarded as one of the outlets to express their general opinion about the entire organizational systems and the procedures. The different facets in the organizational behaviour arena which have been explored by several theorists have been almost similar to the incidents of sociology. This act includes references that cover withholding effort, social loafing, cheating customers, and dishonest acts in the workplace. These acts require the perspective from the individualistic angle rather than emphasis on the asymmetrical employer and employee relations. It also includes the domineering work of nature which invigorates the current work situation and offers insight into different types of organizational misbehaviour. Invigorating the current work situation would lead to the theorizing of certain hidden factors like how and why the employees would like to cover the mistakes conducted by them (Power, 2011). Apart from the impact on organizational performance or outcome, it has shown considerable impact on the organizational relations between the various departments which also leads to difficulty in the attainment of the goals of an organization. The severing of ties and industrial relations would signify the initiation of labour movements and also the curbing down of the potential conflicts. The acts and the incident are almost synonymous in Industrial Sociology and Organizational Misbehaviour. It leads to different and unpredictable organizational outcomes and often to strikes, action strike and strike action, unorganized conflict and also certain alternative forms of unorganized conflicts. This leads to the unconventional practices and formation of gaps in the behaviour between employer and employee (Smith, Gambrell and Russell, 2013). Organizational misbehaviour often leads to huge gaps in the collective bargaining process and also on the cooperative practices that have the potentiality of decreasing the gaps between the employer and employee relationship. These also are known as indulgency patterns which lead to several disputes in the organizations which in turn lead to or have the tendency to lead to industrial disputes. Misbehaviour occurring towards women is also a major issue in the employee and employer misbehaviour. They object against this partiality catered to them and believe such traits to be deeply embedded in men (Sudarsanam, Ang and Frederikslust, 2008). This also leads to the complexity in relationships between male and female supervisors at the workplace and the men regard the fellow women as passive subjects of ridicule (Pollock, 2011). One of the major employee and employer abuse is the substance and drug intake which is highly prevalent in most of the organizations. Drug abuse at workplace not only hampers the productivity but also leads to differences in community responses and also leads to community differences. In the United States of America, the drug abuse at workplace is not only a major issue but also had led to the incurring of several costs and time consuming process (Paton, Juleff and Schachler, 2007). Drug abuse at workplace has been rampant and also has led to the tarnishing of image of the company and also led to the degrading community environment. The recent and relative incidents regarding insider trading is largely considered as a fraudulent activity (Trenerry, 2004). Recent events related to insider trading have led to the change of approach and services which have contributed to the development of several strategies by the Financial Service Authority regarding the use of software to detect errors in the existing financial functions which can identify certain errors through the SABRE II software system (Wolnizer, 2003). Although, insider dealings are a small part of the fraud and abuses committed by employer which relates to certain offences and punishments but greater dealings lies within the fraud committed by the employees like theft, forgery and making certain deal with the outside or rival parties. In case of drug abuse, it has been reported that 23.7 percent of the employee in US and UK take substantive drugs. Similarly, in the year 2012 the basketball coach of Rugers University was not only sacked but also fined for physically abusing his players which was revealed through the whistle blowing method by the players (Moakley, 2013). Employer abuse has taken various forms and one of the most practised forms has been the torture inflicted mentally to employees by bad behaviour, demotion, unwilling to give rewards and incentives and non-recognition at work (National Fraud Authority, n.d). Conclusion Thus, it is observed that the fraud, employee and employer misbehaviour does not only lead to polluting of work environment but also gives a misleading impression about the organization. The distortion in the market behaviour often results in the degrading behaviour of the employee and employer which takes the form of abuse. It is observed that the employee and employer misbehaviour often rises out of potential conflict and hampers the productivity of the organization. The author of the study has also cited various incidents which have affected the community on the whole due to non-ethical misrepresentations. Fraud accounting and insider dealings have led to the formation of the several financial rules and regulations in order to prevent any kind of exhibition of misbehaviour by employer and employees. Thus, it is also observed that employee misbehaviour abuse and fraud have had a significant impact on the organizational outcome, performance and climate which demands to be curbed down for the development of the entire community. Reference List Accounting Degree, 2013. The 10 Worst Corporate Scandal [Online] Available at:< http://www.accounting-degree.org/scandals/> [Accessed 30 October 2013]. Action Fraud, 2013. False Accounting Fraud. [Online] Available at: < http://www.actionfraud.police.uk/fraud-protection/false-accounting-fraud > [Accessed 30 October 2013]. Bierman, H., 2008. Accounting/finance lessons of Enron: A case study. Singapore: World Scientific. Coram, P., Ferguson, C. and Moroney, R., 2007. The Importance Of Internal Audit In Fraud Detection [pdf] American Accounting Association. Available at: [Accessed 30 October 2013]. Dunphy, D. C., Benn, S. and Griffiths, A., 2003. 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