Common unethical business practices

18.05.2020

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We live in a world full of risks and individuals who are willing to do others harm when an opportunity for personal gain presents itself. A business has all kinds of money flowing through it and thus there are many situations in which people at times choose to unethically take advantage. When a company operates in an immoral way in order to maximize its profits despite potentially disastrous consequences, this is called profiteering. Unethical profit examples may take the form of price gouging, companies running up the cost high for medical masks needed in order to treat COVID-19 patients when they are necessary to prevent loss of life, and it can also happen in the form of price fixing, such as multiple companies in a single industry, for instance the Internet industry, agreeing behind closed doors not to lower their prices beyond a certain price. 

In addition to external activities, when it comes to corporations, we must look inward at the most common source of corporate fraud – insiders. Especially with the advent of firewalls and then cloud storage of sensitive information, there is a greater total loss as a result of actions on the part of employees than those committed by cyber criminals alone. Sometimes this is done with the employee’s cooperation in which he is duped while sometimes this is done intentionally in pursuit of the employee’s own interests. A data breach can occur in which fraudsters pose as representatives of the company or an authoritative company requesting sensitive information or a password change on a false password reset form. Regardless, companies are undoubtedly well-advised to track as much of what they do as possible to protect their own interests. Employee monitoring is legal if performed on the company’s own devices and accounts and can extend to recording all of his interactions using these devices. This will not only serve to eliminate shady phenomena causing problems in the company but will also serve as evidence should the situation ever get to the point of a court dispute or a criminal investigation.

It is very common for an employee to have a conflict of interest in a situation where money is passing through his control and this may evoke temptation. An employee may record a printer as costing 300 dollars when it only costs 50 and then pocket the extra 250 dollars. A non-profit organization may have its checks written and stored outside the accounting system in which money goes unaccounted for and that ends up getting buried. One of the main ways bribery and corruption are mitigated is by having as much policy and required procedure as possible and then conducting events in which the employees are reminded frequently about these policies. The more effort that is exerted for this purpose, the harder it will be for the employee to claim that he was unaware of procedures designed to prevent shady behavior. Anti-bribery and corruption policies may entail that an expense article has to pass through several upline managers on a communication line, such as the financial division head and executive council, who must place their signatures on the expense order. Blatantly ignoring endlessly regurgitated policy would expose the perpetrator easily and thus render it unlikely that he’ll do it. 

Policy and procedure only serve to improve business processes. It would be worthwhile to inform customers that you will never request their personal information in an email so that a fraudster posing as you with the intent of luring customers cannot convince them to hand over their login credentials or credit card information.


Employee monitoring Fraud Insider