BY GEORGE WEIMER
specialhandling
business crime: who’s really at fault?
IT SEEMS EVERY FRONT PAGE AND EVERY
evening newscast these days features a story about
someone swindling someone else or perpetrating
some type of corporate fraud. By all appearances,
business theft is on the rise, whether it’s the pilfering
of a few dollars’ worth of supplies, padding expense
accounts, or engaging in multimillion dollar stock
option backdating schemes.
As for what’s behind the spike in business crime,
there’s some evidence that the recession may be a factor. In a recent survey by the Institute for Corporate
Productivity, 27 percent of the respondents from large
companies (defined as those with 10,000 or more
employees) reported that they had seen workplace
crime increase during the current economic recession.
Statistics compiled by the FBI bolster that theory.
According to an online analysis of social trends in
America, “the FBI property crime index peaked
between the two recessions in the 1980s and immediately after the 1990–1991 recession. After that, it
headed down. … Property crime is thus a reflection
of our economic lives and moves in step with unemployment.” (To view the full article, visit
http://social.jrank.org/pages/1239/Crime-Overview-
Property-Crime.html.)
No doubt, economic need plays a role in workplace
theft. But rising theft rates may also reflect frustration, cynicism, and disillusionment with the company’s leaders.
Whatever the cause, crime appears to be up, and
companies are responding. Some have tightened
physical security, installing surveillance cameras and
the like. Some have imposed stricter accounting controls in an effort to prevent fraudulent transactions.
At least one observer believes that’s a step in the right
direction. “Quite possibly, [crime] may go down during bad times when every little dollar is focused on,”
says Phillip S. Kushner, a partner with Kushner and
Hamed, a Cleveland law firm with a white-collar
criminal practice.
But even the most sophisticated loss prevention program will prove ineffective if the company fails to get
its supervisors on board, says Cleveland attorney
Jeffrey Belkin, an arbitrator who has spent many years
advising employers on labor relations. In terms of
keeping internal crime to a minimum, “low-level management must buy into the program,” he says. “Often,
this element is missing. First-line supervision is critical.
If you don’t have that, nothing’s going to work.”
But that doesn’t take top management off the hook.
As we’ve been told time and
again, leadership starts at the
top. Whether the business is a
trucking company or a
machine shop or a warehouse, it is management’s
responsibility to lead by
example, demonstrating a
commitment to honest, ethical, and lawful conduct.
Unfortunately, that kind of
leadership seems to be lacking in all too many organizations. The news media pres-
ent case after case of top managers who have betrayed
the trust placed in them. Perhaps this is the essential
problem when it comes to internal company crime
today. Too many top managers in business and industry have been found wanting. This can only lead to the
kind of environment that allows company crime to
take root and flourish.
It would behoove managers in any industry, logistics included, to make it clear to their staffs that they
expect all employees to comply with the law. They
must reinforce this message with their own exemplary behavior. In other words, they should invest in all
the appropriate security measures, but build trust—
and company loyalty as well—by example. Is that too
much to ask?
George Weimer has been covering material handling, supply chain management and related
industrial and business issues for nearly 40 years. He is now an editor at large for DC VELOCIT Y,
specializing in material handling topics.
