Question

You have recently graduated from college with an MBA. Upon graduation, you start working for Roosevelt Power Plant. The boss, Mr. Jones, invites you into his office. Mr. Jones describes to you a large fraud that has recently taken place in the company. He asks you what actions should be taken to ensure that fraud does not occur again. After analyzing the company, you compile a list of actions that will be needed to prevent fraud from occurring again. Upon presenting the necessary steps and controls to be taken, Mr. Jones notices your suggestion: "Create a culture of honesty and create a positive work environment for employees." Mr. Jones is enraged and wants to know what a positive work environment has to do with the prevention and detection of fraud. 1. What would you tell Mr. Jones about why a positive work environment will help prevent fraud? 2. What factors would you tell Mr. Jones contribute to a negative work environment?

Answer 1

First of all a work environment should be defined. So the work environment is an environment where people of organisations are “WILLING TO WORK “ means there is no deferring of work, people are not trying to get rid off work but are trying to complete the work accurately.

The positive work environment is A WORK ENVIRONMENT (defined above) where work is done to get positive results. Like Increase in profit, sales, efficiency etc It not only relates to quantity but may be related to quality.

The Negative work environment is where people of organisation are not willing to work so they try to avert it or do it imperfectly. People are only concern to getting money without doing so much effort there.

Moving to the given case as told there that a fraud occurred in organisation and the reason is negative work environment. The people in organisation only want to get money for their selves without doing justified work.

If The Manager wants to create a positive environment there. He must ensure that people are willing to work perfectly and give priority to organisational goals. And that can be done only if personal goals are integrated with organisational goals.So the ways to create a positive environment are summarised below :-

1. Issue Companies share to employees (employees stock options)means give them a part of ownership in company so their efforts will be headed to increase the value of share of company or the value of company.

2. Regular Motivation: Some times people don’t want to work because their mental state is not good. So by motivating them for doing work perfectly is a way to create positive work environment.

3. Inducing Fair Competition among them

4 Release Incentive and Bonus Scheme which should aimed to quality of work and quantitative benefits for that.

Thus The honestly working people create a positive environment and It will prevent the fraud.

If we talk about detecting frauds a positive work environment also relates to implementing effective controls, When We talked about positive results it includes to supervise and measure the results of work done by employees so detection is easy even possible at inception of fraud.

The factors contribute to negative work environment are

1. Conflict between personal and organisational Interest.

2. Low level of motivation.

3. Weak morale of employees.

4. No Competition.

5. No supervision of work.

6. Control procedure are not implemented or if implemented are less effective.

7. Organisational hierarchy is not defined properly.

8. Reporting of work to only one or relatively less authorities.